TIDMCHLD
RNS Number : 0860T
Chloride Group PLC
01 June 2009
01 June 2009
CHLORIDE GROUP PLC
ANOTHER STRONG YEAR FOR CHLORIDE
Preliminary results for the year ended 31 March 2009
Chloride Group PLC, a leading specialist provider of critical secure power
solutions, is pleased to announce its results for the year ended 31 March 2009.
Key financials
+---------------------------------------+------------+------------+------------+
| | 2009 | 2008 | Change |
+---------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------+------------+------------+------------+
| Sales (GBPmillion) | 326.7 | 267.6 | +22% |
+---------------------------------------+------------+------------+------------+
| Adjusted operating profit* | 46.4 | 36.1 | +29% |
| (GBPmillion) | | | |
+---------------------------------------+------------+------------+------------+
| Adjusted profit before tax* | 43.7 | 33.3 | +31% |
| (GBPmillion) | | | |
+---------------------------------------+------------+------------+------------+
| Operating margin ** | 14.2% | 13.5% | +0.7pts |
+---------------------------------------+------------+------------+------------+
| Profit before tax (GBPmillion) | 39.8 | 31.1 | +28% |
+---------------------------------------+------------+------------+------------+
| Adjusted earnings per share* (pence) | 11.5 | 9.5 | +21% |
+---------------------------------------+------------+------------+------------+
| Basic earnings per share (pence) | 10.6 | 10.0 | +6% |
+---------------------------------------+------------+------------+------------+
| Adjusted operating cash flow | 93% | 83% | +10 pts |
| conversion | | | |
+---------------------------------------+------------+------------+------------+
| Net debt (GBPmillion) | (15.4) | (21.8) | -29% |
+---------------------------------------+------------+------------+------------+
| Dividend (pence) | 4.70 | 4.00 | +18% |
+---------------------------------------+------------+------------+------------+
* Sales growth of 22% to GBP326.7 million, 10% at constant exchange rates
* Adjusted operating profit* up 29% to GBP46.4 million, 12% at constant exchange
rates
* Adjusted EPS up 21% to 11.5p*
* Proposed final dividend of 2.85p per share, making a total for the year of 4.70p
(up 18%, 2.4 times covered)
* Operating cash flow up 43% at GBP43.0 million
* Net debt reduced by GBP6.4 million to GBP15.4 million; GBP115 million of
committed facilities
* Continued expansion in the higher growth potential markets of Asia Pacific and
the Middle East
* Year end order book up GBP28.0 million to GBP137.8 million
* Profit/earnings per share from operations before amortisation of acquired
intangibles.
**Operating profit before amortisation of acquired intangibles as a % of sales.
Commenting on these results, Tim Cobbold, Chief Executive, said
Chloride's total solutions approach and increasingly balanced market exposure,
combined with a service oriented, cash generative business model, underpinned
strong financial performance in the year.
We enter the new financial year with an order book at record levels led by
Industrial Systems, but remain cautious about the short term.
Chloride, which has a robust business model, supports mission critical business
systems and public infrastructure. Despite the more challenging environment,
with robust service revenues and a strong balance sheet we expect the Group to
show resilience.
Enquiries:
Chloride Group PLC
Tim Cobbold (Chief Executive)
Neil Warner (Finance
Director)
Hudson Sandler
Andrew Hayes/Kate Hough
Telephone:
On 1 June 2009: 020 7796 4133
Thereafter: 020 7881 1440
An analysts' briefing will be held at the offices of Hudson Sandler at 29 Cloth
Fair, London EC1A 7NN at 11.00 a.m. on 1 June 2009.
CHAIRMAN'S STATEMENT
A RESILIENT BUSINESS
Despite a year of global economic turbulence Chloride has delivered another year
of growth in orders, sales, profits and cash. We continued to concentrate on
executing our proven strategy and maintaining our focus on those markets that
offer long term growth potential. Cash and cost management has been a priority
through 2008 and we finished the financial year with lower net debt whilst
maintaining investment in people, in bolt-on acquisitions and further
development to the geographic balance of the business. Significantly the
businesses outside our core market of Western Europe generated more than 43% of
sales in the year.
The mission critical importance of reliable and high quality electrical power is
recognised by our blue-chip customers and this ongoing market need, combined
with our strong service business, broad geographic spread and excellent cash
generation provide a sound basis to trade through more turbulent times and
position Chloride to offer excellent growth potential over the longer term.
KEY FINANCIALS
Total sales increased by 22% to GBP326.7 million (2008: GBP267.6 million), with
product sales up 19% at GBP216.7 million and service revenue up 30% at GBP110.0
million. Adjusted operating profit increased by 29% to GBP46.4 million (2008:
GBP36.1 million). Underlying sales growth in constant currency was 10% and the
operating margin increased - for the seventh successive year - by 0.7 points to
14.2%.
Adjusted profit before tax increased by 31% to GBP43.7 million (2008: GBP33.3
million), giving adjusted earnings per share of 11.5p (2008: 9.5p), an increase
of 21%. Basic earnings per share were 10.6p (2008: 10.0p).
Operating cash flow was GBP43.0 million (2008: GBP30.0 million), representing
93% of adjusted operating profit, despite an increase in stock and
debtors commensurate with the growth of the business.
Net debt for the year was reduced to GBP15.4 million (2008: GBP21.8 million) as
operating cash flow was more than sufficient to fund acquisitions (including
further investment in DB Power Electronics), capital expenditure, dividend
payments, tax and interest.
STRATEGIC INVESTMENT
We continued to make investments to improve the geographic and market sector
balance of the business, and to develop our market leading total solutions
offering. Most significantly, we increased our shareholding in DB Power
Electronics, India ("DB") to 49%. We now operate this business as a subsidiary
of the Group as we have effective management control. Our shareholding in DB
will be increased to 90% in July 2009. We acquired Power & Electronic Services
Limited in Ireland to establish a presence in this important market. In the UK,
we invested in our service business by acquiring Siemens' UK UPS Service
activities and, shortly after the period end, Malcolm Power Systems in
Scotland. We acquired Protech Services to develop our service capability in the
USA. We expanded our sales and service network with new businesses and offices
opened in Russia, Kazakhstan, The Philippines, Vietnam and, since the year end,
South Korea. In all cases we won business rapidly.
Our manufacturing joint venture in Shenzhen, China has developed quickly,
supplying new, upgraded products to European and Asian markets. This low cost
facility will help to underpin margins in a more competitive environment.
Product development remained a focus. Our R&D teams now include the DB
capability, and many new products were launched during the year to maintain our
technological leadership position.
BOARD
Keith Hodgkinson, the Group's former Chief Executive who retired as a director
on 29 July 2008, ended his consultancy arrangements with the Group on 30
November 2008.In December 2008 we announced the addition of John Hughes to the
Board as a non-executive director. John is Chairman of Spectris PLC, Telecity
Group PLC and Intec Telecom Systems PLC. The Board will benefit from his
extensive experience in the electronics, data centre and IT industries.
PEOPLE
Chloride's people are at the heart of the Group's success and the service we
offer our customers. On behalf of the Board I would like to thank them all for
another year of excellent performance. The Chloride Academy, now in its second
year of operation and has gone from strength to strength. The Academy
demonstrates Chloride's commitment to the training and development of its
people. I am also pleased that courses are now being offered as part of the
services we provide to customers.
DIVIDEND
The Board is pleased to propose a final dividend of 2.85p per share (2008:
2.40p), reflecting our continued confidence in the Company's long term
prospects, which with the interim dividend of 1.85p per share, gives a dividend
for the year of 4.7p per share - an increase of 18% on the prior year. Subject
to shareholders' approval at the Annual General Meeting ("AGM"), the final
dividend will be paid on 3 August 2009 to shareholders on the register at close
of business on 10 July 2009.
BALANCE SHEET STRENGTH
Chloride's record of prudent balance sheet management and strong cash generation
has served it well during the exceptional upheaval in markets during the last
year. Cost control and cash generation, together with close management of the
debt facilities, were priorities for the business during the year. We were able
to successfully renegotiate/replace, on sensible terms, all expiring facilities.
This focus on cash generation allowed us to reduce net debt significantly and
means that the company has more than sufficient headroom to continue investment
across the business.
OUTLOOK
Chloride operates in global markets with robust long term growth
characteristics, driven by increasing Digitisation and rising Energy demand.
We enter the new financial year with an order book at record levels led by
Industrial Systems, but remain cautious about the short term.
Chloride, which has a robust business model, supports mission critical business
systems and public infrastructure. Despite the more challenging environment,
with robust service revenues and cash generation, and a strong balance sheet we
expect the Group to show resilience. Mindful of this we continue to review
carefully all our markets and manage closely our cost base.
We continue to execute our strategy, with further careful investment in higher
growth potential markets and sectors, and in the technology and services that
meet the demands of our customers. Accordingly, we are confident in the longer
term prospects for the business.
Norman Broadhurst
Chairman
1 June 2009
CHIEF EXECUTIVE'S REVIEW
The unprecedented upheaval in financial and commercial markets that took place
during the last year affected all aspects of economic activity around the world.
This has, to varying degrees, fed through into each of the geographies and
market sectors in which we operate. The challenge for all businesses and
management teams has been to maximise performance in this very different
macro-economic environment.
At Chloride we chose to remain focused on the consistent and sustained execution
of our proven strategy and by doing so, we have been able to deliver another
year of strong growth in sales, profits and cash flow.
In view of the economic conditions, we were especially focused on operating cash
flows throughout the year. This has allowed us to both manage down our net debt
and to maintain investment for the future.
We managed our cost base appropriately, driving further business efficiencies
and taking pre-emptive cost reduction actions in the US and the UK when market
conditions warranted, to support margins.
Going forward, we will continue to execute our strategy and maintain the careful
and prudent management of our cash flows, costs and balance sheet.
