Final Results
TT electronics PLC
21 March 2005
TT electronics plc
TT ELECTRONICS PLC REPORTS ON STRONG PERFORMANCE IN 2004
TT electronics is a world leader in resistor and sensor technology and today
announces its preliminary results for the year to 31 December 2004.
KEY POINTS
• Group turnover on continuing activities of £597.4 million (2003:
£527.5 million).
• Profit before goodwill amortisation and taxation was £30.1 million
(2003: £20.0 million, before exceptional items).
• Demand for automotive products remained strong and sales to this
market grew by 10 per cent.
• Sales to the telecom and computer market grew by 35 per cent as this
market experienced a recovery.
• Our acquisition Optek Technology, which substantially expanded our
sensor business, performed ahead of expectations and provided the group
with its entry into the active component market.
• The recent acquisition of Dage Limited establishes TT electronics'
manufacturing base in China and will be earnings enhancing with immediate
effect.
• Performance of the electrical division was substantially improved
following the reorganisation of the UK genset business.
• The group generated cash from operations of £58.3 million (2003:
£45.2 million) and gearing at the year end was 32 per cent (2003: 40 per cent).
• The Board is recommending a maintained final dividend of 6.36p per share
bringing the total for the year to 10.05p (2003: 10.05p).
John Newman, Executive Chairman, said today:
'These results reflect the continued growth in demand from the automotive market
and the sustained recovery of the electronic component market.
'Our future strategy lies in both passive and active components and we continue
to develop new technologies such as our advanced inductive sensors and high
intensity visible light emitting diodes which are attracting significant
interest. Our recent expansion into China is an important strategic development
enabling us to continue to meet the requirements of our customers, particularly
in the automotive industry.
'In 2005 we expect demand from North America to remain stable and to see
continuing growth in China. With this relatively healthy background we are
confident of our ability to achieve future growth.'
21 March 2005
Enquiries:
TT electronics plc Tel: 01932 856647
John W Newman, Executive Chairman
Biddicks Tel: 020 7448 1000
Zoe Biddick
Financial Highlights
2004 2003
£million £million
-------- --------
Turnover - continuing activities 597.4 527.5
- discontinued activities - 6.4
----------------------------------------- -------- --------
Turnover - total 597.4 533.9
----------------------------------------- -------- --------
Operating profit before goodwill amortisation 33.1 22.1
Interest (3.0) (2.1)
----------------------------------------- -------- --------
Profit before goodwill amortisation, exceptional items
and taxation 30.1 20.0
----------------------------------------- -------- --------
Profit on ordinary activities after taxation on
continuing activities 19.0 10.8
----------------------------------------- -------- --------
Earnings per share, basic 12.3p (0.1)p
----------------------------------------- -------- --------
Earnings per share before goodwill amortisation and
exceptional items 13.9p 10.4p
----------------------------------------- -------- --------
Ordinary dividends per share 10.05p 10.05p
----------------------------------------- -------- --------
Chairman's statement
This year has seen a significant improvement in operating profit. Turnover on
continuing activities has grown from £527.5 million to £597.4 million, a growth
of 13 per cent, whilst operating profit before goodwill amortisation has
increased from £22.1 million to £33.1 million, an increase of 50 per cent.
Goodwill amortisation was £2.5 million (2003 - £1.8 million). The increase in
goodwill amortisation was primarily due to the acquisition of Optek Technology
in December 2003. Profit before tax was £27.6 million (2003 - £3.2 million).
Taxation charge in the year was £8.6 million (2003 - £3.2 million) at an
effective rate of 29 per cent (2003 - 23 per cent). As a result of funding the
acquisition of Optek Technology with bank indebtedness, interest in the year has
increased from £2.1 million to £3.0 million. Earnings per share before goodwill
amortisation were 13.9p compared with 10.4p.
These figures show that the group had a strong second half following the
improved first half. The electronic sector turnover for the year has increased
by 16 per cent to £403.6 million. Excluding the full year effect of the
acquisition of Optek Technology organic growth was 7 per cent. The electronic
sector operating profit before goodwill amortisation was £26.0 million, compared
with £16.9 million last year. The electrical sector turnover increased by 9 per
cent to £193.8 million with operating profit improving from £5.7 million to £7.1
million.
