Final Results
Porvair PLC
23 January 2002
FOR IMMEDIATE RELEASE 23 January 2002
Contacts:
Ben Stocks, Chief Executive
Mark Moran, Group Finance Director
Porvair plc today 0207 466 5000
at all other times 01553 761111
Charles Ryland/Catherine Miles
Buchanan Communications 0207 466 5000
PORVAIR plc ('Porvair')
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2001
IN LINE WITH EXPECTATIONS
Porvair, the materials science group, announces its preliminary results for the
year ended 30 November 2001.
KEY POINTS
• Profit before tax, goodwill amortisation and exceptional items of
£3.8m (2000 : £6.0m) after increased total R&D expenditure of £5.2m (2000 :
£2.2m).
• Excellent progress against 2001 strategic objectives - significant
increase in R&D expenditure to develop fuel cell related materials; formation,
through acquisition, of Porvair Filtration Group; substantial investment in
core manufacturing facilities.
• Strong contribution from acquired businesses of £2.3m before tax,
goodwill amortisation and exceptional items, offset tough trading conditions for
US based operations.
• Substantial development grant from US Department of Energy endorsing
innovative bi-polar plate for the fuel cell industry.
• Strong net cash generation from operating activities of £11.4m (2000 :
£8.9m) before capex, R&D expense and exceptional items.
• Final dividend of 4.3p per share (2000 : 4.0p restated), making a total
for 2001 of 6.7p per share (2000 : 6.3p restated).
John Morgan, Chairman, said:
'Porvair has had a busy and successful 2001 and has made considerable progress
against the strategic plan outlined a year ago. We are pleased to have made
such progress despite challenging economic and trading conditions. We expect
these difficult conditions to continue through 2002. However, the actions we
have undertaken in prior years should equip us well to achieve both growth and a
full research and development programme in the year ahead.'
CHAIRMAN'S STATEMENT
2001 has been a busy year for Porvair. Despite challenging trading conditions,
particularly in the US, considerable progress has been made with the strategic
plan outlined one year ago :
• Research and development investment has increased substantially. The
fuel cell materials development programme made a very encouraging start with
significant milestones reached.
• Investment in operational efficiencies continued, particularly in the
simplification of our Membranes business.
• A number of acquisitions were made, and the Porvair Filtration Group
formed as a specialist microfiltration business. Integration is well advanced
and initial results are good.
The cost of these strategic developments was financed by a rights issue
announced in May that raised £27.5m net of expenses. These changes have
complicated the interpretation of the trading results; so to clarify the
position the following summary is included :
2001 2000
Continuing
activities Acquisitions Total
£'m £'m £'m £'m
Turnover 60.2 12.1 72.3 65.6
Operating profit before R&D expenditure,
goodwill amortisation and exceptional items 7.5 2.7 10.2 9.1
R&D expenditure
(4.8) (0.4) (5.2) (2.2)
Operating profit before goodwill
amortisation and exceptional items 2.7 2.3 5.0 6.9
The overall picture shows a strong start by our acquired businesses offset, as
expected, by the impact of difficult trading conditions in the US (when compared
with a strong 2000) and the anticipated profit reduction resulting from
Membranes simplification. The research and development expenditure has
increased substantially to £5.2m and this of course has an impact on Group
profits. As explained one year ago, this expenditure is being made in the short
term because we believe strongly that our fuel cell related materials technology
can deliver significant future opportunities.
Consistent with the strategic plan, and as outlined at the interim stage, we
have incurred exceptional costs of £4.4m in 2001, primarily associated with the
streamlining of the Membranes operation and the integration of acquired
businesses. In part these moves have been made to optimise our cash generative
capacity and operational efficiencies, and it is therefore encouraging to note
that operational cash generation has been very strong. Before disbursements of
research and development, capital expenditure, dividends, tax and interest
Porvair generated £11.4m in cash (2000 : £8.9m). This feature of our business
allows us to invest significantly in our future growth prospects.
Earnings per share before goodwill amortisation and exceptional items were 7.8p
(2000 : 13.2p restated). The Board is recommending a final dividend of 4.3p per
share (2000 : 4.0p restated) which makes the total for the year 6.7p (2000 :
6.3p restated).
