Results - Directorate Change
27 Gennaio 2005 - 8:02AM
UK Regulatory
RNS Number:8601H
Eurodis Electron PLC
27 January 2005
EURODIS ELECTRON PLC ("EURODIS")
INTERIM RESULTS ANNOUNCEMENT
for the six months ended 30 November 2004
Eurodis Electron PLC, is a leading pan-European distributor of electronic
components.
KEY STATISTICS
Euro Euro Sterling Sterling
2004 2003 2004 2003
--------- --------- --------- ---------
Sales 154.6m 171.4m 105.1m 119.2m
Operating loss before non recurring
costs & exceptional items, goodwill
and non operating items (7.8m) (10.7m) (5.3m) (7.4m)
Loss before tax (13.2m) (29.8m) (9.0m) (20.7m)
Basic loss per ordinary share (1.42c) (13.19c) (0.96p) (9.17p)
Adjusted loss per ordinary
share (1.11c) (6.20c) (0.75p) (4.13p)
HIGHLIGHTS
* Results in line with expectations
* Pre-tax loss on ordinary activities reduced by 56 per cent to EUR 13.2m (2003:
EUR 29.8m)
* Continuing progress in operating cost reduction - now reduced to annualised
EUR 63m (2003: EUR 77.2m)
* Sales in six months to 30 November 2004; stable compared with six months ended
31 May 2004
* Net debt EUR 56.8m (2003: EUR 82.4m) within market expectations.
* Bill Alexander, currently Senior Non-Executive Director, to be appointed Group
Finance Director
Commenting on the results and prospects, Doug Rogers, Chairman, said:
"The Group continues to make progress. The level of trading losses is
substantially reduced from the prior year. Notwithstanding the competitive
environment, we expect to gain some business from new franchise arrangements,
from our increasing participation in high growth areas such as wireless and
power supply technologies, and from the alliances with our business partners
ATeG and WPG.
The reduction in operating costs has materially reduced the breakeven point and
this will assist in returning the business to profitability in due course.
Bill Alexander has made an excellent contribution since he joined the Board last
year and I am delighted that he is joining the executive team."
For further information, please contact:
Eurodis Electron PLC
Doug Rogers, Chairman 01737242464
Steven Swayne, Chief Executive 01737242464
Bell Pottinger
David Rydell /Zoe Sanders 020 78613232
OPERATING REVIEW
Summary
The refinancing has created a more stable environment for the Group, which in
turn has given customers more confidence, enabling us to compete for business,
especially annual contracts, better than a year ago. The level of trading losses
has been substantially reduced from the prior year and we are confident of
gaining business from net new franchise arrangements, our increasing
participation in high growth areas such as wireless and power supply
technologies, and the alliances with our business partners Advanced Technology
Group (ATeG) and World Peace Group (WPG). The cost reductions announced on 25
November 2004 have lowered the breakeven point and helped offset the short term
effects of the global inventory correction.
Results and Dividends
Sales for the six months ended 30 November 2004 were EUR 154.6m (2003: EUR
171.4m), a similar level to that achieved in the six months ended 31 May 2004.
Gross profit margin was in line with expectations at 17.1% (2003: 15.9% before
non recurring costs).
Operating expenses (before goodwill, non operating items and non recurring
costs) for the six months ended 30 November 2004 totalled EUR 34.3m (2003: EUR
38.0m), a decrease of 10%, reflecting the benefit of cost reduction actions
taken in the previous year. Further to our announcement of 25 November 2004 we
are continuing to review the operating cost base to ensure it is aligned with
the Group's requirements without affecting sales reach and additional savings of
EUR 6m per annum are being implemented to reduce the operating cost base to an
annual run rate of below EUR 63m. Exceptional and non recurring costs arising in
respect of these cost reductions total approximately EUR 5m, of which EUR 2.7m
has been charged in the six months ended 30 November 2004.
Net finance costs totalled EUR 2.5m (2003: EUR 3.1m). The reduction of 19%
reflects the lower levels of debt during the period.
The total loss on ordinary activities before taxation reduced by 56% to EUR
13.2m compared with a loss of EUR 29.8m last year. This result is after charging
goodwill amortisation of EUR 0.2m (2003: EUR 0.6m) and no losses on disposals of
fixed assets (2003: EUR 0.3m).
