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RNS Number:9756H
Telemetrix PLC
26 February 2003
26 February 2003
Telemetrix PLC
2002 Preliminary Results
Financial summary
2002 2001
Turnover #86.5m #92.4m
Operating profit* #2.3m #1.8m
Profit (Loss) Before Tax (#2.7m) (#1.8m)
Earnings Per Share* 2.6p 1.2p
Operating cashflow #14.3m #8.0m
Dividend 2.15p 2.15p
* Before goodwill amortisation, exceptional costs and charges
Highlights
* Zetex growth and steady performance by Network Services more than
compensate for difficult test market conditions.
* Good recovery at Zetex diluted by progressive weakening of US dollar.
* Strong EDITDA performance and working capital reduction turned #4.3m net
debt at end of 2001 into net cash of #4.1m.
* Significant productivity improvement to come at Zetex with benefit of #2m in
2004 with some impact in 2003.
* Telco capex cut backs affect Trend Test division sales across all geographic
markets. 2002 cost reduction programme to yield savings of #1m on full year
basis.
* Trend's Network Services division achieved sixth successive year of growth in
sales and prof
* 2002 dividend maintained.
Commenting on the outlook, the Chairman, Dr Colin Gaskell, states:
"Further growth in Zetex' sales expressed in US dollars is expected in 2003,
particularly in the key consumer and distribution segments. Steps have been
taken to mitigate the effect in the first half year of possible further
weakening of the dollar by selling forward a substantial proportion of Zetex
anticipated unmatched US dollar inflow for that period. Initial benefits are
expected to flow through in 2003 from the wafer fabrication reorganisation
programme. Order intake at Zetex for the first six weeks of the year has been
encouraging.
At Trend, the expected small overall increase in sales and the benefit of the
cost reduction programme initiated in 2002 is expected to mitigate the non-
recurrence of the one-off payments (net of associated stock provisions) received
in 2002 from Agilent.
Further modest sales growth is anticipated at Trend's Network Services division,
although the operating margin is expected to be reduced by higher support fees
required by network equipment vendors.
Overall we are confident that in 2003, absent a major untoward geopolitical
event, the Group will continue to make progress, with part benefit being
obtained from the reorganisations initiated in 2002 at both subsidiaries.
January trading has been in line with this expectation."
- Ends -
Enquiries:
Tim Curtis or Bruce Rattray
Chief Executive Finance Director
Telemetrix PLC Telemetrix PLC
Telephone: +44 (0)20 7638 9571 at Citigate Dewe Rogerson on 26 February 2003
Thereafter: +44 (0)1628 851144
Website: www.telemetrix.co.uk
2002 Preliminary Results and Annual Report
Chairman's Statement
The year 2002 was a year of mixed, but mainly difficult, trading and currency
conditions in which Telemetrix nonetheless increased pre-exceptional and
goodwill operating profit and earnings per share by 26% and 117% respectively
compared with the previous year. Group operating cash flow for the year was 78%
greater than for 2001 which contributed to a net cash position of #4.1m at the
year end compared to net debt of #4.3m a year ago.
Through 2002 progressive improvement was made in half yearly sales and operating
profit before exceptional items and amortisation of goodwill. Compared with an
operating loss before exceptional items and goodwill amortisation in the second
half of 2001 of #0.8m, operating profit before exceptional items and
amortisation of goodwill in the first half of 2002 was #0.5m and in the second
half of the year #1.8m. The second half operating profit before exceptional
items and goodwill amortisation was achieved on sales for the period of #44.6m,
up 6% from #41.9m in the first half and 5% from #42.5m in the second half of
2001.
Group sales for the full year 2002 were #86.5m (2001 - #92.4m). The year's
operating profit before exceptional items and amortisation of goodwill was
#2.3m, an increase of 26% over the #1.8m reported for 2001. This increase in
operating profit was achieved after spending #7.5m (equivalent to 8.6% of sales)
on development of new products and processes, 11% less than the #8.4m
(equivalent to 9.1% of sales) spent in 2001. Exceptional operating costs of
#0.3m were incurred in connection with a cost reduction programme at the
broadband test division of Trend Communications which is expected to yield
savings of #1m on a full year basis. In addition non-cash impairment charges
totalling #2.7m were taken, of which #1.6m related to the carrying value of the
shares held in the Employee Share Ownership Trust. A further #1.1m related to
the future written down value of plant and equipment at Zetex for which no use
or resale value will exist at the completion at the end of 2003 of a programme
to reorganise its wafer fabrication operations in Oldham, UK. Annualised
benefits of approximately #2m are expected once the concentration of wafer
fabrication operations in the newer and more efficient facilities at the
Lansdowne Road site are completed, of which a proportion are expected in 2003;
further exceptional cash charges of approximately #1.9m and #1.5m are expected
to be incurred in 2003 and 2004 respectively in connection with the programme.