STRATEGY
Chloride is a market leading, focused supplier of secure power solutions to
those customers who understand the risk to business continuity of degrading
power quality. We term this Secure Power Always.
Our Total Solutions Approach generates competitive advantage through
establishing long term relationships with customers, to whom we provide service
and support for our own and multi-vendor installations through life, often
exceeding ten years.
It is our strategy to operate in higher growth potential market sectors and
geographies and to focus our investment in order to:
* expand the network of sales and service offices through which we access and
support our customers.
* maintain the industry leading technological advantage in our product and service
solutions
* develop the skills and capability of the Chloride people who service and support
our customers
Looking forward, we are confident that our strategy provides an excellent
framework for sustained growth over the long term as well as greater resilience
in the shorter term.
LONG TERM GROWTH MARKETS
The world market for Secure Power solutions grew strongly in the first half of
2008 but, in common with many other industries, the rates of growth slowed
through the second half of the year as the economic environment
deteriorated.Nevertheless we are pleased to have once again delivered growth
ahead of the market and to build market share.
Despite these shorter term challenges, at a macro level we are confident that
increasing Digitisation and rising Energy demand are enduring long term drivers
of growth in our markets.
* Digitisation: The strong growth in the digital economy is expected to continue
and this will drive demand for digital processing and storage capacity which is
satisfied by data centres, one of our key markets.
* Energy: Long term growth in demand for energy and the poor condition of the
power infrastructure that extracts, generates and delivers it to consumers and
business, in both developed and emerging economies, drives opportunities for our
industrial business in which we have a market leading position.
IMPROVED GEOGRAPHIC AND MARKET SECTOR BALANCE
During the year we continued to focus on extending our capabilities and
geographic reach in higher growth potential markets. In so doing we increased
our addressable market, improved the inherent resilience of the business and
positioned ourselves closer to customers in order to be able to service and
support them more effectively.
This approach has significantly improved the geographic balance of the business.
Western Europe our largest market, now accounts for 57% (2008: 63%) of sales,
with Asia Pacific representing 16% (2008: 12%) and Central Asia and Eastern
Europe generating 10% (2008: 8%).
Similarly, we have developed a better balance to the market sectors the Group
serves. This is achieved on a region by region basis and our approach is focused
on the higher growth potential sectors for Chloride in each region. There remain
opportunities for us, even in relatively difficult market conditions, where we
have historically been underrepresented.
Energy and Oil & Gas represented 16% of our sales and we expect this sector to
continue to generate opportunities as we expand our geographic coverage. Oil &
Gas investment levels are expected to be lower, particularly affecting those
projects dependent on oil prices being greater than $50 per barrel (usually
those involving deepwater drilling and bitumen sands). In Power Generation, the
energy "gaps" in many Western economies should drive opportunities for
conventional and nuclear generation projects.
Despite a slowdown in Financial Services the Data Centre market, which accounts
for 20% of sales, is widely expected to be quite robust but with a switch from
large proprietary data centres to hosted facilities. We will continue to use our
experience and expertise in Western Europe to expand the business in Asia
Pacific, Eastern Europe and Russia.
Whilst we generated good performance in the Manufacturing sector where sales
grew by 53%, we expect this to be softer going forward. In the Medical sector,
up 50%, and the Government sector, 34% higher, we expect to see good growth
potential driven fundamentally by demographics and fiscal stimuli respectively.
Financial Services remained strong for Chloride and grew by 13%, reflecting a
good opening order book and strong performance in the first half of the year,
though order intake weakened markedly in the second half.
STRENGTHENING A MARKET LEADING POSITION IN WESTERN EUROPE
Western Europe, where we continue to be strong in the UK, Italy, Spain and
Germany, performed well with growth at 11%.
During the year we strengthened our presence and capabilities in key Western
European markets and geographies.
In the UK our service business grew strongly, more than offsetting the impact of
a slowdown in the Financial Services related solutions business. Chloride
Masterpower, which is based in Aberdeen and serves the Energy and Oil & Gas
markets, grew strongly and will now be integrated into the UK business. This
will allow a more focused approach to the many opportunities in the UK Energy
and Oil & Gas sectors, as well as releasing back office efficiencies.
In January 2009, we acquired Siemens UK's UPS service business. The business was
immediately integrated into the UK service network and provides access to a
range of new customers and markets. Just after the end of the year we completed
the acquisition of Malcolm Power Systems, a small UPS service provider in
Scotland.
In October 2008, we improved our access to the Irish market with the acquisition
of Power & Electronic Services Limited. Since the business was acquired, it has
performed strongly and has generated good orders, sales and cash.
In France, where our Industrial Systems business is headquartered in Lyon,
performance was strong with the focus on the Energy and Oil & Gas markets. We
also invested in our sales and service business relocating to new facilities and
ASTE, our multi vendor service provider, has had a successful year, growing
strongly with a number of customers including Aeroport de Paris and Euro Disney.
In Italy, we continued to make good progress, building on long term
relationships with customers across a wide range of sectors and, importantly,
started to address hitherto unexplored opportunities in the Energy and Oil & Gas
markets.
Spain performed well, particularly in the Energy and Oil & Gas markets, which
more than compensated for weakness in our traditional sectors. Sales grew 26%.
In Sweden, where we hold a 15% minority stake in Chloride Eltek, performance was
strong. We have an option to acquire the remaining interest in this business by
2010.
ACCELERATING GROWTH IN ASIA PACIFIC
The markets in Asia Pacific offer strong long term growth opportunities and we
continue to move quickly and decisively to expand our presence and capability in
this territory. Sales in the region were up 71%. We won excellent business in
China for the Olympics, in Korea in the Energy and Oil & Gas sectors as well as
in Malaysia and Hong Kong.
In India our strategic partnership with DB Power Electronics (DB) developed
further as we took effective management control in July 2008 and agreed to
acquire up to 90% of the business in July 2009. DB, which is the largest
domestic secure power supplier in India, has a sales and service network of more
than 40 offices. DB has a strong technical capability and holds the requisite
qualifications to supply the Indian nuclear industry. Going forward DB will be
responsible for all of Chloride's business in India, and where appropriate DB
technology will be sold through the Chloride network.
We continued to invest in Chloride Singapore to develop a market leading
presence in the territory and were rewarded with some significant order
wins, including the largest order placed in Singapore in the year from SingTel.
The business is well positioned for 2009/10.
In Vietnam we established our Representative Office and were rewarded with
orders and sales; including a prestigious order with the Vietnamese telecoms
operator Vietel. Late in the period we established a presence in Korea and the
Philippines and have already secured orders.
Our manufacturing joint venture in Shenzhen, Southern China, came on stream
during the year, as expected, with the launch of three new products under
200kVA. This significant investment, in which we have management control and
which is now profitable, will help underpin Group margins going forward and
provides a local source for the Asia Pacific region.
These investments reflect our commitment to the region and our determination to
establish a significant platform for a long term presence in Asia Pacific.
DEVELOPING A PRESENCE IN EASTERN EUROPE AND CENTRAL ASIA
In Eastern Europe and Central Asia we have focused on developing a local
Chloride presence in the countries we see as important. Excellent sales growth
of 51% in Eastern Europe reflected strong performances in a number of
businesses.
In Turkey, where we are the market leader, a focus on expanding our solutions
offering and a targeted approach to the Energy and Oil & Gas sectors generated
sales up by 42%.
In June 2008, we opened Chloride Rus LLC, a joint venture, with our long
standing partner in Russia, in which we have a minority stake. This is proving
to be an exciting opportunity with sales to the joint venture up 25% as we
developed the local technical capability and services platform.
Our business in Poland, Chloride Polska, had its second year of strong growth
with sales more than doubling.
In Kazakhstan, we established an additional sales and service office and in
Azerbaijan we are present in Baku to support the offshore oil & gas
installations in the Caspian Sea.
BUILDING A PLATROFM IN THE MIDDLE EAST AND AFRICA
We achieved another year of growth in the region with sales up 27%. Performance
was driven by good penetration of both the standard and Energy and Oil & Gas
markets in the UAE, Kuwait, North Africa and Saudi Arabia. In addition, we took
steps to further strengthen the management team and improve our technical,
project management and service capabilities in the region.
AMERICAS
Overall performance in the Americas was, in reported terms, up by 13%, the
highest growth rate in the region in recent years. In North America our small
products and power conditioning business struggled (down 11% at constant
exchange rates), a result of the poor economic environment and a specific
exposure to retail markets. However, the high power business grew by 27% (10% at
constant exchange rates), its fourth consecutive year of growth, and also
benefited from the acquisition of Protech Services, a Chicago based service
provider, in January 2009. This acquisition, the first in North America for a
number of years, will allow us to accelerate the development of the US service
business.
In Latin America we grew well with sales up 23%, the result of a strong
performance in Brazil.
SERVICE
Central to our strategy is the provision of high quality service and support to
our customers, which we believe differentiates us in the marketplace. During
the year we focused closely on the development of our service business, a key
part of our business model, as it provides resilient and secure future earnings.
We achieved another year of excellent growth with revenues up 30% to GBP110.0m.
The service order book grew by 27% and service revenue now accounts for 34%
(2008:32%) of total revenues.
PEOPLE
Our strategy is dependent upon the development of the knowledge and skill base
in Chloride and on our ability to add to and develop that base as we expand our
geographic presence.
Chloride is fortunate to have some of the most experienced people in the
industry and I am grateful to my colleagues for their commitment to customers,
which ultimately delivers success for Chloride.
The Chloride Academy is now firmly established at the centre of the training and
development programme for Chloride people and business partners across the
world. Blended learning techniques combining remote and residential attendance
are used and where appropriate courses are provided in local languages. Rapid
progress has been made with the formal accreditation of training centres in
Bologna, Bedford, Erlangen, Singapore, Madrid, Istanbul, Pune and Sydney . More
than 15 trainers have passed through a similarly rigorous assessment to achieve
trainer status.
