Final Results
International Greetings PLC
28 June 2005
INTERNATIONAL GREETINGS PLC
International expansion drives record results
International Greetings PLC ('the Company' or 'the Group') (AIM: IGR), the
leading designer and manufacturer of private label greetings products, wrapping
paper and film and television character based licensed stationery, today
announces preliminary results for the year ended 31 March 2005.
Financial Highlights:
• Turnover improved 13% to £143.7m (2004: £126.7m)
• Adjusted profit before tax* increased 14% to £13.8m (2004: £12.1m)
• European turnover grew 69% to £17.6m (2004: £10.4m), aided by a significant
contribution from Dutch subsidiary Hoomark
• US sales increased 51% to £35.1m (2004: £23.3m) and now represents 24%
(2004: 18%) of Group turnover
• Total overseas sales rose 53% and now comprise 38% (2004: 28%) of
Group turnover
• Adjusted earnings per share* increased 18% to 24.5p (2004: 20.7p)
• Final dividend per share of 5.75p, increases the year's total dividend 15%
to 7.5p (2004 total dividend: 6.5p)
Operational Highlights:
• European operations moved to a new 400,000 sq ft facility in Hoogeveen,
providing increased capacity for future growth
• Continued expansion of product sourcing and manufacturing in the Far East
• Following the acquisitions of Krakajack and Napier, International Greetings
now established as the No. 1 global cracker manufacturer
• Stationery range launched to coincide with the release of Batman Begins
Post Period Events
• Anker International acquired in May 2005 for £35.5m
• Paul Fineman, CEO of Anker International, joined the Group's board
Commenting on the results, Nick Fisher, Joint Chief Executive, said: 'These
results clearly reflect the investments we have made in our overseas markets,
with significant progress made in Europe since the acquisition of Hoomark, and
the US, where the emphasis on developing sales to the mass market has succeeded.
We will continue to pursue opportunities to organically grow our business and
also make acquisitions which will provide us with new products, new markets and
new customers.'
For further information:
Nick Fisher, Joint Chief Executive, International Greetings plc: 01707 630 630
Richard Sunderland/Rachel Drysdale, Tavistock Communications: 020 7920 3150
*figure excludes goodwill amortisation of £443,000 (2004: £233,000) and
exceptional item of £738,000 (2004: £684,000)
CHAIRMAN'S STATEMENT
Once again, I am pleased to report another successful year for International
Greetings. Growth in both turnover and profit of the existing businesses,
together with a number of important strategic acquisitions, has significantly
strengthened the Group and its future prospects.
Adjusted profit before tax* for the year ended 31st March 2005 increased by 14%
to £13.8m with turnover increasing by 13% to £143.7m. In recent years we have,
and continue to, focus on international expansion, which is clearly reflected in
these figures. Hoomark, the Dutch gift wrap division we acquired in November
2003, has performed well and has been primarily responsible for a 69% increase
in European turnover to £17.6m, which now represents 12% of Group turnover. Our
US division also experienced another successful year, and contributed to an
impressive 51% increase in total US sales to £35.1m, representing 24% of Group
turnover. Total overseas sales now account for 38% of turnover compared to 28%
last year.
Adjusted earnings per share* increased by 18% to 24.5p and in line with our
policy of increasing shareholder returns and our continued confidence in the
Group, we are recommending a final dividend of 5.75p per share. This makes a
total for the year of 7.5p, an increase of 15% over last year.
Our industry continues to consolidate and International Greetings has played a
significant part in this process. Last year's acquisition of the Irish cracker
manufacturer Krakajack was followed by the acquisition in January this year of
Napier Industries, our major competitor in the cracker market. Both these
businesses have now been successfully integrated with our existing division,
creating the world's largest cracker manufacturer and strengthening our market
position.
In May this year, we announced the acquisition of Anker International PLC, a
major step forward for the Group. Anker is an international design, import and
distribution business which supplies a wide assortment of greetings, festive,
stationery and photographic gifts products. As well as being immediately
earnings enhancing, we expect Anker to provide synergy benefits, as we explore
the many integration opportunities available.
