Interim Results
Expro International Group PLC
01 December 2004
For Immediate Release
1 December 2004
EXPRO INTERNATIONAL GROUP PLC
("Expro" or "the Group")
Interim results for the six months ended 30 September 2004
Expro International Group PLC, the oilfield services company, today announces
interim results for the six months ended 30 September 2004.
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 30 September 31 March
2004 2003 2004
Restated Restated
(note 1) (note 1)
Turnover(a) £106.7m £103.5m £208.4m
Operating profit/(loss)(a) £9.5m £6.9m (£2.0m)
Operating profit before goodwill
amortisation and exceptional items(b) £11.2m £8.0m £16.5m
Finance charges (net) £1.2m £1.3m £2.5m
Tax charge(c) £3.6m £2.4m £5.4m
Goodwill amortisation and exceptional
items before taxation(c) (£1.7m) (£1.1m) (£18.5m)
Basic EPS/(loss) 7.1p 4.7p (15.0p)
Basic EPS before goodwill
amortisation and exceptional items(c) 9.6p 6.5p 13.0p
Dividends per share 3.8p 3.8p 10.9p
Net indebtedness £47.3m £48.4m £44.8m
a Group and share of joint ventures (September 2003 Turnover restated - see note 1)
b Group and share of joint ventures, before goodwill amortisation and
exceptional items, as extracted from the consolidated profit and loss account
c As extracted from the consolidated profit and loss account
• Results in line with expectations
• The strategy announced a year ago is delivering financially
• Improved enquiry levels and order book continue to be fuelled by
increased technology and customer focus
• Dividend maintained
Commenting on the results, Graeme Coutts, Chief Executive, said, "I am very
pleased to announce today a set of results that reflect in financial terms the
substantive progress we've made in implementing the strategy announced a year
ago. Our increased customer focus and technology development has helped reverse
the previously downward volume trend, and revenues are beginning to grow.
Earnings are now benefiting from the company's high operational gearing, coupled
with lower financing and tax charges. The market outlook for the second half and
beyond remains positive."
- Ends -
For further information please contact:
Expro International Group PLC On 1 December: 020 7067 0700
Graeme Coutts, Chief Executive Thereafter: 01189 591 341
Michael Speakman, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Mike Kirk, Stephanie Badjonat
An analyst meeting will be held at 09.30 this morning at the offices of Weber
Shandwick Square Mile, Fox Court, 14 Gray's Inn Road, London, WC1X 8WS
EXPRO INTERNATIONAL GROUP PLC
("Expro" or "the Group")
Interim results for the six months ended 30 September 2004
Chairman's and Chief Executive's Statement
The Group is pleased to announce an improved overall business performance,
driven by our re-focused strategy announced this time last year and in line with
our pre-close trading statement on 28 September 2004. The improvement follows
three consecutive 6-month periods of difficult trading conditions for both Expro
and the wider oilfield service industry.
The scale of the improvement in financial performance is demonstrated by the 48%
increase in Basic EPS, pre-goodwill and exceptional items, to 9.6p* compared to
the same period last year. This has been achieved on revenues, including share
of joint ventures, which are only 3% ahead. Adverse exchange rate movements mask
the underlying turnover improvement. The Group operates a consistent policy of
selling 12 months forward the majority of its US dollar net income, which
largely protects earnings within that time horizon, but inevitably cannot
protect against the longer term effects of the weakening US dollar. As already
highlighted, this weakening will impact the results for the year with a bias
towards the second half, and as a result, despite the strong first half
performance, the overall outlook for the year remains in line with market
consensus.
The results for the first half include two significant one-off items. A gain of
£1.5m arose as the consequence of the final phase of the Soroosh contract for
Shell, offshore Iran. The expiry of contract options relating to the Soroosh
production platform (ESP1) and its subsequent disposal has enabled us to release
certain contingent contract provisions. Offsetting this gain is an increase in
the obsolescence provision of a similar amount relating to US inventories.
