Final Results
Quarto Group Inc
13 February 2004
THE QUARTO GROUP, Inc - PRELIMINARY ANNOUNCEMENT
Quarto, the London-based and listed international book publisher, announces, for
the year ended December 31 2003, a fifth successive year of increase in
underlying earnings per share, with underlying pre-tax profit increasing to
£5.7m, notwithstanding a very demanding trading environment.
• Pre-tax profit rose by 12.2% to £5.7m and EPS by 5.7% to 22.3p, after
the increased tax charge, before amortization of goodwill and exceptional
item. Sales of £74.6m, which were flat in sterling terms, concealed real
volume growth of about 6% on a local currency basis.
• Cash generation, i.e. net cash inflow from operations, at 138% of
operating profits, continued to be very strong and net debt fell by 12% to
£17.4m in spite of abnormal extra capital expenditure of £3m.
• In light of the good profit performance, and the sustained strong cash
generation, the final dividend per share is increased by 12% to 3.25p,
giving a dividend for the full year of 5.75p, up 10%, covered 3.9 x by
underlying EPS.
• International Co-Edition Book Publishing Division had a very successful
year, with, in sterling terms, sales increasing by 9% to £45.4m and
operating profit growing by 21% to £5.5m. Particularly successful titles
included '1001 Movies You Must See Before You Die', 'Flora'(the most
comprehensive illustrated guide to the world's plants and flowers ever
published), '500 Low Carb Recipes', and 'Household Management for Men'.
• The Publishing Division's sales declined by 11.2% to £29.2m and
operating profit was off by 23% at £2.2m, with most of the decline coming
from the UK's publishing services business following the loss of its
principal customer in July 2002.
• Since October 2003, Lazard & Co has been assisting the Board in its
assessment of the best options for enhancing shareholder value, and the
process has not yet been concluded. Shareholders can be assured that the
Board will continue to act in the interests of all shareholders.
• Without wishing to give a hostage to fortune, the Board believes that it
is entirely possible to at least double Quarto's size within the next few
years. In maximizing the value of Quarto for shareholders, size does matter.
Laurence F Orbach, Chairman and Chief Executive, commented on performance 'In
what was, for most of the year, a fragile and difficult economic environment, we
increased our profits and significantly reduced our debt. That was our objective
going into 2003, in order to provide a sound basis for resuming growth in 2004
through further investment in new activities, and by making selective and
significant acquisitions.'
Mr Orbach concluded with regard to prospects, 'It is early in the year. At this
point, the future looks a little brighter than it did some 12 months ago. Retail
sales figures in the US have exceeded economists' expectation in January and,
absent major international and domestic upheavals in our core markets, we can
expect steady progress, and a contribution from some of our new initiatives.
Pricing elasticity continues to decline, but more books are being sold than ever
before, in more outlets, to more people. Books still deliver to the consumer, at
generally better value than other media, information, instruction, and
entertainment, all in a well-tested format that is easy to use, portable, and
enduring.'
Notes for Editors:
Quarto's International Co-edition Book Publishing Division creates books which
are licensed to other publishers for publication internationally. It also
includes Regent and ProVision, which are Far East-based print broking and
production services businesses, serving both third parties and the Group.
Quarto's Publishing Division primarily publishes books, under imprints owned by
the Group, and art prints, mainly for their domestic markets in the US and
Australia. In addition, it includes two UK-based screen printers primarily
serving the point of sale market, Western and AP Screen.
Although a Delaware registered corporation, Quarto's Head Office is situated in
Islington, London N7 and its shares are fully listed on the London Stock
Exchange.
Enquiries:
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166
Dear Shareholder:
I am very pleased to report that your company, in a very demanding trading
environment, continued its strong improvement in performance in 2003. Market
conditions remained difficult for most of the year. At the beginning of the year
the United States, our single largest market, and responsible for 56% of sales,
was mired in what appeared to be a mild recession, with war almost visible on
the horizon and, although the UK and Australia remained relatively robust, the
locomotive economies of the Euro zone appeared to be stuck at the station. Our
strong 2003 results are the more impressive when seen against this background.
