Final Results
TT electronics PLC
18 March 2003
TT electronics plc
Preliminary Results for the year ended 31 December 2002
TT electronics, a world leader in resistor and sensor technology today announces
its preliminary results.
KEY POINTS
• Group turnover on continuing activities of £520.3 million (2001: £594.6
million, excluding ceased activities - £36.1 million of copper rod).
• Profit before tax, impairment and goodwill amortisation on continuing
activities was £20.4 million (2001: £29.9 million). Impairment and goodwill
amortisation amounted to £12.5 million (2001: £2.2 million).
• The Board is recommending a maintained final dividend of 6.36p per share
bringing the total for the year to 10.05p (2001: 10.05p).
• Gearing has been further reduced to 27% (2001: 29%) and TT electronics
continues to have a strong balance sheet.
• The sale of the investment in Johnston Group PLC generated £10.6 million
of cash and a profit on disposal.
• The recently announced acquisition of the business of Demo Tableaux de
Commande, a French manufacturer of electromechanical climate control units
adds complementary products which are currently designed into Renault,
Peugeot and Citroen cars.
• Continuing success achieved in the automotive sensors and systems market -
strong order intake experienced which is expected to provide growth of 25%
by 2005.
John Newman, Executive Chairman said today:
'The results announced today reflect both the success we are achieving in our
automotive business and the more difficult market conditions being experienced
in some of our other electronic sector markets.
The 6% increase in sales of our electronic sensors and systems to the automotive
market demonstrates the underlying strength of this core market resulting from
the increasing presence of electronics in new cars. We expect sales of these
products to increase by 25% by the year 2005.
We continue to seek acquisitions which complement our existing technology and
develop our customer base.'
18 March 2003
Enquiries:
TT electronics plc Tel: 01932 856 647
John W Newman, Executive Chairman
Biddicks Tel: 020 7448 1000
Zoe Biddick
Chairman's statement
TT electronics' turnover for 2002 was £520.3 million compared with £630.7
million on continuing activities (including ceased activities being £36.1
million of copper rod) and total turnover of £657.9 million in the previous
year. Profit before taxation prior to amortisation of goodwill and impairment
was £20.4 million (2001 - £29.9 million). Amortisation and impairment of
goodwill amounted to £4.7 million (2001 - £2.2 million) which included the write
off of the balance of goodwill arising on the purchase of Prestwick Circuits
Limited in 1999. A plant and machinery impairment provision of £7.8 million has
been made due to the continuing losses of certain of our businesses supplying
telecom related industries.
Earnings per share before impairment provisions, goodwill amortisation and
exceptional items were 10.1p compared to 16.0p. Basic and fully diluted earnings
per share were 3.6p (2001 - 12.2p). The taxation charge of 27 per cent (2001 -
27 per cent) is a combination of a charge on current trading and the benefit of
deferred taxation relief on impairment provisions.
Net borrowings of the group have been kept firmly under control, which has
enabled the group to continue to invest in its manufacturing facilities and at
the same time follow a strong dividend policy. Total net indebtedness at the
year end was £55.8 million compared with £63.5 million at the previous year end.
I mentioned in my half year statement that the Board's decision to maintain
skill levels in our telecom related businesses would be kept under review. In
the light of the uncertainty of demand from the telecom industry over the next
two years, the Board subsequently decided that the reorganisation of certain
businesses was necessary. As a result, the United Kingdom manufacture of
ferrites has ceased and has been transferred to our Indian facility as will a
range of ferrites from our USA factory, whose operation has been significantly
reduced. Our printed circuit board production has been successfully consolidated
into one factory. In addition to incurring these associated reorganisation
charges, redundancy costs where employee numbers have been reduced as the result
of manufacturing efficiency savings have been incurred as a normal ongoing cost
of the business.
The automotive industry is a growth area for electronic components; our sensor
and systems sales grew by 6 per cent this year and are expected to grow by 25
per cent by the year 2005. This improvement in sales comes from the introduction
of new automotive models. 2003 will show a lower increase in sales for whilst we
have had a strong order intake, these orders will provide us with further growth
for 2004 onwards. The telecom and computer markets would appear to have bottomed
and are likely to remain at these depressed levels throughout the year.