Conditions in the semiconductor market in 2002 stabilised somewhat after the
major downward correction of 2001, although the benefit of this to Zetex was
diluted by the progressive weakening of the US dollar through the year. Zetex
sales in the second half of 2002 were #27.1m compared to #24.9m in the first
half of the year and to #22.9m in the second half of last year. For the full
year 2002 Zetex sales were #52.0m, an increase of 2% over 2001 sales of #50.8m.
In 2002 69% of Zetex sales were invoiced in US dollars (at an average rate of
$1.50 / #1); the 2002 over 2001 growth in Zetex sales denominated in US dollars
during 2002 was approximately 7%, compared to estimates of the growth for the
year in the global semiconductor market, expressed in US dollars, of some 2%.
In line with the sequential growth in half yearly sales achieved through 2002,
Zetex pre-exceptional operating profit turned round from an operating loss of
#1.6m in the second half of last year to a #0.4m operating profit in the first
half and a #1.1m operating profit in the second half. 2002 sales of Linear
integrated circuits grew significantly faster than those of discrete devices, up
30% compared to the previous year at #13.4m. The main driver of integrated
circuit growth was the broadening family of products targeted at the direct
broadcast by satellite market, sales of which increased by 48% compared to 2001.
A useful contribution to growth was made by the recently introduced audio
controller chip. Within discretes, sales of Zetex' range of medium and high
density MOSFETs more than doubled.
Trend's enterprise network support division achieved, in 2002, its sixth
successive year of growth in sales and profits. Sales at #17.1m were up 11%
(2001 - #15.4m) and operating profit at #3.2m was up 32% (2001 - #2.4m). The
proportion of the division's sales attributable to one-year network maintenance
contracts increased from 69% in 2001 to 79% in 2002. Sales of Trend's broadband
test equipment division contracted sharply in the year as the cut backs in
communications carriers capex spend that were first initiated in the second half
of 2001 became more pronounced through 2002. On sales down 33% from #26.1m in
2001 to #17.4m, the division moved from an operating profit before exceptional
items and amortisation of goodwill of #1.3m in 2001 to an operating loss of
#0.7m. During the year #2.0m compensation payments were received from Trend's
US distributor, Agilent Technologies, in return for agreeing to reduce certain
minimum purchase commitments. A consequence of the reduced purchase commitments
from Agilent was that Trend were left with associated excess inventories and
during the period #0.4m was set aside to provide for these.
Corporate Head Office costs for 2002 increased by 5% to #1.7m from #1.6m, the
increase due entirely to charges for professional advice taken in relation to
the Telemetrix final salary pension scheme.
FINANCIAL RESULT
Net interest cost for the year was #0.2m, down from #0.3m in 2001. After
goodwill amortisation of #1.8m (2001 - #1.8m), exceptional operating costs of
#0.3m and non-cash impairment charges of #2.7m, the pre-tax loss for the year
was #2.7m. After a tax credit of #1.0m (2001 - tax credit of #0.2m) the
attributable loss was #1.7m (2001 - attributable loss #1.6m) resulting in a loss
per share of 1.8p (2001 - loss per share 1.7p). Excluding the effects of
goodwill amortisation and of exceptional costs and charges, earnings per share
for 2002 were 2.6p compared to 1.2p in 2001, an increase of 117%.
DIVIDEND
The Directors recommend a maintained dividend for the year of 2.15p payable on 2
June 2003 to shareholders on the register on 2 May 2003.
CASH
Net cash at the year-end was #4.1m compared to net debt of #4.3m at the end of
2001. In 2002 earnings before interest, tax depreciation and amortisation
(EBITDA) increased by 20% to #9.0m (2001 - #7.5m) and operating cash flow by 78%
to #14.3m (2001 - #8.0m) before capital expenditure of #2.7m (2001 - #9.9m).
During the year #1.4m was loaned to the Group's Employee Share Ownership Trust.