I am delighted to welcome Anker's Chief Executive, Paul Fineman, to the Board as
an Executive Director. Paul has a wealth of experience of sourcing and trading
in the Far East, which is a major complement to our long standing manufacturing
skills. Paul's contribution will be invaluable to the Group during our next
important period of corporate growth.
This year represents the Group's 10th anniversary as an AIM listed company and
the 10th anniversary of the establishment of the Alternative Investment Market.
During this period the Company's performance has been recognised with an
eight-fold increase in our share price and we are delighted to have been part of
AIM's success. Out of over 1,200 companies now listed, we are one of the
constituent companies making up the FTSE AIM 100 index of leading AIM companies.
Finally, I would like to take this opportunity once again to thank all the
dedicated employees of International Greetings, who together ensure that we
achieve our objectives. I also welcome to the Group all those new employees
within the acquired businesses.
John Elfed Jones CBE DL
Chairman
* figure excludes goodwill amortisation of £443,000 (2004: £233,000) and
exceptional item of £738,000 (2004: £684,000).
REVIEW OF OPERATIONS
The last year has been extremely busy for the Group and has seen our range of
operations significantly expand as a result of the acquisitions made. These have
extended our existing product categories into new market sectors and introduced
new categories for the Group, such as photo frames and albums.
UK
Following our acquisition of two cracker companies in the last year, Krakajack
and Napier, we are now the world's largest cracker manufacturer. Napier's
automated manufacturing plant and customer base have given us a major presence
in the catering and hospitality sector of the cracker market. In addition, its
design expertise is renowned in the industry and, together with our existing
strengths in this category, now enables us to offer our major retail customers
an unparalleled product offering. The acquisition of Napier has also brought the
Tom Smith cracker brand into the Group, together with the Royal Warrants which
have been held by the brand since 1906. As a result, we will now be producing
crackers for the Royal Household this Christmas.
The acquisition of Anker has also further strengthened the Group's UK
operations. The fit with our current business activities is excellent and
Anker's products both complement and extend the Group's existing ranges. We have
already identified areas where cost-saving opportunities exist and will continue
to pursue these vigorously.
Europe
The acquisition of Hoomark in November 2003 has been the main driver behind the
69% increase in European turnover during the last year. In addition to its core
gift wrap products, we are utilising this division to expand sales of the
Group's other product categories, such as bows, ribbons, bags and tags, into
this significant marketplace. The business has also benefited from the
opportunity to offer the Group's licensed portfolio of products, particularly
Disney, to its existing customer base.
In February, as part of our future European expansion plans, we purchased a
freehold building of 400,000 square feet in Hoogeveen, Holland. Hoomark recently
transferred its manufacturing and distribution operations into this new facility
which will provide capacity for future growth and is intended for use as a
mainland European distribution hub for our globally-sourced products.
The re-location of our cards and tags manufacturing facility from the UK to
Latvia has now been successfully completed, and we have been delighted with the
availability of a highly-motivated workforce committed to our development plans.
We believe this will play an important future role in both maintaining
competitiveness in our home market and providing further opportunities across
mainland Europe.
US
Our US division has had a particularly successful year, with like-for-like US$
sales increasing by 38% to $41.6m and operating profit increasing by 30% to
$2.6m. We have invested significant management resources in developing this
market in recent years, and the benefits, as previously forecast, are visible in
this year's results. Economies of scale from increased production levels and
growth in sales of stationery products have been significant factors in
achieving these figures.
The Tom Smith cracker brand, and its associated Royal Warrants, together with
additional products from the Anker portfolio will provide further opportunities
in this market, and we are optimistic about the future prospects for the Group
in the US.
Far East
Our Far East operations fall into two distinct areas, product sourcing and
manufacturing.
