RNS Number:3435K
Ocean Wilsons Holdings Ld
24 April 2003
Ocean Wilsons Holdings Limited
Preliminary Announcement
Chairman's Statement
Accounts and Results
I am pleased to report another strong performance by the Group in 2002. Despite the challenging economic environment
the Group maintained the level of revenue in sterling and grew its operating profit for the year ended 31 December
2002 by 59% to #18.1 million (2001 #11.4 million) reflecting a general strengthening in operating margins. This
improved result demonstrates the excellent progress being made in our core businesses.
Regrettably the result was again impacted by exchange losses on foreign currency borrowings which increased to #23.4
million (2001 #8.6 million) as a result of the devaluation of the $Real in the year. Profit for the financial year at
#0.8 million was #2.8 million lower than last year (# 3.6 million).
Earnings per share were 2.34 pence per share compared to 9.95 pence per share in 2001.
Exchange losses on foreign currency borrowings
As in the prior years the Group's Brazilian subsidiaries have significant US dollar loans and $Real denominated loans
that are monetarily corrected by the movement in the US dollar / $Real exchange rate. The devaluation of the $Real
against the US dollar has generated a large $Real denominated loss on the Group's US dollar and US dollar linked
loans of #23.4 million (2001 # 8.6 million.). Under UK GAAP the Group is required to recognise this result in the
profit and loss account in the period it occurs.
The cash flow effect of these exchange movements will only be realised over the life of the loans when
repayments are made. Whilst the value of the loans remained unchanged in US Dollars, repayments need to be made out
of local currency. The Board, in internally evaluating the Group's performance, spreads the exchange loss on
borrowings over the remaining life of the loans. On this basis of spreading the exchange losses, the portion of
current and past exchange losses attributable to 2002 would be #3.8 million as compared to the reported exchange loss
of #23.4 million.
Dividends
In recognition of the strong trading performance and the Group's significant cash reserves, the Board is recommending
that the final dividend remain unchanged at 5.00 pence per share (2001 5.00 pence per share), which makes a total of
6.00 pence per share for 2002 (2001 6.00 pence per share). If approved by shareholders, the final dividend will be
paid on the 6 June 2003 to shareholders on the register at the 2 May 2003.
Cash flow
The Group continued to generate strong operating cash flow reflecting the solid trading performance during the
period. Cash generation was excellent with operating cash flow increasing by #6.7 million to #24.7 million in 2002
(2001 #18.0 million). Operating cash flow continues to exceed operating profit. The Group's Brazilian subsidiaries
remitted #6.0 million in dividends to the holding company in Bermuda during the year.
Capital expenditure of #13.2 million was invested mainly in the construction of two PSV's (platform supply vessels)
at our shipyard in Guaruja, of which #10.4 million was financed by new loans received in the period. Repayments of
#5.8 million were made on existing loans in accordance with loan repayment schedules.
#1.7 million was received in dividends from our joint ventures. #4.6 million was paid in corporation and social
contribution tax in the period of which #0.8 million related to 2001.
Year end cash balances amounted to #33.3 million (2001 #31.9 million) of which #11.9 million (2001 #8.9 million) was
held outside Brazil, representing 33.6 pence per share. At 31 December 2002 the investment portfolio was #16.2
million (2001 #19.6 million), representing 45.8 pence per share.
Borrowings and Interest
The Group's borrowings decreased #3.5 million from #67.4 million to #63.9 million as a consequence of the
strengthening of sterling against the US Dollar.
The majority of the Group's debt, #43.1 million, has been used to finance vessel construction and is repayable over
periods up to 16 years with an average maturity of 13.8 years.
In the five years to 2002, new borrowings of #63.8 million were arranged by the Group to finance capital expenditure
on $Real denominated assets. During the same period, #20.3 million in capital repayments were made in accordance with
debt repayment schedules. The table below shows the forecast capital and interest repayments for the next five years
based on the Group's debt profile at 31 December 2002 and using year end interest and exchange rates.
