Final Results
Vislink PLC
25 March 2003
Vislink plc
Preliminary results for the year ended December 31, 2002
'The Board is pleased to report that the Group has reduced its gearing, returned
to overall profitability and proposes to increase the dividend. The Group has
benefited from record performances at MRC, the USA microwave broadcast business
and at Hernis, the Norwegian based specialist manufacturer of high quality CCTV
systems for the marine and petroleum industries.'
Highlights
• The Group has increased sales from continuing operations by 6.1% to
£75.50 million (2001 - £71.17 million)
• Operating profit from continuing operations before goodwill
amortisation increased to £3.84 million (2001 - £1.55 million)
• The Group's profit on ordinary activities before tax for the year was
£1.14 million (2001- loss of £0.81 million)
• The Group generated cash of £4.84 million (2001 - £2.46 million) in the
year, which has reduced net debt to £4.99 million (2001 - £9.50 million)
• The Group's gearing has reduced to 15.2% (2001 - 28.2%)
• Due to a higher tax charge in the year, earnings per share excluding
goodwill amortisation and exceptional items, were lower at 1.85 pence
(2001 - 2.06 pence)
• The Board is recommending an increased dividend of 0.2 pence per share
(2001 - 0.1 pence per share)
Commenting on the results Bob Morton, Chairman of Vislink plc, said:
'Against the global economic uncertainty and tougher trading conditions, the
Group has achieved growth in sales and operating profits during the year and
significantly reduced its level of debt.
The Group is well positioned in its global markets. The current economic climate
and the uncertainty in the Middle East are making short-term prospects more
difficult to predict. However, the Group will be able to take advantage of any
subsequent upturn in activity. Given the expected conversion of the current
sales enquiries, the Board remains cautiously optimistic about the prospects for
2003.'
- Ends -
For further information on March 25, 2003, please contact:
Ian Scott-Gall 01488 685500
Chief Executive, Vislink plc
James Trumper 01488 685500
Group Finance Director, Vislink plc
Chairman's Statement
Introduction
The Board is pleased to report that the Group has reduced its gearing, returned
to overall profitability and proposes to increase the dividend.
Sales have increased over the previous year in what has been a challenging
trading environment. The Group has benefited from record performances at MRC,
the USA microwave broadcast business and at Hernis, the Norwegian based
specialist manufacturer of high quality CCTV systems for the marine and
petroleum industries.
The Group is focussed on further developing its global microwave and satellite
transmission businesses and that of high quality CCTV systems for the marine and
petroleum industries.
Financial results for the year
The Group has increased sales from continuing operations by 6.1 per cent to
£75.50 million (2001 - £71.17 million).
Operating profit from continuing operations before goodwill amortisation
increased to £3.84 million (2001 - £3.78 million profit before exceptional
inventory write down of £2.23 million). Goodwill amortisation for the period was
£1.17 million (2001 - £1.20 million).
The profit on ordinary activities before interest and taxation was £1.87 million
(2001 - £0.20 million), after a loss on discontinued businesses of £0.61million
(2001 - £0.27 million) and after exceptional items of £0.19 million (2001 -
exceptional profit of £0.12 million).
The Group's profit on ordinary activities before tax for the year was £1.14
million (2001- loss of £0.81 million).
The Group generated cash of £4.84 million (2001 - £2.46 million) in the year,
which has reduced net debt to £4.99 million (2001 - £9.50 million). The Group's
gearing has reduced to 15.2 per cent (2001 - 28.2 per cent) and the net interest
charge for the year has reduced to £0.73 million (2001 - £1.01 million).
Earnings per share
The adoption of Financial Reporting Standard 19 'deferred tax' has led to the
previous year's tax charge and earnings per share being restated.
Due to a higher tax charge in the year, earnings per share excluding goodwill
amortisation and exceptional items were lower at 1.85 pence (2001 - 2.06
pence). Basic earnings per share were 0.41 pence (2001 - loss per share of 1.22
pence).
