Danakali Share Discussion Threads

[ed winchester] 30/1/2003 13:47

looking at the results. EPS decreased from previous quarter. 0.7p v1.1p. i dont understand, I thought their 3rd quarter was their strongest quarter ?

turnover £224.6 million vs £221.5 million

[johnymac] 30/1/2003 13:41

(AFR) 30/01/03 13:30: Danka Business - 3rd Quarter Results
Danka Business - 3rd Quarter Results
RNS Number:8360G
Danka Business Systems PLC
30 January 2003


Embargoed until: 13.30 30th January 2003


DANKA BUSINESS SYSTEMS PLC
("DANKA", "THE GROUP" OR "THE COMPANY")

Danka Business Systems PLC today announced its third quarter and nine
month results for the three and nine months ended 31st December, 2002
that show improved operating and pre-tax profit, higher gross margin
percentages and increased cash flow from continuing operations. Danka
also announced that it has scheduled a conference call for Thursday, 30th
January to discuss these results.

The Group reported operating profits of £6.9 million for the third
quarter of the year ending 31st March, 2003 as compared to an operating
profit of £7.2 million for the third quarter of the year ended 31st
March, 2002. The Group recorded a pre-tax profit of £2.4 million for the
quarter ended 31st December, 2002 compared to a pre-tax profit of £0.3
million for the quarter ended 31st December, 2001. The pre-tax profit for
the quarter ended 31st December, 2001 included a £3.7 million reduction
for the gain on disposal of Danka Services International and a £1.3
million increase in the exceptional gain from the early retirement of
debt. Excluding these items, the pre-tax profit for the quarter ended
31st December, 2001 was £2.8 million.

The Group reported basic earnings of 0.7 pence per share in the third
quarter of the year ending 31st March, 2003 compared to 0.8 pence per
share in the corresponding period of the prior year and adjusted basic
earnings of 0.7 pence per share and adjusted basic earnings of 1.3 pence
per share for those respective quarters.

Turnover for the third quarter declined by 19.0% to £224.6 million from
£277.2 million in the prior year's third quarter. Excluding a large
hardware transaction in the prior year third quarter, the decline in
total revenue would have been £40.9 million or 15.4%. The decrease for
the quarter was partially offset by increased equipment leasing income of
approximately £0.9 million resulting from payments on account of lease
and residual payments from an external lease funding programme. Foreign
currency movements negatively affected the Group's turnover by
approximately £10.3 million during the third quarter. Retail equipment
revenues for the third quarter declined 21.9% to £77.6 million from £99.3
million in the prior year's third quarter. Excluding the transaction
referenced above, the retail equipment revenue decline would have been
11.5%. Contributing factors include the Group's focus on higher-margin
sales, technology convergence, a global slowdown in capital spending and
a £3.7 million negative foreign currency movement. Retail service,
supply, and rental revenues for the third quarter declined by 18.8% to
£132.9 million from £163.8 million in the prior year's third quarter.
Primary reasons for this decline was the continuing industry-wide
analogue to digital transition on service revenues, technology
convergence and a £7.0 million negative foreign currency movement.

Overall gross margins improved to 37.2% in the third quarter from 35.2%
in the prior year's third quarter. The retail equipment sales margin
increased to 34.0% from 25.0%. Gross margins for service, supplies, and
rentals dipped to 41.0% from 42.7%.

"We are encouraged by our overall gross profit margin which has been a
key strategic goal of the Group and has been instrumental in our cash
generation, debt reduction and profitability improvement" said Lang
Lowrey, Danka's chairman and chief executive officer. "We saw
significant improvements this year in free cash flow which was led by our
U.S. operations. In addition, we had strong overall performance in our
European operations and experienced stabilisation in our Canadian
operations, which had a significant negative impact on our second quarter
results".

Recurring operating expenses decreased by £13.7 million to £76.5 million
or 34.1% of turnover for the quarter ended 31st December, 2002 from £90.2
million or 32.6% of turnover for the quarter ended 31st December, 2001.
Recurring operating expenses were positively affected by a £1.1 million
workers' compensation refund offset by rising payroll costs, as a
percentage of turnover, and £2.9 million of additional bad debt expense.
The increase in bad debt expense was due, in part, to the Group's
increased emphasis on the improvement of its financial and credit
policies. These new policies have been enabled, in part, by the
implementation of the new Oracle financial systems.

