RNS Number:5942I
Horizon Technology Group PLC
12 March 2003
Horizon Technology Group plc
Preliminary Results
For the year to 31 December 2002
Horizon meets earnings expectations
and
generates cash of Euro40m
Highlights:
* Adjusted diluted Earnings Per Share meets market expectations at 4.6 cent
or 6.97 cent excluding discontinued activities;
* EBITDA growth from Euro4.4m to Euro8m on revenues of Euro321.4m;
* Generated cash of Euro40m - that is, moved from net debt of Euro34.7m at start
of year to net cash of Euro5.1m at year-end;
* The group has consolidated into four businesses each of which has been and
continues to be profitable and is a market leader in its area of operation.
Commenting on the results: Samir Naji, Executive Chairman and Chief Executive of
Horizon Technology Group plc said: "2002 was a period of significant progress
for the group. In an uncertain trading environment where confidence is fragile,
the group has generated operating profits, has improved its cash position by
Euro40m thereby eliminating net debt and has consolidated into four core and
profitable businesses. These achievements mark a notable turning point for the
group.
During the year, we have strengthened our customer base in a number of key
market sectors, including public services, manufacturing and retail finance. We
have achieved this by competing aggressively and becoming more efficient than
our competitors, while protecting and increasing our earnings. Customer
satisfaction remains high as we continue to help our customers gain the maximum
return from their new and existing investments in technology.
We have produced growth in operating profits and generated significant cash flow
thereby eliminating net debt and reducing risk profile. We are a profitable
group ready to take advantage of any future upturn in market conditions."
About Horizon:
Horizon Technology Group plc is a leading technical integrator and distributor
of information technology products in the UK and Ireland. Horizon is quoted on
the London and Dublin Stock Exchanges. (Website: www.horizon.ie)
For more information contact;
Paul McSharry,
Financial Dynamics Ireland
Tel: +353-1-6633633
email; paulmc@fdireland.ie
CHAIRMAN'S STATEMENT
SUMMARY PERFORMANCE
2002 was a period of significant progress for the group. In an uncertain trading
environment with falling demand for IT products and services and fragile
confidence internationally, the group generated operating profits, improved its
cash position by Euro40m thereby eliminating net debt and consolidated back to its
four core and profitable businesses. These achievements mark a notable turning
point for the group:
* Operating Profits: Revenue for the year to December was 18.5% down on
calendar year 2001 reflecting the deterioration in market demand. However,
largely due to the benefits of the cost reduction program, EBITDA has
increased from Euro4.4m to Euro8m, which is a considerable achievement given
market conditions.
* Four profitable businesses: In response to the continued downturn in
demand for IT related products and services, Horizon continued its
comprehensive and fundamental restructuring of group-wide operations thereby
reducing quarterly running costs by a further 48% in 2002 alone. Including
cost cuts implemented in 2001, the group's cost structure has been cut by
68% from its peak quarterly cost of Euro17m in March 2001 to current quarterly
costs of Euro5.5m approximately. Likewise, headcount was reduced from 720 at
the peak in March 2001 to a current 208. The restructuring process has
included:
* the disposal of the group's Cisco training business and smaller
application consulting businesses;
* the discontinuation of developmental service lines including that of
i-Fusion, Horizon's ASP offering;
* the realignment of cost structures in continuing businesses to reflect
market demand; and
* the integration of the remaining applications consulting businesses, a
fundamental review of consulting service lines, the rationalisation of
operating premises and the simplification of the supporting group structure.
* Net cash: The group's cash position was improved by Euro40m. That is, the
year began with net debt of Euro34.7m and ended with net cash of Euro5.1m. The net
cash for acquisitions/disposals was Euro3.3m and cash flow from operations
generated Euro38.1m essentially attributable to a reduction in the group's
investment in working capital.
The pre tax result for the year is impacted by two one-off items charged to the
profit and loss account - the loss on disposal of the training and consulting
businesses and the exceptional costs incurred in the restructuring process. As a
result of these negative items of a one-off nature, diluted loss per share for
the year is 19.39 cent. However, underlying trading performance (i.e. from
continuing activities excluding amortisation of intangibles and non-operating
exceptional items) shows a diluted earnings per share of 6.97 cent per share.
