REG-Roxboro Group PLC Final Results
Date/Range: 15-MAR-2004
Short Abstract: THE ROXBORO GROUP PLC PRELIMINARY RESULTS
The Roxboro Group PLC, the international specialist electronics group, announces
its results for the year ending 31 December 2003.
2003 2002
£m £m
Turnover – Group 136.8 156.0
– continuing 122.2 124.7
Operating profit before goodwill – Group 8.3 8.6
– continuing 5.5 5.2
Profit on disposal of Weston 15.6 –
Profit before taxation 22.3 6.6
Cash flow from operations activities 10.6 13.0
Proceeds from disposals 52.7 –
Earnings per share – adjusted 12.6p 9.1p
Highlights
– Disposal of Weston completed
– 75p per share returned to shareholders (£42.6m)
– Balance sheet strengthened
– Significantly improved second half
– Production relocation to Mexico completed
– Strong Q4 bookings at Dialight
– Dividend maintained at 10p
Mr. Harry Tee, Group Chief Executive, said:
“The return of £42.6m to shareholders was well received and resulted in
excellent value generation in the year.
The significant operational advance we made in the second half was very
encouraging. In particular, the fourth quarter was strong, especially at
Dialight where bookings were the strongest for 12 consecutive quarters, and
current trading is equally encouraging.”
PRELIMINARY STATEMENT
The successful disposal of Weston marked the highlight of Roxboro’s year in
2003. The aerospace sector showed signs of recovery after two years of
recession but with the sector continuing to consolidate it was considered to be
the right time for Roxboro to step out of the industry. The sale to Esterline
Technologies Inc., a focussed aerospace supplier, for a gross consideration of
£55.7 million achieved an excellent result and a very good deal for Roxboro
shareholders, equating to 61% of the Group’s market capitalisation (including
Weston) at the time of the announcement of the disposal. Through the issue of
redeemable preference ‘B’ shares, £42.6m was made available for return to
shareholders, the equivalent of 75 pence per share. The profit on disposal,
which is shown as an exceptional item, amounted to £15.6m.
In general the economic environment continued to be difficult in key markets,
although there was an improvement in the second half of the year.
Solartron, our electronic measurement business, continued to perform well in
relatively soft markets in Europe and the USA and achieved a significant
improvement in the second half of the year as markets improved.
The relocation of production from North Carolina to Mexico and the associated
disruption contributed to a disappointing result at Dialight. Outsourced work,
which had previously been carried out in Europe or the USA, was transferred to
new suppliers in Mexico and this caused some short-term difficulties. By the
end of the year, however, Dialight had the majority of its outsourced components
supplied by Mexican companies and the transition had been completed with
on-going operating costs significantly reduced. The telecommunications sector,
which is addressed by Dialight’s OE Division, continued to show relatively weak
demand for most of the year but improved markedly towards the end of the year.
Fourth quarter bookings were the strongest for three years.
Financial Results
Operationally the continuing businesses demonstrated their resilience and
produced an improved result in the second half of the year.
Overall Group turnover for the year to 31st December 2003 was £136.8m (2002:
£156.0m), while turnover of the continuing businesses over the same period was
£122.2m (2002: £124.6m).
During the year currency movement in the Dollar and the Euro has impacted on the
translation and transactional conversion into Sterling. Sales for the
continuing operations have been adversely impacted due to translation by £3.6m.
If sales had been translated on a like for like basis, they would have shown
growth of 1% from £124.6m in 2002 to £125.8m in 2003, using 2002 exchange rates.
Operating profit before goodwill was £8.3m (2002: £8.6m) with continuing
operations contributing £5.5m (2002: £5.2m) and discontinued operations
contributing £2.8m (2002: £3.4m). The impact of translation on the operating
profit for the Group on a like for like basis has been £186k. Restated for this
exchange effect, Group operating profits from continuing businesses, before
interest and goodwill would have increased 9%.