Net borrowings at 30 November 2004 were EUR 56.8m (2003: EUR 82.4m), a reduction
of 31% due mainly to the equity issue in March 2004. Net borrowings were EUR
9.3m higher than at 31 May 2004 due to operating and interest outflows in the
period to 30 November 2004. Net debt levels are within market expectations and
it is expected that there will be adequate headroom going forward.
The Directors are not recommending any dividend for the period and do not
anticipate paying any dividend on the preference shares for the foreseeable
future. The dividends on the preference shares accumulate and must be paid
before any payment of dividends to holders of Ordinary Shares. The unpaid
preference share dividends are disclosed as non equity interests in the Group's
balance sheet within capital and reserves.
The Market, Customers, Suppliers and Collaborations
We provide a comprehensive distribution network throughout Europe from our
state-of-the-art advanced logistics centre in the Netherlands and are,
therefore, an attractive route to market for component manufacturers. We
continue to sign new franchises to offset terminations and we have made some
progress with extending geographically our existing franchises.
The co-operation with ATeG has now been implemented and has effectively
increased Eurodis' sales team by approximately 20% without any material increase
in fixed costs. This will provide our customers with the benefit of being able
to fulfil more of their requirements through one sales contact and is expected
to lead to increased sales over the medium term. Suppliers will also benefit
from increased sales out of existing franchised distribution channels.
The alliance with World Peace Group in Asia has been further strengthened by
establishing a Hong Kong based joint venture company, Eurodis WPG Asia Limited.
This will provide a seamless logistics service for production transfers from
Europe to Asia Pacific, enabling us to tap into the rapidly growing Chinese
market.
Under its "Safe Passage" program, Eurodis is now able to provide customers with
a service to assure continuity of supply when transferring production to Eastern
Europe or to Asia. This enables customers to reduce the risk of production
transfers by outsourcing their component supply arrangements throughout the
transfer period.
Working Capital
The Group continues to pay close attention to working capital. Debtor days have
been further reduced through close management and days sales outstanding (DSO)
were 65 at 30 November 2004 compared with 66 in November 2003 and 68 in May
2004. Suppliers have continued to be paid in line with agreed terms. Further
steps have been taken to reduce inventory levels whilst maintaining good
customer service levels and net inventory at 30 November 2004 was nearly EUR 4m
lower than at 31 May 2004, with turns increased from 4.5 to 5.0.
Board Changes and Staff
On 5 November 2004 Nick Jefferies, Executive Director and Vice President, Sales,
resigned from the Board by mutual consent as part of a review of the Group
organisation and cost structure.
Peter Grant, Group Finance Director, has stepped down from the Board and, after
a handover period, will leave the Company on 12 February 2005 due to family
health reasons. He will be replaced by Bill Alexander, who is currently the
Senior Non-Executive Director of the Company, and is being appointed as Group
Finance Director with effect from 7 February 2005.
The Board would like to thank Peter for his contribution to the Company,
in particular for his support during the Company's restructuring, and wishes him
well for the future.
Mr. Alexander, 45, a Chartered Accountant, was previously Group Finance Director
for United Carriers plc and then Metroline plc. Prior to that he worked as a
senior manager at Mars Inc. and Guinness plc. He was appointed to the Board of
Eurodis on 7 June 2004 as a Non-Executive Director. At the same time, he was
appointed Chairman of the Audit Committee, a post he will relinquish on his
appointment as Group Finance Director.
The Group intends to appoint a new Non-Executive Director in due course.
Our employees and agents have worked with great dedication in challenging
circumstances and we thank them for their efforts. As part of the review
of Group organisation and cost structure we have had to make the difficult
decision to let some people go. We thank them also.
Outlook
On 28 September 2004 we stated that we believed a short term global inventory
correction was occurring. This continues to be the case. We also expect pricing
pressures to continue, at least for the short term, although we continue to take
steps to counteract this effect where possible.
Notwithstanding the competitive environment, we expect to gain some business
from new franchise arrangements, our increasing participation in high growth
areas such as wireless and power supply technologies, and the alliances with our
business partners ATeG and WPG. Additionally we will continue to target improved
margins through better product mix.
The reduction in operating costs has materially reduced the breakeven point and
this will assist in returning the business to profitability in due course.
