RNS Number:7507S
McLeod Russel Holdings PLC
02 December 2003
McLEOD RUSSEL HOLDINGS PLC
Preliminary announcement
Year ended 30 September 2003
2 December 2003
For further information contact:
James Leek, Chairman
Ian Hazlehurst, Chief Executive
Richard Cotton, Finance Director
Tel: 01235 536 677
CHAIRMAN'S STATEMENT
Dear Shareholder
In our Interim Statement of 20 June 2003 we reported an operating loss, before
goodwill amortisation and exceptional costs, of #(0.9)m for the half year to 31
March 2003 and indicated that, despite the extensive restructuring being
undertaken by the Group, the financial performance for the year would be poor.
This has proved to be the case, and the equivalent figure for the full year is
an operating loss, before goodwill amortisation and exceptional costs, of #(1.9)
m, reflecting the continued weak European economic and trading environment. This
loss includes additional pension contributions of #0.7m which are referred to in
the Financial Review.
The trading environment experienced by the Group during the past year has been a
very difficult one. Although a number of our subsidiaries have performed
reasonably well in these conditions, the overall trading results are badly
affected by significant losses in our UK and French clean air companies and a
very challenging economy in Germany. We have been implementing an extensive
programme of cost reduction and rationalisation (at a net cost of #2.5m in the
last year alone as outlined in the Financial Review) to address these and other
problems and to position the Group better for the future. Whilst this
restructuring programme, which affected primarily our operations in U.K., France
and Germany, has now been completed according to the timetable envisaged,
benefits from these actions will only become apparent next year and beyond.
In addition to the exceptional costs of #2.5m referred to above, we have made an
additional provision in the current year of #4.0m for future pension
contributions to the Masons pension scheme. The accompanying Financial Review
provides fuller details of all these exceptional costs, and in the case of the
pension provision indicates that if current improving market trends continue,
this liability may be reduced in future.
Offer Announcement
It was announced today that the Board has reached agreement with SPX Air
Filtration Limited, a wholly owned subsidiary of SPX Corp, on the terms of a
recommended cash offer at 29p per share to acquire the whole of the issued share
capital of McLeod Russel, together with a special interim dividend of 1p per
ordinary share to be paid, assuming the offer is declared unconditional in all
respects. Further details of the offer and background to the directors'
recommendation of acceptance are contained within the offer document.
Dividend
In view of the reported loss for the year 2002/2003, the Directors do not
recommend a final dividend.
Banking
In our half year announcement we explained that, as the result of poor trading,
the Company was in breach of its trading based bank covenants, but not in
default of any payment obligations. This remains the case. The Banks have made
facilities available to the Group and continue to do so. The Banks understand
that the Group has been in negotiations with a prospective purchaser, and are to
continue support during the period until the offer is declared unconditional.
Should the offer not be declared unconditional then the Banks have indicated
that they would re-enter negotiations with the company regarding terms and
conditions of any future facilities.
Outlook
The current trading outlook remains difficult, although we would expect to see a
gradual improvement in our underlying performance as the result of the
restructuring actions taken.
James Leek
Chairman
2 December 2003
OPERATING REVIEW
Restructuring
The key elements of the restructuring programme have been:
* The rationalisation of Indoor Air bag and panel filter
manufacture between UK and Sweden;
* The re-organisation of Vokes, Luwa and Atex brand filters into a
well defined product range targeted at specific markets e.g. Gas Turbines;
* The integration of the Liquid filtration activities of Vokes into
the Industrial Division; and
* The reduction of administration costs through a combination of
support functions across Europe.
The major implications of this restructuring by location have been:
U.K. Reduction in headcount. Stock rationalisation and write-down. Combination of Burnley and
Guildford management functions.
Germany Combination of finance, administrative and support functions between Maintal (Frankfurt)
and Sprockhovel (Dusseldorf).
France Major headcount reductions and significant downsizing of manufacturing operations.
Combination of distribution and warehousing plus reorganisation of sales force.
In addition there has been a major redundancy programme at Cudd Bentley, our
U.K. based Engineering Consultancy business, as a result of the substantial
reduction in its order book.
Business Review
Sales in our core Clean Air and Liquid Filtration (CALF) business at #61.6m were
at a similar level to last year. These figures exclude Cudd Bentley, which,
following a reappraisal of the Group's activities has been designated as a
non-core business.