Interest charges decreased to £0.3m (2002: £0.9m) following the repayment of
group debt from the proceeds of the disposal of Weston. Interest cover before
goodwill amortisation and profit on disposal was 25.4 times (2002: 9.7 times).
Profit before tax (including exceptional profits) was £22.3m (2002: £6.6m).
Basic earnings per share were 45.4p (2002: 7.2p) and adjusted (excluding
exceptional profit and goodwill amortisation) earnings per share were 12.6p
(2002: 9.1p).
Second half profits from continuing businesses (after central costs and interest
before goodwill) were double when compared with the first half and showed an
increase of 78% when compared with the second half of the prior year.
The Group continued to generate strong positive operational cash flows of £10.6m
(2002: £13m) and generated £52.7m from the disposal of Weston (net of expenses).
Cash outflows, including capital expenditure, acquisitions, dividend, tax,
interest and share issue expenses totalled £9.2m (2002: £15.5m). After
returning £40.1m to shareholders following the Weston disposal, the Group ended
the year with a net cash balance of £2m. The value of outstanding ‘B’ shares
not yet redeemed is £2.5m.
Dividend
The Board is recommending maintaining the final dividend at 6.9p per share
(2002: 6.9p per share) which together with the interim dividend of 3.1p (2002:
3.1p) means the full year dividend will be maintained at 10p (2002: 10p). The
dividend will be covered 6.5 times by profits retained for the year. Excluding
the exceptional profit, dividend cover was 1.4 times. The dividend will be paid
on 30th April 2004 to shareholders on the register at 26th March 2004.
Board
Peter Curry retired from the Board on 23rd April 2003 and we wish to record our
thanks to Peter for the contribution he made during his six years as a director
of Roxboro.
Harry Tee, the Group Chief Executive, has agreed to a change in his Service
Agreement reducing his contract period from 24 months to 12 months effective 1st
January 2004, bringing Roxboro in line with best practice.
Operating Review
Following the Weston disposal, Roxboro is more focussed with two strong
businesses, Solartron and Dialight. Markets remained difficult in the first
half of 2003 but clear improvements began to come through in the second half and
particularly towards the end of the year.
Dialight
2003 2002
£m £m
Sales 57.9 59.8
Operating Profit 1.1 1.0
Assuming a constant exchange rate, Dialight’s turnover would have been £3.8m
higher at £61.7m, 3% up on prior year, and operating profit would have been 17%
higher than reported.
Operationally, 2003 was a year of transition for Dialight, not only concerning
the relocation of most of the company’s manufacturing from North Carolina to
Mexico, but also the transfer of the majority of the supply chain for outsourced
parts to Mexican suppliers. Although initially there were difficulties with
some suppliers who found it challenging to meet the company’s high quality
standards and supply demands, by the end of 2003 Dialight had successfully
transferred the sourcing of the majority of its components from a tight supply
chain close to its enlarged facility in Mexico. The cost reductions realised by
this initiative will benefit the company in 2004.
The OE Division of Dialight, which supplies optoelectronic components to
distributors and equipment makers, saw improvements in its markets towards the
end of the year. Sales and operating profit improved in the second half and
bookings in the fourth quarter of 2003 were the highest for 12 consecutive
quarters as demand from the telecoms and general electronics equipment markets
improved. Dialight’s strong proprietary position and overall channel presence
has enabled the company to maintain an excellent position through the downturn
of the past three years. As sales of electronic and telecoms equipment
increase, Dialight would expect to see increasing demand from its wide OEM
customer base and distribution channels. In 2003 Dialight achieved design wins
for its new patented, bi-level, surface mounted Prism product from a number of
equipment producers in the telecom and other sectors. Dialight’s operational
gearing has historically resulted in rapid improvements in margins as volumes
increase, making the company highly leveraged to a recovery in the electronics
and telecoms markets.
Although the volume of Traffic signal modules produced by Dialight increased by
7% by volume over the previous year, sales values were marginally reduced as a
consequence of reduced selling prices, which were closely aligned to the falling
costs of LEDs, the core component of the modules. Sales of signal modules in
the first half of 2003 were hampered by the relocation of production to Mexico,
but recovered well in the second half of the year.