Tax position
At the half year, the Group's effective tax rate reduced to 43%, compared to 47%
for the last full financial year and it is expected that this rate will be
appropriate for the full financial year. The effective rate reflects the
Group's broad geographic spread of profits, unrecoverable losses in certain
territories, a variety of imputed and higher rate overseas tax regimes, and non
deductible items such as goodwill amortisation. Tax remains a key priority for
the Group, both reducing the underlying tax rate and resolving a number of
historical, non recurring, tax issues. During the first half of the year the
Group made progress in addressing the latter, particularly in the USA, and work
continues in addressing similar matters elsewhere in the Group.
Dividend
The Group's dividend policy remains focused on making payments at an earnings
and cash cover that is prudent and consistent with the long-term earnings
profile of the business. The Board remains confident in the long-term outlook
for the Group and, as performance improves, anticipates rebuilding dividend
cover to a level consistent with the long-term capital needs of the business. As
a result, the Board believes that it is appropriate to declare a maintained
interim dividend of 3.8p per share. This will be payable on 31 January 2005 to
shareholders on the register at 31 December 2004.
* as extracted from the consolidated profit and loss account
Business strategy
Expro has a balanced strategy which aims to improve the short-term business
performance whilst investing for long term value. The strategy is driven
primarily by using technology advancement to deliver material service benefits
and improvements for our clients in the upstream oil and gas industry.
The major focus for management during the first half has been to reverse the
adverse effects of the operational gearing in the business, which were such a
significant feature in the prior year results. This has been achieved through
the combination of a rigorous review of our global infrastructure, aimed at
aligning it with local market opportunities, and a systematic approach to
managing client relationships, which ensures that they have a deep understanding
of the Group's capabilities and its ability to deliver superior technology to
meet their needs.
Overview by business stream:
The business continues to operate with three distinct segments all of which have
benefited from our re-focused strategy.
Cased Hole Services
First half revenues fell 9% to just under £40 million compared to the
corresponding period in the prior year. Outside of the currency effect, poor
market conditions in the shallow Gulf of Mexico continued to have an impact. In
local currency terms, the cased hole business remains resilient through
assisting clients enhance productivity from new and existing wells. There is,
however, an element of commodity business within our cased hole services
portfolio. These commodity elements remain under significant supply chain
pressure from our clients and new technology is essential to enhance our growth
potential in this segment.
In the area of new technology we have made significant progress with the
positive effects from three new business initiatives now starting to be seen. In
North America our Excape(R) well perforating technology is playing a material
part in re-engineering Expro Americas. Marathon Oil, the original founders of
the technology and partners with Expro, are clear early adopters in several of
their business units. Our SmarTracT(TM) tractors which are used for the deployment
of cased hole tooling into horizontal wells, and Wireless Well Solutions (WWS),
our cableless in-well telemetry technology, are making material progress.
SmarTracT(TM) played a pivotal role in winning a contract in the Alberta tar sands
development with Encana and WWS was employed by Shell US in the Rockies,
enabling multiple data transmission instruments to be installed in a single
well. In addition, WWS has just collected the prestigious World Oil "best
completion technology" award in Houston. This is the second year in a row that
the Group has won this award, clearly demonstrating the success of our strategy
to become a leading cased hole technology provider. Notwithstanding these
successes, both of these latter technologies are still in the early stages of
commercial exploitation and have yet to make a contribution to Group
profitability.
Subsurface Systems
Our deepwater field development segment has benefited from the combination of a
significant increase in management focus, together with strong demand for our
market leading technologies. Overall revenue, including our share of the QuantX
joint venture, increased by 37% to £29 million compared to the corresponding
period in the prior year, despite the negative translation impact on our US
dollar revenue. All three businesses in the subsurface segment showed
improvement. Tronic, our seabed power and instrumentation connector business,
had a particularly strong performance reflecting overall market share gains and
its leading position in the growing market for seabed power connectors. Demand
for our Subsea safety tools also increased during the period, partly as a result
of a restructuring to focus the business towards global clients and projects.
Whilst the introduction of our new ultra-deep water controls technology has yet
to materially impact business performance, our enquiry book is running at high
levels. The QuantX joint venture with Baker Hughes continues to meet
expectations, delivering market penetration beyond the individual capabilities
of the parent companies.
