Preliminary Results 2002
Intertek Testing Services PLC
10 March 2003
Preliminary 2002 Results Announcement
10 March 2003
Intertek Testing Services plc (Intertek), the global testing, inspection and
certification company, today announces its first set of preliminary results
since its flotation in May 2002 for the year to 31 December 2002.
FINANCIAL HIGHLIGHTS
Turnover £461.1m Up 2.1% at actual exchange rates
Up 6.1% at constant exchange rates
Operating profit(1) £76.9m Up 10.2% at actual exchange rates
Up 15.3% at constant exchange rates
Operating margin 16.7% Up from 15.5%
Operating cash flow(2) £60.2m Up 13.8%
Profit before tax £53.9m
Earnings per share(3) 27.1p
Proposed final dividend per share 5.2p
(1) Before goodwill amortisation and exceptional operating items and includes
profits from associates
(2) Before exceptional items and after capital expenditure
(3) Basic earnings per share before exceptional items
CHIEF EXECUTIVE OFFICER, RICHARD NELSON commented:
I am delighted to report a strong set of results for 2002; we have delivered on
the objectives that we set out when we floated last year. Turnover was up in
all four divisions on a constant currency basis, demonstrating the strength of
our business.
The Labtest division, which tests textiles, toys and consumer goods and
certifies systems, had an excellent year with growth across all areas of
activity. The Caleb Brett division, which principally tests oil and chemicals,
experienced difficult market conditions in its cargo inspection and testing
business, which were offset by growth in the testing outsourced to Caleb Brett
by oil and chemical companies. ETL SEMKO, our electrical testing business
performed well in most areas of safety and performance testing, but the telecoms
testing market continued to be depressed. Our Foreign Trade Standards business
had an excellent year, operating with a low and flexible cost base.
We remain confident of prospects for our business both for the year ahead and
the future.
ANALYSTS' MEETING
There will be a meeting for analysts at 9.30am today at Goldman Sachs
International, Peterborough Court, 133 Fleet Street, London EC4A 2BB. A copy of
the presentation will be available on the website later today.
CONTACT
Richard Nelson, Chief Executive Officer
Bill Spencer, Chief Financial Officer
Aston Swift, Treasurer and Investor Relations
Telephone: +44 (0) 20 7396 3400 as@itsglobal.com
Katie Macdonald-Smith, Tulchan Communications
Telephone: +44 (0) 20 7353 4200 kmacdonald-smith@tulchangroup.com
Corporate website: http:// www.itsglobal.com/
High resolution images of Intertek Testing Services plc businesses are available
to download, free of charge from http://www.vismedia.co.uk/.
OPERATING AND FINANCIAL REVIEW
REVIEW OF RESULTS FOR 2002
OVERVIEW
Turnover for the Group was £461.1m, an increase of 6.1% over the previous year
at constant exchange rates. At actual exchange rates, the increase was 2.1%.
Growth was strong in Asia and Europe but there was lower turnover in America
where market conditions were weak in the oil and chemical sectors and in
telecommunications testing. However, each of the four operating divisions
reported increased turnover in the year at constant exchange rates with Labtest
delivering over 13% year on year growth.
Total operating profit before goodwill amortisation and exceptional items
improved by £10.2m to £76.9m, which was 15.3% at constant exchange rates. At
actual exchange rates, the increase was 10.2%. Labtest, ETL SEMKO and FTS all
delivered strong year on year growth while Caleb Brett reported a small decline
due to depressed oil and chemical markets. The Group made one small acquisition
in the year, costing £0.4m in total, which did not have a significant effect on
the results. Group profit margins after central overheads increased by 1.3% to
16.7%.
The performance of each of the divisions at constant exchange rates with an
adjustment to actual exchange rates is shown below:
Turnover Total operating
profit(2)
2002 2001 Change 2002 2001 Change
£m £m % £m £m %
Labtest 123.8 109.3 13.3 41.5 33.9 22.4
Caleb Brett 172.8 168.4 2.6 16.3 16.5 (1.2)
ETL SEMKO 104.7 99.9 4.8 14.0 12.4 12.9
Foreign Trade Standards 59.8 56.8 5.3 11.3 9.1 24.2
Central overheads - - - (6.2) (5.2) -
Continuing operations at constant exchange rates(1)
461.1 434.4 6.1 76.9 66.7 15.3
Exchange rate adjustment - 17.0 - - 3.1 -
As reported at actual average exchange rates 461.1 451.4 2.1 76.9 69.8 10.2
(1) 2002 and 2001 figures are stated at average exchange rates for 2002.
