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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Chloride Grp. | LSE:CHLD | London | Ordinary Share | GB0001952075 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 374.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1342Z
Chloride Group PLC
27 May 2004
CHLORIDE GROUP PLC
ANNOUNCEMENT OF RESULTS
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2004
27 May 2004
Through rigorous focus on innovation, flexibility and reliability, Chloride is
the supplier of choice for power protection solutions. Its strengths derive
from applying innovative technologies and industry-leading customer service to
the protection of critical applications worldwide.
HIGHLIGHTS
* Sales up to #153.2 million (2003: #143.0 million), representing 7% growth
* Double digit growth in service sales reflects the success of the Total
Solutions approach
* Operating profit (before goodwill amortisation of #2.7 million
(2003: #2.6 million)) up 19% to #8.4 million (2003: #7.1 million)
* Adjusted earnings per share before goodwill amortisation up 20% at 2.37p
(2003: 1.98p). Basic EPS up 43% at 1.26p (2003: 0.88p)
* Dividend up 3.1% at 1.65p per share (2003: 1.6p), reflecting the Board's
growing confidence in the prospects for the Company's chosen markets
* Operating cash flow remains strong at #11.8 million (2003:#11.9 million)
before a special contribution of #1.5 million (2003: #nil) to the UK
pension fund
* Power crises in North America, UK, Italy and Scandinavia increase awareness
of the need for power protection in an environment of degrading power
quality and reliability
* Recent signs of improving opportunities in all business streams
Commenting on the outlook, Keith Hodgkinson, Chief Executive, said
'Chloride's comprehensive product and service solutions offering, across a broad
range of applications, coupled with wide international reach and commitment to
delivering excellence and innovation to our customers, leave us well placed to
continue to capture market share, build margins and generate cash.
Although we expect any market recovery to be gradual in the short term, we are
confident in our ability to develop our Total Solutions approach while
continuing to maintain rigorous cost management. This should hold us in good
stead to drive growth in sales and operating profit and deliver further value to
our shareholders.'
Enquiries:
Chloride Group PLC Telephone:
Keith Hodgkinson (Chief Executive) On 27 May 2004 020 7796 4133
Neil Warner (Finance Director) Thereafter: 020 7834 5500
Hudson Sandler 020 7796 4133
Andrew Hayes/James Hill
An analysts' briefing will be held at the offices of Hudson Sandler at 29 Cloth
Fair, London EC1A 7NN at 11.00 a.m. on 27 May 2004.
CHAIRMAN'S STATEMENT
OVERVIEW
This has been a year of good progress for Chloride. I am pleased to announce
that despite a difficult trading environment the Group continues to outperform
the overall market, and has achieved sales growth of 7% for the year. We also
achieved a 19% increase in operating profit before goodwill amortisation, driven
by margin improvements across the business as we continued to reduce costs, grow
higher-margin service revenues and improve efficiencies in product manufacturing
and distribution.
This performance demonstrates that Chloride is well positioned to achieve
further sales and profit growth through focused management and targeted
investment, in markets which are now expected to improve.
INVESTING FOR THE FUTURE
In the last three years, we have responded to the market downturn by reducing
our cost structure, aligning our resources with more profitable market sectors
and developing our Total Solutions approach to meet our customers' needs. At
the same time, we have continued to invest for the future of the business
through product development and strengthening of our management information
systems, as well as developing partnerships in the growing Eastern Europe and
Middle East markets, and investing for long-term growth in China. These actions
are delivering results.
Power protection remains an attractive worldwide market and we are well placed
to compete for business in our chosen markets. In Europe, we received from
Frost & Sullivan, the principal market research company in the power protection
industry, their 2004 award for "Leadership in the European Medium to Large UPS
Market". The award cited our ability to address those sectors with growth
potential against a background of market decline following the downturn in
telecoms-related business.