Neil Rodgers was appointed the Chief Executive in April 2004 and makes his first
report in these accounts. Neil Rodgers' appointment has been at the time of a
recovery in demand for electronic components and a continuing growth in the
requirement for electronic products from the automotive industry. The increase
in sales of electronic components has to a large extent been met out of excess
manufacturing capacity in our factories which was caused by the downturn in the
telecom industry in 2001 and 2002.
During the year there has been a further reduction in the value of the US dollar
against the Euro and Sterling. As TT electronics is a global manufacturer, the
movement in currencies has provided the group with opportunities. The
devaluation has reduced the cost of our manufactured products in US dollar areas
and given us the opportunity to reduce costs by sourcing product outside the
Euro area. The translation of profits has marginally affected the group's profit
after tax.
TT electronics continues to be a strong generator of cash. At the year end, the
group's net indebtedness had reduced to £62.5 million compared with £78.2
million at the end of last year.
International Financial Reporting Standards come into effect in 2005 and every
effort will be made to assist all shareholders to understand the impact of the
new standards on TT electronics' accounts.
The Board of TT electronics recommends a final dividend of 6.36p per share,
which following the 3.69p interim dividend provides a total dividend for the
year of 10.05p, the same as last year.
Following the retirement of Mark Evans, who reached the non-executive retirement
age of 70, the Board was very pleased to invite David Crowther FCA to become a
non-executive Director of TT electronics plc. I am sure that as a former partner
of PricewaterhouseCoopers LLP, he will make a valuable contribution to the
group. He joined the Board on 10 January 2005 and will offer himself for
election at the Annual General Meeting. I would like to take this opportunity to
thank Mark Evans for his contribution and wise counsel over the past six years.
As Timothy Reed has been a non-executive Director for more than the nine year
term recommended for guidance in the Revised Combined Code, he will again be
offering himself for re-election at the Annual General Meeting. As I said last
year Timothy Reed, a former corporate lawyer, has always presented a strong
independent voice on the Board and it is the opinion of the whole Board that as
an independent non-executive Director his continuing involvement in the group
will be beneficial to the future of TT electronics plc.
I would like to thank all our employees in the group's operations throughout the
world for their contribution to TT electronics' performance during the year and
its continuing success.
On 10 March 2005 the acquisition of Dage Limited was announced. Dage Limited is
a well established contract electronics manufacturer serving a blue chip client
base. The company has manufacturing facilities in Aylesbury in the United
Kingdom and in Suzhou, near Shanghai in China. The entire share capital of Dage
Limited has been acquired for a cash consideration of £8.0 million, subject to
completion accounts, for net assets of £4.9 million as at 30 April 2004. In the
year ended 30 April 2004, on a turnover of £19.3 million Dage Limited's profit
before tax was £1.2 million. As well as extending the group's contract
electronic manufacturing services, this acquisition also provides TT electronics
with facilities in China to meet the requirements of our major customers,
particularly within the automotive industry. This important expansion into China
forms part of the group's long-term plans and followed on from the Board's
decision to acquire a base in China rather than start with a greenfield site.
The future strategy of TT electronics lies in both active and passive electronic
components. Growth will be achieved by continuing development of new products
for our original equipment manufacturing customers and acquisitions to enhance
and strengthen our position in the marketplace. The acquisition of Sensopad
Technologies Ltd in March 2004 was part of this strategy as Sensopad provides
the group with advanced inductive sensor technology to meet the future needs of
the automotive industry.
The 2005 global economy for electronic products is likely to be based on a
stable demand from the North American market and the continuing growth in the
Chinese market. With this relatively healthy background, TT electronics has the
capability to gain new business from our customers, being the original equipment
manufacturers, which will provide good future growth opportunities for the
group.
John W Newman
Executive Chairman
18 March 2005
Chief Executive's statement
The electronic sector showed strong profit growth, up by an impressive 54 per
cent, on turnover growth of 16 per cent.
Demand for our automotive products remained strong and we experienced healthy
recovery in the telecom, computer and industrial markets.
Our recent acquisition Optek Technology performed ahead of expectations and
continues to provide a significant contribution towards overall profitability.
Performance in our electrical sector also improved largely as a result of the
reorganisation of our generator set operations in 2003.
Electronic sector
I am pleased to report the significant improvement in profitability of this
sector which results from continuing success in product development and the
effective management of our businesses in automotive and component markets.
