Danakali Share Discussion Threads

[gorgeous george] 16/5/2002 13:47

people are selling (like last time, but the shares did bounce back). maybe they were expecting too much, but these look decent results at first glance

[easykill] 16/5/2002 13:46

market makers will suck in sellers now. If these results were bad the price would have been marked down instantly. It hasnt, but some traders selling and mm soaking them up.

EPS of 44p is staggering. DNK sits on a p/e of 2. Rerating will occur very soon.

[blockbuy] 16/5/2002 13:44

what were market expectations?

[serious punter] 16/5/2002 13:43

Well done DANKY/DNK

"The recent quarter marked the fourth consecutive quarter of EBITDA growth."

[sigora] 16/5/2002 13:43

super results .

[millionaire] 16/5/2002 13:41

somebody not impressed they sold 25K
No pleasing some people!!

[gorgeous george] 16/5/2002 13:40

Debt Reduction and Margin Improvements Highlight
Danka's Fourth Quarter and Fiscal 2002 Results
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--May 16, 2002--Danka Business Systems PLC (Nasdaq:DANKY - News) today announced results for its fourth quarter and fiscal year ended March 31, 2002 that reflect continued improvement in key areas.

Summary Results

Danka reported operating earnings from continuing operations of $9.3 million for fiscal 2002, a substantial improvement over the $191.4 million operating loss from continuing operations in the prior year. For the fourth quarter, the company incurred an operating loss from continuing operations of $2.9 million, which included a $7.6 million write-off of software related to the company's exit of its legacy business systems and the implementation of its new Vision 21 business systems and $1.8 million of executive contract termination charges. This compares to an operating loss of $106.8 million in the prior year period, which included $89.4 million of asset write-offs and other charges. Excluding these charges, the earnings improvement was due mainly to higher gross margins and improved sales productivity.

"Overall, we achieved our key objectives in both the fourth quarter and the full year, and I'm proud of the way our associates have performed," commented Lang Lowrey, Danka's chairman and chief executive officer. "Our progress despite negative industry trends and the worldwide economic downturn is reflected in our continued EBITDA (earnings before interest expense, taxes, depreciation, and amortization) improvement, which increased to $30.4 million for our fourth quarter. The recent quarter marked the fourth consecutive quarter of EBITDA growth."

Total revenues from continuing operations in the fourth quarter of fiscal 2002 were $371.6 million, compared to $424.5 million in the prior year quarter, and $1.6 billion for the year, compared to $1.8 billion the previous year. The declines were mainly due to the effect of the continued industry-wide analog-to-digital transition on service revenues, technology convergence, reduced U.S. equipment sales, a worldwide slowdown of capital spending and the company's increased focus on generating higher margins.

SG&A expenses, which included a $7.6 million software write-off and $1.8 million of executive contract termination charges, were $137.2 million in the fourth quarter of fiscal 2002, or 36.9% of revenues. Excluding these charges, SG&A expenses would have been 34.4% of revenues. SG&A expenses, excluding $28.6 million in charges for facility closures and receivable writeoffs, were $149.6 million, or 35.2% of revenues, in the prior year fourth quarter. For the year, SG&A expenses were $531.3 million, or 34.2% of revenues. In the prior year, excluding the charges for facility closures and receivable writeoffs, SG&A expenses were $612.9 million or 34.6% of revenues.

Net earnings for the fourth quarter of fiscal 2002 were $15.2 million. This included an after tax gain of $10.6 million from discontinued operations, related to the sale of Danka Services International ("DSI"). The net loss for the prior year comparable period was $127.4 million and included after tax earnings from discontinued operations of $0.4 million.

After allowing for the dilutive effect of dividends on Danka's participating shares in computing basic earnings/(loss) per American Depositary Share ("ADS"), Danka generated net income from continuing operations of $0.004 per ADS in the fourth quarter of fiscal 2002 compared to a net loss of $2.13 per ADS in the fourth quarter of fiscal 2001. The net income from discontinued operations was $0.17 per ADS in the fourth quarter of fiscal 2002 compared to $0.01 per ADS in the fourth quarter of fiscal 2001.