The bulk of our sales is destined for customers all over the world - the UK
domestic market accounts for only 20 % of sales - and by far the majority of our
sales is billed in US dollars. As shareholders will know, the US dollar declined
in value substantially during the course of 2003 (the exchange rate was $1.60=
£1.00 at the beginning of the year, and $1.79=£1.00 at the end), and this has
masked the growth in the volume of our sales. There has been some slight impact
on overall profits, but this has been much more limited than the dollar's
decline might suggest, because a substantial proportion of our associated
liabilities, i.e. the costs of making our books, and our debt, is also paid, or
denominated, in US dollars.
Financial Results
On flat sales, in sterling, of £74.6 million (2002: £74.7 million), operating
profit grew by 5.8% to £6.6 million (2002: £6.2 million), pre-tax profit rose by
12.2% to £5.7 million (2002: £5.1 million), and earnings per share, after the
increased tax charge, increased by 6% to 22.3p (2002: 21.1p). These figures are
before amortization of goodwill, and exceptional item. Cash generation, i.e. net
cash inflow from operations, at 138% of operating profits, continued to be very
strong, and net debt fell by 12% to £17.4 million (2002: £19.8 million), in
spite of abnormal extra capital expenditure of £3 million for the purchase and
re-equipping of a factory for the publishing services business. Underlying
earnings per share have now increased for the 5th consecutive year.
In light of the good profit performance, and the sustained strong cash
generation, your Board is recommending an increase of 12% in the final dividend
to 3.25p (2002: 2.9p), giving a dividend for the full year of 5.75p (2002:
5.25p). If approved at the Annual Meeting on May 12th, 2004, the dividend will
be paid, on May 19th, 2004 to shareholders on the register on April 23rd, 2004.
As shareholders know, the major part of Quarto's business is dollar linked, and
the US dollar is our principal operating currency. It may be instructive,
therefore, to look at Quarto's recent sales numbers in US dollars, as this
highlights the strong growth of the business. Using average rates for the last
three years, Quarto's sales were as follows: For 2001, sales of $106.0 million;
for 2002, sales of $112.1 million; and for 2003, sales of $121.6 million. Even
though the methodology may be a little rough and ready, the point is that, in a
rather subdued, and at times very difficult, economic climate since the burst of
the bubble in 2000, Quarto has grown significantly.
With economic recovery in the air now, it is, perhaps, hard to recall the
outlook of 12 months ago. Economic stagnation, and war clouds, offered an
uninspiring backdrop. Yet, in what was, for most of the year, a fragile and
difficult economic environment, we increased our profits and significantly
reduced our debt. This was our objective, going into 2003, in order to provide a
sound basis for resuming growth in 2004 through further investment in new
activities, and by making selective and significant acquisitions. There was real
volume growth of about 6%, i.e. after stripping out the currency translation
effect. Our overall operating margin improved, helped by a 5% reduction in
overheads.
Commentary on 2003 Trading
The International Co-edition Book Publishing Division had a very successful
year, with sales and profits increasing sharply. In sterling terms, sales
increased by 9% to £45.4 million (2002: £41.8 million), and operating profit
grew by 21% to £5.5 million (2002: £4.5 million). The major contributors to this
outcome were some solid new titles, such as Quintet's 1001 Movies You Must See
Before You Die, Global's Flora, very strong sales of backlist titles (500 Low
Carb Recipes from Rockport's Fair Winds unit was a particularly notable title),
improved management of the sales processes for new and backlist titles, and
maiden contributions from two new imprints, Qu:id, and Eye. Qu:id had great
success with its first title, Household Management for Men, with sales now
running into six figures, and Eye launched its list with The Complete Book of
Oscar Fashion.