Our policy to strengthen our existing businesses by making suitable acquisitions
is being pursued. On 14 March, the assets of Demo Tableaux de Commande SA with a
book value of £5.5 million were purchased for £2.5 million. Demo has a factory
in Le Mans, France and a small assembly operation in Brazil. Demo manufactures
climate control units, their products are designed into a number of European
cars, including Renault, Peugeot and Citroen. Demo products being
electromechanical complement our electronic based climate control businesses in
the United Kingdom and USA. As the demand for additional features grows, our
in-house expertise and technology will benefit our customers and enhance our
turnover.
Our efforts to maximise the value of our investment in Johnston Group PLC were
successful and we sold our shareholding for 425p per share compared with a
market price of 345p. The sale generated £10.6 million of cash and a profit on
disposal of £1.2 million.
We continue to create a total TT electronics identity for all the businesses
within the group. An initial step has been the creation of TT electronic
manufacturing services Limited, which is the combination of AB Electronic
Assemblies Limited and Welwyn Systems Limited, our contract electronic
manufacturing businesses. Further name changes, binding our companies together,
will take place during this coming year.
The strong balance sheet and low borrowings of the group, gives the Board the
confidence to recommend a final dividend of 6.36p per share. This brings the
total dividend for the year to 10.05p, the same as last year. The dividend will
be paid to shareholders on the register on 16 May and will be payable on 29 May
2003.
I would like to thank all the employees of the group for their efforts during a
difficult year and I look forward to them benefiting in the future from a
strongly established TT electronics group.
It would appear that overall demand in the marketplace for our products in the
current year is likely to be no better than last year. TT electronics will
continue its policy of looking to the future and developing new products in line
with the needs of our customers.
John W Newman
Executive Chairman
17 March 2003
Chief Executive's review
Overview
Our investment over the years in new electronic products for the automotive
industry has ensured continued growth in this market during the year contrasting
with the very depressed demand from the telecom market, which failed to make any
recovery throughout the year.
Our strategy over this period, and which will remain for the foreseeable future,
has been to continue to invest both in product development and capital
expenditure to service the group's marketplaces and in particular the automotive
sector, as well as other markets we are developing such as medical and
aerospace, where sales growth can be increased with an acceptable return on
capital employed. A tight control on costs, including headcount reductions of a
further 8 per cent during the year and factory mergers, have been undertaken
where there is exposure to depressed markets such as telecom and computers.
This strategy has ensured that the group has continued to be cash generative,
with a strong balance sheet and is well positioned to take advantage of market
opportunities when the World economies recover.
The group's businesses
The group develops, sells and manufactures a range of electronic,
electromechanical and electrical products using our core technologies. Our
customers include many of the major worldwide original equipment manufacturers,
Tier 1 automotive system suppliers, electronic manufacturing services companies,
specialist distributors in the automotive industry, telecom, computer and
general industrial businesses including aerospace, medical and utilities.
Whilst a United Kingdom based plc, TT electronics is an international business
with factories and technical sales operations in 18 countries which enables us
to service our global customers' needs at cost competitive prices. A central
part of the group's philosophy is to develop a lasting relationship with
selected customers as the majority of the products sold are customer specific
rather than standard.
Manufacturing
We are a global manufacturing company and have developed a considerable
expertise by utilising best manufacturing principles gained from different
countries' management teams. It is important that, as new products are designed,
the development engineers and the production and process engineering teams
integrate their efforts so that products can be manufactured efficiently on cost
effective automated equipment which repetitively produces identical quality
product. Developing automated production equipment is as important as the
product itself and we have adopted the principle of planning the manufacturing
process and then designing the equipment which is constructed by outside
specialists or using in-house expertise.
In many cases our customers prefer that we manufacture relatively close to their
main assembly plants to minimise lead times and transport costs between sites.
Where this is not practical due to a high labour content or small runs not
suitable for automated equipment there is a growing trend to utilise one of our
manufacturing units in low labour cost countries such as Mexico, Malaysia, India
and Barbados as well as our recently established assembly operation in the
Ukraine.
Once the manufacture of a product has started, teams of specialists including
our operatives, use modern manufacturing methodologies, such as the Toyota Lean
Manufacturing principles, Six Sigma and Kaizen, to minimise scrap and produce
products 'right first time' which eliminates costly rework activities.
Computerised factory planning systems are essential for effective control of raw
materials, machine loadings and inventories. The group has invested and
continues to invest in systems which help drive down manufacturing costs, reduce
unit prices and ensure that we meet our customers' expectations for 100 per cent
on time delivery.