Some 640 employees (27% of the headcount) have undertaken training modules in
the year covering sales, solution design and service support that have been
developed by experts, both internal and external to Chloride. As part of our
Environmental Health and Safety (EHS) policy our courses incorporate the
relevant EHS best practice to safeguard employees, customer staff and other
stakeholders.
CURRENCY
The Group's activities in each of the countries in which we operate are
conducted and managed in local currency. A majority of the Group's sales and
profits are generated within the Euro zone and the strength of the Euro relative
to Sterling has had a material translational impact on the Group's results.
During the year the impact on sales and operating profit was GBP32.4 million and
GBP6.1 million respectively.
Significant movements in the Sterling-Dollar and Sterling-Euro exchange rates
have the potential to have a material impact on the Group's reported results
going forward.
BALANCE SHEET STRENGTH
The management of cash, debt and facilities has been a priority throughout the
year. Net debt has been reduced by GBP6.4 million to GBP15.4 million, giving a
gearing of c.10.0%, whilst maintaining investment for the future. All expiring
facilities have been successfully renewed on appropriate terms. At the end of
May 2009 we had committed facilities of GBP115 million, which provides
substantial headroom for the foreseeable future.
PROSPECTS
Chloride operates in global markets with robust long term growth
characteristics, driven by increasing Digitisation and rising Energy demand.
We enter the new financial year with an order book at record levels led by
Industrial Systems, but remain cautious about the short term.
Chloride, which has a robust business model, supports mission critical business
systems and public infrastructure. Despite the more challenging environment,
with robust service revenues and cash generation, and a strong balance sheet we
expect the Group to show resilience. Mindful of this we continue to review
carefully all our markets and manage closely our cost base.
We continue to execute our strategy, with further careful investment in higher
growth potential markets and sectors, and in the technology and services that
meet the demands of our customers. Accordingly, we are confident in the longer
term prospects for the business.
Tim Cobbold
Chief Executive
1 June 2009
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 MARCH
+---+----------------------------------------------------------+------------+-------------------+-------------------+
| | | 2009 | 2008 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| | Notes | GBP000 | GBP000 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| | | | |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Revenue | 2&3 | 326,747 | 267,645 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Cost of sales | | (186,159) | (152,866) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Gross profit | | 140,588 | 114,779 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Distribution costs | | (43,222) | (38,012) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Administrative expenses | | (50,953) | (41,173) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Share of profits from associate and joint venture | | (8) | 475 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Operating profit before amortisation of acquired intangibles | 3 | 46,405 | 36,069 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| | Amortisation of acquired intangibles | | (3,829) | (2,201) |
+---+----------------------------------------------------------+------------+-------------------+-------------------+
| Operating profit | 3 | 42,576 | 33,868 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Finance cost | 4 | (5,477) | (5,264) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Investment income | 4 | 2,727 | 2,513 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Profit before tax | 3 | 39,826 | 31,117 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Income tax expense | 5 | (12,755) | (9,418) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Income tax exceptional release | 5 | - | 2,931 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Total income tax expense | 5 | (12,755) | (6,487) |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Profit after tax | | 27,071 | 24,630 |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Attributable to minority interests | | (454) | - |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Profit for the period attributable to equity holders of the | | 26,617 | 24,630 |
| parent | | | |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Earnings per share | | | |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Basic | 7 | 10.6p | 10.0p |
+--------------------------------------------------------------+------------+-------------------+-------------------+
| Diluted | 7 | 10.5p | 9.9p |
+---+----------------------------------------------------------+------------+-------------------+-------------------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
YEAR ENDED 31 MARCH
+----------------------------------------------+---------+--------------+--------------+
| | Notes | 2009 | 2008 |
+----------------------------------------------+---------+--------------+--------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+---------+--------------+--------------+
| Exchange differences arising on translation | 14 | 23,714 | 10,225 |
| of foreign operations | | | |
+----------------------------------------------+---------+--------------+--------------+
| (Losses)/gains on cash flow hedges | 14 | (24) | 345 |
+----------------------------------------------+---------+--------------+--------------+
| Revaluation of previously held interest in | 10 | 564 | - |
| associate on acquisition of control | | | |
+----------------------------------------------+---------+--------------+--------------+
| Actuarial (losses)/gains on post-employment | | (4,513) | 48 |
| employee benefits | | | |
+----------------------------------------------+---------+--------------+--------------+
| Tax on items recognised in equity | | (19) | 2,006 |
+----------------------------------------------+---------+--------------+--------------+
| Income and expense for the period recognised | | 19,722 | 12,624 |
| in equity | | | |
+----------------------------------------------+---------+--------------+--------------+
| Transfers | | | |
+----------------------------------------------+---------+--------------+--------------+
| Transfer to profit or loss on cash flow | 14 | (72) | (192) |
| hedges | | | |
+----------------------------------------------+---------+--------------+--------------+
| Profit for the period | | 26,617 | 24,630 |
+----------------------------------------------+---------+--------------+--------------+
| Total recognised income and expense for the | | 46,267 | 37,062 |
| period | | | |
+----------------------------------------------+---------+--------------+--------------+
CONSOLIDATED BALANCE SHEET AT 31 MARCH
+----------------------------------------------+--------+--------------+--------------+
| | Notes | 2009 | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+--------+--------------+--------------+
| Assets | | | |
+----------------------------------------------+--------+--------------+--------------+
| Non-current assets | | | |
+----------------------------------------------+--------+--------------+--------------+
| Goodwill | 9 | 71,546 | 57,789 |
+----------------------------------------------+--------+--------------+--------------+
| Other intangible assets | | 21,528 | 9,566 |
+----------------------------------------------+--------+--------------+--------------+
| Property, plant and equipment | | 27,674 | 19,809 |
+----------------------------------------------+--------+--------------+--------------+
| Interests in associates and joint venture | | 522 | 3,576 |
+----------------------------------------------+--------+--------------+--------------+
| Investments | | 25 | - |
+----------------------------------------------+--------+--------------+--------------+
| Deferred tax assets | | 5,739 | 8,371 |
+----------------------------------------------+--------+--------------+--------------+
| | | 127,034 | 99,111 |
+----------------------------------------------+--------+--------------+--------------+
| Current assets | | | |
+----------------------------------------------+--------+--------------+--------------+
| Inventories | | 44,044 | 35,748 |
+----------------------------------------------+--------+--------------+--------------+
| Trade and other receivables | | 110,538 | 88,879 |
+----------------------------------------------+--------+--------------+--------------+
| Derivative financial instruments | | 371 | 965 |
+----------------------------------------------+--------+--------------+--------------+
| Cash and cash equivalents | 12 | 38,145 | 22,770 |
+----------------------------------------------+--------+--------------+--------------+
| | | 193,098 | 148,362 |
+----------------------------------------------+--------+--------------+--------------+
| Total assets | | 320,132 | 247,473 |
+----------------------------------------------+--------+--------------+--------------+
| Liabilities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Current liabilities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Bank overdrafts and other loans | 12 | 44,029 | 12,605 |
+----------------------------------------------+--------+--------------+--------------+
| Obligations under finance leases | 12 | 89 | 41 |
+----------------------------------------------+--------+--------------+--------------+
| Trade and other payables | | 89,062 | 82,166 |
+----------------------------------------------+--------+--------------+--------------+
| Derivative financial instruments | | 103 | 686 |
+----------------------------------------------+--------+--------------+--------------+
| Tax payable | | 7,872 | 9,245 |
+----------------------------------------------+--------+--------------+--------------+
| Provisions | 11 | 3,665 | 3,283 |
+----------------------------------------------+--------+--------------+--------------+
| | | 144,820 | 108,026 |
+----------------------------------------------+--------+--------------+--------------+
| Non-current liabilities | | | |
+----------------------------------------------+--------+--------------+--------------+
| Bank and other loans | 12 | 9,088 | 31,638 |
+----------------------------------------------+--------+--------------+--------------+
| Obligations under finance leases | 12 | 386 | 284 |
+----------------------------------------------+--------+--------------+--------------+
| Other payables | | 341 | 147 |
+----------------------------------------------+--------+--------------+--------------+
| Post-employment benefits | | 12,597 | 6,986 |
+----------------------------------------------+--------+--------------+--------------+
| Deferred tax liabilities | | 6,718 | 2,019 |
+----------------------------------------------+--------+--------------+--------------+
| Tax payable | | 829 | 793 |
+----------------------------------------------+--------+--------------+--------------+
| Provisions | 11 | 3,025 | 3,052 |
+----------------------------------------------+--------+--------------+--------------+
| | | 32,984 | 44,919 |
+----------------------------------------------+--------+--------------+--------------+
| Total liabilities | | 177,804 | 152,945 |
+----------------------------------------------+--------+--------------+--------------+
| Net assets | | 142,328 | 94,528 |
+----------------------------------------------+--------+--------------+--------------+
CONSOLIDATED BALANCE SHEET AT 31 MARCH (continued)
+----------------------------------------------+--------+--------------+--------------+
| | Notes | 2009 | 2008 |
+----------------------------------------------+--------+--------------+--------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+--------+--------------+--------------+
| Equity | | | |
+----------------------------------------------+--------+--------------+--------------+
| Issued capital | 13 | 65,275 | 64,384 |
+----------------------------------------------+--------+--------------+--------------+
| Share premium | 14 | 7,843 | 5,502 |
+----------------------------------------------+--------+--------------+--------------+
| Own shares | 14 | (10,948) | (12,019) |
+----------------------------------------------+--------+--------------+--------------+
| Retained earnings | 14 | 40,834 | 29,766 |
+----------------------------------------------+--------+--------------+--------------+
| Foreign exchange reserve | 14 | 30,489 | 6,775 |
+----------------------------------------------+--------+--------------+--------------+
| Hedge reserve account | 14 | 24 | 120 |
+----------------------------------------------+--------+--------------+--------------+
| Equity attributable to equity holders of the | | 133,517 | 94,528 |
| parent | | | |
+----------------------------------------------+--------+--------------+--------------+
| Minority Interest | | 8,811 | - |
+----------------------------------------------+--------+--------------+--------------+
| Total equity | | 142,328 | 94,528 |
+----------------------------------------------+--------+--------------+--------------+
Approved by the Board on 1 June 2009
+----------------------------------------+-------------------------------------------+
| T R COBBOLD | N W WARNER |
| Director | Director |