Automotive market
Our overall automotive business grew by 10 per cent, a strong performance in a
market where the volume of vehicles produced worldwide is essentially static.
BMW and DaimlerChrysler have become increasingly successful in global markets,
particularly North America, and our relationship with these major OEMs has
contributed to our success as a leader in the European automotive sensor market.
We continue to work closely with customers on development programmes of new
technologies for next generation vehicles, a major strength of our European
automotive business.
Demand for electronics in vehicles is estimated to grow at 6 per cent per annum.
Electronics are taking over more and more of a car's mechanical and electrical
controls and the group's products are utilised in 'drive-by-wire' functions,
temperature and pressure sensing, light current switching and a range of
position and speed sensing applications.
Automotive products and technologies
TT electronics' product range is dominated by our sensor activities. The
acquisition of Optek, a major sensor manufacturer based in North America and
Mexico, has positioned the group well for growth in sales of sensors to the
North American market. Highlights of our European operations are our continued
strength in the field of electronic throttle control pedals, and a range of
engine speed sensors supplied to the German market.
Particularly exciting is the acquisition during early 2004 of Sensopad
Technologies Ltd, which brings to the group highly accurate inductive sensor
technology, primarily for position applications. Work on adapting this
technology within our existing portfolio of products is well advanced and is
generating major interest from both current and prospective customers. The
development of the specific componentry and in particular the ASIC required for
the units to be put into volume production is on target for completion early in
2006.
Our climate control activities are suffering from reduced demand, primarily from
North America. There are several new programmes due for launch during 2005 which
are expected to recover some of the lost ground.
The group's microcircuit hybrid businesses based in Europe have continued to
develop new products, including an electronic control module for an electric
water pump for German vehicles, sun sensors for the monitoring of climate
control systems, and control circuits for the Xenon headlamps now fitted to many
European vehicles.
Component market
TT electronics' components are sold into a variety of markets including telecom
and computer, industrial and office equipment. Our overall component sales grew
in a market which, during 2004, saw a recovery across the world. Sales to
distribution customers have grown to 28 per cent of our component sales
worldwide.
Sales to the telecom and computer market grew by 35 per cent. Our products are
primarily sold to computer and telecom equipment providers across the world for
applications such as local and wide area networks, contributing towards the goal
of the paperless office environment. TT electronics works closely with western
based customers to design-in our components, thereby ensuring continuity of
supply independent of the manufacturing location.
Outlook for the component market in 2005 again shows growth, although at a more
modest level. Our strong position in passive components plus our entry into the
active component market following the acquisition of Optek positions us well in
this market.
Component products and technologies
TT electronics' component operations are skilled at developing new products from
a relatively mature product base. Our business is driven towards custom
designed-in products, at lower volume but higher margin than many of our global
competitors.
During 2004 we developed a Ball Grid Array product range encompassing resistor
and capacitor networks, and sales of this product range have commenced. This
product maximises the number of connections for a given component size, thereby
enhancing its functionality. Development of the AnothermTM product range,used in
high intensity LED assemblies, is attracting significant interest from
prospective customers and a number of prototype orders have been received for
applications such as computer display backlighting, traffic signals, signage and
speciality lighting.
The demand for components which can function at very high frequencies is
expected to grow over the coming years and TT electronics has designed
application specific thick film products in anticipation of this growth.
New programmes have been identified to develop a range of surface mounted
opto-electronic devices. Plans to expand into the visible light emitting diode
market are advanced and a new product range will be launched to market during
2005.
Operations
TT electronics' policy of investing in modern automated manufacturing equipment
to support manufacture in high labour cost economies has been particularly
successful in our German operations, where our factories specialise in leading
edge manufacturing processes capable of producing zero defect products.
Sensor manufacturing operations are concentrated in Western Europe and North
America. However we continue to expand our low cost assembly facility in the
Ukraine for simple products transferred from our German operations.
We have maintained our policy of transferring component manufacturing operations
to lower cost economies where appropriate. In 2004 we moved manufacture of
product lines to Barbados, set up thick film printing capability in Mexico and
completed the transfer of a range of products to our factory in Kuantan,
Malaysia. During 2004 we completed the reorganisation of our remaining ferrite
operations with the expansion of our factory in India.