(2) Total operating profit is stated before goodwill amortisation and
exceptional items.
REVIEW OF 2002 DIVISIONAL PERFORMANCE
Operating profit referred to below is total operating profit before goodwill
amortisation and exceptional items.
LABTEST
Labtest continued to perform strongly. At constant exchange rates, Labtest's
turnover increased by 13.3% to £123.8m and operating profit increased by 22.4%
to £41.5m. At actual exchange rates, reported turnover and operating profit
growth was 8.2% and 16.6% respectively. Most of the growth came from Asia where
textile testing, toy testing, inspection and social compliance audit continued
to perform well as a result of increasing demand for quality by consumers, more
safety standards, growing numbers of product variants, shorter product life
cycles and the continuing migration of manufacturing from developed countries to
Asia. Turnover in China grew strongly in the established operations in Shanghai
and Shenzhen, the new hardlines laboratory in Shanghai and the new textile
testing facility in Guangzhou. The division's operating margin, increased from
31.0% to 33.5% principally due to continued improvement in operating procedures
in Hong Kong and growth in China where operating costs are lower than in Hong
Kong.
CALEB BRETT
At constant exchange rates, turnover increased by 2.6% to £172.8m but operating
profit declined by 1.2% to £16.3m. At actual exchange rates, reported turnover
and operating profit declined 1.8% and 6.3% respectively. The cargo inspection
and testing market accounted for 77% of the business. This part of the business
operated in a competitive market. The oil market was slow, with a decline in
fuel oil shipments in the United States at the start of the year due to the
relatively warm winter and reduced oil shipments to power stations during the
year because of low natural gas prices. Oil shipments generally were low due to
stock levels being kept at a minimum. Caleb Brett's operating margin reduced
from 9.8% to 9.4%.
The decline in turnover in the traditional inspection business was more than
offset by growth in the testing outsourced to Caleb Brett by oil and chemical
companies. This segment showed modest growth, accounting for 23% of Caleb
Brett's turnover. The number of customers interested in outsourcing continues
to increase and the outlook for growth is positive.
ETL SEMKO
At constant exchange rates, ETL SEMKO's turnover increased by 4.8% to £104.7m
and operating profit increased by 12.9% to £14.0m. At actual exchange rates,
reported turnover and operating profit increased by 1.6% and 9.4% respectively.
Growth was mainly due to there being more safety testing of household appliances
manufactured in Asia for export to North America and Europe, increased safety
and electrical testing in Sweden and increased testing of building products and
HVAC equipment in North America.
Telecom testing in the US and Europe together represented some 8% of the
division's turnover, declined due to the lack of product development and
therefore testing. This trend started in mid 2001 and continued for the rest of
that year but stabilised mid 2002. The division's operating margin increased
from 12.4% to 13.4%, mainly due to cost reductions in 2002 in the United States.
FOREIGN TRADE STANDARDS
FTS had a good year with strong growth in operating profit and improved margins.
At constant exchange rates, turnover increased by 5.3% to £59.8m and operating
profit increased by 24.2% to £11.3m. At actual exchange rates, reported
turnover and operating profit increased by 3.3% and 18.9% respectively. The
operating margin at constant exchange rates, increased from 16.0% to 18.9%. The
increase in operating profit was primarily driven by the expansion of the
pre-shipment inspection programme in Nigeria in the latter part of 2001. The
Nigerian programme in its present form was due to terminate in June 2002 but has
been extended. Turnover from the standards testing programme in Saudi Arabia
(SASO) grew due to the addition of new products to the programme, but there were
increased operating costs. On 29 May 2002, the Group announced that it had
received notification from SASO that the programme may cease at the end of
August 2002 but this proved not to be the case. The programme is well
established and contractually it runs until at least August 2003. The
pre-shipment inspection programmes in Kenya, Iran and Uzbekistan generated
growth in operating profit but closure costs were incurred in connection with
discontinued programmes in Uganda and Argentina.