+----------------------------------------+-------------------------------------------+
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 MARCH
+------------------------------------------------------+---------------+---------------+
| | 2009 | 2008 |
+------------------------------------------------------+---------------+---------------+
| | GBP000 | GBP000 |
+------------------------------------------------------+---------------+---------------+
| Operating activities | | |
+------------------------------------------------------+---------------+---------------+
| Operating profit | 42,576 | 33,868 |
+------------------------------------------------------+---------------+---------------+
| Amortisation of intangibles - acquired intangibles | 3,829 | 2,201 |
+------------------------------------------------------+---------------+---------------+
| Amortisation of intangibles - computer software | 927 | 681 |
+------------------------------------------------------+---------------+---------------+
| Depreciation of property, plant and equipment | 3,631 | 2,744 |
+------------------------------------------------------+---------------+---------------+
| Earnings before interest, tax, depreciation and | 50,963 | 39,494 |
| amortisation ("EBITDA") | | |
+------------------------------------------------------+---------------+---------------+
| Book gain on sale of property, plant and equipment | (73) | (74) |
+------------------------------------------------------+---------------+---------------+
| Non-cash charge for employee share schemes | 2,212 | 1,482 |
+------------------------------------------------------+---------------+---------------+
| Post-employment benefits | (170) | (97) |
+------------------------------------------------------+---------------+---------------+
| Interest in associate and joint venture | 8 | (475) |
+------------------------------------------------------+---------------+---------------+
| Operating cash flow before working capital movements | 52,940 | 40,330 |
+------------------------------------------------------+---------------+---------------+
| Decrease/(increase) in inventories | 1,306 | (3,207) |
+------------------------------------------------------+---------------+---------------+
| (Increase) in trade and other receivables | (3,814) | (8,168) |
+------------------------------------------------------+---------------+---------------+
| (Decrease)/increase in trade and other payables | (6,786) | 1,538 |
+------------------------------------------------------+---------------+---------------+
| (Decrease) in other provisions | (639) | (450) |
+------------------------------------------------------+---------------+---------------+
| Operating cash flow | 43,007 | 30,043 |
+------------------------------------------------------+---------------+---------------+
| Income taxes paid | (13,587) | (10,115) |
+------------------------------------------------------+---------------+---------------+
| Finance costs paid | (3,568) | (4,061) |
+------------------------------------------------------+---------------+---------------+
| Investment income | 1,032 | 1,100 |
+------------------------------------------------------+---------------+---------------+
| Net cash from operating activities | 26,884 | 16,967 |
+------------------------------------------------------+---------------+---------------+
| Investing activities | | |
+------------------------------------------------------+---------------+---------------+
| Purchase of property, plant and equipment | (4,896) | (4,097) |
+------------------------------------------------------+---------------+---------------+
| Purchase of software | (542) | (1,094) |
+------------------------------------------------------+---------------+---------------+
| Sale of property, plant and equipment | 179 | 171 |
+------------------------------------------------------+---------------+---------------+
| Purchase of businesses | (7,321) | (3,438) |
+------------------------------------------------------+---------------+---------------+
| Purchase of investment in associate | (914) | (2,337) |
+------------------------------------------------------+---------------+---------------+
| Net cash used in investing activities | (13,494) | (10,795) |
+------------------------------------------------------+---------------+---------------+
| Financing activities | | |
+------------------------------------------------------+---------------+---------------+
| Share capital issued | 3,232 | 2,913 |
+------------------------------------------------------+---------------+---------------+
| Purchase of own shares | (2,032) | (2,907) |
+------------------------------------------------------+---------------+---------------+
| Capital element of finance lease repayments | 61 | 206 |
+------------------------------------------------------+---------------+---------------+
| Increase in short-term borrowings | 29,940 | 7,086 |
+------------------------------------------------------+---------------+---------------+
| (Decrease) in long-term borrowings | (22,587) | (4,796) |
+------------------------------------------------------+---------------+---------------+
| Equity dividends paid | (10,895) | (8,125) |
+------------------------------------------------------+---------------+---------------+
| Net cash used in financing activities | (2,281) | (5,623) |
+------------------------------------------------------+---------------+---------------+
| Net increase in cash and cash equivalents | 11,109 | 549 |
+------------------------------------------------------+---------------+---------------+
| Cash and cash equivalents at beginning of year | 22,292 | 19,985 |
+------------------------------------------------------+---------------+---------------+
| Net foreign exchange differences | 3,792 | 1,758 |
+------------------------------------------------------+---------------+---------------+
| Cash and cash equivalents at end of year | 37,193 | 22,292 |
+------------------------------------------------------+---------------+---------------+
NOTES TO THE CONDENSED ACCOUNTS
YEAR ENDED 31 MARCH
+-----+-------------------------------------------------------------------------------+
| 1 | Basis of accounting |
+-----+-------------------------------------------------------------------------------+
Status of accounts
The financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union and in accordance
with the Companies Act 1985.
The financial information included in the preliminary announcement does not
constitute the Group's statutory accounts for the years ended 31 March 2009 or
2008, but is derived from those accounts. Statutory accounts for 2008 have been
delivered to the Registrar of Companies and those for 2009 will be delivered
following the company's annual general meeting. The auditors have reported on
those accounts; their reports were unqualified, did not draw attention to any
matters by way of emphasis without qualifying their reports and did not contain
statements under s. 237(2) or (3) Companies Act 1985.
While the financial information included in this preliminary announcement is
based on the Group's financial statements which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union, this announcement does not itself contain sufficient information
to comply with IFRSs. The Company expects to publish full financial statements
that comply with IFRSs as adopted by the European Union in June 2009.
The board of directors approved the preliminary announcement on 1 June 2009.
Going concern
The financial position of the Group, its cash flows, borrowing facilities and
liquidity are set out in note 12 below. The directors have considered the
Group's internal forecasts and projections that take into account reasonably
possible changes in trading performance. Based on these and the Group's
financing position at 31 March 2009 and the subsequent renewal of facilities
(see note 12 below), the directors consider that the company has adequate
facilities to continue to operate for the foreseeable future. Accordingly the
directors continue to adopt the going concern basis in preparing the annual
report and accounts.
+----+-------------------------------------------------------------------------------+
| 2 | Revenue |
+----+-------------------------------------------------------------------------------+
+-----------------------------------------------------------+------------+------------+
| | 2009 | 2008 |
+-----------------------------------------------------------+------------+------------+
| | GBP000 | GBP000 |
+-----------------------------------------------------------+------------+------------+
| Sale of goods | 216,699 | 182,790 |
+-----------------------------------------------------------+------------+------------+
| Revenue from services | 110,048 | 84,855 |
+-----------------------------------------------------------+------------+------------+
| | 326,747 | 267,645 |
+-----------------------------------------------------------+------------+------------+
| Investment income | 2,727 | 2,513 |
+-----------------------------------------------------------+------------+------------+
| | 329,474 | 270,158 |
+-----------------------------------------------------------+------------+------------+
+----+-------------------------------------------------------------------------------+
| 3 | Segmental Information |
+----+-------------------------------------------------------------------------------+
The Company derives its revenue and profits from a single class of business,
power protection.
Turnover and profit by source
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | ------------------------2009----------------------- |
+------------------------------+---------------------+-----------------------------------------------------+
| | | | | Inter- | |
| | | | | segment | |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | | GBP000 | GBP000 | GBP000 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Revenue | | | | | |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Europe | | | 269,297 | (10,855) | 258,442 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Americas | | | 28,705 | (1,170) | 27,535 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Asia and Australasia | | | 41,025 | (255) | 40,770 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Total sales | | | 339,027 | (12,280) | 326,747 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Inter-segment revenue | | | (12,280) | 12,280 | - |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | | 326,747 | - | 326,747 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Inter-segment sales are charged at prevailing market prices. |
+------------------------------+----------+----------+-------------------------------+----------+----------+
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | | ------------------------2008----------------------- |
+------------------------------+----------+----------+-----------------------------------------------------+
| | | | | Inter- | |
| | | | | segment | |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | | GBP000 | GBP000 | GBP000 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Revenue | | | | | |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Europe | | | 234,767 | (10,424) | 224,343 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Americas | | | 25,028 | (1,139) | 23,889 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Asia and Australasia | | | 19,444 | (31) | 19,413 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Total sales | | | 279,239 | (11,594) | 267,645 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| Inter-segment revenue | | | (11,594) | 11,594 | - |
+------------------------------+----------+----------+-------------------------------+----------+----------+
| | | | 267,645 | - | 267,645 |
+------------------------------+----------+----------+-------------------------------+----------+----------+
+--------------------+--------------------------------------+------------+------------+
| | | 2009 | 2008 |
+--------------------+--------------------------------------+------------+------------+
| | | GBP000 | GBP000 |
+--------------------+--------------------------------------+------------+------------+
| Operating profit and profit before tax | | |
+-----------------------------------------------------------+------------+------------+
| Europe | | 44,429 | 33,984 |
+--------------------+--------------------------------------+------------+------------+
| Americas | | 870 | 1,858 |
+--------------------+--------------------------------------+------------+------------+
| Asia and | | 2,693 | 2,532 |
| Australasia | | | |
+--------------------+--------------------------------------+------------+------------+
| | | 47,992 | 38,374 |
+--------------------+--------------------------------------+------------+------------+
| Corporate | | (5,416) | (4,506) |
+--------------------+--------------------------------------+------------+------------+
| Total operating | | 42,576 | 33,868 |
| profit | | | |
+--------------------+--------------------------------------+------------+------------+
| Finance costs | | (5,477) | (5,264) |
+--------------------+--------------------------------------+------------+------------+
| Investment income | | 2,727 | 2,513 |
+--------------------+--------------------------------------+------------+------------+
| Profit before tax | | 39,826 | 31,117 |
+--------------------+--------------------------------------+------------+------------+
Net losses from associates and joint ventures of GBP8,000 (2008: GBP475,000
profit) are included in the operating profit analysis above.
