TIDMCCC
RNS Number : 7337R
Computacenter PLC
27 August 2010
Computacenter plc
Interim Results announcement
Computacenter plc, the European IT infrastructure services provider, today
announces unaudited results for the six months ended 30 June 2010.
Financial Highlights
Financial performance
· Adjusted* profit before tax increased 16.6% to GBP21.3 million (2009:
GBP18.2million)
· Adjusted* diluted earnings per share increased by 8.3% to 10.4p (2009:
9.6p)
· Group revenues increased by 5.4% to GBP1.29 billion (2009: GBP1.22
billion)
· Interim dividend increased 16.7% to 3.5p (2009: 3.0p)
· Net funds before customer-specific financing ('CSF') of GBP95.6 million
(2009:GBP47.3 million)
Statutory performance
· Profit before tax increased by 75.1% to GBP21.0m (2009: GBP12.0 million)
· Diluted earnings per share increased by 63.5% to 10.3p (2009: 6.3p)
· Net funds after CSF of GBP57.1 million (2009: net debt of GBP18.1 million)
Operating highlights
· Revenue growth ahead of the market in all our major geographies
· Growth in contractual services base of 4.6% to GBP509.7 million (2009:
GBP487.3 million)
· Encouraging growth in product revenue, up 14.8%, in constant currency and
excluding the effect of the disposal of our trade distribution business in 2009
· Professional services revenue, closely linked to product and shorter term
projects, improved by 8.1% in the UK and by 11.6% in France
· Clear signs of improved performance in Germany after a challenging start
to the period
Outlook
Mike Norris, Chief Executive of Computacenter plc, commented:
"Computacenter made good progress in the first six months of 2010. The
improvement in profitability in the period, was largely driven by a strong
rebound in infrastructure spend, together with steady growth in services, as
well as our continued focus on cost control.
We are confident that we are on track to meet our expectations for the year as a
whole and looking further ahead, our plans to increase the services mix, allied
with our strong balance sheet, give us encouragement for further growth in the
future."
* Adjusted for exceptional items and amortisation of acquired intangibles.
Adjusted Operating Profit is also stated after charging finance costs on
customer-specific financing.
Enquiries:
Computacenter
01707 639000
Mike Norris
Tessa Freeman
Tulchan
Christian Cowley
020 7353 4200
Lucy Legh
Chairman's Statement
We continue to make good progress in the markets we have chosen to serve.
Customers value our offerings and service, as demonstrated by revenue growth in
excess of 5% and as further underscored by our top rating in the customer
advocacy section of an independent survey, by EquaTerra in 2009. The growth in
adjusted1 profit before tax, in excess of 16%, is testament to the hard work of
our people and to the strategic decisions we made at the beginning of 2009. In a
nutshell, our cost reductions, as well as our exit from markets which absorb
working capital without delivering good yield, have resulted in the operational
gearing we continue to see in these first-half results. Our net funds, excluding
customer specific financing has grown further to GBP95.6 million (H1 2009:
GBP47.3 million).
Behind the scenes, we are implementing programmes designed to improve all
aspects of our business on a sustainable basis. We are taking Group-wide actions
to share best practices in our offerings, customer service and in the relentless
drive to ensure our service delivery capabilities are of the highest quality. We
continue to focus on the use of our working capital and the development of our
people's talents in relation to how we serve customers. We are doing this with
specific Group-wide methods and processes. We are investing a very significant
sum in the implementation of our new ERP system. The combined effect of these
programmes is designed to create even more operational gearing and to accelerate
our organic growth in higher margin activities.
I am pleased with our results for this period, and thankful for the commitment
and hard work of Computacenter's people, but we can and must do considerably
better. The actions I have summarised above are even more important to our
future success than the improvements we have achieved in the past 18 months. We
are determined to demonstrate that through continual growth in profitability.
Mike Norris has provided a more detailed assessment of our progress so far, in
the summaries below.
Greg Lock
1 Adjusted for exceptional items and amortisation of acquired intangibles.
Adjusted Operating Profit is also stated after charging finance costs on
customer-specific financing.
Operating Review
Group Summary
Computacenter made good progress in the first six months of 2010, delivering a
16.6% increase in adjusted1profit before tax to GBP21.3 million (H1 2009:
GBP18.2 million). The improvement in profitability in the period, was largely
driven by a strong rebound in infrastructure spend, together with steady growth
in services, particularly in the UK, as well as our continued focus on cost
control. Overall reported revenues increased by 5.4% to GBP1.29 billion (H1
2009: GBP1.22 billion).
Adjusted1 diluted earnings per share for the period grew by 8.3% to 10.4p (H1
2009: 9.6p). The EPS improvement is lower than the level of profit growth
achieved, due to the mix of earnings adversely impacting the Group's tax rate
and the dilution from the exercise of share options resulting from the higher
share price during the period. The tax rate for the year as a whole is not
expected to remain at the current increased level, but is expected to exceed the
overall tax rate in 2009, due to the likely geographic mix of profits for the
full year.
There are no exceptional charges incurred in the period (H1 2009: GBP6.0
million) and we do not anticipate material exceptional charges during the rest
of the year. Therefore, on a statutory basis, after taking amortisation on
acquired intangibles into account, profit before tax increased materially, by
75.1% to GBP21.0 million (H1 2009: GBP12.0 million) and diluted earnings per
share grew by 63.5% to 10.3p (H1 2009: 6.3p).
We are pleased to announce the payment of an increased interim dividend of 3.5p
per share (H1 2009: 3.0p). The interim dividend will be paid on 15 October 2010
to shareholders on the register as at 17 September 2010.
Our progress was achieved within an environment where the economy continues to
be challenging. Growth in services in the Technology Sector in Europe has been
forecast at 2.4% for 20102. We believe that our growth above the market is due
to our continued focus on reducing our customers' costs and our well positioned
offerings, which serve the market's apparent appetite to invest in new
technologies.
The positive trend in increased IT capital expenditure, over the first half of
2010, is evidenced by an encouraging growth in product revenue by 14.8%, in
constant currency and excluding the effect of the disposal of our trade
distribution business in 2009.
The growth in our contractual services base of 4.6% to GBP509.7 million (H1
2009: GBP487.3 million), in constant currency, has already helped performance in
the first half of 2010, with more significant contribution anticipated in the
second half of the year and beyond. The pipeline for the future is encouraging
and, as has been the case in the past, we anticipate that new contractual
services wins will increase in the second half of the year. However, some of
these prospects are binary in nature and present the risk that if not won, could
reduce the contractual services base.
