RNS Number:2542K
Ferraris Group PLC
23 April 2003
23 April 2003
Ferraris Group plc
Interim Results - 6 months to 28 February 2003
Ferraris Group plc ("Ferraris"), the medical diagnostics and life sciences group
with operations in the UK, Europe and North America, announces Interim results
for the six months ended 28 February 2003. Products and services are supplied to
a wide range of healthcare providers and the world's leading pharmaceutical and
diagnostic companies.
Financial Highlights (before discontinued and exceptional items)
* Continued Growth
* Turnover growth of 6% to #30.1m (5% contributed by Acquisitions; 1%
Organic)
* Operating profit (pre-goodwill) up 11% to #2.72m (2002: #2.45m)
* Operating margin up 9.0% for H1 03 (H1 02: 8.6%)
* Pre-tax profits (pre-goodwill) up 16% to #2.27m (2002: #1.96m)
* EPS growth of 14.5% on continuing activities (pre-goodwill)
* Dividend 2.2p (2002: 2.2p), covered 1.9 times
* Interest cover 3.9 times
Other Highlights
* R&D expenditure written off as incurred - all figures stated on this
basis
* Acquisitions of Del Mar and PiKo in January 2003
* New product launches; strength of new contracts in clinical trails
* Member of Stock Exchange techMARK and techMARK Mediscience groups in March
2003
Operational
* Medical Diagnostic Division (58% of sales) - margin increased
* Established as Europe's premier provider of cardio-respiratory devices and
services
* Acquisition of Del Mar secures premier global position for cardiac
ambulatory monitoring products
* Rapid expansion in clinical trial services, rebranded as "Quantum
Research"
* Asthma management business stable - launch of PiKo, world's smallest
electronic peak flow meter
* European liaison of pulmonary and cardiology product groups
* Infant pulmonary laboratory sales on target
* Life Science Division (42% of sales) - margin maintained
* Challenging period across division - like-for-like sales reduced by 2.5%
* Focus on cost control to remain lowest cost producers of top quality
products
* New product opportunities for medical diagnostics
Regarding Prospects, Ian Dighe, Chairman, said:
"The current level of orders is however encouraging in most businesses within
the group. Provided this is maintained, the Board can be optimistic about a
satisfactory outcome for the current financial year."
For further information:
Ferraris Group plc Binns & Co PR Ltd
Steven Mills, Chief Executive Tel: 0121 782 6000 Peter Binns
Mob: 07831 677 067 Paul McManus
www.ferraris.co.uk Tel: 020 7786 9600
CHAIRMAN'S REVIEW
I am pleased to report interim figures to 28 February 2003 showing increased
sales and operating profit before goodwill and exceptionals on continuing
operations (our best indicator of underlying earnings), compared to the same
period last year. On this basis, earnings per share at 6.3p rose 15% above 5.5p
reported for 2002.
The Medtech sector continues to change and is driven by needs to serve an ageing
population cost effectively and by the accelerating trend towards globalisation.
The requirement to expand market share, lower costs of distribution, achieve
critical mass, offer a fully integrated product portfolio and introduce latest
technology drives consolidation in the sector. We have responded to
consolidation amongst US end-user customers, in particular, by the acquisition
of the business of Del Mar Medical Systems ("Del Mar") and by the purchase of
the business and intellectual property rights to PiKo. Details of this corporate
activity are given below. There is also an increasing trend towards outsourcing
drug evaluation clinical trial programmes by the major pharma groups to which
our diagnostic products and services are tailored.
Work on integrating the Del Mar business with our existing cardiology brand of
Reynolds Medical is proceeding smoothly and should be completed by the year
end. The combined business offers a coordinated global approach to customers
for an increased range of products. On a similar note the combination of our
clinical trials operations in the UK following the acquisition of Hertford
Medical in August 2002 is virtually complete. We have adopted the brand name
'Quantum Research' on a worldwide basis for our expanded range of clinical
trials services. Acceptance of membership to join the London Stock Exchange
TechMARK and TechMARK Mediscience groups in March 2003 further underscores our
commitment to the medical diagnostics sector.
Following extensive discussions with shareholders, advisors and bankers, the
Board has decided to expense our significant Research and Development costs as
incurred. We have made this change of policy to demonstrate additional clarity
in our results and to be consistent with current accounting trends. We shall
continue to track expenditure, as any material variation in spending would give
additional volatility to earnings. A favourable consequence of this approach is
a reduction in future tax payments in the USA amounting to $0.75 million. Prior
year results have been restated allowing a proper comparison with previous
periods.