Dialight’s major strength in the Traffic Signals market is its substantial
dealer network, which services day to day business. It is with the help of this
network that the company is able to design its products into the specifications
required by City and local authorities, and to this end Dialight introduced a
number of new “differentiated” products in the latter half of 2003. The most
important of these was “Intellileds”, which is an LED traffic signal that
performs two important new functions. Firstly, it manages the life of the
module giving an indication to the Traffic Engineer when it is time to change
the unit and secondly it allows the signal to be dimmed at night, thus saving
power. Patents are being applied for these features and a number of transport
authorities are specifying them in their requirements. Dialight’s first order
against this new set of specifications was for the city of Edmonton in Canada
for shipment in late 2003 and early 2004.
In Europe the Signals Division of Dialight incorporates Garufo GmbH and the
Microsense product line acquired in the UK in 2002. Dialight’s European
strategy is to sell LED Traffic Light Modules through traffic systems companies
rather than directly to individual cities and to comply with all national
standards. This approach is proving effective as the number of customers
increases. Although pricing fell during the second half of 2003 and the German
market showed significant softness, Dialight’s traffic modules sold strongly in
Eastern and Southern Europe and the UK. As we ended the year, Dialight had
secured significant new supply contracts with both Siemens Traffic and Peek
Traffic Systems and the company will begin to supply both customers in 2004.
Sales into the rail sector are growing as are sales of Obstruction Lights for
broadcast and cellular towers. Dialight achieved some significant sales channel
advantages through the signing of new supply agreements with a number of
specialist providers of these lights in the United States. These agreements
give Dialight excellent access to these growing markets. In Europe, Dialight is
also seeing growing sales of beacons using LED technology for the broadcast
market and will begin supplying a major UK tower operator in 2004.
Airfield sales grew during the year but this is becoming a challenging market as
major Airfield Lighting suppliers seek to qualify their own competitive products
for runway applications. Changes to the Federal Aviation Authority (FAA)
specifications caused major redesign and re-qualification in 2003, setting back
the adoption of LED products. Early in 2004, however, Dialight secured a
contract in excess of $1m to supply the FAA with 16,000 obstruction lights for
installation at selected airports across America.
In 2003 Dialight established the Luxeon Design Centre in conjunction with
LumiLeds, a pioneer in the development of high brightness LED technology, in
order to satisfy a growing need in the lighting industry, and to capitalise on
its leading position in applied LED technology in other sectors. In many parts
of the lighting industry, the transition to solid state lighting technology is
inevitable and will continue for many years to come. The technology is already
making significant inroads into obstruction lights, traffic signals, beacons,
rail signals and many other applications, with Dialight as the major producer of
LED products in North America and increasingly in Europe, but the technology
will also continue to be adopted by other sectors in lighting.
The Luxeon Design Centre, incorporating Dialight’s optical, thermal and
electronic expertise, develops solid state light solutions for OEM customers
with the objective of becoming the provider of “light engines” into these OEMs.
2003 was very much a year of market development, but Dialight closed the year
with a substantial contract from a specialist lighting OEM and expects others to
follow in 2004. These initiatives will add new impetus to Dialight’s growth.
As exciting new developments in the application of LED technology into more
general lighting applications continue to emerge, Dialight’s challenge will be
to select the right opportunities to support sustainable, profitable growth.
Many new opportunities are being explored with a wide range of new OEM customers
on an application-specific basis, although it is likely that many of these will
take some time to develop. The transition from traditional light sources to
solid state light is, however, inevitable and will accelerate as newer, ever
more efficient LED technology becomes available.
At BLP, a much improved second half performance due to the results of an earlier
cost reduction programme and an improving market environment, enabled the
company to contribute to the group’s second half profits. The company continues
to supply the automotive and utility markets with electro-magnetic connect/
disconnect devices and is pursuing some excellent opportunities, particularly in
the United States with its new X-Pulse utility product.