We continue to strengthen our balance sheet, with net funds excluding
customer-specific financing (CSF) of GBP95.6 million at the period end (H1 2009:
net funds of GBP47.3 million). Including CSF, net funds were GBP57.1 million (H1
2009: net debt of GBP18.1 million). Capital expenditure of GBP16.1 million was
incurred during the period, partly in relation to the investment into the ERP
system. This level of cash generation is particularly encouraging, since it has
occurred during a period of revenue growth. The level of CSF has also reduced
from GBP65.3 million, at the end of the first half of 2009, to the current level
of GBP38.5 million. As previously reported, our cash position was flattered by
approximately GBP25 million, due to the ongoing extended credit facility from
one of our major vendors, which is set to continue, at least until the end of
2010.
We remain broadly on time and budget with our implementation of a new Group-wide
ERP system, which we expect to complete in 2011. We estimated the cost at GBP35
million over three years, of which, in excess of 80% has been spent to date.
Outlook
Looking particularly at the second half of 2010, we are confident about further
progress in our contractual services business. Whilst we anticipate that UK
Public Sector capital expenditure is likely to be curbed, we believe that this
will not result in any significant impact at a Group level. Other sectors remain
positive, particularly the Industrial Sector in Germany and the Financial
Services Sector in the UK. There is also the potential that the VAT increase
early in 2011, could stimulate increased spend activity towards the end of this
year.
We remain focused on the cost management of our, as well as our customers'
businesses and we are well aware that in this market, for which low growth is
forecast2, much remains to be done. We are confident that we are on track to
meet our expectations for the year as a whole and looking further ahead, our
plans to increase the services mix, allied with our strong balance sheet, give
us encouragement for further growth in the future.
1 Adjusted for exceptional items and amortisation of acquired intangibles.
Adjusted Operating Profit is also stated after charging finance costs on
customer-specific financing.
2 Gartner (June 2010)
UK Summary
UK performance was strong compared to the same period in 2009, with adjusted1
operating profit growing by 43.7% to GBP18.1 million (H1 2009: GBP12.6 million).
This improvement is largely a result of sharpening our focus as a services and
solutions company, resulting in significant growth in the product business,
especially in the first quarter and a pleasing revenue growth in the services
business, in turn, primarily in the second quarter.
Overall UK revenues for the period, excluding the disposal of the distribution
business, were up by 12.7% to GBP651.9 million (H1 2009: GBP578.4 million).
Services revenues grew by 8.0%, which was largely driven by growth in
contractual services, mainly within the Financial Services environment. Product
revenue increased by 14.6%, as customers continued to invest into new
technologies. Removal of cost remains at the top of our customers' agenda and
our offerings suit these aspirations. We have witnessed this growth trend for
the last year and we believe it is likely to continue throughout the second half
of 2010.
After delivering a GBP13.4 million reduction in UK Sales, General and
Administration (SG&A) expenses in H1 2009, excluding the impact of acquisitions
and disposals, SG&A in this period remained broadly unchanged. This SG&A
stability was achieved despite some investment into projects aimed at enhancing
our services capability further.
The correlation between products and professional services revenue was
demonstrated once again. There was a revenue decline in both businesses in the
first half of 2009, as customers put non-critical project expenditure on hold.
The first half of 2010 saw product revenue growth, and predictably, professional
services revenue improved by 8.1%. The mutuality of these businesses is
demonstrated by a recent successful win within a major datacentre consolidation
programme being undertaken by the New York Stock Exchange (NYSE) Euronext in the
UK. During phase 1 of this strategic NYSE Euronext led programme, Computacenter
has contributed in key enablement areas, such as cabling, server installation,
hardware support, build QA and logistics. The programme will result in NYSE
Euronext extending its use of Tier IV datacentre facilities to support a
strategic objective of significantly reducing trading latency for its customers.
The UK contract base over this term grew by 6.1% in H1 to GBP234.6 million (H1
2009: GBP221.2 million). We attribute our contract base improvement to a
continued trend in multi-vendor outsourcing in the market. Due to customers
wishing to retain control, whilst gaining flexibility through outsourcing
solutions, there has been a larger degree of selectivity in identifying services
suitable for outsourcing, as well as a multi-sourcing approach when choosing
providers.
This widening of the outsourcing arena has given us increased opportunities to
present our offerings to more customers and also provides better potential for
supplier partnering.
A recent five-year contract win evidences the benefit of partnered offerings.
Trinity Expert Systems, an IT Solutions Provider, with which Computacenter has a
long working history of jointly providing application services, awarded us a
contract to deliver datacentre hosting and associated services to a London based
specialist insurance group. Our new Tier IV facility in Romford is well suited
for this purpose and is geared for future expansion.
Similarly, we have been awarded two contracts involving the newly integrated
Oracle/Sun Exadata storage solution, born out of the Sun acquisition last year,
by Oracle. As the only Oracle business partner in the UK, with an Exadata proof
of concept facility, Computacenter has been selected to deploy this solution to
a major European bank and a solutions provider to the Financial Sector.
The Exadata storage servers will enable the bank to enhance operational
efficiency and reduce costs, through supporting the creation of a centralised
global data warehouse. In the instance of the solutions provider, the Exadata
solution will provide financial transaction services and payment processing to
banks, corporations and government departments, worldwide.
Our repeatable solutions, which provide a consistent level of quality,
governance and results, gained further traction in the market. Best Buy UK, a
leading consumer electronics retailer and part of a joint venture with The
Carphone Warehouse plc, has awarded Computacenter a three-year contract to
implement an IT infrastructure solution for its stores, including provisioning,
staging, configuring, installing and support, as well as deploying and
maintaining point of sale devices, desktops, cabling, network connections and
servers.
The IBM premium partner, Thesaurus, which we acquired in 2009, has now been
fully integrated into the UK business and we are encouraged by the early signs
that these added offerings have already contributed to our recent wins and the
pipeline.
RDC, our remarketing and recycling arm, recorded another strong first half, with
revenues up by 24.3%. There has been consistent growth in this business over
recent years and we have identified certain investment opportunities, to support
future growth.
Germany Summary
In Germany, overall adjusted1 operating profit in the first half of 2010,
reduced by 46.7% in local currency. In sterling, this translates to a decrease
of 48.1% to GBP3.7 million (H1 2009: GBP7.2 million).
The primary reason for the decline in profitability was a weaker start for
services in Germany during the first two months of the year, which in turn, was
mainly due to a larger contract that had expired towards the end of 2009. This
caused under-utilisation of the services business at that time, resulting in
2.4% decrease in services revenue, in local currency, for the period as a whole.
Overall, revenue increased by 8.0% in local currency, with the decline in the
services business, countered by a 14.9% growth in the products business. The
strong products sales were mainly in the high-end product arenas of security,
network and datacentre, with the becom acquisition assisting particularly in the
growth of datacentre revenues. Product growth, excluding becom, was 3%.