Forthcoming announcements
Our provisional timetable for results' announcements is as follows:
Ten months to 31 March 2005 Late May 2005
Sixteen months to 30 September 2005 Late November 2005
Doug Rogers
Chairman
27 January 2005
GROUP PROFIT AND LOSS ACCOUNT
for the six months ended 30 November
Goodwill Total Total Total
Before amortisation Six months Six months Twelve
goodwill and non ended 30 ended 30 months ended
and non Exceptional operating November November 31 May
operating items items 2004 2003 2004
items (note 4) (note 3) (Unaudited) (Unaudited) (Audited)
Notes EUR'm EUR'm EUR'm EUR'm EUR'm EUR'm
Sales 2 154.6 154.6 171.4 327.9
======== ======= ======== ======== ======= ========
Gross profit 26.5 - - 26.5 27.3 52.4
Non recurring
costs 4 - - - - (7.1) (7.1)
-------- ------- -------- -------- ------- --------
Total gross
profit 26.5 - - 26.5 20.2 45.3
-------- ------- -------- -------- ------- --------
Operating
expenses (34.3) - (0.2) (34.5) (38.6) (92.4)
Non recurring
costs 4 (0.1) (2.6) - (2.7) (8.0) (18.0)
-------- ------- -------- -------- ------- --------
Total operating
expenses (34.4) (2.6) (0.2) (37.2) (46.6) (110.4)
-------- ------- -------- -------- ------- --------
Operating loss (7.8) - (0.2) (8.0) (11.3) (40.0)
Non recurring
costs 4 (0.1) (2.6) - (2.7) (15.1) (25.1)
-------- ------- -------- -------- ------- --------
Total operating
loss (7.9) (2.6) (0.2) (10.7) (26.4) (65.1)
Non operating
items 3 - - - - (0.3) -
-------- ------- -------- -------- ------- --------
Loss on ordinary
activities before
interest (7.9) (2.6) (0.2) (10.7) (26.7) (65.1)
Net finance
costs (2.5) - - (2.5) (3.1) (9.0)
-------- ------- -------- -------- ------- --------
Loss on ordinary activities
before taxation
- Before non recurring
costs & exceptional items,
goodwill and non operating
items (10.3) - - (10.3) (13.8) (29.4)
-------- ------- -------- -------- ------- --------
- Non recurring costs &
exceptional items, goodwill
and non operating items (0.1) (2.6) (0.2) (2.9) (16.0) (44.7)
-------- ------- -------- -------- ------- --------
Total loss on ordinary
activities before
taxation (10.4) (2.6) (0.2) (13.2) (29.8) (74.1)
Taxation 0.4 - - 0.4 0.2 (0.2)
-------- ------- -------- -------- ------- --------
Loss for the
financial period (10.0) (2.6) (0.2) (12.8) (29.6) (74.3)
======== ======= ========
Potential preference
dividends (0.6) (0.6) (1.3)
-------- ------- --------
Retained loss for the
financial period (13.4) (30.2) (75.6)
======== ======= ========
Loss per ordinary share
of 1.5 cents 6
- on basic and diluted
earnings * (1.42c) (13.19c) (18.13c)
- on adjusted
earnings * (1.11c) (6.20c) (7.41c)
======== ======= ========
The above results relate to continuing operations.
* The comparatives for the six months ended 30 November 2003 have been restated
for the issue of new Ordinary Shares on 2 March 2004.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 November
Six months Six months Twelve
ended 30 ended 30 months ended
November November 31 May
2004 2003 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Loss for the financial period (12.8) (29.6) (74.3)
Actuarial gain recognised on the
pension schemes - - 1.0
Currency translation differences on
foreign currency net investments (0.6) (0.2) (0.9)
--------- --------- ---------
Total recognised gains and losses for
the period (13.4) (29.8) (74.2)
=========
Prior year adjustment 0.4 (0.6)
--------- ---------
Total recognised gains and losses
since previous annual report (29.4) (74.8)
========= =========
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 30 November
Six months
Six months ended 30 Twelve
ended 30 November months ended
November 2003 31 May
2004 Restated 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Loss for the financial period (12.8) (29.6) (74.3)
Potential preference dividends (0.6) (0.6) (1.3)
--------- --------- ---------
Retained loss for the financial period (13.4) (30.2) (75.6)
Currency translation differences on
foreign currency net investments (0.6) (0.2) (0.9)
Actuarial gain recognised on the
pension schemes - - 1.0
Share capital issued - 22.8 77.6
Unpaid preference dividends 0.6 0.6 1.3
--------- --------- ---------
Net reduction in shareholders' funds (13.4) (7.0) 3.4
Opening shareholders' funds as
previously stated 45.0 42.7 41.6
Prior year adjustment for investment