* Indoor Air
Sales increased to #33.5m compared to #31.8m in 2002. The business benefited
from the first full year contribution from Denmark, which represented increased
sales of approximately #1.2m over the previous year. There were also increases
in sales in Germany and Sweden. The major problem areas were UK and France,
where local issues of poor productivity and low service levels from our French
production unit resulted in lost market share.
* Process Air
Overall, sales remained static at approximately #11.8m. Sales of the Luwa brand
products from our Swiss manufacturing unit showed an increase of #0.7m over
2002, based primarily on increased export business. Whilst the market in the
electronics sector has begun to show signs of recovery - particularly in the Far
East - other project related areas remained difficult with continued downward
pressure on prices and margins in the UK.
* Liquid and Industrial
Sales declined from #11.4m to #11.2m. The reduction in sales was mainly due to
the decline in the Group's dust collection activities in France, which are not
in the mainstream of our Industrial business. Vokes liquid filtration had
another good year and continues to make progress in replacing its more
traditional products, with new products and systems for new market areas such as
power transmissions and oil mist eliminators.
* Medical
Sales declined from #6.4m in 2002 to #5.0m in 2003. This decline was primarily
attributable to delays in installation contracts in our core German market as a
result of curtailed Government expenditure in this sector. German order books,
however, remain strong and we expect a significant rebound in sales during 2004.
We continue to make progress in launching McLeod Russel operating theatre
ceiling systems in other European markets.
* Other Activities
- Eurogard
Sales from Eurogard declined from #6.0m in 2002 to #4.8m in 2003 primarily as
the result of lower off-take from G.E., its major customer for coated
polycarbonate sheet. Eurogard continues to develop new applications for coated
shapes and following the success of the Mercedes "Smart" car is coating other
components for the car industry.
- Cudd Bentley
Sales at Cudd Bentley fell from #6.7m in 2002 to #5.1m in 2003 due to a decline
in its markets. This lead to significant redundancies and restructuring during
the year.
- Javelin and Kennedy Wagstaff
Both businesses experienced difficult trading conditions in the year in their
respective markets. We are in the process of merging the activities onto one
site and rationalising the cost base.
I.J. Hazlehurst
Chief Executive
2 December 2003
FINANCIAL REVIEW
Summary of Results
The loss before taxation of #11.0m can be analysed in summary form as follows:
#000
Operating loss after central costs, before goodwill amortisation, exceptionals and pension 1,173
costs
Exceptional and restructuring costs 2,502
Pension provision and additional contributions 4,708
Goodwill amortisation 878
Net interest charge - normal 1,303
Exceptional interest - bank arrangement fees and independent review costs 461
Loss before tax 11,025
To enable clear presentation of the Group's results, the Group Profit and Loss
Account has been separated into the following components:
i Results before goodwill amortisation and exceptional items
Group operating profit, before goodwill amortisation, exceptionals and central
costs, of #0.4m (2002 #5.3m), included the first full year contribution from the
Danish CALF subsidiaries acquired in 2002. The decline is largely attributable
to reductions in sales - detailed in the Operating Review and segmental analysis
- and the resultant reorganisation costs incurred.
Normal ongoing central costs increased in the year from #1.4m to #1.6m due to
surplus property costs of #0.1m, and the additional #0.1m cost relating to tax
advice in respect of balance sheet restructuring in certain overseas
subsidiaries. Additional pension costs of #0.7m relate to the Wheway scheme,
and are described more fully below under Pensions.
ii Goodwill amortisation and exceptional amounts
Total goodwill amortisation was similar at #0.9m (2002 #0.9m). The carrying
value of Goodwill has been reviewed and is consistent with future cash flow
expectations. Consequently no impairment is necessary.
Operating exceptional costs for the year were #1.4m in total. Charges in respect
of obsolete stocks and irrecoverable debtors of #1.2m include the effects of
both European product rationalisation and the effect of weaknesses in internal
controls in one UK business which have now been rectified. Redundancy and
related costs of #0.6m reflect the substantial business rationalisation costs in
the UK and German CALF businesses and Cudd Bentley. A one off gain of #0.4m has
been generated following the renegotiation of contractual arrangements and a
supply contract with Zellweger Luwa.
The loss on disposal of operations of #4.0m relates to the provision for the
future additional employer pension contributions to the Mason's scheme, and is
described more fully under Pensions below. Rationalisation and reorganisation
costs principally comprise #0.6m of redundancy and related costs in respect of
the fundamental restructuring of the French operations. The loss on disposal of
fixed assets includes #0.2m in respect of the residual Masons fixed assets.
