Interim Results

Photo-Me International PLC 13 December 2004 PHOTO-ME INTERNATIONAL PLC - INTERIM ANNOUNCEMENT Underlying Interim Profit up by 22%, H1/H2 Imbalance Reducing Photo-Me International ('PMI'), the digital imaging company focused on professional laboratories and end-consumer vending solutions, announces further progress following the £24.5m turnaround in pre-tax profits (from a loss of £3.4m to a profit of £21.1m) achieved in the year ended 30 April 2004. Underlying pre-tax profit for the half year ended 31 October 2004 is up by 22.0% to £18.0m. As a consequence of the growing Manufacturing activities, the traditionally weaker second half is budgeted to be much stronger than in past years, so reducing the seasonality in PMI's profit profile. Financial Highlights •Turnover increased by 0.4% to £117.7m. •Pre-tax profit up 19.2% (underlying increase 22.0%) to £18.0m, despite foreign exchange loss of £1.3m (2003: gain of £0.2m) •Basic EPS up 16.8% to 3.06p. •Interim dividend per share of 0.8p (2003: nil), following a resumption of dividend payments with a first and final dividend per share of 1.0p for the full year to 30 April 2004. Operational Highlights Vending Division •In the Vending Division (which has an unrivalled network of 27,000 sited machines across 18 countries in high-footfall locations), operating profit was maintained, although turnover decreased by 3.3%. Cash generation remains strong. •The roll-out of Digital Media Kiosks (a unique product for the entirely self-service printing of photographs) commenced in May. Results have so far been pleasing. The Group manufactured 2,000 Digital Media Kiosks, of which 500 were sold to third parties and 1,500 are operated by the Group in Europe. The cost of production of the Digital Media Kiosks will be reduced by more than 50% by the end of the financial year, following the conclusion of manufacturing agreements with suppliers in Asia. This will further improve the profitability of the Vending Division from the next financial year. Manufacturing Division •Turnover increased by 8.0% to £41.2m (2003: £38.1m), benefiting from the continued success of the DKS 15xx range of minilabs, of which 750 units (2003: 600) were sold during the period. Despite a less favourable sales mix, Manufacturing substantially increased its profit, also reflecting cost savings resulting from all minilab production being subcontracted to Flextronics in Poland since January 2004. •In September 2004, PMI signed a contract with Tesco, the UK's largest retailer, to supply 165 DKS 1550 minilabs - PMI has already commenced delivery. In November, PMI signed a contract with Klick, the UK's largest independent photo-processing retailer, also for DKS 1550 minilabs. The value of these contracts totals approximately £25m, a substantial proportion of it being earned in the second half of the current financial year. In addition, trials in the USA have recently commenced with Kodak with a view to the possible replacement by PMI's digital minilabs of up to 10,000 analogue machines. Serge Crasnianski, CEO, stated: 'It is expected that Digital Media Kiosks will be a significant profit contributor for the Vending Division in the coming years. It is planned that a further 5,000 Digital Media Kiosks will be installed by the Group during the first few months of the next financial year. 'In the current financial year, France is expected to continue to trade well, the UK is expected to continue its recovery, and the Japanese market is expected to improve. The Board is confident that its continuing restructuring efforts in Japan will lead in the medium term to satisfactory profitability. 'The Board has noted that ID photograph requirements in France will be boosted by the planned introduction of photographs on the national health identification card, resulting in 48 million replacement cards in 2006. In addition, the Japanese government has recently announced that ID photographs will play an integral part in the new generation of passports to be introduced in March 2006. These views, of two of the most technologically advanced countries in the world, confirm the Board's assessment of the sustained strength of the ID photobooth business. 'With demand remaining strong and a substantial increase in production, combined with a better sales mix, being budgeted for the second half, the manufacture of DKS minilabs is expected to contribute substantial profits to the second half of the current financial year. 