Interim Results - 6 Months to 31 December 1999
Ricardo PLC
28 February 2000
Ricardo plc
Interim Statement for the six months ended 31 December 1999
HIGHLIGHTS
Ricardo plc is the UK's leading independent automotive and powertrain
engineering consultancy. Ricardo is a constituent of the FTSE techMARK 100.
* Turnover up 20% to £54.2m (£45.1m)
* Profit before tax up 25% to £5.6m (£4.5m)
* Increase in earnings per share of 24% to 8.4p (6.8p)
* Interim dividend of 2.4p (2.3p)
* Order book up 17% to £41m (£35m)
* US business continues to show improved performance
Commenting on the interim results, Rodney Westhead, Chief Executive of
Ricardo plc said:-
'I am pleased to report another strong performance for the first half. Our
order book is in a healthy position, showing a 17% increase on levels of 12
months ago. The outlook remains encouraging and I am confident that the
overall performance of our business will continue to improve in the second
half of the financial year. Looking ahead we expect to see continuing double
digit profit growth.'
Enquiries:-
Ricardo plc
Rodney Westhead, Chief Executive Today: 0171 457 2345
Andrew Goodburn, Finance Director Thereafter: 01273 455611
Gavin Anderson & Company Tel: 0171 457 2345
Marc Popiolek
Laura Hickman
Website: www.ricardo.com
CHAIRMAN'S STATEMENT
Overview
The trading results for the six months to 31 December 1999 show an overall
increase in turnover of 20% to £54.2m. Profits before tax increased by 25% to
£5.6m. The increased profits coupled with a steady tax rate resulted in the
earnings per share increasing by 24% to 8.4p.
The order book has continued to improve across the Group to £41m compared with
£35m 12 months earlier.
Dividend
An interim dividend of 2.4p (1998: 2.3p) will be paid on 28 April 2000 to all
shareholders on the register at the close of business on 24 March 2000.
Operations
Continuing growth in turnover in the UK and USA, with our subsidiaries working
closely together, has resulted in a satisfactory first half with a further
overall improvement in net margin to 10.4% (1998 - 10.0%). Ricardo Test
Automation, which started the year with a low order book, is now trading
satisfactorily. Within our US subsidiary, business confidence is growing and
further investment in management, test cells and premises have been authorised
to support a growing, profitable order book.
Europe
In Germany, the first office has been established in Stuttgart. Initial
contact has been made with German OEMs and the first orders have been taken.
In Prague, in the Czech Republic, a satellite office has been established to
take advantage of the competitively priced technical resources currently
available in that country.
Strategy
Our strategy, which is to provide consultancy and technical support for the
engine, transmission and vehicle engineering sectors of the automotive
industry, remains unchanged. Within that strategy, we continue to promote and
recruit high calibre engineers, support relevant continuing R&D programmes and
invest in additional facilities at all of our main sites.
Prospects
We remain confident that the overall performance of our business will continue
to improve in the second half of the current financial year.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Interim Statement for the six months ended 31 December 1999
Six months ended Six months ended Year ended
31 December 31 December 30 June
1999 1998 1999
£'000 £'000 £'000
Turnover 54,199 45,132 95,489
------------ ------------ ------------
Operating Profit 5,809 4,742 10,882
Net Interest (199) (241) (457)
------------ ------------ ------------
Profit on ordinary
activities before
taxation 5,610 4,501 10,425
Taxation (1,683) (1,350) (3,206)
------------ ------------ ------------
Profit for the
period 3,927 3,151 7,219
Non-equity
preference (2) (2) (3)
dividends ------------ ------------ ------------
Profit
attributable
to ordinary
shareholders 3,925 3,149 7,216
Equity ordinary
dividends (1,147) (1,068) (3,261)
------------ ------------- ------------
Amount transferred
to reserves 2,778 2,081 3,955
------------ ------------ ------------
Dividend per
ordinary share 2.4p 2.3p 7.0p
Basic earnings per
ordinary share 8.4p 6.8p 15.5p
Diluted earnings
per ordinary share 8.0p 6.5p 14.9p
All results
relate to
continuing
activities
Notes:
1 This interim Statement should be read in conjunction with the Report and
Accounts for the year ended 30 June 1999.
The accounts for the six months ended 31 December 1999 and 31
December 1998 respectively are neither audited nor reviewed. The abridged
accounts for the year ended 30 June 1999 do not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985 and
are an extract from the latest published accounts which have been
delivered to the Registrar of Companies and on which the auditors gave an
unqualified audit report.
2 Taxation
The tax charge for the period has been calculated as 30% (1998 - 30%)
3 Earnings per share
The calculations of basic earnings per ordinary share and diluted
earnings per ordinary share have been made in accordance with FRS14 and
the comparatives for the six months ended 31 December 1998 have been
adjusted accordingly.
