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RNS Number:2980P
Associated British Ports Hldgs PLC
03 September 2003
EMBARGO: NOT FOR PUBLICATION OR BROADCAST
BEFORE 7.00 a.m. ON WEDNESDAY, 3 SEPTEMBER 2003
ASSOCIATED BRITISH PORTS HOLDINGS PLC
Interim Results for the six months ended 30 June 2003
Financial highlights
* UK ports and transport turnover up 7% to #172.0 million (2002: #161.2
million).
* UK ports and transport operating profit up 4% to #74.0 million (2002:
#71.0 million), underlying UK ports and transport operating profit up 4% to
#74.5 million (2002: #71.5 million).
* Pre-tax profit up 4% to #69.6 million (2002: #66.9 million), basic earnings
per share up 5% to 15.5 pence (2002: 14.7 pence).
* Underlying pre-tax profit reduced by 1% to #66.6 million (2002: #67.6
million), underlying earnings per share reduced by 2% to 14.6 pence (2002:
14.9 pence) reflecting this year's phasing of property sales.
* Interim dividend up 4% to 6.75 pence (2002: 6.50 pence).
* Strong cash flow, underlying operating profit to operating cash flow
conversion 97% (2002: 106%).
Operational highlights
* Strategy implementation continues to produce growth in UK ports
Growth in roll-on/roll-off trade, deep-sea container traffic, vehicle
imports and exports, agribulk volumes, forest products and cruise-ship
calls.
Progress on major growth projects on the Humber and at Dibden, Southampton.
Cost-reduction programme substantially complete - will deliver cost savings
of at least #3.0 million per annum.
* Continuing pipeline of new business
10 new long-term contracts won in 2003.
Over 60 new contracts won over the last three-and-a-half years.
Bo Lerenius, Group Chief Executive, commented on the results and prospects:
"Given the uncertain economic climate, the performance of the group's UK ports
business is particularly pleasing. Again, this demonstrates the benefit of
focusing the business on long-term contracts with quality customers. This leads
the group to believe that the new contracts which have been secured over the
past three-and-a-half years will underpin continued growth for the group's UK
ports business during the second half of the year."
Attached is a copy of the interim statement. This comprises the text that will
be included in the Interim Results 2003, together with the group's profit and
loss account, balance sheet and cash flow statement as at 30 June 2003.
Enquiries:
Associated British Ports Holdings PLC
Bo Lerenius, Group Chief Executive tel: +44 (0) 20 7430 1177
Richard Adam, Group Finance Director
Margie Collins, Corporate Communications Manager
Finsbury
James Murgatroyd/James Leviton/Simon Henson tel: +44 (0) 20 7251 3801
3 September 2003
Notes to Editors:
Associated British Ports Holdings PLC is a leading provider to shippers and
cargo owners of innovative and high-quality port facilities and services.
The group's principal subsidiary, Associated British Ports (ABP), is the UK's
largest and leading ports group, handling almost a quarter of the country's
seaborne trade.
The group owns and operates AMPORTS in the USA, which handles car imports and
exports and provides auto-processing services.
The group's property investment and property development activities are focused
on opportunities within its ports.
The group employs around 3,000 people, mainly at port locations in the UK and
USA.
This, and other news releases relating to the group, can be found on the group's
website, www.abports.co.uk
Photographs:
Print resolution images of Bo Lerenius, Associated British Ports Holdings PLC's
Group Chief Executive, operational management and general port scenes to
accompany this press release, can be viewed and downloaded free of charge from
http://www.vismedia.co.uk/
Key financial figures
2003 2002 Change
Profit and loss account
Group turnover - continuing operations #m 195.9 196.6 -
UK ports and transport turnover #m 172.0 161.2 +7%
Underlying operating profit - UK and USA
continuing ports and transport operations * #m 75.3 72.1 +4%
Underlying operating profit - UK
ports and transport operations * #m 74.5 71.5 +4%
Total underlying operating profit - continuing
operations * #m 83.9 84.5 -1%
Underlying interest cover * Times 4.8 4.5 n/a
Underlying profit before taxation * #m 66.6 67.6 -1%
Profit before taxation #m 69.6 66.9 +4%
Underlying earnings per share * Pence 14.6 14.9 -2%
Basic earnings per share Pence 15.5 14.7 +5%
Dividends
Dividend per share Pence 6.75 6.50 +4%
Underlying dividend cover * Times 2.2 2.3 n/a
Cash flow statement
Net cash inflow from operating activities
including dividends received from
associated undertakings #m 81.6 92.2 -11%
Underlying operating profit cash
conversion * Percentage 97.3 106.3 n/a
Gross capital expenditure #m 40.1 41.4 -3%
Balance sheet
Net borrowings #m 453.2 501.0 -10%
Gearing Percentage 43.6 50.7 n/a
Net assets #m 1,040.6 988.5 +5%
Net assets per share Pence 316 302 +5%
* Before goodwill amortisation and exceptional items (as set out in the group
profit and loss account below).