Product sourcing takes place in our Hong Kong office, where a staff of 35
create, design and source products from a diverse supply base throughout the Far
East region. A key focus for this office is product quality assurance as it is
paramount to ensure that the exacting quality standards required by our
worldwide multiple retail customer base are achieved. The recent acquisition of
Anker, which sources most of its products from the Far East, further improves
the Group's expertise and experience in this important area. We are therefore
working together with Anker's management to identify and maximise cost savings
in all areas of the Group.
Manufacturing in our own production facility in China continues to expand as
products previously out-sourced are now brought in-house. The operation has been
extended to include warehousing and direct distribution to our customers, and we
anticipate this expansion will continue.
Design and Licensing
We cannot overstate how important design is to our business. We are continually
pushing the boundaries, not only of the images and patterns that we create, but
also the use of available raw materials to enhance our consumer products.
Licensed properties form a key part of our design strategy, being either
perennial characters or blockbuster film launches. This announcement coincides
with the recent release of Batman Begins from Warner Bros Studios, for which we
have launched a full range of children's stationery.
The acquisition of Napier has further strengthened our design and licence
portfolio, with the addition of the Tom Smith brand, the prestigious Royal
Warrants and the 'Bratz' girls fashion licence for crackers and Christmas
decorations.
In August 2004, we were delighted to receive an award for 'Licensee of the Year'
from Fox Studios for the creative work and sales success of our Simpsons range
of products. We have seen Simpsons' sales grow substantially and we expect this
to continue for the foreseeable future.
Conclusion
This year saw us celebrate 10 years as an AIM quoted company. The business is
highly focused on its core strengths and we will continue to pursue our
successful strategy of organic growth, complemented by acquisitions that meet
our strict criteria and create added value. We are confident that this will
maintain the consistent pattern of growth that has characterised the Company
since it was founded in 1979.
Anders Hedlund and Nick Fisher
Joint Chief Executives
FINANCIAL REVIEW 2005
1 Group Performance
Turnover for the year to 31st March 2005 increased to £143.7m, an increase of
13% over last year. Group sales in the US increased by 51% to £35.1m whilst
European turnover rose 69% to £17.6m. With overseas sales now representing 38%
of total turnover, the Group's previous dependence on the UK has been
significantly reduced as a result of diversification into new markets over
recent years.
Gross profit amounted to £44.5m, and represented a gross margin of 30.9%, up
0.9% from last year. Adjusted profit before tax* for the year increased 14% to
£13.8m. These figures include two months of post-acquisition overhead and
interest costs of the Napier Christmas cracker business amounting to £588,000.
Due to Napier's seasonality, in common with several other divisions in the
Group, there were no sales during this period. Excluding these costs, adjusted
profit before tax* increased by 19% to £14.4m, and represented a net profit
margin of 10%.
The exceptional item of £0.7m represents the costs, primarily redundancy and
machinery re-location, associated with the transfer of production of greetings
cards and tags from Hatfield to a new location in Latvia in January this year.
2 Earnings Per Share and Dividend
Adjusted basic earnings per share* for the year ended 31st March 2005 were
24.5p, an increase of 18%. Excluding the loss per share attributable to Napier
since acquisition, adjusted basic earnings per share* for the year ended 31st
March 2005 increased by 23% to 25.5p. Basic earnings per share were 22.4p, an
increase of 17%.
The final dividend for the year of 5.75p makes a total dividend for the year of
7.5p, an increase of 15% and is covered three times by basic earnings per share.
3 Cash Flow and Balance Sheet
Capital expenditure during the year was higher than in recent years, due
primarily to the purchase of a new freehold building in Hoogeveen, Holland which
accounted for £5.1m of the Group's total capital expenditure (net of disposals)
of £11.1m. Grants of £2.3m were received during the year, resulting in net
capital expenditure of £8.8m. The cost of the Napier and Krakajack acquisitions
amounted to £6m. Both the capital expenditure and the cost of acquisitions have
been met from the Group's own funds which, notwithstanding these significant
outflows, amounted to £3.8m at 31 March 2005. Shareholders' funds increased by
£7m to £51.1m.