During the year two new initiatives commenced. The first is the establishment of
an International Procurement Office based in China, the objective being to
assist group companies to obtain competitive pricing for materials. The second
initiative is the creation of our Manufacturing Improvement Team. The team,
comprising lean-manufacturing and six-sigma skills, is tasked with establishing
lasting improvements within each of our businesses, with the aim of becoming
more cost competitive in our global markets.
Electrical sector
Performance in this sector shows a substantial improvement following the United
Kingdom genset reorganisation carried out in 2003. Our connector and cable
accessories businesses have performed well but the cable operations are being
reorganised due to strong price competition.
Market
The dominant feature for 2004 was the continuing increase in worldwide copper
prices which impacted on our cable manufacturing operations. Orders for
industrial cable varied considerably throughout the year as customers attempted
to predict short-term copper price fluctuations. Domestic cable volumes and
margins showed improvement, and our specialist rubber cables have experienced
high demand. The order for the cable for new naval vessels won during 2003 was
largely completed during the year and the next phase of the contract has been
awarded covering 2005 production.
Our low cost genset manufacturing operation based in Mexico has performed well
as a result of demand for power generation in China. The United Kingdom genset
operation, now converted to a maintenance and panel upgrade business, returned
to profitability. The demand for ground power units for aircraft improved, with
specialist products being supplied to military and civilian airlines.
Products and technologies
Continued development has resulted in an application for patents on a new
concept for tunnel lighting which avoids high installation costs. We have
continued with the development of new compounds for harsh environment cable
applications, for example our recently developed soft skin fire resistant cable.
The cable accessory operations are designing new ranges of lower cost units for
use by Regional Electricity Companies for power supply installations, and work
is expected to be completed during 2005 for the resourcing of lower cost
components from the Far East.
TT electronics' connector operations have expanded rapidly during the year.
Originally a connector-only supplier to the defence and industrial market, the
company has expanded its product range to include sub assemblies and finished
products, which in many cases comprise complex assembly cables, connectors and
housing units. Demand continues to grow for this product type.
Operations
We have undertaken major changes to our manufacturing and distribution
operations for cable products. In 2004 we initiated the closure of mineral
insulated cable manufacture at our Merseyside operation and our distribution
centre in North America. On 24 February 2005 we announced the proposed closure
of the power cables division located at Gravesend. This loss making operation
services a market dominated by low cost producers and has an old manufacturing
facility. The company is currently in consultation with the workforce.
Acquisitions
On 10 March 2005 we announced the acquisition of Dage Limited, which is based in
Buckinghamshire and in Suzhou near Shanghai, China. The company operates as an
electronic manufacturing services supplier to major OEMs.
This acquisition represents an important step for TT electronics in our entry
into the Chinese market. The company has excellent relationships with locally
based, foreign owned customers, and has demonstrated a profitable growth path in
the past four years. Dage Limited's operation in China, has recently expanded
into new production facilities which we will use to manufacture a range of TT
products for sale into the growing Chinese market.
Outlook
We are pleased with the results for 2004 achieved from the drive and commitment
of our people across the world.
Our electronics sector has a strong product range, world class manufacturing
facilities and a growing customer base. Key to our success remains our
capability to develop new products and technologies to sustain growth for the
future.
Within our electrical sector we have some strong product groups and cost
effective manufacturing strategies. We will continue to review these operations
and will build upon our strengths to improve future profitability.
We are positive about our business for 2005.