On behalf of the Board, I want to thank all our employees for their exemplary
commitment and to welcome new members of staff to Porvair. Their efforts are
much appreciated and enable us to flourish across all the businesses.
Porvair has had a busy and successful 2001 and has made considerable progress
against the strategic plan outlined a year ago. We are pleased to have made
such progress despite challenging economic and trading conditions. We expect
these difficult conditions to continue through 2002. However, the actions we
have undertaken in prior years should equip us well to achieve both growth and a
full research and development programme in the year ahead.
John Morgan, Chairman
23 January 2002
OPERATING REVIEW
1. Introduction to Porvair
Porvair is a materials science company, specialising in :
• Metals handling materials : Porvair Selee invented the ceramic foam
filter, and leads the world in its application to aluminium. A wide range of
porous and microporous ceramic technologies serve other metals industries.
• Microfiltration materials and systems : Porvair Filtration Group is a
specialist microfiltration business, expert in both filtration and filtration
media.
• Microporous membranes : Porvair Membranes make textiles and leather
waterproof and breathable. Our polyurethane technology, which is both durable
and soft, is unique in this field.
• Microporous metals and carbons : Porvair Fuel Cell Technology is an R&
D operation that is developing several Porvair materials for fuel cell component
and allied applications.
Our strategy continues to be the identification and development of materials
technologies that display clear technical edge, strong market position and
significant opportunities for profitable growth. Our objective for the medium
term is to generate both profit growth and cash sufficient to support a full
research and development programme.
2. Operations 2001
2001 was a transition year for Porvair in which we met our strategic and
financial objectives notwithstanding a backdrop of difficult trading in our US
markets - which represent 46% of our sales.
Our metals handling business, Selee, is based in North Carolina, and 75% of its
sales are in North America. After a strong 2000 sales fell back in 2001 by 19%
on a like-for-like basis, primarily due to falling demand from the aluminium
industry - whose own demand was down circa 20% in 2001. This cyclical swing was
expected, and was professionally handled by the Selee management team who were
not deflected from making strong progress in three areas central to Porvair's
operating strategy : consistent new product development initiatives delivering
growth into new market areas; operational efficiency investments, including a
$2.6m manufacturing plant fully commissioned by the end of 2001; and the
acquisition of Engineered Ceramics, a manufacturer of complementary molten metal
handling products, whose integration was completed ahead of time and below
budget. This operating strategy is working well. On a like-for-like basis
compared with 1998 - a similarly soft year for aluminium markets - Selee net
operating margins have improved by 41%. Our position in aluminium filtration, a
market that is growing despite cyclical ups and downs, is strong; we have also
found good growth in other areas of specialist metals handling.
In 2001 our sintered materials operation became the vehicle around which,
through acquisition, we built a microfiltration business - the Porvair
Filtration Group. We believe this will prove a good strategic move for Porvair,
combining the technical edge of our microporous materials, the excellent
products and reputation of our new businesses; and the proven management track
record of the team now running this enlarged operation. Progress in 2001 is
covered in more detail in the Strategic Update section later in this statement.
The Membranes business has been under new management for 18 months, and
significant progress has already been made - again against a backdrop of
difficult trading conditions in the US. As outlined one year ago we have been
going though a simplification programme to focus this business on fewer products
and technologies. We have done this in order to cast off older, mature
technologies; to marshall our technical resources behind product lines with the
best growth prospects; and to streamline operations. Around £3m of the
exceptional charge taken this year is associated with this programme, mostly a
non-cash asset write-down as equipment associated with discontinued products is
written off. The short term effect has been to hold back profits for 2001 and
will do so again in 2002, as we cut products and associated sales. The
operational benefits are however already apparent. We have for example found a
way to cut the number of base polymers five-fold. This reduces inventory and
improves customer delivery performance - through the second half of 2001
customer delivery efficiency has been better than 98%, and inventory levels have
fallen by 13%.