In addressing the decline in both services revenue and margin, during the first
months of 2010, we reviewed some processes, as well as our services efficiency
in our central functions, such as logistics, in order to stabilise the services
margins. Since March 2010, margin stability and utilisation has returned to the
business, albeit that the shortfall in profitability has not been reversed.
We experienced, especially during the second quarter of the year, an increasing
demand for desktop virtualisation, identity management, security, Windows 7,
networking and collaboration.
Towards the end of the first half, the pipeline for consulting projects
improved, which is particularly pleasing, since an increased demand for
consulting projects often precedes hardware and maintenance services contracts,
signalling possible relief in the uncertain market we still find ourselves in.
This early trend may be evidenced by two framework agreements concluded in April
2010 with the Beschaffungsamt des Bundesministeriums des Innern (Procurement
department of the German Federal Ministry of the Interior), for the supply of
workstations for three years and storage products, as well as consulting,
maintenance and support services, over a four-year term.
Also indicative of the early signs that IT spend may be on the increase is a
five-year desktop product supply and related services contract win with RAG
Aktiengesellschaft, which will entail the supply of more than 6,500
workstations.
Computacenter Germany received the prestigious 'Daimler Supplier Award 2009' at
the Daimler Key Supplier Meeting in March, in the category 'IT, General Goods &
Services' for its outstanding performance in providing IT services.
Additionally, as a member of the Virtual Computing Environment (VCE), a
coalition partner system founded by Cisco, EMC and VMware, Computacenter is the
first IT service provider which has integrated the Vblock infrastructure
packages of the VCE coalition into its portfolio and is advising customers in
the planning and implementation of private cloud infrastructures, based on the
Vblock architecture.
The integration of the becom business was successfully completed in April 2010,
with Computacenter Germany becoming IBM's number one business partner in
Germany.
France Summary
In a recovering economic environment, with a flat market forecast for 2010 in
both the products and services businesses, our French operation achieved strong
revenue growth, well ahead of the market, with reported revenue increasing by
8.7% to GBP164.3 million (H1 2009: GBP151.1 million). This growth was, however
offset by margin erosion, following the renewal in H2 2009 of a major product
contract. Consequently, adjusted1 operating loss improved marginally to GBP1.2
million (H1 2009: loss of GBP1.4 million).
Both product and services revenue, in local currency, grew materially by 12.6%
and 7.8% respectively. Product growth resulted mainly from strong development in
the customer base, enterprise product sales and software revenues. As in the UK,
this improvement in product sales was mirrored by an 11.6% growth in
professional services revenue; a first in several years. Contractual services
growth of 6.0% represents steady progress after significant growth in 2009.
Since we anticipated product margin and volume erosion, our efforts were focused
on services revenue and customer base growth. However, better than expected
product margins were achieved and services margins continued to grow, driven by
increased volume and a leaner, more cost-efficient organisation. General
overhead cost reduction has continued, but with some investment made, aimed at
accelerating sales during the second half of the year and 2011. We have
reorganised the sales force through establishing a sales specialist team with
revised performance targets and specific customer sector focus. The reorganised
sales force has already achieved successes and in this period, we have won two
Wintel product supply contracts with a major advertising company, as well as a
mutual insurer to the agricultural workforce. Particularly pleasing, were a
number of managed services contract wins with a leading French bank.
Further contributing to an increase in our contractual services customer base,
has been a recent contract win with ENIM, a school of the French Army and a
maintenance contract with UGAP.
The French enterprise business showed encouraging development, evidenced by good
wins with UGAP, the Public Purchasing Agency, and a Europe-wide roll-out for an
international telecommunications group. We have also managed to upscale our
offerings to the French Army, from primarily, the supply of laptops and
desktops, to select services and enterprise activities.
Benelux Summary
Our Belgium and Netherlands operations recorded an adjusted1 operating profit of
GBP280,000 (H1 2009: loss of GBP166,000). Overall revenue increased by 35.6%,
with a significant increase in product sales.
Aside from the revenue increase, the improved result was also assisted by a
reduction in the cost base, achieved through a reorganisation during 2009.
Contract wins in late 2009 also became fully operational and our decision to
leverage our software licensing competences towards the local market, delivered
some encouraging successes, as can be evidenced by key software licensing wins
with Asco, Lotus Bakeries and Bank J Van Breda & Co. We also implemented a
cabling project for Ikea.
Our business in Luxembourg recorded a loss of GBP298,000,with reduced revenue of
5.3%, compared to the same period last year (H1 2009: loss of GBP244,000). The
services activity in Luxembourg has, in the first months of 2010, been
challenged, but clear signs of improvement towards the end of the half have
transpired, especially within the consulting and managed services space, as can
be evidenced by a recent three-year managed services contract win with a major
energy utilities group.
Group Risk Statement
The principal risks to our business and our approach to mitigating those risks
remain as set out on pages 22 and 23 of our 2009 Report and Accounts. The
economic climate remains uncertain and our enhanced offerings, which help
customers remove cost and risk from their IT expenditure, continue to be
Computacenter's primary defence against this threat. In addition, strategies
remain in place to mitigate operational risks in particular, those relating to
the implementation of complex end-to-end service contracts. These mitigation
strategies are currently being enhanced through the building of services
processes. Together with achieving the desired progress on the Group-wide ERP
project, the successful implementation of the new services processes, feature at
the top of our Group Risk Log.
Mike Norris
Responsibility statement
The Directors confirm that to the best of their knowledge:
· This financial information has been prepared in accordance with IAS 34;
· This interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the remaining
six months of the year);and
· This interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related party transactions and changes
therein.)