+---------------------------------------+--------------------+------------+------------+
| Depreciation | | | |
+---------------------------------------+--------------------+------------+------------+
| Europe | | 2,303 | 1,983 |
+---------------------------------------+--------------------+------------+------------+
| Americas | | 338 | 222 |
+---------------------------------------+--------------------+------------+------------+
| Asia and Australasia | | 646 | 164 |
+---------------------------------------+--------------------+------------+------------+
| Corporate | | 344 | 375 |
+---------------------------------------+--------------------+------------+------------+
| Total | | 3,631 | 2,744 |
+---------------------------------------+--------------------+------------+------------+
+---------------------------------------------------------+--+------------+------------+
| Amortisation of intangibles | | | |
+---------------------------------------------------------+--+------------+------------+
| Europe (including amortisation of acquired intangibles | | 3,108 | 2,790 |
| of GBP2,319,000 | | | |
| (2008: GBP2,126,000)) | | | |
+---------------------------------------------------------+--+------------+------------+
| Americas (including amortisation of acquired | | 35 | 14 |
| intangibles of GBP17,000 (2008: GBPnil)) | | | |
+---------------------------------------------------------+--+------------+------------+
| Asia and Australasia (including amortisation of | | 1,613 | 78 |
| acquired intangibles of GBP1,493,000 (2008: GBP75,000)) | | | |
+---------------------------------------------------------+--+------------+------------+
| Total | | 4,756 | 2,882 |
+---------------------------------------------------------+--+------------+------------+
+--------------------+--------------------------------------+------------+------------+
| Capital expenditure including other intangible additions | | |
+-----------------------------------------------------------+------------+------------+
| Europe | | 3,407 | 3,454 |
+--------------------+--------------------------------------+------------+------------+
| Americas | | 604 | 382 |
+--------------------+--------------------------------------+------------+------------+
| Asia and | | 1,197 | 1,049 |
| Australasia | | | |
+--------------------+--------------------------------------+------------+------------+
| Corporate | | 230 | 306 |
+--------------------+--------------------------------------+------------+------------+
| Total | | 5,438 | 5,191 |
+--------------------+--------------------------------------+------------+------------+
+--------------------+--------------------------------------+------------+------------+
| | | 2009 | 2008 |
+--------------------+--------------------------------------+------------+------------+
| | | GBP000 | GBP000 |
+--------------------+--------------------------------------+------------+------------+
| Total assets | | | |
+--------------------+--------------------------------------+------------+------------+
| Europe | | 200,545 | 175,054 |
+--------------------+--------------------------------------+------------+------------+
| Americas | | 34,680 | 25,100 |
+--------------------+--------------------------------------+------------+------------+
| Asia and | | 43,106 | 14,558 |
| Australasia | | | |
+--------------------+--------------------------------------+------------+------------+
| Total reporting | | 278,331 | 214,712 |
| segments | | | |
+--------------------+--------------------------------------+------------+------------+
| Corporate | | 41,801 | 32,761 |
+--------------------+--------------------------------------+------------+------------+
| Total | | 320,132 | 247,473 |
+--------------------+--------------------------------------+------------+------------+
Assets from joint ventures of GBP 0.5 million are included in the total asset
analysis above.
+--------------------+----------+----------+----------+-------+------------+------------+
| Total liabilities | | | | | | |
+--------------------+----------+----------+----------+-------+------------+------------+
| Europe | | | | | 93,232 | 85,952 |
+--------------------+----------+----------+----------+-------+------------+------------+
| Americas | | | | | 5,038 | 3,565 |
+--------------------+----------+----------+----------+-------+------------+------------+
| Asia and | | | | | 14,865 | 5,136 |
| Australasia | | | | | | |
+--------------------+----------+----------+----------+-------+------------+------------+
| Total reporting | | | | | 113,135 | 94,653 |
| segments | | | | | | |
+--------------------+----------+----------+----------+-------+------------+------------+
| Corporate | | | | | 64,669 | 58,292 |
+--------------------+----------+----------+----------+-------+------------+------------+
| Total | | | | | 177,804 | 152,945 |
+--------------------+----------+----------+----------+-------+------------+------------+
Third-party turnover by market destination
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
| | -------------2009------------- | -------------2008------------- |
+ +---------------------------------------------+--------------------------------+
| | GBP000 | % | GBP000 | % |
+-------------------------------------------+---------------------+-----------------------+---------------------+----------+
| Europe | | 218,844 | 67 | 190,297 | 71 |
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
| Americas | | 29,689 | 9 | 26,384 | 10 |
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
| Asia and | | 52,989 | 16 | 31,024 | 12 |
| Australasia | | | | | |
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
| Africa and Middle | | 25,225 | 8 | 19,940 | 7 |
| East | | | | | |
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
| | | 326,747 | 100 | 267,645 | 100 |
+-------------------+-----------------------+---------------------+-----------------------+---------------------+----------+
+----------+---------------------------+---------------------------+-----------+-----------+
| 4 Finance income and | |
| expense | |
+--------------------------------------+---------------------------------------------------+
| | 2009 | 2008 |
+------------------------------------------------------------------+-----------+-----------+
| | GBP000 | GBP000 |
+------------------------------------------------------------------+-----------+-----------+
| Investment income | | |
+------------------------------------------------------------------+-----------+-----------+
| Interest on short-term deposits | 940 | 474 |
+------------------------------------------------------------------+-----------+-----------+
| Other interest receivable | 8 | 152 |
+------------------------------------------------------------------+-----------+-----------+
| Expected return on post-employment plan assets | 1,779 | 1,887 |
+------------------------------------------------------------------+-----------+-----------+
| Total investment Income | 2,727 | 2,513 |
+------------------------------------------------------------------+-----------+-----------+
| Finance cost | | |
+------------------------------------------------------------------+-----------+-----------+
| Interest on loans | 3,401 | 3,234 |
+------------------------------------------------------------------+-----------+-----------+
| Interest on short-term borrowing and other financing costs | 33 | 316 |
+------------------------------------------------------------------+-----------+-----------+
| Interest on finance lease obligations | 15 | 4 |
+------------------------------------------------------------------+-----------+-----------+
| Interest on post-employment plan liabilities | 2,028 | 1,710 |
+------------------------------------------------------------------+-----------+-----------+
| Finance cost | 5,477 | 5,264 |
+------------------------------------------------------------------+-----------+-----------+
| 5 | |
| Taxation | |
+----------+-------------------------------------------------------------------------------+
| | 2009 | 2008 |
+------------------------------------------------------------------+-----------+-----------+
| | GBP000 | GBP000 |
+------------------------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------------------------+-----------+-----------+
| Current tax: | | |
+------------------------------------------------------------------+-----------+-----------+
| UK corporation tax at statutory rate | 1,454 | - |
+------------------------------------------------------------------+-----------+-----------+
| Foreign tax | 9,917 | 9,951 |
+------------------------------------------------------------------+-----------+-----------+
| Adjustment in respect of prior years | 345 | (208) |
+------------------------------------------------------------------+-----------+-----------+
| Current taxation | 11,716 | 9,743 |
+------------------------------------------------------------------+-----------+-----------+
| Deferred taxation | | |
+------------------------------------------------------------------+-----------+-----------+
| Origination and reversal of timing differences | | |
+------------------------------------------------------------------+-----------+-----------+
| - current year | 1,320 | 57 |
+------------------------------------------------------------------+-----------+-----------+
| - prior year | (281) | (382) |
+------------------------------------------------------------------+-----------+-----------+
| Total deferred tax | 1,039 | (325) |
+------------------------------------------------------------------+-----------+-----------+
| Total | 12,755 | 9,418 |
+------------------------------------------------------------------+-----------+-----------+
| Exceptional income tax item | - | (2,931) |
+------------------------------------------------------------------+-----------+-----------+
| Total tax expense | 12,755 | 6,487 |
+----------+---------------------------+---------------------------+-----------+-----------+
Exceptional tax item
During the prior year the Company released tax provisions of GBP2.9 million
which had previously been set up within the current tax charge. This release
followed the expiry of risks relating to businesses sold in 2001.