RESULTS AND DIVIDEND
Sales on continuing operations increased by 6% to #30.1 million (2002: #28.5
million). A first contribution of #1 million came from the acquisition of Del
Mar and a further #0.5 million from Hertford Medical International Limited,
acquired in August 2002, giving a like for like increase of 1%. Adverse changes
in #/$ exchange rates depressed sales by #0.75 million. Total sales increased in
Medical Diagnostics by 12%, whilst market conditions led to a decrease of 2.5%
in Life Sciences. Operating margin for the Medical Diagnostic division rose to
10.6% from 10.0% whilst that for the Life Sciences division remained static at
around 6.8%.
Operating profit (before goodwill and exceptionals), our best indicator of
underlying earnings, at #2.7 million was 11% ahead of the #2.4 million for 2002.
Exceptional costs of #847,000 (2002 : #243,000) have been incurred in connection
with long term contractual arrangements for key customers in our Life Sciences
Division. Certain costs are necessarily taken up front with this investment
expected to yield commercial benefit over several years as stipulated in
individual contracts. In accordance with best accounting practice and consistent
with the Board's revised approach to Research and Development expenditure, these
items have been expensed as incurred. It is not anticipated that there will be
any further costs of this nature in the second half of this year. In 2002,
exceptional costs related primarily to reorganisation of the asthma management
products group. The higher charge for goodwill amortisation of #968,000 (2002:
#867,000), reflects the acquisitions of Hertford Medical International Limited,
Del Mar and PiKo. Profit before taxation is #453,000 (2002: #736,000), after an
almost similar interest charge.
Earnings per share before exceptional charges and goodwill amortisation were
6.3p (2002: 5.5p). After these charges earnings per share were 0.9p
(2002: 1.4p).
There have been significant changes in cash flow in the period as the
acquisitions noted above were largely financed from increased debt facilities
and there was the usual half-year trend of increased working capital. Stock
levels were contained despite higher sales volumes, debtors increased only
marginally above the uplifted sales but there were sizeable changes in
creditors. These changes reflect both the earlier payment to suppliers in
exchange for substantially better pricing and payment of reorganisation costs
provided for last year. Gearing increased to 68% of shareholder funds. Interest
cover before exceptional items is 3.9 times.
An interim dividend of 2.2p net (2002: 2.2p) per Ordinary Share is declared and
will be payable on 28 July 2003 to holders on the register on 4 July 2003.
Adding back goodwill amortisation to retained earnings this dividend is covered
1.9 times.
CORPORATE ACTIVITY
On 6 January 2003, we announced the purchase of the business of Del Mar, a major
US supplier of ambulatory cardiac monitoring systems, based near Los Angeles.
Consideration on closing was $10 million (#6.25 million) of which $2.75 million
(#1.72 million) was satisfied by the issue of New Ordinary Shares to the Vendors
and the remaining $7.25 million (#4.53 million) paid in cash. A further
contingent payment (payable in cash) of up to $1.5 million (#0.94 million) may
be payable if net sales targets are achieved during the 24 months subsequent to
closing. $1m (#0.6 million) is payable over a four year period to certain
vendors in exchange for a non-compete agreement.
We announced the launch of 'PiKo', the world's smallest electronic peak flow
meter on 28 January 2003, following the purchase of the business, intellectual
property, certain marketing rights and assets relating to 'PiKo' and a range of
other digital spirometers from PiKo Healthcare Products Inc. Initial cash
consideration was $1.9 million (#1.19 million). At the same time, a supply
agreement for manufacture of initial production in Hong Kong and China was
signed. Additional payments of up to $2.4 million (#1.5 million) are payable
upon achievement of various milestones relating to sales over a period of 24
months from completion. Any such payments will be satisfied as to 56 percent in
cash and 44 percent in New Ordinary Shares. Further New Ordinary Shares to a
value of $0.5 million will be issued 24 months after completion in respect of a
non-compete agreement, lasting for a period of three years from completion.