The largest cost within exceptional items is provisions for future costs of
vacant properties. Following the sale of the Cisco training businesses and as a
result of the fundamental restructuring implemented, Horizon has substantial
lease obligations for properties that lie vacant. Appropriate provisions have
been made for these future obligations.
OUTLOOK
IT spending shows no signs of improving, with over-capacity in the market and
continuing poor visibility. However, Horizon has strong market positions, both
in the Irish market and in key segments of the UK market, very competitive cost
structures, efficient processes, strong relationships with blue-chip customers
and global IT vendors and a debt-free balance sheet. These competitive
advantages should enable Horizon to grow market share even in challenging market
conditions. Horizon is a profitable group ready to take advantage of any future
upturn in market conditions.
Samir Naji
Chairman
11 March 2003
OPERATING RESULTS
Revenue for the year to December 2002 was 18.5% down on calendar year 2001
reflecting the deterioration in market demand. Excluding discontinued
businesses, revenue fell by 8%. The fall occurred in the distribution division,
which was down 30% reflecting a reduction in both unit price and volume shipped.
Revenue in the IT Services division was up 10.7% on continuing operations
principally because of the very successful development of our UK enterprise
infrastructure operation, which acts as a key infrastructure partner to major
systems integrators and resellers.
Gross profit margin for the year to December 2002 at 12.4% (11.1% on continuing
operations) was down from 16.7% in calendar year 2001. The fall is attributable
to two factors. Firstly, a change in revenue mix, that is the impact of the
turnover growth in the UK enterprise infrastructure and the reduced contribution
from application consulting and training businesses as a result of recent
disposals. Secondly, as the markets have become more competitive, the group has
focused on aggressive pricing at the same time as cutting its cost structure. We
have and will continue to compete aggressively and achieve greater efficiencies
so as to increase revenues and market share while protecting and increasing
earnings.
Despite the falls in revenue and gross profit, EBITDA has increased from Euro4.4m
to Euro8m largely due to the benefits of the group's cost reduction program.
Operating costs as a percentage of revenue have reduced from 15.6% in calendar
year 2001 to 9.9% in calendar year 2002 and EBITDA as a percentage of revenue is
up from 1.1% to 2.5%.
RESTRUCTURING
It is now nearly two years since the fortunes of the IT sector began to reverse
from the exceptional levels of growth experienced for the previous period. When
the downturn first became evident in May 2001, Horizon's operating plans were
designed to exploit the opportunities in a growing market and these plans were
quickly reviewed in the light of the changed circumstances.
The group initiated an examination of all businesses, operations and
expenditures with a view to consolidating back to its core operations and
ensuring that its cost base was appropriate given the deterioration in the
economic environment. In the last two years annualised running costs have been
reduced by 68% through a group-wide comprehensive and fundamental restructuring
which has included disposals, closures and rationalisation. Full time equivalent
staff numbers were reduced from a March 2001 peak of 720 to a current level of
208. During 2002 this fundamental restructuring process included:
* the disposal of the Cisco training business to Azlan Group plc;
* the disposal of smaller application consulting businesses, WebFactory and
Fusion Business Solutions UK;
* the disposal of the developmental ASP division, iFusion;
* discontinuation of the group's historic infrastructure business in the UK
focusing on telcos and service providers;
* integration and review of the remaining application consulting businesses;
* the rationalisation of operating premises; and
* the simplification of the supporting group structures.
As a result of the fundamental restructuring process, the group's pre tax
results have been impacted by two significant items of a one-off nature:
* a loss on disposal of Euro13.2m inclusive of goodwill write down and
provisions for future losses and property lease commitments on discontinued
operations; and
* redundancy and restructuring provisions of Euro2.1m
The largest item within the exceptional costs is provisions for future lease
obligations on vacant properties. Following the sale of the Cisco training
businesses and as a result of the fundamental restructuring implemented, Horizon
has substantial lease obligations for properties that lie vacant. A program is
underway to sub-let, assign, terminate or otherwise dispose of these obligations
and some minor successes have been achieved. In the unlikely event that this
program were to make no further progress, the present value of all the future
obligations under these leases would be Euro16.6m, the term of the leases range
from two to ten years and the annual cash outflow would be circa Euro2.9m in early
years, reducing as leases expire.