MJ Norris FA Conophy
Chief Executive Finance Director
26 August 2010 26 August 2010
On behalf of the Board
Independent review report to Computacenter plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June
2010 which comprises the Consolidated Income Statement, Consolidated Statement
of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of
Changes in Equity, Consolidated Cash Flow Statement, and the related notes 1 to
12. We have read the other information contained in the half yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with guidance contained
in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed
by the Independent Auditor of the Entity" issued by the Auditing Practices
Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our work, for this report,
or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2010 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
Ernst & Young LLP
Luton
26 August 2010
+--------------------------------------+------+-------------+----------+----------+--------+----------+----------+-------+--+
| Consolidated income statement | | | | | | |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| For the six months ended 30 June | | | | | | |
| 2010 | | | | | | |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| | | Unaudited | | Unaudited | | Audited | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | H1 2010 | | H1 2009 | | Year 2009 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | Note | GBP'000 | | GBP'000 | | GBP'000 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Revenue | 4 | 1,288,780 | | 1,222,184 | | 2,503,198 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Cost of sales | | (1,115,022) | | (1,051,560) | | (2,153,395) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Gross profit | | 173,758 | | 170,624 | | 349,803 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Distribution costs | | (9,384) | | (9,686) | | (19,032) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Administrative expenses | | (142,434) | | (140,947) | | (272,876) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Operating profit: | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Before amortisation of acquired | | 21,940 | | 19,991 | | 57,895 | |
| intangibles and exceptional items | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Amortisation of acquired intangibles | | (299) | | (259) | | (517) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Exceptional items | 6 | - | | (6,003) | | (5,299) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Operating profit | | 21,641 | | 13,729 | | 52,079 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Finance revenue | | 1,249 | | 1,000 | | 1,307 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Finance costs | | (1,914) | | (2,748) | | (4,977) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Profit before tax: | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Before amortisation of acquired | | 21,275 | | 18,243 | | 54,225 | |
| intangibles and exceptional items | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Amortisation of acquired intangibles | | (299) | | (259) | | (517) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Exceptional items | 6 | - | | (6,003) | | (5,299) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Profit before tax | | 20,976 | | 11,981 | | 48,409 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Income tax expense: | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Before exceptional items | | (5,208) | | (3,851) | | (12,113) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Tax on exceptional items | 6 | - | | 1,276 | | 1,415 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Income tax expense | 7 | (5,208) | | (2,575) | | (10,698) | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Profit for the period | | 15,768 | | 9,406 | | 37,711 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Attributable to: | | | | | | | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Equity holders of the parent | | 15,768 | | 9,406 | | 37,703 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Non-controlling interest | | - | | - | | 8 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| Profit for the period | | 15,768 | | 9,406 | | 37,711 | |
+--------------------------------------+------+-------------+----------+-------------------+----------+------------------+--+
| | | | | | | |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| Earnings per share | | | | | | |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| - basic for profit for the period | 8 | 10.7p | | 6.4p | | 25.7p |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| - diluted for profit for the period | 8 | 10.3p | | 6.3p | | 24.9p |
+--------------------------------------+------+------------------------+----------+-------------------+----------+----------+
| | | | | | | | | | |
+--------------------------------------+------+-------------+----------+----------+--------+----------+----------+-------+--+
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Consolidated statement of comprehensive income | | | | |
+---------------------------------------------------+----------+-----------+----------+----------+
| For the six months ended 30 June 2010 | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | Unaudited | | Unaudited | | Audited |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Profit for the period | 15,768 | | 9,406 | | 37,711 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Exchange differences on translation | (8,149) | | (12,163) | | (10,173) |
| of foreign operations | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Total comprehensive income for the | 7,619 | | (2,757) | | 27,538 |
| period | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Attributable to: | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Equity holders of the parent | 7,626 | | (2,755) | | 27,543 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Non-controlling interest | (7) | | (2) | | (5) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | 7,619 | | (2,757) | | 27,538 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Consolidated balance sheet | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| As at 30 June 2010 | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | Unaudited | | Unaudited | | Audited |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | H1 | | H1 | | Year |
| | | 2010 | | 2009 | | 2009 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Non-current assets | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Property, plant and | | 96,241 | | 113,392 | | 105,290 |
| equipment | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Intangible assets | | 77,336 | | 52,503 | | 72,965 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Investment in associate | | 52 | | - | | 57 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Deferred income tax asset | | 17,647 | | 17,674 | | 16,444 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | 191,276 | | 183,569 | | 194,756 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Current assets | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Inventories | | 69,062 | | 71,056 | | 67,086 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Trade and other receivables | | 410,479 | | 403,101 | | 475,646 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Prepayments | | 52,247 | | 59,214 | | 55,785 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Accrued income | | 51,631 | | 70,229 | | 29,538 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Forward currency contracts | | 588 | | - | | 726 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Cash and short-term | | 129,571 | | 75,542 | | 108,017 |
| deposits | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | 713,578 | | 679,142 | | 736,798 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Total assets | | 904,854 | | 862,711 | | 931,554 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Current liabilities | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Trade and other payables | | 384,637 | | 332,022 | | 378,929 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Deferred income | | 93,769 | | 107,648 | | 123,861 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Financial liabilities | | 55,971 | | 64,362 | | 48,647 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Forward currency contracts | | - | | 25 | | - |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Income tax payable | | 5,768 | | 3,849 | | 3,815 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Provisions | | 2,202 | | 2,439 | | 2,202 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | 542,347 | | 510,345 | | 557,454 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Non-current liabilities | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Financial liabilities | | 16,503 | | 29,256 | | 22,022 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Provisions | | 10,338 | | 10,337 | | 11,605 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Other non-current | | 47 | | 381 | | 227 |
| liabilities | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Deferred income tax | | 1,556 | | 1,515 | | 1,674 |
| liabilities | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | 28,444 | | 41,489 | | 35,528 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Total liabilities | | 570,791 | | 551,834 | | 592,982 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Net assets | | 334,063 | | 310,877 | | 338,572 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Capital and reserves | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Issued capital | | 9,231 | | 9,184 | | 9,186 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Share premium | | 3,168 | | 2,890 | | 2,929 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Capital redemption reserve | | 74,950 | | 74,950 | | 74,950 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Own shares held | | (10,377) | | (9,838) | | (9,657) |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Foreign currency | | 8,066 | | 14,207 | | 16,208 |