CENTRAL OVERHEADS
Central overheads increased by 19.2% to £6.2m in the year, primarily due to
additional costs involved in strengthening compliance and increased rent at the
Group's head office in London.
OPERATING EXCEPTIONAL ITEMS
The Group reported an exceptional operating credit of £15.6m in 2002 compared to
exceptional costs of £23.1m in 2001. The credit comprised cash received from
Inchcape plc in connection with indemnified claims arising on the sale of
Inchcape Testing Services in 1996, cash received from the Group's insurers in
respect of costs provided in earlier years relating to litigation in respect of
the discontinued Environmental Testing division and the recovery of certain FTS
government debts previously provided against.
INTEREST
The Group's net interest charge before exceptional items for the year was £22.5m
compared to £39.2m a year ago. The pre-flotation debt was repaid and new
banking facilities were put in place in June and July 2002, which reduced the
Group's interest charge in the second half of the year. Had this refinancing
occurred on 1 January 2002, the interest charge for the year would have been
approximately £10.5m.
The Group incurred an exceptional finance charge of £15.5m in 2002. This
comprised bond redemption fees of £7.3m and accelerated fee amortisation on
repaid loans and share warrants of £8.2m.
TAXATION
Tax on profit before exceptional items was £16.0m, £0.7m lower than last year
and the effective tax rate before exceptional items reduced from 56.6% to 29.7%.
The main reason for the reduction in the effective tax rate was the reduced
interest expense, which resulted from the reorganisation of the Group's capital
structure following the IPO. The effective tax rate is expected to remain close
to 30% in the foreseeable future.
There was no tax impact from the exceptional items. The exceptional income is
either permanently non-taxable, or is offset by brought forward losses. The
exceptional expense is generally deductible but is not absorbed by current year
taxable income.
EARNINGS PER SHARE
Basic earnings per share in the year before exceptional items were 27.1p. After
exceptional items, this increased to 27.2p. An underlying earnings per share
calculation is also shown which removes the impact of exceptional items and
goodwill amortisation to give an underlying earnings per share of 27.8p.
The Group's new capital and debt structure was put in place part way through the
year, which impacted the interest and tax charges and the weighted average
number of shares in issue.
If the new capital and debt structure had been in place for the whole year, the
pro-forma basic earnings per share would have been 27.1p. This provides a more
reliable comparison of the underlying results of the Group when comparing with
future periods.
DIVIDEND
No interim dividend was paid for the six months to 30 June 2002. A final
dividend of 5.2p per share has been proposed, which subject to shareholder
approval will be paid on 18 June 2003, to shareholders on the register at 6 June
2003. Going forward, the Group expects to recommend to shareholders, the
payment of both an interim and a final dividend.
SHAREHOLDERS' FUNDS
The net profit after tax and minority interests for 2002 of £33.6m was reduced
by a provision for the final dividend of £8.0m and an actuarial loss on the
Group's defined benefit pension schemes of £6.5m and was increased by foreign
exchange movements of £6.5m to reduce shareholders' deficit by £25.6m. The
issue of new shares in the year increased shareholders' funds by £232.3m.
Preference shares of £105.5m were redeemed during the year. At the end of 2002,
shareholders' funds were in deficit by £90.5m compared to a deficit of £242.9m
at 31 December 2001. The deficit arises principally from the write-off of
goodwill in 1996 when the Group was purchased from its former owners. This
amounted to £264.7m at 31 December 2002. Excluding this historic goodwill
write-off, shareholders' funds would show a surplus of £174.2m at 31 December
2002.
CASH FLOW
Total operating cash inflow was £97.4m in the year, up £27.4m on last year. The
increase is impacted by exceptional cash inflow in 2002 and exceptional cash
outflow in 2001. The cash inflow in the year included exceptional net cash
inflow of £13.6m relating to income from the settlement of claims against the
Group's former parent, insurance refunds and debts collected from foreign
governments which had previously been written off, offset by restructuring
costs, legal fees and other costs. In 2001, there was exceptional net cash
outflow of £8.7m, which related to fines and legal costs, net of insurance
recoveries, and restructuring costs. Excluding exceptional cash flows, cash
generated by operations was £83.8m (2001: £78.7m).