It is not possible to compete in our marketplaces without manufacturing the
highest quality products. Many of our factories surpass the quality requirement
of ISO9000 and are now achieving the new global standard of ISO/TS16949.
Product development
The group relies on product development, for the future growth of our business
and the design and continuous development of new products is a key strength.
However, it is unusual for the group to develop new products in isolation and
our practice is to work closely with our customers to provide solutions to their
engineering challenges which enhance their product offering.
This way of working is reliant on long-term relationships or strategic
partnerships with all levels of our customers' management teams from design and
development engineering, purchasing departments, process engineering and
administrative functions.
Each of our main business units specialises in a particular technology or
technologies and is responsible for achieving their new product developments.
Regular interaction between the business units ensures that innovations are
shared, design effort does not overlap and resources are not wasted.
Electronic sector
Automotive market - represents 59 per cent of the electronic sector turnover
The automotive industry represents the largest marketplace for our electronic
components and systems and over 50 per cent of all cars manufactured in Europe
and North America contain at least one of our manufactured products. Our
customers include the World's largest car manufacturers, Tier 1 system suppliers
as well as smaller specialist suppliers.
Some years ago we identified the growth in automotive electronics as an ideal
marketplace for our technologies. Growth of automotive electronics has been at
the rate of 6 per cent per annum in recent years and is expected to remain at
this rate over the next five years. By focusing and expanding on our key
technologies the group has since 1998 increased its automotive sales by 70 per
cent. The growth of the group's automotive sensors and electronic systems for
2002 was 6 per cent but has been offset by reduced sales of PCBs and laminations
to Tier 1 suppliers. We have been successful in winning new contracts for the
automotive electronics businesses which were in excess of £180 million in 2002.
These will provide sales growth over the next few years at currently forecast
car production levels.
The growth in automotive electronics is driven by a combination of factors;
legislation which continues to reduce exhaust emissions thereby producing less
pollutants and improving fuel consumption; safety legislation and safety
innovation to reduce road deaths and injuries and demand from customers for
additional comfort for driver and passenger, such as improved climate control
and in-car entertainment.
The automotive industry is highly competitive and uses innovative engineering.
However, once a component or system has been specified for a new car platform
the contract is most likely to last around five years, albeit with contracted
price reductions. This enables appropriate product specific automated equipment
to be utilised and depreciated over the product life, the cost effective
long-term material supply to be negotiated and an in-depth training of
operatives.
Our range of automotive products includes rotating and position sensors,
temperature and pressure sensors, climate control modules, switches and body
electronics, hybrid circuits, trimmers, resistors and printed circuit boards.
Our contacting and contactless sensor technologies were originally adopted for
'drive, brake and steer-by-wire' applications on German luxury cars such as
Mercedes Benz and BMW. These products are now used on a wide range of cars and
continue to be designed in on new model platforms. We are currently producing
over 11,000 units per day of our award winning accelerator pedal modules. We
were the innovator of the chassis height sensor starting with the Range Rover
model and now our chassis height sensors are used to improve comfort and safety
as well as load levelling in conjunction with 'high intensity discharge
headlights'. TT electronics now produces over 20,000 units per day for cars
assembled in Europe and America. We have just completed the third extension to
one of our German factories in the last five years to house the production
equipment to service this growth.
One of our businesses in South Wales specialises in the design and manufacture
of complex climate control systems which can take up to 12,000 man hours to
develop utilising the latest sophisticated integrated design and production
engineering computer systems. Success with this product range, particularly with
American car manufacturers, drove the decision three years ago to manufacture
climate control products in our automotive factory in North Carolina where the
number of units assembled has risen from 45,000 units in 1999 to 408,000 units
in 2002.
Telecom market - represents 11 per cent of the electronic sector turnover
Much publicity has been given over the last two years to the implosion of the
telecom industry which has left the World's leading service providers and
equipment manufacturers struggling for survival. One of the group's major and
long established marketplaces for many years was the World's leading telecom and
internet equipment manufacturers such as Ericsson, Siemens, Lucent, Nortel,
Alcatel and Cisco who continue to report falling sales to this market.