| translation reserve | | | | | | |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Retained earnings | | 249,016 | | 219,465 | | 244,940 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Shareholders' equity | | 334,054 | | 310,858 | | 338,556 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Non-controlling interest | | 9 | | 19 | | 16 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
| Total equity | | 334,063 | | 310,877 | | 338,572 |
+-----------------------------+---+-----------+----------+-----------+----------+---------+
Approved by the Board on 26 August 2010
MJ Norris, Chief Executive
FA Conophy, Finance Director
Consolidated statement of changes in equity
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| | Attributable to equity holders | | |
| | of the parent | | |
+----------------+-----------------------------------------------------------------------------------------------------------------+------------------+---------------------+
| | Issued | | Capital | Own | Foreign | Retained | | Non-controlling | Total |
| | capital | Share | redemption | shares | currency | earnings | Total | interests | equity |
| | | premium | reserve | held | translation | | | | |
| | | | | | reserve | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| At 1 January | 9,181 | 2,890 | 74,950 | (11,169) | 26,368 | 218,970 | 321,190 | 21 | 321,211 |
| 2009 | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Profit for the | - | - | - | - | - | 9,406 | 9,406 | - | 9,406 |
| period | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Other | - | - | - | - | (12,161) | - | (12,161) | (2) | (12,163) |
| comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Total | | | | | (12,161) | 9,406 | (2,755) | (2) | (2,757) |
| comprehensive | - | - | - | - | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Cost of | | | | | | 1,076 | 1,076 | - | 1,076 |
| share-based | - | - | - | - | - | | | | |
| payment | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Exercise of | 3 | | | 1,890 | | (1,890) | 3 | - | 3 |
| options | | - | - | | - | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Purchase of | - | - | - | (559) | - | - | (559) | - | (559) |
| own shares | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Equity | - | - | - | - | - | (8,097) | (8,097) | - | (8,097) |
| dividends | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| At 30 June | 9,184 | 2,890 | 74,950 | (9,838) | 14,207 | 219,465 | 310,858 | 19 | 310,877 |
| 2009 | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Profit for the | - | - | - | - | - | 28,297 | 28,297 | 8 | 28,305 |
| period | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Other | - | - | - | - | 2,001 | - | 2,001 | (11) | 1,990 |
| comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Total | | | | | 2,001 | 28,297 | 30,298 | (3) | 30,295 |
| comprehensive | - | - | - | - | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Cost of | | | | | | 1,479 | 1,479 | - | 1,479 |
| share-based | - | - | - | - | - | | | | |
| payment | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Deferred | - | - | - | - | - | 298 | 298 | - | 298 |
| taxation on | | | | | | | | | |
| share based | | | | | | | | | |
| payments | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Exercise of | 2 | 39 | | 182 | | (182) | 41 | - | 41 |
| options | | | - | | - | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Purchase of | - | - | - | (1) | - | - | (1) | - | (1) |
| own shares | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Equity | - | - | - | - | - | (4,417) | (4,417) | - | (4,417) |
| dividends | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| At 31 December | 9,186 | 2,929 | 74,950 | (9,657) | 16,208 | 244,940 | 338,556 | 16 | 338,572 |
| 2009 | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Profit for the | - | - | - | - | - | 15,768 | 15,768 | - | 15,768 |
| period | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Other | - | - | - | - | (8,142) | - | (8,142) | (7) | (8,149) |
| comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Total | | | | | (8,142) | 15,768 | 7,626 | (7) | 7,619 |
| comprehensive | - | - | - | - | | | | | |
| income | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Cost of | | | | | | 1,320 | 1,320 | - | 1,320 |
| share-based | - | - | - | - | - | | | | |
| payment | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Deferred | | | | | | 131 | 131 | - | 131 |
| taxation on | - | - | - | - | - | | | | |
| share based | | | | | | | | | |
| payments | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Exercise of | 45 | 239 | | 1,332 | | (1,332) | 284 | - | 284 |
| options | | | - | | - | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Purchase of | | | | (2,052) | | - | (2,052) | - | (2,052) |
| own shares | - | - | - | | - | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| Equity | - | - | - | - | - | (11,811) | (11,811) | - | (11,811) |
| dividends | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
| | 9,231 | 3,168 | 74,950 | (10,377) | 8,066 | 249,016 | 334,054 | 9 | 334,063 |
| At 30 June | | | | | | | | | |
| 2010 | | | | | | | | | |
+----------------+----------------+----------------+------------+------------+--------------+---------------------+----------------+------------------+---------------------+
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Consolidated cash flow statement | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| For the six months ended 30 June 2010 | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | Unaudited | | Unaudited | | Audited |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | H1 | | H1 2009 | | Year |
| | 2010 | | | | 2009 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Operating activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Profit before tax | 20,976 | | 11,981 | | 48,409 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Net finance costs | 665 | | 1,748 | | 3,670 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Depreciation | 16,066 | | 17,932 | | 35,326 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Amortisation | 2,433 | | 2,199 | | 4,631 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Share-based payments | 1,320 | | 1,076 | | 2,555 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Loss on disposal of property, plant | 18 | | 229 | | 23 |
| and equipment | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Loss on disposal of intangible assets | - | | 26 | | - |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Profit on disposal of business | - | | - | | (1,879) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| (Increase)/decrease in inventories | (6,171) | | 28,247 | | 34,126 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Decrease in trade and other | 24,358 | | 57,946 | | 52,348 |
| receivables | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| (Decrease)/increase in trade and | (3,529) | | (24,495) | | 10,960 |
| other payables | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Other adjustments | (23) | | (428) | | 283 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Cash generated from operations | 56,113 | | 96,461 | | 190,452 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Income taxes paid | (4,568) | | (10,029) | | (17,500) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Net cash flow from operating | 51,545 | | 86,432 | | 172,952 |
| activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Investing activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Interest received | 1,122 | | 927 | | 1,717 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Acquisition of subsidiaries, net of | | | - | | (9,742) |
| cash acquired | - | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Proceeds from sale of business | | | - | | 2,982 |
| | - | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Sale of property, plant and equipment | 50 | | 4 | | 7 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Purchases of property, plant and | (7,983) | | (5,064) | | (9,511) |
| equipment | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Purchases of intangible assets | (8,137) | | (3,526) | | (11,790) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Net cash flow from investing | (14,948) | | (7,659) | | (26,337) |
| activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Financing activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Interest paid | (1,914) | | (2,623) | | (4,540) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Dividends paid to equity shareholders | (11,811) | | (8,097) | | (12,514) |
| of the parent | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Proceeds from issue of shares | 284 | | 3 | | 44 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Purchase of own shares | (2,052) | | (559) | | (560) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Repayment of capital element of | (10,339) | | (10,476) | | (20,956) |
| finance leases | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Repayment of loans | (8,781) | | (28,775) | | (40,248) |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| New borrowings | 6,019 | | 11,235 | | 16,357 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Increase/(decrease) in factor | 17,142 | | (15,601) | | (25,600) |
| financing | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Net cash flow from financing | (11,452) | | (54,893) | | (88,017) |
| activities | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Increase in cash and cash equivalents | 25,145 | | 23,880 | | 58,598 |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Effect of exchange rates on cash and | (1,987) | | (1,081) | | (533) |
| cash equivalents | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Cash and cash equivalents at the | 104,954 | | 46,889 | | 46,889 |
| beginning of the period | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
| Cash and cash equivalents at the end | 128,112 | | 69,688 | | 104,954 |
| of the period | | | | | |
+---------------------------------------+-----------+----------+-----------+----------+----------+
Notes to the accounts
1 Corporate information
The interim condensed consolidated financial statements of the Group for the six
months ended 30 June 2010 were authorised for issue in accordance with a
resolution of the Directors on 26 August 2010.
Computacenter plc is a limited company incorporated and domiciled in England
whose shares are publicly traded.
