RNS Number:0242A
Bespak PLC
11 July 2007
Preliminary Results for the Year Ending 28 April 2007
A Year of Outstanding Growth
Bespak plc (LSE: BPK), a leader in devices for inhaled drug delivery and
anaesthesia, today announces its preliminary results for the 52 weeks ended 28
April 2007.
Highlights
* Revenue up 44% to #126.5m (2006: #87.6m)
* 25% organic revenue growth from Inhaled Drug Delivery with sales of
#95.7m (2006: #76.5m)
* Profit before tax and special items up 24% to #17.4m (2006: #14.0m),
despite weakening US dollar
* Profit before tax up 10% to #15.7m (2006: #14.3m)
* Adjusted* earnings per share up 18% to 44.3p (2006: 37.4p)
* Cash generated from operations up 84% to #32.7m (2006: #17.8m)
* Final dividend maintained at 12.1p (2006: 12.1p)
* Acquired 51% of Emergent Respiratory Products as part of 2-step
acquisition
* Proposed name change from Bespak plc to Consort Medical plc
Commenting on the results, Mark Throdahl, Bespak plc Chief Executive, said:
"Bespak has had another year of outstanding growth with the business continuing
to perform well. Our expanding product portfolio is reducing our dependence on
big pharma development programmes, and we are confident in achieving our plan to
double the Company's profits within five years."
* Adjusted for amortisation of intangibles and discontinued operations
For further information, please contact:
Bespak plc
Mark Throdahl, Chief Executive Tel: +44 (0) 1908 552600
Jonathan Glenn, Group Finance Director
Maitland
Liz Morley
Brian Hudspith Tel: +44 (0) 20 7379 5151
Summary
In the financial year ending 28 April 2007, Bespak made good financial and
strategic progress toward its target of doubling profit before tax within five
years. During the year Bespak withdrew from the loss-making Consumer Dispensers
business and in April 2007 acquired a 51% stake in Emergent Respiratory
Products, further focusing the Company on higher growth, higher margin markets
and adding another growth platform to the Anaesthesia business segment.
Performance
Revenue increased 44% to #126.5m (2006: #87.6m), of which 25% was organic growth
achieved by Bespak's Inhaled Drug Delivery business segment. Growth in operating
profit was 33%, and profit before tax and special items increased 24% to #17.4m
(2006: #14.0m). Profit before tax was #15.7m (2006: #14.3m). Earnings per share
increased 18% to 44.3p (2006: 37.4p), adjusted for amortisation of intangibles
and discontinued operations.
This performance reflected record inhaler valve sales, the first full year of
the King Systems acquisition, and strong sales of the inhaler for Pfizer's
Exubera(R) powdered insulin.
The Board has proposed a final dividend of 12.1p per share (2006: 12.1p), making
a full year dividend of 19.1p per share (2006: 19.1p). Operating cash flow
increased 84% to #32.7m (2006: #17.8m). Net debt at 28 April decreased to #18.2m
(2006: #27.8m), reflecting a reduction in the borrowings that were necessary to
finance the King Systems acquisition.
Outlook
After a year of 24% profit growth in 2007, Bespak remains on target to double
2005/06 profit before tax within five years. In setting this target, we
recognise that profit growth will be irregular and do not expect steady, linear
progress toward our goal. Accordingly, the Board expects that progress in 2007/
08 will be broadly flat as the sale of valves for ozone-depleting CFC
formulations further declines in the US and Exubera(R) inhaler production
declines following launch stock manufacture. The Company continues to evaluate
acquisition opportunities that will build on its anaesthesia platform.
Operating Review
In January of this year, we announced a goal to double 2006 pre-tax profit
within five years. This will be achieved through a strategy of organic growth
from multiple products, selective acquisitions, and the further development of
competencies in Six Sigma manufacturing, proprietary project management
techniques, and a high-performance culture.
In 2007 all the elements of this strategy contributed to our strong performance.
Both business segments generated record financial results, savings from Six
Sigma increased substantially, our project management techniques contributed to
winning five new multi-year Device Service programmes, and the Company continued
to make progress with its cultural transformation.