The directors, having taken external professional advice, have estimated the
level of income that can reasonably be expected to be generated from these
vacant premises and have made an appropriate provision based on their best
estimate of the net cash outflows. The accounts include a non-operating
exceptional charge of Euro7.5m in respect of these vacant premises of which Euro6.1m
is a provision for future costs.
PROFITS OF CONTINUING OPERATIONS
As a result of the one-off items described above, the group had losses before
tax of Euro12.5m and after tax of Euro13.6m. However, excluding the impact of
amortisation, exceptional items and discontinued operations, profit before tax
was Euro6.6m and profit after tax was Euro4.9m. To provide shareholders with full
visibility of the impact of exceptional and one-off costs on the results for the
year, the table below computes the underlying trading performance of continuing
activities - that is, excluding discontinued businesses, exceptional items and
amortisation of intangibles.
Consolidated
continuing
operations,
Exceptional excluding
items and amortisation &
Discontinued amortisation exceptionals
Consolidated operations
total
Euro'000 Euro'000 Euro'000 Euro'000
Turnover 321,412 11,364 - 310,048
Gross profit 39,814 5,464 - 34,350
EBITDA 8,017 (811) - 8,828
Operating profit 3,975 (1,672) (1,669) 7,316
(Loss)/Profit before tax (12,471) (15,114) (3,962) 6,605
Retained (loss)/profit (13,589) (14,926) (3,545) 4,882
EPS - basic (c) (20.93) 7.52
EPS - diluted (c) (19.39) 6.97
CASH FLOW, LIQUIDITY AND FUNDING
In a very difficult trading environment, significant progress has been made in
the management of working capital and the group's cash position. The group began
the year with net debt of Euro34.7m and ended with net cash of Euro5.1m, a turnaround
of nearly Euro40m. Cash flow from operations generated Euro38.1m. Since the flotation
date, cash generated by operations equates to 130% of operating profits before
goodwill.
Cash from operating activities Euro'm
EBITDA from continuing operations 8.8
EBITDA from discontinued operations (0.8)
Exceptional costs (2.6)
Reduction in working capital 32.7
Cash flow from operating activities 38.1
The positive cash flow from operations is primarily attributable to a reduction
in working capital of Euro32.7m. In the course of the year, stock was increased by
Euro2.1m but this was offset by a reduction in debtors of Euro25.7m and an increase in
creditors of Euro9m.
Debtors' days were reduced from 64 to 50 days. An element of this reduction
arose because a smaller proportion of the sales in the period arose in the month
of December than in previous years. If a normalised proportion of revenues had
been achieved in December, debtors would have been higher by circa Euro3.5m and
debtors' days would have been 54.
A summary of the improvement from net bank debt of Euro34.7m to net cash of Euro5.1m
is as follows:
Movement in net bank debt Euro'm
Opening net bank debt (34.7)
Cash flow from operating activities 38.1
Interest and corporation tax payments (1.8)
Capital expenditure (0.4)
Net cash for acquisitions/disposals 3.3
Finance leases relating to disposals 0.6
Closing net cash balances 5.1
Net debt as a percentage of equity reduced from 109% at 31 December 2001 to nil
at 31 December 2002. The net interest charge for the year at Euro977,000 is a
significant improvement over previous periods. The interest charge for the six
months to 31 December 2002 at Euro334,000 compares with Euro643,000 for the previous
six months and Euro1,077,000 for the corresponding July to December period in 2001.
As a result of the extent of one-off exceptional items, interest cover is
negative but it is notable that interest cover on continuing activities
excluding exceptional costs is 10.3 times, a significant improvement over 4.2
times in the corresponding period of the previous year.
DIVISIONAL ANALYSIS
The group operates through two separate trading divisions, namely IT Services
and Distribution and Channel Services. The performance of each division is
detailed below.