In May 2002, the Group raised £232.7m, net of issue costs, from shareholders by
floating on the London Stock Exchange. Shortly afterwards, new banking
facilities were made available and existing debt, debentures and preference
shares were repaid.
ACCOUNTING POLICIES
The accounting policies of the Group remain unchanged from last year. The Group
elected to adopt FRS 17: Retirement benefits and FRS 19: Deferred tax in its
2001 accounts, ahead of the mandatory deadlines. There were net actuarial
losses of £6.5 million on the Group's defined benefit pension schemes in the
year and the net liabilities increased to £7.4 million. The actuarial pension
losses are charged to shareholders' funds through the statement of recognised
gains and losses and the pension liabilities are included in the Group balance
sheet.
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
Pre exceptional Exceptional Total Pre Exceptional Total
items items exceptional items
items
2002 2002 2002 2001 2001 2001
£m £m £m £m £m £m
Turnover - continuing operations 461.1 - 461.1 451.4 - 451.4
Cost of sales (356.3) - (356.3) (354.9) - (354.9)
Gross profit 104.8 - 104.8 96.5 - 96.5
Administrative expenses (28.8) 15.6 (13.2) (27.7) (20.0) (47.7)
Goodwill amortisation (0.9) - (0.9) (1.3) (3.1) (4.4)
Total administrative expenses (29.7) 15.6 (14.1) (29.0) (23.1) (52.1)
Group operating profit/(loss) 75.1 15.6 90.7 67.5 (23.1) 44.4
Share of operating profits of 0.9 - 0.9 1.0 - 1.0
associates
Total operating profit/(loss) 76.0 15.6 91.6 68.5 (23.1) 45.4
Continuing operations 76.0 5.9 81.9 68.5 (10.7) 57.8
Discontinued operations - 9.7 9.7 - (12.4) (12.4)
Profit/(loss) on ordinary activities 76.0 15.6 91.6 68.5 (23.1) 45.4
before interest
Net interest and similar charges (22.5) (15.5) (38.0) (39.2) - (39.2)
Other finance income 0.3 - 0.3 0.2 - 0.2
Profit/(loss) on ordinary activities 53.8 0.1 53.9 29.5 (23.1) 6.4
before taxation
Taxation on profit/(loss) on (16.0) - (16.0) (16.7) - (16.7)
ordinary activities
Profit/(loss) on ordinary activities 37.8 0.1 37.9 12.8 (23.1) (10.3)
after taxation
Attributable to minorities (4.3) - (4.3) (4.4) - (4.4)
Profit/(loss) for the financial year 33.5 0.1 33.6 8.4 (23.1) (14.7)
Dividends (8.0) - (8.0) - - -
Retained profit/(loss) for the year 25.5 0.1 25.6 8.4 (23.1) (14.7)
Earnings/(loss) per share
Basic 27.1p 0.1p 27.2p 10.4p (28.6)p (18.2)p
Diluted 26.0p 0.2p 26.2p 10.4p (28.6)p (18.2)p
GROUP BALANCE SHEET
at 31 December 2002
2002 2001
£m £m
Fixed assets
Intangible assets - goodwill 12.1 12.1
Tangible assets 76.7 75.6
Investments
Subsidiaries - -
Associates 0.9 0.8
Other 1.1 0.1
TOTAL 90.8 88.6
Current assets
Stocks 1.5 1.8
Debtors 101.0 104.7
Cash 70.6 23.7
TOTAL 173.1 130.2
Creditors due within one year
Borrowings (15.0) (37.1)
Other creditors (89.6) (97.2)
(104.6) (134.3)
Net current assets/(liabilities) 68.5 (4.1)
Total assets less current liabilities 159.3 84.5
Creditors due after more than one year
Borrowings (222.5) (304.0)
Other creditors (4.1) (5.5)
(226.6) (309.5)
Provisions for liabilities and charges (8.7) (9.1)
Net liabilities excluding pension schemes (76.0) (234.1)
Pension assets/(liabilities)
Schemes with net assets - 0.1
Schemes with net liabilities (7.4) (1.7)