The McLeod Russel Executive Share Option Trust holds shares in McLeod Russel
Holdings PLC. In line with UK GAAP, the Group has made a write down of #0.1m
reducing the carrying value of these shares to 30p.
Pensions
The Group has three UK final salary pension schemes which have been closed to
new members for several years. Many of the liabilities associated with these
funds arise from activities which are no longer within the Group. The Wheway and
Masons schemes show significant deficits against the Minimum Funding Requirement
(MFR) whereas the Vokes scheme at its last valuation showed a surplus against
MFR.
During the year the Group obtained actuarial advice on the Wheway scheme which
showed an increased deficit of #6.3m (2002 #5.4m) against the MFR and reflected
the impact on the fund of further significant falls in stock market share prices
since the previous year's valuation. As a result, the company and Trustees have
agreed a schedule of additional employer contributions over the next ten years
to make good the shortfall. The cost impact on operating profit in the financial
year to 30 September 2003 is #0.7m, rising to #0.9m in each of the following
nine years, and is reported separately in the segmental analysis.
The Group also obtained actuarial advice on the Mason's scheme, which showed a
deficit against MFR of #2.9m (2002 #0.6m). As a result, a revised annual
employer contribution has been agreed of #0.7m (2002 #0.1m). This gives rise to
an increase in the discounted provision on the Balance sheet for this scheme of
#4.0m.
The total agreed employer contributions to the Wheway and Mason pension schemes
in the next financial year are #1.6m in aggregate, with the payments to be made
in July and September 2004. Since these contributions were agreed, the outlook
for pension scheme funding has improved considerably with a rise in share prices
and long dated gilt edged yields. If these trends are sustained or continue to
improve, the company will, in agreement with the scheme trustees and actuary,
seek in 2004 to reduce the employer contributions to reflect these improvements.
Interest
The net interest charge for the year was #1.8m (2002 #1.4m). This includes
exceptional items of #0.5m (2002 #0) relating to the accelerated write off of
Bank facility arrangement fees and independent professional review costs.
Taxation
The Group has a tax charge in the year of #0.8m, despite the overall loss
position. This is due to profits from certain overseas subsidiaries which cannot
under current tax legislation be offset against recoverable tax losses
elsewhere.
Earnings and Dividends
Adjusted loss per share, calculated before goodwill amortisation and exceptional
items, was (7.67p) compared to earnings per share of 3.30p in 2002. No final
dividend is recommended for the year, given the poor trading and the scale of
the rationalisation costs borne in the year.
Balance Sheet and Cashflow
Group cashflow from operations at #5.3m is similar to the result for 2002. This
reflects the strong working capital inflow achieved in the year of #6.4m,
resulting from improvements in the management of debtors and stock, as well as
lower trading levels. We will continue aggressively to manage working capital in
2004.
Overall, net debt at the year end is similar to 2002, and has increased by just
#0.2m to #13.2m. All bank borrowings have been redefined to current liabilities
from amounts falling due after more than one year, since amended facility terms
have not yet been agreed.
Net Gearing (excluding finance leases) at the year end was 59.3% (2002 39.6%)
based on shareholders' funds of #21.3m - reflecting the Group loss in the year -
and net debt (excluding finance leases) similar to 2002 of #12.6m.
The accounts have been prepared on a going concern basis, as disclosed in note
2.
