RNS Number:3997L
Genus PLC
22 May 2003
22 May 2003
GENUS plc
Preliminary Results for the year ended 31st March 2003
RECORD TRADING RESULTS
Genus plc, the international bovine genetics company, announces another strong
set of results for the year ended 31st March 2003.
Group Highlights 2003 2002 Change
Group turnover (excluding discontinued activities) #169.7m #154.4m +10%
Underlying* profit before tax #10.6m #8.5m +25%
Profit before tax #5.1m #2.9m +76%
Underlying* EPS 22.2p 16.5p +35%
Basic EPS 8.3p 1.7p +488%
Full Year dividend 5.5p 4.75p +16%
Net debt #12.2m #15.4m -21%
Gearing 26% 32%
*On continuing operations before exceptional items and amortisation of goodwill
* Bovine Genetics (previously Breeding)
- Volume up 4%; revenue up 1.3% in constant currency terms
- 16% underlying profit growth in constant currency terms
- Market share increased in USA, Brazil and Japan
- 35% market share established in Australia through acquisition
- World leading bulls at stud include the Holstein Friesians:
* Machoman - No.1 in the world
* Lookout - No.1 in the UK; and,
* Big Ben - No.1 Zebu in Brazil
* No. 1 Jerseys in the US and Australia
- Level of investment in bioscience being increased by US$1m per year
* Other Businesses
- Animal Health (previously Distribution); like-for-like turnover
increased by #8.0m (15%) and a further #8.8m (17%) through the
acquisition of the business of Dunnwood V S Limited (Dunnwoods)
- Consultancy; reorganisation in first half returned trading to breakeven
- UK Agricultural Consultancy recovered after Foot & Mouth Disease
- Development Consultancy underlying profits up 27% before one-off gain
of #0.4m
- Market Consultancy now discontinued
* Head office sold for #3.4m achieving streamlined operations and #0.96m
profit gain after all costs, including relocation
* Michael Roller succeeded Philip Acton as Group Finance Director, with
effect from 17th March 2003. Previously Group Finance Director for IDS
Group plc, Michael's experience also includes Money Controls plc (formerly
Quadramatic plc), and Cookson Matthey Ceramics plc
* Philip Acton was appointed Chief Operating Officer of Animal Health business
Commenting on prospects Richard Wood, Chief Executive, said:
"We have achieved another year of strong trading results. We have also made
progress with our strategy of extending the diversity and global leadership of
our bovine genetics business. The level of fundamental bioscience expenditure
has been increased by a further US$1m per year. This is aimed at increasing our
competitive edge. We are confident that we can maintain the momentum of past
business growth".
Contact:
Richard Wood, Chief Executive Tel: 020 7466 5000 today
Michael Roller, Finance Director thereafter
Genus plc Tel: 01256 347101
Charles Ryland / Catherine Miles Tel: 020 7466 5000
Buchanan Communications Limited
OVERVIEW OF THE COMPANY RESULTS
Genus has again produced strong trading results in challenging global
agricultural markets.
Group turnover from continuing operations in the year to 31st March 2003
increased by 10% to #169.7m (including #8.8m of revenue from the Dunnwood
acquisition) from #154.4m in 2002.
Underlying operating profit from continuing operations increased by 16% to
#11.9m (2002: #10.3m) and reflected the expected recoveries in Animal Health
(previously Distribution) and areas of the Consultancy business. While reported
Bovine Genetics (previously Breeding) revenue fell by 3.8% to #79.0m, in
constant currency terms revenue grew by 1.3%. Underlying operating profit in
the Bovine Genetics business grew by a healthy 12%, and 16% in constant currency
terms (the latter stating 2002/3 results at 2001/2 exchange rates).
Animal Health increased its like-for-like turnover by #8.0m (15%) to #61.2m,
demonstrating the underlying strength of the business which operates in a highly
competitive market. In July 2002, the business moved swiftly to acquire the
business of Dunnwood V S Limited (Dunnwoods) in Scotland from the receivers and
this added a further #8.8m (17%). As part of the Group's plan to accelerate the
development of this business, the management team was strengthened in February
by the appointment of Philip Acton, previously the Genus Finance Director, to
head the division.
