Final Results
Rathbone Brothers PLC
14 March 2002
Rathbone Brothers Plc 14th March 2002
Rathbone Brothers Plc
Preliminary results for the year ended 31st December 2001
Rathbone Brothers Plc, the group which specialises in discretionary investment
management for private clients, announces preliminary results for the year ended
31st December 2001.
Preliminary results for the year ended 31st December 2001
Highlights:
• Funds under management rise 5% to £5.8bn - against a London stock market
fall of 16%.
• Pre-tax profits, before exceptional items and goodwill amortisation, drop
by 22% to £20.6m.
• Final dividend increased to 16p, making 26p for the year - an increase of
1p (+4%) on the total dividend for the previous year.
• Earnings per share, before goodwill amortisation, drop by 20% to 40.86p.
• Senior recruitment - three new appointments to the Board.
Micky Ingall, Chairman, commented:
'It is gratifying to report that discretionary funds under management have risen
by 5% to £5.8 bn against a stock market fall of 16%. However, the costs of new
business inevitably arrive ahead of revenues and this has exacerbated the
profits fall in the investment management division.'
'We are cautiously optimistic for a recovery in both world economies and markets
as 2002 progresses and providing this forecast proves correct, the Company is
well placed to participate fully in the upturn. Despite the fall in profits, we
have decided to maintain our record of increasing dividends as a manifestation
of the strength of the Group and our confidence in the future.'
For further information, please contact:
Rathbone Brothers Plc (020 7399 0000)
• Micky Ingall, Chairman
• Mark Powell, Managing Director
• Andy Pomfret, Finance Director
Luther Pendragon (020 7618 9100)
• Tim Trotter (Trotter & Co)
• Douglas Trainer
• Andrew Sharkey
Chairman's Statement
I have pleasure in presenting Group figures for the year to 31 December 2001.
Profits before tax (before exceptional items and goodwill amortisation) amount
to £20.6m and earnings per share are 40.86p (before goodwill amortisation). The
figures show a fall of 22% and 20% respectively on the previous year. The final
dividend is increased to 16p making 26p for the year (compared to 25p for 2000).
Despite the fall in profits, we have decided to maintain our record of
increasing dividends as a manifestation of the strength of the Group and our
confidence in the future.
It is disappointing to present lower figures particularly as this is the first
time that profits have fallen since the Group was first quoted in 1984. The
reasons are not hard to find. Around 80% of our business is directly involved in
investment management and the main London stock market has fallen by 16% in 2001
following a fall of 10% in 2000.
Investment Management
Growing an investment management business in 2001 has been akin to running up
the down escalator. It is gratifying therefore to report that discretionary
funds under management have risen 5% to £5.8bn against a stock market fall of
16%. This excellent result has been achieved by a mixture of relatively good
investment performance, a significant recruitment of new investment managers,
and an excellent inflow of new clients. However the costs of new business
inevitably arrive ahead of revenues and this has exacerbated the profits fall in
the investment management division. As and when markets recover, the significant
increase in the size of the investment management division will become apparent.
The private client market place has continued to evolve over 2001 providing
changes that have benefited Rathbones. Industry consolidation has continued
largely as a result of mergers and acquisitions both from British firms and
foreign institutions wishing to expand their British private client operations.
A number of these companies have raised their minimum investment entry
requirements moving away from the more traditional approach to managing private
clients, where the fund manager has direct contact with the client and
constructs bespoke portfolios, to a more centralised approach, where clients
tend to be looked after by relationship managers and their portfolios are
constructed according to a model. As a result, some of the companies that we
used to see as competitors are no longer in the frame, either because their
target market has changed or their investment approach and services are no
longer comparable to ours.
Consequently we have been joined by a steady stream of senior investment
managers from the UK's major investment houses who want to continue to use their
own expertise rather than becoming solely 'relationship managers' restricted by
a very rigid central investment process. In addition clients have moved to us
from these firms as they are also unhappy with these changes and want a more
traditional private client investment service. We have also benefited from the
opening up of the market for clients with under £1m who are now too small for a
number of firms.
Goodwill
You will note the increase in the goodwill charge for the year where we are
writing off goodwill on some acquisitions over a shorter period than previously.
Over the last five years, there have been a number of changes to the way we have
accounted for goodwill - some of them forced on us by changes in accounting
standards. As a group we continue to focus on growing pre-tax profits and
earnings per share before goodwill amortisation.