+--------------------------------------------------------------+----------+----------+
| The table below reconciles the total tax expense with the UK | | |
| corporation tax rate: | | |
+--------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+--------------------------------------------------------------+----------+----------+
| Profit before tax | 39,826 | 31,117 |
+--------------------------------------------------------------+----------+----------+
| Tax on profit arrived at by applying the standard rate of UK | 11,152 | 9,335 |
| tax 28% (2008: 30%) | | |
+--------------------------------------------------------------+----------+----------+
| Tax rate differences arising on overseas earnings - trading | 1,111 | 1,321 |
+--------------------------------------------------------------+----------+----------+
| Expenses not allowable for tax | 273 | 272 |
+--------------------------------------------------------------+----------+----------+
| Overseas losses not tax relieved | 50 | 448 |
+--------------------------------------------------------------+----------+----------+
| Benefit of previously unrecognised overseas tax losses | (122) | (2,399) |
+--------------------------------------------------------------+----------+----------+
| Deferred tax expense relating to changes in tax rates | 324 | 207 |
+--------------------------------------------------------------+----------+----------+
| Tax under/(over)provided in prior years | 64 | (3,405) |
+--------------------------------------------------------------+----------+----------+
| Other differences | ( 97) | 708 |
+--------------------------------------------------------------+----------+----------+
| Total tax expense | 12,755 | 6,487 |
+--------------------------------------------------------------+----------+----------+
Advance Corporation Tax ("ACT") written off in previous years amounting to
GBP9,183,000 (2008: GBP9,183,000) is available to reduce taxation on trading
profits in future years. There was no utilisation of ACT in the year (2008:
GBPnil).
The foreign tax charge includes tax withheld from remittances to the UK of
GBP105,000 (2008: GBP164,000).
+-----------+--------------------------------------------------------+----------+----------+
| 6 | |
| Dividends | |
+-----------+------------------------------------------------------------------------------+
| Amounts recognised as distributions to equity holders in the period: |
+------------------------------------------------------------------------------------------+
| | 2009 | 2008 |
| | GBP000 | GBP000 |
+--------------------------------------------------------------------+----------+----------+
| Final dividend for year ended 31 March 2008 of 2.40p (2007: | 6,010 | 4,166 |
| 1.70p) per share | | |
+--------------------------------------------------------------------+----------+----------+
| Interim dividend for the year ended 31 March 2009 of 1.85p | 4,680 | 3,959 |
| (2008: 1.60p) per share | | |
+--------------------------------------------------------------------+----------+----------+
| | 10,690 | 8,125 |
+--------------------------------------------------------------------+----------+----------+
| Proposed dividend for the year ended 31 March 2009 of 2.85p | 7,247 | 6,180 |
| (2008: 2.40p) per share | | |
+--------------------------------------------------------------------+----------+----------+
| | | |
+--------------------------------------------------------------------+----------+----------+
| The proposed dividend is subject to approval by shareholders at the Annual |
| General Meeting and has not been included as a liability in these financial |
| statements. |
+-----------+--------------------------------------------------------+----------+----------+
The trustees of the Chloride Group Employee Benefit Trust have waived their
rights to receive dividends. Accordingly the amounts shown above for 2009 are
net of dividends of GBP241,000 (2008: GBP264,000).
7 Earnings per share
+--------+--------+--------+--------+----------+--------+--------+--------+--------+--------+
| | | | |
+--------------------------+----------------------------+-----------------+-----------------+
| a) Basic and adjusted EPS |
| The reconciliation between basic and adjusted EPS, and between the earnings figures used |
| in calculating them, is as follows: |
+-------------------------------------------------------------------------------------------+
| | Profit | Taxation | Attributable to | Profit | EPS |
| | before | | | after | |
| | taxation | | Minority | taxation | |
| | | | Interests | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | p |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| 2009 | | | | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Basic | 39,826 | (12,755) | (454) | 26,617 | 10.6 |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Amortisation of | 3,829 | (1,036) | (452) | 2,341 | |
| acquired | | | | | |
| intangibles | | | | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Adjusted | 43,655 | (13,791) | (906) | 28,958 | 11.5 |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| 2008 | | | | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Basic | 31,117 | (6,487) | - | 24,630 | 10.0 |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Amortisation of | 2,201 | (449) | - | 1,752 | - |
| acquired | | | | | |
| intangibles | | | | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Exceptional tax | - | (2,931) | - | (2,931) | - |
| release | | | | | |
+-----------------+-----------------+----------+-----------------+-----------------+--------+
| Adjusted | 33,318 | (9,867) | - | 23,451 | 9.5 |
+--------+--------+--------+--------+----------+--------+--------+--------+--------+--------+
+--------------------------------------------+----------+----------+----------+--------+
| b) Diluted EPS |
| Diluted EPS has been calculated based on the basic and adjusted earnings amounts |
| above. The diluted and diluted adjusted earnings are set out below: |
+--------------------------------------------------------------------------------------+
| | | | 2009 | 2008 |
+--------------------------------------------+----------+----------+----------+--------+
| | | | p | p |
+--------------------------------------------+----------+----------+----------+--------+
| Diluted | | | 10.5 | 9.9 |
+--------------------------------------------+----------+----------+----------+--------+
| Diluted adjusted | | | 11.4 | 9.4 |
+--------------------------------------------+----------+----------+----------+--------+
+--------------------------------------------+----------+----------+----------+---------+
| A reconciliation between the shares used in calculating basic and diluted EPS is as |
| follows: |
+---------------------------------------------------------------------------------------+
| | | | 2009 | 2008 |
+--------------------------------------------+----------+----------+----------+---------+
| | | | million | million |
| | | | | |
+--------------------------------------------+----------+----------+----------+---------+
| Average shares used in basic EPS | | | 252.2 | 246.7 |
| calculation | | | | |
+--------------------------------------------+----------+----------+----------+---------+
| Dilutive share options outstanding | | | 1.0 | 2.2 |
+--------------------------------------------+----------+----------+----------+---------+
| Shares used in diluted EPS calculation | | | 253.2 | 248.9 |
+--------------------------------------------+----------+----------+----------+---------+
The weighted average number of shares excludes shares held by the Chloride Group
Employee Benefit Trust. The directors consider that the adjusted earnings per
share figures more accurately reflect the underlying performance of the
business.
+----+-------------------------------------------------------------------------------+
| 8 | Employee information |
+----+-------------------------------------------------------------------------------+
At 31 March 2009 the total number of the Company's employees, including
executive directors, was 2,333 (2008: 1,578). The average number of persons
employed during the year is analysed below:
+----------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------------------+----------+----------+
| Europe - including 374 in the UK (2008: 399) | 1,256 | 1,211 |
+----------------------------------------------------------------+----------+----------+
| Americas | 200 | 203 |
+----------------------------------------------------------------+----------+----------+
| Rest of the world | 687 | 132 |
+----------------------------------------------------------------+----------+----------+
| | 2,143 | 1,546 |
+----------------------------------------------------------------+----------+----------+
Employment costs (including those relating to executive directors) were as
follows:
+----------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+----------------------------------------------------------------+----------+----------+
| Wages and salaries | 59,696 | 50,543 |
+----------------------------------------------------------------+----------+----------+
| Social security costs | 11,083 | 9,366 |
+----------------------------------------------------------------+----------+----------+
| Other pensions costs | 2,831 | 2,077 |
+----------------------------------------------------------------+----------+----------+
| | 73,610 | 61,986 |
+----------------------------------------------------------------+----------+----------+
+----------+--------------------------------------------------------+----------+----------+
| 9 | |
| Goodwill | |
+----------+------------------------------------------------------------------------------+
| | 2009 | 2008 |
+-------------------------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+-------------------------------------------------------------------+----------+----------+
| Cost and carrying amount: | | |
+-------------------------------------------------------------------+----------+----------+
| At 1 April | 57,789 | 52,859 |
+-------------------------------------------------------------------+----------+----------+
| Exchange differences | 9,384 | 3,217 |
+-------------------------------------------------------------------+----------+----------+
| Adjustment to goodwill in respect of prior year | 167 | 59 |
| acquisitions | | |
+-------------------------------------------------------------------+----------+----------+
| Recognised on acquisition of subsidiaries (see note 10) | 4,206 | 1,654 |
+-------------------------------------------------------------------+----------+----------+
| At 31 March | 71,546 | 57,789 |
+----------+--------------------------------------------------------+----------+----------+
Goodwill is not amortised but is tested for impairment annually. Value in use
calculations are used to calculate recoverable amount. Value in use is
calculated as the net present value of the projected risk-adjusted, post-tax
free cash flows of the cash generating unit in which the goodwill is contained,
applying a discount rate of the Company post-tax weighted average cost of
capital of 9.0%. This approximates to applying a pre-tax discount of 13.1% to
pre-tax cash flows. These cash flow projections are made over a 20-year period
and are consistent with approved budgets, and market growth rates projected by
Frost & Sullivan over the first five years and a growth rate in line with an
inflation assumption of 2% per annum thereafter.
In testing for goodwill impairment, the directors have considered the following
downside sensitivities:
- a 1% increase in the pre-tax discount rate;
- a reduction in the long-term growth rate assumption of 1%; and
- a 1 percentage point reduction in the forecast operating margin the
businesses.
With the exception of our low power North American business, Oneac, the
individual cash generating units showed significant headroom. The assessment for
Oneac showed base case headroom of GBP1.7 million. Current economic conditions
create uncertainty and make forecasting difficult. Projections reflecting the
sensitivities of a 1% increase in the discount rate, a reduction of 1% in the
long term growth rate and a reduction of 1 point in the operating margin of
Oneac, showed potential respective impairments of GBP0.3 million, GBP0.9 million
and GBP0.7 million. No provisions for impairment have been recognised this year
on the grounds of the positive base case headroom. The company will continue to
monitor the performance of Oneac over the next 12 months.
+-----+------------------------------------------------------------------------------+
| 10 | Acquisition of subsidiaries |
+-----+------------------------------------------------------------------------------+
a) DB Power Electronics (Pvt) Ltd
On 3 July 2008 the Company acquired a further 17% of the share capital of DB
Power Electronics (Pvt) Ltd, a manufacturer and supplier of critical power
protection services in India for a cash consideration of GBP4.8 million. This
brings the Company's total investment in DB Power to 49%. Under an agreement
with the shareholders of DB Power, the Company intends to exercise its right to
purchase a further 41% during the period to July 2009.