In addition to our focus on operational efficiencies in the Membranes business,
we have also taken a strategic interest in Sympatex, the leading waterproof/
breathable brand in German-speaking Europe. We expect that the combination of
Sympatex's brand strength and Porvair's membranes technology will strengthen the
competitive position of both Porvair and Sympatex. Early indications are that
this will be the case, and we expect results to start to show through in 2002.
These three operations : Selee, the Filtration Group and Membranes are the three
main businesses in Porvair. Each employs more than 200 staff and have sales of
£20-30m - all are profitable, are capable of good quality growth and generate
cash. This also applies to our two smaller operations - Life Sciences and
Ceramic Moulds. Both have performed well in 2001, Life Sciences in particular,
and both have promising new product pipelines for the future.
The activities of Porvair Fuel Cell Technology are covered in more detail later
in the Strategic Update section of the statement. 2001 has been an exciting
year for this R&D operation. We are assembling an increasingly impressive cadre
of talented technical staff whose progress - both against technical development
targets and in building commercial opportunities - have exceeded our
expectations. We have also earned more related income than planned this year as
funded development programmes and sample product sales have been generated by
customers interested in our technology. We have established the capabilities of
our new materials - their technical performance characteristics; and we have
started the scale-up from laboratory to pilot scale. There is more to do in
2002, and full commercialisation is still some years away, but we are very
satisfied with progress to date.
STRATEGIC UPDATE
1. Strategic update - background
One year ago we started a programme of change at Porvair. As set out in the
2000 report and accounts, we expected in 2001 to :
• increase significantly R&D expenditure and so accelerate development
in our fuel cell related materials.
• strengthen our core businesses through acquisition.
• carry through substantial investment and renewal programmes in our
manufacturing operations.
Our objective was to strengthen Porvair's capability of generating sufficient
cash and profit growth over the medium term and fund a full R&D expenditure
programme for our fuel cell related materials technologies. We are increasingly
confident that these technologies have the potential to transform Porvair in
years to come. Good progress has been made with this strategic plan in 2001, as
explained in more detail below.
Looking ahead, our plans for 2002 and beyond remain consistent with the strategy
we laid out one year ago. Our fuel cell related materials remain an exciting
prospect for Porvair, and we expect to sustain our expenditure in this area. We
are of course conscious that this expenditure holds back Group profits, but
believe strongly that the longer term interests of shareholders are best served
by this R&D investment approach.
Our core operations - Metals handling, Microfiltration and Membranes - will
continue to see the levels of investment they have enjoyed in recent years.
These operations are profitable, cash generative and have good growth
capabilities. In the right circumstances further acquisitions are possible.
So 2002 will be a year in which the changes started in 2001 continue. But our
primary strategic goal does not alter : the identification and development of
materials displaying clear technical edge; strong market position; and
significant opportunities for profitable growth - whilst delivering profit
growth and cash generation sufficient to fund fuel cell related R&D activities.
2. Strategic update - fuel cell related activity
One year ago we announced a significant increase in our group R&D budgets. This
investment started in early 2001, most of it going through Porvair Fuel Cell
Technology in North Carolina. Progress has been encouraging. Our proprietary
microporous ceramics and metals were 'laboratory-scale' 12 months ago and
therefore the technical programme for the year included 14 specific projects
concerned with various aspects of material characterisation and production
scale-up. 12 of the original 14 projects were finished ahead of expectation;
two changed during the year as priorities altered. Our pilot production
facilities are now being installed and we have just received our first (albeit
modest) commercial order for a specific porous metallic alloy. A number of
academic papers have been published through the year, notably at the Grove Fuel
Cell Symposium and the American Mechanical Engineering Society, details of which
may be found at www.porvairfuelcells.com/whitep.htm.
Increasingly we see opportunities both in the fuel cell market and in other
areas, where the heat exchange, catalyst substrate or filtration characteristics
of the materials are finding novel applications.