Net earnings for the year ended March 31, 2002 were $137.6 million and includes after-tax earnings from discontinued operations of $3.6 million, an after-tax gain on the sale of DSI of $115.9 million and an after-tax extraordinary gain from the early retirement of debt of $27.9 million. The net loss for the year ended March 31, 2001 was $220.6 million and included $13.0 million of after-tax earnings from discontinued operations and pre-tax charges of $15.7 million for restructuring and $157.9 million of asset and goodwill write-offs and other charges.

After allowing for the dilutive effect of dividends on Danka's participating shares in computing basic earnings/(loss) per ADS, Danka incurred a net loss from continuing operations of $0.43 per ADS for fiscal 2002 compared to a net loss of $4.13 per ADS for fiscal 2001. Net earnings from discontinued operations were $1.93 per ADS for fiscal 2002 compared to $0.22 per ADS for fiscal year 2001. Net earnings from extraordinary items were $0.45 per ADS for fiscal 2002.

Debt Reduction

Danka substantially reduced its debt in the fourth quarter of fiscal 2002 by $37.7 million or 11.0% to $304.5 million. For the full year, the company eliminated $414.7 million or 57.7% of its debt. Reasons for the full-year decrease include the June 2001 financial restructuring, the use of proceeds from the sale of DSI, and the continued generation of free cash flow (cash flow from operations less capital expenditures). Free cash flow was $49.6 million in the fourth quarter, which included the receipt of an $18.2 million U.S. income tax refund including associated interest income, compared to $31.4 million in the prior year period. For the full year, free cash flow was $105.0 million, compared to $58.1 million for the prior year.

Danka's EBITDA from continuing operations for fiscal year 2002 was $107.4 million. For fiscal 2002, this represents a total leverage ratio (total debt divided by total EBITDA) of approximately 2.8 to 1. The company's ratio of total debt to total capitalization (including participating shares) decreased during the year from 82.0% at March 31, 2001 to 51.3% at March 31, 2002.

"Fiscal 2002 was a watershed year in de-leveraging the company and positioning ourselves for the future," noted Mark Wolfinger, Danka's chief financial officer. "In addition to our significant restructuring last June, our debt reduction initiative was enhanced by continued progress in generating free cash flow."

Margin Improvements

Overall, Danka's gross profit margin was 37.6% in the fourth quarter of fiscal 2002, compared to 31.6% in the prior year period, excluding the asset writeoffs and other charges discussed above. Gross margin for the year was 35.4%, compared to 34.2% in the prior year excluding $92.3 million of asset write-offs. Much of the quarterly and full-year improvements were the result of higher retail equipment margins resulting from Danka's strategy to focus its marketing efforts on value. Since the beginning of the fiscal year, retail equipment margins increased to 35.5% in the fourth quarter of fiscal 2002 from 23.6% in the first quarter of fiscal 2002. Retail services, supplies and rental gross margins also improved due to the increased efficiencies associated with the servicing of digital equipment.

"Improving customer satisfaction and introducing a new value proposition to customers is the cornerstone of our go-forward strategy," explained Lowrey. "We are doing that in several ways. First, we're ensuring that we get full value for the top-quality products and services we have traditionally provided and that has meant walking away from some low-profit and no-profit sales. Second, we're increasing the focus on higher-value solutions through new initiatives such as Danka @ the Desktop, a client-centric print management solution that delivers extended capability and productivity benefits. And third, through our launch of Vision 21, which is our Oracle and re-engineering initiative."

Targeted Investments

Capital expenditures in fiscal 2002 were $50.6 million, compared to $68.9 million in the prior year. Much of the decrease is attributable to the company's de-emphasis of the capital-intensive rental business. The company significantly improved its inventory and accounts receivable position during the year by a combined $123.0 million. Inventories dropped during fiscal 2002 by 34.5% from $199.5 million to $130.6 million. Accounts receivable, net declined by 15.6%, from $346.4 million to $292.4 million.