Based on the Company's right to acquire the additional 41% of DB Power's share
capital and resulting from its rights to govern the financial and operating
policies of DB Power and exposure to its risks and rewards in the intervening
period, the Company has a controlling interest in DB Power. As a consequence
from July 2008, the Company ceased to account for DB Power as an interest in
associate and now consolidates its financial statements.
The purchase has given rise to acquisition goodwill of GBP2.0 million and other
intangibles (intellectual property, customer lists and trade name) of GBP11.9
million.
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| | Book value | Accounting | Fair value | Fair value |
| | | | adjustments | |
| | | policy | | |
| | | changes | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Net assets acquired | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Property plant and | 1,628 | - | 1,224 | 2,852 |
| equipment | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Other intangible assets - | - | - | 11,905 | 11,905 |
| intellectual property, | | | | |
| customer lists and trade | | | | |
| name | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Investments | 11 | - | - | 11 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Deferred tax asset | - | 36 | - | 36 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Inventories | 3,055 | - | (250) | 2,805 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Trade and other | 4,998 | - | (500) | 4,498 |
| receivables | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Cash and cash equivalents | 273 | - | - | 273 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Trade creditors and other | (3,582) | 30 | - | (3,552) |
| payables | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Current taxation | (340) | | - | (340) |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Deferred taxation | (6) | - | (4,299) | (4,305) |
| liability | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Provisions | - | - | (125) | (125) |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Post employment benefits | - | (61) | - | (61) |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| | 6,037 | 5 | 7,995 | 13,997 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Minority share of assets | | | | (7,138) |
| acquired | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Group share of net assets | | | | 6,859 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Cost of acquisition: | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Cash flow on acquisition | | | | 4,546 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Cash acquired with | | | | 273 |
| acquisition | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Cash payment (including directly attributable costs of | | 4,819 |
| GBP49,000) | | |
+--------------------------------------------------------+--------------------------------------------+-------------+
| Transfer from associates | | | | 3,520 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Revaluation of previously held interest in associate | | 564 |
| on acquisition of control | | |
+--------------------------------------------------------+--------------------------------------------+-------------+
| Total cost of acquisition | | 8,903 |
+--------------------------------------------------------+--------------------------------------------+-------------+
| | | | | |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
| Goodwill | | | | 2,044 |
+----------------------------+-------------+-------------+--------------------------------------------+-------------+
Goodwill substantially represents the expertise and technical knowledge of DB
Power's staff together with synergistic benefits. Included in the Group's
results for the 12 month period to 31 March 2009 are Sales of GBP16.6 million
and Profits of GBP2.8 million.
b) Power & Electronic Services Limited ("PES")
On 10 October 2008 the Company acquired the share capital of Power & Electronic
Services Limited a supplier of critical power protection services in Eire for a
cash consideration of GBP1.0 million with a further payment of GBP0.3 million
deferred until October 2009 and 2010.
The purchase has given rise to acquisition goodwill of GBP0.5 million and other
intangibles - customer lists of GBP0.5 million.
+-------------------------------------------+--------------+--------------+--------------+
| | Book value | Fair value | Fair value |
| | | adjustments | |
+-------------------------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+--------------+--------------+--------------+
| Net assets acquired | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Other intangible assets - customer lists | - | 543 | 543 |
+-------------------------------------------+--------------+--------------+--------------+
| Trade and other receivables | 254 | (3) | 251 |
+-------------------------------------------+--------------+--------------+--------------+
| Cash and cash equivalents | 294 | - | 294 |
+-------------------------------------------+--------------+--------------+--------------+
| Trade creditors and other payables | (129) | (56) | (185) |
+-------------------------------------------+--------------+--------------+--------------+
| Current taxation | (21) | 9 | (12) |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred tax liability | - | (86) | (86) |
+-------------------------------------------+--------------+--------------+--------------+
| Provisions | - | (16) | (16) |
+-------------------------------------------+--------------+--------------+--------------+
| | 398 | 391 | 789 |
+-------------------------------------------+--------------+--------------+--------------+
| Goodwill | | | 504 |
+-------------------------------------------+--------------+--------------+--------------+
| Total consideration | | | 1,293 |
+-------------------------------------------+--------------+--------------+--------------+
| Satisfied by : | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Cash | | | 923 |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred acquisition payment | | | 319 |
+-------------------------------------------+--------------+--------------+--------------+
| Directly attributable costs | | | 51 |
+-------------------------------------------+--------------+--------------+--------------+
| | | | 1,293 |
+-------------------------------------------+--------------+--------------+--------------+
| Less: cash acquired | | | (294) |
+-------------------------------------------+--------------+--------------+--------------+
| Cash flow on acquisition | | | 999 |
+-------------------------------------------+--------------+--------------+--------------+
Goodwill substantially represents the expertise and technical knowledge of the
company's staff together with synergistic benefits.
PES contributed GBP0.8 million of revenue and GBP0.2 million to the Company's
profit before tax for the period between the date of acquisition and the balance
sheet date.
c) Protech
On 17 December 2008 the Company acquired the trade and assets of Protech
Technical Services, a supplier of critical power protection services in the USA
for a cash consideration of GBP0.5 million with a further payment of GBP0.2
million deferred until December 2009
The purchase has given rise to acquisition goodwill of GBP0.5 million and other
intangibles - customer lists of GBP0.4 million
+-------------------------------------------+--------------+--------------+--------------+
| | Book value | Fair value | Fair value |
| | | adjustments | |
+-------------------------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+--------------+--------------+--------------+
| Net assets acquired | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Property plant and equipment | 42 | - | 42 |
+-------------------------------------------+--------------+--------------+--------------+
| Other intangible assets - customer lists | - | 426 | 426 |
+-------------------------------------------+--------------+--------------+--------------+
| Inventories | 59 | - | 59 |
+-------------------------------------------+--------------+--------------+--------------+
| Trade creditors and other payables | (135) | - | (135) |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred tax liability | - | (169) | (169) |
+-------------------------------------------+--------------+--------------+--------------+
| | (34) | 257 | 223 |
+-------------------------------------------+--------------+--------------+--------------+
| Goodwill | | | 472 |
+-------------------------------------------+--------------+--------------+--------------+
| Total consideration | | | 695 |
+-------------------------------------------+--------------+--------------+--------------+
| Satisfied by : | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Cash | | | 510 |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred acquisition payment | | | 170 |
+-------------------------------------------+--------------+--------------+--------------+
| Directly attributable costs | | | 15 |
+-------------------------------------------+--------------+--------------+--------------+
| Cash flow on acquisition | | | 695 |
+-------------------------------------------+--------------+--------------+--------------+
Goodwill substantially represents the expertise and technical knowledge of the
company's staff together with synergistic benefits.
Protech contributed GBP0.2 million of revenue and GBP14,500 to the Company's
profit before tax for the period between the date of acquisition and the balance
sheet date.
d) Siemens UK UPS Systems
On 6th January 2009 the Company acquired the trade and assets of Siemens UK UPS
Systems business, a supplier of critical power protection services in the UK for
a cash consideration of 0.6m million with a further payment of GBP0.2 million
deferred until December 2009
The purchase has given rise to acquisition goodwill of GBP1.2 million and other
intangibles - customer lists of GBP0.4 million.
+-------------------------------------------+--------------+--------------+--------------+
| | Book value | Fair value | Fair value |
| | | adjustments | |
+-------------------------------------------+--------------+--------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-------------------------------------------+--------------+--------------+--------------+
| Net assets acquired | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Other intangible assets - customer lists | - | 413 | 413 |
+-------------------------------------------+--------------+--------------+--------------+
| Inventories | 167 | - | 167 |
+-------------------------------------------+--------------+--------------+--------------+
| Trade and other receivables | 581 | - | 581 |
+-------------------------------------------+--------------+--------------+--------------+
| Trade creditors and other payables | (1,060) | - | (1,060) |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred tax liability | - | (124) | (124) |
+-------------------------------------------+--------------+--------------+--------------+
| Provisions | - | (386) | (386) |
+-------------------------------------------+--------------+--------------+--------------+
| | (312) | (97) | (409) |
+-------------------------------------------+--------------+--------------+--------------+
| Goodwill | | | 1,186 |
+-------------------------------------------+--------------+--------------+--------------+
| Total consideration | | | 777 |
+-------------------------------------------+--------------+--------------+--------------+
| Satisfied by : | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Cash | | | 529 |
+-------------------------------------------+--------------+--------------+--------------+
| Deferred acquisition payment | | | 200 |
+-------------------------------------------+--------------+--------------+--------------+
| Directly attributable costs | | | 48 |
+-------------------------------------------+--------------+--------------+--------------+
| Cash flow on acquisition | | | 777 |
+-------------------------------------------+--------------+--------------+--------------+
Goodwill substantially represents the expertise and technical knowledge of the
company's staff together with synergistic benefits.
Siemens UPS Systems contributed GBP0.7 million of revenue and GBP0.1 million to
the Company's profit before tax for the period between the date of acquisition
and the balance sheet date.
e) Other
The company made deferred payments relating to prior year acquisitions of GBP0.3
million.
If the acquisitions had been made on 1 April 2008, Group revenue would have been
GBP333 million and Group profit attributable to equity holders of the parent
would have been GBP27.1 million.