FINANCIAL
Total sales for the year increased by 7% to #153.2 million (2003: #143.0
million). Operating profit before goodwill amortisation was up 19% to #8.4
million (2003: #7.1 million) after absorbing revenue investment costs of #0.8
million in China. Margins once again improved across all our operations,
reflecting the Group's continued focus on driving cost savings and improving
efficiencies, as well as continued growth of higher-margin service revenues.
Profit before tax and goodwill amortisation increased by 19% to #7.6 million
(2003: #6.3 million), generating adjusted earnings per share of 2.37p - an
increase of 20%.
Reported profit before tax was #4.9 million (2003: #3.7 million) and basic EPS
was 1.26p (2003: 0.88p).
Operating cash flow continued to be strong at # 11.8 million (2003: # 11.9
million) before a special contribution of #1.5 million (2003: #nil) to the UK
pension fund. After considerable capital investment across the business the net
debt at the end of the year was #14.4 million (2003: #8.8 million) with gearing
on shareholders' funds at 28% (2003: 16% restated).
DIVIDEND
The Board recommends a final dividend of 0.85p per share (2003: 0.8p). This
increased dividend reflects the Board's growing confidence in the prospects for
the market and our ability to deliver further improvements in performance.
Together with the interim dividend of 0.8p (2003: 0.8p), this gives a full year
dividend of 1.65p (2003: 1.6p) - an increase of 3.1% on the prior year.
The final dividend will be paid on 27 July 2004 to shareholders on the register
at 2 July 2004.
PEOPLE
On behalf of the Board, I would like to thank all our employees for their hard
work and commitment over the last year. At this year's AGM we will be proposing
a resolution to adopt a new Performance Share Plan. Awards under this plan will
further align the interests of the management with those of shareholders, while
at the same time recognising the latest ABI guidelines on Share Incentive
Schemes. Details of the Performance Share Plan will be set out in the circular
to shareholders accompanying the Annual Report & Accounts.
OUTLOOK
The last three years have been challenging for Chloride as the market suffered a
sharp decline, followed by continuing low levels of capital investment, notably
in the telecoms, information technology and commercial sectors. However, our
confidence in the underlying growth drivers for power protection solutions - our
customers' absolute requirement to protect mission-critical applications against
a backdrop of degrading power quality - remains strong and there are now early
signs that the market is beginning to recover. Our actions in re-aligning the
business to respond to the changing environment have left us well placed to
leverage any upturn in the market.
We will maintain our focus on market sectors where we are well positioned,
continue to invest in industry-leading technology and customer service, and
remain committed to driving further operating efficiencies as we deliver value
to our customers and shareholders worldwide.
Norman Broadhurst
CHIEF EXECUTIVE'S REVIEW
MARKET DYNAMICS
The power protection market has experienced significant challenges in the past
three years as a result of the sharp decline in capital investment across many
sectors, particularly in telecoms, information technology and industry.
Nevertheless, the key market drivers remain in place. Following the damaging
power cuts that occurred in North America, the UK, Italy and Scandinavia in
2003, there is growing awareness that degrading power quality is a serious risk
both to business continuity and to critical public infrastructure. We note that
during the London power cut our power protection installations provided
uninterrupted power for the emergency lighting systems on London Underground,
helping the safe evacuation of thousands of passengers.
Market research carried out by Frost & Sullivan indicates that following two
years of declining revenues, the worldwide market for UPS is now regaining
momentum, and is projected to grow at a CAGR of c. 6% between 2004 and 2010. It
is anticipated that factors such as an upswing in capital investment as
economies improve, opportunities in emerging markets and increased awareness of
degrading power quality as a threat to business continuity will drive this
growth. Chloride's approach of focusing our sales resources on the key growth
sectors such as transport, healthcare, leisure and oil and gas; developing our
higher margin service business; continuing to control costs and improve
efficiencies; and maintaining a strong balance sheet and positive cashflow, will
enhance financial performance in an improving trading environment.
PERFORMANCE
Chloride has delivered improved performance despite the pressures of a highly
competitive market. Sales were increased by 7% and operating profit was up by
19% after absorbing the additional costs of our investment in China. The
underlying operating profit before goodwill amortisation excluding China was
increased by 31%.