Unit Trusts
On the whole, our unit trusts have enjoyed another successful year despite
market conditions. Rathbone Unit Trust Management recently won two 2002 Standard
& Poor's awards. The company was named Best Smaller Group (over five years) and,
for the third year running, its Rathbone Smaller Companies Fund was placed first
in the Smaller Companies UK Sector (over five years) category out of sixty seven
funds.
Although our unit trust management activity is not large in relation to the
Group as a whole, the funds provide a valuable shop window of Group performance
which is difficult to demonstrate with individual private portfolios.
Trust Division
Over the last three years the Trust Division has expanded significantly both by
acquisition and staff recruitment. Much of the expansion has taken place in
Jersey and Geneva where we now have staff of 100 and 35 respectively. As a
result of this expansion and an excellent performance in 2001, trust profits
have risen from 10% of Group profits before tax in 1998 to 22% in 2001. The
division has thus proved itself as a growth business which is largely insulated
from the effects of stockmarket weakness.
Directors
There have been a number of changes in directors during 2001. Paul Chavasse
joined us in June to head Group Operations and IT and was appointed to the Board
in September. This is a new appointment demonstrating the importance of
administration and IT in our business and his expertise and commitment are
already showing significant benefits.
Paul Egerton-Vernon who was a senior partner of Nigel Harris & Partners in
Jersey at the time of their acquisition by the Group in April 2000 has been
appointed to the Board and has taken over the management of the Trust Division
from John Tuck. John Tuck has decided to pursue his career elsewhere and we
thank him for his great contribution to the Group over many years.
Ian Buckley who is Chief Executive of Tenon Group Plc joined the Board in
December as a non-executive Director, bringing with him a significant knowledge
of both investment management and trust administration.
I welcome all new members to the Board.
Outlook
At the time of writing, stock markets have recovered from the darkest days post
11th September but remain subdued and significantly below the levels of one and
two years ago. We are cautiously optimistic about a recovery in both world
economies and markets as 2002 progresses and provided that this forecast proves
correct, the Group is well placed to participate fully in the upturn. In the
meantime, the concentration on recurring fee income in both the investment
management and trust divisions enables us to trade profitably in even the most
severe conditions.
Finally I would like to thank all our staff for their great efforts in 2001 and
our long standing clients for their continued support and welcome all new
clients who have joined us this year.
Micky Ingall
Chairman
13th March 2002
Consolidated profit and loss account
for the year ended 31st December 2001
2001 2000
Note £'000 £'000
Interest receivable
- interest receivable and similar income arising from debt securities 18,158 12,804
- other interest receivable and similar income 5,014 5,414
Interest payable (11,774) (9,131)
Net interest income 11,398 9,087
Dividend income 125 57
Fees and commissions receivable 70,667 68,787
Fees and commissions payable (4,361) (4,566)
Other operating income 836 1,395
Operating income - continuing operations 78,665 74,760
Administrative expenses (53,626) (44,069)
Depreciation and amortisation (6,107) (4,528)
Other operating charges (726) (590)
Provisions for bad and doubtful debts 53 (403)
Group operating profit 18,259 25,170
Group operating profit before amortisation of goodwill 20,629 26,542
Amortisation of goodwill (2,370) (1,372)
Net profit on sale of regional office business - continuing operations 8 381 -
Group profit on ordinary activities before tax - continuing operations 18,640 25,170
Tax on Group profit on ordinary activities 3 (6,960) (8,297)
Group profit on ordinary activities after tax 11,680 16,873
Dividends 4 (9,422) (8,993)
Retained profit for the year 2,258 7,880
Dividends per ordinary share 4 26p 25p
Earnings per ordinary share 5
Basic after goodwill amortisation 32.33p 47.45p
Basic before goodwill amortisation 40.86p 51.31p
Diluted after goodwill amortisation 32.09p 46.39p
Diluted before goodwill amortisation 40.56p 50.16p
Consolidated balance sheet
as at 31st December 2001
2001 2000
£'000 £'000
Assets
Cash and balances at central banks 8,083 18,349
Settlement balances 8,629 26,111
Loans and advances to banks 38,109 40,405
Loans and advances to customers 30,207 32,550
Debt securities 381,525 234,591
Equity shares 70 65