The Consultancy Division broke even in the first half, a significant improvement
on the losses incurred for the full year in 2001/02. This improvement was
helped by the return of normal trading conditions to the UK Agricultural
Consultancy business following the Foot & Mouth Disease (FMD) epidemic.
However, the small Market Research Consultancy business continued to generate
losses in the first half and, accordingly, it was decided to withdraw from this
sector in February. Its operations have since been divested for nominal sums.
Following the above disposals, the profitable UK Agricultural & Food Consulting
businesses have been transferred to the Bovine Genetics business where, we
believe, there will be cross-selling opportunities through the common customer
base.
The net result has been an increase in underlying EPS of 5.7 pence to 22.2
pence, up 35%. Basic EPS is up 6.6p to 8.3p.
Cash Flow and Gearing
Net debt reduced by #3.2m to #12.2m at 31st March 2003. Cash flow from
operations was #7.6m, after investing #6.0m of capital expenditure. The
principal items of non operating cash flow were tax payments of #1.6m, dividend
payments of #1.6m, proceeds from property sales of #4.7m, principally of the
former Head Office in Crewe, and the cost of the Dunnwood and RAB acquisitions
totalling #4.9m.
Dividend
On the basis of these continued good results, and to demonstrate the confidence
the Board has in the future, it is recommending an increase in dividend of 16%,
resulting in a full year dividend of 5.50 pence per share (2002: 4.75 pence per
share). This will be paid on 27th August 2003 to shareholders on the register
at the close of business on 1st August 2003 with an ex-dividend date of 30th
July 2003.
Share Capital
Last year, we undertook, when circumstances were appropriate, to buy back small
share holdings for cancellation and then to make placings of blocks of shares to
meet institutional demand. During the first half of the year, we repurchased
75,000 ordinary shares and allotted 350,000 shares to institutional investors.
Given the ongoing cost to the company of maintaining such a large share
register, it remains an objective of the Board to assist shareholders with small
shareholdings to exit from the register. We will shortly be announcing
particulars of a low cost dealing facility to assist small shareholders to sell
their shares more cheaply.
Company Outlook
The Board is concentrating on the development of its world leading core business
in Bovine Genetics.
This business is operating in an evolving market with growth opportunities in
agricultural markets not previously addressed by Genus, including Australasia,
Latin America, Eastern Europe and the Far East. The principal short term
opportunity for growth, either organic or acquisition driven, is to target these
as demonstrated by Genus' penetration of the Australian market.
In Genus' major existing markets such as North America, Continental Europe and
the UK, production capacity has been in excess of demand for many years and
growth is accordingly more difficult to achieve. In the recent past, Genus has
demonstrated that it can grow profitably in these major markets and this has
brought considerable pressure on less efficient competitors. We believe that
there will be opportunities for industry consolidation and that Genus, whose
business has easily the largest geographical reach in the market, is well placed
to be a beneficiary of this process.
In the longer term, scientific innovation will lead to differentiation between
the offerings of the principal bovine genetics companies. The timescales in
which scientific innovation can impact the financial performance of the business
are necessarily long - Genus is now seeing the benefits of initiatives taken
five years ago. Initiatives presently being invested in include enhancing
output per bull, gene markers, semen sexing, fertility and freezing technology.
Against this background, we are confident that we can maintain the momentum of
past business growth.
BOVINE GENETICS BUSINESS
This business strengthened its world leading position in bovine genetics and
increased its international reach and diversity by making two acquisitions in
Australia. Continued research and development expenditure, now investing at a
rate of #8.5m per year, has produced world leading bulls. This research is
carefully targeted so as to achieve early practical and competitive advantage.
Semen sales volume increased by 4% to 8.5m doses. Prices were held in a
globally depressed agricultural market.
Worldwide sales of #79.0m were slightly below last year for two principal
reasons. First, the business mix moved away from the higher priced "direct to
farmer" sector in the UK market, which is now smaller in size since its recovery
from FMD. This reduction was counterbalanced by increased volume elsewhere in
the world, where Genus trades via exclusive agents, at lower prices, but with
lower costs, in the wholesale sector. Secondly, the value of the sales made in
foreign currencies suffered translation losses when converted into sterling. In
constant currency, sales would have increased by 1.3% to #83.1m. We have
restated the historical segmental analysis of the Business so as to include
within it the results of the Agricultural and Food Consulting activities,
transferred into Bovine Genetics in February 2003.