Results
Against the background of an uncertain market, the group has continued to
develop during the first six months of 2003.
The core ports and transport business - which constituted 97 per cent of group
turnover and 90 per cent of underlying operating profit - continued to make
satisfactory progress. During the first half of the year, led by long-term
contracts secured over the past three-and-a-half years, turnover and underlying
operating profit from the continuing operations of these activities increased by
6 per cent to #189.1 million (2002: #178.9 million) and 4 per cent to #75.3
million (2002: #72.1 million), respectively.
As expected, operating profit from property investment rentals decreased by 6
per cent to #3.2 million (2002: #3.4 million), reflecting property sales made
last year. The exact timing of property sales is always difficult to predict
and, while the group currently expects a meaningful contribution from property
development sales for the full year, as anticipated as a result of this year's
phasing, turnover from property development activities for the first six months
of 2003 decreased by 81 per cent to #2.4 million (2002: #12.9 million) and
operating profit reduced to #0.1 million (2002: #4.2 million). This led to the
group's operating profit from continuing operations reducing marginally by 1 per
cent to #78.1 million (2002: #78.8 million).
The group's share of operating profit from its associates for the first six
months of the year increased by 10 per cent to #5.3 million (2002: #4.8
million). This growth was driven by increased container throughput of 4 per
cent at Southampton Container Terminals and 38 per cent at Tilbury Container
Services.
Profit arising on the sale of fixed assets for the first half of the year
totalled #3.5 million (2002: #0.2 million). This relates primarily to the
proceeds from an insurance claim which are being used to reconstruct a damaged
pier in the USA.
Net interest payable decreased to #17.3 million (2002: #19.1 million) reflecting
a combination of lower average net borrowings, following the disposal of
AMPORTS' Aviation division towards the end of 2002, and lower interest rates.
As a result of this year's phasing of property development sales, underlying
pre-tax profit and underlying earnings per share show marginal reductions of 1
per cent to #66.6 million (2002: #67.6 million) and 2 per cent to 14.6 pence
(2002: 14.9 pence), respectively, during the first half of the year.
Pre-tax profit and basic earnings per share increased by 4 per cent to #69.6
million (2002: #66.9 million) and 5 per cent to 15.5 pence (2002: 14.7 pence),
respectively, both benefiting from the profit arising on sale of fixed assets.
Interim dividend
Based on the financial performance of the group in the first six months and the
outlook for the remainder of the year, the directors have declared an interim
dividend of 6.75 pence per share (2002: 6.5 pence per share), representing an
increase of 4 per cent. This will be paid on Friday, 31 October 2003, to
shareholders on the register at the close of business on Friday, 12 September
2003.
Balance sheet and cash flow
The group\'s cash flow generation remains strong, with cash flow conversion from
total underlying operating profit being almost 100 per cent. Net borrowings at
30 June 2003 amounted to #453.2 million (2002: #501.0 million) compared with
#450.1 million at 31 December 2002. Net assets per share increased to 316 pence
per share at 30 June 2003 compared with 308 pence per share at 31 December 2002.
New accounting standards
Financial Reporting Standard (FRS) 17 - Retirement Benefits was adopted under
its transitional arrangements during 2001 and the group will continue to report
on this basis during 2003. Full adoption of FRS 17 during the first half of
2003 would have reduced the group's pre-tax profit by #5.2 million. Under FRS
17, at the end of last year, the group's main defined benefit scheme had a
surplus of assets over liabilities of #33.8 million. This scheme remains in
surplus today.
Review of operations
Ports & transport - UK
In the first six months of 2003, the UK ports and transport business continued
to make progress, with growth in roll-on/roll-off trade, deep-sea container
traffic, vehicle imports and exports, agribulk volumes, forest products and
cruise-ship calls. Turnover increased by 7 per cent to #172.0 million (2002:
#161.2 million). Underlying operating profit grew by 4 per cent to #74.5
million (2002: #71.5 million). Along with other transport companies, the group
continued to experience increased insurance costs, albeit at a much lower rate
than in 2002. This, coupled with the increased growth achieved by the group's
lower margin value-added services operations, has resulted in slightly reduced
operating margins within the UK ports and transport business. However, these
factors aside, operating margins within the core UK ports business are in line
with those achieved in the first half of 2002. The cost-reduction programme
announced in 2002 is now almost complete and will result in cost savings of at
least #1.5 million during the second half of 2003 and at least #3.0 million per
annum from 2004. Significant developments in the operating performance of each
business unit are discussed below.