OPERATIONS REPORT
Medical Diagnostics
Sales in the cardiology group have held up well despite difficult conditions
prevailing in both Germany and the UK. As expected, it is now apparent that
previously reported increased Government spending on the NHS has primarily been
allocated to staff costs and that a relatively small proportion of around 10%
was available for medical equipment. Diagnostic and Treatment Centres for heart
disease and cancer screening equipment should however be particular
beneficiaries. Our cardiology product group has good prospects of further sales
during the remainder of 2003 and into 2004. Sales in the US have shown an
encouraging uplift from 2002 and will of course be additionally increased
following the acquisition of Del Mar. Work on integrating the two US businesses
by the executive management team is already in hand. There are good indications
of aggressive targets being achieved, worldwide distribution has been enhanced
(particularly in the Pacific Rim and South America) and product ranges
streamlined.
The European cardiology businesses are working closer with their sister
pulmonary diagnostic companies and a combination of sales and service resource
is operating to good effect on a lower cost base. Further close working
relationships are planned in these units, which have performed to target in the
six months. In the US sales of the Infant Pulmonary Laboratory are on schedule,
primarily accounting for an 18% increase in sales in this product grouping.
Sales of the high end stress equipment have been slow as capital budgets were
severely reduced by many of the buying groups prior to the well telegraphed war
in Iraq
We have established Denver as our US base for our asthma management and allergy
management devices group. To date sales both there and in Europe have been
relatively flat but stable. With the recent launch of PiKo, opportunities should
present themselves for increased income. The revolutionary PiKo product has
already won an award in the US Medical Design Excellence Awards for the Best
over the counter and Self Care Product. It offers an accurate device with good
digital transmission capabilities at a price within the reimbursement level of
most Western healthcare markets.
We have rebranded our clinical trial services activities under the global name
of 'Quantum Research', combining the businesses of PDS and Hertford Medical in
both the US and UK. Eliminating the exceptionally sizeable sale of pulmonary
equipment last year underlying sales rose by 40%. We were however pleased to
obtain a follow on order worth almost #1 million for pulmonary equipment and
associated clinical trial services from the same pharmaceutical customer. This
is scheduled for delivery by the end of this fiscal year.
Performance by the respiratory team has been significantly above budget from
both existing and new pharmaceutical clients. At times staff resources have been
stretched with a resultant increase in overtime costs. Internal training of
cardiology technicians in respiratory reviews has also been required. Having
started slowly the cardiology activity is now accelerating and has a number of
tenders outstanding for sizeable contracts. Combining the UK businesses is
underway and will be concluded by April 2003 in a single site at Welwyn Garden
City. Development work on digital communication has been extensive and the KoKo
Link software should further enhance the services from this product group.
Life Sciences
Already well publicised operating difficulties at a prime customer supplying
safety critical components for MRI scanners have provided management with a
number of challenges including efficient batch manufacturing and maintaining
margins. Combined with new product development by customers being slower than
expected there has been a below budget profit reported by this unit. Various
initiatives are in hand working with OEM customers to secure 'Preferred
Supplier' status on a medium term contract sharing cost savings and examining
new production techniques. Third party delays have also resulted in a
significant reduction in profit earned from the contract for Cern.
Suppliers to the semi-conductor sector have been adversely hit throughout the
period under review as capital projects were frequently either postponed or
curtailed. Although the operating performance of our business outperformed the
sector by taking market share, its profitability was down against budget, as the
upturn predicted by sector specialists did not emerge. Labour costs were taken
out and sub contracting was kept to a minimum but the result reported was
disappointing. Sales trends are volatile but a further review of costs is
underway and should result in additional savings in the absence of any sign of
improved sales.
Early indications of the impending war in Iraq caused a number of grants in the
US to be withheld pending clarification of available budgets for governmental
institutions and related laboratories. These delays significantly reduced the
last three months' performance in the US for our cryogenics products. European
sales performed reasonably and the overall performance was on budget. As new
products come on stream increased visibility of future profits should be
evident.
PROSPECTS
It is a difficult time to comment upon prospects with a background of
uncertainty about business confidence post the war in Iraq, a potential epidemic
in the Far East delaying production volumes for PiKo, and a poor economic
climate in most of our markets.
The current level of orders is however encouraging in most businesses within the
group. Provided this is maintained, the Board can be optimistic about a
satisfactory outcome for the current financial year.