Dividends
The Board is recommending an increased dividend of 0.2 pence per share (2001 -
0.1 pence per share). The dividend, subject to shareholder approval, will be
paid on July 25, 2003 to shareholders on the register at July 4, 2003.
Operational Strategy and Prospects
The Board recognises that whilst the reduction in the Group's market
capitalisation over the last twelve months has followed the general market
trend, this is nevertheless unsatisfactory. It remains a key objective of the
Group's strategy to enhance shareholder value.
The businesses of MRC and Hernis have performed well. However the performance of
the UK broadcast business was disappointing, as was the performance of the
legacy Video Division businesses. Management has put in place the following key
strategies to address these issues as follows:
• The under performing Video Division businesses of American Auto-Matrix
and Active Imaging were sold in December 2002.
• Data Cell is currently undergoing a strategic review.
• We recruited a Managing Director for the UK broadcast business, who
was appointed on October 1, 2002. He will complete the merger of the
operating companies into a single business during 2003. This will involve
continuing the process of operational rationalisation and overhead
reduction as part of the business integration.
• Reduce the UK broadcast business dependence on winning large-scale
contracts.
• Continuing to invest in developing new products and planning to grow
by taking advantage of new and emerging product and market opportunities.
The broadcast businesses have a strong focus on global opportunities. The USA
microwave radio market has further growth opportunities from the emerging demand
for microwave radio based public safety communications network systems. At the
same time, it will continue to benefit from the mandated installation of digital
transmission systems by the broadcasters. There is also a growing demand for
mobile satellite communication systems for the protection of overseas assets.
The prospects in the European markets are mainly in satellite communications,
for both fixed and mobile broadcast applications as well as the growing demand
for mobile tracking systems for government agency applications. As with the USA,
the public safety market is providing opportunities in larger European cities.
In the Middle East, South America and Asia the demand for microwave links and
broadcast satellite equipment remains encouraging, although the length of the
sales cycle for larger projects continues to be difficult to predict.
Hernis has strength in its ability to tailor its system designs to the specific
demands of marine and petroleum related installations. The business will
continue to grow organically by seeking out further opportunities, particularly
in the marine and naval environments where the issue of safety and security are
becoming increasingly important.
Against the global economic uncertainty and tougher trading conditions, the
Group has achieved growth in sales and operating profits during the last year
and significantly reduced its level of debt.
The Group is well positioned in its global markets. The current economic climate
and the uncertainty in the Middle East are making short-term prospects more
difficult to predict. However, the Group will be able to take advantage of any
subsequent upturn in activity. Given the expected conversion of the current
sales enquiries, the Board remains cautiously optimistic about the prospects for
2003.
ALR Morton
Chairman
March 25, 2003
Chief Executive's review
Introduction
The record performances by MRC, our USA microwave radio business and Hernis, our
Norwegian specialist CCTV business, have made a significant contribution to the
Group's results. However, the second half performance of the UK broadcast
business was disappointing, as its market conditions remained tough. In
addition, the market conditions for both AAM, the Group's previous building
controls business and Active Imaging, the video server business, did not improve
and therefore the businesses were sold in December 2002.
The Group aims to be the market leader in its core technology applications.
Review of performance
Broadcast Division
Sales for the year increased 3.6 per cent to £63.18 million (2001 - £60.99
million). Operating profit before goodwill amortisation and exceptional items
rose by 7.7 per cent to £4.13 million (2001 - £3.84 million). The Division
incurred exceptional costs of £0.32 million (2001 - £1.92 million) relating to
the integration of the operating companies that commenced in 2001 and goodwill
amortisation was £1.17 million (2001 - £1.20 million). The net operating profit
for the Division was £2.64 million (2001 - £0.72 million).