Neil A Rodgers
Chief Executive
18 March 2005
Consolidated profit and loss account
For the year ended 31 December 2004
Note 2004 2003 2003 2003
Continuing Continuing Discontinued Total
activities activities activities £million
Total £million £million
£million
------ --------- --------- --------- -------
Turnover 1 597.4 527.5 6.4 533.9
Cost of sales (486.0) (434.1) (6.1) (440.2)
------------------------ ------ --------- --------- --------- -------
Gross profit 111.4 93.4 0.3 93.7
Operating expenses (80.8) (72.6) (0.8) (73.4)
------------------------ ------ --------- --------- --------- -------
Operating profit 30.6 20.8 (0.5) 20.3
------------------------ ------ --------- --------- --------- -------
Operating profit before
goodwill amortisation 33.1 22.6 (0.5) 22.1
Goodwill amortisation (2.5) (1.8) - (1.8)
------------------------ ------ --------- --------- --------- -------
Operating profit 30.6 20.8 (0.5) 20.3
------------------------ ------ --------- --------- --------- -------
Cost of
reorganisation-magnetics 2 - (3.0) (10.8) (13.8)
Loss on sale of business 2 - (1.2) - (1.2)
------------------------ ------ --------- --------- --------- -------
Profit on ordinary
activities before
interest 30.6 16.6 (11.3) 5.3
Interest (3.0) (2.1) - (2.1)
------------------------ ------ --------- --------- --------- -------
Profit on ordinary
activities before
taxation 1 27.6 14.5 (11.3) 3.2
Taxation (8.6) (3.7) 0.5 (3.2)
------------------------ ------ --------- --------- --------- -------
Profit on ordinary
activities after
taxation 19.0 10.8 (10.8) -
Minority interests - (0.1) - (0.1)
------------------------ ------ --------- --------- --------- -------
Profit /(loss) for the
year 19.0 10.7 (10.8) (0.1)
Dividends 3 (15.6) (15.6) - (15.6)
------------------------ ------ --------- --------- --------- -------
Retained profit/(loss) 3.4 (4.9) (10.8) (15.7)
------------------------ ------ --------- --------- --------- -------
Earnings per share 4
- basic 12.3p (0.1)p
- fully diluted 12.2p (0.1)p
- before goodwill
amortisation and
exceptional items 13.9p 10.4p
----------------------------------------------------------------------------------
Consolidated balance sheet
At 31 December 2004
Note 2004 2003
£million £million
-------------------------------------- ------ ------- -------
Fixed assets
Intangible assets 42.7 44.9
Tangible assets 133.6 143.5
Investments 5.3 5.3
-------------------------------------- ------ ------- -------
181.6 193.7
-------------------------------------- ------ ------- -------
Current assets
Property 0.1 1.8
Stocks 99.6 98.5
Debtors 107.2 108.7
Investments 0.1 0.1
Cash 5.4 8.5
-------------------------------------- ------ ------- -------
212.4 217.6
Creditors falling due within one year (126.1) (147.2)
-------------------------------------- ------ ------- -------
Net current assets 86.3 70.4
-------------------------------------- ------ ------- -------
Total assets less current liabilities 267.9 264.1
Creditors falling due after more than one year (65.9) (60.9)
Provisions for liabilities and charges (2.5) (4.2)
Minority interests (2.9) (2.9)
-------------------------------------- ------ ------- -------
Total net assets 196.6 196.1
-------------------------------------- ------ ------- -------
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 23.0 23.0
Profit and loss account 74.5 74.0
-------------------------------------- ------ ------- -------
Equity shareholders' funds 5 196.6 196.1
-------------------------------------- ------ ------- -------
Consolidated cash flow statement
For the year ended 31 December 2004
Note 2004 2003
£million £million
------ ------- ------
Net cash inflow from operating activities 6 58.3 45.2
------------------------------------- ------ ------- ------
Returns on investments and servicing of finance
Interest paid (3.2) (2.6)
Interest received 0.2 0.5
------------------------------------- ------ ------- ------
Net cash outflow from returns on investments and
servicing of finance (3.0) (2.1)
------------------------------------- ------ ------- ------
Taxation (15.8) (2.9)
------------------------------------- ------ ------- ------
Capital expenditure and financial investment
Sale of tangible fixed assets 6.2 2.2
Government grants received 2.0 0.8
Loan repayment 6.0 -
Purchase of fixed asset investments - (0.2)
Purchase of tangible fixed assets (24.6) (23.5)
------------------------------------- ------ ------- ------
Net cash outflow from capital expenditure and
financial investment (10.4) (20.7)
------------------------------------- ------ ------- ------
Acquisitions and disposals
Purchase of businesses 8 (1.6) (31.0)
Sale of business - 1.1
Reduction in purchase consideration 0.3 -
------------------------------------- ------ ------- ------
Net cash outflow from acquisitions and disposals (1.3) (29.9)
------------------------------------- ------ ------- ------
Ordinary dividends paid (15.6) (15.6)
------------------------------------- ------ ------- ------