I R Dighe
Chairman
23rd April 2003
Consolidated Profit and Loss Account
(unaudited)
Half Year to Half Year to Year to
28 February 2003 28 February 31 August
2003 2002 2002
(as restated) (as restated)
#'000 #'000 #'000
Turnover
Continuing operations 29,087 28,472 58,016
Acquisitions 994 - -
------- ------- -------
30,081 28,472 58,016
Discontinued Operations - 2,733 4,250
------- ------- -------
30,081 31,205 62,266
------------------------------------------------------------------------------
Operating Profit
Operating profit before
amortisation of goodwill,
discontinued operations and
exceptionals 2,715 2,446 4,786
Exceptional (847) (243) (1,830)
Amortisation of goodwill (968) (867) (1,734)
------------------------------------------------------------------------------
Operating profit
Continuing operations 826 1,336 1,222
Acquisitions 74 - -
------- ------- -------
900 1,336 1,222
Discontinued operations - (113) (452)
------- ------- -------
Total operating profit 900 1,223 770
Loss on disposal of
discontinued operations - - (810)
------- ------- -------
Profit/(loss) on ordinary
activities before interest 900 1,223 (40)
Interest (net) (447) (487) (440)
------- ------- -------
Profit/(loss) on ordinary 453 736 (480)
activities before taxation
Taxation (182) (336) (482)
------- ------- -------
Profit/(loss) after
taxation 271 400 (962)
Minority Interests - equity
interests (3) (6) (7)
------- ------- -------
Profit/(loss) for the
financial period 268 394 (969)
Dividend (661) (625) (1,600)
------- ------- -------
Retained loss for the
period (393) (231) (2,569)
------- ------- -------
Basic earnings per share -
before goodwill amortisation,
discontinued and
exceptional 6.3p 5.5p 11.8p
Basic earnings per share -
before goodwill
amortisation 4.3p 4.5p 2.7p
Basic earnings per share -
after goodwill amortisation 0.9p 1.4p (3.4p)
Dividend per share 2.2p 2.2p 5.6p
The restatement of 2002 relates only to the change in accounting policy to
expense Research and Development expenditure as incurred.
Consolidated Balance Sheet
(unaudited)
28 February 28 February 31 August
2003 2002 2002
(as restated) (as restated)
#'000 #'000 #'000
Fixed assets
Intangible assets 43,334 32,358 33,451
Tangible assets 10,581 11,843 10,304
Investments 1,081 1,049 964
------- ------- -------
54,996 45,250 44,719
------- ------- -------
Current assets
Stocks 10,675 11,976 9,800
Debtors 16,017 15,924 13,333
Cash at bank and in hand 415 836 904
------- ------- -------
27,107 28,736 24,037
Current Liabilities
Creditors - amounts falling due
within one year
Short term borrowings (9,026) (8,630) (7,418)
Other creditors (13,927) (15,294) (14,820)
------- ------- -------
Net current assets 4,154 4,812 1,799
------- ------- -------
Total assets less current
liabilities 59,150 50,062 46,518
Creditors: amounts falling due
after more than one year
Borrowings (16,787) (11,044) (9,228)
Other creditors (202) (165) (187)
------- ------- -------
(16,989) (11,209) (9,415)
Provisions for liabilities and
charges (4,744) (1,026) (1,551)
------- ------- -------
37,417 37,827 35,552
------- ------- -------
Capital and reserves
Called up share capital 7,604 7,175 7,237
Contingent equity share capital 645 401 201
Share premium account 20,670 19,031 19,297
Merger reserve 12,252 12,252 12,252
Profit and loss account (3,773) (1,046) (3,450)
------- ------- -------
Shareholders' funds - equity
interests 37,398 37,813 35,537
Minority interests - equity
interests 19 14 15
------- ------- -------
37,417 37,827 35,552
------- ------- -------
The restatement of 2002 relates only to the change in accounting policy to
expense Research and Development expenditure as incurred.