One area where technical objectives have developed rapidly during 2001 has been
with our microporous carbon technology, with which we are at the early stages of
bi-polar plate development. Bi-polar plates are a component of PEM (polymer
electrolyte membrane) fuel cells, and our technology is being developed in
conjunction with a major US fuel cell developer and the US Department of Energy
('DoE'). We are delighted to have secured a DoE grant - $6.1m on a cost shared
basis - particularly as we did so against robust competition from other bi-polar
plate developers.
In the year ahead the development of our bi-polar plate will be one of six
primary technical programmes. The other five cover production scale-up of
porous metals; component design; catalysis applications; funded projects and new
alloy development.
3. Strategic Update - Porvair Filtration Group '(PFG)'
In 2001 we created a specialist microfiltration business. We combined our own
sintered materials operation with four other microfiltration companies :
Microfiltrex, Filters for Industry ('2FI'), MF&T and Vokes Microfiltration, all
of which we acquired. PFG makes highly engineered speciality microfiltration
products that are used in demanding environments. Key markets include
aerospace, pharmaceutical and chemical industries. This new business is part
owned, and is being managed by the team who founded and grew 2FI. Their track
record for growth and innovation is strong, and is borne out by initial results
which have been most encouraging with the integration programme well ahead of
schedule. Duplicated costs have been eradicated swiftly; purchasing benefits
have been found and continue to be sought; the advantages of distributing a
larger product range through broader sales and distribution channels are
starting to show through; and manufacturing efficiency benefits will accrue from
mid 2002. Few companies in this market combine microfiltration expertise with
microporous materials technology, and we expect the good start made in 2001 to
continue in the years ahead.
4. Strategic update - Investment and renewal programmes for operational
efficiency
During 2001 Porvair has completed one significant capital investment programme
at Selee and started a second in the Membranes operation.
At Selee, new manufacturing plant was installed and commissioned. This
equipment will handle approximately 40% of the factory output. It has lowered
running costs and cut environmental emissions.
In our Membranes operation our simplification programme has cut the number of
products we make and sell. Cutting complexity improves customer service and
inventory requirements are lower. The removal of older machinery enhances
environmental compliance and reduces repair and maintenance costs. By the end
of 2002, when the programme will be complete, the factory will be more
efficient, more cash generative and will focus on those product lines that offer
the best growth prospects.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 30 November 2001
Continuing Acquisitions Before Exceptional Group Group
Operations exceptional items 2001 2000
items restated
Note £'000 £'000 £'000 £'000 £'000 £'000
Turnover
Continuing operations
(including share of
joint venture) 60,247 12,020 72,267 - 72,267 65,613
Less : share of joint
venture (808) - (808) - (808) (1,061)
1 59,439 12,020 71,459 - 71,459 64,552
Cost of sales (44,713) (7,677) (52,390) (2,608) (54,998) (44,292)
Gross profit 14,726 4,343 19,069 (2,608) 16,461 20,260
Distribution costs (2,007) (919) (2,926) (507) (3,433) (2,092)
Administrative expenses (11,950) (1,720) (13,670) (913) (14,583) (13,418)
Group operating
profit before
goodwill amortisation 2,648 2,340 4,988 (4,028) 960 6,863
Goodwill amortisation 6 (1,879) (636) (2,515) - (2,515) (2,113)
Group operating
profit/(loss) before
joint venture 769 1,704 2,473 (4,028) (1,555) 4,750
Share of operating
profit in joint
venture 40 - 40 - 40 35
Group operating
profit/(loss)
including joint
venture 809 1,704 2,513 (4,028) (1,515) 4,785
Exceptional profit on
part disposal in
subsidiary
