2000 Preliminary - Amendment
Morgan Crucible Co PLC
13 March 2001
The issuer has advised that this announcement replaces the '2000 Preliminary
Announcement' released through the RNS system under RNS No. 3418A at 7 am on 13
March 2001. Line three, Underlying Pre-Tax Profit for 2000, should have read
£95.1m and not £5.1m. The full amended text appears as follows:-
13 March 2001
THE MORGAN CRUCIBLE COMPANY PLC
PRELIMINARY ANNOUNCEMENT 2000
'MORGAN GAINS CLEAR BENEFITS FROM RESTRUCTURING AND STRONGER FOCUS ON GROWTH
MARKETS'
2000 1999 % Growth
Group Turnover £m 1051.1 862.4 +21.9%
Underlying Operating Profit * £m 111.3 94.6 +17.7%
Underlying Pre-Tax Profit * £m 95.1 81.1 +17.3%
Underlying EPS * pence 27.5 23.2 +18.5%
*Before goodwill amortisation of £5.8 million (1999 : £2.0 million) and
operating exceptionals of £6.9 million (1999: £17.5 million).
* Underlying Pre-Tax Profit* increases by 17.3% to £95.1 million (1999 : £81.1
million).
* Substantial capacity added to our magnetics business supporting organic
sales growth in this business of 23.4% over last year.
* Overall organic sales growth of 4.3% in the Group's other core businesses.
* More than 50% of Group Turnover achieved by businesses which grew
organically by more than 5%.
* Borrowings reduced by £12.3 million since the end of 1999 despite a
substantial increase in gross capital expenditure to £70.9 million (1999 :
£40.0 million).
Commenting on the results, Ian Norris, Group Chief Executive, said:
'After the major business restructuring and disposal programme of the last two
years, Morgan has emerged in strong shape to face the future. More than 50%
of Group turnover now comes from businesses which grew organically at more
than 5% last year and our strategic entry into the magnetics market in 1999
with the acquisition of Vacuumschmelze has been particularly successful. The
balance between growth and mature businesses within our portfolio has clearly
improved and assuming no significant worsening in the current rate of slowdown
across a number of sectors in the United States, we shall demonstrate
continued progress in 2001.'
Organic growth in sales, as referred to in this statement, is calculated after
adjusting for movements in foreign exchange rates as well as the impact of
acquisitions and disposals.
THE MORGAN CRUCIBLE COMPANY plc
PRELIMINARY STATEMENT 2000
Strategic Progress
Morgan's portfolio of businesses has undergone substantial change in the last
two years with the disposal of a number that were outside our core
competencies. In 1999, Morgan also extended its advanced materials skills base
by the strategic entry into the magnetics market with the acquisition of a
world leading magnetics business, Vacuumschmelze GmbH ('VAC'), based in
Germany and the smaller Crumax Magnetics Inc. in the USA. These have been
merged to form a technically driven organisation providing high-performance
magnetics solutions.
The Group's portfolio now provides a strong base on which to build its future.
Global management structures are in place across all our operations. The
benefits have been steadily emerging with good organic growth across a number
of our businesses. The refocusing of Morgan over the last three years has
positioned far more of our sales into markets capable of strong and
sustainable growth. More than 50% of Group turnover now comes from operations
which grew organically at more than 5% last year.
An exciting portfolio of new products based on our advanced material
technologies provides the pipeline to support continued growth. Our fuel cell
development team has been further strengthened and is developing new design
capability and manufacturing processes which are expected to contribute
greatly to a dramatic cost reduction for bi-polar plates. Our technical
ceramics business continues in partnership with one of the world's leading
data storage manufacturers to provide a piezo-electric solution to enable a
substantial increase in the data storage capacity of disk-drive devices. We
continue to develop high temperature super-conducting materials which should
provide the future solution to transporting high volumes of electrical power
across great distances.