Hull & Goole
Turnover increased by 1 per cent, with growth in forest products, roll-on/
roll-off traffic and grain exports. In March, a #0.6 million investment in
timber-storage facilities was completed at Hull, accommodating new business from
Grange Fencing, suppliers of value-added products to B&Q and Jewson.
At the Port of Goole, a #0.7 million investment in new storage and distribution
facilities under a long-term agreement with RMS Europe became operational in
July. In addition a new #1.0 million railfreight terminal is under
construction, which will improve the port's rail infrastructure, enabling a
higher proportion of cargo - including imports of steel coils and import/export
containers - to be transported by rail. ABP was awarded a #0.7 million Freight
Facilities Grant by the Strategic Rail Authority towards the cost of
construction, in recognition of the environmental benefits that the scheme will
bring about.
Grimsby & Immingham
Turnover increased by 4 per cent, with growth in grain exports, roll-on/roll-off
traffic, coal imports and vehicle imports/exports. In addition to the
completion of a #1.0 million investment in Immingham Forest Products Terminal,
under a term agreement with Bowater Incorporated, and the completion of a #1.1
million investment in a new agribulk facility at Immingham for IAWS, under a
15-year contract, two new developments were announced in the first half of 2003.
The first will see a further boost to Immingham's forest products trade with a
#0.8 million investment in a new warehouse, following a five-year agreement with
Humber Timber Terminals Ltd. The second development involves a #2.0 million
investment in a new terminal, also at Immingham, following a long-term agreement
with Freshney Cargo Services Limited. The agreement will allow Sea-Cargo AS, a
long-term customer of Freshney Cargo Services Limited, to relocate its
operations from Grimsby to Immingham, enabling it to expand and improve its
service by using larger and faster vessels. This will create additional space
to accommodate business expansion at Grimsby, including the continued growth of
Volkswagen Group.
Southampton
Turnover rose by 11 per cent, driven by growth in grain exports, vehicle imports
/exports and container traffic. The port also saw its cruise business continue
to expand, with 76 cruise calls in the first half of 2003 (2002: 69). Three
projects, totalling #10.0 million, to improve and expand the port's cruise
facilities have been completed. Mayflower Cruise Terminal, P&O Cruises' UK
base, has benefited from a #6.5 million major reconstruction following a new
10-year agreement. Queen Elizabeth II Terminal has been refurbished following a
#2.0 million investment, underpinned by an agreement with Cunard Line confirming
Southampton as Cunard's UK base through to 2009. The #1.5 million City Cruise
Terminal, the port's third cruise terminal, became operational in August.
South Wales Ports
While turnover fell by 6 per cent, mainly due to the reduction in the import of
steel slab by Corus, the South Wales Ports achieved strong growth in timber
imports and scrap exports, together with a recovery in iron ore imports. The
region also saw a number of significant new developments during the first half
of 2003.
Timber business is set to benefit from new developments at both Newport and
Barry. At Newport, a #4.6 million investment in new storage facilities,
following a 20-year agreement with Saint-Gobain, became operational in June. At
Barry, a #0.8 million investment in a new pallet-production facility was
announced on the back of a 10-year agreement with the Scott Timber group, the
UK's leading pallet manufacturer.
New investment in excess of #2.5 million in steel-handling facilities at Cardiff
and Newport is also planned. At Cardiff, this has resulted from two new
customer contracts, including a 10-year agreement with Marshall Maritime
Services to create a bespoke steel-importing facility and a five-year agreement
with Duferco UK Ltd to modify an existing port warehouse. At Newport, ABP is to
invest #0.8 million in a new mobile harbour crane, following a three-year
agreement with Corus.
Also at Newport, a 20-year agreement has been reached with Sims Group to invest
#3.5 million in new facilities, the refurbishment of a rail link, provision of
storage areas and quay-strengthening works.
Shortsea Ports
Turnover increased by 8 per cent, with growth in grain exports and roll-on/
roll-off traffic. At the Port of Ayr, a #1.0 million investment in a warehouse
facility, built under a long-term contract with Peacock Salt, became operational
in June. Work on a #4.3 million investment in marine works for Brittany Ferries
at Plymouth will begin this autumn. The works are required to accommodate the
new superferry, Pont Aven, which will come into service in April 2004. The
investment is supported by a 15-year agreement with Brittany Ferries. At
Teignmouth, a public inquiry into the proposed #4.0 million project to redevelop
port facilities will begin in September. The #1.0 million Lowestoft Haven
Marina development, which will have a 140-berth capacity, is on track for
completion in September. At Ipswich, the group is to invest #6.1 million to
construct a second roll-on/roll-off berth, following a 20-year agreement with
Ferryways N.V., enabling it to expand its twice-daily service to Ostend.