Solartron
2003 2002
£m £m
Sales 64.3 64.8
Operating Profit 6.6 7.2
At Solartron, the electronics measurement business, the results were only
marginally impacted by currency translation.
The difficult business environment began to ease in the second half and
operating profits improved as a result. The company successfully completed an
important Dualstream II, Wet Gas project with Shell UK for the Penguin Field in
the North Sea, and secured a substantial contract from AMEC for Dualstream II
Wet Gas metering systems for the Sakhalin gas fields in Russia. Although the
results in the second half of 2003 benefited to an extent from these contracts,
the final systems will not be delivered until mid 2004.
Following a period of investment in developing customer relationships in China,
Solartron was awarded a contract to provide 15 systems for detecting changes in
density of oil being pumped down a pipeline. These were successfully deployed
in 2003, and early in 2004, contracts for a further 19 systems were signed. The
company also secured its first Dualstream II Wet Gas metering contract in China.
Dualstream II has now been successfully installed and commissioned on a number
of sub-sea, top-side and onshore applications with major operators such as BP,
Statoil, Shell and Pan American (Argentina).
As a result of independent tests and working installations, approval has been
granted, on a project by project basis, to use the Dualstream II technology for
allocation and fiscal metering by the approval authorities in the USA, Norway
and the UK. Dualstream II is the only non-test separator based product to have
been granted this approval. This emphasises the market’s rapid acceptance of
Solartron’s novel and robust solution to in-line measurement of wet gas at the
point of extraction, something the industry has long desired.
In the Process sector Solartron continued to improve throughout the year despite
sluggish markets, particularly in the USA and Europe. During the year Solartron
acquired a proven radar technology for a consideration of around £100,000, which
was expensed during the year. This will enable a more rapid introduction of a
range of radar based level measurement products. Radar technology provides a
non-contact sensor that is virtually unaffected by changes in process
temperature, pressure or the gas and vapour composition within a vessel. This
is consistent with Solartron’s strategy of developing best of breed products at
the top end of the measurement spectrum to meet increasingly stringent customer
needs.
Solartron continues to develop its customer care and service activities and as a
result secured a substantial contract in the UK for audit and remedial work for
a number of UK water companies in 2003.
Sales of analytical instruments improved in the fourth quarter, particularly in
the Far East following a significant slow-down earlier in the year due to the
SARS scare. The Japanese market also showed stronger demand than it has in the
past three years. Additionally, the spend in research and development of
battery technology, an area previously hit quite hard by the global
telecommunications downturn, improved markedly. This is presenting new
opportunities for Solartron’s Cell Test system.
Solartron continued to develop well in the Metrology market, advancing its new
digital gauging transducers into the quality control market. This market
remained slow in the United States throughout most of 2003, however there were
more encouraging signs towards the end of the year. In particular, another
major American OEM has now committed to purchasing gauging transducers from
Solartron, replacing in-house manufacturing.
Also, Solartron introduced a number of new metrology products including a block
gauge product line during the year. These new products enhance the extensive
range of gauging products already produced by the company. Sales of the digital
product family grew strongly in the year and are expected to show continued
growth in the current year and beyond as the market increasingly moves from
analogue to digital products.
Outlook
The outlook is more encouraging now than it has been over the past three years.
The disposal of Weston has created a more focussed group with two specialist
businesses. In their respective fields of activity both companies are highly
respected and are leveraged to economic recovery, which seems more likely now
than it has for some time. The continued investment in our solid state lighting
products is creating new opportunities. The majority of the operational
difficulties and costs associated with the relocation of production facilities
are behind us and the benefits will now begin to be realised. This, together
with the improving demand for opto-electronic components, should result in a
significantly improved Dialight performance in 2004. At Solartron, steady
progress is being maintained and with the US economy showing signs of
improvement the process sector is expected to improve in 2004. The success of
the Dualstream II and other new product introductions will drive growth at
Solartron. Looking forward therefore conditions appear favourable for growth in
sales.