'The Directors remain confident that PMI will make further significant progress in the current financial year. Further out, the Directors intend to expand substantially, and build market-leading positions in, both the Vending and Manufacturing Divisions'. Presentation: A presentation to investors and broker's analysts will be given from 09:30 to 10:30 today at Regus, CityPoint, 9th Floor, 1 Ropemaker Street, London, EC2. Enquiries: Photo-Me International plc 01372-453 399 Vernon Sankey (Deputy Chairman / Chairman designate) ) (today) 020-7444 4166 Serge Crasnianski (Chief Executive Officer) ) Bankside Consultants Limited Charles Ponsonby 020-7444 4166 CHIEF EXECUTIVE'S STATEMENT In the year ended 30 April 2004, PMI recorded a pre-tax profit of £21.1m - a turnaround of £24.5m from the previous year's loss of £3.4m. In the following half year ended 31 October 2004, another good result has been achieved. Pre-tax profit totalled £18.0m (2003: £15.1m reported, £14.8m excluding an exceptional credit), ahead of budget and despite a foreign exchange loss of £1.3m (2003: gain of £0.2m). Starting from this year, as a consequence of the growing Manufacturing activities, the traditionally weaker second half is budgeted to be much stronger than in past years. Further out, the Directors remain confident that the digital revolution in photography offers PMI huge opportunities. Both the manufacture of digital minilabs and the operation of Digital Media Kiosks (for the self-service printing of photographs) are expected to be drivers for substantial profit growth. PROFIT & LOSS ACCOUNT OVERVIEW 6 months to 31 Oct 2004 2003 Variance Turnover (£m) 117.7 117.2 0.4% Operating profit (£m) 18.5 15.6 18.6% Depreciation (£m) 12.7 16.1 (21.4%) EBITDA *(£m) 31.2 31.7 (1.7%) PBT* (£m) 18.0 14.8 22.0% Basic earnings per share (p) 3.06 2.62 16.8% * 2003 excludes an exceptional credit of £0.3m As the table indicates, on turnover increased by 0.4%, underlying pre-tax profit was 22.0% higher whilst basic earnings per share advanced by 16.8%. NET DEBT/INTEREST At 31 October 2004 2003 Net debt (£m) (8.6) (7.9) In the half year, gross cash inflow remained substantial at £31.4m (2003: £31.6m). During this period, PMI rolled-out 1,500 Digital Media Kiosks, manufactured at its factory in Grenoble, and replaced 1,000 photobooths; this explains most of the capital expenditure totalling £20.4m (2003: £9.6m). Ongoing investment in Vending equipment, together with the continued growth of digital minilab sales, resulted in additional requirements for working capital, which increased by £15.1m. Thus, the combination of capital expenditure and working capital have contributed to a net cash outflow of £11.5m since 30 April 2004 and closing net debt of £8.6m. In the second half, it is expected that capital expenditure will substantially reduce following the transfer in the New Year of Digital Media Kiosk manufacture to a sub-contractor in China, resulting in a suspension of production for a few months. Consequently, a net cash balance at the year-end is confidently predicted. In the absence of substantial capital expenditure, PMI remains highly cash generative, in particular in its photobooth business. Net interest payable for the half year of £0.5m (2003: £0.9m) was covered 36 x (2003: 19 x) by profit before interest and tax. DIVIDENDS Following the resumption of dividend payments, with a first and final dividend per share for the year ended 30 April 2004 of 1.0p, an interim dividend per share of 0.8p (2003: nil) has been declared. The dividend will be paid on 8 April 2005 to shareholders on the register on 4 March 2005, with an ex-dividend date of 2 March 2005. BUSINESS REVIEW Divisional Analysis of Turnover 6 months to 31 Oct 2004 2003 Variance £m £m % Vending 76.5 79.1 (3.3) Manufacturing 41.2 38.1 8.0 ----------------------------------------- 117.7 117.2 0.4 ========================================== As the table indicates, the 0.4% increase in Group turnover was the net of a 3.3% decrease in Vending and an 8.0% increase in Manufacturing. Vending accounted for 65% (2003: 68%) of Group turnover . Geographic Analysis of Turnover and Profit Turnover Pre-tax profit 6 months to 31 Oct 2004 2003 Variance 