Our USA based business, MRC, has achieved a record result with a 20.4 per cent
growth in sales and a 21.0 per cent increase in operating profits. Our UK
Broadcast business trades under the brand names of Advent, Continental Microwave
and Multipoint. Its business has been steady, with sales growth of 1.3 per cent,
but it has experienced a decline in operating profits as a result of further
integration costs incurred in bringing the operating businesses together and
from the delivery of several large contracts where margins were eroded.
The Division continues to sell into the global market with 38 per cent of sales
in North America, 21 per cent into the UK and Europe and 41 per cent to the rest
of the world.
Video Division
As a result of an excellent performance from Hernis, sales grew by 21.0 per cent
to £12.31 million (2001 - £10.18 million). Operating profits grew by 32.9 per
cent to £1.08 million (2001 - £0.81 million). Hernis has established itself as a
global market leader in the supply of high quality, intrinsically safe, CCTV
systems for the onshore and offshore oil and gas industries and to the
commercial and naval shipping markets. Datacell, the image analysis business
within the Video Division, traded at break-even with sales of £2.54 million
(2001- £2.63 million). With the image analysis market continuing to be affected
by the general economic uncertainty, we are carrying out a strategic review of
the business.
Discontinued businesses
It was highlighted in the Interim Statement that a decline in demand for the
American Auto-Matrix ('AAM') building control systems in the USA and the limited
demand for the Active Imaging Internet video server products (AIMMS) had had a
detrimental effect on the Video Division's first half results. Following a
review of the businesses it was decided that they would be unable to provide an
adequate return for the Group. The decision was therefore taken to dispose of
AAM, which had taken over the manufacture and distribution of the AIMMS product.
The business, together with certain trading assets, was sold to a company
specifically formed by the management of AAM for a total consideration of £1.34
million. During the year the businesses contributed sales of £4.05 million and
made an operating loss of £0.61 million. There was a loss on disposal of £0.19
million.
The consideration was satisfied by the payment in cash of $1.35 million, the
issue of a one-year promissory note for $0.08 million, a retention over certain
longer term debtors of $0.09 million and 30,000 class A units in the purchaser
valued at $0.50 million. These class A units are held as a trade investment for
sale in due course. In addition, the freehold land and buildings currently
occupied by AAM have been retained by Vislink and leased to the purchaser under
a commercial lease arrangement. It is the Group's intention to realise the
current book value of the property of $1.44 million (£0.91 million) by way of a
future sale.
Product development
New product development continues to be an important part of the Group's growth
strategy. The Group's development expenditure in the continuing businesses
increased 8.1 per cent to £3.94 million (2001 - £3.64 million).
In the broadcast business the main focus has been the development of a smaller
and lighter weight range of microwave radio products. The portable Strata radio
and the wireless camera radio, Reporter, were both launched during 2002.
Development is continuing on these products to provide the full range of
frequency requirements for all international markets. There has been further
development of systems for satellite acquisition and tracking for the
lightweight flyaway terminals. In addition, we have developed remote control and
management systems for large complex microwave links and multiple satellite
terminal systems.
Hernis has continued to develop its existing integrated camera systems,
including a new range of explosion proof pan and tilt camera stations with a
thermal imaging capability. In addition Hernis is developing the next generation
of CCTV systems that can be integrated into existing computer systems such as
fire and gas alarms for petro-chemical plants and onboard ships.
Markets and business opportunities
The USA microwave radio market has remained buoyant throughout 2002. The market
for digital broadcast microwave links has been particularly strong in 2002 as a
result of the Federal Communications Committee's requirement for all TV stations
to have a digital transmission capability by December 2004. Microwave Radio
Communications (MRC), the Group's USA broadcast business and the market leader,
has benefited from the growth in demand for digital studio to transmitter links
which have to be in place as part of the digital TV plan. Outside of the
broadcast market there has been an increasing demand for microwave radios for
government, police and public safety requirements.