Although it did not contribute profits to 2003's figures, we are very proud to
have been able to produce Global's Flora, the most comprehensive illustrated
guide to the world's plants and flowers ever published, and to have written off
the entire development cost (in accordance with our group accounting policy) in
the year. Weighing in at about 6.5kgs, Flora has approximately 1,600 pages,
20,000 plant entries, and 12,000 photographs. It is a monumental achievement for
the Sydney-based team that produced it, and will be maintained and updated as a
valuable resource for years to come, to form the core of an entire publishing
list. Rockport/RotoVision was turned around successfully, and progress was made
in stabilizing Q+, our imprint producing enhanced books, which now has a new
strategy.
The Publishing Division, operating mostly in its domestic markets of the US, the
UK, and Australia, was affected by the roller-coaster ride of retail sales in
the US, and the continuing impact of the loss of the publishing services
businesses' major client in the UK in the middle of 2002 . Almost two-thirds of
the division's sales are in the US. The sales decline in the US was only small
in local currency terms, and operating profit was up but, in sterling terms, was
down by 4%. Sales of the division declined by 11.2% to £29.2 million (2002:
£32.9 million), and operating profit was off by 23% at £2.2 million (2002: £2.9
million), with most of the decline coming from the UK's publishing services
business.
In the UK, we invested in a new factory and new state-of-the-art equipment in
2003. The disruption of moving one unit to a new factory also contributed
adversely to the results. Although progress was made in replacing the lost work,
and the profit erosion was halted, there remains much to do to restore the
publishing services businesses to robust health, as their operating profits were
three-quarters down on 2002's.
Our art publishing operations improved marginally on their 2002 performance, and
Book Sales and Walter Foster both improved in local currency terms.
Corporate Events
For almost half of 2003 Quarto's management has been dealing with running the
business effectively, and with the implications, for all shareholders, of the
partial tender offer for Quarto that was launched by J O Hambro Capital
Management Ltd (JOHCM) in July. Your board vigorously opposed the JOHCM offer
for a number of crucial reasons: It is unfair to shareholders as it is not a
full offer and, but for the fact that Quarto, a Delaware corporation, is not
governed by the Takeover Code, it would not be permitted; it grossly undervalues
Quarto, as Quarto's share price has demonstrated in the meantime; and it implied
to shareholders that Quarto's performance was stumbling when, in fact, the
reverse is true.
Your board does, though, agree with the underlying motivation behind JOHCM's
opportunistic offer, namely, that Quarto's value has not been appropriately
reflected in its share price. If nothing else, JOHCM's actions have afforded
Quarto a much higher profile. The results that we are announcing now amply
justify your board's confidence that the interests of all shareholders are best
served by ignoring the JOHCM offer.
When I wrote to you last year, in response to announcement of the JOHCM tender
offer, I indicated that your Board would consider all options for the future of
the company. On October 15 we announced that Lazard & Co had been appointed by
the Board to assist the company in assessing the various options for optimizing
value for all of Quarto's shareholders, including the possibility of a change of
control. Against the background of solid trading, the Board was looking actively
at a number of acquisition possibilities, and third-party interest had been
expressed in the company. Lazard has been assisting in the assessment of the
best options for enhancing shareholder value and, as of this writing, the
process has not been concluded. Shareholders can be assured that the Board will
continue to act in the interests of all shareholders.
Whatever the outcome of this exercise, your Board is comfortable that the
management of Quarto has the skills and experience to expand the business
considerably, both through starting new ventures, and by acquiring publishing
businesses in our traditional areas of expertise. In the last year or so, we
have started several new ventures but, at Quarto's size, it is clear that it
will be some time before they can have any more than marginal impact on the
group. Quarto has had generally good results with the publishing businesses it
has acquired, and your Board is convinced that a few significant acquisitions in
this area will begin the transformation of Quarto into a much larger group. What
has become increasingly clear is that, to maximize shareholder value, size does
matter.
There will always be opportunities to bolt on small publishing businesses, as
they become available. Now, we are looking at larger businesses, too, and have
identified some opportunities, which we are investigating. With a growing trend
to consolidation in the book publishing industry, we expect these opportunities
to increase, as the logic of consolidation imposes itself.