4 Treasury Operations
The Board continues to assess and manage the risks associated with the treasury
function as the business develops. The Group's business has a strong seasonal
focus, resulting in large variations in working capital, with net funds for
certain periods of the year and net borrowings in other periods. As a result,
the Board considers that long term reduction of exposure to fluctuations in
interest rates on working capital is unlikely to be economically viable.
A significant proportion of the Group's purchases are denominated in US$. The
effect of exchange rate fluctuations is reduced through a combination of
measures including hedging and forward exchange contracts.
Mark Collini
Finance Director
* figure excludes goodwill amortisation of £443,000 (2004 : £233,000) and
exceptional item of £738,000 (2004 : £684,000).
Consolidated profit and loss account
for the year ended 31 March 2005
Note Continuing operations
Pre-exceptional Exceptional Acquisition Total Total
item item
2005 2005 2005 2005 2004
£000 £000 £000 £000 £000
Turnover 2 143,689 - - 143,689 126,689
Cost of sales (99,144) - (76) (99,220) (88,673)
-------- -------- -------- -------- --------
Gross profit 44,545 - (76) 44,469 38,016
Distribution
expenses (13,907) - (110) (14,017) (11,854)
Administrative
expenses (16,693) (738) (368) (17,799) (14,825)
-------- -------- -------- -------- --------
Operating
profit 2 13,945 (738) (554) 12,653 11,337
Net interest
payable (2) - (34) (36) (137)
-------- -------- -------- -------- --------
Profit on
ordinary
activities
before
taxation 2-3 13,943 (738) (588) 12,617 11,200
-------- -------- --------
Tax on profit
on ordinary
activities 4 (3,098) (3,142)
-------- --------
Profit for the
financial year 9,519 8,058
Dividends -
equity 5 (3,221) (2,774)
-------- --------
Retained
profit for the
financial year 6,298 5,284
======== ========
Earnings per
share 7
Basic 22.4p 19.2p
Adjusted basic
excluding goodwill
and exceptional item 24.5p 20.7p
Diluted 22.1p 19.1p
======== ========
Consolidated statement of total recognised gains and losses
for the year ended 31 March 2005
2005 2004
£000 £000
Profit for the financial year 9,519 8,058
Currency translation differences
arising on foreign currency net
investments (160) (835)
-------- --------
Total recognised gains and losses
relating to the financial year 9,359 7,223
======== ========
Consolidated balance sheet
at 31 March 2005
Note 2005 2004
£000 £000 £000 £000
Fixed assets
Intangible assets - goodwill 5,113 2,737
Tangible assets 30,853 23,271
------- ------
35,966 26,008
Current assets
Stocks 24,178 22,069
Debtors 16,477 11,492
Cash at bank and in hand 6,490 16,233
------- ------
47,145 49,794
Creditors: amounts falling due
within one year (25,417) (25,583)
------- ------
Net current assets 21,728 24,211
------ ------
Total assets less current
liabilities 57,694 50,219
Creditors: amounts falling due
after more than one year (1,611) (3,059)
Provisions for liabilities and
charges (380) (243)
Deferred income (4,575) (2,802)
------- -------
Net assets 51,128 44,115
====== ======
Capital and reserves
Called up share capital 2,140 2,112
Share premium account 2,704 1,703
Potential issue of shares 6(a) 926 1,080
Other reserves 21 181
Profit and loss account 45,337 39,039
------ ------
Equity shareholders' funds 8 51,128 44,115
====== ======
Consolidated cash flow statement
for the year ended
31 March 2005
Note 2005 2004
£000 £000
Net cash inflow from operating
activities 10 14,398 23,695
Returns on investments and
servicing of finance 11 (54) (191)
Taxation (3,600) (3,175)
Capital expenditure 11 (8,793) (4,842)
Acquisitions and disposals 11 (5,984) (7,777)
Equity dividends paid (2,872) (2,511)
------- -------
Cash (outflow)/inflow before
financing (6,905) 5,199
Financing 11 (1,180) 1,440
------- -----
(Decrease)/increase in cash (8,085) 6,639
======= =====
Reconciliation of net cash flow to movement in net funds
for the year ended 31 March 2005
Note 2005 2004
£000 £000
(Decrease)/increase in cash in
the year (8,085) 6,639
Cash outflow/(inflow) from debt
and lease financing 12 1,541 (783)
------ ------
Change in net funds resulting
from cash flows (6,544) 5,856
New finance leases - (180)
Finance leases acquired with
subsidiary - (393)
Translation differences 12 66 1,552
------ -------
Movement in net funds in the year (6,478) 6,835
Net funds at beginning of year 10,268 3,433
------ -------
Net funds at end of year 12 3,790 10,268
======= =======
Notes
1. Basis of preparation
The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 31 March 2005 or 2004.