2004 2003 £m £m % £m £m Continental Europe 72.2 68.3 5.7 16.8 14.7 UK & Republic of Ireland 28.5 30.4 (6.2) 0.5 0.7 Asia 15.3 16.1 (5.3) 0.9 0.1 USA 1.7 2.4 (29.0) (0.2) (0.4) ---------------------------------------------------- Total 117.7 117.2 0.4 18.0 15.1 ==================================================== Continental Europe, which includes the Manufacturing activity, contributed 61% (2003: 58%) of Group turnover and, again, substantially all of Group pre-tax profit. Continental Europe was the only region that increased its turnover, with much of the increase arising in Manufacturing. The pre-tax profit in the UK and the Republic of Ireland is depressed by the inclusion of Head Office overheads. Although the Board believes that detailed disclosure of the results of the individual activities could be prejudicial to the Group's commercial interests, certain trends are commented on below. Vending The Vending business comprises the operation of photobooths and other Vending equipment. Over the past 12 months, the total number of Vending sites world-wide had increased by approximately 1,000 to 27,000, including some 20,000 photobooths. PMI is a global company, operating in 18 countries, with three major Vending territories: France, the UK & the Republic of Ireland, and Japan - in all of which it continues to enjoy a leading market position. Globally, the turnover of the Vending Division, which is currently mature, decreased by 3.3%. The contribution to profits was, however, maintained. Geographical Analysis Vending turnover in France (with 8,900 sites, including 5,800 photobooths, of which 96% are digital), increased by 7%. ID photograph requirements in France will be boosted by the planned introduction of photographs on the national health identification card, resulting in 48 million replacement cards in calendar 2006. Vending turnover in the UK and the Republic of Ireland (with 8,900 sites, including 5,700 photobooths, of which 75% are digital) increased by 1%. Vending turnover in Japan (with 4,400 sites, including 4,300 photobooths, of which 79% are digital) decreased by 8% despite a 10% increase in the number of machines, an increase in the proportion of digital machines from 63%, and the introduction of a voluntary ID card in August 2003. This continuing disappointing performance reflects Japan's sustained recession and competition. To address these problems, in the New Year, the roll out of digital machines (which are more easily maintained) will be increased and the workforce will be reduced by one-third. The Japanese Government has recently announced that ID photographs will play an integral part in the new generation of passports to be introduced in March 2006. Acquisition of Minority Interest In May 2004, PMI acquired the outstanding 30.3% interest in its German subsidiary, FOTOFIX-Schnellphotoautomaten GmbH, for £2.5m in cash. Digital Media Kiosks Following successful trials over almost two years involving 265 units, mainly in Continental Europe, the roll-out of Digital Media Kiosks commenced in May. By the period end, 1,500 had been manufactured, for operation by PMI, especially in France. To date, with average revenues higher than for a photobooth, results have been pleasing. Agreement has been reached with a sub-contractor in Asia for the manufacture of 5,000 thermal (i.e. dry process) Digital Media Kiosks, mainly for operation by the Group. Manufacture will commence in the second quarter of 2005, initially at the rate of 1,000 units a month. This agreement reduces the cost of Digital Media Kiosks by more than 50% whilst improving a number of features. Manufacturing Manufacturing turnover primarily derives from the sale to third parties of photo-processing equipment manufactured by PMI or by sub-contractors on its behalf. PMI has a unique and comprehensive range covering all market segments, from wholesale labs, via professional and retail labs, to end-consumer vending kiosks. In output terms, processing labs range from 250 to 20,000 prints per hour. This Division increased its turnover by 8.0%. Wholesale Labs Imaging Solutions' wholesale lab business (formerly the Gretag central lab business) was purchased in April 2003 and comfortably repaid its purchase price in the first year of ownership. Based near Zurich in Switzerland, Imaging Solutions is involved in the