2 Basis of preparation
The interim condensed consolidated financial statements for the six months ended
30 June 2010 have been preparedin accordance with International Accounting
Standard 34 'Interim Financial Reporting', as adopted by the European Union.
They do not include all of the information and disclosures required in the
annual financial statements, and should be read in conjunction with the Group's
annual financial statements as at 31 December 2009.
The Group's strong cash position, combined with the strong cash flows generated
by the business, support the Directors' view that the Group has sufficient funds
available for it to meet its foreseeable working capital requirements. The
directors have concluded therefore that the going concern basis remains
appropriate.
3 Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
interim financial statements are the same as those applied by the Group in its
consolidated financial statements for the year ended 31 December 2009, except
for the adoption of new Standards and Interpretations as of 1 January 2010,
noted below:
IFRS 3 Business Combinations (Revised)
IFRS 3 (Revised) introduces significant changes in the accounting for business
combinations. It requires that all acquisition related costs are expensed in the
period incurred rather than included in the cost of the investment, that changes
to the contingent consideration following a business combination are shown in
the statement of comprehensive income instead of adjusting goodwill and that
changes to deferred tax assets relating to business combinations are only
reflected within goodwill if they occur within the measurement period. The Group
has applied IFRS 3 (Revised) with effect from 1 January 2010. During the period
the Group recognised the benefit of tax losses of GBP932,000 attributable to an
acquisition completed in a previous period. The impact is included within
current income tax expense. Had the standard not been adopted, an adjustment to
goodwill would have been required.
A number of other new, revised or amended standards and interpretations are
effective for the current period, but none of them has had any material impact
on the interim condensed financial statements.
4 Segment information
For management purposes, the Group is organised into geographical segments, with
each segment determined by the location of the Group's assets and operations.
The Group's business in each geography is managed separately and held in
separate statutory entities.
No operating segments have been aggregated to form the above reportable
operating segments.
Management monitors the operating results of its geographical segments
separately for the purposes of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on adjusted
operating profit or loss which is measured differently from operating profit or
loss in the consolidated financial statements. Adjusted operating profit or loss
takes account of the interest paid on customer-specific financing ('CSF') which
management consider to be a cost of sale. Excluded from adjusted operating
profit is the amortisation of acquired intangibles, exceptional items and the
transfer of internal ERP implementation costs between segments as management do
not consider these items when reviewing the underlying performance of a segment.
Segmental performance for the periods to H1 2010, H1 2009 and Full Year 2009
were as follows:
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | |
| Six months ended 30 June 2010 (unaudited) | | | | |
+--------------------------------------------------+----------+----------+---------+------------+
| | | UK | Germany | France | Benelux | Total |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Revenue | | 651,859 | 455,781 | 164,252 | 16,888 | 1,288,780 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Results | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted gross profit | | 91,932 | 60,005 | 18,315 | 2,207 | 172,459 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted net operating | | (73,805) | (56,265) | (19,523) | (2,225) | (151,818) |
| expenses | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted operating | | 18,127 | 3,740 | (1,208) | (18) | 20,641 |
| profit/(loss) | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted net interest | | | | | | 634 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted profit/(loss) | | | | | | 21,275 |
| before tax | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
+----------------------------+----------+----------+----------+----------+---------+------------+
| Six months ended 30 June 2009 (unaudited) | | | | |
+--------------------------------------------------+----------+----------+---------+------------+
| | | UK | Germany | France | Benelux | Total |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Revenue | | 624,888 | 433,315 | 151,085 | 12,896 | 1,222,184 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Results | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted gross profit | | 87,772 | 60,336 | 18,996 | 1,496 | 168,600 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted net operating | | (75,155) | (53,131) | (20,442) | (1,905) | (150,633) |
| expenses | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted operating | | 12,617 | 7,205 | (1,446) | (409) | 17,967 |
| profit/(loss) | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted net interest | | | | | | 276 |
+----------------------------+----------+----------+----------+----------+---------+------------+
| Adjusted profit/(loss) | | | | | | 18,243 |
| before tax | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
| | | | | | |
+----------------------------+----------+----------+----------+----------+---------+------------+
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Year ended 31 December 2009 (audited) | | | | |
+---------------------------------------------------+-----------+----------+---------+-----------+
| | | UK | Germany | France | Benelux | Total |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Revenue | | 1,226,917 | 930,673 | 319,384 | 26,224 | 2,503,198 |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Results | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Adjusted gross profit | | 181,149 | 124,395 | 37,448 | 2,838 | 345,830 |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Adjusted net operating | | (143,310) | (104,831) | (40,169) | (3,597) | (291,907) |
| expenses | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Adjusted operating | | 37,839 | 19,564 | (2,721) | (759) | 53,923 |
| profit/(loss) | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Adjusted net interest | | | | | | 302 |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| Adjusted profit/(loss) | | | | | | 54,225 |
| before tax | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
| | | | | | | |
+----------------------------+----------+-----------+-----------+----------+---------+-----------+
Reconciliation to adjusted results
Management reviews adjusted measures of performance as shown in the tables
above. Adjusted profit before tax excludes exceptional items and the
amortisation of acquired intangibles as shown below:
+-------------------------------------------+---------+----------+---------+----------+---------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+-------------------------------------------+---------+----------+---------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Adjusted profit before tax | 21,275 | | 18,243 | | 54,225 |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Amortisation of acquired intangibles | (299) | | (259) | | (517) |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Exceptional items | - | | (6,003) | | (5,299) |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Profit before tax | 20,976 | | 11,981 | | 48,409 |
+-------------------------------------------+---------+----------+---------+----------+---------+
Management also reviews adjusted measures for gross profit, operating expenses,
operating profit and net interest, which in addition takes account of interest
costs of CSF within cost of sales (as these are considered to form part of the
gross profit performance of a contract). The reconciliation for adjusted
operating profit to operating profit, as disclosed in the Consolidated Income
Statement, is as follows:
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| | UK | Germany | France | Benelux | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Six months ended 30 June 2010 | | | | | |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Adjusted operating profit/(loss) | 18,127 | 3,740 | (1,208) | (18) | 20,641 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Add back interest on CSF | 875 | 424 | - | | 1,299 |
| | | | | - | |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Amortisation of acquired intangibles | (240) | (59) | - | - | (299) |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Exceptional items | | | | | |
| | - | - | - | - | - |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| ERP implementation costs | (2,051) | 2,051 | | | |
| | | | - | - | - |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Segment operating profit/(loss) | 16,711 | 6,156 | (1,208) | (18) | 21,641 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| | | | | | |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Six months ended 30 June 2009 | | | | | |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Adjusted operating profit/(loss) | 12,617 | 7,205 | (1,446) | (409) | 17,967 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Add back interest on CSF | 1,650 | 374 | - | - | 2,024 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Amortisation of acquired intangibles | (241) | (18) | - | - | (259) |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Exceptional items | (4,556) | - | (1,206) | (241) | (6,003) |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| ERP implementation costs | (1,143) | 1,143 | - | - | - |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
| Segment operating profit/(loss) | 8,327 | 8,704 | (2,652) | (650) | 13,729 |
+----------------------------------------+----------------------+----------------------+----------+----------+----------+
+----------------------------------------+----------+----------+----------+----------+----------+
| | UK | Germany | France | Benelux | Total |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+----------+----------+----------+----------+----------+
| For the year ended 31 December 2009 | | | | | |
+----------------------------------------+----------+----------+----------+----------+----------+
| Adjusted operating profit/(loss) | 37,839 | 19,564 | (2,721) | (759) | 53,923 |
+----------------------------------------+----------+----------+----------+----------+----------+
| Add back interest on CSF | 2,921 | 1,051 | - | - | 3,972 |
+----------------------------------------+----------+----------+----------+----------+----------+
| Amortisation of acquired intangibles | (481) | (36) | - | - | (517) |
+----------------------------------------+----------+----------+----------+----------+----------+
| Exceptional items | (3,155) | (291) | (1,613) | (240) | (5,299) |
+----------------------------------------+----------+----------+----------+----------+----------+
| ERP implementation costs | (2,728) | 2,728 | - | - | - |
+----------------------------------------+----------+----------+----------+----------+----------+
| Segment operating profit/(loss) | 34,396 | 23,016 | (4,334) | (999) | 52,079 |
+----------------------------------------+----------+----------+----------+----------+----------+
Sources of revenue
Each geographical segment principally consists of a single entity with shared
assets, liabilities and capital expenditure. The Group has three sources of
revenue, which are aggregated and shown in the table below. The sale of goods is
recorded within product revenues and the rendering of services is split into
Professional and Support and Managed Services.