# Million 2003 2004 2005 2006 2007
Capital repayments 5.6 6.4 6.1 6.2 6.4
Interest repayments 2.3 2.7 2.4 2.1 1.8
Total 7.9 9.1 8.5 8.3 8.2
The Group's net interest receivable in the profit and loss was #1.1 million (2001 #0.1 million interest paid). This
excludes the net exchange movements on foreign currency borrowings held by the Brazilian subsidiaries, which are
shown separately in the profit and loss account.
The Group's Brazilian subsidiaries have significant US dollar loans and $Real denominated loans that are monetarily
corrected by the movement in the US dollar / $Real exchange rate. The Group assumes this risk as there is no
long-term financing denominated in $Real available to us for capital expenditure. Current interest rates on $Real
commercial borrowings in Brazil are 32% per annum. Due to the prohibitive cost of hedging the $Real the Group does
not hedge its long term net exposure, although management use available instruments to manage the short term cash
flow exchange risk on the current repayments.
Exchange rates
During 2002, the $Real showed significant volatility against the US dollar, falling as low as 3.95 before recovering
to 3.54 at year end. In the year to 31 December 2002, the $Real devalued 53% against the US dollar (from 2.31 to
3.54) and 70% against sterling (from 3.36 to 5.70). In 2001 the $Real devalued 18% against the US dollar (from 1.95
to 2.31) and 15% against sterling (from 2.91 to 3.36).
Balance Sheet
At 31 December 2002, the Group's net assets amounted to #42.0 million (2001 #60.3 million). The decrease in the
Group's net assets is attributable to the devaluation of the $Real as the greater part of the Group's net assets are
$Real denominated and financed in US Dollars.
Since 1998 tangible fixed assets increased through investment from $Real 124 million to $Real 298 million in 2002.
The same figures when translated into sterling, decreased from #61.5 million to #52.3 million. The Group's Brazilian
assets generate significant positive operating cash flow and a substantial part of the income in 2002 generated by
these assets is linked to the US Dollar.
The Group's net assets represent 118.9p per share (2001 170.5p). Net assets located in Brazil account for 47.6p
(2001 97.4p) and net assets outside Brazil 71.3p (2001 73.1p).
Accounting
During the year the Group adopted Financial Reporting Standard 19 - Deferred Tax, and changed the exchange rate basis
used to translate the profit and loss account from the year end exchange rate to the average rate for the year. The
Board considers that translating the profit and loss account using average exchange rates provides a fairer
presentation of the Group's results, as income is earned throughout the year. Comparative figures for 2001 have been
restated accordingly.
Future Prospects
The underlying business remains strong with results for the first quarter in 2003 significantly ahead of the
corresponding period in 2002. Management is succeeding in linking the necessary portion of invoicing to the US Dollar
exchange rate to service the Group's capital investment.
The Brazilian economy is showing encouraging signs of improvement. Investors have responded positively to the new
government prompting a sharp rally in Brazilian assets. The monetary and fiscal policy decisions adopted so far have
smoothed market concerns. As a result the $Real is undergoing a revaluation trend since year end, strengthening 16%
against the US Dollar to 3.04. Were this level to be maintained at year end, this would generate significant exchange
gains in the profit and loss account and increase the tax payable. Lastly, I would like to thank all who work for the
Group, our partners and clients for their support during the period.
J F Gouvea Vieira
23 April 2003
Operating Review
Brazil
The Brazilian economy was under pressure during 2002, due to the presidential election held in October, and the
uncertainty in international capital markets. The $Real weakened dramatically against all major currencies, reaching
R$3.54 against the US Dollar at year end. Inflation as measured by the consumer price index increased to 25.3% and
the central bank responded by raising interest rates to 26%. On the positive side exports benefited from the lower
exchange rate and the trade balance recorded a US$13 billion surplus in the year helping the country to reduce its
dependence on external finance.