Whilst, the Group’s expected improving US results, when translated into
sterling, could be affected by a continuing weakness in the US dollar, export
sales from the UK are largely protected by Group risk management actions in
respect of currency hedging.
Taking all these factors into account, the Board remain confident in the ongoing
prospects of the Group.
SIR ALAN COCKSHAW HARRY TEE
Chairman Group Chief Executive
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2003
Notes 2003 2002
£’000 £’000
Turnover 2(a)
Continuing operations 122,173 124,657
Discontinued operations 14,606 31,370
136,779 156,027
Cost of sales (96,342) (110,223)
Gross profit 40,437 45,804
Distribution costs (18,062) (20,122)
Administrative expenses (15,304) (18,226)
Operating profit 2(b)
Continuing operations 4,235 4,062
Discontinued operations 2,836 3,394
7,071 7,456
Operating profit before amortisation of intangible assets 8,273 8,553
Amortisation of intangible assets (1,202) (1,097)
Profit on disposal of discontinued operations 4 15,585 –
Profit on ordinary activities before interest and taxation 22,656 7,456
Net interest payable (326) (883)
Profit on ordinary activities before taxation 22,330 6,573
Tax on profit on ordinary activities (2,612) (2,491)
19,718 4,082
Profit for the financial year
Dividends 5 (3,042) (5,675)
Retained profit/(loss) for the financial year 16,676 (1,593)
Pence Pence
Earnings per share – basic 6 45.4 7.2
– adjusted 6 12.6 9.1
– diluted 6 45.4 7.2
GROUP BALANCE SHEETS
at 31 December 2003
2003 2002
£’000 £’000
Fixed assets
Intangible assets 15,464 19,454
Tangible assets 13,100 22,122
Investments – 16
28,564 41,592
Current assets
Stocks 16,118 23,906
Debtors 25,879 29,279
Cash at bank and in hand 4,332 7,747
46,329 60,932
Creditors:
Amounts falling due within one year
Borrowings (2,364) (19,442)
Other creditors (19,354) (25,208)
(21,718) (44,650)
Net current assets 24,611 16,282
Total assets less current liabilities 53,175 57,874
Creditors:
Amounts falling due after more than one year
Borrowings – (7)
Provisions for liabilities and charges (1,507) (1,843)
51,668 56,024
Capital and reserves
Called up share capital 3,115 568
Share premium account 5,976 5,841
Capital redemption reserve 40,104 51
Profit and loss account 2,473 49,564
Shareholders’ funds – equity and non-equity interests 51,668 56,024
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2003
Notes 2003 2002
£’000 £’000
Cash flow from operating activities 3 10,562 12,975
Returns on investments and servicing of finance
Interest paid (529) (985)
Interest received 216 103
Net cash outflow from returns on investment (313) (882)
and servicing of finance
Taxation (1,867) (1,789)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,726) (2,415)
Sale of tangible fixed assets 101 82
Net cash outflow from investing activities (1,625) (2,333)
Acquisitions and disposals
Disposal of subsidiary undertakings 52,654 –
Purchase of subsidiary undertakings – (4,357)
Purchase of intangible assets (50) (473)
52,604 (4,830)
Dividends paid (4,883) (5,675)
Cash inflow/(outflow) before use of liquid resources and financing 54,478 (2,534)
Financing
Issue of ordinary share capital 97 13
Share issue expenses (459) –
Redemption of B shares (40,053) –
Net loan (repayments)/advances (17,065) 4,216
Capital element of finance lease rental payments (20) (26)
(57,500) 4,203
(Decrease)/increase in cash in the year (3,022) 1,669
Reconciliation of net cash flow to movements in net debt
(Decrease)/Increase in cash in the year (3,022) 1,669
Cash outflow/(inflow) from change in debt and lease financing 17,085 (4,190)
Change in net debt resulting from cash flows 14,063 (2,521)
Translation difference (393) (630)
Movement in net debt in the year 13,670 (3,151)
Net debt at beginning of year (11,702) (8,551)
Net cash/(debt) at end of year 1,968 (11,702)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2003
2003 2002
£’000 £’000
Profit for the financial year 19,718 4,082
Currency translation differences on foreign currency net investments (2,281) (2,987)
Total gains recognised in the year 17,437 1,095
RECONCILIATION OF MOVEMENTS IN GROUP’S SHAREHOLDERS’ FUNDS
2003 2002
£’000 £’000
The movements in group’s shareholders’ funds are:
Total recognised gains and losses 17,437 1,095
Dividends (3,042) (5,675)
Goodwill previously taken to profit and loss account 21,664 –
New share capital subscribed 97 13
Share Issue expenses (459) –
Redemption of B Shares (40,053) –
Net change to shareholders’ funds (4,356) (4,567)
Balance brought forward 56,024 60,591
Balance carried forward 51,668 56,024
NOTES TO THE ACCOUNTS
1. The financial information has been prepared on the basis of the accounting
policies set out in the Group’s statutory accounts for the year ended 31
December 2003.