The basic earnings per ordinary share has been calculated by dividing the
profit attributable to ordinary shareholders of £3,925,000 (1998 -
£3,149,000) by the weighted average number of shares in issue of
46,975,107 (1998 - 46,423,511). The calculation of the average number of
shares in issue has been made having deducted the shares held by the
Employee Share Ownership Trust and the Long Term Incentive Plan Trustee.
The diluted earnings per ordinary share has been calculated by dividing
the profit attributable to ordinary shareholders of £3,925,000 (1998 -
£3,149,000) by the adjusted weighted average number of shares in issue.
This latter figure has been calculated by adjusting the shares in issue
of 46,975,107, as described above, to take account of the effect of the
diluted securities of share options and the Long Term Incentive Plan, to
give an adjusted total of 49,026,626 shares in issue (1998 - 48,169,721).
SUMMARISED BALANCE SHEET
Interim Statement for the six months ended 31 December 1999
As at As at As at
31 December 31 December 30 June
1999 1998 1999
£'000 £'000 £'000
Fixed assets 39,211 31,879 36,671
------------- ------------ ------------
Stock and
debtors 39,407 33,288 34,770
Creditors
falling due
within one
year (36,205) (30,691) (32,046)
------------ ------------ -----------
3,202 2,597 2,724
Cash deposit 340 340 340
Net bank balance 1,105 (556) (1,952)
------------ ------------ -----------
Net current assets 4,647 2,381 1,112
------------ ------------ -----------
Total assets less
current liabilities 43,858 34,260 37,783
Creditors
falling due
after more than
one year
Bank borrowings (4,188) (1,995) (1,775)
Other (5) (107) (51)
---------- ---------- ----------
(4,193) (2,102) (1,826)
Provisions for
liabilities and
charges (4,651) (2,957) (4,579)
------------ ----------- ----------
Net assets 35,014 29,201 31,378
------------ ------------- ----------
Called up share
capital and
share premium account 17,348 16,127 16,395
Long term
incentive plan reserve 882 279 635
Reserves 16,784 12,795 14,348
---------- ---------- ----------
Shareholders'
funds 35,014 29,201 31,378
---------- ---------- ----------
These accounts were approved by the Board of Directors on 28 February 2000
This announcement is being circulated to all shareholders of the Company, and
copies will be available to the public at the Company's Registered Office at
Bridge Works, Shoreham-by-Sea, West Sussex, BN43 5FG
CONSOLIDATED CASH FLOW STATEMENT
Interim Statement for the six months ended 31 December 1999
Six months ended Six months ended Year ended
31 December 31 December 30 June
1999 1998 1999
£'000 £'000 £'000 £'000 £'000 £'000
Net cash
inflow from
operating activities 9,005 9,675 18,218
Interest paid (398) (353) (366)
Dividends paid
on non-equity
shares (2) (1) (3)
------ ------ ------
Net cash
outflow from
returns on
investment
and servicing ------ ------ ------
of finance (400) (354) (369)
Taxation (228) (411) (1,700)
Capital
expenditure
Purchase of
tangible fixed
assets (6,188) (5,942) (13,260)
Sale of
tangible
fixed assets 415 137 159
------- ------ ------ ------- ------ -------
(5,773) (5,805) (13,101)
Equity
dividends paid (2,207) (2,044) (3,114)
Financing
Issue of
ordinary
share capital 302 43 311
Proceeds from
ESOP share
options - - 127
Purchase of
own shares - - (328)
Capital
elements
of finance
lease rental
payments (61) (53) (102)
Loans repaid (2,534) (219) (192)
-------- ------ ----- ------ ------ -----
(2,293) (229) (184)
(Decrease)/
increase in cash (1,896) 832 (250)
------- -------- -------
NOTES TO THE CONSOLIDATED CASH FLOW
STATEMENT
Six months Six months Year
ended ended ended
31 December 31 December 30 June
1999 1998 1999
£'000 £'000 £'000
Reconciliation
of net
cash flow to
movement in net
debt
(Decrease)/increase
in cash (1,896) 832 (250)
Increase /
(decrease)
in debt and lease
financing 2,725 272 (55)
New finance leases - (17) (18)
Translation difference (124) 14 295
----------- ----------- -----------
Movement in net
debt in
period 705 1,101 (28)
Net debt at
beginning of
period (3,899) (3,871) (3,871)
Net debt at end
of period (3,194) (2,770) (3,899)
---------- ------------ ------------
Reconciliation
of operating
profit to net
cash inflow
from operating
activities
Operating profit 5,809 4,742 10,882
Depreciation charges 3,227 2,568 5,047
(Gain)/loss on
sale of tangible
fixed assets and
investment
properties (12) - 2
Long term
incentive plan charge 247 267 623
Provision for
diminution in value of
investment properties 30 - 235
(Increase)/decrease
in working captial (296) 2,098 1,429
----------- ------------ -----------
9,005 9,675 18,218
----------- ----------- ----------
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