Statutory financial statements for 2004 have been delivered to the registrar of
companies, and those for 2005 will be delivered following the company's annual
general meeting. The auditors have reported on those accounts; their reports
were unqualified and did not contain statements under section 237(2) or (3) of
the Companies Act 1985.
2. Segmental analysis
(a) Geographical area of operation
UK, Europe & Far East USA Group
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Turnover 121,675 110,338 22,014 16,351 143,689 126,689
======= ======= ====== ====== ======= =======
Operating
profit
before
exceptional
item 12,003 10,944 1,388 1,077 13,391 12,021
Exceptional
item (see
below) (738) (684) - - (738) (684)
------- ------- ------ ------ ------- -------
Operating
profit after
exceptional
item 11,265 10,260 1,388 1,077 12,653 11,337
------- ------- ------ ------
Net interest (36) (137)
------- -------
Profit on
ordinary
activities
before
taxation 12,617 11,200
======= =======
Net assets 44,844 38,408 6,284 5,707 51,128 44,115
======= ======= ====== ====== ======= =======
The above results relate entirely to continuing operations.
Exceptional item
During the year ended 31 March 2005 the Group transferred the manufacturing of
greetings cards and tags from Hatfield to a new facility in Latvia. The
exceptional item of £738,000 represents the costs, primarily redundancy and
machinery re-location, associated with this transfer. The exceptional item of
£684,000 during the year ended 31 March 2004 represented the one-off start-up
costs associated with the establishment of a new product category involving the
design and sale of licensed decorations.
(b) Geographical analysis of turnover by destination
2005 2004
£000 £000
UK 89,004 90,986
USA 35,132 23,287
Europe 17,637 10,427
Rest of world 1,916 1,989
----- -----
143,689 126,689
======= =======
3. Profit on ordinary activities before taxation
2005 2004
£000 £000
Profit on ordinary activities before taxation is
stated after charging/(crediting)
Auditors' remuneration - audit fees paid to the Company's
auditor and its associates 86 73
- non audit fees paid to the
Company's auditor and
its associates 36 52
Hire of plant and machinery - rentals payable
under operating leases 343 309
Hire of other assets - operating leases 746 741
Release of deferred grant income (554) (299)
Depreciation - owned 4,217 4,327
- leased 255 139
Amortisation of goodwill 443 233
======= =======
4. Taxation
2005 2004
£000 £000 £000 £000
Current tax
UK corporation tax on
profits of the year 2,240 3,414
Adjustments in respect of
previous periods (235) (63)
------- -------
2,005 3,351
Foreign tax
On profits of the year 1,237 166
Adjustments in respect of
previous periods (51) (205)
------- -------
1,186 (39)
------- -------
Total current tax 3,191 3,312
Deferred taxation
Origination and reversal of
timing differences (95) (190)
Adjustments in respect of
previous periods 2 20
------- -------
Total deferred tax (93) (170)
------- -------
Tax on profits on ordinary
activities 3,098 3,142
======== =======
Factors affecting tax charge for period
2005 2004
£000 £000
Profit on ordinary activities before tax 12,617 11,200
======= =======
Profit on ordinary activities multiplied by standard
rate of corporation tax in the UK of 30% 3,785 3,360
Effects of:
Expenses not deductible for corporation tax purposes 232 239
Tax deductions for gains on employee share options (155) -
Release of grant (161) (86)
Capital allowances for the year lower than depreciation 167 221
Provisions not deductible until paid 1 (4)
Other timing differences 32 (52)
Difference between UK and overseas tax rates (424) (98)
Adjustments in respect of previous periods (286) (268)
------- -------
Current year tax charge 3,191 3,312
======= =======
5. Dividends
2005 2004
£000 £000
Interim paid - 1.75p per share (2004: 1.5p) 760 662
Final proposed - 5.75p per share (2004: 5.0p) 2,461 2,112
------- -------
3,221 2,774
======= =======
The final dividend, if approved, will be paid on 23 September 2005 to
shareholders on the register on 2 September 2005.