Continued emphasis on improving profitability and cashflow from our more
mature operations will satisfy demands on our higher growth businesses for
capital. The shift in the composition of the Group's portfolio provides us
with new opportunities. Gross capital expenditure this year at £70.9 million
(1999 : £40.0 million) was at record levels with £25.0 million invested to
support growth in our magnetics business. Capital expenditure was 1.6 times
depreciation for the year with the majority of the investment funding our high
growth opportunities.
Carbon Division
The Carbon Division comprises our Electrical Carbon, Engineered Carbon and
Magnetics businesses. Total sales of the division were £563.8 million (1999 :
£322.2 million), an increase of £241.6 million or 75.0%. Encouraging organic
growth in sales was achieved across all businesses although £200.7 million of
the total increase arises as a result of having a full 12 months trading of
VAC compared to 1 month in 1999.
Underlying operating profit was £66.5 million (1999 : £48.2 million) with
underlying operating margins at 11.8 % (1999 : 15.0%). Some decline in
underlying margins was experienced in both the Electrical and Engineered
Carbon businesses. The principal factor behind the overall decline in
underlying operating margins for the division has, however, been the
contribution from the Magnetics business where operating margins were below
the divisional average, although ahead of expectations.
Electrical Carbon
Turnover within Electrical Carbon increased to £197.9 million (1999 : £189.1
million) and included organic growth of 2.2%. Underlying operating profit
fell, however, to £26.3 million (1999 : £30.3 million) yielding an underlying
operating margin of 13.3% (1999 :16.0%).
The Group is taking steps to address the decline in margin by increasing the
proportion of product sourced from lower cost plants in China and India.
Performance was also adversely impacted in the industrial and rail traction
segment where the much reported disruption to the UK rail network at the end
of the year contributed to a deferral of orders for replacement traction
brushes.
The automotive and consumer markets performed strongly until close to the
year-end when the slow down in the United States, particularly in the
automotive market, had a notable impact. Plans were implemented at the
beginning of 2001 to substantially reduce costs to compensate for the
anticipated market weakness. Nevertheless, positive organic growth was still
achieved with only a slight decline in overall operating margins. Our
automotive and consumer business has been working progressively towards
reinventing itself as an integrated power transfer solutions provider rather
than a simple component manufacturer. A number of successes were recorded
during the year with orders received for the supply of fully integrated
assemblies including brush, commutator and bonded magnets. This represents a
major growth opportunity for the long term in an area where no competitor can
offer customers the breadth of technologies which Morgan can provide.
Engineered Carbon
Engineered Carbon achieved turnover of £124.9 million (1999 : £108.8 million)
with organic growth of 6.2%. Underlying operating profits grew slightly to
£16.6 million (1999 : £16.4 million) with underlying operating margin of 13.3%
(1999 : 15.1%).
Our mechanical carbon business, providing a range of tribological solutions,
showed encouraging organic growth of more than 6% although at some expense to
operating margins. These margins will recover this year. Our specialty
graphite sales grew strongly particularly in the USA benefiting from exposure
to the semiconductor equipment manufacturing market. An investment project
was initiated to bring our European and Asian specialty graphite plants up to
the same level of technical excellence as our United States facilities. This
will enable us to compete effectively in the expanding global market for
specialty graphite materials.
The Morgan fuel cell task force, which draws together all of Morgan's
technologies, has produced promising developments in low cost bipolar plate
materials and a rapid precision manufacturing process protected by a number of
patent filings.
The Group's precision coatings business, which provides a full range of
solutions from solid film lubricants to diamond coatings, had a successful
year growing both sales and profits. The business has the potential to grow
globally. A plant is currently being established in continental Europe, and
plans are also being developed for similar investment in Asia. Shortly after
the year-end Diamonex Inc. was acquired in the United States for a total
consideration of US$13.8 million. With this acquisition, the Group has
acquired technology protected by over 40 patents for commercial diamond and
diamond-like coatings which provide properties of exceptional resistance to
wear as well as the ability to rapidly dissipate heat. These properties
provide superior wear resistant coatings solutions for products such as diesel
fuel injectors, storage discs in hard disc drives and heat dissipation devices
for the semiconductor and power electronic industries.