development, manufacture, sale and technical support of equipment and systems for high volume photo-finishing laboratories (up to 20,000 prints per hour). In the period, Imaging Solutions increased its turnover by 12% to £6.7m and contributed a useful profit. Professional Labs A substantial majority of Manufacturing turnover is represented by sales of the DKS 15xx range of minilabs through PMI's world-wide range of distributors and its OEM contract with Kodak. The success of the DKS 15xx range reflects its quality, as evidenced by the award of the DIMA minilab prize at the PMA Convention and Trade Show in Las Vegas in February 2004, uniquely for the second successive year. These minilabs have an output of 800 to 1,500 prints an hour. In the period, PMI sold 750 units (2003: 600) of the DKS 15xx range, but only 30% (2003: 61%) of these were the top-of-the-range DKS 1550 model. However, margins benefited from the move of production to PMI's sub-contractor in Poland, Flextronics, with effect from January 2004. In September 2004, PMI signed a contract with Tesco, the UK's largest retailer, to sell and service 165 DKS 1550 minilabs. In November 2004, PMI signed a contract with Klick, the UK's largest independent photo-processing retailer, with over 600 stores, also to sell DKS 1550 minilabs. The value of these contracts totals approximately £25m, a substantial proportion of which will be earned in the second half of the current financial year. Trials have recently commenced with Kodak in the USA with a view to the possible replacement by PMI's digital minilabs of up to 10,000 analogue machines. Outside the USA, PMI has been selling digital minilabs to Kodak since 1998. Kodak remains PMI's largest individual customer. Retail Labs PMI's retail lab is the DKS 900, the world's first thermal digital minilab. The DKS 900 is based on a unique proprietary PMI technology capable of printing from 250 to 1,000 prints per hour with a high quality comparable to that of traditional silver halide prints. It accepts all current digital inputs, including mobile telephones, Bluetooth and memory chips, as well as analogue sources (negatives). Its compactness, reliability and ease of use make it particularly suited for a retail store environment. Unveiled at the PMA Convention and Trade Show in February 2004, the first deliveries of the DKS 900 were made in August 2004. Consumer Labs Digital Media Kiosks provide vending machine convenience for digital camera customers and can be sited at PMI's unrivalled network of locations world-wide or at retail locations, which in turn benefit from PMI's established, and unique, maintenance and cash collection infrastructure. Whilst a substantial majority of Digital Media Kiosks is currently manufactured for operation by the Group, some are also sold for operation by third parties. With effect from the New Year, manufacture is being transferred to a sub-contractor in China, thereby securing low cost producer status. BOARD At the AGM on 4 November 2004, it was announced that Dan David will retire as Chairman on 1 February 2005, having fulfilled the role for the past 12 years. In recognition of his contribution to the Group over the past 41 years, the Board asked Mr David to accept the position of Life President and to continue as a non-executive Director. The Board agreed that Vernon Sankey, who has held the position of non-executive Deputy Chairman since his appointment to the Board four years ago, should take over as non-executive Chairman. Mr Sankey has an excellent pedigree to assume the role, having a wealth of experience in other PLCs, many of them very substantial corporations. On Vernon Sankey's elevation to the Chairmanship, David Scotland will become Senior Independent Non-executive Director PROSPECTS Market Opportunity With the exponential growth in digital photography predicted in the coming years, customers will be searching for digital printing solutions. PMI is uniquely placed to satisfy this need by offering a complete range of high quality, reasonably priced equipment targeted at each market segment. Vending It is expected that Digital Media Kiosks will be a significant profit contributor in the coming years. In the current year, France is expected to continue to trade well, the UK is expected to continue its recovery, and the Japanese market is expected