ABP Connect
Turnover increased by 23 per cent. New developments included B&Q's decision to
handle containerised imports into the UK through ABP Connect's Exxtor Terminal
at the Port of Immingham. Additionally, Hams Hall Railfreight Terminal in
Birmingham has undergone a major expansion, following a #1.2 million grant from
the Strategic Rail Authority. The grant was awarded on the back of a new daily
railfreight service between Hams Hall and Scotland which has reduced the amount
of goods transported by road. The overall cost of the project was #2.2 million,
with the remainder funded by ABP.
Ports & transport - USA
AMPORTS' continuing Seaport division has shown further improvement, experiencing
vehicle-volume growth of 3 per cent in the first six months of 2003, primarily
as a result of new accounts which came on stream last year. Following the
weakening of the US dollar against sterling, turnover, at #17.1 million (2002:
#17.7 million), decreased by 3 per cent compared to the first six months of last
year. However, operating profit, which has benefited from reduced overhead
costs following last year's sale of the Aviation division, has increased by 33
per cent to #0.8 million (2002: #0.6 million). AMPORTS has continued to win new
business with KIA's decision to import vehicles through Baltimore, Maryland, and
General Motors agreeing to import vehicles through Benicia, California. Both of
these will commence during the second half of this year.
Property investment and development
The group's policy of selling non-operational port-located property and
exploiting the potential of the property portfolio continues. As expected, as a
result of the group's ongoing disposal programme, turnover from property
investment decreased by 8 per cent to #4.4 million (2002: #4.8 million) and
operating profit reduced by 6 per cent to #3.2 million (2002: #3.4 million).
The phasing of property sales resulted in a modest contribution from property
development in the first half of the year. Turnover decreased by 81 per cent to
#2.4 million (2002: #12.9 million) and operating profit reduced to #0.1 million
(2002: #4.2 million). Nonetheless, while the exact timing of property sales is
always difficult to predict, the group currently continues to expect a
meaningful contribution from property development sales for the full year.
Associates
Southampton Container Terminals and Tilbury Container Services continued to
benefit from increased container throughput, up by 4 per cent and 38 per cent
respectively, during the course of the first half of the year. The Cardiff Bay
Partnership had a stable first half of the year. The group's share in the
turnover of associates increased by 11 per cent to #23.5 million (2002: #21.1
million) and its share of operating profit was up 10 per cent to #5.3 million
(2002: #4.8 million).
Strategy update
Ports & transport - UK
UK ports and transport operations continue to be the main focus of the group's
activities. Developments announced in the first six months of 2003 are in line
with the group's strategy of growing existing business and developing new
business through rigorously-targeted investment. These investments are
supported by long-term contracts with quality customers, generating internal
rates of return of at least 15 per cent.
This strategy has led to over 50 per cent of the UK ports' business over the
next year being underpinned by contracts. This stable revenue profile helps
make the group more resilient to downturns in economic activity. In addition,
the locations of the group's UK ports provide a good geographical spread of risk
and no single type of cargo accounts for more than 10 per cent of the UK ports'
turnover.
Maintenance capital expenditure continues to be monitored closely and contained
below the group's annual depreciation charge.
The group continues to plan major growth projects on the Humber Estuary and at
Dibden, Southampton. Plans for the Humber Estuary comprise the construction of
further riverside terminals at Hull and Immingham to accommodate increasing
volumes of roll-on/roll-off traffic, coal imports and shortsea container
traffic. The group's plans for development on the Humber Estuary have recently
received a boost with the announcement of a groundbreaking agreement between the
group and leading conservation organisations which should accelerate the
consideration of the grant of the necessary planning consents by the Department
for Transport. The agreement ensures that ABP will provide valuable wildlife
habitat as an integral part of the developments.
The public inquiry into the group's application to develop Dibden Terminal at
Southampton ended in December 2002 and the Government's decision is expected
either late this year or in 2004. Capital expenditure on this project in the
first half of 2003 amounted to #2.9 million and the group's investment in this
project totalled #38.3 million as at 30 June 2003 (2002: #31.2 million).