The Group generated free cash flow of £20.1 million in the third quarter
ended 31st December, 2002 compared to £20.4 million in the comparable
prior year period. Total debt during the quarter was reduced by £3.6
million to £144.7 million. In addition, £3.2 million of the £8.9 million
in capital expenditures in the current quarter related to the Group's
ongoing Vision 21 programme. The Group's cash balance was £44.8 million
at the end of the third quarter, an increase of £20.9 million from the
end of the second quarter.

The Group's total debt of £144.7 million was 30.4% or £63.3 million lower
than total debt as of 31st March, 2002. With third quarter EBITDA
(earnings before interest, taxes, depreciation, and amortisation) of
£17.4 million, the total leverage ratio (total debt divided by the
trailing 12-month EBITDA) improved from 2.6 to 1 at 31st March, 2002 to
2.0 to 1 as of 31st December, 2002. The Group's ratio of total debt to
total debt plus equity and non-equity decreased from 37.5% at 31st March,
2002 to 30.3% at 31st December, 2002.

"We decided to abstain from making additional debt repayments during the
quarter in order to maximise our liquidity" stated Mark Wolfinger,
Danka's chief financial officer. "In addition, we modified the credit
facility with our senior bank lenders to allow us greater flexibility in
refinancing our senior debt and addressing other elements of our capital
structure. We believe that maintaining the flexibility which comes with
increased liquidity is important as we explore various opportunities to
refinance our debt and reduce our cost of borrowing." The Group had £44.8
million in cash at the end of the quarter and liquidity of £76.2 million
that includes unused borrowing capacity of £31.4 million.

Nine month Results

For the nine months ended 31st December, 2002, operating profits from
continuing operations increased to £20.6 million from £16.0 million in
the comparable prior year period. The current and prior year's nine month
earnings included exceptional items related to restructuring and
adjustment to the expected liability arising on the disposal of certain
properties of a credit of £2.7 million in the current year and a charge
of £0.8 million in the prior year (restructuring only). Excluding these
exceptional items, the operating profit from continuing operations was
£17.9 million for the current nine month period and £16.9 million in the
comparable prior year period.

Profit before tax, exceptional items, profit on discontinued operations
and an exceptional gain on the refinancing of debt for the nine months
ended 31st December, 2002 was £6.3 million compared to a loss of £0.3
million in the prior year period.

For the nine-month period ended 31st December, 2002, the Group reported
basic earnings of 4.9 pence per share compared to 43.8 pence per share in
the comparable prior year period and adjusted basic earnings of 4.2 pence
per share and 5.5 pence per share for those respective periods.

Turnover from continuing operations for the nine month period declined by
17.0% to £684.0 million from £824.4 million. Foreign currency movements
negatively affected the Group's turnover by approximately £22.7 million
for the nine month period. Overall, gross margins were 37.3% in the
current nine month period compared to 34.7% in the comparable prior year
period for continuing operations. Recurring operating expenses for
continuing operations decreased by £31.9 million to £237.0 million or
34.7% of turnover for the nine month period ended 31st December, 2002
from £269.0 million or 32.6% of turnover for the nine month period ended
31st December, 2001.

The Group generated net cash inflow from operating activities and free
cash flow of £92.9 and £50.4 million, respectively, in the nine month
period ended 31st December, 2002 compared to £76.6 and £15.6 million in
the comparable prior year period. Total capital expenditure in the
current nine month period was £19.4 million compared to £24.5 million in
the prior year period. Total debt during the nine month period was
reduced by 30.4% to £144.7 million.

Conference Call

A conference call to discuss Danka's third quarter results has been
scheduled for Thursday, 30th January at 4:00 p.m. (U.K. time). Please
call 1-706-643-9560 to participate in the call. If you are unable to
participate in the call, you may access a recorded audio playback by
dialling 1-706-645-9291 and enter conference ID number 7764112. The
recording will be available via an instant replay service until Monday,
3rd February at 10:00pm (U.K. time).