to improve. Further out, the increased photograph ID requirements in France and Japan should have a materially beneficial effect. Manufacturing With demand remaining strong and a substantial increase in production, combined with a better sales mix, being budgeted for the second half, the manufacture of DKS minilabs is expected to contribute substantial profits to the second half of the current financial year, which will reduce the seasonality of the Group's profit profile. Overall The Directors remain confident that PMI will make further significant progress in the current financial year. Further out, the Directors intend to expand substantially, and build market-leading positions in, both the Vending and Manufacturing Divisions. Serge Crasnianski Chief Executive Officer 13 December 2004 GROUP PROFIT AND LOSS ACCOUNT for the six months ended 31 October 2004 Unaudited Unaudited Audited 6 months to 6 months to year to 31 October 31 October 30 April 2004 2003 2004 Note £000 £000 £000 Group turnover - continuing 2 117,669 117,245 219,949 operations Cost of sales (87,087) (90,470) (177,826) --------------------------------- Gross profit 30,582 26,775 42,123 Administrative expenses (12,763) (11,623) (20,847) Other operating income 672 435 983 ------------------------------- Operating profit - continuing operations 18,491 15,587 22,259 Share of operating profit of associates 24 20 32 ------------------------------ Total operating profit 18,515 15,607 22,291 Profit on the sale of joint venture - 358 358 ------------------------------- Profit on ordinary activities before 18,515 15,965 22,649 interest Interest receivable 263 80 195 Interest payable (776) (937) (1,714) -------------------------------- Profit on ordinary activities before 3 18,002 15,108 21,130 taxation Tax on profit on ordinary 4 (6,748) (5,353) (6,018) -------------------------------- activities Profit on ordinary activities after taxation 11,254 9,755 15,112 Minority interests - equity interests (98) (232) (535) - non-equity interests (9) (10) (19) ------------------------------- Profit attributable to members of the holding company 11,147 9,513 14,558 Dividends - equity interests 5 (2,914) - (3,643) -------------------------------- Retained profit for the period 8,233 9,513 10,915 =============================== Basic earnings per share 6 3.06p 2.62p 4.01p Diluted earnings per share 6 3.03p 2.60p 3.97p Dividend per share 5 0.80p - 1.00p GROUP BALANCE SHEET as at 31 October 2004 Unaudited Unaudited Audited 31 October 31 October 30 April 2004 2003 2004 Note £000 £000 £000 Fixed assets Intangible assets - goodwill 7 9,266 8,098 7,984 - development costs, patents and licences 7 14,457 10,693 13,411 Tangible assets 7 72,024 70,808 63,971 Investments 256 282 282 ------------------------------ 96,003 89,881 85,648 ============================== Current assets Stocks 25,599 23,385 23,018 Debtors 41,963 31,152 32,345 Investments and short-term deposits 2,170 10,683 13,983 Cash at bank and in hand 19,002 14,254 18,026 ------------------------------ 88,734 79,474 87,372 Creditors Amounts falling due within one year 67,485 63,544 68,649 ------------------------------ Net current assets 21,249 15,930 18,723 ------------------------------ Total assets less current 117,252 105,811 104,371 liabilities Creditors Amounts falling due after more than one year 20,263 22,413 17,651 ------------------------------ 96,989 83,398 86,720 Provisions for liabilities and charges Provisions 6,141 6,229 6,323 Deferred taxation 9,450 6,162 8,747 ------------------------------ 15,591 12,391 15,070 ------------------------------ 81,398 71,007 71,650 Minority interests - equity interests 935 1,481 1,713 - non-equity interests 787 830 803 ------------------------------ 79,676 68,696 69,134 ============================== Capital and reserves Called-up share capital 2,022 2,017 2,022 Reserves: Share premium account 8 3,487 2,823 3,487 Other reserves 8 2,891 2,829 2,765 Profit and loss account 8 71,276 61,027 60,860 ------------------------------ 79,676 68,696 69,134 =============================== Shareholders' funds are attributable to: Equity interests 79,475 68,495 68,933 Non-equity interests 201 201 201 ------------------------------- 79,676 68,696 69,134 ============================== GROUP CASH FLOW STATEMENT for the six months ended 31 October 2004 