Net cash inflow/(outflow) before liquid resources
and financing 12.2 (26.0)
------------------------------------- ------ ------- ------
Net cash outflow from management of liquid
resources - -
------------------------------------- ------ ------- ------
Financing
New loans 4.9 6.7
Loan repayments (0.6) (0.4)
------------------------------------- ------ ------- ------
Net cash inflow from financing 4.3 6.3
------------------------------------- ------ ------- ------
Increase/(decrease) in cash 7 16.5 (19.7)
------------------------------------- ------ ------- ------
Notes to the financial statements
1. Analysis of turnover and profit on ordinary activities before taxation
2004 2003
Turnover £million £million
------- --------
By sector
Electronic 403.6 349.3
Electrical 193.8 178.2
---------------------------------------- ------- --------
Continuing activities 597.4 527.5
Discontinued activities - 6.4
---------------------------------------- ------- --------
597.4 533.9
---------------------------------------- ------- --------
By origin
United Kingdom 281.8 258.6
Rest of Europe 149.1 136.2
North America 133.8 102.0
Rest of the World 32.7 30.7
---------------------------------------- ------- --------
Continuing activities 597.4 527.5
Discontinued activities - 6.4
---------------------------------------- ------- --------
597.4 533.9
---------------------------------------- ------- --------
By destination
United Kingdom 179.9 155.8
Rest of Europe 227.5 206.5
North America 117.7 101.5
Rest of the World 72.3 63.7
---------------------------------------- ------- --------
Continuing activities 597.4 527.5
Discontinued activities - 6.4
---------------------------------------- ------- --------
597.4 533.9
---------------------------------------- ------- --------
2004 2003
Profit on ordinary activities before taxation £million £million
------- -------
By sector
Electronic 26.0 16.9
Electrical 7.1 5.7
---------------------------------------- ------- -------
Continuing activities 33.1 22.6
Discontinued activities - (0.5)
---------------------------------------- ------- -------
Operating profit before goodwill amortisation 33.1 22.1
Goodwill amortisation (2.5) (1.8)
---------------------------------------- ------- -------
Total operating profit 30.6 20.3
Exceptional items - (15.0)
---------------------------------------- ------- -------
Profit on ordinary activities before interest 30.6 5.3
Interest (3.0) (2.1)
---------------------------------------- ------- -------
Profit on ordinary activities before taxation 27.6 3.2
---------------------------------------- ------- -------
By origin
United Kingdom 3.0 2.0
Rest of Europe 16.5 14.2
North America 10.7 4.4
Rest of the World 2.9 2.0
---------------------------------------- ------- -------
Continuing activities 33.1 22.6
Discontinued activities - (0.5)
---------------------------------------- ------- -------
Operating profit before goodwill amortisation 33.1 22.1
Goodwill amortisation (2.5) (1.8)
---------------------------------------- ------- -------
Total operating profit 30.6 20.3
Exceptional items - (15.0)
---------------------------------------- ------- -------
Profit on ordinary activities before interest 30.6 5.3
Interest (3.0) (2.1)
---------------------------------------- ------- -------
Profit on ordinary activities before taxation 27.6 3.2
---------------------------------------- ------- -------
The results include the first full year's contribution from Optek Technology
Inc, acquired on 3 December 2003. The results of TT electronics technology
Limited (formerly Sensopad Technologies Ltd) acquired on 11 March 2004 are not
considered to be material and therefore are reported as continuing activities.
Discontinued activities in 2003 were the results of the laminations business.
Exceptional items for 2003 are described in note 2. Goodwill amortisation is in
respect of the electronic sector.
2. Exceptional items - 2003
A major reorganisation of the group's magnetics business was carried out in 2003
and resulted in a charge of £13.8 million including £10.1 million of goodwill
previously written-off to reserves. The group sold the business of Air Transport
Avionics in 2003 at a loss of £1.2 million including £0.8 million of goodwill
previously written-off to reserves.
3. Dividends
2004 2003 2004 2003
pence per pence per £million £million
share share
-------- ------- ------- -------
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
----------------------------- -------- ------- ------- -------
The final dividend will be paid on 27 May 2005 to shareholders on the register
at 20 May 2005.
4. Earnings per share
2004 2003
pence per pence per
share share
-------- -------
Earnings per share
Basic 12.3 (0.1)
Fully diluted 12.2 (0.1)
Before goodwill amortisation and exceptional items 13.9 10.4
--------------------------------------- -------- -------
Earnings per share has 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 goodwill amortisation and exceptional items.