6. Acquisitions
(a) On 19 November 2003, the Group acquired 100% of the issued share capital of
Hoomark Giftwrap Partners BV. The purchase agreement provided for future
payments of deferred consideration, based on Hoomark's profits for the 3 years
ended 31 March 2007. At 31 March 2004, the total future consideration was
estimated at £1,217,000 of which up to £1,080,000 was payable by the issuance of
new ordinary shares at the company's option. During the year ended 31 March
2004, £668,000 of this amount was paid by the issuance of new ordinary shares.
Based on Hoomark's results for the year ended 31 March 2005, and future
projections, the estimated total consideration has been increased by £377,000 to
£926,000. It has also been agreed with the vendors that up to 100% of the total
unpaid consideration at 31 March 2005 may be payable by the issue of new
ordinary shares, at the company's option.
(b) On 1 June 2004, the Group purchased certain assets and the business of
Krakajack Limited, a supplier of Christmas crackers to the catering market for
an initial consideration of £1,520,000. In addition to this amount, an agreed
percentage of sales made to customers in 2004 and 2005 will be payable to the
vendors. This amount is expected to amount to £100,000. Assets acquired comprise
approximately £800,000 each in respect of plant and machinery and stock. No
goodwill arose on this acquisition.
During the year to 31 March 2005, sales to Krakajack customers totalled £2.1m.
Following Krakajack's integration into the Group's Christmas cracker operations,
it is not possible to separately identify the operating profit attributable to
these sales.
(c) On 25 January 2005 the Group purchased the business and certain assets of
Napier Industries Limited (in administrative receivership) from the receivers.
The book value and provisional fair value of assets purchased were as follows:
Book value Provisional Provisional fair
of acquired fair value value at date
assets/(liabilities) adjustments of acquisition
£000 £000 £000
Fixed assets 200 - 200
Stock 570 (365) 205
Debtors 1,488 317 1,805
Creditors (100) (90) (190)
------- ------- -------
Net assets acquired 2,158 (138) 2,020
======= =======
Goodwill (estimated useful
life of 20 years) 2,438
-------
Total consideration, satisfied
entirely by cash 4,458
=======
The latest available audited accounts of Napier Industries Limited were prepared
as at 31 August 2002. The latest available unaudited management accounts were
for the 11 months to 30 November 2004 and reflect turnover of £12.1m, operating
profit of £0.1m and interest payable of £2.0m, resulting in a loss before
taxation of £1.9m.
The provisional fair value adjustments to stocks and debtors represent
adjustments to bring provisioning into line with group policies and amounts
subsequently received.