"We continue to invest in our business, particularly in providing world-class service to our clients, but we're doing so with a sharper focus," noted Lowrey. "Over the last year, we have developed new go-to-market strategies and business plans to better target our spending and investments. In addition, we have begun the rollout of new business systems that will improve our ability to serve customers and at the same time begin to generate savings from increased productivity."

About Danka

Danka delivers value to clients worldwide by using its superior technical and professional services expertise to implement effective document information and office imaging solutions. As one of the largest independent providers of enterprise imaging systems and services, we enable choice, convenience, and continuity. Our vision is to expand our strategic value to customers by empowering them to benefit fully from the convergence of image and document technologies in a connected environment. For more information, visit our web site at

Forward-Looking Statements: Certain statements contained in this press release, or otherwise made by our officers, including statements related to our future performance and our outlook for our businesses and respective markets, projections, statements of management's plans or objectives, forecasts of market trends and other matters, are forward looking statements, and contain information relating to us that is based on the beliefs of our management as well as assumptions, made by, and information currently available to, our management. The words "goal", "anticipate", "expect", "believe" and similar expressions as they relate to us or our management are intended to identify forward looking statements. No assurance can be given that the results in any forward looking statement will be achieved. For the forward looking statements, we claim the protection of the safe harbor for forward looking statements provided for in the Private Securities Litigation Act of 1995. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those reflected in the forward looking statements. Factors that might cause such actual results to differ materially from those reflected in any forward looking statements include, but are not limited to, the following: (i) any material adverse change in financial markets or in our own position, (ii) any inability to achieve or maintain cost savings, (iii) increased competition from other high-volume and digital copier distributors and the discounting of such copiers by our competitors, (iv) any inability by us to procure, or any inability by us to continue to gain access to and successfully distribute, new products, including digital products and high-volume copiers, or to continue to bring current products to the marketplace at competitive costs and prices, (v) any negative impact from the loss of any of our key upper management personnel, (vi) fluctuations in foreign currencies (vii) any change in economic conditions in domestic or international markets where we operate or have material investments which may affect demand for our services and (viii) other risks including those risks identified in any of our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our analysis only as of the date they are made. We undertake no obligation, and do not intend, to update these forward looking statements to reflect events or circumstances that arise after the date they are made. Furthermore, as a matter of policy, we do not generally make any specific projections as to future earnings nor do we endorse any projections regarding future performance, which may be made by others outside our company.

Danka is a registered trademark and Danka @ the Desktop is a trademark of Danka Business Systems PLC. All other trademarks are the property of their respective owners.


Danka Business Systems PLC
Consolidated Statement of Operations for the three months and twelve
months ended March 31, 2002 and 2001
(In thousands, except per American Depositary Share ("ADS") amounts)
(Unaudited)

For the Three Months For the Twelve Months
Ended Ended
March 31, March 31, March 31, March 31,
2002 2001 2002 2001
---------------------- ----------------------

Revenue:
Retail equipment
sales $ 129,954 $ 145,124 $ 538,439 $ 614,107
Retail service,
supplies and
rentals 221,172 254,974 937,790 1,062,007
Wholesale 20,517 24,412 78,947 97,128
Total revenue 371,643 424,510 1,555,176 1,773,242

Costs and
operating
expenses:
Cost of retail
equipment sales 83,796 152,652 394,056 518,296
Retail service,
supplies and
rental costs 131,346 171,285 546,881 660,167
Wholesale costs
of revenue 16,859 20,181 64,357 80,922
Selling, general
and administrative
expenses 137,217 178,166 531,331 641,480
Amortization of
intangible
assets 3,145 9,526 11,207 38,419
Restructuring
charges (credits) - (3,604) (1,992) 15,705
Other (income)
expense 2,150 3,083 81 9,621
Total costs and
operating
expenses 374,513 531,289 1,545,921 1,964,610