CAPITAL EXPENDITURE
Group capital expenditure in 2002 was #2.7m compared to #9.9m in the prior year.
A level of #7.5m is planned for 2003. Some #6.5m will be spent at Zetex of
which approximately half is related to improvements and upgrades to wafer
fabrication capability.
BOARD CHANGES
Looking forward, the Board composition has a number of significant changes in
prospect over the next 18 months for which plans are in hand. Tim Curtis, Chief
Executive of Telemetrix since 1992, and who reached the age of 60 in 2002, has
indicated his desire to retire in 2004. Dr William Venter, non-executive
director since 1994, reaches the age of 70 in 2004 and will retire from the
Board at that time. Dr Venter, his family and related trusts own 34.6% of the
Company. His son, Robert Venter, will remain on the Board.
The Board will in due course commence the search for a successor for Mr Curtis
and for a new independent non-executive director. Also in 2004, I shall have
completed three terms as a director of Telemetrix and, in accordance with best
practice, I intend to retire following the 2004 AGM.
Given the scale of these changes and in order to ensure a smooth transition, I
have decided to relinquish my role as Chairman following this year's AGM. Liz
Airey, Telemetrix' senior independent non-executive director since 2000, has
agreed to accept the Chairmanship of the Company when I stand down. At that
time Professor Jim Norton, an independent non-executive director of the Company
since 2000, will become the senior independent non-executive director.
PENSION SCHEME
Telemetrix continues to account for pensions under SSAP24 and, based on a
valuation date of 5 April 2002, there was an actuarial funding deficit of #1.8m
for the UK final salary pension scheme. Using an FRS17 valuation basis, the
deficit as at 31 December 2002 was #11.2m compared with a deficit of #4.2m at
the end of 2001. In February 2002 the Scheme was closed to new entrants and a
Stakeholder Pension Scheme put in place. Since the end of 2002 consultations
have taken place with Scheme members which have resulted in the acceptance of
the Company's proposals to increase Normal Retirement Age from 63 to 65 and to
increase members' contribution rates related to the existing per annum 1/60th of
pensionable salary accrual rate; a scale of optional lower contribution rates
related to lower accrual rates has also been accepted. The new arrangements
will come into effect on 6 April 2003, making future funding levels in the
Scheme less dependent on investment performance. No changes to the Company's
cash contributions are currently anticipated.
RENEWAL OF EXECUTIVE SHARE OPTION SCHEME
The Board of Telemetrix is proposing to introduce a new Executive Share Option
Scheme to replace the 1994 Executive Share Option Scheme. Details of the
proposed new scheme will be set out in the Notice of Meeting for the forthcoming
AGM, which will be sent to shareholders in late March 2003.
CHANGE IN ACCOUNTING POLICY
In 2003 the Group will adopt a more prudent approach to the recognition of
revenue derived from sales to stocking distributors, although this affects only
Zetex where such sales accounted for 36% of that subsidiary's 2002 sales. In
future, sales and gross profit will only be recognized when the underlying
product has been onward sold by the distributor rather than, as currently, at
the time of sale to the distributor. The use of this approach to revenue
recognition brings Zetex into line with its US peer group. The change is not
expected to materially alter 2003 reported sales and profits, as distributor
inventories are anticipated to be relatively stable through the year.
OUTLOOK
Further growth in Zetex' sales expressed in US dollars is expected in 2003,
particularly in the key consumer and distribution segments. The extent to which
this would flow through into sterling equivalent sales and profit would be
adversely affected by further weakening of the US dollar / sterling exchange
rate from the current level. Zetex' reported sales and profits are
particularly sensitive to the US dollar/sterling exchange rate. As stated
above, Zetex' sales are primarily US dollar denominated, 69% in 2002, whilst in
the same period only 32% of total costs were incurred in US dollars. As an
illustration of the effect of currency movements, had the average US
dollar/sterling rate in 2002 been $1.60: #1 rather than the actual average rate
of $1.50:#1, Zetex sales and operating profits in the year would have been #2.1m
and #1.1m lower, respectively, once translated into sterling. Steps have been
taken to mitigate the effect in the first half year of possible further
weakening of the US dollar by selling forward a substantial proportion of Zetex
anticipated unmatched US dollar inflow for that period. Order intake at Zetex in
the first six weeks of the year has been encouraging and 2003 will also see the
initial benefits from the wafer fabrication reorganisation programme begin to
flow through.