Magnetics
In its first full year as part of Morgan, the performance of our Magnetics
business has been strong with turnover of £241.0 million (1999 : £24.3
million). Organic growth for the business overall was 23.4%. The two
acquisitions made last year, Crumax Magnetics Inc. in the United States and
the much larger VAC headquartered in Hanau, Germany, are now operating
successfully under a common global team.
Crumax provides a stronger North American presence as well as the technology
to use magnetic and resin bonded materials within the substantially broader
technical base of VAC. Certain of Crumax's range of products have been exited
during the year which has had the effect of understating the strong underlying
growth experienced by our magnetics business overall. Looking at the results
of VAC alone, record sales were achieved with an underlying sales growth of
27.9% and an operating margin of 11.8%.
A key driver of this performance was the growth achieved by our permanent
magnets sold into the growing data storage market. This has been strongly
supported by the sale of fully integrated assemblies incorporating magnetic
cores into the specialist niche sectors of telecommunications markets and the
provision of soft magnetic materials to the retail security sensor market.
Synergies with the rest of Morgan's businesses are also being actively
pursued. Our Magnetics and electrical carbon teams, working together, have
started to make exciting breakthroughs into the market for fully integrated
power transfer solutions for electric motors.
Underlying operating profits were £23.6 million (1999 : £1.5 million) with
this year having received the benefit of a full years trading. At 9.8%
underlying operating margins, though below the average for the Group, were
ahead of our expectations for the year.
Ceramics Division
The Ceramics Division comprises our Technical Ceramics and Insulating Ceramics
businesses. Total sales of the division were £457.0 million (1999 : £428.1
million), an increase of 6.8% with organic sales growth achieved by each of
our businesses. Underlying operating profits rose by 5.9% to £42.9 million
(1999 : £40.5 million) giving an underlying operating margin of 9.4% (1999 :
9.5%) for the division as a whole.
Technical Ceramics
Turnover within Technical Ceramics increased by £20.5 million to £139.8
million (1999 : £119.3 million), with organic growth of 14.8%. Underlying
operating profits also advanced strongly rising by 51.5% to £15.0 million
(1999 : £9.9 million) with underlying operating margin improving to 10.7%
(1999 : 8.3%).
A major restructuring programme was carried out in our North American advanced
ceramics business during 1999 with all of our plant based sales teams merged
into one focused organisation. Advanced ceramics achieved organic sales
growth in the year of 13.6% although within this, growth in North American
sales was 16.9%. Particular market focus has been directed towards the fast
growing sectors of medical equipment, telecommunications and semiconductor
equipment manufacture. The European businesses within advanced ceramics were
refocused towards the end of the year along similar lines to those in North
America.
Shortly after the year-end, the Group completed the acquisition of Performance
Materials Incorporated ('PMI') in the United States for an initial
consideration of US$18.5 million. Based on exacting performance criteria, an
earn-out formula is in place which could increase the consideration to a
maximum of US$50.0 million. PMI's expertise is in the provision of high
purity components, formed by chemical vapour deposition, to the semiconductor
hardware market.
Our electro-ceramics business also had a very good year with organic sales
growth of 22.9%. Our share in the piezo electric automotive parking sensor
market moved ahead strongly to the point where we have now become a clear
leader in both Europe and North America. Progress was made on bringing a
number of new initiatives closer to market commercialisation. These include a
revolutionary new design of a fuel injector utilising multi-layer ceramic
actuators and a piezo electric actuator application to micro-position the read
write head of disc drive devices, thus enabling a substantial increase in data
storage capacity. Both of these products are being developed with customers
who lead in their respective fields.
Insulating Ceramics
Insulating Ceramics turnover was £317.2 million (1999 : £308.8 million),
showing marginal organic sales growth of 0.7%. Underlying operating profits
declined, however, to £27.9 million (1999 : £30.6 million) as a result of
operational difficulties within the thermal operations in the Americas.
Underlying operating margin declined from 9.9% to 8.8%.