Operating earnings
(loss) from
continuing
operations (2,870) (106,779) 9,255 (191,368)
Interest expense (7,507) (18,239) (42,298) (82,648)
Interest income 4,411 829 5,768 3,172
Earnings (loss)
from continuing
operations before
income taxes (5,966) (124,189) (27,275) (270,844)
Provision (benefit)
for income taxes (10,567) 3,587 (17,407) (37,328)
Earnings (loss)
from continuing
operations before
extraordinary
items 4,601 (127,776) (9,868) (233,516)
Discontinued
operations, net
of tax 10,630 392 119,490 12,956
Extraordinary
gain on early
retirement of
debt, net of tax - - 27,933 -

Net (loss)
earnings $ 15,231 $ (127,384) $ 137,555 $ (220,560)

Basic (loss)
earnings available
to common
shareholders
per ADS:
Net earnings
(loss) per ADS,
continuing
operations $ - $ (2.13) $ (0.43) $ (4.13)
Net earnings
per ADS,
discontinued
operations 0.17 0.01 1.93 0.22
Net earnings
per ADS,
extraordinary item - - 0.45 -
Net earnings
(loss) per ADS $ 0.18 $ (2.12) $ 1.95 $ (3.91)
Weighted average
ADSs 62,150 61,893 61,967 60,438

Diluted (loss)
earnings available
to common
shareholders
per ADS:
Net earnings
(loss) per ADS,
continuing
operations $ - $ (2.13) $ (0.43) $ (4.13)
Net earnings per
ADS, discontinued
operations 0.17 0.01 1.93 0.22
Net earnings
per ADS,
extraordinary
item - - 0.45 -
Net earnings
(loss) per ADS $ 0.17 $ (2.12) $ 1.95 $ (3.91)
Weighted average
ADSs 62,150 61,893 61,967 60,438

Note: Certain prior year amounts have been reclassified to conform
to the current year presentation.


Danka Business Systems PLC
Condensed Consolidated Balance Sheet as of March 31, 2002 and
March 31, 2001
(In Thousands)
(Unaudited)

March 31, March 31,
2002 2001
-------------------- --------------------
Assets
Current assets:
Cash and cash equivalents $ 59,470 $ 69,085
Accounts receivable, net 292,350 346,398
Inventories 130,599 199,523
Prepaid expenses, deferred
income taxes and other
current assets 35,935 81,025
Assets of discontinued
operations - 113,405

Total current assets 518,354 809,436

Equipment on operating
leases, net 57,432 94,085
Property and equipment, net 60,549 66,470
Intangible assets, net 232,985 244,170
Deferred income taxes
and other assets 56,366 68,782

Total assets $ 925,686 $ 1,282,943

Liabilities and
shareholders' equity
(deficit)
Current liabilities:
Current maturities of
long-term debt and
notes payable $ 36,293 $ 517,447
Accounts payable 110,586 136,604
Accrued expenses and
other current liabilities 109,219 143,088
Taxes payable 47,101 39,372
Deferred revenue 42,343 34,969
Liabilities of
discontinued operations - 22,230

Total current liabilities 345,542 893,710

6.75% convertible
subordinated notes - 200,000
Long-term debt and notes
payables, less current
maturities 268,161 1,731
Deferred income taxes
and other long-term
liabilities 23,415 29,431

Total liabilities 637,118 1,124,872

6.5% convertible
participating shares 240,520 223,713

Shareholders' equity
(deficit):
Ordinary shares, 1.25
pence stated value 5,139 5,130
Additional paid-in capital 325,880 325,399
Retained earnings
(accumulated deficit) (181,873) (302,619)
Accumulated other
comprehensive (loss)
income (101,098) (93,552)

Total shareholders'
equity (deficit) 48,048 (65,642)

Total liabilities &
shareholders' equity
(deficit) $ 925,686 $ 1,282,943

Note: Certain prior year amounts have been reclassified to conform to
the current year presentation.