Intangible fixed assets 27,592 29,378
Tangible fixed assets 8,955 7,764
Other assets 3,083 3,582
Prepayments and accrued income 15,146 12,838
Total assets 521,399 405,633
Liabilities
Deposits by banks 630 3,127
Settlement balances 7,387 13,632
Customer accounts 416,033 289,643
Other liabilities 9,154 11,065
Accruals and deferred income 5,742 4,981
Provision for liabilities and charges 7,024 12,506
Called up share capital 1,814 1,800
Share premium account 7,277 6,156
Other reserves 25,342 23,811
Profit and loss account 40,996 38,912
Equity shareholders' funds 75,429 70,679
Total liabilities 521,399 405,633
Memorandum items
Contingent liabilities
- guarantees 955 32
- assets pledged as collateral security 40 18
995 50
Commitments
- undrawn commitments to lend 5,765 1,885
Consolidated cash flow statement
for the year ended 31st December 2001
2001 2000
Notes £'000 £'000 £'000 £'000
Net cash inflow from operating activities 9(i) 160,146 144,462
Taxation
- UK corporation tax (7,756) (7,520)
- overseas tax (502) (193)
Net cash outflow for taxation (8,258) (7,713)
Capital expenditure and financial investments
-purchase of equity shares (5) -
- purchase of investment securities (1,873,471) (1,087,513)
- proceeds from sale and maturities of 1,726,537 981,170
investment securities
- purchase of tangible fixed assets (5,331) (3,776)
- sale of tangible fixed assets 358 209
Net cash outflow for capital expenditure and (151,912) (109,910)
financial investments
Acquisitions and disposals
- acquisitions of subsidiaries (4,193) (5,328)
- disposal of regional office business 1,092 -
- net cash acquired with subsidiary undertakings 11 628
Net cash outflow for acquisitions and disposals (3,090) (4,700)
Equity dividends paid (9,019) (8,452)
Net cash (outflow)/inflow before financing (12,133) 13,687
Financing
- issue of shares 727 1,011
- capital element of finance lease rental payments - (44)
Net cash inflow from financing 9(iii) 727 967
(Decrease)/increase in cash in the year 9(ii) (11,406) 14,654
Consolidated statement of total recognised gains and losses
for the year ended 31st December 2001
2001 2000
£'000 £'000
Profit for the financial year attributable
to shareholders 11,680 16,873
Currency adjustments 132 291
Total recognised gains and losses for the year 11,812 17,164
Reconciliations of movements in shareholders' funds
for the year ended 31st December 2001
2001 2000
£'000 £'000
Profit for the financial year attributable
to shareholders 11,680 16,873
Dividends (9,422) (8,993)
Retained profit for the financial year 2,258 7,880
Currency adjustments 132 291
Shares issued 14 65
Premium on shares issued 1,941 11,004
Goodwill on disposals previously eliminated against reserves 711 -
Movement in relation to the SIP (306) -
Net addition to shareholders' funds 4,750 19,240
Opening shareholders' funds 70,679 51,439
Closing shareholders' funds 75,429 70,679
Notes
1 Accounting policies
This preliminary announcement has been prepared on the basis of the accounting
policies as set out in the published report and accounts for the year ended 31st
December 2000 with the exception of the following:
(a) Financial Reporting Standards
In 2001, the Group has adopted the provisions of the UK Financial Reporting
Standard ('FRS') 18 'Accounting Policies'. The Group has made the transitional
disclosures required by FRS 17 'Retirement benefits'.
(b) Goodwill
Goodwill is amortised to nil by equal instalments over its estimated useful life
as follows:
- investment management businesses 8-10 years
- trust businesses 20 years
The amortisation period for investment management businesses acquired has been
shortened from 20 years to 8-10 years. The effect of the change has been to
increase the goodwill amortisation charge for 2001 by £778,000 of which £291,000
relates to prior periods. Such goodwill will continue to be subject to periodic
review for impairment.
(c) Share Incentive Plan (formerly known as the All Employee Share Ownership
Plan)
In accordance with Urgent Issues Task Force ('UITF') Abstract 13 'Accounting for
ESOP Trusts', the Company's Share Incentive Plan ('SIP') has been treated as a
branch of the Company reflecting assets which have not yet vested with employees
and the corresponding liabilities. Assets not yet deemed to have vested with
employees are:
- Matching shares still subject to forfeiture
- Free shares still subject to forfeiture
- Uninvested partnership share contributions
Matching shares and free shares are held in the balance sheet at cost as 'own
shares' within fixed assets to the extent they have been purchased in the
market. Where the matching shares and free shares have been newly issued, the
cost is debited to profit and loss reserves.