The thermal ceramics business encountered difficulties with the commissioning
of a Mexican manufacturing facility which led to manufacturing variances and
capacity shortages in North America. These shortages were met by shipping
product from European and Asian facilities at considerable expense.
Significant changes have been made to the management of the thermal business
and the operational challenges which adversely affected the Americas in 2000
have now been resolved.
The future strategic position of the thermal business has been the subject of
a major review in the year. A restructuring plan has been developed which
will enhance the cash generating capability of this business and concentrate
efforts in areas with attractive margin and growth prospects such as our world
leading soluble fibre technology. Low growth and low margin parts of the
business will be subject to further review.
Our crucibles business delivered a particularly creditable performance given
the fundamental restructuring implemented during the year. Our French
manufacturing facility has now been closed and our UK facility substantially
overhauled. These steps have now placed the business in a position to deliver
attractive levels of profit and cashflow in the future.
Acquisitions and Disposals
Acquisitions
In September, the Group acquired the piezo ceramic assets and business of
Philips Components BV for a consideration of £4.2 million. This acquisition
will bring a combination of materials technology and product expertise in the
field of multi-layer piezo ceramics to support growth in the
telecommunications, transportation and computer industries. During the year,
this acquisition contributed £1.0 million to turnover and made a small
operating loss of £0.2 million.
Disposals
The disposal of non-core activities, which commenced in 1999, was completed
during the year and generated proceeds of £63.4 million (1999 : £176.9
million). The total proceeds from this programme amounted to £240.3 million
over the programme's duration. During the year, discontinued businesses
contributed £30.3 million (1999 : £112.1 million) to turnover and £1.9 million
(1999 : £5.9 million) to underlying operating profits.
Financial Review
Group turnover rose to a record £1,051.1 million (1999 : £862.4 million) an
increase of 21.9% over last year. Underlying operating profit before goodwill
amortisation and operating exceptionals was £111.3 million (1999 : £94.6
million). Operating exceptional charges of £6.9 million (1999 : £17.5
million) were incurred during the year relating to the final stage of the
business restructuring programme which commenced in 1999 and which has now
been completed. Goodwill amortisation rose to £5.8 million (1999 : £2.0
million) mainly as a result of the acquisition of VAC in December 1999.
A gain of £10.2 million (1999 : £32.6 million) has been treated as a corporate
exceptional item. This arises from the sale of non-core businesses and from
the disposal of fixed assets.
Net finance charges were £16.2 million (1999 : £13.5 million) and were covered
by underlying operating profits before goodwill amortisation 6.7 times (1999 :
6.9 times).
The Group tax charge of £30.5 million (1999 : £32.7 million) gives an
effective rate of 32.9% (1999 : 34.7%) after exceptional charges. The tax
charge attributable to total exceptional items was £3.0 million (1999 : £8.3
million). Before these exceptional items, the effective Group tax rate was
30.8% and remains in line with last year.
Net cash inflow from operating activities was £114.8 million (1999 : £101.9
million). Working capital showed a net increase of £26.4 million compared to
an increase of £15.2 million last year. This rise is principally due to the
strong organic growth in sales achieved by the Group this year. Net interest
payments accounted for £16.2 million (1999: £14.2 million) whereas taxation
consumed £18.7 million (1999 : £26.5 million).
Capital expenditure increased substantially during the year, largely due to
the inclusion of a full twelve months of the rapidly growing magnetics
business. Total capital expenditure net of insurance proceeds and proceeds on
the disposal of fixed assets rose to £62.5 million (1999 : £34.1 million).
With this higher level of capital spending and after dividend payments of
£39.0 million (1999 : £39.0 million), the Group experienced an outflow of
£21.6 million (1999 : £11.9 million) at the free cashflow level.
Borrowings at the year-end were £220.0 million (1999 : £232.3 million) to give
gearing of 47.7% (1999 : 53.9%).
The underlying earnings per share before goodwill amortisation at 27.5 pence
(1999 : 23.2 pence) shows an improvement of 18.5% over the prior year.