Consolidated Cash Flow Statement
(unaudited)
Half Year to Half Year to Year to
28 February 28 February 31 August
2003 2002 2002
#'000 (as restated) (as restated)
#'000 #'000
Cash (outflow)/inflow from
operating activities (722) 61 3,084
Returns on investments and
servicing of finance
Interest received 10 27 472
Interest paid (465) (299) (923)
------- ------- -------
Net cash outflow from returns
on investments and servicing
of finance (455) (272) (451)
Taxation
UK corporation tax & overseas
tax paid (655) (325) (856)
------- ------- -------
Tax paid (655) (325) (856)
------- ------- -------
Net cash outflow before
investing activities (1,832) (536) 1,777
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (1,023) (475) (1,122)
Receipts from sales of
tangible fixed assets 53 53 122
Purchase of fixed asset
investments (117) (139) (138)
------- ------- -------
Net cash outflow from capital
expenditure and financial
investment (1,087) (561) (1,138)
Acquisitions
Acquisition of subsidiary
undertakings (5,837) - (983)
Net cash acquired with new
subsidiaries 200 - 163
Cash received on disposal of
subsidiary undertakings - - 2,638
Net cash disposed of with
subsidiary undertakings - - (22)
------- ------- -------
Net cash (outflow)/inflow
arising from acquisitions and
disposals (5,637) - 1,796
Equity dividends paid (975) (857) (1,482)
------- ------- -------
Net cash (outflow)/inflow
before use of liquid
resources and financing (9,531) (1,954) 953
Financing
Issue of ordinary share 15 370 148
capital net of expenses
Other loans 8,761 1,394 (797)
Loan repayments (927) (1,036) -
Loan note repayments (1,764) - -
Hire purchase and finance
lease payments (468) (520) (1,017)
------- ------- -------
Net cash inflow/(outflow)
from financing 5,617 208 (1,666)
------- ------- -------
Decrease in cash in period (3,914) (1,746) (713)
------- ------- -------
Consolidated Statement of Total Recognised Gains and Losses
(unaudited)
Half Year to Half Year to Year to
28 February 28 February 31 August
2003 2002 2002
(as restated) (as restated)
#'000 #'000 #'000
Profit/(loss) for the financial
period 268 394 (969)
Currency translation gains/(losses) 70 53 (378)
------- ------- -------
Total recognised gains/(losses)
relating to the period 338 447 (1,347)
Prior period adjustment - Deferred
tax (FRS19) - (494) (494)
Prior period adjustment - Change
in R&D policy (4,995) - -
------- ------- -------
Total recognised gains and losses
since last annual report (4,657) (47) (1,841)
Reconciliation of movements in shareholders' funds
Half Year to Half Year to Year to
28 February 28 February 31 August
2003 2002 2002
(as restated) (as restated)
#'000 #'000 #'000
Profit/(loss) for the financial
period 268 394 (969)
Dividends (661) (625) (1,600)
------- ------- -------
(393) (231) (2,569)
Goodwill on acquisition written back - - 365
Other recognised gains and losses
relating to the period 70 53 (378)
Net proceeds of share issue 1,740 370 1,463
Contingent equity share capital 444 - (965)
------- ------- -------
Net addition/(reduction) to
shareholders' funds 1,861 192 (2,084)
Opening shareholders' funds 35,537 37,621 37,621
------- ------- -------
Closing shareholders' funds 37,398 37,813 35,537
------- ------- -------
The opening shareholders' funds at 1 September 2001 as previously reported
amounted to #41,801,000 before the prior year adjustment of #4,180,000.
NOTES TO THE INTERIM RESULTS
1. This interim report was approved by the Board on 23 April 2003. It has been
prepared using accounting policies that are consistent with those adopted in
the statutory accounts for the year ended 31 August 2002 as amended for the
change in accounting policy to expense Research and Development expenditure
as incurred. The decision to change the accounting policy followed extensive
discussions with shareholders, advisers and bankers. We believe it will
bring additional clarity to our results and is consistent with current
accounting trends. As a result of this change in accounting policy, the
comparatives have been restated to ensure comparability of corresponding
figures. This results in a decrease in operating profit of #1,220,000 for
the year to 31 August 2002 and a decrease of #293,000 for the half year to
28 February 2002. The net assets have been reduced by #4,995,000 as at 31
August 2002 and by #4,507,000 as at 28 February 2002. The figures for the
year to 31 August 2002 were derived from the statutory accounts for that
year. The statutory accounts for the year ended 31 August 2002 have been
delivered to the Registrar of companies and received an audit report which
was unqualified and did not contain statements under S237(2) or (3) of the
Companies Act 1985.
2. The taxation charge is based upon the expected rate for the year ending 31
August 2003.