Unaudited Unaudited Audited 6 months to 6 months to year to 31 October 31 October 30 April 2004 2003 2004 Note £000 £000 £000 Net cash inflow from operating activities a 16,285 35,544 58,743 Dividends from associated 55 25 26 undertakings Returns on investments and servicing (534) (869) (1,553) of finance Taxation (4,982) 56 (1,102) Capital expenditure and financial investment (20,439) (9,631) (20,979) Acquisitions and disposals (2,456) (113) (154) ---------------------------------- Cash inflow before use of liquid resources and financing (12,071) 25,012 34,981 Management of liquid resources 12,196 (9,560) (12,876) Financing - increase/(decrease) in debt 1,177 (10,929) (16,093) - ordinary shares issued for cash - 95 764 - shares in subsidiary undertakings contributed by minorities 11 265 226 ------------------------------ Increase in cash in the period 1,313 4,883 7,002 ============================== Reconciliation of net cash flow to b movement in net debt Increase in cash in the period 1,313 4,883 7,002 Repayment of capital element of finance leases 634 1,291 2,151 Cash flow from (increase)/decrease in (1,811) 9,638 13,942 debt Cash flow from (decrease)/increase in liquid resources (12,196) 9,560 12,876 -------------------------------- Change in net debt resulting from cash (12,060) 25,372 35,971 flows Foreign exchange translation differences 529 179 355 ------------------------------- Movement in net debt in the period (11,531) 25,551 36,326 Opening net cash/(debt) 2,925 (33,401) (33,401) -------------------------------- Closing net (debt)/cash (8,606) (7,850) 2,925 ================================ NOTES TO THE CASH FLOW STATEMENT for the six months ended 31 October 2004 (a) Reconciliation of operating profit to operating cash flow Unaudited Unaudited Audited 6 months to 6 months to year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Operating profit 18,491 15,587 22,259 Depreciation and amortisation charges 12,668 16,114 29,863 (Profit)/loss on sale of assets (172) (51) 467 Other non-cash movements 424 (26) 200 ------------------------------- Gross cash inflow 31,411 31,624 52,789 Net movement in working capital (15,126) 3,920 5,954 -------------------------------- Net cash inflow from operating activities 16,285 35,544 58,743 ================================ (b) Analysis of net debt At Other At At 1 May non-cash Exchange 31 October 31 October 2004 Cash flow changes movement 2004 2003 £000 £000 £000 £000 £000 £000 Cash at bank and in 18,026 560 416 19,002 14,254 hand Overdrafts (5,674) 753 (15) (4,936) (3,761) ----- 1,313 ----- Debt due after one (14,342) (6,380) 3,949 (147) (16,920) (17,901) year Debt due within one (8,436) 4,569 (3,949) (91) (7,907) (9,595) year Finance (632) 634 (17) (15) (1,530) leases ----- (1,177) ===== Current asset investments and short-term 13,983 (12,196) 383 2,170 10,683 deposits ------------------------------------------------------------------ Total 2,925 (12,060) - 529 (8,606) (7,850) =================================================================== GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the six months ended 31 October 2004 Unaudited Unaudited Audited 6 months to 6 months to year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Profit attributable to shareholders 11,147 9,513 14,558 Exchange and other adjustments 2,309 (843) (2,476) --------------------------------- Total recognised gains and losses for the period 13,456 8,670 12,082 ================================ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the six months ended 31 October 2004 Unaudited Unaudited Audited 6 months to 6 months to year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Profit for the period before dividends 11,147 9,513 14,558 Dividends (2,914) - (3,643) Exchange and other adjustments 2,309 (843) (2,476) Shares issued - 95 764 --------------------------------- Net movement in shareholders' funds 10,542 8,765 9,203 Opening shareholders' funds 69,134 59,931 59,931 ---------------------------------- Closing shareholders' funds 79,676 68,696 69,134 ================================= NOTES ON THE ACCOUNTS for the six months ended 31 October 2004 1 Basis of preparation of the interim accounts The interim accounts have been prepared on the basis of accounting policies set out in the Group's 2004 Report and Accounts. For the preparation of the interim accounts, the results of overseas undertakings have been translated at exchange rates ruling on 31 October 2004. Turnover and operating profit are derived from continuing operations. The financial information set out in this document in respect of the year ended 30 April 2004 does not constitute the Group's statutory accounts for that period but has been extracted from the statutory accounts, which have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. 