Interim Results
25 Maggio 2005 - 9:01AM
UK Regulatory
RNS Number:7132M
Eurodis Electron PLC
25 May 2005
25 May 2005 (For immediate release)
EURODIS ELECTRON PLC ("EURODIS")
INTERIM RESULTS ANNOUNCEMENT
for the ten months ended 31 March 2005
Eurodis Electron PLC, is a leading pan-European distributor of electronic
components.
KEY STATISTICS
Euro Euro Sterling Sterling
Ten months Twelve months ended Ten months ended Twelve months ended
ended 31 May 2004 31 March 2005 31 May 2004
31 March 2005
-------------------- -------------------- -------------------- --------------------
Sales 244.1m 327.9m 167.1m 225.5m
Operating loss before non recurring
costs & exceptional items and
goodwill (12.0m) (22.9m) (8.2m) (15.7m)
Loss before tax (20.5m) (74.1m) (14.0m) (50.9m)
Basic loss per ordinary share (1.93c) (18.13c) (1.32p) (12.45p)
Adjusted loss per ordinary share (1.50c) (7.41c) (1.03p) (5.09p)
HIGHLIGHTS
* Results in line with expectations
* Pre-tax loss on ordinary activities reduced by 37 percent (pro-rata) to
EUR 12.0m.
* Continuing progress in operating cost reduction - reduced by 20 percent to
an annualised EUR 60m. (2004: EUR 75.3m).
* Sales in ten months to 31 March 2005 were EUR 244.1m; 10.7 per cent down
on the same period ended 31 March 2004.
* Net Debt EUR 53.5m (31 May 2004 EUR 47.5m, 30 November EUR 56.8m).
Commenting on the results and prospects, Doug Rogers, Chairman, said:
"The Group continues to make progress and the level of trading losses is
substantially reduced from the prior year. The management team has delivered the
restructuring benefits it set out to do in its turnaround program and operating
costs have been materially reduced. Our order book has remained flat but with a
growing bias to the second half of this year. This has been reflected in
disappointing sales during April and May.
The announcement we made that we were to lose the Philips franchise from the
start of 2006 was disappointing but reflected their policy to focus only on
global distributors. Despite this setback the management is determined to win
replacement lines and early signs are encouraging.
The European Distribution market is changing: the franchise base is looking for
strong global or continental players, a move away from those that only operate
locally. Further distributor consolidation has begun and this creates
opportunities for the Group. The Board continues to pursue all options to
enhance shareholder value."
For further information, please contact:
Eurodis Electron PLC
Doug Rogers, Chairman 01737 242 464
Steven Swayne, Chief Executive 01737 242 464
Financial Dynamics
Billy Clegg 020 7269 7157
OPERATING REVIEW
Summary
Results are in line with expectations. The management team has delivered the
restructuring benefits it set out to do in its turnaround programme and
continues to look for further improvements going forward. The progress of the
Group over the past ten months to March 2005 has given customers more
confidence, enabling us to compete for business better than a year ago.
Our focus on our Advanced Technology Centres in Wireless, Displays/Embedded and
Power Supplies allows us to gain new business and the alliance with our business
partners, Advanced Technology Group (ATeG), has also begun well.
The level of trading losses in the ten month period were substantially reduced
following our recent restructuring, where we have taken our overheads to a much
lower breakeven point.
The announcement we made on 24 March 2005 that we were to lose the Philips
franchise from the start of 2006 was disappointing but reflected their policy to
focus only on global distributors. Despite this setback the management is
determined to win replacement lines and early signs are encouraging.
The European Distribution market is changing: the franchise base is looking for
strong global or continental players, a move away from those that only operate
locally. Further distributor consolidation has begun and this creates
opportunities for the Group. The Board continues to pursue all options to
enhance shareholder value.
Results and Dividends
Sales for the ten months ended 31 March 2005 were EUR 244.1m (compared to EUR
327.9m for the twelve months to 31 May 2004). Sales in Q1 2005 were 8.8 per
cent down on the same period in 2004, reflecting the loss of franchises during
2004 following the refinancing during that period, combined with a small fall in
the overall European market.
Gross profit margin during this period was in line with expectations at 17.0 per
cent (twelve months to 31 May 2004: 15.9 per cent) and has remained stable at
this level over the past four months since the last Interim statement for the
six months to November 2004.