Inhaled Drug Delivery Segment
Bespak is the world's leading producer of inhaler valves by value. Valves are
the most technically complex element in a metered dose inhaler, and they are
critical to delivering consistent doses to patients. Bespak has completed the
development of more dry powder inhaler programmes and now manufactures more of
these devices than any other company.
Fuelled by the increasing prevalence and improved diagnosis of asthma and
chronic obstructive pulmonary disease, 2007 saw record sales of valves and dry
powder inhalers. The transition in the US market to the ozone-friendly
chlorofluorocarbon (CFC)-free inhaler formulations progressed faster than
anticipated, and to date our customers have gained a majority share of the US
CFC-free market for albuterol, which accounts for 50% of the US valve market.
Sales of the Diskus(TM) device for Advair(R) were also strong, and Bespak was
awarded a significant expansion of its Diskus(TM) capacity for the new indication
of Advair(R) for chronic obstructive pulmonary disease. Advair(R) is the second
largest prescription drug in the world. Sales also benefited from the first full
year's production of the Exubera(R) inhaled insulin device, which significantly
exceeded our expectations in inventory build-up prior to launch.
The Bespak Technologies division has developed a range of metering valves now
used on 30, or about two-thirds, of CFC-free inhaler formulations and has been
selected for trial in more than 50 other drug development programmes. As these
programmes roll out we are confident that our valve market share will grow from
the low 40% range to around half of the world market.
The Company has also taken an early leadership position in dose counters which
indicate the number of doses left in an inhaler. Dose counters are an emerging
market with unit prices approximately twice that of valves and are now mandatory
on all new metered dose inhaler drugs approved in the US. Bespak's new dose
counter is under active evaluation by a number of pharmaceutical companies, and
we believe that we have more programmes than any of our competitors. It is
expected that successful conclusion of these trials will lead to launch of dose
counter products in the critical US market in Bespak's 2008/9 financial year.
Bespak has two designs, one developed in-house and the other licensed through a
partnership with Bang & Olufsen Medicom.
The Device Services division provides a range of development, industrialisation
and manufacturing services which enable customers to market their own patented
designs of dry powder inhalers and other speciality devices. The Group invoices
its customers for product development work during the clinical trial stages and
subsequently is specified in the drug filing as the manufacturer of the device.
Given the significant investments made by both parties, Bespak typically
manufactures the device for as long as the drug is marketed.
Bespak's Device Services division has a portfolio of 15 drug delivery
programmes, of which five are new programmes won this year, five more are
already in development, and five are already marketed. Significantly, two of the
five new programmes are projects at two of the world's largest pharmaceutical
companies-one an early-stage and the other a late-stage opportunity. In
addition, SOSEI Co. Ltd. awarded Bespak the development of a sublingual spray
device for pain management, and Glide Pharma is working with the Company on its
Glide Solid Dose Injector technology.
Following the ramp-up in inventory prior to Exubera's launch this year, we have
received a reduced demand forecast. In June we embarked on a consultation
process with employees involved in the production of the Exubera(R) inhaler.
This is expected to produce a significant number of redundancies among the 160
employees engaged in producing the device at our Milton Keynes facility. One-off
costs for this will be covered by the customer. Sales of Exubera(R) inhalers
over the short- to medium-term are uncertain, and we continue to be in close
contact with the customer on future requirements. Due to our diversification
both of the Device Services portfolio and of the Company, we are not dependent
on Exubera(R) sales to attain our five-year growth goals.
Bespak's Inhaled Drug Delivery segment has the potential to grow substantially
over the next five years. This growth will require significant new manufacturing
capacity, and the Board is considering expansion plans for products currently in
development.
Anaesthesia Segment
Sales in 2007 were #31m, driven by growing demand for the Company's proprietary
airway management devices. These include three growth platforms: patented
breathing circuits, which connect a patient to a mechanical ventilator;
laryngeal tubes, which are placed in the patient's airway and are connected to
the breathing circuit; and the AIRTRAQ(R) disposable laryngoscope.
Bespak entered the anaesthesia and respiratory care space with the acquisition
of King Systems in December 2005. The integration of King Systems was completed
in 2007, and its management team was strengthened with the addition of new
personnel in Sales Management and Finance. A new European general manager for
King Systems has been appointed.