2 Turnover Turnover was contributed as follows: 6 months to 6 months to Year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Analysis by activity Manufacturing: Total sales 51,766 38,740 82,448 Sales of capital equipment to Group undertakings for own use (10,623) (657) (3,889) ----------------------------------- Sales to third parties 41,143 38,083 78,559 Vending 76,526 79,162 141,390 ---------------------------------- Total sales to third parties 117,669 117,245 219,949 ================================== Geographical analysis by origin Continental Europe 72,217 68,350 130,765 United Kingdom and Republic of Ireland 28,496 30,377 54,035 Asia 15,229 16,084 31,210 United States of America 1,727 2,434 3,939 ---------------------------------- 117,669 117,245 219,949 ================================== Sales of capital equipment to Group undertakings originates from Continental Europe and has been excluded from the geographical analysis by origin. 3 Profit on ordinary activities before taxation 6 months to 6 months to Year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Geographical analysis Continental Europe 16,788 14,721 17,344 United Kingdom and Republic of Ireland 485 677 3,016 Asia 958 69 1,096 United States of America (229) (359) (326) ---------------------------------- 18,002 15,108 21,130 ================================== 4 Taxation 6 months to 6 months to Year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 United Kingdom 105 169 368 Overseas 6,643 5,184 5,650 ----------------------------------------------- 6,748 5,353 6,018 ============================================== The charges for taxation for the six months ended 31 October 2004 have been computed by applying the estimated effective tax rates for the full financial year. 5 Dividends 6 months to 6 months to Year to 31 October 31 October 30 April 2004 2003 2004 £000 £000 £000 Interim - 0.8p per share (2003: nil) 2,914 - - Final - 1.0p per share - - 3,643 ----------------------------------- 2,914 - 3,643 =================================== The directors have declared an interim dividend of 0.8p (2003: nil) per Ordinary share. The interim dividend will be paid on 8 April 2005 to shareholders on the register at the close of business on 4 March 2005. 6 Earnings per share The calculation of earnings per share is based on the following: 6 months to 6 months to Year to 31 October 31 October 30 April 2004 2003 2004 Earnings available to ordinary shareholders (£000) 11,147 9,513 14,558 Weighted average number of shares in issue in the period - basic (000) 364,252 363,122 363,387 - including dilutive share options (000) 368,225 366,251 367,000 -------------------------------- 7 Fixed assets Development costs, patents and Goodwill licences Tangible £000 £000 £000 Net book value at 1 May 2004 7,984 13,411 63,971 Exchange adjustment 10 390 935 Additions - vending equipment - - 17,104 - other 1,595 2,947 1,417 Depreciation provided in the period (323) (2,291) (10,054) Disposals at net book value - - (1,349) -------------------------------------- Net book value at 31 October 2004 9,266 14,457 72,024 ===================================== 8 Reserves Share Profit premium Other and loss account Reserves account £000 £000 £000 Balance at 1 May 2004 3,487 2,765 60,860 Profit for the period - - 11,147 Dividend - - (2,914) Exchange and other adjustments - 126 2,183 -------------------------------------- Balance at 31 October 2004 3,487 2,891 71,276 ===================================== 9 Copies of the Interim Report Copies of the Interim Report will be mailed to shareholders on 21 December 2004 and from that date will be available from the Company's Registered Office at Church Road, Bookham, Surrey KT23 3EU (tel: 01372-453399). This information is provided by RNS The company news service from the London Stock Exchange

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