Surface and Environmental
After the negative impact of the US dollar translation, this project driven
business delivered revenues slightly lower than the corresponding period in the
prior year of £38 million. This result was driven by healthy demand for our well
testing and associated well clean-up services. In particular, volumes were high
in North and West Africa as well as in the North Sea, where clients continue to
be active in linking their marginal accumulations to existing platform
infrastructure via subsea tie-backs. The revenues from production solutions
included the final phase of Shell's Soroosh field production contract in Iran
which will conclude in December 2004, but did not include any benefit from the
Chayvo Sakhalin contract, for ExxonMobil, which remains on schedule for July
2005 operations.
Overview by geographic market:
Following the review of September 2003, the Group was reorganised to give better
alignment to its geographic markets. Europe and Former Soviet Union ("Europe
FSU") was created to allow our European critical mass and know-how to accelerate
our development of the rapidly emerging FSU market. The Europe FSU region has
enjoyed good activity levels in what have been favourable market conditions for
the Group, particularly in the North Sea. In this market our clients continue to
be very focused on incremental spend, both on enhancing existing well
performance or adding new production wells, areas which play heavily to the
strengths of the Group. In the FSU we are making progress, with significant
increases in enquiry levels. Our focus in the coming period will be to convert
our enquiry book into firm orders and add to the Group's important, growing
position.
Turning to Africa Middle East ("Africa ME") where the Group has opened a new
region office in Dubai managing activities in South, West and North Africa, the
Middle East as well as our re-aligned Asian business. In the important deep
water markets of West Africa enquiry levels have been very active, however
management remain cautious on revenue conversion as project timing and slippage,
usually driven by factors outside of our clients' control, remain a key factor.
Our new Dubai presence covering the Middle East has yet to deliver material
benefit for the Group. However, it is already allowing us to market many of our
new products into this region which has a growing appetite for new technology,
having historically been much more commodity focused. In this area we remain
very disciplined to ensure that we target individual markets best suited to
Expro's technology leadership. Asia has seen a positive turn around under our
new focused approach to what are multiple and fragmented markets. During the
period we reviewed operations to deliver cost reductions including the closure
of our Perth regional and Singapore offices. Trading has also improved in target
markets such as Australia, again due to an increase in management focus.
Finally, in the Americas, where the Group was over-exposed to the shallow water
Gulf of Mexico market, our business has been undergoing complete re-engineering.
We continue to actively reduce the historical dependence upon the shallow water
Gulf by driving our Subsea technology in the deep water Gulf, and promoting
Excape(R), SmarTracT(TM), and Wireless Well Solutions in the land market.
Technology
This remains a fundamental part of the Group's strategy, aimed at delivering
step change performance for our clients and shareholders. We are building a
strong reputation for the introduction of high value, cost effective technology
within our sector. Evidence of this lies in previously highlighted World Oil
Technology awards. This year's award was in recognition of the potential of our
new wireless well, cableless telemetry technology which is already beginning to
find its way into the planning cycle of our clients looking at enhanced recovery
from both old and new fields. In addition, during the period we successfully
concluded phase one of our joint industry project to develop a rigless
intervention system capable of transforming the economics of existing subsea
wells and materially influencing the future direction of the subsea industry.
The initial phase, which was funded by the project partners, concluded that such
a system, under our intellectual ownership, was fully feasible. We are currently
engaged with the same oil industry partners to define subsequent phases prior to
considering prototype build and eventual field use. Technology development
continues at a strong pace within the Group. We are scheduling to spend more
throughout the year on this vital area of our business driven by the compelling
and clear business opportunities.
Outlook
We are pleased to report improved levels of activity, after three consecutive
periods of flat performance. Our focus remains clearly on executing the strategy
outlined 12 months ago in order to restore short-term performance by reversing
the adverse impact of operational gearing effect in the business, and to create
longer-term shareholder value by establishing our technology position within the
upstream sector. Our strategy is being delivered through a management structure
which ensures that we have a higher degree of engagement with our clients at all
levels and our efforts are now being assisted by improving market conditions.