Strategy
Quarto has structured its businesses into two separate divisions, organizing
them by several distinctive criteria. For the International Co-Edition Book
Publishing Division these are that: (a) each business depends on international
sales for its viability and has, therefore, no single domestic focus; (b) books
are not put into production until firm sales have been made to publishers or
distributors in major markets, and at a level adequate to ensure that the costs
of producing the books are completely covered; (c) books are produced in
categories of enduring interest, so that successful books can remain in print
for many years; and (d) books inform and instruct the reader, so that he or she
improves levels of skill and knowledge, and are produced in attractive full
color formats that enhance the experience.
The Publishing Division, by contrast, contains businesses that operate primarily
in a domestic market, hold inventory, and are as much focused on marketing,
sales, and distribution as they are on the creative side. Generally, these are
special interest publishers, e.g. Walter Foster, which is the leading firm
publishing books for practicing artists, and sold mostly through the arts and
crafts stores where they buy their supplies.
There has been a modest amount of inter-company and inter-divisional trading,
but it has not been the group's strategy to attempt to grow the group by
vertical integration. Rather, in order to maintain the individual focus of each
unit, we have struggled against this temptation. Instead, we have undertaken
some rationalization of back office functions, and provide group assistance by
way of finance, IT, and general management help to each unit. We are convinced
that this is the correct approach for our industry, and pleased to note that
some other large publishers are now following this policy, too. In our view, it
is the only effective way, in the medium-term, to run a business in a
product-rich area.
One side effect of this is that, in common with most publishing businesses, we
operate under a large number of different names (or imprints). But, it's a
necessary skill of the senior management to cope with this slight untidiness,
for it is the price of maintaining the creative vitality of the individual
imprints.
It may help to put our seemingly bewildering variety of imprints in context.
According to Standard & Poor's Industry Survey of Publishing, this is
commonplace in large book publishing companies. This recent S & P survey notes
that, as of July 2003, Bertelsmann (best known for the Random House imprint)
published books under 50 imprints, Pearson (Viking Penguin) under 42, and Viacom
(Simon & Shuster) under 47, looking at their operations in the United States
only.
Your board is satisfied that Quarto has demonstrated that it has the skills to
manage diversity of imprints, and that its infrastructure is, to that extent,
scalable. No doubt, as we grow, our systems will become more sophisticated. But,
we must labor hard to resist any attempt to rationalize the front end of the
publishing process, namely, book selection and creation, in order to continue
providing an environment in which these activities are nurtured and challenged.
We have learned this from experience.
Organic growth, and starting new imprints is vital but, with very rare
exceptions, takes time to have a noticeable impact on the group. (The growth of
Fair Winds is a welcome exception, with sales of about £3.6 million after three
years of trading.) The optimal size of a unit is, probably, sales of about £7-8
million. This produces the maximum sales, consistent with lean management of the
unit, and maintenance of creative vitality. A new imprint can take some years to
reach that level of sales. We have recently launched several new imprints - most
recently an educational list, QED Publishing, that will publish over 60 new
titles for the school and library markets in 2004 - and the impact on the growth
of Quarto will be for the next few years.
This is largely because the book publishing industry, although large, solid, and
with well-established distribution and retail channels, is very mature, and its
overall rate of growth in our major markets is also modest even though, as the
same S & P report notes, 'Americans continue to spend more on books than on any
other medium except cable television'. At the same time, it remains a very
fragmented industry. We believe that the only workable strategy for Quarto is to
take advantage of the fragmentary nature of the book industry, its established
infrastructure, and Quarto's skills and proven experience of taking on new
businesses, to grow Quarto swiftly by acquisitions, without changing the risk
profile of the business.
We anticipate that the trend, in media businesses, to separate content and
distribution operationally, will continue, even if both activities are conducted
under a joint corporate umbrella. Content and distribution power both have to be
first-rate. This development is more advanced in other areas, particularly in
the visual media - film, television, and broadcasting - than in book publishing,
but it is noticeable elsewhere, too. Looking backwards, publishers were even
more vertically integrated than many are now, once routinely printing their own
books, and having a bookstore out front! The days of the jack-of-all-trades
approach is outdated, because we need effective and professional skills to be
competitive, and these require focus.