The growth in operating profit was achieved from increased sales volume,
improved product margins, and rigorous control of costs. The improvement in the
product contribution margin was a significant achievement against the background
of severe pressure on prices. Overall the contribution margin also benefited
from the continued growth in higher margin service revenues.
Improved performance was achieved in all business streams, with both sales
revenue and operating profit ahead of last year in Uninterruptible Power
Supplies, Industrial Systems, Power Conditioning and Telecoms Systems.
A major strength of Chloride is its ability to convert profits into cash.
Operating cash flow before the special contribution to the UK pension fund was
again strong, with cash conversion at 141% of operating profit before goodwill
amortisation (2003: 168%).
SALES
The return to sales growth was achieved in difficult market conditions, by
focusing our resources on those territories and market sectors which provided
the most favourable opportunities. The success of this approach was recognised
by Frost & Sullivan in their 2004 award to Chloride for "Market Leadership in
the European Medium to Large UPS Market".
In geographic terms we achieved above-market growth of 7% in our major market of
EMEA and 24% growth in Asia Pacific. Our sales in the Americas were flat.
Product Sales were up by 6% with good growth in infrastructure projects and the
financial services, petrochemical and medical sectors. Sales in the telecom
sector started to recover as the main telecoms operators started to increase
investment in their networks. Manufacturing continued to be a difficult sector,
mainly in Europe where the depressed economic conditions adversely affected
capital investment.
Important contracts implemented during the year included the Network Rail and
Cross Channel Link rail infrastructure projects; Bank of Bilbao, Spain and
Agriculture Bank, China in financial services; the Sakhlin Island gas production
facility in Russia; hospital projects in the UK and the Middle East; and a large
data centre for Vodafone in Germany.
Service Sales continued to grow strongly with sales growth in the year of 11%.
This underlines the importance of after-sales support to our Total Solutions
approach, which is becoming a key criterion in the selection of power protection
suppliers by blue-chip customers. The increase in service sales was underpinned
by improvements to our offering, including further development of our LIFE
remote monitoring and diagnostic system, a new range of flexible support
services to match customer requirements, and the implementation of a power
quality audit capability.
LEADING SOLUTIONS
Excellent customer service is at the core of our Total Solutions approach and
allows us to respond swiftly to our customers' needs. Our industry-leading
remote monitoring and diagnostic system is an important component of our Total
Solutions approach. An updated, web-enabled version was launched during the
year under the LIFE.net brand. This enhanced system enables any potential
problems with a customer's power supply or applications to be identified and
dealt with by Chloride service specialists through a greater use of Internet and
e-mail communication. The success of this enhanced system is reflected in an
increase in Life connections of 16% on an annual basis.
Chloride is at the forefront of innovation in the power quality industry.
During the year we invested in product development to bring new products based
on industry-leading technology to market. These include:
- high power 90-Net and mid range 70-Net UPS systems, with the benefit of
vector digital control technology;
- 50 amp rectifiers for telecoms systems;
- line interactive power conditioned UPS systems, uniquely suited to
telecoms applications, as the telecoms operators develop new services such
as VoIP;
- updated connectivity software for parallel UPS systems; and
- the new Apodys range of modular industrial systems products.
Chloride Industrial Systems launched the Apodys product range at the end of the
first half of the year, and the first systems are now in operation, providing a
compact, robust and technically advanced solution for use in even the harshest
environments. This innovative development expands our proprietary Vector digital
control technology into industrial systems, to provide modular, cost-efficient
products with flexible configuration, smaller footprint and enhanced
performance. We are pleased that the Apodys solution has been chosen by EnCana
(UK) Ltd, the operator of the North Sea Buzzard field, to support safety and
process-critical loads at the main wellhead platform.
All these product and service developments give us confidence that we have again
improved our Total Solutions offering and are well positioned to grow sales
further during the coming year.