Operating expenses (before goodwill and non recurring costs) for the ten months
ended 31 March 2005 totalled EUR 53.5m (twelve months to 31 May 2004: EUR
75.3m), reflecting the benefit of cost reduction actions taken in the period.
Exceptional and non recurring costs arising in this period in respect of these
cost reductions totalled EUR 3.8m. Following this work, our current annualised
operating expense run rate has fallen to EUR 60m (a 20 per cent decrease on
2004) and EUR 3m lower than previously announced. We expect these to improve
further over the next twelve months.
Net finance costs for the ten months totalled EUR 4.4m (twelve months to 31 May
2004 before exceptional items: EUR 6.5m). The reduction of 19 per cent pro-rata
reflects the lower level of debt during this period following the refinancing in
March 2004.
The total loss on ordinary activities before taxation, non recurring costs &
exceptional items and goodwill amortisation was EUR 16.4m compared with a loss
of EUR 29.4m in the full twelve month period last year. Non recurring operating
costs of EUR 1.0m, exceptional charges of EUR 2.8m and goodwill amortisation of
EUR 0.3m have also been charged which were better than expectations.
As a result of the resolution of some prior year tax issues the corporation tax
balances have been recalculated resulting in a credit to the profit and loss
account of EUR 0.9m in the ten months to 31 March 2005. Deferred tax balances
have also been restated and this has resulted in a credit to the profit and loss
account of EUR 1.7m.
Net borrowings at 31 March 2005 were EUR 53.5m (31 May 2004: EUR 47.5m, 30 Nov
2004: EUR 56.8m), the increase being attributable to operating and interest
outflows in the period to 31 March 2005.
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 and Collaborations
The Board believes that the European market has seen a decline in the first
quarter of 2005 against the same period in 2004, with poor order intake, as a
result of the inventory correction that we commented on in January 2005, and
this has contributed to the impact on our trading position. Notwithstanding
these demanding market conditions we have been encouraged by the level of new
business opportunities that have been generated in the form of new customers and
our network share rose on some of our larger lines. Our order book has remained
broadly flat during this period although the longer term element has risen
strongly suggesting an upturn in the second half of calendar year 2005.
We remain committed to developing our Technology Centres, which focus on the
design led element of our business. These help to improve our product mix and
are higher margin lines. In January we launched our third Centre, for Power
Supplies, adding to our Wireless and Displays/Embedded Centres. Our Power
Supplies Centre has benefited from the recently announced pan-European franchise
agreement with Delta Energy Systems, the world's largest manufacturer of Power
Supplies, which complements key suppliers including Astec, Vicor, Alcatel and
Bourns. These centres provide closer ties with our customers and an added value
service.
The co-operation with ATeG, announced in November, has now been implemented and
has effectively increased Eurodis' sales team by approximately 20 per cent
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. Even whilst this venture is still in its early days, we
are already beginning to realise the benefits of this increased scope of our
business.
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. Their position has been further strengthened by the recent merger with
its main competitor, Silicon Applications Corp., effectively doubling the size
of their organisation.
Under its "Safe Passage" programme, 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.
Franchises
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. Our
distribution centre, which won the European Supply Chain Excellence Award in
2003, continues to perform well and we are actively looking to provide third
party logistic solutions to our European partners.
Prior to the end of March we were continuing to sign new franchises and we made
progress with extending geographically our existing franchises. However, as
previously announced on 24 March 2005, the Company's franchise relationship with
Philips Semiconductors, representing approximately EUR 44m of the Group's annual
sales, will cease in January 2006. This was particularly disappointing given
the progress we had made with the line in the past six months. In order to
sustain the current business model this franchise needs to be replaced.
Management are focused on this and are encouraged by the response from some of
the larger semiconductor manufacturers, who see this as an opportunity for them
and discussions continue. Our key objective is to build up the confidence of all
our stakeholders; we are working very hard to achieve this.
The recent acquisition of Memec Group Holdings Ltd by Avnet Inc, both direct
competitors of Eurodis, has reduced the number of key players within the
European market. There are now only a few true pan-European distributors and we
have been encouraged by discussions with replacement suppliers we have had as a
result of this announcement.
Some of our main franchises have reorganised and moved their focus onto
distributors with strong global or continental players, moving away from those
that only operate locally. This should work in our favour.