The North American markets are leading the way in using the broadcast quality,
digital video technology for the public safety market. MRC supplied helicopter
mounted microwave equipment to enable the Calgary Police in Canada to provide
real-time air surveillance video to the security services, whilst Continental
Microwave also supplied a similar system for an aircraft to the RCMP, both for
the 2002 G8 Summit in Calgary. In addition, a significant contract was won
during the year for the supply of a full mobile emergency communication and
video back up system for a major USA city. We expect to see further growth from
these markets.
The broadcast businesses have had continued success in overseas markets. The
Middle East, where there continues to be significant investment in satellite
newsgathering equipment and satellite TV uplinks, is expected to remain strong
in the longer term as the market for broadcast satellite TV systems continues to
grow. We have also supplied microwave digital link systems for broadcasters in
Korea, Hong Kong and Thailand during the year.
West Africa continues to provide analogue broadcast transmission business. Two
transmitter systems were supplied in 2002 and there are further opportunities.
In South America, we are installing equipment through a UN sponsored
organisation for two separate communication network systems, one using microwave
links and the other using satellite terminals, for use in air traffic control.
In the UK and European markets, sales were steady. The terrestrial TV
transmitter market has however been weak, although the Olympic games in Greece
provide an opportunity for the Group. We have already supplied one vehicle based
SNG system in 2002. Significant progress has been made in the year by the UK
broadcast business in the supply of satellite systems to UK and USA defence
contractors. The opportunities for the application of new digital technology,
particularly in the satellite communications market, continue to grow and will
help the business to diversify into non-broadcast markets.
Hernis saw growth in the year from the onshore petro-chemical markets and in its
marine naval business. Major contracts won in the year included an onshore
security and safety system in the USA, a system for an onshore Chinese refinery
and two offshore gas plants. There continues to be good prospects for both the
offshore market in South America and marine/naval applications where ship
security and safety is becoming increasingly important, both for new builds and
existing shipping.
Strategic objectives
Broadcast business
Within the broadcast businesses, the rationalisation of the smaller operating
companies undertaken at the end of 2001 has continued during 2002. This
rationalisation has provided an integrated approach to international sales and
marketing as well the technical and development strategy.
The UK broadcast management was strengthened by the appointment of Jonathan
Flint as Managing Director of the UK broadcast business in October 2002.
Jonathan joins us from BAe Systems, where he was managing director of the Sensor
Systems Division. Our strategy is to bring the UK businesses under one
management team. This requires the integration of its operational areas, which
will be re-scaled to reduce the dependence of the business on winning larger
projects. The UK management team recognises the opportunities and potential that
can be achieved through structured change and teamwork.
The product sales and marketing strategy has been rationalised in order to
maximise the strengths of our core brands and technologies. In addition to the
focus on existing markets, our strategy is to develop new lateral markets for
both satellite and digital microwave products. Opportunities have been
identified in police, security and surveillance markets and new business has
been won in 2003.
The product development strategy, which is aligned to that of sales and
marketing, is based on the use of common development platforms for use
throughout the broadcast businesses. An example of this is the Strata radio
developed in the USA, which will form the internal platform for the next
generation of digital microwave radio for the UK business.
Hernis
Hernis has strength in its ability to tailor its system designs to the specific
demands of marine and petroleum related installations. Through its Visual
Integrated System (VIS) approach it can offer a comprehensive, high quality CCTV
package that can be integrated into other control systems within the customer's
chosen environment and add on other functionality, such as motion detection, to
provide comprehensive safety and security systems. Hernis has a clear objective
to continue to build its market share. There are some significant opportunities
in the marine and naval markets. Hernis expects to continue to grow organically
by seeking out such opportunities, particularly where the issues of safety and
security are becoming increasingly important.
Summary
The Group has positioned itself as a leading microwave radio and satellite
transmission business for broadcast quality TV, video and data applications. We
are also the market leader for specialist CCTV systems for the marine and
petroleum industries.