King Systems won two significant Group Purchasing Organisation contracts, with
Health Trust Purchasing and Ascension Health. Three important new products were
added: the KING LTS-D(TM) laryngeal tube, ErgoMask(TM), and AIRTRAQ(R), the
world's first disposable optical laryngoscope. These products have considerable
potential not only in the hospital market, but also in emergency medicine.
In April 2007 Bespak announced the two-step acquisition of Emergent Respiratory
Products of Irvine, California, with an initial investment of $3m. Emergent
sells specialty breathing machines and related devices used in the early
treatment of patients experiencing breathing difficulty from conditions such as
congestive heart failure. Emergent is one of three suppliers of continuous
positive airway pressure products, a rapidly growing embryonic market in the US.
Emergent's product is unique in that it features a valve that only delivers air
to patients when they inhale, therefore preserving the limited supply of oxygen
that ambulances are able to carry.
Emergent is highly complementary to King Systems. Bespak's initial investment
will fund the expansion of Emergent's pre-hospital sales organisation and expand
the Company's access to the growing emergency medicine market, where King
Systems' existing airway management products have considerable potential.
Acquisition Strategy
Bespak's corporate development effort is focused on building our Anaesthesia
business, where King Systems already has leading share positions. This is a
fragmented global market with many opportunities. Our goal is to build this
segment to a size comparable to Inhaled Drug Delivery and generate synergies
with King Systems' existing marketing and supply-chain infrastructure.
Proposed name change
Last year's closure of the Consumer Dispensers division removed Bespak's last
association with the packaging industry. We are now focused on medical devices
for inhaled drug delivery and anaesthesia. At the Annual General Meeting in
September a resolution will be proposed to change the Company's name to Consort
Medical plc.
Financial Review
Trading
Revenue increased by 44% to #126.5m (2006: #87.6m), growth coming from both of
the Group's business segments, including aerosol valves, Diskus(TM), and for the
first time, full-scale production of the Exubera(R) device.
Operating profit before special items increased by 33% to #19.5m (2006: #14.7m)
which included a full year's contribution from the acquisition of King Systems
Corporation. Excluding the effect of the acquisition, operating profit before
special items increased by 15% on sales that increased by 25%.
Profit before tax and special items (adjusted PBT) increased 24% to #17.4m
(2006: #14.0m)
In August 2006 we announced the closure of the Consumer Dispensers division and
this was completed during the year. Certain of the assets were sold and the
closure costs and asset write downs, net of the sale proceeds, were #2.1m. The
cash impact of the withdrawal was positive by #0.4m.
During the year we impaired to zero our investment in Bull Rubber Ltd.
Historically, Bull Rubber was a key rubber supplier for our CFC valves. With the
conversion to CFC-free propellants the investment is no longer appropriate and
it is planned to divest the shareholding in the near future. An impairment
charge of #0.2m appears in the profit and loss account.
After special items, profit before tax increased 10% to #15.7m (2006: #14.3m).
The acquisition of King Systems Corporation was financed principally by debt,
such that there is a net finance cost (including the pension scheme costs) of
#1.8m (2006: #0.7m). The financing expense has been partly fixed in the medium
term with an interest rate swap.
Earnings per share
Earnings per share increased 18% to 44.3p (2006 37.4p), as adjusted for
amortisation of intangibles and discontinued operations. Earnings per share on
an unadjusted basis were 34.8p (2006 37.9p).
Dividends
The Board is recommending a maintained final dividend per share of 12.1p (2006:
12.1p), such that the total dividend for the year amounts to 19.1p (2006:
19.1p). This remains a sector-leading dividend yield. The final dividend will
be paid on 26 October 2007 to shareholders on the register on 5 October 2007.
Dividend cover, based on earnings before special items, increased to 2.3 times
(2006: 1.9 times).
Goodwill and intangible assets
Upon acquisition of King Systems Corporation, intangible assets were capitalised
and are now being amortised over their useful lives. Goodwill, being the
difference between purchase consideration and net assets (including intangible
assets), was required to be capitalised and not amortised. At the year end, the
carrying value of goodwill (#35.8m) and intangible assets (#12.0m) were reviewed
and no impairment was required.