11 Provisions for liabilities
+-----------------+-----------------+---------------+----------+------------+------------+
| | Restructuring | Warranty | Other | Total |
| | | | | |
+-----------------------------------+---------------+----------+------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------+---------------+----------+------------+------------+
| | | | | |
+-----------------------------------+---------------+----------+------------+------------+
| At 1 April 2008 | 474 | 2,286 | 3,575 | 6,335 |
+-----------------------------------+---------------+----------+------------+------------+
| Exchange rate adjustments | 62 | 386 | 178 | 626 |
+-----------------------------------+---------------+----------+------------+------------+
| Profit and loss account | 65 | (13) | 430 | 482 |
+-----------------------------------+---------------+----------+------------+------------+
| Acquisition of subsidiaries | - | 173 | 905 | 1,078 |
+-----------------------------------+---------------+----------+------------+------------+
| Utilised in the year | (402) | (437) | (992) | (1,831) |
+-----------------------------------+---------------+----------+------------+------------+
| At 31 March 2009 | 199 | 2,395 | 4,096 | 6,690 |
+-----------------------------------+---------------+----------+------------+------------+
| Current | 199 | 325 | 3,141 | 3,665 |
+-----------------------------------+---------------+----------+------------+------------+
| Non-current | - | 2,070 | 955 | 3,025 |
+-----------------+-----------------+---------------+----------+------------+------------+
Restructuring provisions mainly relate to redundancy payments. Warranties given
by the Company depend on the nature of the application sold, and range from
between one and five years. Other provisions also include contractual, other
obligations such as vacant property and routine legal matters and deferred
acquisition costs.
12 Analysis of net debt
+------------+------------+------------+------------+-------------+------------+
| | | | Exchange | At |
+-------------------------+------------+------------+-------------+------------+
| | At 1 April | | translation | 31 March |
| | | | | |
+ +------------+------------+-------------+------------+
| | 2008 | Cash flow | difference | 2009 |
| | | | | |
+-------------------------+------------+------------+-------------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------+------------+------------+-------------+------------+
| Cash and cash | 22,770 | 11,522 | 3,853 | 38,145 |
| equivalents | | | | |
+-------------------------+------------+------------+-------------+------------+
| Bank overdrafts | (478) | (413) | (61) | (952) |
+-------------------------+------------+------------+-------------+------------+
| | 22,292 | 11,109 | 3,792 | 37,193 |
+-------------------------+------------+------------+-------------+------------+
| Debt due within one | (12,127) | (29,940) | (1,010) | (43,077) |
| year | | | | |
+-------------------------+------------+------------+-------------+------------+
| Debt due after more | (31,638) | 22,587 | (37) | (9,088) |
| than one year | | | | |
+-------------------------+------------+------------+-------------+------------+
| Finance lease | (325) | (61) | (89) | (475) |
| obligations | | | | |
+-------------------------+------------+------------+-------------+------------+
| Net debt | (21,798) | 3,695 | 2,656 | (15,447) |
+------------+------------+------------+------------+-------------+------------+
Analysis of borrowings by currency:
+-------------------------------------------------+-----------+---------+---------+---------+
| | Sterling | Euro | Other | Total |
+-------------------------------------------------+-----------+---------+---------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | |
+-------------------------------------------------+-----------+---------+---------+---------+
| Year ended March 2009 | | | | |
+-------------------------------------------------+-----------+---------+---------+---------+
| Bank overdrafts | - | - | 952 | 952 |
+-------------------------------------------------+-----------+---------+---------+---------+
| Other loans | 44,000 | 7,918 | 247 | 52,165 |
+-------------------------------------------------+-----------+---------+---------+---------+
| | 44,000 | 7,918 | 1,199 | 53,117 |
+-------------------------------------------------+-----------+---------+---------+---------+
| Year ended March 2008 | | | | |
+-------------------------------------------------+-----------+---------+---------+---------+
| Bank overdrafts | - | 386 | 92 | 478 |
+-------------------------------------------------+-----------+---------+---------+---------+
| Other loans | 31,200 | 12,401 | 164 | 43,765 |
+-------------------------------------------------+-----------+---------+---------+---------+
| | 31,200 | 12,787 | 256 | 44,243 |
+-------------------------------------------------+-----------+---------+---------+---------+
The weighted average interest rate on the borrowings above was 5.09% (2008:
6.20%).
Borrowings and cash balances have been offset where the legal right of offset
exists. The Company's Articles of Association limit the external borrowings of
the Company and its subsidiary undertakings to an amount equal to twice the
share capital and consolidated reserves.
At 31 March 2009 the Company had GBP110 million of committed facilities (2008:
GBP92 million), of which GBP58 million (2008: GBP46 million) was unutilised. Of
this amount, GBP50 million expires within one year (2008: GBP30 million), GBP10
million expires within one to two years (2008: GBP50 million) and GBP50 million
(2008: GBP10 million) expires after two years. In addition to this the Company
has GBP7 million of overdraft facilities (2008: GBP2 million) of which GBP1
million were drawn (2008: GBP0.5 million).
On 22 May the company signed a further GBP30 million three year committed
facility with HSBC. This facility replaces a GBP25 million facility which is
included in the GBP50 million of facilities expiring with one year shown above.
The directors have considered the Company's internal forecasts and projections
that take into account reasonably possible changes in trading performance. The
levels of committed facilities have been compared to forecast borrowing
requirements. The directors have also analysed the effect of forecast
performance on covenant compliance. Chloride has significant headroom in terms
of both available facilities and in terms of its operation within existing
covenants.
Based on the above, and after making enquiries, the directors have a reasonable
expectation that the company and the group have adequate facilities to continue
in operational existence for the foreseeable
future.
13 Share Capital
+-----------------------+-----------------------+--+--------+------------+------------+
| | | | 2009 | 2008 |
+-----------------------------------------------+--+--------+------------+------------+
| | | | GBP000 | GBP000 |
+-----------------------------------------------+--+--------+------------+------------+
| Authorised: | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| Equity | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| Ordinary shares of 25p each: 329,752,000 | | | 82,438 | 82,438 |
| (2008: 329,752,000) | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| | | | 82,438 | 82,438 |
+-----------------------------------------------+--+--------+------------+------------+
| Issued: | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| Equity | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| Ordinary shares of 25p each 261,098,032 | | | 65,275 | 64,384 |
| (2008: 257,534,906) | | | | |
+-----------------------------------------------+--+--------+------------+------------+
| | | | 65,275 | 64,384 |
+-----------------------+-----------------------+--+--------+------------+------------+
The increase in the issued ordinary share capital of the Company is due to the
exercise during the year of executive and savings-related share options and
certain PSP awards over a total of 3,563,126 shares (2008: 5,173,413). As at 31
March 2009, there were 3,241,349 ordinary shares (2008: 6,806,110) under option
under executive share option schemes, 1,301,686 (2008: 1,461,178) under option
under the Company's savings-related share option schemes and 4,028,683 (2008:
4,301,209) under option under the Company's Performance Share Plan.
+----------+----------------------+---------+----------+---------+----------+----------+----------+
| 14 | |
| Reserves | |
+----------+--------------------------------------------------------------------------------------+
| | Share | Own | Hedging | Exchange | Retained | |
| | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| | premium | shares | reserve | reserve | earnings | Total |
| | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| At 1 April 2007 | 3,882 | (10,408) | (33) | (3,450) | 11,021 | 1,012 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Exchange rate adjustments | - | - | - | 10,225 | - | 10,225 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Gains on cash flow hedges | - | - | 345 | - | - | 345 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Profit for the year | - | - | (192) | - | 24,630 | 24,438 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Dividends paid | - | - | - | - | (8,125) | (8,125) |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Premium on shares issued | 1,620 | - | - | - | - | 1,620 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Movements in respect of | - | (1,611) | - | - | (1,296) | (2,907) |
| own shares | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Share-based payments | - | - | - | - | 1,482 | 1,482 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Actuarial gain | - | - | - | - | 48 | 48 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Tax on items recognised | - | - | - | - | 2,006 | 2,006 |
| in equity | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| At 1 April 2008 | 5,502 | (12,019) | 120 | 6,775 | 29,766 | 30,144 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Exchange rate adjustments | - | - | - | 23,714 | - | 23,714 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Gains on cash flow hedges | - | - | (24) | - | - | (24) |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Profit for the year | - | - | (72) | - | 26,617 | 26,545 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Dividends paid | - | - | - | - | (10,690) | (10,690) |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Premium on shares issued | 2,341 | - | - | - | - | 2,341 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Movements in respect of | - | 1,071 | - | - | (3,103) | (2,032) |
| own shares | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Share-based payments | - | - | - | - | 2,212 | 2,212 |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Revaluation of previously | - | - | - | - | 564 | 564 |
| held interest in | | | | | | |
| associate on acquisition | | | | | | |
| of control | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Actuarial Loss | - | - | - | - | (4,513) | (4,513) |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| Tax on items recognised | - | - | - | - | (19) | (19) |
| in equity | | | | | | |
+---------------------------------+---------+----------+---------+----------+----------+----------+
| At 31 March 2009 | 7,843 | (10,948) | 24 | 30,489 | 40,834 | 68,242 |
+----------+----------------------+---------+----------+---------+----------+----------+----------+
"Own shares" represent 6,793,309 (2008: 8,140,994) ordinary shares in the
Company held by the Chloride Group Employee Benefit Trust, having a market value
at 31 March 2009 of GBP8.5 million (2008: GBP15.5 million). The Trust holds
these shares to meet long-term commitments in relation to employee share plans.
The retained profits of foreign subsidiary undertakings, if distributed as
dividends, would be liable to UK and/or foreign taxes and subject to double tax
relief.
RESPONSIBILITY STATEMENT
The responsibility statement below has been prepared in connection with the
company's full annual report for the year ended 31 March 2009. Certain parts of
that report are not included within this announcement.
We confirm that to the best of our knowledge:
* The financial statements, prepared in accordance with IFRS as adopted by the
European Union, give a true and fair view of the assets, liabilities, financial
position and profit and loss of the company and the undertakings included in the
consolidation taken as a whole; and
* The management report, which is incorporated into the director's report,
includes a fair review of the development and performance of the business and
the position of the company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties they face.
This responsibility statement was approved by the board of directors on 1 June
2009 and is signed on its behalf by:
Tim CobboldNeil Warner
Chief ExecutiveGroup Finance Director
1 June 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZGGZKNLGGLZM
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