Danka Business Systems PLC
Consolidated Statements of Cashflow as of March 31, 2002 and
March 31, 2001
(In Thousands)
(Unaudited)

March 31, March 31,
2002 2001
-------------------- --------------------

Operating activities:
Net earnings (loss) $ 137,555 $ (220,560)
Adjustments to reconcile
net earnings (loss) to
net cash provided:
Extraordinary gain on
debt retirement (27,933) -
Net earnings and gain
from sale of
discontinued operations (119,490) (12,956)

Depreciation and
amortization 92,347 140,969

Deferred income taxes (4,722) (32,801)
Amortization of debt
issuance costs 5,187 1,912
Loss on sale of property
and equipment and
equipment on
operating leases 14,075 13,700
Proceeds from sale of
equipment on operating
leases 5,483 5,845
Restructuring and
other special charges
(credits) (1,992) 15,705
Changes in net assets
and liabilities:
Changes in net
assets of
discontinued
operations - 28,062
Accounts receivable 54,048 106,624
Inventories 68,924 124,201
Prepaid expenses and
other current assets 7,520 (5,168)
Other non-current
assets (14,002) 30,670
Accounts payable (26,018) (24,233)
Accrued expenses and
other current
liabilities (36,772) (47,519)
Deferred revenue 7,374 (3,863)
Other long-term
liabilities (6,017) 6,353

Net cash provided by
operating activities 155,567 126,941

Investing activities:
Capital expenditures (50,577) (68,881)
Proceeds from the sale
of property and
equipment 928 6,108
Net proceeds from the
sale of business 273,994 -

Net cash provided by
(used in) investing
activities 224,345 (62,773)

Financing activities:
Net payments under line
of credit agreements (341,845) (67,810)
Principal payments of
debt (25,281) 170
Payment of debt issue
costs (25,797) -

Net cash used in financing
activities (392,923) (67,640)
Effect of exchange rates 3,397 7,696
Net decrease in cash (9,615) 4,224
Cash and cash equivalents,
beginning of period 69,085 64,861
Cash and cash equivalents,
end of period $ 59,470 $ 69,085


Note: Certain prior year amounts have been reclassified to conform to
the current year presentation.


Danka Business Systems PLC
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization) for the three months ended March 31, 2002,
December 31, 2001, September 30, 2001 and June 30, 2001
(In thousands)
(Unaudited)

For the three months ended
June 30, Sept. 30, Dec. 31, March 31, Fiscal Year
2001 2001 2001 2002 2002
Operating earnings
(loss) from
continuing
operations (1,190) 4,214 9,097 (2,870) 9,255
Interest income 701 457 199 4,411 5,768
Depreciation and
amortization 22,600 20,790 20,070 28,887 92,347

EBITDA 22,111 25,461 29,366 30,428 107,370



--------------------------------------------------------------------------------
Contact:
Danka Business Systems PLC, St. Petersburg
Sanjay Sood, 727-576-6003
or
Danka Business Systems PLC, London
Paul G. Dumond, 011-44-207-603-1515

[easykill] 16/5/2002 13:40

good results. very happy.

EPS 44.9 p for the year

4th qrtly loss was £1.9m but thats deceptive because of one write off. If it werent for this write off they made a profit of £3.4m

No bad susprises.

Phew.

[serious punter] 16/5/2002 13:40

Progress maintained - excellent

[blockbuy] 16/5/2002 13:38

profit, debt reduction, margin improvement.

what more do you want eh?

[sfink] 16/5/2002 13:37

which means that...

[gorgeous george] 16/5/2002 13:37

EPS 3.1p, debt down by 10%, gross margins up, looks like an ok set of results

[miata] 16/5/2002 13:36

For the fourth quarter, the company incurred an operating loss from continuing operations of $2.9 million, which included a $7.6 million write-off of software related to the company's exit of its legacy business systems and the implementation of its new Vision 21 business systems and $1.8 million of executive contract termination charges.