Cash Flow
Having assumed debt to finance the King Systems acquisition greater emphasis is
now being placed on efficient cash management. Cash generated from continuing
operations was particularly strong, increasing by 84% to #32.7m (2006: #17.8m).
There was a cash outflow of #5.9m for the final deferred consideration payment
due on the acquisition of King Systems Corporation, $3m (#1.6m) for the purchase
of 51% of Emergent Respiratory Products together with a cash outflow of #1.8m
reflecting additional payments agreed with the Trustees to fund the deficit in
the defined benefit pension scheme. Notwithstanding these payments together with
the dividend of #5.4m there was a net cash inflow of #2.8m.
Capital Expenditure
Capital expenditure of #7.9m (2006:#4.5m) exceeded depreciation for the
continuing business of (#6.7m) by #1.2m. Going forward, capital expenditure is
expected to be approximately two times depreciation as we invest in additional
valve capacity, dose counter infrastructure and new facilities to accommodate
the growing customer base.
Acquisitions
On 13th April we announced the first step of a two-stage acquisition of Emergent
Respiratory Products. We have acquired 51% of the share capital of Emergent and
will acquire the remaining 49% at a pre determined multiple of profits between
2009 and 2011 at an estimated cost of $15m - $18m (subject to a maximum deferred
consideration of $35m).
The Emergent business is highly complementary to that of King Systems and the
structure of the transaction allows for considerable financial upside with
limited risk or exposure.
Emergent will be treated as an associate, as Bespak does not have ultimate
control of the business. Furthermore, as the results for the 18 days of
ownership during the year are not material, no profit/loss has been taken in the
period to 28 April 2007.
Treasury
At the year end, the Group had net debt of #18.2m (2006: #27.8m) and undrawn
committed facilities of #22.3m (2006: #25.5m).
Transactions in foreign currencies are matched wherever possible and the net
position is hedged using forward contracts. A significant proportion of
operating and intangible assets are denominated in US dollars, which are largely
matched by US dollar borrowings, thereby hedging the balance sheet exposure.
Translation effects of exchange rate movements on the income statement are not
hedged.
The significant weakening of the US dollar during the year has had an impact on
the results of King Systems, however as there is not a full year comparative, a
constant exchange analysis has not been prepared.
The average rate of exchange between sterling and the US dollar was 1.91 (2006:
1.78), the year end rate of exchange was 2.0 (2006: 1.82).
Pensions
Bespak operates a defined benefit pension scheme in the UK that is closed to new
employees, who are eligible to join a defined contribution pension scheme.
As at 28 April 2007, the deficit was #10.8m under IAS 19 (2006:#12.0m) and the
Company will continue to make additional annual contributions of #1.8m in
agreement with the Trustees to settle the deficit. During the year an extensive
review of the defined benefit scheme was performed by the Company, and the
Company and the Trustees are currently in consultation over proposals that will
accelerate the settlement of the deficit and thereby reduce the exposure of the
Company to the Scheme going forward.
International Financial Reporting Standards
These results for the 52 weeks ended 28 April 2007 are prepared under
International Accounting Standards and International Financial Reporting
Standards (IFRS) as adopted by the European Union. There have been no new
standards during the year that have impacted the results of the Group.
Tax
The underlying tax charge on profit before tax and special items of 28% (2006:
27%) has benefited from utilisation of prior year US losses. These losses have
now been fully utilized so the effective tax rate will increase next year.
After the non-cash tax credit of #0.7m (2006: #0.3m) on the amortisation of
acquired intangible assets, the overall tax charge is 27% (2005: 25%). The tax
charge last year reflected the nil tax charge on the exceptional credit.
About Bespak plc
Bespak plc is a leader in medical devices for inhaled drug delivery and
anaesthesia. The Group develops drug delivery systems for the pharmaceutical
industry and disposable airway management products for critical care settings in
hospitals.