The group continues to take a cautious view in respect of strategic
acquisitions. 'Bolt-on' activities closely aligned with the group's core
business will be considered, provided they meet the prescribed hurdle rate of
return of 15 per cent for new capital investment.
Ports & transport - USA
Following last year's sale of AMPORTS' Aviation division, the group is now
concentrating on growing the remaining Seaport business. The development of
this business will be in line with the group's strategy of growing the existing
business and developing new business through rigorously-targeted investment.
Disposal of non-core assets
The group will continue to sell non-operational property and exploit the
potential of its property portfolio, while retaining those assets essential to
support the growth strategy in the main ports and transport business.
Although property development sales in the first half of the year have been
modest, the group remains on track to achieve its target of #200.0 million for
total non-core property and land sales set at the beginning of 2000.
Non-core property and land sales since 1 January 2000 totalled #170.9 million at
the end of the half year. The inclusion of #71.0 million received from the sale
of Red Funnel Group in 2000 and #32.0 million from the sale of AMPORTS' Aviation
division in 2002 brings the total amount of non-core asset sales since 1 January
2000 to #273.9 million.
Prospects
While the economic climate remains uncertain, the group's UK ports business has
the advantage of having many long-term contracts with quality customers. This,
together with the group's strong cash flow and diverse spread of geographical
and cargo risk, leads the group to believe that the new contracts which have
been secured over the past three-and-a-half years will underpin the growth for
the group's UK ports business in 2003. Current trading remains in line with
expectations.
Unaudited group profit and loss account for the six months ended 30 June
Goodwill Exceptional Year ended
Underlying* amortisation Items Total Total 31
December
2003 2003 2003 2003 2002 2002
Note #m #m #m #m #m #m
Turnover including share of
associates
Continuing operations 219.4 - - 219.4 217.7 446.0
Discontinued operations - - - - 17.1 27.9
219.4 - - 219.4 234.8 473.9
Less: share of turnover in (23.5) - - (23.5) (21.1) (44.1)
associates
Group turnover 2 195.9 - - 195.9 213.7 429.8
Cost of sales (93.7) - - (93.7) (106.9) (211.8)
Gross profit 102.2 - - 102.2 106.8 218.0
Administrative expenses (23.6) (0.5) - (24.1) (25.8) (59.8)
Continuing operations 78.6 (0.5) - 78.1 78.8 154.6
Discontinued operations - - - - 2.2 3.6
Group operating profit 78.6 (0.5) - 78.1 81.0 158.2
Share of operating profit in 5.3 - - 5.3 4.8 10.5
associates
Total operating profit 83.9 (0.5) - 83.4 85.8 168.7
Profit on disposal of discontinued
operations 3 - - - - - 7.4
Profit on sale of fixed assets 3 - - 3.5 3.5 0.2 0.7
Profit on ordinary activities
before interest 2 83.9 (0.5) 3.5 86.9 86.0 176.8
Net interest payable 4 (17.3) - - (17.3) (19.1) (37.7)
Profit on ordinary activities
before taxation 66.6 (0.5) 3.5 69.6 66.9 139.1
Taxation on profit on ordinary
activities 5 (18.6) - - (18.6) (18.9) (38.0)
Profit on ordinary activities
after taxation attributable to
shareholders 48.0 (0.5) 3.5 51.0 48.0 101.1
Dividends 6 (22.2) - - (22.2) (21.4) (48.5)
Retained profit for the group and
its share of associates 25.8 (0.5) 3.5 28.8 26.6 52.6
Earnings per share - basic 8 14.6p (0.2p) 1.1p 15.5p 14.7p 30.9p
Earnings per share - diluted 8 15.4p 14.5p 30.6p
Earnings per share - underlying * 8 14.6p 14.9p 30.4p
Dividend per share - interim 6.75p 6.50p 6.50p
Dividend per share - final 8.25p
14.75p
* Underlying represents results before goodwill amortisation and exceptional
items.