IT SERVICES DIVISION
Year ended Six months ended
December 2002 December 2001
Euro'000 Euro'000
Turnover 213,997 101,200
Gross profit 32,701 24,382
Gross margin 15.3% 24.1%
The division assists customers in implementing their IT strategies through the
provision of infrastructure, development and consulting services, predominantly
to blue-chip corporate clients and government departments. The division has
enterprise infrastructure businesses in Ireland and the UK and an application
consulting business in Ireland. It has a current full time equivalent headcount
of 146.
In the year to December 2002, the division's turnover was Euro214m, down 10.7% on
calendar year 2001. Excluding discontinued businesses, the division's turnover
grew 10.7% principally because of the very successful development of our UK
enterprise infrastructure operation, which acts as a key infrastructure partner
to major systems integrators and resellers. While the revenue of the Irish
enterprise infrastructure operation was well down on its peak, it has
experienced growth in the second half of 2002, up 12.6% on the equivalent period
in 2001.
Application consulting revenue from continuing activities reduced principally
because of a weakness in demand for new SAP implementation projects. However,
data warehousing and customer relationship management services were particularly
strong with a number of new projects completed successfully during 2002.
The IT Services division continued to broaden its customer base in 2002 with
strong market share gains in the key mid-range and high-end of the market.
Sectors which experienced significant wins included public service,
manufacturing and retail finance, in which a number of large systems projects
were completed in 2002. The telecommunications sector now accounts for less than
20% of revenues, down from circa 50% at its peak in 2000. We continue to have an
exceptionally high level of customer retention, with over 80% of our business
coming from repeat customers.
The reduction in the division's gross profit margin is primarily attributable to
a change in mix brought about by the growth in enterprise infrastructure
turnover and the reduced contribution from application consulting businesses as
a result of the recent disposals. Also, as the market becomes more competitive,
the group has focused on aggressive pricing at the same time as cutting its cost
structure. Horizon has and will continue to compete aggressively and achieve
greater efficiencies so as to increase revenues and market share while
protecting and increasing earnings.
DISTRIBUTION AND CHANNEL SERVICES DIVISION
Year ended Six months ended
December 2002 December 2001
Euro'000 Euro'000
Turnover 107,128 66,525
Gross profit 7,063 4,027
Gross margin 6.6% 6.1%
Clarity Distribution is Ireland's leading value added distributor of volume IT
products and offers leading edge supply chain management services to global IT
vendors and resellers. This division operates in the Irish market and has a
current full time equivalent staff count of 52.
Turnover of the division fell by 30% in 2002 on calendar year 2001 reflecting
both the decrease in PC unit shipments in Ireland and the reduction in unit
price during the year. Clarity's gross profit margin has been reducing for some
time but this trend was reversed in 2002 as the division increased custom,
configuration and staging work for larger resellers and continued the
development of its customer segmentation program. This increase in gross profit
margin and a reduction in operating costs protected the division's EBIT margins.
The merger of HP and Compaq to become the world's second largest IT manufacturer
represents a significant development in the consolidation of this market and has
been of benefit to the group's distribution division. Horizon is the leading
distributor of the combined HP and Compaq product range in Ireland and Northern
Ireland and has further expanded its market share in this area following the
merger.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
Total
Total Six months
Continuing Discontinued Year ended ended
operations operations 31 Dec 2002 31 Dec 2001
Note Euro'000 Euro'000 Euro'000 Euro'000
TURNOVER 2 310,048 11,364 321,412 168,156
Variation in stocks of finished goods and
work-in-progress 1,777 (140) 1,637 (3,241)
Purchases (277,475) (5,760) (283,235) (136,397)
Staff Costs (15,546) (3,628) (19,174) (18,530)
Other operating charges (9,976) (2,647) (12,623) (10,136)