In the peak telecom year of 2000, the group sold £86 million of products into
this market as against £38 million in 2002. This unprecedented low level of
demand continued throughout 2002 despite the earlier consensus of expectations
that the market would recover during the latter part of last year. A major
feature holding back the recovery was the high stocks of finished goods and
components held by our customers. It is reported that much of this stock has
been consumed which should open the way for increasing sales as service
providers' demand returns to normality.
Those of our operations which had a heavy bias to telecom products were
particularly badly affected and considerable headcount reductions and
reorganisation have taken place. These include the closure of our United Kingdom
based ferrite manufacturing plant with the production being moved to the group's
operation in India.
Our products based on thick and thin film hybrid circuits and resistive
technologies are used in a wide range of applications such as switching for
fixed line, mobile base stations as well as fibre optic systems. Many of our
components are used in internet infrastructure equipment such as servers and
routers as well as in communication satellites. Despite the low demand for our
products our development engineers continue to work with our customers on the
next generation designs to win sales as the market recovers.
Computer market - represents 8 per cent of the electronic sector turnover
The majority of the World's leading computer manufacturers use our electronic
components in their products. The lower level of production of computers in
2002, together with component stocks still filling the supply chain, reduced
demand for our resistors, inductors, transformers, ferrite cores and filters,
with sales to this market dropping from £62 million in 2000 to £28 million in
2002. Forecasts predict a slight upturn in computer sales in 2003 which will be
beneficial if these predictions materialise. We have maintained our technical
sales and application engineering staff and also opened up a sales office in
southern mainland China to service customers better who have moved their
production to this area making China one of the major electronic manufacturing
centres of the World. We continue to develop products applicable to the next
generation of PCs and laptops which should be launched into the market during
2003.
Industrial market - represents 22 per cent of the electronic sector turnover
Due to the major downturn in the telecom market we have been working hard to
increase sales into the industrial market. This has required a redirection of
our engineering focus and product development to meet the challenges of this
market which is large overall, but diverse and very fragmented and is
represented by numerous companies ranging from global original equipment
manufacturers to small family owned businesses.
Whilst we have had successes in this market it has been difficult due to the
weak demand in a number of sectors, notably aerospace and control
instrumentation. Our focus on the medical market has won us orders for
components into defibrillators, pacemakers and a range of diagnostic equipment
and we expect this to continue to grow. Our electronic manufacturing business
has won a contract worth £20 million over the next four years for sub-assemblies
for use in high frequency radio systems for the Ministry of Defence Bowman
programme.
Electrical sector
Power generation - represents 31 per cent of the electrical sector turnover
Our businesses in the United Kingdom and Mexico design and build electrical
power generating units of between 50 and 2000KVA for both standby and continuous
power generation. We export generator sets to Africa, the Middle East, China and
the Far East, Central and South America. The global market for power generation
declined by 12 per cent in 2002 causing stiff competition. We commenced delivery
of a large contract worth £5.8 million that was won at the end of 2002 for an
oil project in North Africa. This proved to require a more stringent
specification than was anticipated and has utilised more engineering time than
had been planned thus reducing our margin. On the positive side the group's
operation based in Mexico achieved another excellent year of profit and our
uninterruptible power supply business in the United Kingdom, which has been
suffering from the downturn in telecom, won a substantial contract for equipment
for the new generation 3G base stations in Singapore. Our ground power
generation company which manufactures units for airlines and airports suffered
from the substantial cut back on capital expenditure in this industry. We were,
however, successful in winning an order worth £4.3 million spread over three
years for airstart units for the Ministry of Defence. The harsh environment
connector business also won a contract ultimately for the Ministry of Defence
for output panels, harnesses and connectors for field power systems worth £7.7
million over a three year period.
Power transmission - represents 69 per cent of the electrical sector turnover
Whilst these businesses improved their performance in 2002 the lack of an
expected large sub-sea cable contract was disappointing but we now anticipate
the contract, for which our cable has been specified, to be placed in late 2003.
The cable industry is still suffering from over-capacity with competitive
pricing from Eastern European countries. However, our cable accessories and
specialist compound businesses again produced good results. Some time ago we
identified that off-shore wind farms, which the Government are partially funding
as sources of renewable energy, would require our specification of sub-sea cable
and late last year we won a contract worth £3.2 million which will be delivered
in the first half of 2003.