in own shares (0.1)
Prior year adjustment for pensions (1.0)
---------
Opening shareholders' funds restated 41.6
--------- --------- ---------
Closing shareholders' funds 31.6 34.6 45.0
========= ========= =========
GROUP BALANCE SHEET
as at 30 November
30 November
30 November 2003 31 May
2004 Restated 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Fixed assets
Intangible assets: Goodwill 3.3 19.9 3.5
Tangible assets 31.7 43.7 33.9
Investments 0.2 0.2 0.2
--------- --------- ---------
35.2 63.8 37.6
--------- --------- ---------
Current assets
Stocks 52.5 50.7 56.4
Debtors 72.9 89.6 78.7
Cash at bank and in hand 5.4 6.4 6.3
--------- --------- ---------
130.8 146.7 141.4
--------- --------- ---------
Creditors - Amounts falling due within
one year
Finance debt (40.7) (54.4) (39.6)
Other creditors (57.0) (71.6) (64.6)
--------- --------- ---------
(97.7) (126.0) (104.2)
--------- --------- ---------
--------- --------- ---------
Net current assets 33.1 20.7 37.2
--------- --------- ---------
Total assets less current liabilities 68.3 84.5 74.8
Creditors - Amounts falling due after
more than one year
Finance debt (21.5) (34.4) (14.2)
Provision for liabilities and charges (4.0) (3.2) (4.7)
--------- --------- ---------
Net assets excluding pension
liabilities 42.8 46.9 55.9
Pension liabilities (11.2) (12.3) (10.9)
--------- --------- ---------
Net assets 31.6 34.6 45.0
========= ========= =========
Capital and reserves
Called up share capital 35.9 47.1 35.9
Share premium account 159.9 116.7 159.9
Share capital redemption reserve 23.0 0.2 23.0
Unpaid preference dividends 2.7 1.4 2.1
Reserve for own shares (0.5) (0.5) (0.5)
Profit and loss account (189.4) (130.3) (175.4)
--------- --------- ---------
Shareholders' funds* 31.6 34.6 45.0
========= ========= =========
* Shareholders' funds are represented by:
Equity interests 7.2 11.5 21.2
Non-equity interests 24.4 23.1 23.8
--------- --------- ---------
31.6 34.6 45.0
========= ========= =========
The balance sheet for 30 November 2003 has been restated as detailed in note 12
GROUP CASH FLOW STATEMENT
for the six months ended 30 November
Six months Six months Twelve months
ended 30 ended 30 ended
November 2004 November 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm EUR'm EUR'm EUR'm
Net cash flow from
operating activities
(note 7) (5.5) (2.5) (15.3)
Returns on investments and
servicing of finance
Net interest paid (2.0) (2.9) (8.0)
Interest element of
finance lease payments (0.1) (0.2) (0.4)
-------- -------- -------
Net cash outflow from
returns on investments
and servicing of finance (2.1) (3.1) (8.4)
Taxation
UK corporation and overseas
tax paid - (1.8) (3.3)
Capital expenditure and
investments
Purchase of tangible
fixed assets (0.7) (1.4) (2.3)
Proceeds from disposal of
tangible fixed assets 0.1 0.2 0.6
-------- -------- -------
Net cash outflow from
capital expenditure and
investments (0.6) (1.2) (1.7)
Acquisitions and disposals
Net outflow on acquisitions - - (0.2)
-------- -------- -------- ------- ------- -------
Cash outflow before
financing (8.2) (8.6) (28.9)
Financing (note 9) 10.8 10.0 48.0
-------- -------- -------- ------- ------- -------
Increase in cash
(note 8) 2.6 1.4 19.1
======== ======== ======== ======= ======= =======
1 ACCOUNTING POLICIES
The financial statements are prepared in accordance with applicable accounting
standards, all of which have been applied consistently throughout the period and
the preceding year. These accounting policies are set out in the Group's
published accounts for the year ended 31 May 2004.
2 ANALYSIS OF RESULTS
Eurodis Electron PLC is a pan-European distributor of electronic components and
associated products with operations in eighteen European countries. The analysis
of sales by geographical origin for continuing operations is as follows:
Six months ended Twelve months
Six months ended 30 November 2003 ended 31 May 2004
30 November 2004 Restated Restated
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
United Kingdom 20.8 20.5 40.2
Rest of European Union 123.1 137.8 263.4
Other 10.7 13.1 24.3
----------- ----------- -----------
154.6 171.4 327.9
=========== =========== ===========
The comparative figures have been restated for new member states added to the
European Union in 2004, previously reported within 'Other'.