Although little, if any, increase in communications carriers' capex spend is
anticipated in 2003 a continuation is expected of the growth achieved in 2002,
outside the major 2001 customer, for Trend broadband test division's expanding
range of DSL products. Combined with early sales of the recently launched high
end transmission test platform, incorporating initially 10 gbs SDH/SONET, and
growth in ATM sales related to 3G cellular network roll outs, this should
compensate for the further anticipated decline in sales of mature ISDN and low
speed SDH products. This, together with the benefit of the cost reduction
programme initiated in 2002 is expected to mitigate the non-recurrence of the
one-off payments (net of associated stock provisions) received in 2002 from
Agilent. Further modest sales growth is anticipated at Trend's enterprise
network support division, although the operating margin is expected to be
reduced by higher support fees required by network equipment vendors.
Overall we are confident that in 2003, absent a major untoward geopolitical
event, the Group will continue to make progress, with part benefit being
obtained from the reorganisations initiated in 2002 at both subsidiaries.
January trading has been in line with this expectation.
Consolidated Profit and Loss Account
Year Ended 31 December 2002
2002 2001
(restated)
Notes # 000 # 000
Turnover 1 86,506 92,358
Cost of sales (59,709) (63,160)
Gross profit 26,797 29,198
Operating expenses (27,789) (30,742)
Operating profit (loss) 1 (992) (1,544)
Analysis: Operating profit before impairment of fixed assets, 2,291 1,819
severance and goodwill amortisation
Impairment of fixed assets 2 (1,100) -
Severance costs 3 (335) (1,515)
Goodwill amortisation (1,848) (1,848)
Amounts written off investments 4 (1,563) -
Net interest receivable (payable) 5 (180) (299)
Profit (loss) on ordinary activities before taxation (2,735) (1,843)
Tax on profit (loss) on ordinary activities 6 1,009 237
Profit (loss) attributable to shareholders for the financial year (1,726) (1,606)
Dividend 9 (2,071) (2,079)
Retained profit (loss) for the financial year (3,797) (3,685)
Retained profit (loss) for the financial year in :
The Company 164 316
Subsidiary undertakings (3,961) (4,001)
(3,797) (3,685)
Earnings (loss) per share 7 (1.8)p (1.7)p
Amount attributable to impairments, severance
and goodwill amortisation 7 4.4 p 2.9 p
Earnings (loss) per share excluding impairments,
severance and goodwill amortisation 7 2.6 p 1.2 p
Diluted earnings (loss) per share 7 (1.8)p (1.7)p
Diluted earnings (loss) per share excluding impairments,
severance and goodwill amortisation 7 2.6 p 1.2 p
Statement of Total Recognised Gains and Losses
Profit (loss) for the financial year (1,726) (1,606)
Currency translation differences (600) (383)
Total recognised gains (losses) relating to the year (2,326) (1,989)
Prior year adjustment 10 (2,420)
Total recognised gains (losses) recognized
since last Annual Report (4,746)
Consolidated Balance Sheet
31 December 2002
Group
2002 2001
Notes (restated)
# 000 # 000
Fixed Assets
Intangible assets 15,490 18,534
Tangible assets 2 29,856 34,109
Investments 4 4,034 4,233
49,380 56,876
Current Assets
Stocks 16,209 19,343
Debtors 14,314 16,265
Cash at bank and in hand 12,608 6,742
43,131 42,350
Creditors : Amounts falling due within one year (24,472) (24,491)
Net current assets 18,659 17,859
Total assets less current liabilities 68,039 74,735
Creditors : Amounts falling due after more than one year (5,075) (7,155)
Provisions for liabilities and charges (2,923) (3,243)
60,041 64,337
Capital and reserves
Called up share capital 4,995 4,985
Share premium account 33,957 33,866
Profit and loss account 16,499 20,896
Other reserves 4,590 4,590
Equity shareholders' funds 60,041 64,337
Group reconciliation of movements in shareholders' funds 2002 2001
(restated)
# 000 # 000
Profit (loss) for the financial year (1,726) (1,606)