Final Dividend
The Board is recommending a final dividend of 8.5 pence per Ordinary share
(1999 : 8.5 pence) to give a total for the year of 15.9 pence per Ordinary
share (1999 : 15.9 pence). The dividend will be paid on 6 July 2001 to
Ordinary shareholders on the register of members at the close of business on
25 May 2001.
A Dividend Reinvestment Plan will be made available again for Ordinary
shareholders who would like to take their dividends by way of shares. Details
will be posted to shareholders at the end of May 2001.
Outlook
After the major business restructuring and disposal programme of the last two
years, Morgan has emerged in strong shape and has produced an encouraging
result for the year. Organic growth in sales across all of our businesses was
positive during 2000 and the performance of our magnetics business has
exceeded expectations. A portfolio of businesses focused increasingly on
markets with long term growth potential will require continued investment in
extra product development in addition to capacity expansion. In order to meet
these opportunities, cash generation and profitability from the more mature
parts of the Group's business portfolio will remain an area of focus.
The balance between growth and mature businesses within our portfolio has
clearly improved and assuming no significant worsening in the current rate of
slowdown across a number of business sectors in the United States, we shall
demonstrate continued progress in 2001.
Dr. Bruce Farmer CBE, Chairman
Ian Norris, Group Chief Executive
For and on behalf of the Board
13th March 2001
Morgan House
Madeira Walk
Windsor
Berkshire SL4 1EP
CONSOLIDATED PROFIT STATEMENT FOR THE YEAR ENDED 4 JANUARY 2001
Note 2000 1999
(as restated)
Total Total
£m £m
Turnover
Continuing operations 1,019.8 750.3
Acquisitions 1.0 -
Discontinued operations 30.3 112.1
_______ _____
Group turnover 1 1,051.1 862.4
Other operating income 5.1 6.4
_______ _____
1,056.2 868.8
_______ _____
Operating profit before goodwill amortisation and operating
exceptionals
Continuing operations 109.6 88.7
Acquisitions (0.2) -
Discontinued operations 1.9 5.9
_______ _____
111.3 94.6
Operating exceptionals
- restructuring costs 2 (6.9) (17.5)
Operating profit before goodwill
amortisation 104.4 77.1
Goodwill amortisation (5.8) (2.0)
Operating profit
Continuing operations 97.1 69.8
Acquisitions (0.2) -
Discontinued operations 1.7 5.3
_______ _____
Group operating profit 1 98.6 75.1
Corporate exceptional items
Continuing operations
-Disposal of fixed assets (1.2) 0.7
-Profit on sale of business - 1.6
-Loss on closure of business (2.0) (2.4)
Discontinued operations
-Profit on sale of businesses 21.4 34.8
-Loss on sale of businesses (8.0) (2.1)
_______ _____
3 10.2 32.6
Profit on ordinary activities before interest and taxation
108.8 107.7
Net finance charges and similar items (16.2) (13.5)
Profit on ordinary activities before taxation 92.6 94.2
Taxation 4 (30.5) (32.7)
Profit on ordinary activities after taxation 62.1 61.5
Equity minority interest (1.7) (0.8)
Net profit attributable to
The Morgan Crucible Company plc 60.4 60.7
Preference dividends on non-equity shares (2.1) (2.1)
Ordinary dividends on equity shares 5 (36.9) (36.9)
Retained profit for the year 21.4 21.7
Earnings per share (Note 6)
2000 1999
Before After Before After
goodwill goodwill goodwill goodwill
amortisation amortisation amortisation amortisation
- underlying 27.5p 25.0p 23.2p 22.4p
- basic 27.6p 25.1p 26.1p 25.3p
- diluted - 24.9p - 25.1p
- underlying diluted - 24.8p - 22.3p