In the opinion of the Directors, further segmental information would be
seriously prejudicial to the interests of the Group.
3 GOODWILL AND NON OPERATING ITEMS
Six months Six months
ended 30 ended 30 Twelve
November November months ended
2004 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Operating profit
Goodwill amortisation 0.2 0.6 1.2
Goodwill impairment - - 15.9
--------- --------- ---------
0.2 0.6 17.1
Non operating items
- Loss on disposal of fixed assets - 0.3 -
--------- --------- ---------
0.2 0.9 17.1
========= ========= =========
4 NON RECURRING COSTS & EXCEPTIONAL ITEMS
Six months Six months
ended 30 ended 30 Twelve
November November months ended
2004 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Operating loss - continuing
operations
Ordinary items
- Non recurring restructuring costs 0.1 1.2 1.4
Exceptional items
- Restructuring costs 2.6 2.1 5.9
- Debt restructuring costs (excluding
finance issue costs) - 4.7 4.2
- Write down of tangible fixed assets - - 6.5
- Stock provision - 7.1 7.1
--------- --------- ---------
2.6 13.9 23.7
Operating loss non recurring costs 2.7 15.1 25.1
Finance issue costs - exceptional
items - - 2.5
--------- --------- ---------
2.7 15.1 27.6
========= ========= =========
Non recurring restructuring costs comprise EUR 0.1m of salary costs incurred for
the period from the formal Board agreement of terminations to the date that the
implementation of these terminations took place.
Operating exceptional items of EUR 2.6m comprise EUR 1.9m of termination
payments, EUR 0.5m of restructuring specialists' fees and EUR 0.2m of vacant
property lease costs.
5 DIVIDENDS
No interim ordinary dividend has been declared (2003: nil). Potential preference
dividends of EUR 0.6m (2003: EUR 0.6m) have been charged to the profit and loss
account in the six months to 30 November 2004.
Cumulative potential preference dividends of EUR 2.7m (2003: EUR 1.4m) are
unpaid at 30 November 2004. Potential preference dividends will continue to be
charged to the profit and loss account until payment is made, which must be
before any future ordinary dividends are paid.
6 LOSS PER ORDINARY SHARE
Basic and fully diluted loss per Ordinary Share
Basic and diluted loss per share is calculated on the basis of the weighted
average of 946,394,031 Ordinary Shares in issue for the six months to 30
November 2004. Comparatives for the six months have been restated for the Firm
Placing and Placing and Open Offer of shares on 2 March 2004 to a weighted
average of 228,882,970 (previously 127,341,413) Ordinary Shares. The calculation
excludes shares held in the Eurodis Electron PLC Share Ownership Plan, which are
treated as cancelled. The loss for the financial period, after potential
preference dividends, is EUR 13.4m (2003: EUR 30.2m).
Adjusted loss per Ordinary Share
Adjusted loss per share is shown by reference to earnings before goodwill, non
recurring costs & exceptional items and non operating items. Adjusted earnings
per share is presented as the Directors consider that this gives valuable
additional information about the underlying performance of the Group and is
calculated as follows:
Six months
Six months ended 30
ended 30 November Twelve
November 2003 months ended
2004 Restated 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Loss for the financial period (12.8) (29.6) (74.3)
Goodwill amortisation and impairment
(note 3) 0.2 0.6 17.1
Non operating items (note 3) - 0.3 -
Non recurring costs &
exceptional items (note 4) 2.7 15.1 27.6
-------- -------- ---------
(9.9) (13.6) (29.6)
Potential preference dividends (0.6) (0.6) (1.3)
Loss before goodwill amortisation, non -------- -------- ---------
recurring costs & exceptional items
and non operating items (10.5) (14.2) (30.9)
======== ======== =========
Adjusted earnings per share (1.11c) (6.20c) (7.41c)
======== ======== =========
7 RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING ACTIVITIES
Six months Six months
ended 30 ended 30 Twelve
November November months ended
2004 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Operating loss (10.7) (26.4) (65.1)
Depreciation 2.3 3.1 5.8
Exceptional write down of fixed
assets - - 6.5
Goodwill amortisation and impairment 0.2 0.6 17.1
Difference between pension charge
and cash contributions - - (0.5)