The financial information contained in this announcement for the quarters
and nine months ended 31st December, 2002 and 2001 is unaudited and does
not constitute full statutory accounts within the meaning of Section 240
of the United Kingdom Companies Act 1985. Statutory accounts for the year
ended 31st March, 2002 have been delivered to the Registrar of Companies
for England and Wales. The auditors' report on those statutory accounts
was unqualifed and did not contain a statement either under Section
237(2) or 237(3) of the Companies Act 1985.

-Ends-

For further information please contact:
Danka Business Systems PLC
Paul Dumond, Company Secretary (UK) 020 7605 0150
Keith Nelsen, Senior VP (USA) 001 727 579 2801

Weber Shandwick Square Mile
Katie Hunt/Sally Lewis 020 7067 0700


About Danka
Danka delivers value to clients worldwide by using its expert technical
and professional services to implement effective document information
solutions. As one of the leading independent providers of enterprise
imaging systems and services, the company enables choice, convenience,
and continuity. Danka's vision is to empower customers to benefit fully
from the convergence of image and document technologies in a connected
environment. This approach will strengthen the company's client
relationships and expand its strategic value.

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 25 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 herein, 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 harbour for forward looking
statements provided for in the Private Securities Litigation Reform 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 and (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. 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
Group Profit and Loss Account
For the Quarter Ended 31st December, 2002

31st December
________________________
2002 2001
£000 £000
Note (Unaudited) (Unaudited)
__________ __________

Turnover 2 224,596 277,165
Cost of sales (141,123) (179,692)
__________ __________
Gross profit 2 83,473 97,473


Distribution costs (30,334) (34,691)
Administrative expenses (46,198) (55,554)
__________ __________

Operating profit 6,941 7,228
Adjustment to gain on disposal of
discontinued operations - (3,742)
__________ __________
Profit on ordinary activities before
interest 6,941 3,486

Interest receivable and similar
income 1,252 1,247
Interest payable and similar charges (5,842) (5,700)
Exceptional gain on refinancing of debt - 1,300
__________ __________

Profit on ordinary activities before
taxation 2,351 333

Tax (charge)/credit on profit on
ordinary activities (564) 6,558
__________ __________

Profit for the financial period 1,787 6,891
Additional financial costs of non-
equity shares (148) (4,945)
__________ __________

Retained profit for the financial period 1,639 1,946
========== ==========

Earnings per share: 4 __________ __________
Basic (after exceptional items) 0.7p 0.8p
Diluted (after exceptional items) 0.6p 0.8p
Adjusted basic (before exceptional items) 0.7p 1.3p
Adjusted diluted (before exceptional items) 0.6p 1.3p

Average exchange rate £1= $1.571 $1.444
__________ __________


Danka Business Systems PLC
Group Profit and Loss Account

For the Nine Months Ended
_____________________________________________________
31st December,
2002 31st December, 2001
_____________ _____________________________________
Continuing Discontinued
Operations Operations Total
£000 £000 £000 £000
Note (Unaudited) (Unaudited) (Unaudited) (Unaudited)
_____ __________ __________ __________ __________

Turnover 2 684,004 824,388 52,226 876,614

Cost of sales (429,069) (538,568) (41,472) (580,040)
__________ __________ __________ __________

Gross profit 2 254,935 285,820 10,754 296,574

Distribution costs (95,411) (103,380) (1,136) (104,516)

Administrative expenses __________ _____________________________________
Recurring (141,627) (165,584) (4,871) (170,455)
Exceptional 2,672 (808) - (808)
__________ _____________________________________

(138,955) (166,392) (4,871) (171,263)
__________ __________ __________ __________

Operating profit 20,569 16,048 4,747 20,795


Profit on disposal of
discontinued operations - 119,243
__________ __________
Profit on ordinary
activities before interest 20,569 140,038

Interest receivable and
similar income 4,234 2,906
Interest payable and
similar charges (15,886) (24,803)
Exceptional gain on
refinancing of debt - 32,991
__________ __________
Profit on ordinary
activities before taxation 8,917 151,132
Tax charge on profit on
ordinary activities (2,140) (35,214)
__________ __________
Profit for the financial
period 6,777 115,918
Additional financial costs
of non-equity shares 5,446 (7,429)
__________ __________
Retained profit for the
financial period 12,223 108,489
========== ==========