Revenue performance is reported to the Chief Operating Decision Maker excluding
the UK Trade Distribution business, which was disposed of on 27th October 2009.
The table below reflects revenue performance before and after the impact of the
sold business.
+--------------------------------------------+--+-----------+--+-----------+------------+
| | | H1 2010 | | H1 | Year |
| | | | | 2009 | 2009 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| | | GBP'000 | | GBP'000 | GBP'000 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Sources of revenue | | | | | |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Product revenue | | | | | |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Ongoing operations | | 907,078 | | 800,351 | 1,678,613 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Trade distribution | | - | | 46,483 | 84,589 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Total product revenue | | 907,078 | | 846,834 | 1,763,202 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Services revenue | | | | | |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Professional services | | 90,313 | | 85,712 | 175,364 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Support and managed services | | 291,389 | | 289,638 | 564,632 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Total services revenue | | 381,702 | | 375,350 | 739,996 |
+--------------------------------------------+--+-----------+--+-----------+------------+
| Total revenue | | 1,288,780 | | 1,222,184 | 2,503,198 |
+--------------------------------------------+--+-----------+--+-----------+------------+
5 Seasonality of operations
Historically revenues have been higher in the second half of the year than in
the first six months. This is principally driven by customer buying behaviour in
the markets in which we operate. Typically this leads to a more pronounced
effect on operating profit. In addition the effect is compounded further by the
tendency for the holiday entitlements of our employees to accrue during the
first half of the year and to be utilised in the second half.
6 Exceptional items
+-------------------------------------------+---------+----------+---------+----------+---------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+-------------------------------------------+---------+----------+---------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Operating profit | | | | | |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Profit on disposal of business, net of | - | | | | 1,879 |
| goodwill | | | - | | |
+-------------------------------------------+---------+----------+---------+----------+---------+
| Restructuring costs | - | | (6,003) | | (7,178) |
+-------------------------------------------+---------+----------+---------+----------+---------+
| | - | | (6,003) | | (5,299) |
+-------------------------------------------+---------+----------+---------+----------+---------+
+-------------------------------------------+-------+----------+------------------------+----------+--------+
| Income tax | | | | | |
+-------------------------------------------+-------+----------+------------------------+----------+--------+
| Tax on exceptional items included in | - | | 1,276 | | 1,415 |
| operating profit | | | | | |
+-------------------------------------------+-------+----------+------------------------+----------+--------+
| | - | | 1,276 | | 1,415 |
+-------------------------------------------+-------+----------+------------------------+----------+--------+
Restructuring costs in H1 2009 arose from the change programme to reduce net
operating expenses. They include expenses from headcount reductions and vacant
premises costs.
The net gain on disposal of business of GBP1,879,000 arose from the Group
disposing of its trade distribution division to Ingram Micro in October 2009.
The disposal did not match the criteria of IFRS 5 'Non-current assets
held-for-sale and discontinued operations' as the disposal did not represent a
separate major line of business or geographical area of operations and hence was
not treated as a discontinued operation.
7 Income tax
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| The charge based on the profit for the | | | | | |
| period comprises: | | | | | |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| | Unaudited | | Unaudited | | Audited |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| UK corporation tax | 6,082 | | 3,270 | | 11,181 |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| Foreign tax | 316 | | 147 | | 1,394 |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| Adjustments in respect of prior periods | - | | (49) | | (853) |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| Deferred tax | (1,190) | | (793) | | (1,024) |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
| | 5,208 | | 2,575 | | 10,698 |
+-------------------------------------------+-----------+----------+-----------+----------+---------+
In his budget of 22 June 2010, the Chancellor of the Exchequer announced Budget
tax changes, which, if enacted in the proposed manner, will have an effect on
the Group's future tax position. As at 30 June 2010, the tax changes announced
in the Budget are not yet regarded as 'substantively enacted' and as such, in
accordance with accounting standards, the changes have not been reflected in the
Group's financial statements as at 30 June 2010. The budget proposed a decrease
in the rate of UK corporation tax from 28% to 24% by 1% each year, from April
2011, which will be enacted annually.
The effect on the Group of these proposed changes to the UK tax system will be
reflected in the Group's financial statements for the year ending 31 December
2010 once the proposals have been substantively enacted.
8 Earnings per ordinary share
Earnings per share (EPS) amounts are calculated by dividing profit attributable
to ordinary equity holders by the weighted average number of ordinary shares
outstanding during the year (excluding own shares held).
Diluted earnings per share amounts are calculated by dividing profit
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year (excluding own shares held) adjusted
for the effect of dilutive options.
Adjusted basic and adjusted diluted EPS are presented to provide more comparable
and representative information. Accordingly the adjusted basic and adjusted
diluted EPS figures exclude the amortisation of acquired intangibles and
exceptional items.