undertaking
- - - 90 90 -
Interest payable (1,167) (92) (1,259) (425) (1,684) (877)
(net)
(Loss)/profit on
ordinary activities
before taxation (358) 1,612 1,254 (4,363) (3,109) 3,908
Tax on profit on
ordinary activities 5 (1,186) 1,761 575 (2,438)
(Loss)/profit on
ordinary activities
after taxation 68 (2,602) (2,534) 1,470
Equity minority interests (150) 9
(Loss)/profit
attributable to
shareholders (2,684) 1,479
Dividends (2,467) (1,723)
Retained loss for the
financial year (5,151) (244)
Earnings per share
- basic and diluted 2 (8.7)p 5.4p
- basic and diluted 2
before goodwill
amortisation and
exceptional items 7.8p 13.2p
Reconciliation of movements in equity shareholders' funds
For the year ended 30 November 2001
GROUP
2001 2000
restated
£'000 £'000
(Loss)/profit attributable to shareholders (2,684) 1,479
Dividends (2,467) (1,723)
Retained loss for the year (5,151) (244)
New share capital subscribed 27,569 121
Exchange differences (420) 270
Net increase in equity shareholders' funds 21,998 147
Opening equity shareholders' funds (restated) 41,335 41,188
(originally £43,643,000 (2000 : £42,866,000) restated for
prior year adjustment of £2,308,000 (2000 : £1,678,000)
Closing equity shareholders' funds 63,333 41,335
Statement of total recognised gains and losses
For the year ended 30 November 2001
GROUP
2001 2000
restated
£'000 £'000
(Loss)/profit attributable to shareholders (2,684) 1,479
Exchange differences on retranslation of net assets of subsidiary undertaking (420) 270
and foreign borrowings
(3,104) 1,749
Prior year adjustment (2,308) -
Total (losses)/gains recognised in the year (5,412) 1,749
BALANCE SHEET
As at 30 November 2001
GROUP
2001 2000
restated
Note £'000 £'000
Fixed assets
Goodwill 6 35,940 18,599
Tangible assets 22,020 20,543
Investments
Investments in joint venture :
Share of gross assets 369 305
Share of gross liabilities (275) (250)
7 94 55
Investment in associated undertaking 7 2,192 -
60,246 39,197
Current assets
Stocks 14,892 11,993
Debtors falling due after more than one year 3,247 1,447
Debtors falling due within one year 15,559 14,467
Cash at bank and in hand 2,548 856
36,246 28,763
Creditors
Amounts falling due within one year (15,713) (13,179)
Net current assets 20,533 15,584
Total assets less current liabilities 80,779 54,781
Creditors
Amounts falling due after more than one year (10,346) (10,668)
Provisions for liabilities and charges 8 (2,201) (2,742)
Net assets 68,232 41,371
Capital and reserves
Called up share capital 736 515
Share premium account 28,679 1,331
Other reserves 4,942 5,362
Profit and loss account 28,976 34,127
Total equity shareholders' funds 63,333 41,335
Equity minority interests 4,899 36
68,232 41,371
Approved by the Board on 23 January 2002
B D W Stocks, Director
M Moran, Director
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 November 2001
Group Group
Note 2001 2000
£'000 £'000
Net cash inflow from operating activities 9 4,882 6,758
Returns on investments and servicing of
finance
Interest received 25 26
Interest paid (1,100) (815)
Exceptional finance costs (425) -
(1,500) (789)
Taxation
UK corporation tax (paid)/refunded (830) 151
Overseas tax paid (649) (602)
(1,479) (451)
Capital expenditure
Purchase of tangible fixed assets (3,233) (3,583)
Sale of tangible fixed assets 16 80
(3,217) (3,503)
Acquisitions
Acquisition of associate investment (2,192) -
Acquisition of subsidiaries (excluding (19,050) -
overdraft acquired)
(21,242) -
Equity dividends paid (1,990) (1,670)
Financing
Issue of ordinary share capital 28,771 121
Expenses of rights issue (1,202) -
Decrease in net borrowings 10 (1,198) (125)
26,371 (4)
Increase in cash in the year 10 1,825 341
NOTES
1. Turnover and segmental analysis
The analysis by geographical segment of the Group's turnover, operating profit
and net assets is set out below :
2001 2000
By destination By origin By destination By origin
£'000 £'000 £'000 £'000
(a) Turnover by geographical destination
United Kingdom 16,241 42,787 8,932 34,703
Continental Europe 11,559 - 12,000 -
Americas 32,812 28,672 31,530 29,849
Asia 8,501 808 8,969 1,061