We have regularly looked at acquisition candidates. For the last several years,
our low profile, and a low share price, have inhibited us from making anything
other than small acquisitions. Thanks to the higher profile of the last year,
following on from the publication of our 2002 results, the situation has
changed, and our strong performance in 2003 gives the board the confidence to
approve a more ambitious approach to acquisitions. In our planning to execute
this strategy, we are considering, with our advisers, the broad shape of the
appropriate capital structure for the Group.
Without wishing to give a hostage to fortune, we believe that it is entirely
possible to at least double Quarto's size within the next few years. In
maximizing the value of Quarto for shareholders, size does matter. Our guiding
principles, in making acquisitions, are that the businesses acquired shall be
within our known areas of competence, bring measurable benefits to the group
and, in the year after acquisition, shall be earnings enhancing.
This does not mean that we shall abandon organic growth. Quite the contrary will
happen, as we have demonstrated over the last year or so. Creative ideas are
often subversive, and creative people are often mavericks. It's not easy to
program their progress. Creativity is, after all, as others have recognized, an
essentially destructive purpose, engaged in by those people who simply don't
see, or accept, the status quo. We live in a time of rapid change, when it often
seems as though all of our assumptions and beliefs are being challenged. This is
not the case, but it is a background against which much new and needed thinking
can emerge.
Prospects
It is early in the year. At this point the future looks a little brighter than
it did some 12 months ago. Retail sales figures in the US have exceeded
economists' expectation in January and, absent major international and domestic
upheavals in our core markets, we can expect steady progress, and a contribution
from some of our new initiatives. Pricing elasticity continues to decline, but
more books are being sold than ever before, in more outlets, to more people.
Books still deliver to the consumer, at generally better value than other media,
information, instruction, and entertainment, all in a well-tested format that is
easy to use, portable, and enduring.
Once again, I am pleased to thank my colleagues, who have worked hard to produce
these results, and have focused their attentions on commercial rather than
corporate issues, and my fellow board directors, who have been so helpful in
charting a course for the benefit of all Quarto's shareholders. I want to
address a special word of personal thanks to our independent directors, who have
been more involved than they expected to be in Quarto's affairs, and to our
Chief Financial Officer, Michael Mousley, and his team. They have coped with the
extra demands of dealing with corporate issues, due diligence on potential
acquisitions, and the preparation of the financial statements. They may come
only to regret this extraordinary performance, as it demonstrates that they will
rise to any challenge!
Sincerely,
Laurence F Orbach
Chairman and Chief Executive
London, February 13th, 2004
SUMMARY FINANCIAL RESULTS
for the year ended December 31st, 2003
2003 2002
£000 £000
Turnover 74,623 74,735
-------- --------
Gross Profit 25,383 25,939
Net operating expenses before exceptional items and
goodwill amortisation (18,817) (19,733)
Amortisation of goodwill (206) (175)
Exceptional items* (595) -
Operating Profit
----------------------------- ---------- ---------
Before exceptional items and goodwill amortisation 6,566 6,206
Amortisation of goodwill (206) (175)
Exceptional items (595) -
----------------------------- ---------- ---------
5,765 6,031
Net Interest Payable (892) (1,151)
Profit on ordinary activities before taxation
----------------------------- ---------- ---------
Before exceptional items and goodwill amortisation 5,674 5,055
Amortisation of goodwill (206) (175)
Exceptional items (595) -
----------------------------- ---------- ---------
4,873 4,880
Taxation (750) (497)
------- -------
Profit on ordinary activities after taxation 4,123 4,383
Minority interests - equity (314) (343)
------- -------
Profit for the financial year 3,809 4,040
Dividends (including non-equity) (1,458) (1,379)
--------- ---------
Retained profit for the financial year 2,351 2,661
======= =======
Earnings per share 18.9p 20.1p
======= =======
Underlying earnings per share 22.3p 21.1p
------- -------
Diluted earnings per share 18.2p 19.3p
======= =======
Diluted underlying earnings per share 21.2p 20.1p
======= =======
Dividends per ordinary share 5.75p 5.25p
======= =======
===
* Exceptional items in 2003 comprise US and UK legal and professional
fees associated with the JOHCM Tender Offerand the Group's response.