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| | Unaudited | | Unaudited | | Audited |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Profit attributable to equity holders of the | 15,768 | | 9,406 | | 37,703 |
| parent | | | | | |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Amortisation of acquired intangibles | 299 | | 259 | | 517 |
| attributable to equity holders of the parent | | | | | |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Tax on amortisation of acquired intangibles | (84) | | (67) | | (145) |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Exceptional items | - | | 6,003 | | 5,299 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Tax on exceptional items | - | | (1,276) | | (1,415) |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Adjusted profit after tax | 15,983 | | 14,325 | | 41,959 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| | | | | | |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| | No | | No | | No |
| | '000 | | '000 | | '000 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Basic weighted average number of shares | 147,563 | | 146,845 | | 146,918 |
| (excluding own shares held) | | | | | |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Effect of dilution: | | | | | |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Share options | 6,256 | | 3,143 | | 4,671 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
| Diluted weighted average number of shares | 153,819 | | 149,988 | | 151,589 |
+------------------------------------------------+-----------+----------+-----------+----------+------------------+
+-------------------------------------------------+-------+----------+-------+----------+--------+
| | H1 | | H1 | | Year |
| | 2010 | | 2009 | | 2009 |
+-------------------------------------------------+-------+----------+-------+----------+--------+
| | pence | | pence | | pence |
+-------------------------------------------------+-------+----------+-------+----------+--------+
| Basic earnings per share | 10.7 | | 6.4 | | 25.7 |
+-------------------------------------------------+-------+----------+-------+----------+--------+
| Diluted earnings per share | 10.3 | | 6.3 | | 24.9 |
+-------------------------------------------------+-------+----------+-------+----------+--------+
| Adjusted basic earnings per share | 10.8 | | 9.8 | | 28.6 |
+-------------------------------------------------+-------+----------+-------+----------+--------+
| Adjusted diluted earnings per share | 10.4 | | 9.6 | | 27.7 |
+-------------------------------------------------+-------+----------+-------+----------+--------+
9 Dividends paid and proposed
A second interim dividend for 2009 of 8.0p per ordinary share in lieu of a final
dividend was paid on 1 April 2010. No final dividends in respect of 2009 were
proposed or paid. An interim dividend in respect of 2010 of 3.5p per ordinary
share, amounting to a total dividend of GBP5,173,000, was declared by the
Directors at their meeting on 26 August 2010. This interim report does not
reflect this dividend payable.
10 Adjusted management cash flow statement
The adjusted management cash flow has been provided to explain how management
view the cash performance of the business. There are two primary differences to
this presentation compared to the statutory cash flow statement, as follows:
1) Factor financing is not included within the statutory definition of cash
and cash equivalents, but operationally is managed within the total net
funds/borrowings of the businesses; and
2) Items relating to customer-specific financing ("CSF") are adjusted for as
follows:
a. Interest paid on customer-specific financing is reclassified from interest
paid to adjusted operating profit; and
b. Where customer-specific assets are financed by finance leases and the
liabilities are matched by future amounts receivable under customer operating
lease rentals, the depreciation of leased assets and the repayment of the
capital element of finance leases are offset within net working capital; and
c. Where assets are financed by loans and the liabilities are matched by
amounts receivable under customer operating lease rentals, the movement on loans
within financing activities is also offset within working capital.
Adjusted management cash flow statement
For the six months ended 30 June 2010
+-----------------------------------------+---+----+----------+---+----------+----+----------+---+----------+------+---+
| | Unaudited | | Unaudited | | Audited |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | H1 2010 | | H1 2009 | | Year |
| | | | | | 2009 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Adjusted profit before tax | 21,275 | | 18,243 | | 54,225 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net finance income | (634) | | (276) | | (302) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Depreciation and amortisation | 8,817 | | 8,262 | | 17,695 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Share-based payment | 1,320 | | 1,076 | | 2,555 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Working capital movements | 13,188 | | 39,332 | | 65,337 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Other adjustments | 9 | | (193) | | (1,567) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Adjusted operating cash inflow | 43,975 | | 66,444 | | 137,943 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net interest received | 507 | | 328 | | 1,149 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Income taxes paid | (4,568) | | (10,029) | | (17,500) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Capital expenditure and investments | (16,069) | | (8,590) | | (21,294) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Acquisitions and disposals | - | | - | | (6,775) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Equity dividends paid | (11,811) | | (8,097) | | (12,514) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Cash inflow before financing | 12,034 | | 40,056 | | 81,009 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Proceeds from issue of shares | 284 | | 3 | | 44 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Purchase of own shares | (2,052) | | (559) | | (560) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Increase in net funds excluding CSF in the | 10,266 | | 39,500 | | 80,493 |
| period | | | | | |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | | | | | |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Increase in net funds excluding CSF | 10,266 | | 39,500 | | 80,493 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Effect of exchange rates on cash and cash | (1,089) | | 3,152 | | 1,301 |
| equivalents | | | | | |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net funds excluding CSF at beginning of | 86,403 | | 4,609 | | 4,609 |
| period | | | | | |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net funds excluding CSF at end of period | 95,580 | | 47,261 | | 86,403 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | | | | | | |
| 11 Analysis of net funds | | | | | | |
+-----------------------------------------+--------+----------+-------------------+----------+---------------------+---+
| | Unaudited | | Unaudited | | Audited |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | H1 2010 | | H1 2009 | | Year |
| | | | | | 2009 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Cash and short term deposits | 129,571 | | 75,542 | | 108,017 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Bank overdraft | (1,459) | | (5,854) | | (3,063) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Cash and cash equivalents | 128,112 | | 69,688 | | 104,954 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Other loans non-CSF | (1,442) | | - | | (3,705) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Factor financing | (31,090) | | (22,427) | | (14,846) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net funds excluding CSF | 95,580 | | 47,261 | | 86,403 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Finance leases | (32,759) | | (48,892) | | (42,567) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Other loans | (5,725) | | (16,444) | | (6,488) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Total CSF | (38,484) | | (65,336) | | (49,055) |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| Net funds/(debt) | 57,096 | | (18,075) | | 37,348 |
+---------------------------------------------+-------------------+----------+-------------------+----------+----------+
| | | | | | | | | | | | |
+-----------------------------------------+---+----+----------+---+----------+----+----------+---+----------+------+---+
12 Publication of non-statutory accounts
The financial information contained in the interim statement does not constitute
statutory accounts as defined in section 435 of the Companies Act 2006. The
auditors have issued an unqualified opinion on the Group's statutory financial
statements under International Accounting Standards for the year ended 31
December 2009 and did not include a statement under section 498(2) or (3) of the
Companies Act 2006. Those accounts have been delivered to the Registrar of
Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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