Unaudited group balance sheet as at 30 June
At
31 December
2003 2002 2002
Note #m #m #m
Fixed assets
Intangible assets 14.9 22.7 15.4
Tangible operating assets 854.1 819.5 834.0
Tangible property assets 574.8 585.1 568.8
Investments 52.6 50.4 50.2
1,496.4 1,477.7 1,468.4
Current assets
Property developments and land held for sale 38.2 42.2 38.3
Debtors - due within one year 91.9 104.7 93.4
Debtors - due after one year 86.4 80.0 82.9
Cash and short-term deposits 8.0 8.8 6.4
224.5 235.7 221.0
Creditors - amounts falling due within one year (126.7) (130.7) (129.9)
Net current assets 97.8 105.0 91.1
Total assets less current liabilities 1,594.2 1,582.7 1,559.5
Creditors - amounts falling due after more than one year (454.1) (503.9) (449.5)
Provisions for liabilities and charges (89.8) (81.7) (92.0)
Deferred income (9.7) (8.6) (8.7)
Net assets 2 1,040.6 988.5 1,009.3
Capital and reserves
Called-up share capital 82.3 81.9 82.0
Share premium account 81.1 76.1 77.4
Revaluation reserve 627.4 637.3 627.9
Other reserves 37.0 37.0 37.0
Profit and loss account 212.8 156.2 185.0
Equity shareholders' funds 9 1,040.6 988.5 1,009.3
Net assets per share 316p 302p 308p
Net borrowings #453.2m #501.0m #450.1m
Net borrowings as a percentage of equity shareholders' funds 43.6% 50.7% 44.6%
Unaudited group cash flow statement for the six months ended 30 June
Year ended
31 December
2003 2002 2002
Note #m #m #m
Net cash inflow from operating activities 10 81.3 91.9 199.1
Dividends received from associated undertakings 0.3 0.3 2.4
Returns on investments and servicing of finance
Interest received 0.4 0.1 0.8
Interest paid (13.5) (14.2) (36.9)
Interest element of finance lease rental payments (0.1) - (1.0)
Net cash outflow from returns on investments and servicing of (13.2) (14.1) (37.1)
finance
Taxation (8.7) (12.9) (25.7)
Capital expenditure and financial investment
Tangible operating assets (36.7) (38.6) (70.0)
Tangible property assets (4.2) (2.8) (6.7)
Grants received 0.8 - -
Sale of fixed assets 4.3 2.2 3.4
Movement on investment in own shares 0.4 0.3 1.3
Net cash outflow from capital expenditure and financial investment (35.4) (38.9) (72.0)
Free cash flow 24.3 26.3 66.7
Acquisitions and disposals
Purchase of business and subsidiary undertakings - (0.3) (0.3)
Sale of subsidiary undertakings 7 (1.6) - 29.4
Net cash (outflow)/inflow from acquisitions and disposals (1.6) (0.3) 29.1
Equity dividends paid (27.1) (25.3) (46.6)
Cash (outflow)/inflow before use of liquid resources and financing (4.4) 0.7 49.2
Management of liquid resources (1.9) (3.9) (2.0)
Financing
Issue of shares 2.4 3.8 4.8
Increase/(decrease) in borrowings 2.9 0.5 (48.8)
Capital element of finance lease rental payments - - (3.3)
Net cash inflow/(outflow) from financing 5.3 4.3 (47.3)
(Decrease)/increase in cash in the period (1.0) 1.1 (0.1)
Notes to the interim financial statements
1. Basis of preparation
The interim financial statements have been prepared in accordance with the
accounting policies set out in the group's financial statements for the
year ended 31 December 2002.
The interim financial statements are unaudited and do not comprise
statutory accounts within the meaning of Section 240 of the Companies Act
1985. The comparative figures for the year ended 31 December 2002 are
taken from the statutory accounts filed with the Registrar of Companies.
The Auditors' report on the statutory accounts was unqualified and did not
contain a statement under Section 237 of the Companies Act 1985.
2. Segmental analysis
Analysis of group turnover, profit on ordinary activities before interest
and net assets by class of business and geographical segment are given
below. Turnover is disclosed by origin. There is no material difference
between turnover by origin and turnover by destination.