Working Capital
The Group's close attention to working capital management has kept debtor days
to 66 at 31 March 2005 (31 May 2004: 68 days, 30 Nov 2004: 65 days) whilst
suppliers have continued to be paid in line with agreed terms. The further
steps taken to optimise inventory levels whilst maintaining good customer
service levels has reduced net inventory at 31 March 2005 to EUR 49.4m, nearly
EUR 7m lower than at 31 May 2004, with turns increased from 4.5 to 4.9. We see
further scope to reduce inventory levels to assist with the future funding of
the Group. Our banking facilities are predominantly secured on our debtor book
and inventory. The decline in sales in this ten month period combined with lower
inventory has had the effect of reducing our overall available facilities.
Board Changes and Staff
As previously announced, 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 left the Company on 12 February 2005 due to family health
reasons. Bill Alexander, formerly the Senior Non-Executive Director of the
Company, was appointed as Group Finance Director on 7 February 2005.
Our employees and agents have worked with great dedication in challenging
circumstances and the Board would like to thank them for all their ongoing
commitment and hard work. As part of recent reorganisations, we have had to make
the difficult decision to let some people go, and we would like to thank them
also.
Outlook
In our first interim announcement on 27 January 2005, we commented on the
continuing short term global inventory correction. Lead times continue to be
short, products are relatively easily available and the environment remains
competitive. This leads to continuing pricing pressure and offsets to some
extent our strategy to increase margins over time through, amongst other things,
better product mix. Our order book has remained flat but with a growing bias to
the second half of this year. This has been reflected in disappointing sales
during April and May and cash is therefore tighter than previously thought.
There is likely to be a small impact following the termination of the Philips
franchise during the rest of this year to September 2005 as we have retained the
line until the end of December 2005. We expect to see a greater impact in the
year to September 2006 and we believe that we need to gain either another large
franchise or a number of smaller franchises to compensate for this loss to
ensure that we reach a level of sales that will sustain our current business
model. To this end we are exploring some large franchise opportunities as a
result of the Philips loss and the acquisition of Memec Group Holdings Ltd by
Avnet Inc.
The European Distribution market is changing: the franchise base is looking for
strong global or continental players, a move away from those that only operate
locally. Further distributor consolidation has begun and this creates
opportunities for the Group. The Board continues to pursue all options to
enhance shareholder value.
Forthcoming announcements
Our provisional timetable for results' announcements is as follows:
Sixteen months to 30 September 2005 Late November 2005
Doug Rogers
Chairman
25 May 2005
GROUP PROFIT AND LOSS ACCOUNT
for the ten months ended 31 March 2005
Before Goodwill and Total Total
goodwill and exceptional ten months ended twelve months
exceptional items 31 March 2005 ended
items (note 3) 31 May 2004
(Unaudited) (Audited)
Notes EUR'm EUR'm EUR'm EUR'm
Sales 2 244.1 244.1 327.9
Gross profit 41.5 - 41.5 52.4
Non recurring costs 3 - - - (7.1)
Total gross profit 41.5 - 41.5 45.3
Operating expenses (53.5) (0.3) (53.8) (92.4)
Non recurring costs 3 (1.0) (2.8) (3.8) (18.0)
Total operating expenses (54.5) (3.1) (57.6) (110.4)
Operating loss (12.0) (0.3) (12.3) (40.0)
Non recurring costs 3 (1.0) (2.8) (3.8) (25.1)
Total operating loss (13.0) (3.1) (16.1) (65.1)
Net finance costs (4.4) - (4.4) (9.0)
Loss on ordinary activities before taxation
- Before non recurring costs & exceptional
items and goodwill (16.4) - (16.4) (29.4)
- Non recurring costs & exceptional items
and goodwill (1.0) (3.1) (4.1) (44.7)
Total loss on ordinary activities before
taxation (17.4) (3.1) (20.5) (74.1)
Taxation 2.8 - 2.8 (0.2)
Loss for the financial period (14.6) (3.1) (17.7) (74.3)
Potential preference dividends (0.6) (1.3)
Retained loss for the financial period (18.3) (75.6)
Loss per ordinary share of 1.5 cents 5
- on basic and diluted earnings (1.93c) (18.13c)
- on adjusted earnings (1.50c) (7.41c)
The above results relate to continuing operations.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the ten months ended 31 March 2005