The outlook for the remainder of this year is broadly favourable. Notable
events, such as the conclusion of the highly successful Soroosh contract and the
negative effect of the US dollar working its way through to earnings, will be
evident in the second-half performance. Our strategy places no reliance on
improved market conditions and we remain focused on delivery. Our performance in
the current period has established the validity of this approach. Our longer
term objective remains clear, to profitably grow the business throughout the
cycle.
Dr Chris Fay, CBE Graeme Coutts
Chairman Chief Executive 1 December 2004
- Ends -
For further information please contact:
Expro International Group PLC On 1 December: 020 7067 0700
Graeme Coutts, Chief Executive Thereafter: 01189 591 341
Michael Speakman, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Mike Kirk, Stephanie Badjonat
Consolidated Profit and Loss Account
for the six months ended 30 September 2004
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 30 September 31 March
2004 2003 2004
Restated
(note 1)
Note £000's £000's £000's
Turnover:
Group and share of joint ventures 106,653 103,522 208,395
Less: share of joint ventures (6,005) (6,367) (12,655)
-------- -------- --------
Group turnover 2 100,648 97,155 195,740
-------- -------- --------
Operating profit before goodwill
amortisation and exceptional items 11,157 8,027 16,519
Goodwill amortisation (1,588) (1,144) (2,372)
Exceptional provision for goodwill
impairment 6 - - (16,125)
Exceptional provision for
inventory obsolescence 2 (1,546) - -
Exceptional credit from release of
joint ventures provision 2 1,464 - -
-------- -------- --------
Operating profit/(loss) 9,487 6,883 (1,978)
-------- -------- --------
Operating profit/(loss):
Group 2 7,214 5,877 (5,544)
Share of joint ventures 2 2,273 1,006 3,566
-------- -------- --------
Total 9,487 6,883 (1,978)
-------- -------- --------
Profit/(loss) on ordinary activities
before finance charges 9,487 6,883 (1,978)
Finance charges (net) (1,205) (1,312) (2,488)
-------- -------- --------
Profit/(loss) on ordinary activities
before tax 8,282 5,571 (4,466)
Tax on profit/(loss) on ordinary
activities 3 (3,586) (2,418) (5,428)
-------- -------- --------
Profit/(loss) on ordinary activities
after tax 4,696 3,153 (9,894)
Minority equity interests (12) (17) (9)
-------- -------- --------
Profit/(loss)for the period 4,684 3,136 (9,903)
Dividends paid and proposed 4 (2,511) (2,511) (7,202)
-------- -------- --------
Retained profit/(loss) for the period 2,173 625 (17,105)
-------- -------- --------
Earnings per ordinary share:
Basic 5 7.1p 4.7p (15.0p)
Diluted 5 7.1p 4.7p (15.0p)
Basic before goodwill amortisation
and exceptional items 5 9.6p 6.5p 13.0p
Consolidated Statement of Total Recognised Gains and Losses
for the six months ended 30 September 2004
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 30 September 31 March
2004 2003 2004
£000's £000's £000's
Profit/(loss) for the financial period 4,684 3,136 (9,903)
Translation gain/(loss) on foreign
currency investments 907 (3,297) (14,114)
(Loss)/gain on foreign currency borrowings (1,083) 1,922 6,943
-------- -------- --------
4,508 1,761 (17,074)
-------- -------- --------
Consolidated Balance Sheet
at 30 September 2004
Unaudited Unaudited Audited
30 September 30 September 31 March
2004 2003 2004
Restated Restated
(note 1) (note 1)
Note £000's £000's £000's
Fixed assets
Intangible fixed assets and goodwill 6 25,092 36,897 26,137
Tangible fixed assets 59,964 65,046 58,077
Investments in joint ventures:
- share of gross assets 12,696 18,970 12,496
- share of gross liabilities (4,201) (14,140) (6,012)
- goodwill - 863 757
-------- -------- --------
8,495 5,693 7,241
-------- -------- --------
93,551 107,636 91,455
-------- -------- --------
Current assets