Towage and Shipyard
The towage business has performed strongly. Revenue in sterling terms was in line with 2001 while operating margins
showed considerable improvement. The main drivers behind this improved performance were the continued recovery in
towage tariffs and a 10% increase in the number of vessels attended.
The Group's strategy is to link towage tariffs to the cost of finance where possible, providing a natural hedge for
the US Dollar linked borrowings used to finance the construction of our tug fleet. Management successfully
implemented this strategy in 2002, so that a significant percentage of our towage income is now linked to the US
Dollar. Consequently margins improved as revenue was maintained in Sterling while costs in Sterling fell as a result
of the depreciation of the $Real.
An ISO 9002 quality programme was successfully implemented in our southern branches certified by Lloyds Register
Quality Assurance. We are currently extending this programme to our remaining branches.
The division continued to expand operations with a new towage service at the port of Pecem in the state of Ceara,
Northeast Brazil.
Our towage joint ventures, Consorcio Baia de Sao Marcos and Barra dos Coqueiros continued to perform well although
results were down on 2001 due to higher than anticipated dry-docking costs for the fleet.
During 2002, the shipyard in Guaruja continued to undertake the maintenance of the towage fleet and the construction
of two large PSV's, (Platform Supply Vessels) to be operated by the Group under contract to Petrobras. The Group is
constructing these vessels in response to opportunities presented by the booming Brazilian offshore Oil and Gas
market. Each vessel costs approximately #9 million and is built to an internationally recognised design prepared by
Rolls-Royce Marine. The first PSV commenced operation in March 2003 and the second is forecast to enter service in
June 2003. This new business enhances the Group's operations and presence in Brazil, and the Board is confident that
future opportunities exist to grow and develop this aspect of the Group's operations.
The Group is preparing a tug fleet renewal programme to begin in 2003. To maintain the current average age of
our fleet, which currently stands at approximately 17 years, the Group must construct a minimum of two tugs a year,
representing annual capital expenditure of at least #5.0 million.
Results at our associate dredging company Dragaport were poor due to a lack of investment by port authorities in
dredging which will give rise to a significant backlog in due course.
Ship Agency
The ship agency division had an excellent year with profit before tax increasing to #1.3 million. Margins continued
to improve as the ship agency business benefited from the weak $Real and further improvements in its cost base.
Revenue was in line with 2001 at #6.5 million.
4,663 vessels were attended in 2002 an increase of 141 over 2001. Tramp volumes increased 10% and a major Italian
liner client, Costa Container Lines, started a new service to the Caribbean and Central America. On the downside, we
lost the Docenave agency, which was moved in-house.
The ship agency division continues to invest in technology to improve the quality and efficiency of our service. We
offer a number of e-products and services to our clients through the Internet and are currently working on the next
generation of services. This will consist of a series of integrated on-line information for each individual client
containing cargo loading and discharging confirmation and payment facilities.
Port Operations and Logistics
2002 was another record year for Tecon Rio Grande. Container volumes moved through the terminal increased 29% to
444,144 TEU's (Twenty foot equivalent units). The terminal is now operating near capacity and further capital
investment will be required if the terminal is to grow significantly. Based on current volumes and growth, the
terminal is forecast to be amongst the 100 largest container terminals in the world in 2003.
Tecon Rio Grande's strong performance at the operating level was adversely affected by significant exchange
losses on the US Dollar denominated loans. Much emphasis this year has been on renegotiating service price agreements
with customers to link service prices to movements in the US Dollar where possible. This is an important natural
hedge against devaluation in the $Real as capital investments at Tecon Rio Grande are financed by US Dollar loans.
Operating results at Tecon Salvador showed a substantial improvement over 2001 benefiting from the new commercial
strategy implemented in 2002. Tecon Salvador moved 105,866 TEU's, a 37% increase over 2001 that represented 88% of
the Salvador container market. As with Tecon Rio Grande, results were adversely affected by exchange losses on US
Dollar denominated loans.