Despite the market issues and the impact on overseas earnings of adverse
movements in currency translation of #400,000, operating profit rose to #11.2m,
a 12% improvement on last year's exceptional result and 16% in constant currency
terms.
Significant progress was made in many leading markets. Market share increased
by 1% in the USA with a 6% volume increase. We have started to sell pregnancies
as opposed to semen among the larger West Coast herds in order to capture the
stronger "direct to farmer" margins available in what is a growing sector of the
US market.
In Latin America, market share in Brazil increased by 6%, new distributors were
added in Columbia and Peru and a distributor was changed in Puerto Rico. These
changes are expected to improve local currency sales and profit potential next
year.
In November, the company acquired the outstanding 70% of the equity in ABSA, its
joint venture distributor in Australia, as a vehicle to extending its market
position in this important and growing market. In March, Genus acquired RAB,
the second largest Australian cattle breeding company. The ABSA and RAB
businesses are now being integrated. Together they will have a 35% market share
in Australia and will become joint market leader alongside the local company,
Genetics Australia. The traditional breeding programme operated by RAB has
already produced 'Donor', formerly the No.1 Holstein Friesian bull in Australia.
R&D investment in Australia will be enhanced, over the next few years, by the
addition of Genus' scientific expertise and this should improve inventiveness
and reduce costs.
Bovine Genetics Research & Development
At the core of the business lies an #8.5m per year research and development
programme. Laboratory bioscience is used to target and augment traditional
mating and selection programmes, testing 400 new bulls a year. The rolling five
year programme aims continuously to improve the genetic make-up of the
successive generations of the bulls created. Semen from the bulls selected from
this programme for stud is sold for use on customers' herds, to improve the
output and stature of their offspring.
In the quest to find elite genetics, comparative mapping with gene markers
identified in other species has isolated genes for health, fitness and meat
quality. These genes are being incorporated into the breeding programmes but
the work is, because of its complexity, of a long term nature.
Shorter term projects have already raised the semen output from stud bulls to
well in excess of that achieved by other cattle genetics companies. Our
researchers have developed proprietary freezing techniques that reduce damage by
20% and we have developed a unique feed additive that strengthens sperm
membranes, making the semen more robust to the freezing and thawing process.
Multiple projects researching novel methods of gender selection were set up in
October 2001, following the closure of Gensel. The new projects are aimed at
enabling cattle breeders to pre-determine the sex of offspring, so that a dairy
farmer can generate a high percentage of females for milking and a beef farmer a
high percentage of males for superior meat quality.
Other projects include looking for ways to extend the life of sperm inside the
cow, so improving the chance of a successful pregnancy and making the timing of
insemination less critical.
All this bioscience work is being supported by a discovery programme for
innovative research in the top 25 research institutions.
The impact of the above bioscience programme on the traditional mating
programmes, last year lifted the business's inventive rate to 20% ahead of its
nearest competitor. Amongst the leading bulls now at stud are:
* Machoman, No.1 in the world
* Lookout No.1 in the UK
* Big Ben No.1 Zebu in Brazil
* No. 1 Jerseys in the US & Australia
Bovine Genetics Outlook
We believe Genus' market leading position and the strength of its Research &
Development will ensure that it continues to drive through profitable growth,
although developed world agriculture remains depressed. Many new research
projects have been established in-house, with institutions and universities.
This new work is being aimed at improving the efficacy of the existing genetic
improvement programmes, reducing production costs, increasing semen output and,
in particular, improving fertility. All these projects are aimed at creating
short and medium term competitive advantage through innovation.
The Genus studs, now located in four continents, provide biosecurity and
unrivalled genetic diversity. Not all these advantages are yet fully exploited
worldwide. For instance, the new Australian grassland genetics, recently
acquired, will be sold in Ireland, Denmark and Holland, while tropical animals
developed in the Latin American studs will now also be sold in the Far East
through the new Australian business.
OTHER GENUS BUSINESSES
Animal Health Business
This business markets both licenced veterinary pharmaceuticals and other
products under the Animalcare brand and wholesales veterinary products to vets
under the Genusxpress brand.