In accordance with UITF Abstract 17 (revised 2000) 'Employee share schemes', the
cost of the matching shares and free shares is charged to the profit and loss
account as follows:
- Matching shares - the charge, calculated in accordance with UITF Abstract 17,
is spread on a straight line basis over the period from the start of the
accumulation period to the end of the forfeiture period (three years from
allocation) when the shares become unconditionally vested in the employees
- Free shares - the charge, calculated in accordance with UITF Abstract 17, is
debited to the profit and loss account in the performance period, being the
calendar year.
2 Segmental information
Gross operating income Profit before taxation
2001 2000 2001 2000
£'000 £'000 £'000 £'000
By class of business:
Investment management and banking (see note below) 75,162 73,065 14,526 21,549
Trust services 19,638 15,392 4,114 3,621
94,800 88,457 18,640 25,170
Total assets Net assets
2000
2001 2000 2001 (Restated)
£'000 £'000 £'000 £'000
By class of business:
Investment management and banking (see note below) 469,377 358,325 44,402 39,947
Trust services 52,022 47,308 31,027 30,732
521,399 405,633 75,429 70,679
The Group's banking activity relates almost entirely to clients in the
investment management business and both are treated as one segment for
management and internal reporting purposes. Accordingly, in the opinion of the
directors, it is more meaningful to present segmental information for these
activities on a combined basis.
Gross operating income Profit before taxation
2001 2000 2001 2000
£'000 £'000 £'000 £'000
By geographical segment:
United Kingdom 80,028 75,448 14,246 20,546
Jersey, Switzerland and other European countries 12,235 10,862 2,960 3,381
The Americas 2,537 2,147 1,434 743
94,800 88,457 18,640 25,170
Total assets Net assets
2000
2001 2000 2001 (Restated)
£'000 £'000 £'000 £'000
By geographical segment:
United Kingdom 471,535 355,915 45,036 40,769
Jersey, Switzerland and other European countries 45,429 44,348 27,566 27,813
The Americas 4,435 5,370 2,827 2,097
521,399 405,633 75,429 70,679
The allocations by class of business and geographical segment of total and net
assets include goodwill of £27,592,000 (2000: £29,378,000) of which £24,261,000
(2000: £25,855,000) relates to Trust services.
Gross operating income comprises interest receivable, dividend income, fees and
commissions receivable and other operating income which arise by geographical
segment as follows:
Interest receivable Dividend income Fees and commissions Other operating
receivable income
2001 2000 2001 2000 2001 2000 2001 2000
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 22,126 17,205 125 57 56,966 56,834 811 1,352
Jersey, Switzerland and 883 833 - - 11,351 9,986 1 43
other European countries
The Americas 163 180 - - 2,350 1,967 24 -
23,172 18,218 125 57 70,667 68,787 836 1,395
In the opinion of the Directors, there is no material difference between the
sales origin and destination of gross operating income and accordingly, the
geographic segmental analysis has been prepared on a sales origin basis only.
None of the activities were discontinued in the current and previous years. The
tables include companies that have joined the Group with effect from the date of
their acquisition.
Common costs and earnings on shareholders' funds have been allocated on the same
basis that is used for internal management reporting. Total assets have been
allocated on a legal entity basis, which, in the main, reflects both the 'by
class of business' and 'by geographical segment' analyses.
3 Taxation
2001 2000
£'000 £'000
UK corporation tax
Current tax on income for the year 6,125 8,058
Adjustments in respect of previous years 67 47
6,192 8,105
Double taxation relief (625) (600)
5,567 7,505
Foreign tax
Current tax on income for the year 952 839
Adjustments in respect of previous years 41 (3)
993 836
Deferred taxation charge/(credit) 400 (44)
6,960 8,297
The effective tax rate for the year is 32% after adjusting the profit before
taxation for goodwill amortisation charges of £3,081,000 (comprising £2,370,000
included in operating administrative expenses and £711,000 included in
non-operating exceptional items).
4 Dividends
The Board is recommending a final dividend of 16p (2000: 15p) payable on 14th
May 2002 to persons on the register on 12th April 2002 and this, together with
the interim dividend of 10p (2000: 10p), results in total dividends of 26p
(2000: 25p) per ordinary share for the year.