The Group has well-established brand names and operates in global markets. Using
our market strengths and technological capability, the Group can extend its
reach into new markets and benefit from any subsequent upturn in the broadcast,
security and marine markets once the present economic uncertainties are
overcome.
IH Scott-Gall
Chief Executive
March 25, 2003
Group Profit and Loss Account
for the year ended December 31, 2002
Before
goodwill &
Before exceptional Goodwill &
goodwill & items as exceptional
exceptional Goodwill & restated* items as Total as
items exceptional restated* restated*
items Total
2002 2002 2002 2001 2001 2001
£'000 £'000 £'000 £'000 £'000 £'000
Notes
Turnover
Continuing operations 75,495 - 75,495 71,172 - 71,172
Discontinued operations 4,049 - 4,049 5,257 - 5,257
1 79,544 - 79,544 76,429 - 76,429
Operating profit
Continuing operations before
exceptional inventory write down
and goodwill amortisation 4,160 (318) 3,842 3,669 113 3,782
Exceptional inventory write down - - - - (2,227) (2,227)
Continuing operations before 1 4,160 (318) 3,842 3,669 (2,114) 1,555
goodwill amortisation
Goodwill amortisation 1 - (1,170) (1,170) - (1,199) (1,199)
Continuing operations 1 4,160 (1,488) 2,672 3,669 (3,313) 356
Discontinued operations 1 (609) - (609) 89 (355) (266)
3,551 (1,488) 2,063 3,758 (3,668) 90
(Loss)/profit on disposal of 2 - (195) (195) - 15 15
businesses
Profit on disposal of freehold - - - - 100 100
land
Profit on ordinary activities
before interest 3,551 (1,683) 1,868 3,758 (3,553) 205
Interest receivable 106 - 106 214 - 214
Interest payable (831) - (831) (1,226) - (1,226)
Profit/(loss) on ordinary
activities before taxation 2,826 (1,683) 1,143 2,746 (3,553) (807)
Tax on profit/(loss) on ordinary 3 (941) 211 (730) (658) 227 (431)
activities
Profit/(loss) for the financial 1,885 (1,472) 413 2,088 (3,326) (1,238)
year
Dividends 4 (205) - (205) (101) - (101)
Transfer to/(from) reserves 1,680 (1,472) 208 1,987 (3,326) (1,339)
Basic earnings/(loss) per share 5 1.85p (1.44)p 0.41p 2.06p (3.28)p (1.22)p
Diluted earnings/(loss) per share 5 1.85p (1.44)p 0.41p 2.05p (3.27)p (1.22)p
Dividend per share 4 0.20p 0.10p
Statement of retained profits
Profit and loss account at
January 1, 2002 as previously
reported 2,234 2,729
Prior year adjustment in respect 3 814 1,321
of FRS19
Profit and loss account at 3,048 4,050
January 1, 2002 as restated
Arising in the financial year 208 (1,339)
Foreign exchange (1,208) 337
Profit and loss account carried 2,048 3,048
forward
* As adjusted for the adoption of FRS 19, see note 3 (b)
Statement of Total Recognised Gains and Losses
for the year ended December 31, 2002
Notes 2002 2001
£000 £000
Profit/(loss) for the financial year 413 (1,238)
Translation difference on foreign currency net investments (1,208) 337
(795) (901)
Prior year adjustment in respect of FRS19 3 814
Total recognised gains and losses since last Annual Report 19
There is no material difference between the reported results and the historical
cost profits and losses.