WIDE REACH
We continue to invest in developing the capabilities of our Shanghai-based
telecom power systems company, Chloride Masterguard Power Systems (CMPS). This
business, like many others in the region, was severely affected by the 'SARS
effect', which was more prolonged than the epidemic itself. During the year we
have focused on the introduction of a competitive range of telecoms power
systems and UPS products that will put us in a better position as the market
recovers. We are confident that CMPS will provide an effective platform from
which to expand our business in China for telecom power systems, UPS and
industrial systems.
During the year we have also developed relationships with a number of important
partners in Middle Eastern States including Jordan and Kuwait, to enable us to
benefit from increased commercial activity in the region.
We have had considerable success in developing our UPS business in Russia and
Eastern Europe and anticipate further opportunities with the accession of the
East European States to the European Union.
Our distribution hub in Duisberg, Germany has resulted in increased efficiency
in our international logistics network. We are now starting up a similar
logistics hub in Madrid which will improve inventory and logistics management in
the Iberian Peninsula.
PROSPECTS
Our Total Solutions approach covering a broad range of applications, strong
blue-chip client base, wide international reach and commitment to delivering
excellence and innovation to our customers, underpin our continuing ability to
capture market share, build margins, increase profit and generate cash.
We enter the new financial year with greater confidence as economic conditions
start to improve and with evidence of increased spending in the telecoms,
information technology and petrochemical sectors. Although we expect to see
only a gradual recovery in the short term, we firmly believe our Total Solutions
approach will provide the platform to drive growth in sales and operating
profit, and deliver further value to our shareholders.
Keith Hodgkinson
Consolidated profit and loss account
for the year ended 31 March
-----------------2004-------------------- ------------------2003-----------------
Before Before
goodwill Goodwill goodwill Goodwill
amortisation amortisation Total amortisation amortisation Total
Notes #000 #000 #000 #000 #000 #000
Turnover 3 153,171 - 153,171 142,967 - 142,967
Cost of sales (90,090) - (90,090) (85,961) - (85,961)
Gross Profit 63,081 - 63,081 57,006 - 57,006
Distribution (27,734) - (27,734) (25,073) - (25,073)
expenses
Administrative (26,953) (2,654) (29,607) (24,871) (2,587) (27,458)
expenses
Operating profit 3 8,394 (2,654) 5,740 7,062 (2,587) 4,475
Net interest (835) - (835) (725) - (725)
payable
Profit on
ordinary
activities
before
taxation 3 7,559 (2,654) 4,905 6,337 (2,587) 3,750
Tax on profit on
ordinary 4 (2,281) - (2,281) (1,712) - (1,712)
activities
Profit on
ordinary
activities after 5,278 (2,654) 2,624 4,625 (2,587) 2,038
taxation
Minority 353 - 353 48 - 48
interests
Profit for the
financial year 5,631 (2,654) 2,977 4,673 (2,587) 2,086
Dividends (3,916) (3,777)
Loss retained (939) (1,691)
Earnings per 25p
ordinary share 5
Adjusted 2.37p 1.98p
Basic 1.26p 0.88p
Diluted 1.25p 0.88p
Consolidated balance sheet
at 31 March
--------------Group--------------
2004 2003
(as re-stated
see note 6)
#000 #000
Fixed assets
Goodwill 35,547 41,069
Tangible assets 18,168 14,158
Investments - -
53,715 55,227
Current assets
Stocks 26,077 29,040
Debtors 53,437 49,948
Cash at bank and in hand 9,992 16,662
89,506 95,650
Creditors: amounts falling due within one
year
Borrowings 8,039 22,398
Other 56,235 57,028
Net current assets 25,232 16,224
Total assets less current liabilities 78,947 71,451
Creditors: amounts falling due after one year
Borrowings 15,034 1,888
Other 404 708
Provisions for liabilities and charges 13,031 13,625
Net assets 50,478 55,230
Capital and reserves