Dividend for the year (2,067) (2,089)
Adjustment re. prior year dividend (4) 10
Retained profit (loss) for the year (3,797) (3,685)
Effect of foreign exchange rate movements (600) (383)
New share capital issued 101 350
Net increase (decrease) in shareholders' funds (4,296) (3,718)
Opening shareholders' funds (note 10) 64,337 68,055
Closing shareholders' funds 60,041 64,337
Consolidated Cash Flow Statement
Year Ended 31 December 2002
Notes 2002 2001
# 000 # 000
Net cash inflow from operating activities 8 14,300 8,033
Returns on investments and servicing of finance
Interest paid (533) (626)
Interest received 348 360
(185) (266)
Taxation
UK tax recovered (paid) 875 (424)
Overseas tax recovered (paid) (417) (2,660)
458 (3,084)
Capital expenditure and financial investment
Receipts from sale of tangible assets and investments 329 42
Payments to acquire intangible assets (142) (748)
Payments to acquire tangible assets (2,545) (9,136)
Payments to acquire own shares by Telemetrix ESOT (1,405) (1,215)
(3,763) (11,057)
Equity dividends paid (2,094) (2,070)
Net cash flow before management of liquid
resources and financing 8,716 (8,444)
Management of liquid resources
(Increase) decrease in short term deposits with banks (5,650) 3,819
Financing
Issue of ordinary share capital 101 350
Loans raised 129 6,881
Loans repaid (2,699) (1,591)
Capital element of finance leases repaid (66) (24)
(2,535) 5,616
Increase in cash in the year 531 991
2002 2001
Reconciliation of net cash flow to movement in net funds # 000 # 000
Increase in cash in the year 531 991
Cash flow from decrease (increase) in debt and lease financing 2,636 (5,266)
Cash flow from increase (decrease) in liquid resources 5,650 (3,819)
Change in net funds resulting from cash flows 8,817 (8,094)
Translation difference (354) (291)
Movement in net funds in year 8,463 (8,385)
Net (debt) cash at beginning of year (4,346) 4,039
Net cash (debt) at end of year 4,117 (4,346)
1 Segmental analysis
1.1 Classes of business
Turnover 2002 2001
# 000 # 000
Analog semiconductors - Zetex 52,024 50,825
Broadband test equipment - Trend 17,370 26,100
Enterprise network services - Trend 17,112 15,433
Telemetrix Group 86,506 92,358
Profit (loss) 2002 2001
# 000 # 000
Analog semiconductors - Zetex 422 (1,452)
Analysis Analog semiconductors - pre impairment & severance 1,522 (284)
Impairment of fixed assets (note 2) (1,100) -
Severance costs (note 3) - (1,168)
Broadband test equipment - Trend (2,828) (856)
Analysis Broadband test equipment pre severance
& goodwill amortisation (687) 1,339
Severance costs (note 3) (293) (347)
Goodwill amortisation (1,848) (1,848)
Enterprise network services - Trend 3,147 2,413
Analysis Enterprise network services pre severance 3,189 2,413
Severance costs (note 3) (42) -
Telemetrix corporate (1,733) (1,649)
Group operating profit (loss) (992) (1,544)
Amounts written off investments (note 4) (1,563) -
Net interest receivable (payable) (180) (299)
Group profit (loss) on ordinary activities before taxation (2,735) (1,843)
Operating Assets 2002 2001
(restated)
# 000 # 000
Analog semiconductors - Zetex 37,782 42,932
Broadband test equipment & enterprise network services - Trend 21,066 28,874
Analysis Broadband test equipment & enterprise
network services pre goodwill 6,735 12,695
Goodwill 14,331 16,179
Telemetrix corporate (398) (306)
Group net operating assets 58,450 71,500
Add back non-operating assets
Telemetrix ESOT (note 4) 3,924 4,110
Gross cash 12,608 6,742
16,532 10,852
Less non-operating liabilities
Provisions for liabilities and charges (2,923) (3,243)
Taxation (1,460) (1,595)
Dividend (2,067) (2,089)
Gross debt and overdrafts (8,491) (11,088)
(14,941) (18,015)
Group net assets 60,041 64,337
Due to the integrated nature of the accounting records, it is not possible to segment Trend's operating assets
with sufficient accuracy, therefore a combined figure has been given for all of Trend, as in previous annual
reports.