Outlook
We expect 2003 to be a demanding environment in which to grow our sales. Over
the last 18 months we have done much to reduce headcount and costs, merged and
relocated more of our manufacturing to low labour cost areas to reduce unit
costs and increased our efforts to develop new markets. We feel confident that
we have the right organisation and skills to maximise future opportunities in
our various markets.
Sheridan W A Comonte
Chief Executive
17 March 2003
Consolidated profit and loss account
For the year ended 31 December 2002
2002 2001
Impairment Impairment
provisions provisions
Business and goodwill Business and goodwill Continuing Discontinued
performance amortisation performance amortisation activities activities
£million £million Total £million £million £million £million Total
Note £million £million
Turnover 1 520.3 - 520.3 630.7 - 630.7 27.2 657.9
Cost of sales 2 (427.8) (7.8) (435.6) (521.5) - (521.5) (20.4) (541.9)
Gross profit 92.5 (7.8) 84.7 109.2 - 109.2 6.8 116.0
Operating
expenses 2 (70.1) (4.7) (74.8) (72.5) (2.2) (74.7) (5.3) (80.0)
Operating profit 22.4 (12.5) 9.9 36.7 (2.2) 34.5 1.5 36.0
Profit on sale of
fixed asset
investment 3 1.2 - 1.2 - - - - -
Loss on sale or
termination of
businesses 3 - - - (0.9) - (0.9) (2.1) (3.0)
Cost of demerger 3 - - - - - - (1.1) (1.1)
Profit on
ordinary
activities before
interest 23.6 (12.5) 11.1 35.8 (2.2) 33.6 (1.7) 31.9
Interest (3.2) - (3.2) (5.9) - (5.9) (0.2) (6.1)
Profit on
ordinary
activities before
taxation 1 20.4 (12.5) 7.9 29.9 (2.2) 27.7 (1.9) 25.8
Taxation (3.4) 1.3 (2.1) (7.4) - (7.4) 0.5 (6.9)
Profit on
ordinary
activities after
taxation 17.0 (11.2) 5.8 22.5 (2.2) 20.3 (1.4) 18.9
Minority
interests (0.2) - (0.2) - - - - -
Profit for the
year 16.8 (11.2) 5.6 22.5 (2.2) 20.3 (1.4) 18.9
Dividends
- ordinary 4 (15.6) - (15.6) (15.6) - (15.6) - (15.6)
- in specie 4 - - - - - - (41.1) (41.1)
Retained loss 1.2 (11.2) (10.0) 6.9 (2.2) 4.7 (42.5) (37.8)
Earnings per
share 5
- basic and fully 3.6p 12.2p
diluted
- before
impairment
provisions
goodwill
amortisation and
exceptional items 10.1p 16.0p
--------------------------------------------------------------------------------
The 2002 results arise from continuing activities
Consolidated balance sheet
At 31 December 2002
Note 2002 2001
£million £million
Fixed assets
Intangible assets 30.2 38.1
Tangible assets 142.1 153.2
Investments 5.1 10.7
177.4 202.0
Current assets
Property 2.0 4.0
Stocks 98.2 99.1
Debtors 109.7 111.0
Investments 0.1 0.1
Cash 5.1 8.8
215.1 223.0
Creditors falling due within one year (121.0) (132.6)
Net current assets 94.1 90.4
Total assets less current liabilities 271.5 292.4
Creditors falling due after more than one year (57.2) (60.8)
Provisions for liabilities and charges (5.8) (6.9)
Minority interests (2.8) (2.6)
Total net assets 205.7 222.1
Capital and reserves
Share capital 38.7 38.7
Share premium account 56.0 56.0
Capital redemption reserve 4.4 4.4
Merger reserve 12.1 12.1
Profit and loss account 94.5 110.9
Equity shareholders' funds 6 205.7 222.1
Consolidated cash flow statement
For the year ended 31 December 2002
Note 2002 2001
£million £million
Net cash inflow from operating activities 7 42.6 76.6
Returns on investments and servicing of finance
Dividends received 0.3 0.3
Interest paid (4.0) (9.1)
Interest received 0.5 0.7
Net cash outflow from returns on investments and servicing of finance (3.2) (8.1)
Taxation (2.9) (7.4)
Capital expenditure and financial investment
Sale of tangible fixed assets 1.2 3.2
Government grants received 1.0 2.5
Sale of fixed asset investment 10.6 -
Purchase of fixed asset investments (4.0) -
Purchase of tangible fixed assets (26.5) (35.4)
Net cash outflow from capital expenditure and financial investment (17.7) (29.7)
Acquisitions and disposals
Demerger of businesses - 15.2
Sale of businesses - 5.4
Net cash inflow from disposals - 20.6
Ordinary dividends paid (15.6) (15.6)
Net cash inflow before liquid resources and financing 3.2 36.4
Management of liquid resources
Purchase of current asset investments - (1.7)
Net cash outflow from management of liquid resources - (1.7)
Financing
New loans 2.2 51.8
Loan repayments (1.6) (21.1)
Finance lease repayments (0.3) (1.3)
Net cash inflow from financing 0.3 29.4
Increase in cash 8 3.5 64.1
Notes to the financial statements
1. Analysis of turnover and profit on ordinary activities before taxation
Turnover
By sector 2002 £million 2001 £million
Electronic 349.0 399.6
Electrical 171.3 231.1
Continuing activities 520.3 630.7
Discontinued activities - 27.2
520.3 657.9
Discontinued activities in 2001 arose from the demerger of the glass container
businesses, the sale of the packaging machinery business, and the closure of the
copper rod business.