Decrease in stock 3.9 22.5 16.9
Decrease in debtors 5.5 13.3 27.3
Decrease in creditors (6.6) (15.0) (23.8)
(Decrease)/increase in provisions (0.1) (0.6) 0.5
-------- -------- ---------
Net cash flow from operating
activities (5.5) (2.5) (15.3)
======== ======== =========
Included in the net cash flow from operating activities is a cash outflow for
non recurring costs of EUR 4.9m (2003: EUR8.0m)
8 RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET DEBT
Six months
ended 30 Six months Twelve
November ended 30 months ended
2004 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Increase in cash in the period 2.6 1.4 19.1
Decrease in finance leases 0.5 1.3 1.8
(Increase)/decrease in bank loans (11.3) 11.5 27.8
-------- -------- ---------
(Increase)/decrease in net debt from
cash flows (8.2) 14.2 48.7
New finance leases - - (0.1)
Currency translation differences (1.1) (0.5) -
-------- -------- ---------
(Increase)/decrease in net debt in
the period (9.3) 13.7 48.6
Net debt at beginning of period (47.5) (96.1) (96.1)
-------- -------- ---------
Net debt at end of period (56.8) (82.4) (47.5)
======== ======== =========
Analysis of Net Debt
Cash at bank and in hand 5.4 6.4 6.3
Overdrafts (21.9) (45.9) (24.4)
Borrowings due within one year (18.8) (8.5) (15.2)
Borrowings due after more than one year (21.5) (34.4) (14.2)
-------- -------- ---------
Net debt at end of period (56.8) (82.4) (47.5)
======== ======== =========
Funding is currently provided through local facilities and a structured asset
finance facility which covers the U.K., Germany, France, Sweden and Benelux.
This facility is secured by a floating charge over the receivables and inventory
of the various companies.
Bank overdrafts of EUR 21.9m (2003: EUR 45.9) are repayable on demand.
At 30 November 2004 there were secured bank loans and overdrafts of EUR 38.8m
(2003: EUR 63.2m). Of these EUR 32.8m (2003: EUR 55.2) are secured by floating
charges over the assets of the various companies. The remaining EUR 6.0m (2003:
EUR 8.0m) relates to a long term bank loan secured on the assets of the advanced
logistics centre which is funded on fixed rate financing of 4.85%.
Finance leases of EUR 4.3m (2003: 5.0m) are secured on the assets which they are
used to finance on fixed rate financing. The weighted average fixed interest
rate implicit on the finance leases is 7.5% (2003: 7.4%).
9 ANALYSIS OF CASH FLOW FROM FINANCING
Six months Six months
ended 30 ended 30 Twelve
November November months ended
2004 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
EUR'm EUR'm EUR'm
Increase/(decrease) in bank loans 11.3 (11.5) (27.8)
Capital element of finance lease
rental payments (0.5) (1.3) (1.8)
-------- -------- ---------
Cash inflow/(outflow) from
increase/(decrease) in debt 10.8 (12.8) (29.6)
Cash inflow from issue of ordinary
share capital - 25.5 83.8
Cash outflow from expenses of share
issue - (2.7) (6.2)
-------- -------- ---------
Net cash inflow from financing
activities 10.8 10.0 48.0
======== ======== =========
10 PREFERENCE SHARES
The conversion rights on the 6.5% Convertible Cumulative Redeemable Preference
shares of #1 each have now expired though the Company has the right to redeem at
par any shares of this class that remain in issue. Normally the preference
shares do not carry voting rights in ordinary shareholders' meetings, but they
do carry such rights when the preference dividend is in arrears, as is currently
the case. The voting rights are equivalent to the conversion rights which
applied just before those rights expired and are the equivalent of 7,808,309
ordinary shares. Based on the current ordinary shares in issue, which total
946,394,031 (excluding shares held in the Eurodis Electron PLC Share Ownership
Plan, which are treated as cancelled), the preference shares may exercise votes
amounting to 0.82% of the total available votes.
11 YEAR END CHANGE
As previously announced, the Company has changed its year end to 30 September.
To effect this change there will be two sets of interim results: this one covers
the six months ended 30 November 2004, the next one will cover the ten months
ending 31 March 2005. Audited results will then be announced for the sixteen
month period to 30 September 2005 and the next Annual Report and Accounts will
cover this period.