Bespak develops and manufactures metered dose inhaler valves, actuators,
compliance aids, dry powder devices, disposable face masks, breathing circuits
and laryngeal tubes. The Group has facilities in King's Lynn and Milton Keynes
in the UK, Indianapolis, Indiana and Kent, Ohio in the US, and a liaison office
in Mumbai, India. Bespak is a public company quoted on the full list of the
London Stock Exchange (LSE: BPK). For more information, please visit
www.bespak.com
Consolidated Income Statement
For the 52 weeks ended 28 April 2007
2007 2007 2007 2006 2006 2006
Before Special Total Before Special Total
special items special items
items (note 3) items (note 3)
Notes #000 #000 #000 #000 #000 #000
--------- ------- ------- --------- -------- ------
Continuing operations
Revenue 2 126,480 - 126,480 87,560 - 87,560
Operating expenses (106,955) (1,752) (108,707) (72,815) 242 (72,573)
--------- ------- ------- --------- -------- ------
Operating profit 2 19,525 (1,752) 17,773 14,745 242 14,987
Finance income 601 - 601 825 - 825
Finance expense (2,017) - (2,017) (1,030) - (1,030)
Other finance costs 4 (433) - (433) (501) - (501)
Share of post tax
(losses)/profits of
associate (27) - (27) 10 - 10
Impairment of
investment in associate (242) - (242) - - -
--------- ------- ------- --------- -------- -------
Profit before tax 17,407 (1,752) 15,655 14,049 242 14,291
Taxation 5 (4,907) 694 (4,213) (3,860) 290 (3,570)
--------- ------- ------- --------- -------- -------
Profit for the financial
period from continuing
operations 12,500 (1,058) 11,442 10,189 532 10,721
Loss for the period from
discontinued operations 6 (150) (1,485) (1,635) (399) - (399)
--------- ------- ------- --------- -------- -------
Profit for the financial
period 12,350 (2,543) 9,807 9,790 532 10,322
--------- ------- ------- --------- -------- -------
Basic earnings per
ordinary share
Continuing operations 7 40.6p 39.4p
Discontinued operations 7 (5.8p) (1.5p)
------- -------
Total 7 34.8p 37.9p
------- -------
Diluted earnings per
ordinary share
Continuing
operations 7 39.9p 38.8p
Discontinued
operations 7 (5.7p) (1.5p)
------- -------
Total 7 34.2p 37.3p
------- -------
Dividends #000 #000
Final dividend paid of
12.1p per share
(2006: 12.1p) 3,391 3,241
Interim dividend paid
of 7.0p per share
(2006: 7.0p) 1,989 1,960
------- -------
5,380 5,201
------- -------
Non-GAAP measure:
Continuing operations #000 #000
Adjusted profit before tax 17,407 14,049
Adjusted profit after tax 12,500 10,189
Adjusted earnings per share 44.3p 37.4p
Adjusted diluted earnings
per share 43.6p 36.8p
------- -------
Consolidated Balance Sheet at 28 April 2007
2007 2006
Notes #000 #000
Assets
Non-current assets
Property, plant and equipment 51,608 52,537
Goodwill 35,792 39,259
Other intangible assets 11,976 14,906
Investment in associates 1,555 269
Deferred taxation 552 -
-------- -------
101,483 106,971
-------- -------
Current assets
Inventories 10,453 9,571
Trade and other receivables 19,526 19,289
Current taxation receivable - 282
Cash and cash equivalents 17,274 9,782
-------- -------
47,253 38,924
-------- -------
Liabilities
Current liabilities
Borrowings 9 (25,829) (23,106)
Trade and other payables 8 (23,007) (15,080)
Current taxation payable (2,085) (3,850)
Provisions and other
liabilities (886) (6,147)
-------- -------
(51,807) (48,183)
-------- -------
Net current liabilities (4,554) (9,259)
Non-current liabilities
Borrowings 9 (9,625) (14,449)
Deferred taxation (5,048) (5,197)
Defined benefit
pension scheme deficit 10 (10,769) (12,002)
-------- -------
(25,442) (31,648)
-------- -------
Net assets 71,487 66,064
-------- -------
Shareholders' equity
Share capital 2,845 2,802
Share premium 30,205 28,837
Retained earnings 39,841 34,693
Other reserves (1,404) (268)
-------- -------
Total equity 11 71,487 66,064
-------- -------
The preliminary financial statements were approved by the Board on 11 July 2007
Consolidated Cash Flow Statement
For the 52 weeks ended 28 April 2007
2007 2006
Notes #000 #000
------ ------