By origin 2002 2001
£million £million
United Kingdom 270.9 368.0
Rest of Europe 112.9 105.4
United States and Canada 87.7 98.9
Mexico and Central America 18.6 20.8
Rest of the World 30.2 37.6
Continuing activities 520.3 630.7
Discontinued activities - 27.2
520.3 657.9
By destination 2002 2001
£million £million
United Kingdom 162.4 227.2
Rest of Europe 180.3 202.1
United States and Canada 91.8 96.9
Mexico and Central America 17.4 19.0
Rest of the World 68.4 85.5
Continuing activities 520.3 630.7
Discontinued activities - 27.2
520.3 657.9
Profit on ordinary activities before taxation
By sector 2002 £million 2001
£million
Electronic 15.7 32.9
Electrical 6.7 3.8
Continuing activities 22.4 36.7
Discontinued activities - 1.5
Operating profit before impairment provisions and goodwill amortisation 22.4 38.2
Impairment provisions and goodwill amortisation (12.5) (2.2)
Total operating profit 9.9 36.0
Exceptional items 1.2 (4.1)
Profit on ordinary activities before interest 11.1 31.9
Interest (3.2) (6.1)
Profit on ordinary activities before taxation 7.9 25.8
By origin 2002 £million 2001
£million
United Kingdom (0.9) 6.4
Rest of Europe 12.5 10.6
United States and Canada 3.2 12.8
Mexico and Central America 2.4 1.8
Rest of the World 5.2 5.1
Continuing activities 22.4 36.7
Discontinued activities - 1.5
Operating profit before impairment provisions and goodwill amortisation 22.4 38.2
Impairment provisions and goodwill amortisation (12.5) (2.2)
Total operating profit 9.9 36.0
Exceptional items 1.2 (4.1)
Profit on ordinary activities before interest 11.1 31.9
Interest (3.2) (6.1)
Profit on ordinary activities before taxation 7.9 25.8
Impairment provisions and goodwill amortisation are in respect of the
electronics sector and are shown in note 2. Exceptional items are shown in note
3. Discontinued activities are defined in note 1.
2. Impairment provisions and goodwill amortisation
2002 £million 2001 £million
Impairment of plant and equipment 7.8 -
Impairment of goodwill 2.6 -
Total impairment provisions 10.4 -
Goodwill amortisation 2.1 2.2
Impairment provisions and goodwill amortisation 12.5 2.2
In accordance with FRS 11 'Impairment of fixed assets and goodwill' the carrying
values of the fixed assets and goodwill of the ferrites, laminations and printed
circuit board businesses have been compared with their recoverable amount. The
recoverable amount has been derived from an estimate of their net realisable
value. The review has resulted in a charge of £10.4 million (2001 - £nil) to
operating costs of which £2.6 million has been allocated to the goodwill which
arose on the acquisition of the printed circuit board business and £7.8 million
to plant and equipment.
3. Exceptional items
2002 £million 2001 £million
Profit of sale of fixed asset investment 1.2 -
Loss on sale of businesses - (2.3)
Loss on termination of business - (0.7)
1.2 (3.0)
Cost of demerger - (1.1)
1.2 (4.1)
On 19 December 2002 the group disposed of its entire holding in Johnston Group
PLC at a profit of £1.2 million.