Reconciliation of Movements in Shareholders' Funds
for the year ended December 31, 2002
Notes 2002 2001
£'000 £'000
Opening equity shareholders' funds as previously reported 32,879 33,596
Prior year adjustment in respect of FRS19 3 814 1,321
Opening equity shareholders' funds restated 33,693 34,917
Profit/(loss) for the financial year 413 (1,238)
Dividends (205) (101)
Value of share issues in the year 223 -
Change in the value of shares to be issued (216) (222)
Translation difference on foreign currency net investments (1,208) 337
Movement in the year (993) (1,224)
Closing equity shareholders' funds 32,700 33,693
Group and Company Balance Sheet
as at December 31, 2002
Group Company
As restated*
2002 2001 2002 2001
£'000 £'000 £'000 £'000
Fixed assets
Intangible assets 19,851 21,745 - -
Tangible assets 5,643 6,032 8 21
Investments 86 15 25,390 25,299
25,580 27,792 25,398 25,320
Current assets
Stocks 12,086 13,217 - -
Debtors 17,114 19,217 2,432 1,458
Cash at bank and in hand 4,189 3,450 446 1,171
33,389 35,884 2,878 2,629
Creditors - amounts falling due within one year 18,630 17,808 2,791 2,926
Net current assets (liabilities) 14,759 18,076 87 (297)
Total assets less current liabilities 40,339 45,868 25,485 25,023
Creditors - amounts falling due after more than one year 6,947 10,697 18,045 16,604
Provisions for liabilities and charges 692 1,478 - -
32,700 33,693 7,440 8,419
Capital and reserves
Called up share capital 2,552 2,534 2,552 2,534
Shares to be issued - 216 - 216
Share premium account 205 - 205 -
Merger reserve 27,895 27,895 - -
Profit and loss account 2,048 3,048 4,683 5,669
Equity shareholders' funds 32,700 33,693 7,440 8,419
* As adjusted for the adoption of FRS 19, see note 3(b)
Group Cash Flow Statement
for the year ended December 31, 2002
Notes 2002 2001
£'000 £'000
Net cash inflow from operating activities 6 5,923 4,651
Returns on investments and servicing of finance
Interest received 106 214
Interest paid (871) (1,633)
(765) (1,419)
Taxation paid (155) (17)
Capital expenditure
Purchase of tangible fixed assets (877) (839)
Purchase of investments (84) -
Proceeds from sale of tangible assets 118 277
(843) (562)
Acquisitions and disposals
Proceeds from sale of businesses 783 215
Equity dividends paid (101) (405)
Net cash inflow before financing 4,842 2,463
Financing
Repayment of bank loans (3,818) (2,243)
Finance lease repayments (8) (104)
(3,826) (2,347)
Increase in cash 1,016 116
Reconciliation of Net Cash Flow to Movement in Net Debt
for the year ended December 31, 2002
Notes 2002 2001
£'000 £'000
Increase in cash 1,016 116
Repayment of bank loans 3,818 2,243
Finance lease repayments 8 104
Change in net debt resulting from cash flows 6 4,842 2,463
Effect of foreign exchange changes 6 (323) (120)
Movement in net (debt) 4,519 2,343
Opening net (debt) (9,504) (11,847)
Closing net (debt) 6 (4,985) (9,504)
1. Segmental Analysis
Turnover Operating Profit Net Assets
Total Total Total Total Total Total
2002 2001 2002 2001 2002 2001*
£'000 £'000 £'000 £'000 £'000 £'000
By division:
Broadcast 63,183 60,993 4,130 3,835 14,429 15,757
Video Technology 12,312 10,179 1,079 812 3,488 3,629
Central - - (1,049) (978) 14,783 10,990
75,495 71,172 4,160 3,669 32,700 30,376
Other exceptional costs (note 2) - - (318) 113 - -
75,495 71,172 3,842 3,782 32,700 30,376
Exceptional inventory write down - - - (2,227) - -
(note 2)
Goodwill amortisation - - (1,170) (1,199) - -
Continuing operations 75,495 71,172 2,672 356 32,700 30,376
Discontinued operations 4,049 5,257 (609) (266) - 3,317
Total 79,544 76,429 2,063 90 32,700 33,693
*As adjusted for the adoption of FRS 19, see note 3(b)
Net assets within Central include group debt, capitalised goodwill and
dividends.