1 Segmental analysis (continued)
1.2 Geographical analysis
Turnover by origin 2002 2001
Turnover made by Group companies located in the # 000 # 000
following geographic areas
United Kingdom 73,325 73,873
United States of America * 11,773 14,901
Continental Europe 24,464 27,526
Asia Pacific 25,967 13,538
Other geographic areas 674 1,473
136,203 131,311
Inter-area eliminations (49,697) (38,953)
Group turnover 86,506 92,358
Turnover by destination 2002 2001
Turnover in each geographic market in which customers are located # 000 # 000
in the following geographic areas
United Kingdom 26,747 34,142
United States of America * 11,783 15,002
Continental Europe 19,718 20,038
Asia Pacific 26,985 20,570
Other geographic areas 1,273 2,606
Group turnover 86,506 92,358
Profit (Loss) 2002 2001
Profit (loss) on ordinary activities made by Group companies located in the
following geographic areas # 000 # 000
United Kingdom (3,232) (3,922)
Analysis United Kingdom - pre impairment & severance (1,821) (2,463)
United Kingdom - impairment of fixed assets (note 2) (1,100) -
United Kingdom - severance costs (note 3) (311) (1,459)
United States of America * 785 282
Continental Europe (93) 1,034
Analysis Continental Europe - pre-severance
& goodwill amortisation 1,779 2,938
Continental Europe - severance costs (note 3) (24) (56)
Continental Europe - goodwill amortisation (1,848) (1,848)
Asia Pacific 1,530 1,024
Other geographic areas 18 38
Group Operating Profit (Loss) (992) (1,544)
Amounts written off investments (1,563) -
Net interest receivable (payable) (180) (299)
Group profit (loss) on ordinary activities before taxation (2,735) (1,843)
* In April 2002, Trend renegotiated its OEM agreement with its distributor
in the USA. In return for agreeing to reduce certain minimum purchase
commitments Trend received $3m (#2m) in cash, of which $2m (#1.4m) was
reported in the Interim results. The exclusive distribution rights of the
distributor were limited such that Trend can now sell direct into the
USA market alongside the distributor. A consequence of the reduced purchase
commitment is that Trend were left with excess inventories and during the year
set aside #0.4m to provide for this. This stock provision has been
netted off against the $3m (#2m) and the net credit is included as part of
"Operating expenses" in the Profit and Loss account.
1 Segmental analysis (continued)
1.2 Geographical analysis (continued)
Operating Assets 2002 2001
Operating assets held by Group companies located in the following geographic
areas. # 000 # 000
United Kingdom 33,634 41,399
United States of America 1,082 2,961
Continental Europe 20,414 21,096
Analysis Continental Europe - pre-goodwill 6,083 4,917
Continental Europe - goodwill 14,331 16,179
Asia Pacific 3,100 5,640
Other geographic areas 220 404
Group net operating assets 58,450 71,500
2 Tangible Assets
A charge of #1,100,000 has been made to the Profit and Loss account for
impairment of certain items of plant and machinery.
This is a result of the decision to transfer Zetex's wafer fabrication
operations at Gem Mill to more efficient facilities at the
Lansdowne Road site. #664,000 of this charge has been included in the
Plant & Machinery depreciation charge. The balance of #436,000 is
included in "Creditors: Amounts falling due within one year" as an
accrual for onerous commitments in respect of impairment of assets to be
acquired to fulfill certain contractual commitments.
3 Severance and redundancy costs
During 2001, both principal trading subsidiaries implemented redundancy
programmes to align costs with revenues and better place themselves to
cope with the subdued market conditions experienced during that year.
Both programmes covered European operations with most of the redundancies
taking place in the UK. In 2002 Trend implemented another redundancy
programme to reduce costs further.
Severance and redundancy costs Continental 2002 2001
UK Europe Total Total
# 000 # 000 # 000 # 000
Zetex - - - 1,168
Trend 311 24 335 347
Telemetrix Group 311 24 335 1,515
4 Investments
Included in the figure of #4,034,000 is #3,924,000 relating to the
carrying value of the Employee Share Ownership Trust (ESOT). The
ESOT holds Telemetrix ordinary shares for purchase by the Group's
employees on exercise of options granted to them by the Company. In view
of the decline in the market value of Telemetrix ordinary shares over the
last two years, the Directors believe that it is prudent to make a
provision of #1,563,000 (2001 - #nil) against the carrying value of those
shares purchased in 2000 and 2001 at prices which are not likely to be
recovered from the exercise of the related share options.