Progress at our joint venture bonded warehouse Eadi Santo Andre was slower during the year and the business faced
difficult trading conditions with a significant reduction in imported cargo in Brazil. We are taking action to
improve the performance of this business.
Results at our new logistics business, CD Brasil were encouraging, due to the signing of new agreements with Xerox
and Merck. We see an increasing number of opportunities to expand this business through further geographical
expansion.
Our joint venture, Allink, signed an important agreement with Fedex, to offer in Brazil a new Fedex product, "Supply
Chain Solutions". It is expected that this will significantly leverage the logistics operations of the Group.
Our joint venture Brasco, established a new onshore base in Niteroi, Rio de Janeiro to service the offshore Oil and
Gas markets, resulting in a number of long term client agreements. Brasco is well positioned to exploit developments
in the Brazilian offshore Oil and Gas industry.
Insurance
It is to early to give an accurate forecast of results from our underwriting subsidiary at Lloyds. We have committed
#2 million by way of a guarantee for Ascension Underwriting Limited. Although 2001 was a difficult year the prospects
for 2002 and the current year look very encouraging.
Investment Portfolio
Hanseatic Asset Management LBG which manages the investment portfolio reports as follows:
Market Environment
Equity investors endured an exceptionally difficult year in 2002. The MSCI World Equity Index fell by 27.62% in
sterling terms and that was after a strong rally in all but the Japanese market during the fourth quarter. Since its
peak in March 2000 this index has declined by 47.16% in sterling terms and the first three years of the new
millennium has been the worst period for equity investment since the 1930's. All markets were swept along to some
extent or another by this negative tide but the most severe falls came in some of the European markets, notably
Germany and also in the high beta areas of the US market such as technology and biotechnology. Again, the Far East
and emerging markets offered the best 'relative performance' with more muted falls than elsewhere. Other notable
features of the year were a weaker dollar, especially against the Euro, higher government bond prices and strength in
a range of commodities including gold, which increased by 24.7% and oil, which increased by 57.2%.
The key factors that weighed heavily on markets in 2001 such as the collapse of capital spending and terrorism
remained major concerns in 2002 and were compounded by a series of corporate governance scandals that cracked what
little confidence remained amongst investors. The prospect of war with Iraq only served to reinforce such negative
sentiment.
Performance
The portfolio did not remain unscathed by this environment. At the year end the assets amounted to #21.4 million
(including cash under management of #5.2 million), a decline of 11.1%. As was highlighted a year ago, the portfolio
has been extensively restructured with a greater emphasis on 'real return' type vehicles and on hedge funds. However,
two large historical holdings in investment trusts, namely Finsbury Smaller Quoted and Finsbury Growth, accounted for
a significant portion of the loss. The fall of the dollar against sterling also undermined the portfolio's returns.
The relative performance of the investments was very strong, outperforming the MSCI World Index by nearly 1,400 basis
points. Asset allocation was positive, particularly the decision to be overweight in emerging markets and underweight
in the United States. Stock and investment selection was positive in all markets apart from the United States where
the portfolio marginally underperformed.
Portfolio Activity
There were sales totalling #4.4million and purchases amounting to #4.3million from the portfolio during the year. The
percentage of the portfolio's assets held in cash stood at 24% at year end. The two largest purchases made were hedge
funds, Odey European and the Mariner Fund. Direct purchases of equities included the Lloyd's insurance companies
Amlin, Beazley and Wellington. These companies are benefiting from the hardening of premium rates in the insurance
sector. Investments were also made in the US market in three special situations, Tenet Healthcare, Tyco and Toys'R
Us. These investments were made after substantial falls had occurred revealing significant longer term opportunities.
Valuation is supportive for these investments but patience will be required in the current 'dour' market conditions.