Richard Cotton
Finance Director
2 December 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 30 September 2003
2003 2002
Total before Total before
goodwill goodwill Goodwill
amortisation Goodwill amortisation amortisation
and amortisation and and
exceptionals and Total exceptionals exceptionals Total
exceptionals
#000 #000 #000 #000 #000 #000
Turnover
Continuing 73,710 - 73,710 77,180 - 77,180
Discontinued operations - - - 2,801 - 2,801
Total turnover 73,710 - 73,710 79,981 - 79,981
Cost of sales (48,913) (947) (49,860) (51,980) (353) (52,333)
Gross profit/(loss) 24,797 (947) 23,850 28,001 (353) 27,648
Distribution costs (12,744) - (12,744) (12,079) - (12,079)
Administrative expenses (13,917) (1,833) (15,750) (12,242) (922) (13,164)
Other operating income 12 454 466 205 - 205
Operating (loss)/profit
pre goodwill amortisation
Continuing (1,852) (1,448) (3,300) 3,784 (404) 3,380
Discontinued - - - 101 - 101
Total (1,852) (1,448) (3,300) 3,885 (404) 3,481
Goodwill amortisation - (878) (878) - (871) (871)
Operating (loss)/profit
Continuing (1,852) (2,326) (4,178) 3,784 (1,275) 2,509
Discontinued - - - 101 - 101
Total operating (loss)/ (1,852) (2,326) (4,178) 3,885 (1,275) 2,610
profit
Income from fixed asset - 48 - 48
Investments
Exceptional items -
(Loss)/profit on
disposal of operations - (4,029) (4,029) - 249 249
Reorganisation &
restructuring costs - (774) (774) - - -
(Loss)/profit on
disposal of fixed assets - (222) (222) - 463 463
(Loss)/profit before (1,852) (7,351) (9,203) 3,933 (563) 3,370
interest
Interest receivable 74 - 74 135 - 135
Amounts written off
investments - (58) (58) - (661) (661)
Interest payable and
similar charges (1,377) (461) (1,838) (1,527) - (1,527)
(Loss)/profit on ordinary
activities before taxation (3,155) (7,870) (11,025) 2,541 (1,224) 1,317
Taxation on (loss)/profit
on ordinary activities (819) (822)
(Loss)/profit for the
financial year (11,844) 495
Dividends - (847)
Retained loss for the
financial year (11,844) (352)
(Loss)/earnings per share
- basic (22.86p) 0.96p
(Loss)/earnings per share
- adjusted (7.67p) 3.30p
(Loss)/earnings per share
- diluted (22.86p) 0.96p
There is no difference between the result as stated above and the result as
stated on an historical cost basis.
CONSOLIDATED BALANCE SHEET
30 September 2003
2003 2002
#000 #000
Capital employed
Fixed assets
Intangible assets 16,314 16,341
Tangible assets 14,793 15,321
Investments 371 639
31,478 32,301
Current assets
Stocks 8,315 9,502
Debtors 16,043 21,316
Cash at bank and in hand 3,695 4,999
28,053 35,817
Creditors: amounts falling due within one year (31,150) (19,569)
Net current (liabilities)/assets (3,097) 16,248
Total assets less current liabilities 28,381 48,549
Creditors: amounts falling due after more than one year (455) (15,144)
Provisions for liabilities and charges (6,656) (2,406)
21,270 30,999
Financed by
Capital and reserves
Called up share capital 5,211 5,211
Share premium account 5,270 5,270
Other reserves 1,068 (1,047)
Profit and loss account 9,721 21,565
Equity shareholders' funds 21,270 30,999
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 30 September 2003
2003 2002
#000 #000
(Loss)/profit for the financial year (11,844) 495
Currency translation difference on foreign currency net investments 2,115 780
Taxation on effect of currency translation difference on foreign
currency net investments - 97
Total recognised gains and losses for the financial year (9,729) 1,372
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 30 September 2003
2003 2002
#000 #000
(Loss)/profit for the financial year (11,844) 495
Dividends - (847)
(11,844) (352)
Other recognised gains and losses relating to the year (net) 2,115 877
Net reduction in shareholders' funds (9,729) 525
Opening shareholders' funds 30,999 30,474
Closing shareholders' funds 21,270 30,999
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September 2003
2003 2002
#000 #000
Net cash inflow from operating activities 5,312 5,677
Returns on investments and servicing of finance (1,370) (1,341)
Tax paid (1,333) (907)
Capital expenditure and financial investment (661) 4,686
Acquisitions and disposals (489) 980
Equity dividends paid (847) (1,669)
Cash inflow before use of liquid resources/financing 612 7,426
Management of liquid resources (5) 191
Financing (2,784) (8,669)
Decrease in cash (2,177) (1,052)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the year ended 30 September 2003
2003 2002
#000 #000
Decrease in cash (2,177) (1,052)
Cash outflow/(inflow) from increase in liquid resources 5 (191)
Cash outflow from decrease in debt 2,584 8,479
Cash outflow from lease financing 200 190
Change in net debt resulting from cash flows 612 7,426
Exchange movement (668) (195)
New finance leases (40) -
Movement in prepaid bank fees (108) -