________ ________ ________ ________
EARNINGS BEFORE INTEREST
DEPRECIATION, AMORTISATION
AND GOODWILL IMPAIRMENT 8,828 (811) 8,017 (148)
Depreciation (1,512) (770) (2,282) (2,374)
Amortisation of intangibles (1,669) (91) (1,760) (1,935)
Goodwill impairment - - - (9,692)
________ ________ ________ ________
OPERATING PROFIT/(LOSS) 5,647 (1,672) 3,975 (14,149)
NON OPERATING EXCEPTIONAL ITEMS:
Costs of fundamental restructuring (2,132) - (2,132) (760)
Disposal and termination of business units - (13,176) (13,176) (6,884)
Diminution in value of long term investments (161) - (161) -
________ ________ ________ ________
3,354 (14,848) (11,494) (21,793)
________ ________
Net interest charge (977) (1,077)
________ ________
LOSS ON ORDINARY ACTIVITIES BEFORE (12,471) (22,870)
TAXATION
Tax on loss on ordinary activities (1,109) 1,336
________ ________
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (13,580) (21,534)
Minority interests (including non-equity (9) -
minority interests)
________ ________
LOSS RETAINED FOR THE FINANCIAL PERIOD AND (13,589) (21,534)
ATTRIBUTABLE TO MEMBERS OF THE PARENT
COMPANY
________ ________
Earnings per share: 3
Basic earnings per ordinary shares (cents) (20.93) (34.46)
Basic earnings per ordinary shares
adjusted* (cents) 4.97 (3.61)
Basic earnings per ordinary shares
adjusted^ (cents) 7.52 (0.20)
Diluted earnings per ordinary shares
(cents) (19.39) (34.00)
Diluted earnings per ordinary shares
adjusted* (cents) 4.60 (3.56)
Diluted earnings per ordinary shares
adjusted^ (cents) 6.97 (0.20)
*Earnings per share adjusted for operating and non-operating exceptional items
and amortisation of intangibles
^Earnings per share adjusted for all exceptional items, amortisation of
intangibles, and discontinued operations in order to give a better indication of
the underlying performance of the group.
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2002
Year ended Six months ended
31 December 2002 31 December 2001
Euro'000 Euro'000
Loss attributable to members of the parent company (13,589) (21,534)
Exchange difference on retranslation of net assets of
subsidiary undertakings and deferred trading balances (1,001) (736)
__________ __________
TOTAL RECOGNISED LOSSES RELATING TO
THE PERIOD (14,590) (22,270)
__________ __________
RECONCILIATION OF SHAREHOLDERS FUNDS
for the year ended 31 December 2002
Year ended Six months ended
31 December 2002 31 December 2001
Euro'000 Euro'000
Total recognised losses (14,590) (22,270)
Expenses on share issue (34) (33)
Re-instatement of goodwill previously written off 947 -
Shares to be issued by way of deferred
consideration on acquisitions (4,563) 1,491
__________ __________
Total movements during the period (18,240) (20,812)
Shareholders' funds at beginning of period 31,917 52,729
__________ __________
Shareholders' funds at end of period 13,677 31,917
__________ __________
CONSOLIDATED BALANCE SHEET
at 31 December 2002
2002 2001
Euro'000 Euro'000
FIXED ASSETS
Intangible assets 9,899 17,988
Tangible assets 4,787 11,590
Financial assets - 161
__________ __________
14,686 29,739
__________ __________
CURRENT ASSETS
Stocks 18,137 16,693
Debtors 41,293 71,675
Cash at bank and in hand 9,330 8,552
__________ __________
68,760 96,920
CREDITORS: amounts falling due within one year (62,087) (85,850)
__________ __________
NET CURRENT ASSETS 6,673 11,070
__________ __________
TOTAL ASSETS LESS CURRENT LIABILITIES 21,359 40,809
CREDITORS: amounts falling due after more than one year (1,417) (8,686)
PROVISIONS FOR LIABILITIES AND CHARGES (6,148) (89)
__________ __________
13,794 32,034
__________ __________
FINANCED BY CAPITAL AND RESERVES
Called up share capital 4,754 4,524
Shares to be issued after period end 3,200 10,823
Share premium 66,960 64,164
Profit and loss account (45,690) (32,047)
Cost of shares of the company held in an ESOP (15,547) (15,547)
__________ __________
Shareholders' funds (all equity interests) 13,677 31,917
Minority interests:
Non equity 117 117
__________ __________
13,794 32,034
__________ __________
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2002
Year ended Six months ended
31 December 2002 31 December 2001
Note Euro'000 Euro'000
CASH INFLOW FROM OPERATING ACTIVITIES 4 38,083 110
__________ __________
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Net interest paid (1,021) (933)
Dividends paid to minority interests (9) -
Interest element of finance lease rental payments (109) (77)
__________ __________
NET CASH OUTFLOW FROM RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE (1,139) (1,010)