Cash flows from operating activities
Operating profit from continuing operations 17,773 14,987
Depreciation 6,381 6,423
Amortisation 1,883 750
Impairment credit - (438)
Loss/(profit) on disposal of property, plant
and equipment 33 (272)
Share based payments 495 410
Increase in inventories (1,317) (1,504)
Increase in trade and other receivables (1,246) (692)
Increase in trade and other payables 7,821 21
Increase/(decrease) in provisions 1,047 (1,725)
Increase in financial instruments (138) (149)
------ ------
Cash generated from continuing operations 32,732 17,811
Cash flows from discontinued operations 6 45 (13)
Interest paid (2,166) (854)
Tax paid (4,375) (3,554)
------ ------
Net cash inflow from operating activities 26,236 13,390
------ ------
Cash flows from investing activities
Purchases of property, plant and equipment (7,347) (4,129)
Purchases of intangible assets (203) (182)
Proceeds from sale of property, plant and
equipment 20 3,402
Disposal of fixed asset investments - 83
Interest received 583 815
Dividend received from associate - 10
Acquisition of subsidiary (net of cash acquired) (5,883) (45,772)
Investment in associate (1,563) -
------ -------
Net cash used in investing activities from
continuing operations (14,393) (45,773)
Net cash from/(used in) investing activities -
discontinued operations 6 356 (205)
------- -------
Net cash used in investing activities (14,037) (45,978)
------- -------
Cash flows from financing activities
Net proceeds from issues of ordinary share
capital 1,411 403
Equity dividends paid to shareholders (5,380) (5,201)
New bank loans raised - 20,121
Repayment of amounts borrowed (3,671) (1,008)
Payments to fund defined benefit pension
scheme deficit 10 (1,775) (9,540)
------- -------
Net cash (used)/generated in financing
activities (9,415) 4,775
------- -------
Net increase/(decrease) in cash and
short-term borrowings 9 2,784 (27,813)
Effects of exchange rate changes 1,634 932
Cash and short-term borrowings at start
of period (9,466) 17,415
------- -------
Cash and short-term borrowings at end
of period 9 (5,048) (9,466)
------- -------
Cash and short-term borrowings consist of:
Cash and cash equivalents 17,274 9,782
Bank overdrafts and short-term loans (22,322) (19,248)
------- -------
Cash and short-term borrowings at end
of period 9 (5,048) (9,466)
------- -------
Consolidated Statement of Recognised Income and Expense
For the 52 weeks ended 28 April
2007
2007 2006
Notes #000 #000
--------- ---------
Fair value movements on cash flow hedges (121) 152
Deferred tax on fair value movements on
cash flow hedges - (46)
Current tax on fair value movements on
cash flow hedges 36 -
Exchange movements on translation of
foreign subsidiaries (1,305) (331)
Current tax on exchange movements 254 -
Deferred tax on exchange movements - 99
Deferred tax on share based payments 44 193
Current tax on share based payments 256 -
Actuarial losses on defined benefit
pension scheme 10 (106) (5,040)
Current tax on actuarial losses - 543
Deferred tax on actuarial losses 32 970
--------- ---------
Net loss recognised directly in equity (910) (3,460)
Profit for the financial period 9,807 10,322
--------- ---------
Total recognised income for the period 8,897 6,862
--------- ---------
Notes to the accounts
1. Basis of preparation
The preliminary announcement for the 52 weeks ended 28 April 2007 has been
prepared in accordance with International Accounting Standards and International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) at 28
April 2007.
The financial information in this preliminary announcement does not constitute
the Company's statutory accounts for the 52 weeks ended 28 April 2007 or the 52
weeks ended 29 April 2006, but is derived from those accounts. Statutory
accounts for 2006 have been delivered to the Registrar of Companies and those
for 2007 will be delivered after the Company's Annual General Meeting. The
auditors have reported on those accounts; their reports were unqualified and did
not contain statements under s237(2) or s237(3) Companies Act 1985.