The business recovery began last year and accelerated this year. Sales rose 31%
to a total of #70.0m, #8.8m of sales coming from the Dunnwood acquisition. The
underlying operating profit, net of #0.2m of one-off costs, was up 20% on the
prior year. Organic sales growth was achieved by winning a total of 31 new
accounts in the year and by growth in the market as a whole.
The acquisition of Dunnwoods, from the receiver, was made towards the end of the
first half of the year. It has been integrated and began to contribute to the
Genusxpress business in the second half.
Two new licenced "over the counter" pharmaceutical products were launched during
the year, and the product pipeline for prescription only pharmaceuticals was
enhanced by the submission of a number of licence applications, due to be
registered in 2003/4.
The market leading identichip range continued to command a premium price in the
market place, despite price pressure from the competition. This has been partly
achieved by the introduction during the year of a client service database
product, called Locate. This enhancement to the registration process helps
clients to retrieve their lost animals more easily. The new temperature sensing
chip, announced last year, will help differentiate the product range in the
coming year.
The "palm pilot" based hand held electronic ordering device, Genuslynx,
continued to be welcomed by the market. Enhanced system features will be
launched in 2003/4.
Animal Health Outlook
During the year, the Animal Health business was set up as a wholly separate
operation. Its management has been strengthened by the transfer, in February
2003, of Philip Acton, previously Genus' Finance Director, to become Chief
Operating Officer. Also, a new head of the Animalcare business has been
recruited.
Following the Secretary of State for Trade & Industry's approval of the
Competition Commission's recommendations in April 2003, veterinary prescriptions
will also be able to be dispensed by retail pharmacies. Genus will be able to
service pharmacies, as well as vets, with a same day service rather than the
next day service offered by all competitors. This will mean that pharmacies
will receive the same good service they already receive from human
pharmaceutical wholesalers and will not need to carry large stocks of veterinary
medicines, for the relatively small market demand for veterinary products.
Development Consultancy Business
This small business provides consulting services to the UK Government, the EU
and overseas aid agencies
Sales increased by 9.4% to #20.9m and operating profit by an underlying 27% to
#576,000, prior to taking account of the recovery of a #0.4m debt, for which
there was a provision. The business won 80 assignments in 42 countries. The
largest were:
UK Department for International Development
* Three year policy studies for the UK Rural Livelihoods Department
* Institutional reform of South African Forestry programme
European Union
* Financial disciplines in Lithuanian Enterprises
* DTI nuclear non-proliferation programme, redeployment studies for Russian
Closed Nuclear cities
Asian Development Bank
* Central region poverty reduction programme
Development Consultancy Outlook
Continued growth in sales and operating profit is expected.
CONSOLIDATED PROFIT & LOSS ACCOUNT
For the year ended 31 March 2003
Notes Continuing Operations
Before
Exceptional
Items Exceptional Discontinued Total Total
Items Operations 2003 2002
#000 #000 #000 #000 #000
TURNOVER
Continuing operations - ongoing 160,972 - - 160,972 154,424
- acquisitions 8,777 - - 8,777 -
Discontinued operations - - 3,041 3,041 5,997
______________________________________________________________
1 169,749 - 3,041 172,790 160,421
______________________________________________________________
Underlying operating profit/(loss) 1 11,854 (247) (1,425) 10,182 9,198
Amortisation of goodwill (1,636) - (169) (1,805) (1,894)
OPERATING PROFIT/(LOSS) 1 10,218 (247) (1,594) 8,377 7,304
Of which:
______________________________________________________________
Continuing operations - ongoing 10,309 (247) - 10,062 8,572
- acquisitions (91) - - (91) -
Discontinued operations - - (1,594) (1,594) (1,268)
______________________________________________________________
Loss on disposal of discontinued
operations
- - (3,179) (3,179) (1,181)
Profit on disposal of properties - 1,205 - 1,205 458
Profit on disposal of investment 34 - 34 -
Write-down of investment - - - - (1,809)
Interest receivable and similar 62 - - 62 66
income
Interest payable and similar charges (1,357) - - (1,357) (1,890)
______________________________________________________________
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION 8,923 992 (4,773) 5,142 2,948
Tax on profit on ordinary activities (2,887) 74 488 (2,325) (2,349)
______________________________________________________________
profit/(LOSS) on ordinary activities after