__________ __________
TAXATION
Irish corporation tax paid (1,443) (178)
Overseas taxation refund/(paid) 824 (160)
__________ __________
NET CASH OUTFLOW FROM TAXATION (619) (338)
__________ __________
CAPITAL EXPENDITURE
Payments to acquire tangible fixed assets (852) (1,655)
Payments to acquire intangible fixed assets - (207)
Receipts from sales of tangible fixed assets 422 50
__________ __________
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (430) (1,812)
__________ __________
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertakings (3,823) (303)
Net cash transferred with subsidiaries sold (891) -
Sale of subsidiary 5(d) 8,046 -
_________ __________
NET CASH INFLOW/(OUTFLOW) FROM
ACQUISITIONS AND DISPOSALS 3,332 (303)
_________ __________
CASH INFLOW/(OUTFLOW) BEFORE USE
OF LIQUID RESOURCES AND FINANCING 39,227 (3,353)
CASH INFLOW FROM MANAGEMENT OF LIQUID 1,016 -
RESOURCES
NET CASH OUTFLOW FROM FINANCING 5(c) (10,723) (3,392)
__________ __________
INCREASE/(DECREASE) IN CASH 5(b) 29,520 (6,745)
__________ __________
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2002
1. BASIS OF PREPARATION
The results incorporated in the preliminary announcement have been prepared in
accordance with accounting policies consistent with previous years.
The board of directors approved the preliminary announcement for the year to 31
December 2002 on 11 March 2003. The financial information set out above does not
constitute statutory accounts for the year ending 31 December 2002 or the six
months ending 31 December 2001. The full accounts for the six months ended 31
December 2001, which received an unqualified audit report, have been filed with
the Irish Companies Registration Office.
2. SEGMENTAL INFORMATION
An analysis by geographical location, class of business and gross profit is set
out below:
Year ended Six months ended
31 December 2002 31 December 2001
Euro'000 Euro'000
Turnover (by source)
Republic of Ireland 164,704 94,746
Britain and Northern Ireland 153,858 70,442
Mainland Europe 2,850 2,968
__________ __________
321,412 168,156
__________ __________
Turnover (by destination)
Republic of Ireland 123,201 81,094
Britain and Northern Ireland 192,465 82,841
Mainland Europe 5,521 2,158
Rest of World 225 2,063
__________ __________
321,412 168,156
__________ __________
Turnover (by class of business)
IT services division 213,997 101,200
Distribution and channel services division 107,128 66,525
Application service provider division 287 431
__________ __________
321,412 168,156
__________ __________
Gross profit (by class of business)
IT services division 32,701 24,382
Distribution and channel services division 7,063 4,027
Application service provider division 50 109
__________ __________
39,814 28,518
__________ __________
An analysis of group net profit and net assets by geographic region and
class of business is not provided as the directors believe that the
disclosure of this information would be prejudicial to the interests of
the group.
3. EARNINGS PER ORDINARY SHARE
Year ended Six months ended
31 December 2002 31 December 2001(i)
The computation of basic and diluted earnings Euro'000 Euro'000
per share is set out below:
Numerator
Loss after tax and minority interests (13,589) (21,534)
Non operating exceptional items 15,052 7,649
Amortisation of goodwill and intangibles 1,760 11,627
__________ __________
Adjusted profit before exceptional items and amortisation 3,223 (2,258)
Discontinued operations 1,659 2,132
__________ __________
Adjusted profit before exceptional items, amortisation,
and discontinued operations 4,882 (126)
__________ __________
Denominator
Weighted average number of shares in issue for the period 64,912 62,492
('000)
Dilutive potential ordinary shares:
Deferred consideration 4,971 784
Employee share options 190 59
__________ __________
Diluted weighted average number of ordinary shares ('000) 70,073 63,335
__________ __________
Earnings per share:
Basic earnings per ordinary shares (cents) (20.93) (34.46)
Basic earnings per ordinary shares adjusted* (cents) 4.97 (3.61)
Basic earnings per ordinary shares adjusted^ (cents) 7.52 (0.20)
Diluted earnings per ordinary shares (cents) (19.39) (34.00)
Diluted earnings per ordinary shares adjusted* (cents) 4.60 (3.56)
Diluted earnings per ordinary shares adjusted^ (cents) 6.97 (0.20)
*Earnings per share adjusted for operating and non-operating
exceptional items and amortisation of intangibles.