12 STATUS OF INTERIM REPORT
The Interim Report was approved by the Directors on 27 January 2005. It should
be read in conjunction with the 2004 Annual Report, which contains the most
recent audited financial statements. The financial information contained in this
report does not constitute statutory accounts. The figures for the year ended 31
May 2004 have been extracted from the Group's published accounts for that year
which have been reported on by the Company's auditors and delivered to the
Registrar of Companies. The report of the auditors was unqualified and did not
contain a statement under section 237 (2) or (3) of the Companies Act. The
figures for the six months ended 30 November 2003 were extracted from the 2003
interim statement, which was unaudited, and have been restated in line with the
accounting policy changes detailed in the 2004 Annual Report. The restatements
relate to the reclassification of agents retirement cost provision in Italy as
pension liabilities, previously disclosed in other creditors, the adoption of
FRS 17 "Retirement Benefits" and the adoption of UITF 38 "Accounting for ESOP
trusts".
Pro forma Group profit and loss account, balance sheet and cash flow statements
in Sterling are shown in notes 13 to 15.
13 PRO FORMA GROUP PROFIT AND LOSS ACCOUNT IN STERLING
(Unaudited)
for the six months ended 30 November
Before Goodwill Total Total
goodwill Amortisation Six months Six months Total
and non and non items ended 30 ended 30 Twelve
operating Exceptional operating November November months ended
items items items 2004 2003 31 May 2004
#'m #'m #'m #'m #'m #'m
Sales 105.1 105.1 119.2 225.5
======== ======== ======== ======== ======= ========
Gross profit 18.0 - - 18.0 19.0 36.0
Non recurring
costs - - - - (4.9) (4.9)
-------- -------- -------- -------- ------- --------
Total gross profit 18.0 - - 18.0 14.1 31.1
-------- -------- -------- -------- ------- --------
Operating expenses (23.3) - (0.1) (23.4) (26.8) (63.4)
Non recurring
costs (0.1) (1.8) - (1.9) (5.6) (12.4)
-------- -------- -------- -------- ------- --------
Total operating
expenses (23.4) (1.8) (0.1) (25.3) (32.4) (75.8)
-------- -------- -------- -------- ------- --------
Operating
loss (5.3) - (0.1) (5.4) (7.8) (27.4)
Non recurring
costs (0.1) (1.8) - (1.9) (10.5) (17.3)
-------- -------- -------- -------- ------- --------
Total operating
loss (5.4) (1.8) (0.1) (7.3) (18.3) (44.7)
Non operating
items - - - - (0.2) -
-------- -------- -------- -------- ------- --------
Loss on ordinary
activities before
interest (5.4) (1.8) (0.1) (7.3) (18.5) (44.7)
Net finance costs (1.7) - - (1.7) (2.2) (6.2)
-------- -------- -------- -------- ------- --------
Loss on ordinary activities
before taxation
- Before non recurring costs
& exceptional items, goodwill
and non operating items (7.0) - - (7.0) (9.6) (20.2)
-------- -------- -------- -------- ------- ---------
- Non recurring costs &
exceptional items, goodwill
and non operating items (0.1) (1.8) (0.1) (2.0) (11.1) (30.7)
-------- -------- -------- -------- ------- --------
Total loss on ordinary
activities before taxation (7.1) (1.8) (0.1) (9.0) (20.7) (50.9)
Taxation 0.3 - - 0.3 0.1 (0.1)
-------- ------- --------
Loss for the
financial period (6.8) (1.8) (0.1) (8.7) (20.6) (51.0)
======== ======== ========
Potential preference
dividends (0.4) (0.4) (0.9)
Retained loss for the
financial period (9.1) (21.0) (51.9)
======== ======= ========
Loss per ordinary
share of 1 pence
- on basic and diluted
earnings (0.96p) (9.17p) (12.45p)
- on adjusted
earnings (0.75p) (4.13p) (5.09p)
======== ======= ========
The above results relate to continuing operations.
The pro forma Group profit and loss account in Sterling has been calculated
using a weighted average Sterling rate of 1Euro:#0.6801. The figures for the six
months ended 30 November 2003 are taken from the pro forma Group profit and loss
account published in the unaudited Interim Report for 2003. The loss per share
for this period has been restated for the issue of new Ordinary Shares on 2
March 2004. The figures for the year ended 31 May 2004 are taken from the pro
forma Group profit and loss account published in the Annual Report.