Earnings per share:
__________ __________
Basic (after exceptional
items) 4.9p 43.8p
Diluted (after exceptional
items) 4.8p 43.6p
Adjusted basic (before
exceptional items) 4.2p 5.5p
Adjusted diluted (before
exceptional items) 4.1p 5.5p

Average exchange rate £1= $1.526 $1.435
__________ __________



Danka Business Systems PLC
Group Profit and Loss Account (continued)


Year Ended 31st March, 2002
_____________________________________
Continuing Discontinued
Operations Operations Total
£000 £000 £000
Note (Audited) (Audited) (Audited)
_____ __________ __________ __________

Turnover 2 1,084,836 52,226 1,137,062

Cost of sales (701,189) (42,344) (743,533)
__________ __________ __________

Gross profit 2 383,647 9,882 393,529

Distribution costs (137,404) (1,136) (138,540)
Administrative expenses __________ __________ __________
Recurring (231,842) (4,871) (235,713)
Exceptional (1,237) - (1,237)
__________ __________ __________

(232,079) (4,871) (236,950)
__________ __________ __________

Operating profit 14,164 3,875 18,039

Profit on disposal of
discontinued operations 122,349
__________ __________
Profit on ordinary
activities before interest 140,388

Interest receivable and
similar income 6,119
Interest payable and
similar charges (29,732)
Exceptional gain on
refinancing of debt 32,991
__________
Profit on ordinary
activities before taxation 149,766
Tax charge on profit on
ordinary activities (24,561)
__________
Profit for the financial
period 125,205
Additional financial costs
of non-equity shares (13,824)
__________
Retained profit for the
financial period 111,381
==========

Earnings per share:
__________
Basic (after exceptional
items) 44.9p
Diluted (after
exceptional items) 44.5p
Adjusted basic (before
exceptional items) 3.1p
Adjusted diluted (before
exceptional items) 3.1p

Average exchange rate £1= $1.433
__________


Danka Business Systems PLC
Group Balance Sheet
At 31st December, 2002

31st December 31st March
2002 2002
£000 £000
(Unaudited) (Audited)


Fixed assets
Intangible assets 1,752 2,157
Tangible assets 65,424 81,839
________ ________
67,176 83,996

Current assets ________ ________
Stocks 68,023 91,623
Debtors (of which £57,509,000 (2002-£51,266,000)
fall due after more than one year) 234,771 266,823
Investments 79 140
Cash at bank and in hand 44,804 41,581
________ ________
347,677 400,167

Creditors: amounts falling due within one year ________ ________
Convertible subordinated loan notes - (11,216)
Bank and other loans (21,642) (13,938)
Other creditors (214,811) (222,643)
________ ________
(236,453) (247,797)


Net current assets 111,224 152,370
________ ________
Total assets less current liabilities 178,400 236,366

Creditors: amounts falling due after more
than one year
________ ________
Bank and other loans (123,098) (182,896)
Other creditors (5,307) (9,087)
________ ________
(128,405) (191,983)
Provisions for liabilities and charges (9,774) (11,955)
________ ________
Net assets 40,221 32,428
________ ________

Capital and reserves
Called up share capital 3,280 3,277

Share premium account 329,275 344,116

Profit and loss account (292,334) (314,965)
________ ________
Equity shareholders' deficit (127,462) (140,701)

Non-equity shareholders' funds 167,683 173,129
________ ________
Shareholders' funds 40,221 32,428
________ ________
Closing exchange rate £1= $1.596 $1.425
________ ________

Danka Business Systems PLC
Group Cash Flow Statement
For the Quarter Ended 31st December, 2002

31st December
______________________
2002 2001
£000 £000
(Unaudited) (Unaudited)
___________ ___________
Net cash inflow from operating
activities 37,277 33,269

Net cash outflow from returns on
investments and servicing of finance (7,271) (3,025)

Total taxes paid (961) (1,461)

Net cash outflow for capital
expenditure (8,948) (8,374)
___________ ___________

Net cash inflow before use of resources
and financing 20,097 20,409

Management of liquid resources 320 (92)

Net cash inflow/(outflow) from
financin

[forfaiter] 30/1/2003 13:05

SP..no never...institutions seem to like the recovery story...