In 2001, the group sold the business of F.D. Sims Limited, a magnet wire
manufacturer, and United Packaging PLC, a packaging machinery manufacturer, and
closed the copper rod production facility of Rodco Limited.
4. Dividends
2002 2001
pence pence 2002 2001
per share per share £million £million
Equity
Ordinary dividends
• Interim, paid 3.69 3.69 5.7 5.7
• Final, proposed
6.36 6.36 9.9 9.9
10.05 10.05 15.6 15.6
On 15 May 2001 the group's glass container businesses were demerged by way of a
dividend in specie of Send Group plc shares. Net assets demerged amounted to
£41.1 million including £14.6 million of goodwill previously written off to
reserves.
5. Earnings per share
2002 2001
pence pence
per share per share
Earnings per share
Basic and fully diluted 3.6 12.2
Before impairment provisions, goodwill amortisation and 10.1 16.0
exceptional items
Earnings per share have been calculated by dividing the profit attributable to
shareholders by the weighted average number of shares in issue during the
period. The numbers used in calculating basic and fully diluted earnings per
share are reconciled below.
An adjusted earnings per share has also been presented based on the profit
attributable to shareholders before impairment provisions, goodwill amortisation
and exceptional items. The effect of these items on earnings is reconciled
below.
2002 2001
Net profit for the period attributable to shareholders £million £million
Earnings basic and fully diluted 5.6 18.9
Goodwill amortisation 2.1 2.2
Impairment provisions, net of tax relief 9.1 -
Exceptional items, net of tax relief (1.2) 3.6
Earnings before impairment provisions, goodwill amortisation and exceptional items 15.6 24.7
2002 2001
million million
Weighted average number of shares in issue
Basic 154.8 154.8
Adjustment for share options 0.4 0.5
Fully diluted 155.2 155.3
6. Reconciliation of movements in shareholders' funds
2002 £million 2001 £million
Profit for the year 5.6 18.9
Exchange differences on net foreign currency investments (6.4) (0.7)
Total recognised gains and losses (0.8) 18.2
Dividends - ordinary (15.6) (15.6)
- in specie - (41.1)
Goodwill on demerger and disposals - 16.1
Net change in shareholders' funds (16.4) (22.4)
Opening shareholders' funds 222.1 244.5
Closing shareholders' funds 205.7 222.1
7. Reconciliation of group operating profit to net cash inflow
from operating activities
2002 2001
£million £million
Total operating profit 9.9 36.0
Depreciation 26.0 31.7
Amortisation 2.1 2.2
Charge for impairment 10.4 -
Government grants credited to profit (1.0) (1.8)
Profit on sale of tangible fixed assets (0.1) (0.3)
Closure and other costs (1.0) (0.9)
Decrease in property current assets 2.0 2.9
Decrease in stocks 0.9 8.5
Decrease in debtors 2.2 19.9
Decrease in creditors (4.0) (17.2)
Movement on pension prepayments and accruals (1.2) (3.4)
Exchange translation differences (3.6) (1.0)
Net cash inflow from operating activities 42.6 76.6
8. Reconciliation of net cash flow to movement in net debt
Loans and finance
lease obligations
Net cash/ Short-term £million Net debt £million
(overdraft) investments
£million £million
Balance at 31 December 2001 (11.6) 0.1 (52.0) (63.5)
Cash flow 3.5 - (0.3) 3.2
Exchange translation differences 0.5 - 4.0 4.5
Balance at 31 December 2002 (7.6) 0.1 (48.3) (55.8)
9. Basis of preparation
The information above, which does not constitute full financial statements
within the meaning of S240 CA, 1985 is extracted from the audited financial
statements of TT electronics plc for the year ended 31 December 2002 which:
• have been prepared on a basis consistent with the accounting policies set
out in the annual report for the year ended 31 December 2001 as filed with
the Registrar of Companies except that the group has adopted FRS19 'Deferred
tax', the effect of which is not material
• were approved by the Directors on 17 March 2003
• carry an unqualified audit report, which did not contain any statements
under S237 CA,1985
• will be posted to shareholders and available to the public in April 2003
• will be filed with the Registrar of Companies following the Annual General
Meeting on 14 May 2003
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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