Ten months ended Twelve months
ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Loss for the financial period (17.7) (74.3)
Actuarial gain recognised on the pension schemes - 1.0
Currency translation differences on foreign currency net investments (0.3) (0.9)
Total recognised gains and losses for the period (18.0) (74.2)
Prior year adjustment (0.6)
Total recognised gains and losses since previous annual report (74.8)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the ten months ended 31 March 2005
Ten months ended Twelve months
ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Loss for the financial period (17.7) (74.3)
Potential preference dividends (0.6) (1.3)
Retained loss for the financial period (18.3) (75.6)
Currency translation differences on foreign currency net investments (0.3) (0.9)
Actuarial gain recognised on the pension schemes - 1.0
Share capital issued (net of expenses) - 77.6
Unpaid preference dividends 0.6 1.3
Net (reduction)/increase in shareholders' funds (18.0) 3.4
Opening shareholders' funds 45.0 41.6
Closing shareholders' funds 27.0 45.0
GROUP BALANCE SHEET
as at 31 March 2005
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Fixed assets
Intangible assets: Goodwill 3.3 3.5
Tangible assets 31.3 33.9
Investments 0.2 0.2
34.8 37.6
Current assets
Stocks 49.4 56.4
Debtors 66.7 78.7
Cash at bank and in hand 4.3 6.3
120.4 141.4
Creditors - Amounts falling due within one year
Finance debt (35.8) (39.6)
Other creditors (57.1) (64.6)
(92.9) (104.2)
Net current assets 27.5 37.2
Total assets less current liabilities 62.3 74.8
Creditors - Amounts falling due after more than one year
Finance debt (22.0) (14.2)
Provision for liabilities and charges (2.0) (4.7)
Net assets excluding pension liabilities 38.3 55.9
Pension liabilities (11.3) (10.9)
Net assets 27.0 45.0
Capital and reserves
Called up share capital 35.9 35.9
Share premium account 159.9 159.9
Share capital redemption reserve 23.0 23.0
Unpaid preference dividends 2.7 2.1
Reserve for own shares (0.5) (0.5)
Profit and loss account (194.0) (175.4)
Shareholders' funds* 27.0 45.0
* Shareholders' funds are represented by:
Equity interests 2.6 21.2
Non-equity interests 24.4 23.8
27.0 45.0
GROUP CASH FLOW STATEMENT
for the ten months ended 31 March 2005
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
Notes EUR'm EUR'm EUR'm EUR'm
Net cash flow from operating activities 6 (1.0) (15.3)
Returns on investments and servicing of finance
Net interest paid (3.7) (8.0)
Interest element of finance lease payments (0.2) (0.4)
Net cash outflow from returns on investments
and servicing of finance (3.9) (8.4)
Taxation
UK corporation and overseas tax refunded/(paid) 1.3 (3.3)
Capital expenditure and investments
Purchase of tangible fixed assets (1.8) (2.3)
Proceeds from disposal of tangible fixed assets 0.1 0.6
Net cash outflow from capital expenditure and
investments (1.7) (1.7)
Acquisitions and disposals
Net outflow on acquisitions - (0.2)
Cash outflow before financing (5.3) (28.9)
Financing 8 11.2 48.0
Increase in cash 7 5.9 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:
Ten months ended Twelve months ended
31 March 2005 31 May 2004
Restated
(Unaudited) (Audited)
EUR'm EUR'm
United Kingdom 32.8 40.2
Rest of European Union 193.9 263.4
Other 17.4 24.3
244.1 327.9
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, NON RECURRING COSTS AND EXCEPTIONAL ITEMS
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Operating loss - continuing operations
Goodwill
- Goodwill amortisation 0.3 1.2
- Goodwill impairment - 15.9
0.3 17.1
Ordinary items
- Non recurring restructuring costs 1.0 1.4
Exceptional items
- Restructuring costs 2.8 5.9
- Debt restructuring costs (excluding finance issue costs) - 4.2
- Write down of tangible fixed assets - 6.5
- Stock provision - 7.1
2.8 23.7
Operating loss - goodwill and non recurring costs 4.1 42.2
Finance issue costs - exceptional items - 2.5
4.1 44.7
Non recurring restructuring costs comprise EUR 1.0m 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 2.8m comprise EUR 1.7m of termination
payments, EUR 0.8m of restructuring specialists' fees and EUR 0.3m of vacant
property lease costs.
4 DIVIDENDS
No interim ordinary dividend has been declared (twelve months to 31 May 2004:
nil). Potential preference dividends of EUR 0.6m (twelve months to 31 May 2004:
EUR 1.3m) have been charged to the profit and loss account in the ten months to
31 March 2005.
Cumulative potential preference dividends of EUR 2.7m (May 2004: EUR 2.1m) are
unpaid at 31 March 2005. 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.