The other exceptional costs and the exceptional inventory write down can be
allocated as £318,000 (2001 - £1,918,000) to the Broadcast Division and £nil
(2001 - £196,000) to the Video Division.
Goodwill amortisation in the continuing operations is in respect of the
businesses of Advent Communications, Multipoint Communications and Microwave
Radio Communications all of which are within the Broadcast Division.
The discontinued operations relate to the Video Division.
Turnover Analysis
Discontinued
Operations
Broadcast Video Technology Total
2002 2001 2002 2001 2002 2001 2002 2001
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
By market:
UK & Ireland 9,386 6,302 2,614 2,303 101 903 12,101 9,508
Rest of Europe 3,623 6,660 4,844 3,386 21 16 8,488 10,062
North America 24,072 25,256 2,009 1,112 3,844 4,215 29,925 30,583
South America 7,034 2,583 2 - - - 7,036 2,583
Middle East 4,870 3,861 111 - - - 4,981 3,861
Asia 9,447 11,725 2,487 2,426 29 123 11,963 14,274
Africa 3,802 3,650 14 - - - 3,816 3,650
Other 949 956 231 952 54 - 1,234 1,908
63,183 60,993 12,312 10,179 4,049 5,257 79,544 76,429
By origin:
UK & Ireland 35,827 35,266 2,540 2,630 90 820 38,457 38,716
Rest of Europe - - 9,772 7,549 - - 9,772 7,549
North America 27,356 25,727 - - 3,959 4,437 31,315 30,164
63,183 60,993 12,312 10,179 4,049 5,257 79,544 76,429
Net Assets Analysis
Total
2002 2001*
£'000 £'000
By market:
United Kingdom & Ireland 18,890 21,950
Rest of Europe 3,937 2,695
North America 9,873 9,048
32,700 33,693
*As adjusted for the adoption of FRS 19, see note 3(b)
2. Exceptional items
a) Operating exceptional items
2002 2001
£'000 £'000
Redundancy costs 318 313
Exceptional credits relating to fair value provisions - (426)
318 (113)
Exceptional inventory write down - 2,227
Total operating exceptional costs - continuing business 318 2,114
Exceptional development costs in discontinued business - 355
318 2,469
In the year ended December 31, 2001 the Group announced the further integration
of the operating companies in the Broadcast Division. The redundancy costs in
2002 relate to the continuation of this activity.
b) Non-operating exceptional items
2002 2001
£'000 £'000
(Profit) on disposal of freehold land in continuing business - (100)
Loss/(profit) on disposal of businesses 195 (110)
Provision against leased properties associated with businesses previously disposed of - 95
195 (115)
The loss on disposal of businesses relates to the sale of the business and
certain assets of American Auto Matrix on December 13, 2002.
3. Taxation
a) Analysis of tax charge in period
As restated*
2002 2001
The tax charge for the year comprises: £'000 £'000
Current tax
UK Corporation tax at 30% (2001 - 30%) - -
Adjustment in respect of prior years (15) (229)
(15) (229)
Overseas taxation - current 472 153
Overseas taxation adjustments in respect of prior years 192 -
Total current tax 649 (76)
Deferred tax
Origination and reversal of timing differences
UK tax (127) (44)
Foreign tax 208 551
Total deferred tax 81 507
Tax on ordinary activities 730 431
*As adjusted for the adoption of FRS 19, see note 3(b)
b) Implementation of Financial Reporting Standard 19
The Group's accounting policy on deferred taxation has been amended following the adoption of Financial
Reporting Standard 19 'Deferred Tax' (FRS 19). FRS19 requires full provision to be made for deferred
taxation arising from timing differences between the recognition of income and expenses in the financial
statements and their recognition in a tax computation.