The effect of these items on earnings is reconciled below.
2004 2003
£million £million
------- -------
Net profit/(loss) for the period attributable to
shareholders
Earnings basic and fully diluted 19.0 (0.1)
Goodwill amortisation 2.5 1.8
Exceptional items, net of tax relief - 14.5
--------------------------------------- ------- -------
Earnings before goodwill amortisation and exceptional
items 21.5 16.2
--------------------------------------- ------- -------
2004 2003
million million
------- -------
Weighted average number of shares in issue
Basic 154.8 154.8
Adjustment for share options 1.5 0.6
--------------------------------------- ------- -------
Fully diluted 156.3 155.4
--------------------------------------- ------- -------
5. Reconciliation of movements in shareholders' funds
2004 2003
£million £million
------- -------
Profit/(loss) for the year 19.0 (0.1)
Exchange differences on net foreign currency investments (2.9) (4.8)
--------------------------------------- ------- -------
Total recognised gains and losses 16.1 (4.9)
Dividends (15.6) (15.6)
Goodwill included in exceptional items - 10.9
--------------------------------------- ------- -------
Net change in shareholders' funds 0.5 (9.6)
Opening shareholders' funds 196.1 205.7
--------------------------------------- ------- -------
Closing shareholders' funds 196.6 196.1
--------------------------------------- ------- -------
6. Reconciliation of group operating profit to net cash inflow from operating
activities
2004 2003
£million £million
------- --------
Total operating profit 30.6 20.3
Depreciation 29.3 26.1
Amortisation 2.7 1.8
Government grants credited to profit (1.1) (0.8)
Profit on sale of tangible fixed assets (2.8) (0.7)
Closure and other costs - (1.5)
Decrease in property current assets 1.7 0.8
(Increase)/decrease in stocks (1.1) 1.5
(Increase)/decrease in debtors (3.8) 8.6
Increase/(decrease) in creditors 5.4 (8.9)
Movement on pension prepayments and accruals (0.8) (0.9)
Exchange translation differences (1.8) (1.1)
-------------------------------------- -------- --------
Net cash inflow from operating activities 58.3 45.2
-------------------------------------- -------- --------
7. Reconciliation of net cash flow to movement in net debt
Net cash/ Short-term Loans Net Debt
(overdraft) investments and finance £million
£million £million lease
obligations
£million
--------- --------- --------- ---------
Balance at 31 December
2002 (7.6) 0.1 (48.3) (55.8)
Cash flow (19.7) - (6.3) (26.0)
Acquisitions - - (0.6) (0.6)
Exchange differences 0.1 - 4.1 4.2
---------------------- --------- --------- --------- ---------
Balance at 31 December
2003 (27.2) 0.1 (51.1) (78.2)
Cash flow 16.5 - (4.3) 12.2
Exchange differences 1.0 - 2.5 3.5
---------------------- --------- --------- --------- ---------
Balance at 31 December
2004 (9.7) 0.1 (52.9) (62.5)
---------------------- --------- --------- --------- ---------
8. Acquisitions
On 11 March 2004 the group acquired Sensopad Technologies Ltd, a technology
development company, which then changed its name to TT electronics technology
Limited. The purchase consideration was £3.5 million including future royalties
provisionally valued at £2.1 million. The net cash outflow in respect of this
acquisition was £1.6 million.
9. Post balance sheet event
On 10 March 2005 the group announced the acquisition of Dage Limited, an
electronic manufacturing services business with manufacturing facilities in the
United Kingdom and China. The cash consideration was £8.0 million, subject to
completion accounts, for £4.9 million of assets as at 30 April 2004. In the year
ended 30 April 2004, Dage Limited's profit before taxation was £1.2 million on a
turnover of £19.3 million.
10. 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 2004 which:
• have been prepared on a basis consistent with the accounting policies
set out in the annual report for the year ended 31 December 2003 filed with
the Registrar of Companies
• were approved by the Directors on 18 March 2005
• carry an unqualified audit report, which did not contain statements
under S237 CA, 1985
• will be posted to shareholders and available to the public in April 2005
• will be filed with the Registrar of Companies following the Annual
General Meeting on 18 May 2005
This information is provided by RNS
The company news service from the London Stock Exchange
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