Movement in net debt in the year (204) 7,231
Net debt at the start of the year (12,961) (20,192)
Net debt at the end of the year (13,165) (12,961)
NOTES TO THE ACCOUNTS
30 September 2003
1. segmental analysis
2003 2002
Class of business Turnover Operating Capital Turnover Operating Capital
profit employed profit employed
#000 #000 #000 #000 #000 #000
Clean air and liquid 61,574 494 34,298 61,294 3,682 45,474
filtration
Other ongoing activities 12,136 (63) 3,535 15,886 1,652 1,932
Unallocated - - (16,617) - - (15,304)
Ongoing activities before
central costs, goodwill
amortisation and exceptional
items 73,710 431 21,216 77,180 5,334 32,102
Central costs:
Normal ongoing - (1,604) - - (1,425) -
Additional pension -
contributions - (679) - - (125)
Total central costs - (2,283) - - (1,550) -
Discontinued activities - - 54 2,801 101 (1,103)
Total before goodwill
amortisation and exceptional
items 73,710 (1,852) 21,270 79,981 3,885 30,999
Goodwill amortisation:
Clean air & liquid - (878) - (871) -
filtration
Exceptional items: - - -
Clean air & liquid - (1,148) - (353) -
filtration
Other ongoing activities - (242) - - - -
Central costs - (58) - (51) -
As reported 73,710 (4,178) 21,270 79,981 2,610 30,999
Geographical analysis by
destination
United Kingdom 19,806 25,935
Rest of Europe 49,503 49,569
Rest of World 4,401 4,477
73,710 79,981 - -
As the Group's operations are now all located in Europe, which is considered to
be substantially one homogenous market, a geographic segmental breakdown of
turnover, operating profit and capital employed is not provided.
Discontinued activities shown above represent the results of the Group's former
UK coatings business, Mason Coatings.
The amounts relating to Cudd Bentley have been segmentally reanalysed to other
ongoing activities from clean air and liquid filtration during the year
following a reassessment of the core activities of the group and the
comparatives re stated accordingly The amounts reanalysed are turnover
#5,080,000 (2002: #6,681,000), operating loss before exceptional items #642,000
(2002: profit #351,000) and capital employed #787,000 (2002: #1,134,000).
Capital employed treated as unallocated above primarily relates to external
borrowings of the group and pension provisions.
2. Basis of preparation
The financial statements have been prepared in accordance with the historical
cost convention and in accordance with applicable accounting standards.
The Group meets its day to day working capital requirements through banking
facilities which expire in December 2005. Under the facility agreement the
Group has to comply with certain stipulated financial covenants. The facility
agreement stipulated covenants to September 2003 but not beyond.
As a result of its performance, the Group breached its trading based financial
covenants during the year. Following discussions with the Group's bankers, an
independent review of the Group was commissioned which has now been completed.
The Group's bankers are continuing to extend existing facilities. However in the
absence of formal renegotiations these facilities are repayable on demand.
The Company has announced today a recommended offer for the entire issued share
capital of the Company. The directors consider that the offer, which is subject
to shareholder approval, will be completed and that the Group will receive
borrowing facilities from the offeror.
The Group's bankers have confirmed that should the offer not be accepted they
would re enter negotiations with the Group regarding terms and conditions of any
future facilities
On the basis of the recommended offer announced today, cash flow forecasts which
cover the period to September 2004 and their discussions with the Group's
bankers the directors consider it appropriate to prepare the financial
statements on a going concern basis. However, there is no certainty that the
offer will be completed, or that the directors will be able to renegotiate
appropriate facilities if required, and the financial statements do not include
any adjustments which would result from a failure to obtain funding.
3. Exceptional items
FRS 3 exceptional items comprise:
Following disposal of the Masons operations the Group retained certain funding
obligations to the scheme in respect of former employees. A discounted provision
of #4,029,000 has been made for additional contributions required under the
Mason Pension scheme rules following the updated MFR (Minimum Funding
Requirement) assessment.
Reorganisation and restructuring costs principally comprise #578,000 incurred in
the year in respect of the planned fundamental restructuring of the French
operation following rationalisation of the European product range.
The loss on disposal of fixed assets includes #180,000 in respect of the
residual Masons fixed assets.