Australasia 596 - 679 -
Africa 2,558 - 3,503 -
72,267 72,267 65,613 65,613
Less share of joint venture (808) (808) (1,061) (1,061)
71,459 71,459 64,552 64,552
(b) Operating profit
United Kingdom 4,479 4,059
Americas 509 2,804
Operating profit before goodwill
amortisation, exceptional items and share of
joint venture 4,988 6,863
Goodwill amortisation (2,515) (2,113)
Share of joint venture 40 35
Operating profit before exceptional items 2,513 4,785
(c) Net assets
Net assets before goodwill and net
borrowings :
United Kingdom 32,620 21,991
Continental Europe 2,192 -
Americas 6,837 10,741
41,649 32,732
Goodwill 35,940 18,599
Net borrowings (9,357) (9,960)
68,232 41,371
2. Earnings per share
Year ended Year ended 30
30 Nov 2001 30 Nov 2000
restated
(a) (Losses)/earnings per share
(Losses)/earnings (£'000) (2,684) 1,479
Number of shares (weighted) 31,042,605 27,313,065
(Losses)/earnings per share (8.7)p 5.4p
(b) Earnings per share before goodwill amortisation and exceptional charges
Earnings (£'000) 2,433 3,592
Number of shares (weighted) 31,042,605 27,313,065
Earnings per share 7.8p 13.2p
3. Dividends
The Board is recommending a final dividend of 4.3p per share
(2000 : 4.0p restated) to be paid on 10 April 2002 to shareholders on the
register at the close of business on 15 March 2002.
4. Exceptional items
As noted in the Interim results the group incurred operating
exceptional charges during the period due to simplification of the membranes
operation and in relation to the reorganisation of the newly created Porvair
Filtration Group, following the acquisitions of Fairey Microfiltrex Limited and
2Fi Holdings Limited (see note 11). In addition there were significant costs
incurred prior to the rights issue to provide financing for the acquisitions;
there is also a charge for costs incurred relating to prospective acquisitions
that were aborted.
£'000
Simplification of the membranes operation :
Fixed assets made obsolete and related costs 1,363
Inventory write-offs 852
Other costs 732
Reorganisation of Porvair Filtration Group 609
Financing costs 425
Costs of aborted acquisitions 382
4,363
5. Tax on profit on ordinary activities
Group Group
2001 2000
£'000 £'000
UK corporation tax at 30% (2000 : 30%)
Current period tax 320 870
Adjustments in respect of previous periods (502) -
Total UK current tax (182) 870
Overseas tax payable 113 824
Total current tax (69) 1,694
Deferred tax (506) 744
Tax on (loss)/profit on ordinary activities (575) 2,438
6. Goodwill
Group Group
2001 2000
£'000 £'000
Cost
At beginning of the year 30,322 30,322
Additions 19,884 -
At end of the year 50,206 30,322
Amortisation
At beginning of the year (11,723) (9,610)
Charge for the year (2,515) (2,113)
Other (28) -
At end of the year (14,266) (11,723)
Net book value
At end of the year 35,940 18,599
The additional goodwill for the year relates to acquisitions described in note 12.
7. Fixed asset investments
2001
Investment in Investment in
associated Permair Austins
undertaking joint venture
£'000 £'000
At 1 December 2000 - 55
Share of joint venture profit during year - 40
Additions 2,192 -
Exchange - (1)
At 30 November 2001 2,192 94
On 21 March 2001, the Group purchased a 25% interest in Sympatex (incorporated
in Germany) for Euro 1.7million (including expenses) and provided a loan of Euro
1.2million on which interest is receivable at a commercial rate. The
investment will allow Porvair's membrane technologies to share in the brand
recognition and marketing strength of Sympatex.
The Group has a 50% interest in the ordinary shares of a joint venture called
Permair Austins Limited, a company based and incorporated in Hong Kong. The
company was established to manufacture enhanced leather to satisfy our
customers' demands for a locally produced quality product and to take advantage
of this large and growing market. During the year ended 30 November 2001, the
group made sales on an arms length basis to Permair Austins Limited of £345,000
(2000 £589,000). In addition the group guarantees 50% of their borrowings up
to a maximum of £200,000.