[gorgeous george] 16/5/2002 13:32

RNS Number:0191W
Danka Business Systems PLC
16 May 2002



Embargoed until: 13.30 16th May 2002



DANKA BUSINESS SYSTEMS PLC

("DANKA" OR "THE GROUP")



DANKA REPORTS RESULTS FOURTH QUARTER

AND FOR THE YEAR ENDED 31st MARCH, 2002



Danka Business Systems PLC today announced its results for the fourth quarter
and for the year ended 31st March 2002 that reflect continued improvements in
key areas.



Summary Results



The Group reported operating profits from continuing operations of £14.2 million
for the year ended 31st March, 2002 as compared to an operating loss from
continuing operations of £93.4 million for the year ended 31st March, 2001. The
current year's profit included an exceptional charge related to restructuring of
£1.2 million while the prior year's loss included exceptional charges related to
the write-down of analogue inventory and rental equipment in the U.S. and Europe
of £58.7 million and exceptional charges of £23.1 million related to the
restructuring plan and additional administrative expenses, primarily related to
facilities reserves. Excluding these exceptional items, the operating profit
from continuing operations was £15.4 million for the current year and a loss of
£11.7 million for the prior year.



The Group reported an operating loss from continuing operations of £1.9 million
for the fourth quarter of the year ended 31st March, 2002 (which included a £5.3
million write-off of software related to the Group's exit of its legacy business
systems and the implementation of its new Vision 21 business systems and £1.3
million of executive contract termination charges) as compared to an operating
loss from continuing operations of £79.7 million for the fourth quarter of the
year ended 31st March, 2001. The prior year's fourth quarter earnings included
exceptional charges related to the write-down of analogue inventory and rental
equipment in the U.S. and Europe of £36.8 million and £19.4 million related to
the restructuring plan and additional administrative expenses, primarily related
to facilities reserves. Excluding these exceptional items, the operating loss
from continuing operations was £23.5 million for the prior year fourth quarter.
The improvement in operating performance was mainly due to higher gross margins
and improved sales productivity.



Total turnover from continuing operations for the fourth quarter declined by
£29.3 million or 10.1% to £260.4 million from £289.8 million in the prior year's
fourth quarter, while total turnover from continuing operations for the year
ended 31st March, 2002 declined by £112.6 million or 9.4% to £1,084.8 million
from £1,197.4 million for the year ended 31st March, 2001. The declines in
revenue were mainly due to the effect of the continued industry-wide
analogue-to-digital transition on service revenues, technology convergence,
reduced U.S. equipment sales, a worldwide slowdown in capital spending and the
Group's increased focus on generating higher margins.



Operating expenses of continuing operations excluding exceptional items, but
after the software write-off and executive contract charges noted above,
decreased by £15.3 million to £99.3 million or 38.1% of turnover for the quarter
ended 31st March 2002 (35.6% of turnover excluding the software write-off and
executive contract charges), from £114.6 million or 39.5% of turnover for the
quarter ended 31st March 2001 (excluding £0.4 million and £19.4 million related
to the restructuring plan and additional administrative expenses, primarily
related to facilities reserves respectively) primarily due to our plan to
improve profitability by reducing expenses while increasing productivity.




"Overall, we achieved our key objectives in both the fourth quarter and the full
year, and I'm proud of the way our associates have performed," commented Lang
Lowrey, Danka's chairman and chief executive officer. "Our progress despite
negative industry trends and the worldwide economic downturn is reflected in our
continued EBITDA (earnings before interest expense, taxes, depreciation, and
amortisation) improvement, which increased to £18.9 million for our fourth
quarter."