Net liabilities TOTAL (83.4) (235.7)
Capital and reserves
Called up share capital 1.5 106.3
Shares to be issued - 2.8
Share premium 231.6 -
Merger reserve 3.6 3.6
Other reserves 2.8 -
Profit and loss account (330.0) (355.6)
Shareholders' deficit (90.5) (242.9)
Minority shareholders' equity interest 7.1 7.2
Capital employed TOTAL (83.4) (235.7)
Equity (83.4) (341.2)
Non-equity - 105.5
Shareholders' deficit (83.4) (235.7)
STATEMENT OF GROUP CASH FLOW
for the year ended 31 December 2002
2002 2001
£m £m
Net cash inflow from operating activities 97.4 70.0
Dividends received from associated undertakings 0.5 0.4
Returns on investments and servicing of finance (34.4) (28.4)
Taxation (12.7) (13.6)
Capital expenditure and financial investment (23.3) (25.5)
Acquisitions and disposals (4.3) (1.5)
Cash inflow before financing TOTAL 23.2 1.4
Financing
Net issue of shares 127.2 -
(Decrease)/increase in debt (97.1) 1.8
Increase in cash in the year TOTAL 53.3 3.2
Reconciliation of net cash flow to movement in net debt
Increase in cash in the period 53.3 3.2
Cash inflow/(outflow) from decrease/(increase) in debt 97.1 (1.8)
Decrease in net debt resulting from cash flows TOTAL 150.4 1.4
Debt issued in lieu of interest payments (6.1) (11.7)
Acquisitions and disposals - 0.1
Other non-cash movements (5.4) (2.2)
Exchange adjustments 11.6 (3.9)
Decrease/(increase) in net debt in the year TOTAL 150.5 (16.3)
Net debt at the start of the year (317.4) (301.1)
Net debt at the end of the year (166.9) (317.4)
.STATEMENT OF TOTAL GROUP RECOGNISED GAINS AND LOSSES
2002 2001
£m £m
Net profit/(loss) from group companies 33.0 (15.3)
Net profit from associates 0.6 0.6
Profit/(loss) for the financial year TOTAL 33.6 (14.7)
Actuarial pension loss* (6.5) (3.3)
Exchange adjustments 6.5 (4.9)
Total recognised gains and losses relating to the year 33.6 22.9
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' DEFICIT
2002 2001
£m £m
Opening shareholders' deficit (242.9) (220.0)
Issue of ordinary shares 232.3 -
Redemption of preference shares (105.5) -
Profit/(loss) for the financial year 33.6 (14.7)
Dividend proposed (8.0) -
Actuarial pension loss * (6.5) (3.3)
Exchange adjustments 6.5 (4.9)
Closing shareholders' deficit TOTAL (90.5) (242.9)
*Actuarial pension loss is stated net of deferred tax
HISTORICAL COST PROFITS AND LOSSES
A note of consolidated historical cost profits and losses is not presented, as
there is no material difference in either year between the profits of the Group
as shown in these accounts and those shown on a historical cost basis.
NOTES
1) SEGMENTAL INFORMATION
The group comprises four operating divisions which are organised as follows:
Labtest, which tests and inspects textiles, toys and other consumer products;
Caleb Brett, which tests and inspects oil, chemicals and agricultural produce;
ETL SEMKO, which tests and certifies electrical and electronic products,
telecommunication equipment, building products and heating, ventilation and air
conditioning equipment and Foreign Trade Standards, which provides standards
programmes and Fiscal Good Governance programmes to standards bodies and
governments. Central overheads comprise the costs of the corporate head office
and non-operating holding companies.