7. Earnings per share
2005 2004
Adjusted basic earnings per share excluding
goodwill and exceptional item 24.5p 20.7p
Loss per share on goodwill (0.9p) (0.4p)
Loss per share on exceptional item (1.2p) (1.1p)
------- -------
Basic earnings per share 22.4p 19.2p
======= =======
Diluted earnings per share 22.1p 19.1p
======= =======
The basic earnings per share is based on the earnings of £9,519,000 (2004:
£8,058,000) and the weighted average number of ordinary shares in issue of
42,529,155 (2004: 41,995,174). The calculation of diluted earnings per share is
based on 43,165,480 (2004: 42,180,513) ordinary shares. The difference of
636,325 (2004: 530,830) represents the dilutive effect of outstanding employee
share options which has been calculated in accordance with FRS 14.
Adjusted basic earnings per share excluding goodwill and exceptional item is
calculated after adjusting for amortisation of goodwill of £443,000 (2004:
£233,000) with attributable tax relief of £48,000 (2004: £44,000) and the
exceptional item of £738,000 (2004: £684,000) with attributable tax relief of
£221,000 (2004: £205,000).
8. Reconciliation of movements in shareholders' funds
2005 2004
£000 £000
Profit for the financial year 9,519 8,058
Dividends (3,221) (2,774)
------- -------
6,298 5,284
Other recognised gains and losses relating
to the year (net) (160) (835)
New share capital subscribed 1,029 657
Potential issue of shares (note 6 (a)) (154) 1,080
------- -------
Net addition to shareholders' funds 7,013 6,186
Opening shareholders' funds 44,115 37,929
------- -------
Closing shareholders' funds 51,128 44,115
======= =======
9. Post balance sheet event
On 26 May 2005 the company acquired 100% of the issued share capital of Anker
International PLC, an international design, import and distribution business,
for a total consideration of up to £35.5m. £25m was paid on completion, of which
£12.5m was represented by the issue of 3,294,242 new ordinary shares and £12.5m
in cash. The remaining £10.5m is payable in cash on 26 May 2006, of which £0.5m
is dependent on Anker achieving a certain level of profitability.
10. Reconciliation of operating profit to net cash inflow from operating activities
2005 2004
£000 £000
Operating profit before exceptional item 13,391 12,021
Exceptional costs (738) (684)
Depreciation charge 4,472 4,466
(Increase)/decrease in stocks (1,251) 1,454
(Increase)/decrease in debtors (3,366) 2,073
Increase in creditors 2,001 4,431
Grant income (554) (299)
Goodwill amortisation 443 233
------- -------
Net cash inflow from operating activities 14,398 23,695
======= =======
11. Gross cash flows
Cash inflow/(outflow)
2005 2004
£000 £000
Returns on investment and servicing of finance
Interest paid (662) (501)
Interest received 649 348
Interest element of finance lease repayments (41) (38)
------- -------
(54) (191)
======= =======
Capital expenditure
Purchase of tangible fixed assets (11,262) (5,016)
Disposal of tangible fixed assets 146 174
Grants received in relation to capital
expenditure 2,323 -
------- -------
(8,793) (4,842)
======= =======
Acquisition and disposals
Acquisition of businesses (note 6) (5,978) -
Acquisition of subsidiary (6) (1,226)
Net overdraft acquired with subsidiary - (6,551)
------- -------
(5,984) (7,777)
======= =======
Financing
New shares issued 361 657
New loans - 1,158
Repayment of amounts borrowed (1,256) (188)
Capital element of finance lease payments (285) (187)
------- -------
(1,180) 1,440
======= =======
12. Analysis of changes in net funds
At 1 April Cash flow Exchange Other At 31 March
2004 movement changes 2005
£000 £000 £000 £000 £000
Cash at bank and in hand 16,233 (9,743) - - 6,490
Overdrafts (2,324) 1,658 (6) - (672)
------- ------- ------- ------- -------
13,909 (8,085) (6) - 5,818
Debt due after one year (2,118) 785 56 134 (1,143)
Debt due within one year (439) 471 12 (134) (90)
Finance leases (1,084) 285 4 - (795)
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(3,641) 1,541 72 - (2,028)
------- ------- ------- ------- -------
Total net funds 10,268 (6,544) 66 - 3,790
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