Stocks and work-in-progress 14,424 17,558 16,296
Debtors - due within one year 67,224 74,019 69,146
- due after one year 800 - 419
Cash at bank and in hand 13,213 16,104 14,563
-------- -------- --------
95,661 107,681 100,424
Creditors due within one year (44,062) (50,103) (49,932)
-------- -------- --------
Net current assets 51,599 57,578 50,492
-------- -------- --------
Total assets less current liabilities 145,150 165,214 141,947
Creditors due after more than one year (60,513) (64,846) (59,407)
Provisions for liabilities and charges (8,462) (2,668) (8,374)
-------- -------- --------
Net assets 76,175 97,700 74,166
-------- -------- --------
Capital and reserves
Called-up share capital 6,615 6,615 6,615
Share premium account 61,650 61,650 61,650
Other reserves 17 17 17
Profit and loss account 7,849 29,378 5,852
-------- -------- --------
Shareholders'funds being equity interests 76,131 97,660 74,134
Minority equity interests 44 40 32
-------- -------- --------
Total capital and reserves 76,175 97,700 74,166
-------- -------- --------
Consolidated Cash Flow Statement
for the six months ended 30 September 2004
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2004 2003 2004
Restated
(note 1)
Note £000's £000's £000's
Net cash inflow from operating
activities 7 17,210 11,769 27,990
Finance charges (net) (1,182) (1,692) (2,805)
Taxation (3,379) (5,440) (10,278)
Capital expenditure and
financial investment (9,313) (7,959) (13,401)
Acquisitions and disposals - - (3,867)
Equity dividends paid (4,686) (4,700) (7,202)
-------- -------- --------
Net cash outflow before financing (1,350) (8,022) (9,563)
Financing - (4,000) (4,000)
-------- -------- --------
Decrease in cash in the period (1,350) (12,022) (13,563)
-------- -------- --------
Notes to the Interim Results
1. The results for the six months to 30 September 2004 and the comparative
results for the six months to 30 September 2003 have not been audited by the
company's auditors or reviewed in accordance with APB Bulletin 1999/4. They have
been prepared on a basis consistent with the accounting policies set out in the
statutory accounts for the year ended 31 March 2004 except for the adoption of
UITF Abstract 38 'Accounting for ESOP trusts' as described below.
The adoption of Amendment to FRS5 'Reporting the substance of transactions:
Revenue recognition' during the year ended 31 March 2004 resulted in certain
subcontractor costs recharged to customers being recorded as turnover rather
than as part of cost of sales. Turnover for the period to 30 September 2003 has
been restated accordingly with no impact on profit.
Also during the year ended 31 March 2004 the Group concluded that the accounting
policy of classifying certain specific categories of replacement components for
operational equipment as tangible fixed assets was no longer appropriate.
Following a change in the accounting policy these items are now classified as
stocks and work-in-progress. Accordingly, tangible fixed assets and stocks and
work-in-progress at 30 September 2003 have been restated.
The adoption of UITF Abstract 38 'Accounting for ESOP trusts' during the period
ended 30 September 2004 resulted in the investment in own shares, previously
reported within tangible fixed assets and investments, to be shown as a
reduction in equity of £9,000 (six months ended 30 September 2003 £13,000; year
ended 31 March 2004 £13,000). Prior period figures have been restated
accordingly.
The comparative figures for the year ended 31 March 2004, as restated, do not
constitute statutory accounts for the purpose of Section 240 of the Companies
Act 1985 and have been extracted from the company's published accounts, a copy
of which has been delivered to the Registrar of Companies and on which an
unqualified audit report has been made by the auditors under Section 235 of the
Companies Act 1985.