14 PRO FORMA GROUP BALANCE SHEET IN STERLING
(Unaudited)
as at 30 November
30 November
30 November 2003 31 May
2004 Restated 2004
#'m #'m #'m
Fixed assets
Intangible assets: Goodwill 2.3 13.9 2.3
Tangible assets 22.0 30.5 22.6
Investments 0.1 0.1 0.1
--------- --------- ---------
24.4 44.5 25.0
--------- --------- ---------
Current assets
Stocks 36.5 35.3 37.6
Debtors 50.7 62.5 52.5
Cash at bank and in hand 3.8 4.5 4.2
--------- --------- ---------
91.0 102.3 94.3
--------- --------- ---------
Creditors - Amounts falling due within one
year
Finance debt (28.3) (38.0) (26.4)
Other creditors (39.6) (49.9) (43.0)
--------- --------- ---------
(67.9) (87.9) (69.4)
--------- --------- ---------
--------- --------- ---------
Net current assets 23.1 14.4 24.9
--------- --------- ---------
Total assets less current liabilities 47.5 58.9 49.9
Creditors - Amounts falling due after more than
one year
Finance debt (14.9) (24.0) (9.5)
Provision for liabilities and charges (2.8) (2.2) (3.1)
--------- --------- ---------
Net assets excluding pension liabilities 29.8 32.7 37.3
Pension liabilities (7.8) (8.6) (7.3)
--------- --------- ---------
Net assets 22.0 24.1 30.0
========= ========= =========
Capital and reserves
Called up share capital 22.8 30.0 22.8
Share premium account 101.4 72.5 101.4
Share capital redemption reserve 15.1 0.1 15.1
Unpaid preference dividends 1.9 1.0 1.5
Reserve for own shares (0.4) (0.4) (0.4)
Profit and loss account (118.8) (79.1) (110.4)
--------- --------- ---------
Shareholders' funds* 22.0 24.1 30.0
========= ========= =========
* Shareholders' funds are represented by:
Equity interests 6.8 9.8 15.2
Non-equity interests 15.2 14.3 14.8
--------- --------- ---------
22.0 24.1 30.0
========= ========= =========
The pro forma Group balance sheet in Sterling has been calculated using the
closing exchange rate at 30 November 2004 of 1EUR:#0.6953 except for pre euro
conversion balances for called up share capital, share premium and share capital
redemption reserve which have been fixed in Sterling at the rate at 23 April
2002 (1EUR:#0.6139) and subsequent share capital movements which have been
translated at the prevailing rate at the time of the transaction. The figures
for the six months ended 30 November 2003 are taken from the pro forma Group
balance sheet published in the unaudited Interim Report for 2003 and have been
restated for accounting policy alignment. The figures for the year ended 31 May
2004 are taken from the pro forma Group balance sheet published in the Annual
Report.
15 PRO FORMA GROUP CASH FLOW STATEMENT IN STERLING
(Unaudited)
for the six months ended 30 November
Six months Six months Twelve months
ended ended ended
30 November 2004 30 November 2003 31 May 2004
(Unaudited) (Unaudited) (Audited)
#'m #'m #'m #'m #'m #'m
Net cash flow from operating
activities (3.7) (1.7) (10.5)
Returns on investments and
servicing of finance
Net interest paid (1.4) (2.0) (5.5)
Interest element of
finance lease payments (0.1) (0.1) (0.3)
-------- -------- -------
Net cash outflow from
returns on investments
and servicing of finance (1.5) (2.1) (5.8)
Taxation
UK corporation and overseas
tax paid - (1.2) (2.3)
Capital expenditure and
investments
Purchase of tangible fixed
assets (0.5) (1.0) (1.6)
Proceeds from disposal of
tangible fixed assets 0.1 0.1 0.4
-------- -------
Net cash outflow from
capital expenditure and
investments (0.4) (0.9) (1.2)
Acquisitions and disposals
Net outflow on acquisitions - - (0.1)
-------- -------- -------- ------- ------- -------
Cash outflow before
financing (5.6) (5.9) (19.9)
Financing 7.3 7.0 33.0
-------- -------- -------- ------- ------- -------
Increase in cash 1.7 1.1 13.1
======== ======== ======== ======= ======= =======
The pro forma Group cash flow statement in Sterling has been calculated using a
weighted average Sterling rate of 1EUR:#0.6801. The figures for the six months
ended 30 November 2003 are taken from the pro forma Group cash flow statement
published in the unaudited Interim Report for 2003.The figures for the year
ended 31 May 2004 are taken from the pro forma Group cash flow statement
published in the Annual Report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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