2002 2001
Business analysis Turnover Total Net Turnover Total Net
operating operating operating operating
profit assets profit assets
£m £m £m £m £m £m
By activity
Labtest 123.8 41.5 21.7 114.4 35.6 20.5
Caleb Brett 172.8 16.3 42.4 176.0 17.4 39.2
ETL SEMKO 104.7 14.0 37.9 103.1 12.8 43.3
Foreign Trade Standards 59.8 11.3 5.8 57.9 9.5 0.4
Central overheads - (6.2) 0.7 - (5.5) (1.2)
TOTAL 461.1 76.9 108.5 451.4 69.8 102.2
Operating exceptional items - 5.9 - - (10.7) -
Goodwill amortisation - (0.9) - - (1.3) -
Continuing operations TOTAL 461.1 81.9 108.5 451.4 57.8 102.2
Discontinued operations - - 9.7 - - (12.4) -
exceptional items
TOTAL 461.1 91.6 108.5 451.4 45.4 102.2
By geographical origin
Americas 166.0 16.4 50.8 177.8 13.9 53.8
Europe, Middle East and Africa 144.3 12.1 32.7 136.4 11.8 20.4
Asia 150.8 48.4 25.0 137.2 44.1 28.0
Continuing operations TOTAL 461.1 76.9 108.5 451.4 69.8 102.2
The operating profit shown by geographical origin is before goodwill
amortisation and exceptional items.
In 2002, Systems Certification Services was transferred from ETL SEMKO to
Labtest. The 2001 figures for turnover and operating profit have been restated
to show a true comparison. Labtest turnover increased by £5.9m and operating
profit increased by £1.4m from the figures previously reported. ETL SEMKO
turnover and operating profit reduced by the same amounts.
The above table shows the turnover analysed by geographical origin. The
turnover of continuing operations by geographical destination was Americas
£168.6m (2001: £183.6m), Europe, Middle East and Africa £137.5m (2001:
£127.2m) and Asia £155.0m (2001: £140.6m).
In order to facilitate comparison of the underlying performance, profit on
continuing operations by activity has been shown before exceptional operating
items and before allocating goodwill amortisation to the divisions. After
allocating these costs, the divisional profitability was: Labtest £41.5m (2001:
£35.6m), Caleb Brett £17.7m (2001: £12.2m), ETL SEMKO £13.8m (2001: £10.2m),
FTS £15.1m (2001: £5.3m) and central overheads £(6.2)m (2001: £(5.5)m) and
geographically was: Americas £18.2m (2001: £11.1m), Europe, Middle East and
Africa £15.3m (2001: £2.7m) and Asia £48.4m (2001: £44.0m).
Discontinued operations relate to the Environmental Testing business.
2) NET INTEREST AND SIMILAR CHARGES
2002 2001
£m £m
Interest payable:
Senior Subordinated Notes 7.3 14.5
Parent Subordinated PIK Debentures 6.5 12.2
Senior Term Loans 8.0 7.7
Senior Revolver 0.5 1.3
Other 0.7 2.0
Amortisation of debt issuance costs 1.3 1.9
TOTAL 24.3 39.6
Interest receivable:
On bank balances (1.8) (0.4)
Net interest payable TOTAL 22.5 39.2
Exceptional finance charges
Unamortised costs in connection with:
Warrants converted into shares 2.2 -
Repaid Senior Term Loans 6.1 -
Premium on redemption of Senior Subordinated Notes 7.2 -
TOTAL 15.5 -
Total net interest and similar charges 38.0 39.2
3) EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share is based on earnings after tax
and minority interests and the weighted average number of ordinary shares in
issue during the year.
In addition to the earnings per share required by FRS 14: Earnings per share an
underlying earnings per share has also been calculated and is based on earnings
excluding the effect of the exceptional items and goodwill amortisation. It has
been calculated to allow shareholders to gain a clearer understanding of the
trading performance of the Group. Details of the underlying earnings per share
are set out below:
2002 2001
Based on the profit for the period: £m £m
Underlying profit before tax 54.7 30.8
Taxation on underlying profit (16.0) (16.7)
Minority interest in underlying profit (4.3) (4.4)
Underlying earnings TOTAL 34.4 9.7
Goodwill amortisation (0.9) (1.3)
Exceptional operating items 15.6 (23.1)
Exceptional finance charges (15.5) -
Basic earnings TOTAL 33.6 (14.7)
Number of shares (millions):
Basic weighted average number of shares 123.7 80.8
Potentially dilutive share options 1.5 n/a
Potentially dilutive share warrants 2.9 n/a
Diluted weighted average number of shares 128.1 80.8
Basic underlying earnings/(loss) per share 27.8p 12.0p
Options (0.3)p n/a
Warrants (0.6)p n/a
Diluted underlying earnings per share TOTAL 26.9p 12.0p
Basic earnings/(loss) per share 27.2p (18.2)p
Options (0.4)p n/a
Warrants (0.6)p n/a
Diluted earnings/(loss) per share TOTAL 26.2p (18.2)p
The weighted average number of shares used in the calculation of the diluted
earnings per share for the year to 31 December 2002 excludes 1,378,500 potential
shares (2001: 9,303,809) as these were not dilutive in accordance with FRS 14:
Earnings per share.