Called-up share capital 62,136 62,048
Share premium account 2,979 2,942
Own shares (10,500) (10,519)
Revaluation reserve 951 921
Profit and loss account (4,620) 51
Equity shareholders' funds 50,946 55,443
Minority interests (468) (213)
Total capital employed 50,478 55,230
Consolidated cash flow statement
for the year ended 31 March
--------2004------ -------2003-------
#000 #000 #000 #000
Cash flow from operating activities 10,308 11,852
Returns on investments and servicing of finance
Interest received 653 1,227
Interest paid (1,446) (1,903)
Interest element of finance lease rentals (42) (49)
Net cash outflow from returns on investments and servicing of
finance (835) (725)
Taxation (2,537) (2,298)
Capital expenditure and financial investment
Purchase of tangible fixed assets (8,414) (2,546)
Disposal of tangible fixed assets 331 554
Net cash outflow from capital expenditure and financial investments (8,083) (1,992)
Acquisitions and disposals
Purchase of businesses (444) (482)
Deferred consideration - (76)
Net cash outflow from acquisitions and disposals (444) (558)
Equity dividends paid (3,791) (3,786)
Cash (outflow)/inflow before use of liquid resources and financing (5,382) 2,493
Management of liquid resources
Net decrease in short-term deposits 10,111 3,413
Financing
Issue of ordinary share capital 125 112
Net sale of own shares 19 106
(Decrease)/increase in bank advances due within one year (18,937) 7,715
Increase/(decrease) in other loans due beyond one year 13,334 (14,136)
Net increase in discounted trade bills 250 304
Capital element of finance lease rental payments (84) (157)
Net cash outflow from financing (5,293) (6,056)
Decrease in cash in the period (564) (150)
Reconciliations of operating profit to net cash flow from operating activities
and of net cash flow to movement in net debt, together with an analysis of net
debt and other supporting information to the consolidated cash flow statement,
are given in note 7.
Statement of total recognised gains and losses
for the year ended 31 March
2004 2003
#000 #000
Profit for the financial year 2,977 2,086
Currency translation differences on foreign currency net investments (3,702) 890
Total recognised (losses)/gains since last annual report (725) 2,976
Reconciliation of movements in equity shareholders' funds
for the year ended 31 March
2004 2003
(as
re-stated
see note 6)
#000 #000
Profit for the financial year 2,977 2,086
Dividends (3,916) (3,777)
Exchange adjustments (3,702) 890
New share capital issued 88 112
Share premium thereon 37 -
Movement in respect of own shares 19 105
Net decrease in equity shareholders' funds (4,497) (584)
Opening equity shareholders' funds (as previously reported) 65,962 66,651
Prior year adjustment (see note 6) (10,519) (10,624)
Opening equity shareholders' funds (as restated) 55,443 56,027
Closing equity shareholders' funds 50,946 55,443
Note 1: The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 March 2004 or 2003, but is
derived from those accounts. Statutory accounts for 2003 have been delivered to
the Registrar of Companies and those for 2004 will be delivered following the
Company's annual general meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under S237 (2) or
(3) Companies Act 1985.
Note 2: Preparation of the financial statements
Apart from the change set out below the financial statements have been prepared
on the same basis as in the prior year.
UITF Abstract 38, "Accounting for ESOP Trusts" has been adopted in the year.
Details of this change are set out in note 6 below.
Note 3: Segmental information
Segmental profits/(losses) are shown at the level of profit on ordinary
activities before interest. Central costs have been fully allocated.
Unallocated net assets/(liabilities) include non-operating assets and
liabilities and provisions, dividend creditors, finance lease obligations and
cash balances and borrowings.
The Company derives its revenue and profits from a single class of business,
power protection.