2. Segmental information
Turnover and operating profit/(loss) by business stream were as follows:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2004 30 September 2003 31 March 2004
Restated (note 1)
Turnover Profit/(loss) Turnover Profit/(loss) Turnover Profit/(loss)
£000's £000's £000's £000's £000's £000's
Group
Cased Hole Services 39,860 3,480 43,735 4,261 88,054 7,755
Subsurface Systems 25,158 7,895 18,100 4,241 34,770 7,129
Surface & Environmental
Systems 35,630 3,805 35,320 2,626 72,916 4,564
------- ------ ------ ------ ------ ------
100,648 15,180 97,155 11,128 195,740 19,448
------- ------ ------
Common costs (6,420) (5,251) (8,867)
Exceptional provision for
goodwill impairment * - - (16,125)
Exceptional provision for
inventory obsolescence** (1,546) - -
------- ------ ------
Operating profit/(loss) 7,214 5,877 (5,544)
------- ------ ------
Share of joint ventures
Subsurface Systems 4,133 270 3,261 131 7,232 863
Surface & Environmental
Systems 1,872 539 3,106 875 5,423 2,703
Exceptional credit from
release of provision*** - 1,464 - - - -
------- ------ ------ ------ ------ ------
6,005 2,273 6,367 1,006 12,655 3,566
------- ------ ------ ------ ------ ------
Group and share of joint
ventures 106,653 9,487 103,522 6,883 208,395 (1,978)
------- ------ ------
Finance charges (net) (1,205) (1,312) (2,488)
------- ------ ------
Profit/(loss)on ordinary
activities before taxation 8,282 5,571 (4,466)
------- ------ ------
2. Segmental information (continued)
Turnover and operating profit/(loss) by geographical origin were as follows:
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2004 30 September 2003 31 March 2004
Restated (note 1)
Turnover Profit/(loss) Turnover Profit/(loss) Turnover Profit/(loss)
Group £000's £000's £000's £000's £000's £000's
Europe/FSU(a) 49,747 12,922 44,772 8,935 91,751 18,103
Africa/ME(b) 20,455 1,795 21,473 4,130 44,253 7,000
Asia Pacific 12,128 348 10,968 (898) 20,964 (2,174)
Americas 18,318 115 19,942 (1,039) 38,772 (3,481)
------- ------- ------ ------ ------ -------
100,648 15,180 97,155 11,128 195,740 19,448
------- ------ ------
Common costs (6,420) (5,251) (8,867)
Exceptional provision for
goodwill impairment - - (16,125)
Exceptional provision for
inventory obsolescence** (1,546) - -
------- ------ ------
Operating profit/(loss) 7,214 5,877 (5,544)
------- ------ ------
Share of joint ventures
Europe/FSU(a) 1,195 24 1,030 (176) 2,243 28
Africa/ME(b) 3,441 821 4,486 1,237 8,679 3,475
Asia Pacific 499 (31) 282 19 99 114
Americas 870 (5) 569 (74) 1,634 (51)
Exceptional credit from
release of provision*** - 1,464 - - - -
------- ------- ------ ------ ------ -------
6,005 2,273 6,367 1,006 12,655 3,566
------- ------- ------ ------ ------ -------
Group and share of joint
ventures 106,653 9,487 103,522 6,883 208,395 (1,978)
------- ------- ------ ------ ------ -------
Finance charges (net) (1,205) (1,312) (2,488)
------- ------ -------
Profit/(loss) on ordinary
activities before taxation 8,282 5,571 (4,466)
------- ------ -------
(a) FSU - Former Soviet Union (b) ME - Middle East
* The exceptional provision for goodwill impairment of £16,125,000 reported in
the year ended 31 March 2004 related to Cased Hole Services - £14,950,000 and
Surface & Environmental Systems - £1,175,000.
** The exceptional provision for inventory obsolescence relates to Cased Hole
Services inventories in the Americas region. As a result of an obsolescence
review, a one-off stock obsolescence provision of £1,546,000 has been recorded
in the six months ended 30 September 2004.
*** The exceptional credit from release of a provision, which relates to a
Surface & Environmental Systems Africa/ME joint venture, represents the release
of a provision of £1,464,000 no longer required for a customer's equipment
purchase option.
There is no material difference between turnover by origin and turnover by
destination.