Year ended
30 June 2003 30 June 2002 31 December 2002
UK USA Total UK USA Total UK USA Total
#m #m #m #m #m #m #m #m #m
Group turnover
Ports and transport
Continuing operations 172.0 17.1 189.1 161.2 17.7 178.9 325.7 36.1 361.8
Discontinued operations - - - - 17.1 17.1 - 27.9 27.9
172.0 17.1 189.1 161.2 34.8 196.0 325.7 64.0 389.7
Property investment 3.5 0.9 4.4 3.8 1.0 4.8 7.3 2.0 9.3
Property development 2.4 - 2.4 12.9 - 12.9 30.8 - 30.8
Group turnover 177.9 18.0 195.9 177.9 35.8 213.7 363.8 66.0 429.8
Profit on ordinary activities
before interest
Ports and transport
Continuing operations 74.5 0.8 75.3 71.5 0.6 72.1 141.4 1.5 142.9
Discontinued operations - - - - 2.2 2.2 - 3.6 3.6
74.5 0.8 75.3 71.5 2.8 74.3 141.4 5.1 146.5
Property investment 2.4 0.8 3.2 2.5 0.9 3.4 5.0 1.8 6.8
Property development 0.1 - 0.1 4.2 - 4.2 12.0 - 12.0
Share of operating profit
in associates 5.3 - 5.3 4.8 - 4.8 10.5 - 10.5
Total underlying operating
profit 82.3 1.6 83.9 83.0 3.7 86.7 168.9 6.9 175.8
Goodwill amortisation (0.5) - (0.5) (0.5) (0.4) (0.9) (0.9) (0.7) (1.6)
Exceptional items -
administrative expenses
(note 3) - - - - - - (5.5) - (5.5)
Total operating profit 81.8 1.6 83.4 82.5 3.3 85.8 162.5 6.2 168.7
Profit on disposal of
discontinued operations
(note 3) - - 7.4
Profit on sale of fixed
assets (note 3) 3.5 0.2 0.7
Profit on ordinary
activities before interest 86.9 86.0 176.8
Year ended
30 June 2003 30 June 2002 31 December 2002
UK USA Total UK USA Total UK USA Total
#m #m #m #m #m #m #m #m #m
Net assets
Net operating assets
Ports and transport 1,391.5 45.6 1,437.1 1,337.5 47.9 1,385.4 1,355.2 42.5 1,397.7
Property investment 72.7 9.2 81.9 78.7 9.9 88.6 73.2 9.4 82.6
Property development 36.3 - 36.3 44.7 - 44.7 39.2 - 39.2
Share of associated
undertakings 52.1 - 52.1 48.6 - 48.6 49.3 - 49.3
Continuing operations 1,552.6 54.8 1,607.4 1,509.5 57.8 1,567.3 1,516.9 51.9 1,568.8
Discontinued operations - - - - 12.7 12.7 - - -
1,552.6 54.8 1,607.4 1,509.5 70.5 1,580.0 1,516.9 51.9 1,568.8
Less: group items
Goodwill 14.9 22.7 15.4
Net borrowings (453.2) (501.0) (450.1)
Net liabilities (128.5) (113.2) (124.8)
Net assets 1,040.6 988.5 1,009.3
The group's share of associated undertakings is stated after deducting the
group's share of net borrowings of #19.0 million (2002: #19.6 million).
3. Exceptional items
Profit arising on the sale of fixed assets totalled #3.5 million (2002:
#0.2 million), which includes #3.4 million (2002: #nil) relating to an
insurance claim resulting from a damaged pier in the USA.
During the year ended 31 December 2002, the group recorded #5.5 million of
exceptional operating expenses in relation to a review of its cost base,
generated a profit of #7.8 million in respect of the sale of AMPORTS'
Aviation division and a #0.4 million charge on the closure of Southern
Emergency Vehicles, a small vehicle modification business located in the
USA.
4. Net interest payable
Net interest payable is shown after deducting interest receivable of #0.4
million (2002: #0.1 million) and finance costs capitalised on payments for
fixed assets of #0.6 million (2002: #0.5 million).
5. Taxation
The taxation charge for the period is based on the estimated underlying
effective tax rate of 28.0 per cent for the year ending 31 December 2003
(year ended 31 December 2002: 28.0 per cent). The taxation charge for
associates was #1.2 million (2002: #1.0 million).
6. Dividends
An interim dividend of 6.75 pence per share (2002: 6.50 pence per share)
will be paid on Friday, 31 October 2003, to shareholders on the register at
the close of business on Friday, 12 September 2003.
7. Disposal
During the year ended 31 December 2002, the group received #32.0 million
cash proceeds from the sale of AMPORTS' Aviation division and paid disposal
costs of #2.6 million. During the six months ended 30 June 2003, #1.6
million of related costs were paid in respect of this transaction.
8. Earnings per share
The calculation of earnings per share is based on 328.7 million (2002:
326.5 million) ordinary shares being the weighted average number of shares
in issue and ranking for dividend during the period.
The directors consider that underlying earnings per share is a more
appropriate basis for comparing performance between periods than basic
earnings per share. Figures calculated on this basis have been provided to
show the effect of excluding goodwill amortisation, exceptional
administrative expenses, profit on disposal of discontinued operations and
profit on sale of fixed assets.