taxation 6,036 1,066 (4,285) 2,817 599
Minority interests - equity (63) - - (63) (34)
______________________________________________________________
PROFIT/(LOSS) FOR THE FINANCIAL YEAR 5,973 1,066 (4,285) 2,754 565
_______________________________________
Dividends on equity shares (1,846) (1,580)
___________________
RETAINED PROFIT/(LOSS) FOR THE YEAR 908 (1,015)
___________________
Earnings per share - underlying 2 22.2p 16.5p
- basic 2 8.3p 1.7p
- diluted 2 8.1p 1.7p
Dividend per share 5.5p 4.75p
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
2003 2002
#000 #000
Profit for the financial year 2,754 565
Exchange difference on the re-translation of net assets (2,522) (164)
of subsidiary undertakings
Tax on exchange differences 254 102
________ ________
Total recognised gains and losses relating to the year 486 50
________ ________
CONSOLIDATED BALANCE SHEET
at 31 March 2003
2003 2002
#000 #000
Fixed assets
Intangible assets 28,147 31,298
Tangible assets 16,851 16,602
Investments 83 76
________ ________
45,081 47,976
________ ________
CURRENT ASSETS
Stocks 17,640 14,726
Debtors 32,177 29,511
Cash at bank and in hand 6,831 2,703
________ ________
56,648 46,940
CREDITORS: amounts falling due within one year 47,636 37,620
________ ________
NET CURRENT ASSETS 9,012 9,320
________ ________
TOTAL ASSETS LESS CURRENT LIABILITIES 54,093 57,296
CREDITORS: amounts falling due after more than one year 5,759 8,026
PROVISIONS FOR LIABILITIES AND CHARGES 623 711
ACCRUALS AND DEFERRED INCOME 32 33
EQUITY MINORITY INTERESTS 222 194
________ ________
NET ASSETS 47,457 48,332
________ ________
CAPITAL AND RESERVES
Called up share capital 3,357 3,325
Share premium account 34,708 34,138
Profit and loss account 9,392 10,869
________ ________
EQUITY SHAREHOLDERS' FUNDS 47,457 48,332
________ ________
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2003
2003 2002
Note #000 #000
NET CASH INFLOW FROM OPERATING ACTIVITIES 3 13,562 12,099
Returns on investments and servicing of finance
Interest received and similar income 62 66
Interest paid and similar charges (1,180) (1,686)
Interest element of finance lease and hire purchase rental payments (177) (131)
Dividends received from investments - 47
________ ________
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE (1,295) (1,704)
________ ________
Taxation
Corporation tax paid (991) (568)
Overseas tax paid (646) (1,147)
________ ________
(1,637) (1,715)
________ ________
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets (6,005) (3,445)
Payments to acquire investments - (120)
Receipts from sales of tangible fixed assets 4,693 1,185
Receipts from sales of investments 34 -
________ ________
Net cash outflow on capital expenditure (1,278) (2,380)
________ ________
ACQUISITIONS AND DISPOSALS
Purchase of subsidiaries and businesses (4,946) (19)
Net cash acquired 42 -
Receipts from sale of subsidiaries - 167
Net cash and bank overdrafts disposed of - 13
----- -----
(4,904) 161
________ ________
EQUITY DIVIDENDS PAID (1,576) (1,481)
________ ________
NET CASH INFLOW BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING 2,872 4,980
________ ________
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
For the year ended 31 March 2003
2003 2002
Note #000 #000
NET CASH INFLOW BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING 2,872 4,980
MANAGEMENT OF LIQUID RESOURCES
Decrease in short term deposits - 700
________ ________
2,872 5,680
________ ________
FINANCING
Repayment of loan notes (835) (989)
Repayment of bank loans (3,541) (2,545)
Finance leases 2,382 297
Repayments of capital element of finance lease and hire
purchase rental payments (920) (630)
Issue of ordinary share capital 602 173
________ ________
NET CASH OUTFLOW FROM FINANCING (2,312) (3,694)
________ ________
INCREASE/(DECREASE) IN CASH 4 560 1,986
________ ________
ANALYSIS OF CHANGES IN NET DEBT DURING THE YEAR
Reconciliation of net cash flow to movement in net debt:
2003 2002
Note #000 #000
Increase/(decrease) in cash in year 560 1,986
Cash inflow from short term deposits - (700)
________ ________
-
560 1,286
Repayment of loan notes 835 989
Repayment of bank loans 3,541 2,545
New finance leases (2,382) (297)
Repayment of capital element of finance lease contracts 920 630
________ ________
-
Change in net debt resulting from cash flows 3,474 5,153
Exchange differences (24) (71)
Other (219) (73)
________ ________
-
Movement in net debt 3,231 5,009
Net debt at 1 April (15,427) (20,436)
________ ________
Net debt at 31 March 4 (12,196) (15,427)
________ ________
1. TURNOVER AND SEGMENTAL ANALYSIS
The prior year comparative data have been restated to show the results of the
continuing agricultural consulting business within the Bovine Genetics business
segment. This reflects the revised management arrangements to focus these
activities on the same customer base.