[forfaiter] 30/1/2003 11:57

Well is she going to pop or plop ?..thats the million dollar question....a breakout from here should see 1.20 in no time.....

[newstarter] 30/1/2003 11:38

bout to say same thing !!!

Sorry share price re last night, was not following

[serious punter] 30/1/2003 11:35

Re my post 11076

Must be a large buy order ticked up 2p on the bid. Perhaps Oaks header will come true sooner rather than later :0)

[serious punter] 30/1/2003 10:41

Someone has sold 225k earlier on didn't effect the price - must have a large buy order in or expecting some positive news IMHO

[serious punter] 30/1/2003 09:28

Results last year were embargoed until 13:30 GMT

[johnymac] 30/1/2003 09:16

Results should come out around 2-2.30pm (UK).
Get ready for the big tree shake immediately the market opens, whether the DNK results are good or bad..... ;>)

[serious punter] 30/1/2003 08:19

Redhill

Thanx. Should help sector and Danka's should be above expectation with increased sales and their debt driven down. XRX went up on results by $1.40 and that was just after they borrowed $5Billion from GE Capital.

Seems the MMs want stock still, 1p premium to the touch just paid

[bdawes] 30/1/2003 08:15

Can anyone please tell me what time results posted today?
Cheers in advance!

[redhill] 30/1/2003 08:11

Serious Punter

Heard them on Bloomberg this morning.Up 100% on last quarter i understand.

[serious punter] 30/1/2003 08:06

perotta

You on commission ? :0) I see you posted that on the ARM board as well.

[perotta] 30/1/2003 07:56

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[serious punter] 30/1/2003 07:52

Redhill

Where can I find them please?

Although ended down 7c across the pond, as one poster there pointed out, it was similar trading to last Friday. A lot of institutional buys yesterday.

Did anyone notice over here there was a 300k buy or sell yesterday @77.75. Either it was a sell with a premium to the bid or a discounted buy. Whichever IMHO its good news. Looking forward to results.

[redhill] 30/1/2003 07:31

Certainly Cannon's results today wont cause any harm to the price!

[serious punter] 29/1/2003 18:34

NS

Somethings going on across the pond, been into backwardation three times, someones bought a 100k block for $5.05, someone else has just sold a 50k block for $4.96 (I'm assuming it was a sell), as I post the bid/offer same price $5.03 its been up again to $5.10 - get the picture - if yes post the answer :0)

[newstarter] 29/1/2003 17:55

Oaks £1 with us soon then !

NS

[serious punter] 29/1/2003 16:46

Hi Newstarter

Re New Appt - seems in line with Danka's strategy - not qualified to comment on the individual though.

Now trading as I post @ $5.06/07 L2 gives the impression DANKY may jump significantly tonight. The sellers have been reatil, but the institutions that matter have been the buyers. It also makes me wonder whether someone has the inside track on DANKY/DNK results. Its held $5 for days despite heavy selling pressure, now its moving north again, not rocketing, but steadily. Oops just shot up to $5.10/13 :0)

[newstarter] 29/1/2003 16:30

Hi share price - think you do well having a constructive conv with ones self !! Any views on appt ??

Cheers
NS

[serious punter] 29/1/2003 16:18

Hello Me :0)

For anyone interested, across the pond shedloads of retail sells, price stays the same the in come some institution buyers and up she goes. L" realtime looks like DANKY could break north bigtime - currently $5.02/04 which is also the high for the day - volume 190k and inreasing quickly.

[dsmith626] 29/1/2003 00:31

Well the price has ticked up a bit over here, so that's encouraging.

[serious punter] 29/1/2003 00:01

Mornin All

IMHO DANKY will push and stay above $5 today. All the futures across the pond are positive, we might see an upward correction, and with this more buoyant mood both DANKY/DNK should move forward. I notice that 2 x 25k blocks picked up this am - could be interesting later because my broker said they were short of stock..hmm

[serious punter] 28/1/2003 16:26

Late buys coming through, I thought it might be a roll over, but time differential too great :0)