Turnover, net assets and profit by source
----------------------2004----------------------- ---------------------2003----------------------
------Turnover------ ------Turnover------
Net
assets/
Net (liabilities)
Third assets/ Profit/ Third (as Profit/
Total party (liabilities) (loss) Total party (restated) (loss)
#000 #000 #000 #000 #000 #000 #000 #000
Europe 126,706 121,399 22,755 8,278 122,985 115,142 19,654 6,966
Americas 21,925 20,858 5,568 727 21,870 21,085 3,237 41
Asia and 11,106 10,914 3,055 (611) 7,935 6,740 2,077 55
Australasia
Inter-segment
adjustments (6,566) - - - (9,823) - - -
Continuing 153,171 153,171 31,378 8,394 142,967 142,967 24,968 7,062
operations
Goodwill and 35,547 (2,654) 41,069 (2,587)
amortisation
Unallocated net (16,447) (10,807) -
liabilities
153,171 153,171 50,478 142,967 142,967 55,230
Profit on
ordinary
activities 5,740 4,475
before interest
Net interest (835) (725)
payable
Profit on
ordinary
activities 4,905 3,750
before taxation
Third party turnover by market destination
------------2004------------ ------------2003------------
#000 % #000 %
Europe 102,305 67 98,889 69
Americas 22,712 15 22,877 16
Asia and Australasia 23,110 15 16,078 11
Africa 5,044 3 5,123 4
153,171 100 142,967 100
Note 4: Taxation
a) Analysis of charge based on profit for the year
2004 2003
#000 #000
Current tax
United Kingdom:
UK corporation tax on profits at 30% (2003: 30%) 2,901 1,527
Double tax relief (2,453) (1,053)
Advance corporation tax displaced - 492
448 966
Foreign tax 919 821
Adjustment in respect of - UK tax 150 (225)
prior years
- foreign tax (109) (96)
Total current tax 1,408 1,466
Deferred tax
Origination and reversal of timing differences - trading
- current year 828 129
- prior year 45 117
Total deferred tax 873 246
Tax on profit on ordinary activities 2,281 1,712
ACT written off in previous years amounting to #9,183,000 (2003: #9,183,000) is
available to reduce taxation on trading profits in future years. There was no
utilisation of ACT in the year (2003: #nil).
The foreign tax charge includes tax withheld from remittances to the UK of
#64,000 (2003: #58,000).
The Company has tax losses amounting to approximately #22 million (2003: #25
million) of which #2.2 million (2003: #2.2 million) has been taken into account
in calculating deferred tax.
b) Factors affecting tax charge for the year The differences between the
current tax charge and the amount calculated by applying the standard rate of UK
corporation tax (30%) to the profit before tax are as follows:
2004 2003
#000 #000
Profit before tax 4,905 3,750
Tax on profit arrived at by applying the standard rate of UK tax (30%) 1,472 1,125
ACT written back - 492
Expenses not allowable for tax (including goodwill amortisation and 1,033 1,168
impairment)
Foreign exchange loss on inter-company balances - (754)
Overseas losses not tax relieved 538 597
Brought forward overseas losses utilised (503) -
Differences arising on overseas earnings - trading 176 261
Tax underprovided/(overprovided) in prior years 41 (321)
Other differences (1,349) (1,102)
1,408 1,466
Note 5: Earnings per share
2004 2003
million million
Weighted average number of 25p ordinary shares
- basic and adjusted 237.1 236.6
Adjusted for shares under option 0.2 -
Weighted average number of 25p ordinary shares
- diluted 237.3 236.6
#000 #000
Profit for basic and diluted earnings per share calculations 2,977 2,086
Goodwill amortisation 2,654 2,587
Profit for adjusted earnings per share calculation 5,631 4,673
Earnings per - adjusted 2.37p 1.98p
share
- basic 1.26p 0.88p
- diluted 1.25p 0.88p
The weighted average number of shares excludes shares held by the Chloride Group
Employee Benefit Trust and the Chloride Quest.
The directors consider that the adjusted earnings per share figures more
accurately reflect the underlying performance of the business.