Turnover, which is stated net of value added tax and overseas sales taxes,
represents amounts invoiced to third parties.
Underlying
Turnover operating profit* Net assets
2003 2002 2003 2002 2003 2002
#000 #000 #000 #000 #000 #000
Area of activity
Bovine Genetics 79,002 82,088 11,198 9,984 38,000 39,458
Consultancy 23,930 25,138 (442) (645) 6,554 7,825
Animal Health 69,955 53,218 962 805 18,329 20,118
________ ________ ________ ________ ________ ________
172,887 160,444 11,718 10,144 62,883 67,401
Inter-segmental sales (97) (23) - - - -
Unallocated - - (1,536) (946) (15,426) (19,069)
________ ________ ________ ________ ________ ________
172,790 160,421 10,182 9,198 47,457 48,332
________ ________ ________ ________ ________ ________
*before amortisation of goodwill
Operating profit
2003 2002
#000 #000
Area of activity
Bovine Genetics 10,317 9,014
Consultancy (642) (845)
Animal Health 238 81
________ ________
9,913 8,250
Unallocated (1,536) (946)
________ ________
8,377 7,304
Non-operating exceptional items
Bovine Genetics 1,266 458
Consultancy (3,179) (1,181)
Animal Health (61) -
Unallocated 34 (1,809)
Net interest (1,295) (1,824)
________ ________
Profit on ordinary activities before taxation 5,142 2,948
________ ________
Unallocated costs within operating profit are common corporate costs.
Unallocated net liabilities comprise:
2003 2002
#000 #000
Fixed assets and investments 533 -
Debtors 961 652
Creditors (577) (931)
Net Debt (12,196) (15,427)
Taxation (2,079) (1,593)
Proposed dividends (1,846) (1,576)
Minority interest (222) (194)
________ ________
(15,426) (19,069)
________ ________
1. TURNOVER AND SEGMENTAL ANALYSIS (continued)
Geographical region of origin
Turnover Operating profit Net assets
2003 2002 2003 2002 2003 2002
#000 #000 #000 #000 #000 #000
United Kingdom 131,421 116,542 4,099 2,626 40,820 52,442
Europe 6,231 6,063 1,196 992 1,854 2,195
North America 37,128 39,380 3,947 4,079 15,793 9,567
Rest of the World 6,552 7,017 671 553 4,416 3,197
________ ________ ________ ________ ________ ________
181,332 169,002 9,913 8,250 62,883 67,401
Inter-segment sales (8,542) (8,581)
Unallocated - - (1,536) (946) (15,426) (19,069)
________ ________ ________ ________ ________ ________
172,790 160,421 8,377 7,304 47,457 48,332
________ ________ ________ ________
Non-operating (1,940) (2,532)
exceptional items
Net interest (1,295) (1,824)
________ ________
Profit on ordinary
activities before
taxation
5,142 2,948
________ ________
Geographical region of destination
Turnover
2003 2002
#000 #000
United Kingdom 107,217 96,637
Europe 17,077 14,496
North America 25,248 26,438
Rest of the World 23,248 22,850
________ ________
172,790 160,421
________ ________
The segmental analysis includes the following results from discontinued
activities:
Geographical region of origin Region of destination
Turnover Operating loss Turnover
2003 2002 2003 2002 2003 2002
#000 #000 #000 #000 #000 #000
United Kingdom 2,430 4,416 (1,498) (1,137) 1237 2,348
Europe - 193 - (27) 160 1,155
North America 611 1,388 (96) (104) 1,116 2,001
Rest of the World - - - - 528 493
________ ________ ________ ________ ________ ________
3,041 5,997 (1,594) (1,268) 3,041 5,997
________ ________ ________ ________ ________ ________
1. TURNOVER AND SEGMENTAL ANALYSIS (continued)
Area of Activity
Turnover Operating loss
2003 2002 2003 2002
#000 #000 #000 #000
Consultancy 3,041 5,997 (1,594) (1,268)
________ ________ ________ ________
The segmental analysis includes the following results from acquisitions:
Turnover Operating Profit
2003 2003
#000 #000
Animal Health 8,777 (91)
________ ________
The acquired activities took place in the UK and all sales were made to
destinations within the UK.