3. Tax on profit/(loss) on ordinary activities
Tax on profit/(loss) on ordinary activities has been calculated based on an
estimated weighted average tax rate for the year ended 31 March 2005 and
includes foreign tax of £2,080,000 (six months ended 30 September 2003
£1,934,000; year ended 31 March 2004 £3,699,000). The weighted average tax
charge for the period on profit on ordinary activities is 43.3%. This is
compared to the UK standard rate of 30% with the difference largely attributable
to foreign profits taxed at rates higher than the UK rate, expenses not
deductible for tax purposes and the impact of unrelieved foreign losses in
locations where the future utilisation of those losses is not sufficiently
certain to justify recognition of the losses.
Tax on profit/(loss) on ordinary activities includes tax on profits of joint
ventures of £94,000 (six months ended 30 September 2003 £42,000; year ended 31
March 2004 £340,000).
4. Dividends paid and proposed
An interim dividend of 3.8 pence per ordinary share is declared for payment on
31 January 2005 (six months ended 30 September 2003 3.8 pence; year ended 31
March 2004 10.9 pence).
5. Earnings per ordinary share
The calculations of earnings per share are based on the following profits/
(losses) and numbers of shares.
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2004 30 September 2003 31 March 2004
£000's £000's £000's
Profit/(loss) for the period
for Basic and Diluted earnings
per share 4,684 3,136 (9,903)
Goodwill amortisation of Group
and joint ventures 1,599 1,144 2,372
Exceptional provision for
inventory obsolescence 1,546 - -
Exceptional credit from release
of joint ventures provision (1,464) - -
Exceptional provision for goodwill
impairment - - 16,125
-------- -------- --------
Earnings before goodwill and
exceptional items 6,365 4,280 8,594
-------- -------- --------
Number of shares Number of shares Number of shares
30 September 2004 30 September 2003 31 March 2004
Weighted average number of
shares ranking for dividend
used for Basic earnings per
share 66,075,394 66,075,394 66,075,394
Dilutive effect of
share options 57,828 24,628 21,595
-------- -------- --------
Weighted average number of
shares used for diluted earnings
per share 66,133,222 66,100,022 66,096,989
-------- -------- --------
The directors believe that the presentation of basic earnings per share before
goodwill amortisation and exceptional items assists with understanding the
underlying performance of the group.
6. Goodwill and exceptional provision for goodwill impairment
In accordance with FRS11 'Impairment of fixed assets and goodwill' the carrying
value of the Group's subsidiary undertakings has been compared to their
recoverable amounts, represented by their value in use to the Group. At 31 March
2004 this review resulted in an exceptional provision for impairment of
£16,125,000 reducing the net carrying value of goodwill at that date from
£35,452,000 to £19,327,000. The carrying value of goodwill at 30 September 2004
is £18,494,000 and no adjustment to the impairment provision is considered
necessary at that date.
7. Cash flow information
Reconciliation of operating profit/(loss) to net operating cash inflow
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2004 30 September 2003 31 March 2004
Restated (note 1)
£000's £000's £000's
Operating profit/(loss) 7,214 5,877 (5,544)
Depreciation and amortisation 9,924 9,472 19,399
Exceptional provision for
goodwill impairment - - 16,125
Exceptional provision for
inventory obsolescence 1,546 - -
Loss/(profit) on sale of
tangible fixed assets 155 (28) 26
Decrease/(increase) in stocks
and work-in-progress 326 (986) 400
Decrease/(increase) in debtors 1,541 (3,940) 584
(Decrease)/increase increditors
and provisions (3,496) 1,374 (3,000)
-------- -------- --------
Net cash inflow from operating
activities 17,210 11,769 27,990
-------- -------- --------
Analysis of net debt
Audited Unaudited
1 April 2004 Other non-cash 30 September
Restated (Note 1) Cash flow changes 2004
£000's £000's £000's £000's
Cash at bank and in hand 14,563 (1,350) - 13,213
Debt due after one year (59,407) - (1,106) (60,513)
-------- -------- -------- --------
(44,844) (1,350) (1,106) (47,300)
-------- -------- -------- --------
Other non-cash changes represent foreign exchange revaluations of foreign currency loans.
This information is provided by RNS
The company news service from the London Stock Exchange
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