2. Segmental information
Turnover, profit before interest and taxation and net assets are analysed
below: 2003 2002
£’000 £’000
a) Turnover
By geographical destination:
UK 28,562 32,787
USA 56,005 71,596
Other European countries 31,367 31,439
Rest of the world 20,845 20,205
136,779 156,027
By geographical origin:
UK 71,397 83,180
USA 58,882 69,205
Other European countries 15,698 14,945
145,977 167,330
Inter-segment sales (9,198) (11,303)
136,779 156,027
By business operation:
Continuing operations
Dialight 57,916 59,812
Solartron 64,257 64,845
122,173 124,657
Discontinued operations
Weston 14,606 31,370
136,779 156,027
b) Profit before interest and taxation 2003 2002
By geographical origin: £’000 £’000
UK 9,004 9,492
USA 1,944 2,435
Other European countries (445) (351)
Operating profit before central costs and intangible assets amortisation 10,503 11,576
Central costs (2,230) (3,023)
Amortisation of intangible assets (1,202) (1,097)
Operating profit on ordinary activities 7,071 7,456
Profit on sale of discontinued operations 15,585 –
Profit before interest and taxation 22,656 7,456
By business operation:
Continuing operations
Dialight 1,071 1,014
Solartron 6,596 7,168
7,667 8,182
Discontinued operation
Weston 2,836 3,394
Operating profit before central costs and intangible assets amortisation 10,503 11,576
Central costs (2,230) (3,023)
Amortisation of intangible assets (1,202) (1,097)
Operating profit on ordinary activities 7,071 7,456
Profit on sale of discontinued operations 15,585 –
Profit before interest and taxation 22,656 7,456
In 2003, £766,000 of the amortisation of intangible assets related to the
Solartron business, £84,000 to the Weston business and £352,000 related to
the Dialight business.
In 2002, £766,000 of the amortisation of intangible assets related to the
Solartron business, £184,000 related to the Weston business and £147,000
related to the Dialight business.
Net assets 2003 2002
c) £’000 £’000
By geographical origin:
UK 21,099 30,167
USA 14,770 19,428
Other European countries 1,693 1,558
37,562 51,153
Unallocated central net assets 14,106 4,871
51,668 56,024
By business operation:
Continuing operations
Dialight 20,406 23,678
Solartron 17,156 16,682
37,562 40,360
Discontinued operations
Weston – 10,793
37,562 51,153
Unallocated central net assets 14,106 4,871
51,668 56,024
Unallocated central net assets include intangible assets of £15,464,000 of
which £12,165,000 relates to the Solartron business and £3,299,000 relates
to the Dialight business. In 2002 the unallocated central net assets
included intangible assets of £19,454,000 of which £12,931,000 related to
the Solartron business and £3,571,000 related to the Dialight business and
£2,952,000 related to the Weston business.