2001 2000
£'000 £'000
Interim dividend of 10p per share on 36,175,860 shares
(2000: 10p per share on 35,801,385 shares) 3,618 3,580
Final dividend of 16p per share on 36,280,118
(2000: 15p per share on 36,003,418 shares) 5,804 5,400
Adjustment to previous year's final dividend - 13
Total dividends - 26p per share (2000: 25p per share) 9,422 8,993
5 Earnings per share
Basic earnings per share has been calculated by dividing the profit attributable
to shareholders of £11,680,000 (2000: £16,873,000) by the weighted average
number of shares in issue throughout the year of 36,127,021 (2000: 35,560,272).
Diluted earnings per share is the basic earnings per share, adjusted for the
effect of contingently issuable shares, employee share options remaining capable
of exercise and any dilutive shares to be issued under the Share Incentive Plan,
weighted for the relevant period (see table below).
The directors believe that the provision of additional EPS figures, in
particular before goodwill amortisation, is beneficial to the users of the
financial statements to understand the performance of the Group and therefore
supplementary basic and diluted EPS figures have been calculated to exclude the
effect of goodwill amortisation of £3,081,000, comprising £2,370,000 included in
operating administrative expenses and £711,000 included in non-operating
exceptional items (2000: £1,372,000 included in operating administrative
expenses).
The average fair value of one ordinary share during 2001 was £8.70 (2000: £9.93)
and the average exercise price for shares under option during 2001 was £7.19
(2000: £6.34).
2001 2000
Weighted average number of ordinary shares in issue
during the year - basic 36,127,021 35,560,272
Effect of ordinary share options 256,222 484,043
Effect of dilutive shares issuable under the Share Incentive Plan 10,621 -
Weighted average number of contingently issuable
ordinary shares during the year - 325,949
Diluted ordinary shares 36,393,864 36,370,264
6 Equity shares
2001 2000
Directors' Directors'
valuation/ valuation/
market market
Cost value Cost value
£'000 £'000 £'000 £'000
Listed equity shares (see Note (b) below) - 8,440 - 4,550
Unlisted equity shares 70 70 65 65
70 8,510 65 4,615
a. The equity shares are held as investment securities for continuing use in the
business.
(b) The Group holds a total of 2,000,000 shares in London Stock Exchange plc
held by the Group's stockbroking subsidiaries, Rathbone Neilson Cobbold Limited
and Rathbone Laurence Keen Limited which are held in the balance sheet at cost
(£2). Shares in London Stock Exchange plc were listed on the main market of the
Exchange on 20th July 2001. Simultaneously with listing, the Exchange completed
a bonus issue of shares on the basis of nine new ordinary shares for each share
held.
7 Pension schemes
FRS 17 disclosures
Whilst the Group continues to account for pension costs in accordance with
Statement of Standard Accounting Practice 24 'Accounting for pension costs',
under FRS 17 'Retirement benefits' the following transitional disclosures are
required:
(i) The Group currently operates two funded pension schemes in the UK (the
Rathbone Scheme and the Laurence Keen Scheme) providing benefits based on final
pensionable salary. The Laurence Keen Scheme was closed to new entrants with
effect from 1st October 1999. The Rathbone Scheme will be closed to new entrants
with effect from 1st April 2002. The assets are held in independent, trustee
administered funds. The pension costs are assessed on the advice of the Scheme
actuaries using the projected unit method which looks at the value of the
benefits accruing over the year following the valuation date based on projected
salary to date of termination of service.
(ii) The latest full actuarial valuations were conducted as at 31st December
1999 (the Rathbone Scheme) and 1st April 2000 (the Laurence Keen Scheme) and
were updated to 31st December 2001 by qualified independent actuaries. The major
assumptions used in these valuations were as follows:
Laurence
Keen Rathbone
Scheme Scheme
Rate of increase in salaries 4.7% 4.7%
Rate of increase in pensions in payment 2.7% *2.7%
Rate of increase of deferred pensions 2.7% 2.7%
Discount rate 5.7% 5.7%
Inflation assumption 2.7% 2.7%
* 5% for service prior to April 2001
The assumptions used by the actuary are the best estimates chosen from a range
of possible actuarial assumptions which, due to the timescale covered, may not
necessarily be borne out in practice.