5 Net interest receivable (payable) 2002 2001
# 000 # 000
Interest payable on bank loans and overdrafts (497) (642)
Finance lease interest (4) (3)
Other charges relating to long term provisions (26) (26)
(527) (671)
Interest receivable on bank and other short term cash deposits 347 372
(180) (299)
6 Tax charge (credit) on profit on ordinary activities 2002 2001
(restated)
# 000 # 000
UK Corporation tax 100 (1,112)
UK Tax overprovided in prior years (1,110) (200)
Foreign taxes payable by subsidiary undertakings 391 505
Total Current Tax (619) (807)
Deferred Tax - timing differences (390) 570
Tax on profit on ordinary activities (1,009) (237)
The tax effect in the Profit and Loss account relating to impairments,
severance costs and goodwill amortisation is a credit of #608,000
(2001 - #607,000).
7 Earnings per share (EPS) 2002 2002 2002 2001 2001 2001
(restated) (restated) (restated)
Profits Basic Diluted Profits Basic Diluted
(losses) (losses)
# 000 EPS (p) EPS (p) # 000 EPS (p) EPS (p)
Adjusted earnings
and EPS 2,512 2.6 2.6 1,150 1.2 1.2
Exceptional items
Effect of fixed
asset impairment (1,100) (1.1) (1.1) - - -
Effect of severance (335) (0.4) (0.4) (1,515) (1.6) (1.6)
costs
Effect of goodwill
amortisation (1,848) (1.9) (1.9) (1,848) (1.9) (1.9)
Effect of ESOT (1,563) (1.6) (1.6) - - -
impairment
Tax effects of
exceptional 608 0.6 0.6 607 0.6 0.6
items
Total profit (loss)
and EPS (1,726) (1.8) (1.8) (1,606) (1.7) (1.7)
Weighted average
number of shares 96,709,493 98,180,075 96,507,616 97,463,188
An adjusted earnings per share has been provided in order to eliminate the
distortions caused by non-operating items.
8 Reconciliation of operating profit (loss) to operating cashflows 2002 2001
# 000 # 000
Operating profit (loss) (992) (1,544)
Depreciation & know-how amortisation 8,300 7,217
Goodwill amortisation 1,848 1,848
(Profit) loss on sale of fixed assets (160) -
(Increase) decrease in stocks 3,673 (891)
(Increase) decrease in debtors 1,635 4,616
Increase (decrease) in creditors (48) (3,303)
Increase (decrease) in provisions 44 90
Net cashflow from operating activities 14,300 8,033
9 Dividend
The dividend recommended by the directors, if approved by the shareholders at
the Annual General Meeting on 25 April 2003, will be paid on 2 June 2003 to
shareholders on the register at the close of business on 2 May 2003.
10 Group accounts
The preliminary statement for the financial year to 31 December 2002 is
unaudited and does not constitute the Company's statutory accounts. However, the
results for the year to 31 December 2002 are based on the audited accounts for
that period. The 2001 figures have been derived from the Company's statutory
accounts for the year to 31 December 2001 which have been filed with the
Registrar of Companies with an unqualified auditor's report. The statutory
accounts for the year to 31 December 2002, which have been prepared on the basis
of the accounting policies set out in the statutory accounts for the year ended
31 December 2001, except as noted below, will be delivered to the Registrar of
Companies in due course together with an unqualified auditor's report.
This year the Company has adopted FRS 18 "Accounting Policies" and FRS 19
"Deferred Tax". Adoption of FRS 18 has not required any revisions to the
financial statements in either the current or prior years. Adoption of FRS 19
has required revisions to the financial statements as set out below.
Prior Year Adjustment - The Company has adopted FRS 19 "Deferred Tax" with
effect from 1 January 2002 whereby provision is required for deferred tax
because of timing differences between the treatment of certain items for tax and
accounting purposes. The Company had previously adopted the partial provision
approach where provision was only made to the extent that it was probable that
an actual liability would crystallise in the foreseeable future. This has
necessitated a restatement of prior year figures in respect of the Group's
liability for deferred tax. Reserves at 1 January 2001 have been reduced by
#1,850,000 and the tax charge for 2001 has been increased by #570,000 in the
second half of the year. Earnings per share have been restated accordingly.
The Company has also adopted the transitional disclosure requirements of FRS 17
"Retirement Benefits" and provided additional information in respect of its
defined benefit pension scheme.
11 Date
The preliminary announcement was approved by the board of directors on 25
February 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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