2. Segmental information
(a) Revenue from continuing operations
Revenue by business 2007 2006
#000 #000
--------- ---------
Inhaled drug delivery 95,694 76,502
Anaesthesia 31,047 11,118
--------- ---------
Total revenues 126,741 87,620
Intra-segment sales (261) (60)
--------- ---------
Revenue 126,480 87,560
--------- ---------
Revenue by origin 2007 2006
#000 #000
--------- ---------
United Kingdom 95,694 72,568
United States of America 31,047 17,802
--------- ---------
Total revenues 126,741 90,370
Intra-segment sales (261) (2,810)
--------- ---------
Revenue 126,480 87,560
--------- ---------
Revenue by destination 2007 2006
#000 #000
--------- ---------
United Kingdom 23,614 21,272
United States of America 72,592 41,948
Europe 21,493 17,936
Rest of the World 8,781 6,404
--------- ---------
Revenue 126,480 87,560
--------- ---------
(b) Operating profit from continuing operations
2007 2006
#000 #000
--------- ---------
Inhaled drug delivery 14,572 13,125
Reallocation of corporate costs (note 6) - (399)
--------- ---------
Inhaled drug delivery - revised segmental basis 14,572 12,726
Special items - 901
--------- ---------
Inhaled drug delivery after special items 14,572 13,627
--------- ---------
Anaesthesia 4,953 2,019
Special items (1,752) (659)
--------- ---------
Anaesthesia after special items 3,201 1,360
--------- ---------
Operating profit before special items 19,525 15,144
Reallocation of corporate costs (note 6) - (399)
--------- ---------
Revised segmental basis 19,525 14,745
Special items (1,752) 242
--------- ---------
Operating profit after special items 17,773 14,987
--------- ---------
(c) Net assets
Net assets by business segment 2007 2006
#000 #000
--------- ---------
Continuing operations
Inhaled drug delivery 49,600 55,218
Anaesthesia 55,862 63,231
Unallocated net liabilities (33,975) (54,310)
--------- ---------
Total continuing operations 71,487 64,139
Discontinued operations - 1,925
--------- ---------
Net assets 71,487 66,064
--------- ---------
Exchange rates 2007 2006
--------- ---------
Average rate of exchange - USD 1.91 1.78
Closing rate of exchange - USD 2.00 1.82
3. Special items
2007 2006
#000 #000
--------- ---------
Continuing operations
Exceptional operating income - 901
Amortisation of acquisition related intangible
assets (1,752) (659)
--------- ---------
Special items before tax (1,752) 242
Taxation 694 290
--------- ---------
Special items after tax (1,058) 532
--------- ---------
Discontinued operations
Impairment charge (873) -
Plant closure costs (1,249) -
--------- ---------
Exceptional operating expense (2,122) -
Taxation 637 -
--------- ---------
Special items after tax (1,485) -
--------- ---------
Total special items after tax (2,543) 532
--------- ---------
4. Other finance costs
2007 2006
#000 #000
--------- ---------
Expected return on defined benefit scheme assets 2,485 1,657
Interest cost on defined benefit scheme
liabilities (2,657) (2,041)
--------- ---------
Interest net of expected return on plan assets (172) (384)
Unwinding of discount on deferred consideration (261) (117)
--------- ---------
Other finance costs (433) (501)
--------- ---------
5. Taxation
2007 2006
#000 #000
--------- ---------
UK corporation tax 4,023 3,780
Overseas taxation 321 289
Deferred taxation (131) (499)
--------- ---------
4,213 3,570
--------- ---------
6. Discontinued operations
2007 2006
Notes #000 #000
--------- ---------
Revenue 3,269 5,524
Operating expenses (3,483) (6,087)
--------- ---------
Operating loss (a) (214) (563)
Impairment provisions (b) (873) -
Closure costs (c) (1,249) -
--------- ---------
Loss before tax (2,336) (563)
Attributable taxation 701 164
--------- ---------
Loss after tax from discontinued operations (1,635) (399)
(a) The operating loss for the year ended 29 April 2006 as originally disclosed
was #962,000. Certain corporate and other costs previously allocated to this
business segment amounting to #399,000 have been reclassified into inhaled
drug delivery in the segmental analysis for the continuing businesses.
(b) An impairment provision was made against the carrying value of the fixed
assets in the consumer dispenser business. The assets were either scrapped
or sold during the year.
(c) Closure costs comprise employee severance and other costs associated with
the closure.