Note 6: Reserves
Share Profit
premium Own Revaluation Other and loss Total
account shares reserve reserves account reserves
#000 #000 #000 #000 #000 #000
Group:
At 1 April - as 2,942 - 921 (29,573) 29,624 3,914
previously
stated
Prior year - (10,519) - 29,573 (29,573) (10,519)
adjustment (see
note below)
At 1 April - as 2,942 (10,519) 921 - 51 (6,605)
re-stated
Exchange rate - - 30 - (3,732) (3,702)
adjustments
Premium on 37 - - - - 37
shares issued
Movements in - 19 - - - 19
respect of own
shares
Retained loss - - - - (939) (939)
for the year
At 31 March 2,979 (10,500) 951 - (4,620) (11,190)
"Own Shares" represent 11,192,920 (2003: 11,242,920) ordinary shares in the
Company held by the Chloride Group Employee Benefit Trust, having a market value
at 31 March 2004 of #5.4 million (2003: #3.3 million). The Trust holds these
shares to meet long-term commitments in relation to employee share plans.
UITF Abstract 38, "Accounting for ESOP Trusts" has been adopted in the year.
This Abstract requires companies to account for shares owned by employee benefit
trusts (which amounted to #10.5 million as at 31 March 2003) as a reduction in
equity shareholders' funds rather than as fixed assets investments. Comparatives
have been adjusted accordingly. The adoption has had no impact on profit in
either the current or prior year. Net sales/(purchases) of shares by the Trust,
which were previously shown in the cash flow within capital expenditure and
financial investment, are now shown within the financing section. For the
Company the impact of adopting the Abstract has been to reduce current assets -
debtors as at 31 March 2003 by #10.5 million with the shares owned by the
employee benefit trust being accounted for as a reduction in equity
shareholders' funds as presented within "Own shares" above. The Group has also
taken the opportunity to simplify the presentation of its group reserves by
amalgamating "other reserves" with the profit and loss account reserve as
presented above.
The cumulative amount of goodwill resulting from acquisitions which has been
written off to reserves is #26.3 million comprising #6.3 million which was
previously written off to the profit and loss account reserve and #20.0 million
which was previously included within "other reserves" (2003: #26.3 million).
The retained profits of foreign subsidiary undertakings, if distributed as
dividends, would be liable to UK and/or foreign taxes and subject to double tax
relief.
Note 7: Cash flow statement supporting information
a) Reconciliation of net cash flow to movements in net funds
2004 2003
#000 #000
Decrease in cash in the period (564) (150)
Net cash inflow from increase in debt and lease financing 5,437 6,274
Cash inflow from decrease in liquid resources (10,111) (3,413)
Change in net funds resulting from cash flows (5,238) 2,711
Debt and finance leases acquired with subsidiary - (451)
Exchange rate translation differences (346) (2,981)
Decrease in net funds in the period (5,584) (721)
Net debt at 1 April (8,845) (8,124)
Net debt at 31 March (14,429) (8,845)
b) Reconciliation of operating profit to net cash flow
2004 2003
#000 #000
Operating profit 5,740 4,475
Depreciation 3,677 3,079
Amortisation 2,654 2,587
Book loss on sale of tangible fixed assets 221 12
Decrease in stocks 1,892 3,100
(Increase)/decrease in debtors (5,002) 3,555
Increase/(decrease) in creditors and provisions 1,126 (4,956)
Cash inflow from operating activities 10,308 11,852
c) Analysis of net debt
Exchange At
At 1 April translation 31 March
2003 Cash flow differences 2004
#000 #000 #000 #000
Cash 6,174 3,907 (467) 9,614
Overdrafts (2,520) (4,471) 83 (6,908)
Debt due within one year (19,878) 18,937 (190) (1,131)
Debt due after more than one year (1,888) (13,334) 188 (15,034)
Discounted trade bills (633) (250) 28 (855)
Finance lease obligations (588) 84 11 (493)
Liquid resources 10,488 (10,111) 1 378
Net debt (8,845) (5,238) (346) (14,429)
Liquid resources comprise short-term bank and money market deposits. In the
Group balance sheet, cash at bank and in hand comprises the amounts for cash and
liquid resources stated in the above table.
The annual report will be posted on 9 June 2004 and the annual general meeting
will be held on Tuesday 20 July 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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