CONSOLIDATED BALANCE SHEET AS AT 4 JANUARY 2001
2000 1999
£m £m
Fixed assets
Goodwill 112.6 107.9
Tangible assets 493.4 489.2
Other investments 18.5 6.2
_____ _____
624.5 603.3
_____ _____
Current assets
Stocks 196.4 189.9
Debtors 252.8 231.7
Cash at bank and in hand 93.6 191.7
_____ _____
542.8 613.3
Creditors - amounts falling due within one year 400.8 324.8
_____ _____
Net current assets 142.0 288.5
_____ _____
Total assets less current liabilities 766.5 891.8
_____ _____
Creditors - amounts falling due after more than one year
Term loans 181.2 322.5
Exchangeable redeemable preference shares 7.5 11.7
Grants for capital expenditure 1.8 2.2
_____ _____
190.5 336.4
Provisions for liabilities and charges 114.8 124.8
_____ _____
305.3 461.2
_____ _____
461.2 430.6
===== =====
Capital and reserves
Equity shareholders' funds
Called up share capital 58.0 57.9
Share premium account 44.3 44.2
Revaluation reserve 11.2 15.6
Other reserves 1.6 0.7
Profit and loss account 301.6 266.0
_____ _____
416.7 384.4
Non-equity shareholders' funds
Called up share capital 30.3 30.3
_____ _____
447.0 414.7
Minority interest
Equity 14.1 15.8
Non-equity 0.1 0.1
_____ _____
14.2 15.9
_____ _____
461.2 430.6
===== =====
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
2000 1999
£m £m
Net profit attributable to shareholders 60.4 60.7
Foreign currency translation 8.3 (9.7)
_____ _____
Total recognised gains and losses
relating to the year 68.7 51.0
===== =====
CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 4 JANUARY 2001
2000 1999
£m £m £m £m
Net cash inflow from operating activities 114.8 101.9
Returns on investments & servicing
of finance
Interest received 9.6 7.5
Interest paid (25.8) (21.7)
Preference dividends paid (2.1) (2.1)
_____ _____
Net cash outflow from returns on
investments & servicing of finance (18.3) (16.3)
Taxation (18.7) (26.5)
Capital expenditure and financial
investments
Purchase of tangible fixed assets (70.9) (40.0)
Insurance proceeds for tangible
fixed assets 4.4 1.1
Other proceeds on sale of
tangible fixed assets 4.0 4.8
Purchase of investments (11.6) (0.6)
Disposal of investments - 1.4
_____ _____
Net cash outflow from capital
expenditure and financial investments (74.1) (33.3)
Acquisitions and disposals
Acquisition of subsidiary undertakings (5.6) (140.8)
Net cash acquired - 2.1
Deferred consideration for prior
year acquisitions (3.7) (20.4)
Disposal of businesses 63.4 176.9
_____ _____
Net cash inflow from acquisitions
and disposals 54.1 17.8
Equity dividends paid (36.9) (36.9)
_____ _____
Cash inflow before use of liquid
resources 20.9 6.7
Management of liquid resources 79.4 (69.9)
Financing
Increase in share capital 0.2 0.3
Increase in bank loans 66.4 161.0
Repayment of bank loans (181.6) (78.7)
Repurchase of exchangeable redeemable
preference shares (5.2) (3.3)
_____ _____
(120.2) 79.3
_____ _____
Net (decrease)/increase in cash (19.9) 16.1
===== =====
Reconciliation of net cashflow to
movement in net borrowings
2000 1999
£m £m
Net (decrease)/increase in cash (19.9) 16.1
Cashflow from decrease/(increase) in loans 115.2 (82.3)
Cashflow from (decrease)/increase in deposits (79.4) 69.9
Cashflow from repurchase of exchangeable
redeemable preference shares 5.2 3.3
_____ _____
Change in net borrowings resulting from cashflows 21.1 7.0
Issue of exchangeable redeemable
preference shares (0.3) (4.1)
Bank loans acquired with acquisitions - (33.8)
Exchange movement (8.5) (1.5)
Movement in net borrowings during the period 12.3 (32.4)
Opening net borrowings (232.3) (199.9)