================================================================================
SUMMARY PROFIT & LOSS ACCOUNT
for the year ended December 31st, 2003
2003 2002
£000 £000
Turnover 74,623 74,735
-------- --------
Gross Profit 25,383 25,939
-------- --------
Operating Profit 5,765 6,031
Net Interest Payable (892) (1,151)
Profit on ordinary activities before 4,873 4,880
taxation
Taxation (750) (497)
------- -------
Profit on ordinary activities after 4,123 4,383
taxation
Minority interests - equity (314) (343)
------- -------
Profit for the financial year 3,809 4,040
Dividends (including non-equity) (1,458) (1,379)
--------- ---------
Retained profit for the financial year 2,351 2,661
======= =======
Earnings per share 18.9p 20.1p
======= =======
Underlying earnings per share 22.3p 21.1p
------- -------
Diluted earnings per share 18.2p 19.3p
======= =======
Diluted underlying earnings per share 21.2p 20.1p
======= =======
Dividends per ordinary share 5.75p 5.25p
================== ==================
CONSOLIDATED BALANCE SHEET
as at December 31st, 2003
2003 2002
£000 £000
Fixed assets
Goodwill 3,337 3,376
Tangible assets 8,909 5,875
------- -------
12,246 9,251
-------- -------
Current assets
Stocks and work in progress 17,451 18,675
Debtors 20,667 21,519
Cash and deposits 12,490 11,315
-------- --------
50,608 51,509
-------- --------
Creditors: Amounts falling due within one year (24,303) (24,576)
---------- ----------
Net current assets 26,305 26,933
-------- --------
Total assets less current liabilities 38,551 36,184
Creditors: Amounts falling due after more than one year (29,588) (29,056)
Provision for liabilities and charges
Deferred taxation (875) (1,235)
------- ---------
Net assets 8,088 5,893
======= =======
Capital and reserves
Called up share capital 1,341 1,341
Treasury stock (802) (698)
- Reserves - paid in surplus 23,893 23,891
- revaluation 978 988
- profit and loss (19,758) (22,135)
----- -----
Shareholders' funds 5,652 3,387
------- -------
Equity 448 (1,817)
Non equity 5,204 5,204
------- -------
5,652 3,387
Minority interests - equity 2,436 2,506
------- -------
8,088 5,893
======= =======
CONSOLIDATED CASH FLOW STATEMENT
for the year ended December 31st, 2003
2003 2002
£000 £000
Net cash inflow from operating activities 7,965 8,396
------- -------
Net cash outflow from return on investment and servicing
of finance (1,422) (2,335)
--------- ---------
Taxation (371) (504)
------- -------
Capital expenditure (2,502) (599)
--------- -------
Acquisitions and disposals (179) (1,767)
------- ---------
Equity dividends paid (969) (875)
------- -------
Management of liquid resources (1,593) (1,895)
--------- ---------
Movement of short term deposits
Net cash flow from financing 1,631 (536)
------- -------
Increase/(decrease) in cash 2,560 (115)
------- -------
Reconciliation of net cashflow to movement in net debt
Movement in cash 2,560 (115)
Movement in debt (1,733) 476
Management of liquid resources 1,593 1,895
------- -------
2,420 2,256
New finance leases (1,631) (123)
Translation differences 1,607 1,721
------- -------
Movement in debt for year 2,396 3,854
Net debt at beginning of year (19,783) (23,637)
---------- ----------
Net debt at end of year (17,387) (19,783)
========== ==========
NOTES
1. Segmental Analysis
Geographical analysis of turnover by destination
2003 2002
£000 £000
United Kingdom 14,983 16,557
United States of America 41,624 41,879
Canada 1,955 1,794
Europe 8,270 7,956
Australasia and the Far East 6,721 5,212
Rest of the World 1,070 1,337
------- -------
74,623 74,735
======== ========
Turnover and operating profit before amortisation of goodwill and exceptional
items
Operating
profit before
amortisation of
goodwill and
exceptional
items
Turnover
2003 2002 2003 2002
£000 £000 £000 £000
Class of business
Co-edition
publishing 45,413 41,856 5,482 4,528
Publishing 29,210 32,879 2,218 2,864
-------- -------- ------- -------
74,623 74,735 7,700 7,392
======== ========
Group
overheads (1,134) (1,186)
--------- ---------
6,566 6,206
======= =======
2. Exceptional items in 2003 comprise US and UK legal and professional
fees associated with the JOHCM Tender Offer and the Group's response.