^Earnings per share adjusted for all exceptional items, amortisation of
intangibles, and discontinued operations in order to give a better
indication of the underlying performance of the group.
(i) In accordance with FRS 14 the weighted average number of shares
in issue for the period and the diluted weighted average number of
ordinary shares have been restated for the period ended December 2001,
as the potential ordinary shares outstanding at that date were changed
by events since that date.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares, namely share options and future
contingent share issues.
4. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
Year ended Six months ended
31 December 2002 31 December 2001
Euro'000 Euro'000
Operating profit/(loss) 3,975 (14,149)
Non operating exceptional items (15,469) (7,644)
Non - cash exceptional items 12,919 5,461
Depreciation, amortisation and impairment 4,042 14,001
Loss on disposal of tangible fixed assets 25 18
Decrease in debtors 25,646 18,225
(Increase)/decrease in stocks (2,056) 3,241
Increase/(decrease) in creditors 9,001 (19,043)
___________ ___________
Net cash inflow from operating activities 38,083 110
___________ ___________
5. ANALYSIS OF NET DEBT AND FINANCING AND RECONCILIATION OF NET CASH
FLOW TO MOVEMENT IN NET DEBT
(a) Analysis of debt
31/12/2001 Cashflow Non-cash Disposals Translation 31/12/2002
Opening Changes Adjustment Closing
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Cash 7,536 1,956 - - (162) 9,330
Overdraft (31,274) 27,564 - - 22 (3,688)
________ ________ ________ ________ ________ ________
(23,738) 29,520 - - (140) 5,642
Liquid resources* 1,016 (1,016) - - - -
Short term loans (3,830) 3,810 - - - (20)
Long term loans (1,029) 930 - - - (99)
Finance lease (2,139) 1,058 (25) 702 14 (390)
obligations
Acquisition loan notes (4,933) 4,891 - - 2 (40)
________ ________ ________ ________ ________ ________
(34,653) 39,193 (25) 702 (124) 5,093
________ ________ ________ ________ ________ ________
* Liquid resources include monies held on deposit, which were
pledged as security on borrowings. These have subsequently been
repaid.
(b) Reconciliation of net cash flow to movement in net debt
Euro'000
Increase in cash in year 29,520
Cash outflow from decrease in debt and lease financing 10,689
Cash inflow from decrease in liquid resources (1,016)
__________
Change in net debt resulting from cash flows 39,193
Finance leases disposed of with subsidiaries 702
New finance leases (25)
Translation adjustment (124)
__________
Movement in net debt in the year 39,746
Net debt at 31 December 2001 (34,653)
__________
Net debt at 31 December 2002 5,093
__________
(c) Net cash outflow from financing
2002 2001
Euro'000 Euro'000
Net movements in short term borrowings (8,701) (2,198)
Net movement in long term borrowings (930) (190)
Expenses on issue of ordinary share capital (34) (33)
Capital element of finance lease rental payments (1,058) (971)
___________ ___________
Net cash outflow from financing (10,723) (3,392)
___________ ___________
(d) Disposal of subsidiary undertakings
Euro'000
Net assets disposed of 10,616
Diminution in value of tangible fixed assets 2,852
___________
13,468
Loss on disposal (4,788)
___________
Total cash receipts 8,680
___________
Satisfied by:
Cash consideration (including expenses) 8,046
Deferred cash consideration (including expenses) 634
___________
Total cash receipts 8,680
___________
The businesses sold during the period had cash outflows from operating
activities of Euro712,000, paid Euro251,000 in respect of net returns on
investments and servicing of finance, paid Euro8,000 in respect of taxation
and utilised Euro21,000 for capital expenditure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UAVNROUROAAR