The table below of pro-forma earnings is given in order to show the impact of
the post flotation capital structure of the Group.
Actual Pro-forma
2002 2002
£m £m
Profit on ordinary activities before interest and exceptional items 76.0 76.0
Net interest and similar charges (22.2) (10.5)
Taxation (16.0) (19.6)
Attributable to minorities (4.3) (4.3)
Profit for the financial year before exceptional items TOTAL 33.5 41.6
Exceptional operating items 15.6 -
Exceptional finance charges (15.5) -
Basic earnings TOTAL 33.6 41.6
Basic weighted average number of shares in issue (millions) 123.7 153.4
Basic earnings per share before exceptional items 27.1p 27.1p
Basic earnings per share 27.2p 27.1p
Pro-forma basic earnings per share represents the earnings per share based on
the post flotation capital structure of the Group. This assumed that all
pre-flotation debt was replaced on 31 December 2001 with the £300m new loan
facility of which £250m was drawn. The pro-forma weighted average number of
shares in issue was the actual number of shares in issue post flotation.
4) CREDITORS DUE WITHIN ONE YEAR
Group Group
2002 2001
£m £m
Borrowings:
Senior Term Loans 15.5 15.4
Senior Revolver - 22.4
Other borrowings 0.4 1.0
TOTAL 15.9 38.8
Debt issuance costs (0.9) (1.7)
TOTAL 15.0 37.1
Trade creditors 25.5 28.6
Corporation tax 11.0 8.5
Other taxation and social security 5.0 5.0
Other creditors 2.5 9.9
Accruals and deferred income 37.6 45.2
Dividends payable 8.0 -
TOTAL 104.6 134.3
5) CREDITORS DUE AFTER ONE YEAR
Group Group
2002 2001
£m £m
Borrowings:
Senior Term Loans 225.4 68.5
Senior Subordinated Notes - 140.0
Parent Subordinated PIK Debentures - 100.7
TOTAL 225.4 309.2
Debt issuance costs (2.9) (5.2)
TOTAL 222.5 304.0
Other creditors 4.1 5.5
TOTAL 226.6 309.5
6) ANALYSIS OF NET DEBT
At beginning Cash flow Debt issued in Other non-cash Exchange At end of
of year lieu of changes adjustments year
interest
payment
£m £m £m £m £m £m
Cash 23.7 53.3 - - (6.4) 70.6
Borrowings (341.1) 97.1 (6.1) (5.4) 18.0 (237.5)
Total net debt (317.4) 150.4 (6.1) (5.4) 11.6 (166.9)
7) RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
Group Group
2002 2001
£m £m
Group operating profit after exceptional items 90.7 44.4
Depreciation charge 17.6 15.7
Goodwill amortisation 0.9 1.3
Goodwill impairment - 3.1
Impairment of fixed assets - 0.9
Loss on sale of fixed assets 0.1 0.1
Decrease/(increase) in stocks 0.3 (0.1)
Increase in debtors (2.6) (6.1)
(Decrease)/increase in creditors (8.9) 16.1
Decrease in other provisions (0.7) (5.4)
Total operating cash inflow 97.4 70.0
Operating cash inflow before exceptional items 83.8 78.7
Exceptional cash inflow/(outflow) 13.6 (8.7)
Total operating cash inflow 97.4 70.0
8) ANNUAL REPORT AND ACCOUNTS
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2002 or 2001. Statutory
accounts for 2001 have been delivered to the Registrar of Companies and those of
2002 will be delivered following the Company's Annual General Meeting. The
auditor has reported on those accounts; their reports were unqualified and did
not contain statements under section 237(2) or (3) of the Companies Act 1985.
The report and accounts will be posted in March 2002. The Annual General
Meeting will be held on 15 May 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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