On the sales side of the ledger the holdings in the Stapleford and Aetos funds were liquidated and there were partial
liquidations in the New Flag High Yield Fund and the Close Finsbury Technology Fund. Stapleford and Aetos were both
hedge funds specialising in merger arbitrage. Due to the very depressed nature of capital markets this activity had
diminished significantly on both sides of the Atlantic limiting the scope for these funds to add value. The reduction
in the technology fund occurred ahead of the rout that unfolded in this sector later in the year.
Market Outlook
Markets have been hugely volatile during the early months of 2003. The FTSE 100 Index in London set a new record by
posting eleven consecutive down days in a row which was then followed by some of the sharpest daily rallies seen for
many years. The Euro strengthened against the US dollar and sterling. Both the oil price and the price of gold, which
had started the year very strongly in anticipation of events in Iraq, surrendered their gains completing what were
essentially "round trips".
Following a successful military campaign in Iraq equity markets have rallied eliminating most of their year to date
losses. However, as the war ebbs from investors minds, the economic realities of anaemic world growth, deficits,
consumer retrenchment and an over-supply of capital goods are likely to come to the fore and cap the extent of any
gains. Despite the severity and extent of market weakness over the last three years, it remains far from clear that
all the excesses of the equity bubble have been cleared and valuations remain far from compelling.
Accordingly, the portfolio is over 30% in hedge funds whose investment strategies should not be dependent upon a
market direction to deliver value. A further 10% is in emerging markets, including emerging market debt where high
spreads continue to offer opportunity.
The Asian markets continue to be our preferred area for long term commitments and the combination of growth prospects
and low stock market valuations remains most favourable there.
Risk Management
Treasury
The Group has a centralised Treasury operation in Brazil that manages the investment of surplus funds and borrowings.
Clear guidelines have been established relating to cash management authority levels and investment limits. The
guidelines prohibit taking speculative financial instrument positions and regular financial management reports are
supplied to senior management.
The main financial risks facing the Group are those related to funding, interest rate, currency and, market price.
Funding risk
The Group trades principally in Brazil and holds a portfolio of internationally listed investments outside Brazil.
The Group borrows to fund capital projects and looks to cash flow from these projects to meet repayments. Working
capital is funded through cash generated by operating revenues.
There is limited long term commercial funding available in Brazil except from the Banco Nacional do Desenvolvimento
Economico e Social (BNDES). All Long term funding is obtained by our Brazilian subsidiaries from the BNDES or
International Finance Corporation (IFC, part of the World Bank) except for specific equipment supplier financing when
available on favourable terms. The Group will not consider short-term borrowing in the Brazilian commercial markets
while prohibitive interest rates prevail.
At the year end the Group had #63.9 million in borrowings repayable over periods up to 16 years.
At the year end the Group held approximately #21.4 million in $Reais denominated cash deposits in Brazil and #11.9
million in sterling and US dollar denominated deposits outside Brazil. The company maintains these large cash
balances as it continues to look for investment opportunities in Brazil and to manage short term fluctuations in cash
flow.
Interest rate risk
During 2002 the Group did not use interest rate swaps, options or forward rate agreements to manage interest rate
exposure on its debt positions. However the Group actively reviews risk profiles and considers undertaking interest
rate swaps if necessary and only with Board approval.
The Group has three types of borrowings, $Reais denominated, $Reais denominated linked to the US dollar and US dollar
borrowings.
Currency risk
The Group operates principally in Brazil with the majority of the Group's revenue, expenses and assets denominated in
$Reais. Consequently currency translation movements can significantly affect the Group's income and balance sheet and
the Group faces significant currency exposures when translating results into sterling. Due to the prohibitive cost of
hedging the $Real the Group does not hedge its net exposure to the $Real as the board considers it uneconomic. Our US
dollar debt has defined repayments during the life of the loans. Management reviews hedging these repayments for
periods up to one year by investing surplus funds in US dollar linked funds or purchasing foreign exchange options.