Reconciliation of profit used for calculating basic and underlying earnings
per share:
Profit Earnings per share
Year ended Year ended
31 December 31 December
2003 2002 2002 2003 2002 2002
#m #m #m p p p
Profit on ordinary activities after taxation
attributable to shareholders - basic earnings
per share 51.0 48.0 101.1 15.5 14.7 30.9
Goodwill amortisation 0.5 0.9 1.6 0.2 0.3 0.5
Exceptional items - administrative expenses - - 5.5 - - 1.7
(note 3)
Profit on disposal of discontinued operations - - (7.4) - - (2.3)
(note 3)
Profit on sale of fixed assets (note 3) (3.5) (0.2) (0.7) (1.1) (0.1) (0.2)
Attributable taxation - - (0.7) - - (0.2)
Profit on ordinary activities after taxation
attributable to shareholders
- underlying earnings per share 48.0 48.7 99.4 14.6 14.9 30.4
Reconciliation of weighted average number of shares used for calculating basic
and diluted earnings per share:
Number of shares Earnings per share
Year ended Year ended
31 December 31 December
2003 2002 2002 2003 2002 2002
m m m p p p
Weighted average number of shares - basic earnings
per share
328.7 326.5 327.0 15.5 14.7 30.9
Dilution arising from share option schemes 2.1 3.5 3.0 (0.1) (0.2) (0.3)
Weighted average number of shares - diluted
earnings per share 330.8 330.0 330.0 15.4 14.5 30.6
9. Reconciliation of movements in equity shareholders' funds
Year ended
31 December
2003 2002 2002
#m #m #m
Profit on ordinary activities after taxation attributable to shareholders 51.0 48.0 101.1
Dividends (22.2) (21.4) (48.5)
28.8 26.6 52.6
New share capital subscribed 2.5 3.8 4.7
Deficit arising on revaluation of tangible property assets - - (5.5)
Currency translation differences on foreign currency net investments - (0.3) (0.9)
Net increase in equity shareholders' funds 31.3 30.1 50.9
Equity shareholders' funds at 1 January 1,009.3 958.4 958.4
Equity shareholders' funds at period end 1,040.6 988.5 1,009.3
10. Reconciliation of operating profit to net cash inflow from operating
activities
Year ended
31 December
2003 2002 2002
#m #m #m
Group operating profit 78.1 81.0 158.2
Non-cash items:
Depreciation and grant amortisation 13.1 12.0 24.5
Amortisation of goodwill 0.5 0.9 1.6
Pension prepayment movement (3.1) (3.4) (6.7)
Cash inflow/(outflow) from movements in working capital:
Property developments and land held for sale 0.8 5.8 11.9
Debtors (0.8) (8.0) (3.4)
Creditors (2.2) 3.9 6.7
(Decrease)/increase in provisions (5.1) (0.3) 6.3
Net cash inflow from operating activities 81.3 91.9 199.1
11. Analysis of changes in net borrowings during the period
Effect of
foreign
At exchange At At
1 January Cash flow rates 30 June 30 June
2003 2003 2003 2003 2002
#m #m #m #m #m
Cash at bank and in hand 1.5 (0.3) - 1.2 2.0
Bank overdraft (1.9) (0.7) - (2.6) (1.0)
(0.4) (1.0) - (1.4) 1.0
Borrowings - amounts falling due within one year
(excluding overdrafts) (5.6) 0.8 - (4.8) (5.3)
Borrowings - amounts falling due after more than
one year (449.0) (6.2) 1.4 (453.8) (503.5)
(455.0) (6.4) 1.4 (460.0) (507.8)
Liquid resources 4.9 1.9 - 6.8 6.8
Net borrowings (450.1) (4.5) 1.4 (453.2) (501.0)
Liquid resources comprise short-term deposits with banks with maturity dates
between seven days and 12 months.
12. Unaudited reconciliation of net cash flow to movement in net borrowings for
the six months ended 30 June
Year ended
31 December
2003 2002 2002
#m #m #m
(Decrease)/increase in cash in the period (1.0) 1.1 (0.1)
Cash (inflow)/outflow from (increase)/decrease in
borrowings and lease finance
(2.9) (0.5) 52.1
New finance leases (2.5) - -
Cash outflow from movement in liquid resources 1.9 3.9 2.0
Currency translation differences 1.4 3.4 4.8
Change in net borrowings resulting from cash flows (3.1) 7.9 58.8
Net borrowings at 1 January (450.1) (508.9) (508.9)
Net borrowings at period end (note 11) (453.2) (501.0) (450.1)
13. Company information
The preliminary announcement was approved by the board of directors on 3
September 2003. The Interim Results 2003 will be posted to all
shareholders by 12 September 2003 and both this statement and the Interim
Results 2003 will be available via the Internet at www.abports.co.uk or on
request from the Company Secretary, Associated British Ports Holdings PLC,
150 Holborn, London EC1N 2LR. A webcast of the group's Interim Results 2003
presentation will also be available via the Internet at
www.abports.co.uk/investor/index/asp.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFLEARIFIIV
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