Closing net borrowings (220.0) (232.3)
CONSOLIDATED FREE CASHFLOW FOR THE YEAR ENDED 4 JANUARY 2001
2000 1999
£m £m
Net cash inflow from operating activities 114.8 101.9
Net interest paid (16.2) (14.2)
Taxation (18.7) (26.5)
_____ _____
Cash earnings 79.9 61.2
Dividends paid (39.0) (39.0)
_____ _____
Post dividend cashflow 40.9 22.2
Net capital expenditure (66.5) (38.9)
Proceeds on sale of tangible fixed assets 4.0 4.8
_____ _____
Free cashflow (21.6) (11.9)
===== =====
Reconciliation of operating profit to
net cash inflow from operating activities
2000 1999
Contin- Discon- Contin- Discon-
uing tinued Total uing tinued Total
£m £m £m £m £m £m
Operating profit 96.9 1.7 98.6 69.8 5.3 75.1
Loss on closure of
business (1.2) - (1.2) - - -
____ ____ ____ ____ ____ ____
95.7 1.7 97.4 69.8 5.3 75.1
Depreciation 42.4 1.1 43.5 35.8 3.9 39.7
Amortisation of goodwill 5.7 0.1 5.8 1.8 0.2 2.0
Loss on sale/write off
of plant and machinery 0.3 0.6 0.9 0.4 1.0 1.4
Increase in stocks (18.2) (0.4) (18.6) (3.3) (0.8) (4.1)
(Increase)/decrease in
debtors (26.1) (0.4) (26.5) (6.9) 7.5 0.6
Increase/(decrease)
in creditors 23.7 (5.0) 18.7 (5.2) (6.5) (11.7)
Decrease in provisions (4.8) (1.6) (6.4) (0.7) (0.4) (1.1)
_____ _____ _____ ____ ____ ____
Net cash inflow from
operating activities 118.7 (3.9) 114.8 91.7 10.2 101.9
===== ===== ===== ==== ==== =====
GROUP RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2000 1999
£m £m
Net profit attributable to shareholders 60.4 60.7
Goodwill written back to profit
and loss account 2.4 86.3
Dividends (39.0) (39.0)
_____ _____
23.8 108.0
New share capital 0.2 0.3
Foreign currency translation 8.3 (9.7)
_____ _____
Net increase to shareholders' funds 32.3 98.6
Opening shareholders' funds 414.7 316.1
_____ _____
Closing shareholders' funds 447.0 414.7
===== =====
NOTES
1. SEGMENTAL INFORMATION
Product Group Turnover Operating profit
2000 1999 2000 1999
£m £m £m £m
Carbon division 563.8 322.2 64.5 43.4
Ceramics division 457.0 428.1 38.1 28.2
_______ ______ ______ _____
Continuing operations 1,020.8 750.3 102.6 71.6
Discontinued operations 30.3 112.1 1.8 5.5
_______ ______ ______ _____
1,051.1 862.4 104.4 77.1
======= ======
Goodwill amortisation (5.8) (2.0)
______ _____
Group operating profit 98.6 75.1
====== =====
Geographical Area
The analysis shown below is based on the
location of the contributing companies:
Turnover Operating profit
2000 1999 2000 1999
£m £m £m £m
United Kingdom
Sales in the UK 53.1 57.2
Sales overseas 70.9 64.7
_______ _____
Total United Kingdom 124.0 121.9 6.6 2.8
Rest of Europe 391.7 197.2 39.2 9.6
The Americas 478.3 364.4 42.5 49.8
Far East and Australasia 117.0 96.9 12.3 7.6
Middle East and Africa 11.6 10.2 2.0 1.8
_______ _____ _____ ____
1,122.6 790.6 102.6 71.6
Discontinued operations 30.3 112.1 1.8 5.5
Inter-segment sales (101.8) (40.3)
_______ _____ _____ _____
1,051.1 862.4 104.4 77.1
======= =====
Goodwill amortisation (5.8) (2.0)
_____ ____
Group operating profit 98.6 75.1
===== ====
Turnover
2000 1999
£m £m
The analysis shown below is based on
the location of the customer:
United Kingdom 76.9 66.0
Rest of Europe 326.3 209.0
The Americas 442.4 348.7
Far East and Australasia 157.8 110.6
Middle East and Africa 17.4 16.0
_______ _____
1,020.8 750.3
Discontinued operations 30.3 112.1
_______ _____
1,051.1 862.4
======= =====
2.OPERATING EXCEPTIONALS
The redundancy and reorganisation costs of £6.9 million incurred
during 2000 (1999: £17.5 million) have been shown separately as
exceptional due to the amounts involved.