3. Exceptional items (continued)
Operating exceptional items are as follows:
2003 2002
#000 #000
Exceptional operating costs:
Inventory adjustments (761) (353)
Irrecoverable trade debtors (472) -
Redundancy & related costs (611) -
Settlement of guaranteed margin 454 -
Corporate finance costs (58) (51)
(1,448) (404)
Amounts written off investments (58) (661)
Interest payable and similar charges:
Independent professional costs relating to bank review (196) -
Accelerated write off of prepaid bank arrangement fees (265) -
(461) -
Inventory write offs amounting to #220,000 and debt write offs amounting to
#472,000 arose following weaknesses in controls in a UK subsidiary surrounding
the initial recording and subsequent assessment of recoverability of assets.
Actions have been taken to address these issues.
Charges of #541,000 have been incurred in respect of obsolete inventory
following the rationalisation of the European product range and a significant
reduction in trading in the UK and Germany.
Following reductions in the level of business at McLeod Russel UK, Cudd Bentley
and McLeod Russel Germany, redundancy programmes were implemented. These
programmes resulted in a cost of #611,000.
A one-off gain of #454,000 has been generated following the renegotiation of
contractual arrangements and a supply agreement with Zellweger Luwa.
Corporate finance costs of #58,000 relate to the requisitioned EGM earlier in
the year.
Following an impairment review the carrying value of the investment in own
shares has been written down with a charge of #58,000.
Bank arrangement fees of #265,000 which would normally have been amortised over
the period of the facilities to which they relate have been written off during
the year as amended facility terms have not yet been agreed.
Professional fees of #196,000 payable, following the independent review of the
Group's finances carried out at the request of the Group's bankers, have been
expensed in the year.
4. Dividends
2003 2002
#000 #000
Interim dividend nil p (2002: paid on 4 October 2002 of 1.25p net per - 642
share)
Final dividend of nil p (2002: 0.4 p paid on 4 April 2003 net per share) - 205
- 847
5. (Loss)/earnings per share
Basic (loss)/earnings per share are calculated on (losses)/earnings attributable to shareholders
of a loss of #11,844,000 (2002: profit #495,000) and on the adjusted average of 51,811,394 (2002:
51,365,540) shares in issue and ranking for dividend after excluding ordinary shares held by the
McLeod Russel Employee Benefit Trust.
The diluted (loss)/earnings per share figure is calculated on the above number of shares in issue
and ranking for dividend after deducting potential shares which would have a dilutive effect on
EPS. There are no dilutive shares at 30 September 2003 and consequentially this number is also
51,811,394 (2002:51,365,540).
The adjusted (loss)/earnings per share figure presented before exceptional items is considered by
the directors to be a more representative basis of the businesses underlying performance and it
is calculated on attributable losses of #3,974,000 (2002: earnings #1,695,000). It is reconciled
to the total figure as follows:
2003 2002
#000 #000
(Losses)/earnings attributable to shareholders: total (11,844) 495
Goodwill amortisation 878 871
Exceptional items charged/(credited) for the year 6,934 (308)
Amounts written off investments 58 661
Tax effect of exceptional items - (24)
(Losses)/earnings attributable to shareholders: before (3,974) 1,695
exceptional items
6. Reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
#000 #000
Operating (loss)/profit (4,178) 2,610
Depreciation and amortisation charges 3,260 3,471
Exchange losses 66 151
(Gain)/loss on disposal of tangible fixed assets (6) (18)
Increase/ in stocks 1,809 604
Decrease in debtors 6,181 3,356
Decrease in creditors (1,547) (4,039)
Cash flows relating to fundamental reorganisation (143) -
Decrease in provisions (130) (458)
Net cash inflow from operating activities 5,312 5,677
7. Additional notes
The accounts for the year ended 30 September 2002, which are summarised above,
are taken from the full accounts which have been filed with the Registrar of
Companies and which received an unqualified auditors' report.
These statements are not the company's statutory accounts. The 2003 figures are
extracts from the annual report and accounts, copies of which will be posted to
shareholders shortly. These have not yet been signed by the auditors. As
described in note 2 the unaudited financial statements from which this
preliminary announcement has been extracted have been prepared on a going
concern basis. Given the nature and significance of the uncertainties
surrounding both the outcome of the recommended bid announced today and the
continuation of the Group's bank facilities, the auditors have indicated that
their report will be modified by reference to those uncertainties, but that
their report is not expected to be qualified in this respect.
Copies of this announcement are available from the company's registered office
at 2 Hitching Court, Blacklands Way, Abingdon Business Park, Abingdon, Oxon,
OX14 1RG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UUAOROWRURAA