The Group reported basic earnings of 1.1 pence per share in the fourth quarter
of the year ended 31st March, 2002 compared to a basic loss of 26.8 pence per
share in the corresponding period of the prior year and an adjusted basic loss
of 2.4 pence per share and an adjusted basic loss of 5.7 pence per share for
those quarters. Basic earnings for the Group were 44.9 pence per share for the
year ended 31st March, 2002 compared to a basic loss of 55.9 pence per share in
the corresponding period of the prior year while adjusted basic earnings per
share were 3.1 pence per share and an adjusted loss of 23.8 pence per share for
those years.



Debt Reduction



Danka substantially reduced its total debt in the fourth quarter of the year
ended 31st March, 2002 by £21.9 million or 9.5% to £208.1 million. For the full
year, the company eliminated £294.4 million or 58.6% of its debt. Reasons for
the full-year decrease include the June 2001 financial restructuring, the use of
proceeds from the sale of DSI and the continued generation of free cash flow
(defined as operating cash flow less interest and tax paid and capital
expenditure). Free cash flow was £40.8 million in the fourth quarter, (which
included the receipt of a £12.8 million U.S. corporation tax refund including
associated interest income) compared to £31.2 million in the prior-year period.
For the full year, free cash flow was £56.5 million compared to £44.6 million a
year ago.



Danka's EBITDA from continuing operations for the year ended 31st March, 2002
was £79.9 million, which represents a total leverage ratio (total debt divided
by total EBITDA) of approximately 2.6 to 1. The Group's ratio of total debt to
total debt plus equity and non-equity decreased during the year from 59.1% at
31st March, 2001 to 37.5% at 31st March, 2002. "Fiscal 2002 was a watershed year
in de-leveraging the company and positioning ourselves for the future," noted
Mark Wolfinger, Danka's chief financial officer. "In addition to our significant
restructuring last June, our debt reduction initiative was enhanced by continued
progress in generating free cash flow."



Margin Improvements



Overall, the Group's gross profit margin (before exceptional items) for the
fourth quarter was 37.6% compared to 31.4% for continuing operations in the
prior year's fourth quarter. For the year ended 31st March, 2002, the Group's
combined gross margin from continuing operations was 35.4% compared to 34.3%
(excluding the exceptional inventory and rental asset write-downs recorded in
the second and fourth quarter of £21.9 million and £36.8 million respectively)
for the prior year. Since the beginning of the financial year, retail equipment
margins increased to 35.5% in the fourth quarter of the year ended 31st March,
2002 from 23.9% in the first quarter of the year. Much of the quarterly and
full-year improvements were the result of higher retail equipment margins
resulting from Danka's strategies to focus its marketing efforts on value.
Services/supplies/rental gross margins also improved due to the increased
efficiencies associated with the servicing of digital equipment.



"Improving customer satisfaction and introducing a new value proposition to
customers is the cornerstone of our go-forward strategy," explained Lang Lowrey.
"We are doing that in several ways. First, we're ensuring that we get full value
for the top-quality products and services we have traditionally provided and
that has meant walking away from some low-profit and no-profit sales. Second,
we're increasing the focus on higher-value solutions through new initiatives
such as Danka @ the Desktop, a client-centric print management solution that
delivers extended capability and productivity benefits. And third, through our
launch of Vision 21, which is our Oracle and re-engineering initiative."



Targeted Investments



Net capital expenditure for the year ended 31st March, 2002 was £31.7 million,
compared to £50.2 million for the year ended 31st March, 2001. Much of the
decrease is attributable to the Group's de-emphasis of the capital-intensive
rental business. The Group significantly improved its stock and trade debtors
position during the year by a combined £116.3 million. Stock declined during
the year ended 31st March 2002 by 35.2% from £141.3 million to £91.6 million.
Trade debtors declined 25.4% from £262.3 million to £195.7 million.



"We continue to invest in our business, particularly in providing world-class
service to our clients, but we're doing so with a sharper focus," noted Lang
Lowrey. "Over the last year, we have developed new go-to-market strategies and
business plans to better target our spending and investments. In addition, we
have begun the rollout of new business systems that will improve our ability to
serve customers and at the same time begin to generate savings from increased
productivity."