3. Segmental Analysis
By class of Turnover Operating Profit
business
Half Year Year to Half Year Year to
to 28 February 31 August to 28 February 31 August
2003 2002 2002 2003 2002 2002
(as (as
restated) restated)
#'000 #'000 #'000 #'000 #'000 #'000
-------- -------- -------- -------- -------- --------
Continuing
Operations
Medical
Diagnostics 17,540 15,613 32,291 1,862 1,560 2,929
Life
Sciences 12,541 12,859 25,725 853 886 1,857
-------- -------- -------- -------- -------- --------
30,081 28,472 58,016 2,715 2,446 4,786
-------- -------- -------- -------- -------- --------
Discontinued
Operations
Engineering - 2,733 4,250 - (113) (452)
-------- -------- -------- -------- -------- --------
30,081 31,205 62,266 2,715 2,333 4,334
Exceptional
items - - - (847) (243) (1,830)
Goodwill - - - (968) (867) (1,734)
-------- -------- -------- -------- -------- --------
30,081 31,205 62,266 900 1,223 770
-------- -------- -------- -------- -------- --------
4. Basic earnings per share has been calculated on the weighted average number
of ordinary shares in issue during the relevant period. For diluted earnings
per share, where earnings are positive the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares, being share option schemes, where the exercise
price is less than the average market price of the company's ordinary shares
during the period. The number of shares is also adjusted for the potential
dilution of deferred consideration.
Half year to Year to
28 February 31 August
2003 2002 2002
Number Number Number
Weighted average number of
shares - basic 28,994,339 28,064,488 28,295,605
Share option adjustment 73,950 287,878 226,041
--------------------------------------------
Weighted average number of
shares - diluted 29,068,289 28,352,366 28,521,646
--------------------------------------------
(as restated) (as restated)
#'000 #'000 #'000
Earnings attributable to
ordinary shareholders before
goodwill, discontinued and
exceptionals 1,829 1,544 3,334
Earnings attributable to
ordinary shareholders before
goodwill 1,236 1,261 765
Earnings attributable to
ordinary shareholders after
goodwill 268 394 (969)
Earnings per share - basic
* before goodwill, discontinued
and exceptionals 6.3p 5.5p 11.8p
* before goodwill 4.3p 4.5p 2.7p
* after goodwill 0.9p 1.4p (3.4p)
Earnings per share - diluted
* before goodwill, discontinued
and exceptionals 6.3p 5.4p 11.7p
* before goodwill 4.3p 4.4p 2.7p
* after goodwill 0.9p 1.4p (3.4p)
5. Reconciliation of operating profit to net cash flow from operating activities
Half year to Year to
28 February 31 August
2003 2002 2002
(as restated) (as restated)
#'000 #'000 #'000
Operating profit 900 1,223 770
Depreciation charges 874 968 1,594
Amortisation of goodwill and
intangibles 968 867 1,735
Loss/(profit) on sale of fixed
assets 30 (5) 13
Increase in stocks (319) (1,619) (990)
Increase in debtors (1,274) (2,120) (22)
(Decrease)/increase in creditors
and provisions (1,901) 747 (16)
------- ------- -------
Net cash (outflow)/inflow from
operating activities (722) 61 3,084
------- ------- -------
6. Analysis of net debt
At 1 September Cash Flow Other At 28
2002 Movements February
2003
#'000 #'000 #'000 #'000
Cash in hand and at
bank 904 (489) - 415
Bank overdrafts (2,905) (3,425) - (6,330)
------- ------- ------- -------
Cash (2,001) (3,914) - (5,915)
Hire Purchase and
Finance leases due
within one year (887) 47 - (840)
Loans due within one
year (1,862) - 6 (1,856)
Loan notes due within
one year (1,764) 1,764 - -
Hire purchase and
finance leases due
after one year (1,172) 421 (178) (929)
Loans due after one
year (8,056) (7,834) 32 (15,858)
------- ------- ------- -------
(15,742) (9,516) (140) (25,398)
------- ------- ------- -------
7. Included in the share premium account is a premium that arose on the
acquisition of Del Mar Medical Systems.
8. Further copies of the Interim Report are available from the Company's
registered office.
INDEPENDENT REVIEW REPORT TO FERRARIS GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 28 February 2003 which comprises the consolidated profit
and loss account, balance sheet, summarised cash flow statement, statement of
total recognised gains and losses, and related notes 1 to 8, together with the
reconciliation of movements in shareholders' funds. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
polices and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 28th February 2003.
Deloitte & Touche
Chartered Accountants
Birmingham
23rd April 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SELFUESDSEEL