8. Provisions for liabilities and charges
As explained in the interim results the Group has implemented the new Financial
Reporting Standard for Deferred Tax ('FRS 19'). As this is a change of
accounting policy it has resulted in a prior year adjustment to the results
previously published for 2000.
Under FRS 19 the Group now provides for deferred tax on a full provision basis.
2001
£'000
Balance at beginning of the year as previously stated 434
Prior year adjustment 2,308
Balance at beginning of the year as restated 2,742
Profit and loss credit (506)
Acquisitions (35)
Balance at end of the year 2,201
9. Reconciliation of operating profit to net cash inflow from operating activities
2001 2000
£'000 £'000
Group operating profit including joint venture before exceptional 2,513 4,785
items
Goodwill amortisation 2,515 2,113
Depreciation 3,222 2,938
Loss on sale of fixed assets 116 58
Increase in stocks (1,068) (586)
Decrease/(increase) in debtors 514 (2,115)
Decrease in creditors (1,485) (400)
Share of joint venture profit (40) (35)
Net cash inflow from operating activities before 6,287 6,758
exceptional items
Exceptional items (1,405) -
Net cash inflow from operating activities 4,882 6,758
10. Reconciliation of net cash flow to movement in net borrowings
2001 2000
£'000 £'000
Increase in cash in the year 1,825 341
Decrease in borrowings 1,198 125
Change in net borrowings from cash flows 3,023 466
Translation difference (17) (929)
Movement in net borrowings in the year 3,006 (463)
Acquired companies (2,403) -
Opening net borrowings (9,960) (9,497)
Closing net borrowings (9,357) (9,960)
11. Analysis of net borrowings
01/12/00 Cash flow Acquired Other Exchange 30/11/01
Companies non-cash movement
£'000 £'000 £'000 £'000 £'000 £'000
Cash in hand and at bank 856 1,739 - - (47) 2,548
Overdrafts (23) 86 (63) - - -
1,825 (63) - (47)
Borrowings due after 1 year (10,668) 1,019 (739) 42 - (10,346)
Borrowings due within 1 year (125) 179 (1,601) (42) 30 (1,559)
1,198 (2,340) - 30
Total (9,960) 3,023 (2,403) - (17) (9,357)
12. Acquisitions
The Group has made several acquisitions during the year.
On 27 February 2001 Selee Inc. purchased the assets of
Engineered Ceramics in Gilberts, Illinois. The Porvair Filtration Group ('PFG')
was formed in the UK by grouping the assets of Porvair Technology Limited with
those of Microfiltrex Limited (purchased 27 March 2001) and 2Fi Holdings Limited
('2Fi', purchased 2 May 2001). The owners of 2Fi acquired a 21% interest in PFG
as part of the transaction.
Microfiltrex 2Fi Holdings Other Total
£'000 £'000 £'000 £'000
Net assets acquired :
Fixed assets 806 1,424 570 2,800
Stock 1,856 1,067 579 3,502
Debtors 1,507 1,563 479 3,549
Creditors (1,113) (1,031) (228) (2,372)
Provisions (104) (418) - (522)
Overdraft - (63) - (63)
Loans - (840) - (840)
Total book value 2,952 1,702 1,400 6,054
Provisional fair value adjustments:
Stock (515) - (34) (549)
Fair value of net assets acquired 2,437 1,702 1,366 5,505
Purchase cost :
Cash (12,822) (1,005) (4,459) (18,286)
Shares - (4,839) - (4,839)
Loan notes - (1,500) - (1,500)
(12,822) (7,344) (4,459) (24,625)
Costs of acquisition (303) (146) (315) (764)
Total purchase cost (13,125) (7,490) (4,774) (25,389)
Goodwill arising on acquisition (10,688) (5,788) (3,408) (19,884)
13. Accounts
The foregoing statements do not constitute the Group's statutory accounts. The
Group's 2001 statutory accounts, on which the Company's auditors,
PricewaterhouseCoopers, have given an unqualified opinion in accordance with
Section 235 of the Companies Act 1985, are to be delivered to the Registrar of
Companies. The Group's 2000 statutory accounts have been filed with the
Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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