The Group has significant long-term borrowings in US dollars and in $Reais denominated loans linked to the US dollar.
These are used to finance $Reais denominated capital projects. This exposes the Group to a potential currency
mismatch of costs and revenues. The Group undertakes this risk as there is no source of long term financing
denominated in $Reais available to the Group.
The $Reais denominated loans linked to the US dollar are monetarily corrected by the movement in the US dollar/$Real
exchange rate and bear interest of between 1.5 - 4.5 % per annum.
The majority of the Group's US dollar loans bear interest between Libor + 2.75 and Libor + 4.0 % and are repayable in
periods up to seven years. In addition the Group has loans, which bear interest linked to the performance of Tecon
RG, that vary between Libor +2.0% and Libor +6.0%.
Cash and investments held outside Brazil are principally in US dollar and sterling denominated assets.
Market price risk
The Group invests in internationally listed securities and open ended funds principally for the long-term. The
Group's exposure to market price risk arises mainly from potential loss the Group may suffer through holding.
Ocean Wilsons Holdings Limited
Preliminary Announcement
At a board meeting held on 23 April 2003 the following announcement of the unaudited results of the Company and
its subsidiary companies for the twelve months ended 31 December 2002 was approved by the directors.
Consolidated Profit and Loss Account
Unaudited (restated refer note 4)
Year to 31 December 2002 Audited
Year to 31 December 2001
#'000 #'000
Turnover
Turnover and share of joint 88,723 87,493
ventures' turnover
less share of joint venture (8,641) (8,307)
turnover
Group turnover 80,082 79,186
Operating costs (57,433) (61,576)
Depreciation (4,550) (6,220)
Group operating profit 18,099 11,390
Share of operating profit 2,848 3,262
in joint ventures
Share of operating profit/ 484 (482)
(loss) in associates
Income from fixed asset 458 167
investments
Realised surpluses / 195 (280)
(deficits) on sale of
investments
Profit on disposals of 28 232
assets
Interest receivable and 4,672 3,857
similar income
Interest payable (3,567) (3,882)
Net exchange loss on (23,376) (8,630)
foreign currency borrowings
(Loss) / profit on ordinary
activities before taxation (159) 5,634
Taxation on (loss)/profit 223 (2,405)
on ordinary activities
Profit on ordinary activities
after taxation 64 3,229
Minority interests 765 336
Profit for the financial year 829 3,565
Dividends
Paid and proposed (2,122) (2,122)
Retained (loss) / profit for the period (1,293) 1,443
Earnings per share basic and diluted 2.34p 9.95p
Ocean Wilsons Holdings Limited
Preliminary Announcement
Consolidated Statement of Total Recognised Gains and Losses
Unaudited (restated refer note 4)
Year to 31 December 2002 Audited
Year to 31 December 2001
#'000 #'000
Profit for the financial year 829 3,565
Decrease in unrealised appreciation of investments (2,592) (409)
(1,763) 3,156
Loss on foreign currency translation (12,232) (4,467)
Total losses and gains recognised since last annual (13,995) (1,311)
report
Ocean Wilsons Holdings Limited
Preliminary Announcement
Consolidated Balance Sheet
Unaudited Audited
As at 31 As at 31
December December
2002 2001
#'000 #'000
Fixed Assets 52,896 71,610
Investments 17,964 25,693
Current Assets
Stocks 1,242 1,243
Debtors 18,849 16,703
Investment held for resale 1,480 -
Cash at Bank 33,273 31,876
54,844 49,822
Creditors (amounts falling due within one year) (23,465) (24,802)
Net current assets 31,379 25,020
Total assets less current liabilities 102,239 122,323
Creditors (amounts falling due after one year) (57,576) (59,759)
Provisions for liabilities and charges (2,614) (2,270)
Net assets 42,049 60,294
Capital and reserves
Called up share capital 7,073 7,073
Profit and loss account 23,345 27,994
Capital reserves 9,646 18,096
Revaluation reserve 363 3,381
40,427 56,544
Minority interests 1,622 3,750
42,049 60,294
Net assets per share 118.90p 170.50p
Ocean Wilsons Holdings Limited
Preliminary Announcement