5 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 ten months to 31 March
2005. 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 18.3m (twelve months to 31
May 2004: EUR 75.6m).
Adjusted loss per Ordinary Share
Adjusted loss per share is shown by reference to earnings before non recurring
costs & exceptional items and goodwill. 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:
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Loss for the financial period (17.7) (74.3)
Goodwill amortisation and impairment (note 3) 0.3 17.1
Non recurring costs & exceptional items (note 3) 3.8 27.6
(13.6) (29.6)
Potential preference dividends (0.6) (1.3)
Loss before non recurring costs & exceptional items and
goodwill (14.2) (30.9)
Adjusted loss per share (1.50c) (7.41c)
6 RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING
ACTIVITIES
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Operating loss (16.1) (65.1)
Depreciation 3.9 5.8
Exceptional write down of fixed assets - 6.5
Goodwill amortisation and impairment 0.3 17.1
Difference between pension charge and cash contributions - (0.5)
Decrease in stock 6.9 16.9
Decrease in debtors 11.5 27.3
Decrease in creditors (7.0) (23.8)
(Decrease)/increase in provisions (0.5) 0.5
Net cash flow from operating activities (1.0) (15.3)
Included in the net cash flow from operating activities in the ten months to 31
March 2005 is a cash outflow for non recurring costs of EUR 5.7m (twelve months
to 31 May 2004: EUR 7.9m)
7 RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET DEBT
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Increase in cash in the period 5.9 19.1
Decrease in finance leases 0.8 1.8
(Increase)/decrease in bank loans (12.0) 27.8
(Increase)/decrease in net debt from cash flows (5.3) 48.7
New finance leases - (0.1)
Currency translation differences (0.7) -
(Increase)/decrease in net debt in the period (6.0) 48.6
Net debt at beginning of period (47.5) (96.1)
Net debt at end of period (53.5) (47.5)
Analysis of Net Debt
Cash at bank and in hand 4.3 6.3
Overdrafts (17.2) (24.4)
Borrowings due within one year (18.6) (15.2)
Borrowings due after more than one year (22.0) (14.2)
Net debt at end of period (53.5) (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.
These facilities are secured by floating charges over the receivables and
inventory of the various companies. At 31 March 2005 the total debt included
secured bank loans and overdrafts of EUR 40.0m (May 2004: EUR 25.7m). Of these,
EUR 35.0m (May 2004: EUR 18.7m) are secured by floating charges over the assets
of the various companies. The remaining EUR 5.0m (May 2004: EUR 7.0m) 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 per cent. The total debt also
includes finance leases of EUR 3.9m (May 2004: EUR 4.7m) which are secured on
the assets which they are used to finance on fixed rate financing. The weighted
average fixed interest rate implicit on these finance leases is 7.5 per cent
(May 2004: 7.5 per cent). The remaining EUR 13.9m (May 2004: EUR 23.4m) of
total debt is unsecured.
Bank overdrafts of EUR 17.2m (May 2004: EUR 24.4m) are repayable on demand.
8 ANALYSIS OF CASH FLOW FROM FINANCING
Ten months ended Twelve months ended
31 March 2005 31 May 2004
(Unaudited) (Audited)
EUR'm EUR'm
Increase/(decrease) in bank loans 12.0 (27.8)
Capital element of finance lease rental payments (0.8) (1.8)
Cash inflow/(outflow) from increase/(decrease) in debt 11.2 (29.6)
Cash inflow from issue of ordinary share capital - 83.8
Cash outflow from expenses of share issue - (6.2)
Net cash inflow from financing activities 11.2 48.0
9 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 15,033,962
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 1.56 per cent of the total available votes.
10 YEAR END CHANGE
As previously announced, the Company has changed its year end to 30 September.
To effect this change there are two sets of interim results: the first covered
the six months ended 30 November 2004; this, the second report, covers the ten
months ended 31 March 2005. Audited results will be announced for the sixteen
month period to 30 September 2005 and the next Annual Report and Accounts will
cover this period.
11 STATUS OF INTERIM REPORT
The Interim Report was approved by the Directors on 25 May 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.
Pro forma Group profit and loss account, balance sheet and cash flow statements
in Sterling are shown in notes 12 to 14.