-Ends-



For further information please contact:
Danka Business Systems PLC

Paul Dumond, Company Secretary (UK) 020 7603 1515

Keith Nelsen, Senior VP (USA) 001 727 579 2801



Weber Shandwick Square Mile

Katie Hunt/Sally Lewis 020 7950 2800





Note to Editors:

Danka Business Systems PLC, headquartered in London, and St. Petersburg,
Florida, is one of the world's leading suppliers of office imaging equipment,
supplies and services. Danka provides office products and services globally in
27 countries around the world. Danka's ordinary shares are listed on the London
Stock Exchange and its ADSs are listed on NASDAQ. For additional information
about copier, printer and other office imaging products, and information
regarding the Group's U.S. filings with the Securities and Exchange Commission,
please visit Danka's web site at www.danka.com.



The following statement is included pursuant to US securities laws:

Forward-Looking Statements: Certain statements contained in this press release,
or otherwise made by officers of the Group, including statements related to the
Group's future performance and outlook for its businesses and respective
markets, projections, statements of management's plans or objectives, forecasts
of market trends, and other matters, are forward-looking statements, and contain
information relating to the Group that is based on the beliefs of management as
well as assumptions made by, and information currently available to, management.
The words "goal", "anticipate", "expect", "intends", "believe" and similar
expressions as they relate to the Group or the Group's management, are intended
to identify forward-looking statements. No assurance can be given that the
results in any forward-looking statement will be achieved. For the
forward-looking statements, the Group claims the protection of the safe harbour
for forward-looking statements provided for in the Private Securities Litigation
Reform Act of 1995. Such statements reflect the current views of the Group with
respect to future events and are subject to certain risks, uncertainties and
assumptions that could cause actual results to differ materially from those
reflected in the forward-looking statements. Factors that might cause such
differences include, but are not limited to (i) any material adverse change in
financial markets or the Group, (ii) any inability to achieve or maintain cost
savings, (iii) increased competition from other high-volume and digital copier
distributors and the discounting of such copiers by competitors, (iv) any
inability by the Group to procure, or any inability by the Group to continue to
gain access to and successfully distribute new products, including digital
products and high-volume copiers, or to continue to bring current products to
the marketplace at competitive costs and prices, (v) any negative impact from
the loss of any of the Group's key upper management personnel, (vi) fluctuations
in foreign currency exchange rates, (vii) any change in economic conditions in
domestic or international markets where we operate or have material investments
which may affect demand for our services and (viii) other risks including those
risks identified in any of the Group's filings with the United States Securities
and Exchange Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements which reflect the Group's analysis only as at
the date they are made. The Group undertakes no obligation and does not intend
to update these forward-looking statements to reflect events or circumstances
that arise after the date such statements are made. Furthermore, as a matter of
policy, the Group does not generally make any specific projections as to future
earnings nor does it endorse any projections regarding future performance, which
may be made by others outside the Group.

[carpetfiter] 16/5/2002 13:26

carpetfiter worried

[serious punter] 16/5/2002 13:21

IMHO if DANKY/DNK can demonstrate that they are continuing to make progress, that'll be good. Any enhancing good news in the figures will be a major bonus.

[pistonbroke1] 16/5/2002 13:19

O.K. Guys sign in lets see whos out there watching this baby

[easykill] 16/5/2002 13:07

its an agonising wait...

[newstarter] 16/5/2002 13:04

He's in a tree or on a beach - either way, sure he will not be bothered by short term issues !!

[smoketrader] 16/5/2002 09:38

Good work Telbap

[telbap] 16/5/2002 09:07

SM....covered the moni site in donkeys.....maybe it will bring them some luck..christ knows they need it!!.

[newstarter] 16/5/2002 09:04

PB - good post, can do much worse than to take heed

[357aman] 16/5/2002 09:04

Good luck and happy Xmas!