2. EARNINGS PER SHARE
The basic earnings per share of 8.3p (2002: 1.7p) is based on the profit for the
financial year of #2,754,000 (2002: #565,000) and the weighted average number of
ordinary shares in issue of 33,322,000 (2002: 32,894,000).
The underlying earnings per share of 22.2p (2002: 16.5p) is based on the
earnings of continuing operations before amortisation of goodwill, acquisition
and float costs and exceptional items as set out below:
2003 2002
#000 #000
Profit for the financial year 2,754 565
Add: Amortisation of goodwill 1,805 1,894
Exceptional operating items 247 -
Write down of investment - 1,809
Profit on disposal of investment (34) -
Loss on disposal of properties and businesses 1,974 723
Loss on discontinued operations 1,425 1,099
________ ________
8,171 6,090
Less: Associated taxation on adjustments (775) (674)
________ ________
Underlying earnings 7,396 5,416
________ ________
The directors consider that underlying earnings per share as calculated is an
appropriate and consistent measure of the Group's performance.
The diluted earnings per share of 8.1p (2002: 1.7p) is based on profit for the
financial year of #2,754,000 (2002: #565,000) and on 34,175,000 (2002:
33,170,000) diluted ordinary shares as set out below:
2003 2002
000's 000's
Basic weighted average number of shares 33,322 32,894
Dilutive potential ordinary shares:
Employee share options 853 276
________ ________
34,175 33,170
________ ________
3. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES
2003 2002
#000 #000
Operating profit 8,377 7,304
Depreciation 3,435 3,984
Amortisation of milk quota 7 8
Amortisation of goodwill 1,805 1,894
(Profit)/loss on disposal of fixed assets (304) 222
Deferred government grants (1) (1)
(Increase) in stocks (2,850) (298)
(Increase)/Decrease in debtors (2,555) 558
Increase/(decrease) in creditors 5,648 (1,572)
________ ________
Net cash inflow from operating activities 13,562 12,099
________ ________
4. ANALYSIS OF CHANGES IN NET DEBT DURING THE YEAR
At At
1 April Cash 31 March
2002 flows Other 2003
#000 #000 #000 #000
Cash at bank and in hand 2,703 6,831
Bank overdrafts (2,396) (5,908)
________ ________ ________ ________
Cash 307 560 56 923
Bank loans 11,699) 3,541 -- (8,158)
Loan notes (3,451) 835 (2,616)
Obligations under finance leases and
hire purchase contracts (584) (1,462) (299) (2,345)
________ ________ ________ ________
(15,427) 3,474 (243) (12,196)
________ ________ ________ ________
5. FINANCIAL STATEMENTS
This preliminary statement of results was approved by the Board on 21 May 2003.
The figures for the year ended 31 March 2003 are unaudited and do not constitute
full accounts within the meaning of Section 240 of the Companies Act 1985. The
figures for the year ended 31 March 2002 have been extracted from the accounts
for 2002, which have been delivered to the Registrar of Companies. The auditors
have reported on these accounts; their report was unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
Statutory accounts for the year ending 31 March 2003 will be delivered to the
Registrar of Companies following the Annual General Meeting.
The preliminary statement of results should be read in conjunction with the
Annual Report 2002. It has been prepared on the basis of accounting policies
which are in accordance with the accounting principles generally accepted in the
United Kingdom and have been applied on a basis consistent with those applied in
2002.
6. The Annual Report and Notice of Annual General Meeting will be
posted to shareholders during July 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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