3. Reconciliation of operating profit to cash inflow from operating
activities 2003 2002
£’000 £’000
Operating profit 7,071 7,456
Depreciation charges 3,390 4,870
Amortisation of intangible assets 1,202 1,097
(Profit)/loss on sale of tangible fixed assets (59) 56
Decrease in stocks 2,462 498
(Increase)/decrease in debtors (1,988) 1,644
Decrease in creditors (1,713) (2,635)
Increase/(decrease) in provisions 197 (11)
Net cash inflow from operating activities 10,562 12,975
4. Disposal of subsidiary undertakings
In June 2003 the Group completed the disposal of the entire issued share
capital of Weston Aerospace, Norwich Aero Products Inc., Pressure Systems
Inc. and Pressure Systems International Limited for a gross cash
consideration of £55.7m.
The impact of the disposal on the consolidated net assets is summarised
below:
£’000
Net assets disposed of:
Intangible fixed assets 2,868
Tangible fixed assets 6,790
Stocks 4,520
Debtors 4,877
Cash at bank 1,237
Creditors due within one year (3,655)
Provision for liabilities and charges (579)
16,058
Goodwill previously written off to reserves 21,664
Profit on disposal 15,585
Net proceeds satisfied by cash 53,307
The Company has guaranteed the obligations under the Sale and Purchase
Agreement and the Tax Deed.
5. Dividends
The directors have proposed a final dividend of 6.9p (2002: 6.9p) which is
subject to shareholder approval at the Annual General Meeting on 26 April
2004, and if approved, will be payable on 30 April 2004 to shareholders
on the register on 26 March 2004.
6. Earnings per Share
The calculation of earnings per ordinary share is based on profit after
tax of £19,718,000 (2002: £4,082,000) and after non-equity dividends of
£35,000 (2002: £nil) and on 43,324,000 (2002: 56,754,000) ordinary shares,
being the average number of ordinary shares in issue during the year.
The diluted earnings per share is based on profit after tax for the year
of £19,718,000 (2002: £4,082,000) and non-equity dividends of £35,000
(2002: £nil) and on 43,339,000 (2002: 56,754,000) ordinary shares,
calculated as follows:
2003 2002
Thousands Thousands
Basic weighted average number of shares 43,324 56,754
Dilutive potential ordinary shares:
Employee share options 15 –
43,339 56,754
Reconciliation to adjusted earnings per share
2003 2002
Pence Pence
Basic earnings per share 45.4 7.2
Amortisation of intangible assets of £1,202,000
(2002:£ 1,097,000) 2.8 1.9
Profit on sale of discontinued operations (35.6) –
Adjusted earnings per share 12.6 9.1
7. Pensions
FRS 17 ‘Retirement Benefits’ was issued in November 2000 to replace SSAP
24 by 2005. Although it is not required to be fully implemented until
2005 there is a phased approach with regards to disclosures which the
Group has complied with. If the Group had fully adopted FRS 17 in 2003
then the profit and loss charge in respect of defined benefits schemes
would have reflected a charge of £1.3m a reduction of £0.7m from the
actual 2003 SSAP 24 based charge. In addition, the net deficit arising
on FRS 17 applied principals, which is effectively a snap shot of the
assets at the year end date would have led to the Group’s Net Assets being
reduced by £7.5m (2002: £8.1m).
8. The Annual Report and Accounts for the year ended 31 December 2003 which
was approved by the Board of directors on 15 March 2004 includes an
unqualified audit opinion and did not contain a statement under Section
237(2) or (3) of the Companies Act 1985. Accounts will be despatched to
shareholders on 24 March 2004. The accounts will be available from that
date from the Company Secretary at the Company’s registered office, Byron
House, Cambridge Business Park, Cambridge, CB4 4WZ.
9. The above financial information does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985. The comparative
financial information for the year ended 31 December 2002 is abridged and
has been extracted from the statutory accounts, on which the auditors
issued an unqualified opinion, and which have been delivered to the
Registrar of Companies.
– ENDS –
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The company news service from the London Stock Exchange