3. Dividends comprise:
2003 2002
£000 £000
Non equity: Preference: 426 437
Equity: Ordinary: Interim 449 422
Final proposed 583 520
----- -----
1,458 1,379
======= =======
The Board proposes a final dividend of 3.25p net (2002: 2.90p) per share of
common stock of par value US$0.10 each ('ordinary share') which is expected to
be paid on 19 May 2004 to shareholders on the register on 23 April 2004.
4. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
common stock holders by the weighted average number of shares in issue during
the period, excluding those held as treasury stock.
For diluted earnings per share, the weighted average number of shares in issue
is adjusted to assume conversion of all dilutive potential shares of common
stock. These represent share options granted to employees where the exercise
price is less than then weighted average market price of the Company's shares
during the period and preference shares which are convertible into shares of
common stock.
Underlying earnings per share figures are presented. These exclude the effects
of exceptional items and goodwill amortisation.
Earnings 2003 Per Earnings 2002 Per Share
£000 Weighted Share £000 Weighted Amount Pence
Average Number
of Shares
Average Amount
Number Pence
of Shares
Basic
earnings 3,383 17,926,756 18.9 3,603 17,925,306 20.1
per share
Effect of
dilutive
options - 66,305 - - 31,423 -
Dilutive
preference
shares 426 2,933,965 14.6 437 2,989,414 14.6
----- ----------- ------ ----- ----------- ------
Diluted
earnings per
share 3,809 20,927,026 18.2 4,040 20,946,143 19.3
------- ------------ ------ ------- ------------ ------
Underlying
earnings per
share
figures
Basic
earnings 3,383 17,926,756 18.9 3,603 17,925,306 20.1
per share
Effect of:
Exceptional
items 416 17,926,756 2.3 - 17,925,306 -
Goodwill
amortisation 206 17,926,756 1.1 175 17,925,306 1.0
----- ------------ ----- ----- ------------ -----
Basic
earnings
per share
before
goodwill
amortisation
and
exceptional 4,005 17,926,756 22.3 3,778 17,925,306 21.1
items ------- ------------ ------ ------- ------------ ------
Underlying
basic
earnings 4,005 17,926,756 22.3 3,778 17,925,306 21.1
per share
Effect of:
Dilutive
options - 66,305 - - 31,423 -
Dilutive
preference
shares 426 2,933,965 14.6 437 2,989,414 14.6
----- ----------- ------ ----- ----------- ------
Diluted
underlying
earnings per
share before
goodwill
amortisation 4,431 20,927,026 21.2 4,215 20,946,143 20.1
------- ------------ ------ ------- ------------ ------
and
exceptional
items
Exceptional items is stated net of a tax credit of £179,000.
5. The financial information contained in the preliminary announcement
does not constitute the Company's statutory accounts for the years ended 31
December 2003 or 2002 but is derived from those accounts. Statutory accounts for
2002 have been delivered to the Registrar of Companies; those for 2003 will be
delivered following the Company's Annual General Meeting. The auditors have
reported on those accounts, their reports were unqualified and did not contain a
statement under Section 237(2) or (3) of the Companies Act 1985.
6. The Annual Report will be sent out to shareholders in March. Additional
copies can be obtained from the Finance Director, The Quarto Group, Inc., the
Old Brewery, 6 Blundell Street, London, N7 9BH. Tel: 020 7700 9000 (email:
mickm@quarto.com).
This information is provided by RNS
The company news service from the London Stock Exchange
Tuesday, 14th May 2024
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