Cash flows from discontinued operations
2007 2006
#000 #000
--------- ---------
Loss before taxation (2,336) (563)
Depreciation 282 649
Impairment provisions 873 -
Decrease/(increase) in inventories 267 (2)
Decrease/(increase) in trade and other receivables 959 (97)
--------- ---------
Net cash flows from operating activities 45 (13)
Investing activities - proceeds from sale/(purchase)
of property, plant and equipment 356 (205)
--------- ---------
Cash flows from discontinued operations 401 (218)
--------- ---------
7. Earnings per share
2007 2006
#000 #000
The calculation of earnings per ordinary share is
based on the following:
Profit for the financial period 9,807 10,322
--------- ---------
Profit for the period from continuing operations 11,442 10,721
Add back: Special items after tax 1,058 (532)
--------- ---------
Adjusted profit for the financial period 12,500 10,189
--------- ---------
Loss for the period from discontinued operations (1,635) (399)
--------- ---------
Number Number
Weighted average number of ordinary shares in
issue 28,188,943 27,242,663
Shares owned by Employee Share Ownership Trusts - (8,071)
--------- ---------
Average number of ordinary shares in issue for
basic earnings 28,188,943 27,234,592
Dilutive impact of share options outstanding 455,465 422,960
--------- ---------
Diluted average number of ordinary shares in
issue 28,644,408 27,657,552
--------- ---------
Pence Pence
Basic earnings per ordinary share
Continuing operations 40.6p 39.4p
Discontinued operations (5.8p) (1.5p)
--------- ---------
Total 34.8p 37.9p
--------- ---------
Adjusted earnings per ordinary share
Continuing operations 44.3p 37.4p
--------- ---------
Diluted earnings per ordinary share
Continuing operations 39.9p 38.8p
Discontinued operations (5.7p) (1.5p)
--------- ---------
Total 34.2p 37.3p
--------- ---------
Adjusted diluted earnings per share
Continuing operations 43.6p 36.8p
--------- ---------
8. Trade and other payables
2007 2006
#000 #000
--------- ---------
Amounts falling due within one year:
Trade payables 9,915 7,137
Amounts payable to associated companies - trading 157 158
Other taxation and social security 606 692
Other creditors 5,764 3,461
Accruals and deferred income 6,565 3,632
--------- ---------
23,007 15,080
--------- ---------
9. Reconciliation of net cash flow to movement in net debt
Cash and cash Current Non-current Net debt
equivalents borrowings borrowings
#000 #000 #000 #000
---------- --------- --------- ---------
At 30 April 2006 9,782 (23,106) (14,449) (27,773)
Cash flow for the period 7,611 (4,827) - 2,784
Loan repayments included in
cash flow for the period - 3,671 - 3,671
Re-classify from non-current
to current borrowings - (3,671) 3,671 -
Effect of exchange rate
changes (119) 2,104 1,153 3,138
---------- --------- --------- ---------
At 28 April 2007 17,274 (25,829) (9,625) (18,180)
---------- --------- --------- ---------
Net debt at 28 April 2007
comprises:
Cash and short-term
borrowings 17,274 (22,322) - (5,048)
Bank term loan - (3,500) (9,625) (13,125)
Finance lease obligations - (7) - (7)
---------- --------- --------- ---------
At 28 April 2007 17,274 (25,829) (9,625) (18,180)
---------- --------- --------- ---------
10. Defined benefit pension scheme deficit
2007 2006
#000 #000
--------- ---------
Pension deficit at start of period 12,002 15,703
Current service costs 2,110 1,537
Expected return on plan assets (2,485) (1,657)
Interest cost 2,657 2,041
Actuarial losses 106 5,040
Regular employer contributions (1,846) (1,122)
Employer payments to fund deficit (1,775) (9,540)
--------- ---------
Pension deficit at end of period 10,769 12,002
--------- ---------
11. Consolidated statement of changes in shareholders' equity
2007 2006
#000 #000
--------- ---------
Total equity at start of period 66,064 57,998
Total recognised income and expense for the period 8,897 6,862
Recognition of share-based payments 495 410
Proceeds for sale of shares for employee options 1,411 314
Proceeds from release of own shares held - 88
Equity dividends paid (5,380) (5,201)
Issue of share capital - 5,593
--------- ---------
Total equity at end of period 71,487 66,064
--------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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