3.CORPORATE EXCEPTIONAL ITEMS
The corporate exceptional item mainly relates to profit and loss
on the sale of businesses. Power Industry Products, Laser Diode
and Centronics were the principal businesses disposed during 2000,
whereas in 1999 it was the Chemical Products business.
4.TAXATION 2000 1999
£m £m
United Kingdom tax 14.9 5.5
Overseas tax 15.6 27.2
_____ _____
Total taxation 30.5 32.7
===== =====
Overseas tax includes £4.5 million charged on exceptional profits.
United Kingdom tax includes a tax credit of £1.5 million
attributable to exceptional losses.
5.DIVIDENDS ON ORDINARY SHARES
2000 1999 2000 1999
Pence per share £m £m
Interim 7.4 7.4 17.2 17.2
Final 8.5 8.5 19.7 19.7
_____ _____ _____ _____
15.9 15.9 36.9 36.9
===== ===== ===== =====
6. EARNINGS PER SHARE
a. Basic and underlying earnings per share
2000 1999
Before After Before After
goodwill goodwill goodwill goodwill
amortis- amortis- amortis- amortis-
ation ation ation ation
£m £m £m £m
Profit after tax and
minority interest 66.2 60.4 62.7 60.7
Preference dividend (2.1) (2.1) (2.1) (2.1)
_____ _____ _____ _____
Basic earnings 64.1 58.3 60.6 58.6
Adjusted by all post
tax exceptional items (0.3) (0.3) (6.8) (6.8)
_____ _____ _____ _____
Underlying earnings 63.8 58.0 53.8 51.8
===== ===== ===== =====
Weighted average number
of ordinary shares 231,884,681 231,793,066
Basic earnings per share 27.6p 25.1p 26.1p 25.3p
____ ____ ____ ____
Underlying earnings per share 27.5p 25.0p 23.2p 22.4p
____ ____ ____ ____
The Directors have disclosed an underlying earnings per share as,
in their opinion, this better reflects the real performance of the
Group and assists comparison with the results of earlier years.
b. Diluted earnings 2000 1999
£m £m
Profit after tax and minority interest 60.4 60.7
Preference dividend as calculated under FRS14 - -
_____ _____
Diluted earnings 60.4 60.7
Adjusted by all post tax exceptional items (0.3) (6.8)
_____ _____
Underlying diluted earnings 60.1 53.9
===== =====
Weighted average number of ordinary shares
231,884,681 231,793,066
Dilutive effect of share
option schemes 261,705 113,035
Dilutive effect if Preference
shares converted 10,259,858 10,272,343
____________ ___________
Weighted average number of diluted shares 242,406,244 242,178,444
____________ ___________
Diluted earnings per share 24.9p 25.1p
____ ____
Diluted underlying earnings per share 24.8p 22.3p
____ ____
7. CURRENT LIABILITIES
Current liabilities include bank loans and overdrafts of £124.9
million (1999: £89.8 million).
The financial information contained in this Preliminary Statement
does not amount to statutory accounts for the Company's financial
years ended 4 January 2001 and 4 January 2000. It has been
approved by the Board of Directors on 13 March 2001 and has been
prepared on a consistent basis with the accounting policies set
out in the Group's 1999 annual report and accounts. Statutory
accounts for the year ended 4 January 2000 have been filed with the
Registrar of Companies and the statutory accounts for the year ended
4 January 2001 are expected to be filed immediately following the
Annual General Meeting of the Company in May 2001.
This Preliminary Statement will be dispatched to all registered
holders of Ordinary shares and Preference shares. Copies of this
statement may be obtained from the Secretary at the Registered
Office of the Company, Morgan House, Madeira Walk, Windsor,
Berkshire, SL4 1EP.
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