Consolidated Cash flow Statement
for the year ended 31 December 2002
Unaudited (restated refer note 4)
Year to Audited
Year to
31 December 31 December
2002 2001
Note #'000 #'000
Net cash inflow from operating activities 3 24,668 17,960
Dividends from joint ventures 1,691 2,502
Returns on investments and servicing of finance 2,168 422
Taxation (4,614) (2,614)
Capital expenditure and financial investment (13,225) (25,992)
Acquisitions and disposals (46) (1,941)
Equity dividends paid (2,122) (2,184)
Cash inflow/(outflow) before management of liquid resources 8,520 (11,847)
and financing
Management of liquid resources (11,516) 3,863
Financing 4,565 9,315
Increase in cash in period 1,569 1,331
Ocean Wilsons Holdings Limited
Preliminary Announcement
Notes to the Preliminary Accounts
1. Basis of Accounting
The preliminary accounts have been prepared under the historical cost convention except for the valuation of listed
investments, which is shown in the accounts at closing market value at the end of the year and the accounting
policies set out on pages 21 to 23 on the Annual Report and Accounts for the year ended 31 December 2001. The Group
adopted FRS 19 "Deferred Tax" on 1 January 2002. There was no effect on the Group's results and net assets for the
year or prior year on the adoption of the accounting standard. The Group has changed the exchange rate basis used to
translate the profit and loss account from the year end exchange rate to the average rate for the year. The
comparative figures have been restated accordingly. Refer to note 4 for information on the impact of this change on
the profit and loss account and net assets.
2. Basis of Preparation
The financial information set out in the announcement does not constitute the company's statutory accounts for the
years ended 31 December 2002 or 2001. The financial information for the year ended 31 December 2001 is derived from
the statutory accounts for that year. The auditors reported on those accounts; their report was unqualified. The
statutory accounts for the year ended 31 December 2002 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement.
3. Reconciliation of operating profit to net cash inflow from operating activities
(restated refer note 4)
Unaudited Audited
Year to Year to
2002 2001
#' 000 #'000
Operating profit 18,099 11,390
Depreciation 4,550 6,220
Amortisation 37 49
Decrease/(increase) in stocks 3 (10)
Decrease in debtors 1,558 2,479
Increase / (decrease) in creditors 567 (2,013)
(Decrease) in provisions (146) (155)
Net cash inflow from operating activities 24,668 17,960
4. Prior year adjustment
The group policy for translating the profit and loss account into sterling was changed during the year from the year
end exchange rate to the average rate for the year. The directors consider that the new policy provides a fairer
presentation of the result as income is earned throughout the year. The comparative figures in the primary statements
and notes have been restated to reflect the new policy.
The effects of the change in policy are summarised below.
2002 2001
#' 000 #'000
Profit and loss account
Increase/(decrease) in group turnover 18,393 (568)
Increase/(decrease) in operating profit 4,878 (87)
Increase/(decrease) in financial profit for the year 390 (30)
Statement of total recognised gains and losses
(Decrease)/increase in foreign currency translation (390) 30
Balance Sheet
Increase/(decrease) in net assets - -
5. Dividends
The proposed final dividend of 5.00p per share will be paid on 6 June, 2003, to shareholders on the register at close
of business on 2 May 2003 if approved by shareholders at the annual general meeting to be held on the 6 June 2003.
6. Other information
Additional copies of this announcement can be obtained from the company's registered office, Clarendon House, Church
Street, Hamilton, Bermuda or from the Company's UK transfer agent, Capita Registrars Group Plc, The Registry 34
Beckenham Road, Beckenham, Kent BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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