12 PRO FORMA GROUP PROFIT AND LOSS ACCOUNT IN STERLING
(Unaudited)
for the ten months ended 31 March 2005
Before goodwill Goodwill and Total Total
and exceptional exceptional ten months ended twelve months
items items ended
31 March 2005 31 May 2004
#'m #'m #'m #'m
Sales 167.1 167.1 225.5
Gross profit 28.4 - 28.4 36.0
Non recurring costs - - - (4.9)
Total gross profit 28.4 - 28.4 31.1
Operating expenses (36.6) (0.2) (36.8) (63.4)
Non recurring costs (0.7) (1.9) (2.6) (12.4)
Total operating expenses (37.3) (2.1) (39.4) (75.8)
Operating loss (8.2) (0.2) (8.4) (27.4)
Non recurring costs (0.7) (1.9) (2.6) (17.3)
Total operating loss (8.9) (2.1) (11.0) (44.7)
Net finance costs (3.0) - (3.0) (6.2)
Loss on ordinary activities before taxation
- Before non recurring costs & exceptional items
and goodwill (11.2) - (11.2) (20.2)
- Non recurring costs & exceptional items
and goodwill (0.7) (2.1) (2.8) (30.7)
Total loss on ordinary activities before taxation (11.9) (2.1) (14.0) (50.9)
Taxation 1.9 - 1.9 (0.1)
Loss for the financial period (10.0) (2.1) (12.1) (51.0)
Potential preference dividends (0.4) (0.9)
Retained loss for the financial period (12.5) (51.9)
Loss per ordinary share of 1 pence
- on basic and diluted earnings (1.32p) (12.45p)
- on adjusted earnings (1.03p) (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 1EUR:#0.6847. 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.
13 PRO FORMA GROUP BALANCE SHEET IN STERLING
(Unaudited)
as at 31 March 2005
31 March 2005 31 May 2004
#'m #'m
Fixed assets
Intangible assets: Goodwill 2.3 2.3
Tangible assets 21.5 22.6
Investments 0.1 0.1
23.9 25.0
Current assets
Stocks 34.0 37.6
Debtors 45.9 52.5
Cash at bank and in hand 3.0 4.2
82.9 94.3
Creditors - Amounts falling due within one year
Finance debt (24.6) (26.4)
Other creditors (39.3) (43.0)
(63.9) (69.4)
Net current assets 19.0 24.9
Total assets less current liabilities 42.9 49.9
Creditors - Amounts falling due after more than one year
Finance debt (15.1) (9.5)
Provision for liabilities and charges (1.4) (3.1)
Net assets excluding pension liabilities 26.4 37.3
Pension liabilities (7.8) (7.3)
Net assets 18.6 30.0
Capital and reserves
Called up share capital 22.8 22.8
Share premium account 101.4 101.4
Share capital redemption reserve 15.1 15.1
Unpaid preference dividends 1.9 1.5
Reserve for own shares (0.4) (0.4)
Profit and loss account (122.2) (110.4)
Shareholders' funds* 18.6 30.0
* Shareholders' funds are represented by:
Equity interests 3.4 15.2
Non-equity interests 15.2 14.8
18.6 30.0
The pro forma Group balance sheet in Sterling has been calculated using the
closing exchange rate of 1EUR:#0.6878 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 year ended
31 May 2004 are taken from the pro forma Group balance sheet published in the
Annual Report.
14 PRO FORMA GROUP CASH FLOW STATEMENT IN STERLING
(Unaudited)
for the ten months ended 31 March 2005
Ten months ended Twelve months ended
31 March 2005 31 May 2004
#'m #'m #'m #'m
Net cash flow from operating activities (0.8) (10.5)
Returns on investments and servicing of finance
Net interest paid (2.5) (5.5)
Interest element of finance lease payments (0.1) (0.3)
Net cash outflow from returns on investments and
servicing of finance (2.6) (5.8)
Taxation
UK corporation and overseas tax refunded/(paid) 0.9 (2.3)
Capital expenditure and investments
Purchase of tangible fixed assets (1.2) (1.6)
Proceeds from disposal of tangible fixed assets 0.1 0.4
Net cash outflow from capital expenditure and
investments (1.1) (1.2)
Acquisitions and disposals
Net outflow on acquisitions - (0.1)
Cash outflow before financing (3.6) (19.9)
Financing 7.7 33.0
Increase in cash 4.1 13.1
The pro forma Group cash flow statement in Sterling has been calculated using a
weighted average Sterling rate of 1EUR:#0.6847. 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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