(iii) The fair value of the Schemes' assets, which are not intended to be
realised in the short term and may be subject to significant change before they
are realised, and the present value of the Schemes' liabilities, which are
derived from cash flow projections over long periods and are thus inherently
uncertain, and the related tax effect are set out below:
Laurence
Keen Rathbone
Scheme Scheme
£'000 £'000
Equities 2,587 11,610
Bonds 3,045 3,319
Other 196 774
Total market value of assets 5,828 15,703
Present value of scheme liabilities (8,000) (23,830)
Deficit in scheme (2,172) (8,127)
Related deferred tax asset 652 2,438
Net pension liability (1,520) (5,689)
(iv) If the above amounts had been recognised in the financial statements, the
Group's net assets and profit and loss reserve at 31st December 2001 would have
been as follows:
£'000
Net assets
Net assets excluding pension liability 75,429
Pension liability (7,209)
Net assets including pension liability 68,220
Reserves
Profit and loss reserve excluding pension liability 40,996
Pension liability (7,209)
Profit and loss reserve including pension liability 33,787
(v) The total contributions made by the Group to the Rathbone Scheme during the
year to 31st December 2001 were £1,579,538 based on 11.5% of pensionable salary.
Given that after 31st March 2002, the Rathbone Scheme will be closed to new
entrants, the current pension cost will increase as the members of the Scheme
approach retirement.
No contributions were made by the Group to the Laurence Keen Scheme during the
year (2000: nil). As the Scheme was closed to new entrants with effect from 1st
October 1999, the current pension cost will increase as the members of the
Scheme approach retirement.
8 Net profit on sale of regional office business
Tunbridge Isle of
Wells (part) Wight Total
£'000 £'000 £'000
Net proceeds on disposal of regional office business 655 437 1,092
Goodwill previously eliminated against reserves (525) (186) (711)
Net profit 130 251 381
On 26th January 2001, the Group's Isle of Wight office was sold. On 19th October
2001, part of the business of the Group's Tunbridge Wells office was sold. The
amount of tax attributable to the profits on sale included in the overall tax
charge is £328,000.
9 Group cash flow statement
(i) Reconciliation of operating profit to net cash inflow from operating
activities
2001 2000
£'000 £'000
Operating profit 18,259 25,170
Loss/(profit) on disposal of tangible fixed assets 48 (119)
Depreciation and amortisation 6,107 4,528
UITF Abstract 17 SIP charge 98 -
Provision for bad and doubtful debts (53) 403
Increase in accrued income and prepayments (2,295) (1,334)
Increase in provision for liabilities and charges 281 1,039
Increase in accruals and deferred income 772 1,399
Net cash inflow from trading activities 23,217 31,086
Net decrease/(increase) in loans and advances to banks and customers 3,321 (9,774)
Net decrease/(increase) in settlement debtor balances 17,482 (4,113)
Net decrease in settlement creditor balances (6,245) (238)
Net increase in deposits by banks and customer accounts 124,187 126,721
Net (decrease)/increase in other liabilities (2,314) 1,391
Net decrease/(increase) in other assets 498 (611)
Net cash inflow from operating activities 160,146 144,462
(ii) Analysis of the balances of cash as shown in the balance sheet
At 1st At 31st
January Cash Non-cash Exchange December
2001 flow changes movements 2001
£'000 £'000 £'000 £'000 £'000
Cash and balances at central banks 18,349 (10,276) - 10 8,083
Loans and advances to banks repayable on 15
demand 28,386 (1,130) - 27,271
Total 46,735 (11,406) - 25 35,354
The Group is required to maintain a balance with the British Virgin Islands
government which, at 31st December 2001, amounted to £344,000 (2000: £335,000).
(iii) Analysis of changes in financing
Share Share
capital premium
£'000 £'000
Balance at 1st January 2001 1,800 6,156
Cash inflow 8 719
Other movement 6 402
Balance at 31st December 2001 1,814 7,277
(iv) Acquisition of subsidiary undertaking
The acquisition of Speed 7673 Limited on 16th May 2001 did not make a material
contribution to the Group's net operating cash flows and did not incur any
capital expenditure.
(v) Major non-cash transactions
The consideration for the purchase of Speed 7673 Limited included shares.
10 Financial information
The financial information set out in this preliminary announcement has been
extracted from the Group's accounts which have been approved by the Board of
Directors.
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31st December 2001 or 2000. Statutory
accounts for 2000 have been delivered to the Registrar of Companies and those
for 2001 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 statements under section 237(2) or (3) of the Companies Act 1985.
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