Previously the Group's accounting policy was to provide for deferred tax liabilities on timing
differences to the extent that they were expected to become payable in the foreseeable future. The
application of the previous accounting policy resulted in no provision for deferred taxation being
recognised at December 31, 2000 and 2001.
As a result of this change in accounting policy net deferred tax assets have been recognised and the
comparatives have been restated as follows:
Profit and loss account restated comparative information
Tax charge Retained Basic loss
for the loss per
year share
£000 £000 £000
Year ended December 31, 2001 as previously reported (76) 832 0.72p
Implementation of FRS 19 507 507 0.50p
Year ended December 31, 2001 as restated 431 1,339 1.22p
Balance sheet restated comparative information
Intangible Debtors Shareholders'
assets funds
£000 £000 £000
As at December 31, 2001 as previously reported 21,965 18,183 32,879
Implementation of FRS 19 (220) 1,034 814
As at December 31, 2001, as restated 21,745 19,217 33,693
The adjustment to intangible assets is an adjustment to the goodwill in respect of the acquisition of MRC
to reflect the recognition of deferred tax assets acquired not previously recognised.
4. Dividends
2002 2001
£'000 £'000
Final dividend proposed of 0.20p per share (2001 - 0.10p per share) 205 101
5. Earnings per Ordinary Share
Earnings per ordinary share is calculated by reference to a weighted average of
101,757,000 (2001 - 101,377,000) ordinary shares in issue throughout the year
(excluding the shares held by the Employees' Share Ownership Plan) and on the
profit for the year of £413,000 (2001 - loss of £1,238,000*). Diluted earnings
per share is after taking account of a further nil (2001 - 310,000) shares being
the dilutive effect of share options.
Earnings per share before goodwill and exceptional items excludes after tax
amounts relating to goodwill and exceptional items of £1,472,000 (2001 -
£3,326,000).
At the date of issue of the report the total number of shares in issue were
102,073,000.
Basic Diluted Basic* Diluted*
2002 2002 2001 2001
£'000 £'000 £'000 £'000
Basic and diluted earnings/(loss) per share 0.41p 0.41p (1.22)p (1.22)p
Adjustment for goodwill and exceptional items 1.44p 1.44p 3.28p 3.27p
Basic and diluted earnings per share before goodwill and 1.85p 1.85p 2.06p 2.05p
exceptional items
* As adjusted for the adoption of FRS 19, see note 3(b).
6. Notes to the Statement of Cash Flows
(a) Reconciliation of operating profit to net cash inflow from
operating activities
Total Total
2002 2001
£'000 £'000
Operating profit 2,063 90
Depreciation 929 1,084
Amortisation of goodwill 1,170 1,199
Provision against investments 13 4
Loss (profit) on sale of fixed assets 12 (29)
Decrease in stocks 348 4,016
Decrease in debtors 1,186 39
Increase (decrease) in creditors 969 (1,259)
(Decrease) in provisions (767) (493)
Net cash inflow from operating activities 5,923 4,651
(b) Analysis of net debt
At Exchange At
January 1, Cash flow movements December 31,
2002 2002
£'000 £'000 £'000 £'000
Cash at bank and in hand 3,450 1,016 (277) 4,189
Loans (12,946) 3,818 (46) (9,174)
Finance leases (8) 8 - -
(9,504) 4,842 (323) (4,985)
7. Directors Responsibilities
The financial information for the year ended December 31, 2002 has been
extracted from the full accounts of the Group, which contain an unqualified
audit report and will be filed, in due course, with Companies House. The
auditors have reported on those accounts; their report was unqualified and did
not contain statements under section 237 (2) or (3) of the Companies Act 1985.
8. Report and Accounts
Copies of the Report and Accounts will be sent to shareholders in due course and
will then be available from the registered office at Marlborough House, Charnham
Lane, Hungerford, Berkshire, RG17 0EY.
This information is provided by RNS
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Friday, 31st May 2024
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