Interim Results
July 30 2003 - 3:01AM
UK Regulatory
30 July, 2003
TDG plc
INTERIM RESULTS 2003
Delivering Continued Progress
Highlights
* Headline profit before tax up 4% to �9.8 million
* Headline earnings per share up 8% to 9.1p
* Decision taken to withdraw from direct operations in France
* Results after goodwill amortisation, exceptional operating costs and
exceptional items : loss before tax �3.1m (2002 : profit �8.5m) ; loss per
share 6.7p (2002 : earnings 7.2p).
* Strong cash inflow of �12.8m further reduces net debt to �33.8m
A table analysing the Group results is included in the Chief Executive's
Review.
David Garman, Chief Executive of TDG, commented:
"The financial results for the first six months of the year reflect the
continuing benefit from the actions we have taken to strengthen the Group. We
are pleased that in the current environment we maintained margins overall in
our ongoing Contract Logistics activities. We are also encouraged that new
business wins in our ongoing activities in the first half are at a comparable
level to the equivalent period last year, and include additional business with
existing customers and new relationships in both the consumer goods and
chemicals sectors .
Following the strategic review announced last year we are taking decisive
action to withdraw from direct operations in France. We have started the
process of exiting our operations which we expect to be significantly cash
positive. To enable us to continue to offer our customers the capability of
operating with TDG in France we have established a reciprocal alliance with a
well established French logistics business.
We expect to benefit from the actions we have taken during the first half to
reduce costs and to continue to benefit from the other actions we have taken to
strengthen the Group both strategically and operationally. Barring any further
deterioration in market conditions, we continue to expect modest improvement in
headline profit for the year."
Enquiries:
TDG Financial Dynamics
David Garman, Chief Executive Ben Foster/Andrew Dowler
Paul Mainwaring, Finance Director Tel: 020 7831 3113
Tel: 020 7222 7411
CHAIRMAN'S STATEMENT
The financial results for the first six months of the year reflect the
continuing benefit from the actions we have taken to strengthen the Group. In
the first half of this year, headline profit before tax is up 4% to �9.8m, and
headline earnings per share are up 8% at 9.1p. We are pleased that in the
current environment we maintained margins overall in our ongoing Contract
Logistics activities. We are also encouraged that new business wins in our
ongoing activities in the first half are at a comparable level to the
equivalent period last year, and include additional business with existing
customers and new relationships in both the consumer goods and chemicals
sectors.
We continue to focus on the implementation of the major strategic initiatives
we have taken over the last three years in order to build the momentum of
profitable growth. We remain focused on cost and we have taken steps to reduce
our cost base in the UK and to exit from some low value added activities in
Ireland. The �1.1m cost of these actions has been charged as an exceptional
operating cost.
Our strategy is to develop our existing strong positions in our chosen sectors
in selected European markets. The core of TDG consists of our successful
businesses in the UK, The Netherlands and Ireland, which are countries where we
believe appropriate and sustainable returns can be achieved for shareholders.
These operations will be progressively complemented by operational alliances in
other countries which have less attractive characteristics and where it is
difficult to achieve profitable scale. This will allow us to continue to
provide operational capability to serve our customers, but with minimal risk
for shareholders.
In line with this approach, at the end of last year we announced a strategic
review of our loss making French business. We have concluded that it would be
very difficult to achieve profitable scale in this market and that our existing
unsatisfactory position would be likely to deteriorate. We have therefore taken
decisive action to withdraw from direct operations in France, as set out in
more detail in the Chief Executive's review. This action will result in an
exceptional charge in 2003 of an estimated �16m, of which approximately �9m is
cash and �7m non-cash asset write downs. The estimated proceeds from asset
disposals are �14m which should, therefore, exceed the cash costs by
approximately �5m. The proceeds are expected to be received over the next 12
months. As a result of the actions already taken in France, we have charged �
10.9m as an exceptional item in the first half, of which �5.4m relates to
non-cash asset write downs.
After goodwill amortisation, and including the exceptional operating costs and
exceptional items discussed above, the loss before tax is �3.1m (2002 : profit
of �8.5m). On the same basis the loss per share is 6.7p (2002 : earnings of
7.2p).
The Group continues to be in a strong financial position, with a sound balance
sheet and good cash generation.
Dividend
The Board is declaring an unchanged interim dividend of 5.25p per ordinary
share. The dividend will be payable on 1 October 2003 to shareholders on the
register at the close of business on 29 August 2003.
Outlook
We expect to benefit from the actions we have taken during the first half to
reduce costs and to continue to benefit from the other actions we have taken to
strengthen the Group both strategically and operationally. Barring any further
deterioration in market conditions, we continue to expect modest improvement in
headline profit for the year.
CHIEF EXECUTIVE'S REVIEW
The first half of 2003 has been another period of progress for the Group
towards our goal of establishing a focused European Contract Logistics
business. Although market conditions continue to be challenging, I believe that
our focus on providing services to our customers that enhance their
competitiveness, combined with our flexibility and speed of response, will
continue to allow us to win in the market.
We are beginning to see tangible returns from the investments we have made over
the past three years in expanding our range of services and developing
strategic alliances to extend our skills and capabilities. The extension of our
operational expertise and network of alliances has facilitated our entry into
new higher value added segments of the supply chain management market and
allows us to support our customers through the delivery of increasingly
sophisticated solutions, particularly involving the international movement of
products.
The annualised value of new contracts won during the first half was �37m.
Although this is lower than the �41m reported for the first half last year, the
comparative includes �8m of contract wins in France. As lead times for the
conversion of pipeline opportunities into new business wins remain stretched,
we have increased our focus on targeting business with shorter decision and
implementation lead times. Our continued application of account management
principles underpins the renewal of existing contracts and the extension of
customer relationships.
Our vision of offering European-wide service to our customers has not changed
over the last three years. As we stated at the beginning of this year we have,
however, adapted our implementation to reduce the risk for our shareholders of
investing in countries where it is difficult to achieve profitable scale. Our
model of operating in such countries through either operational alliances with
customers or through establishing reciprocal arrangements with local logistics
operators is showing encouraging results.
Following the detailed strategic review of our operations in France, we have
concluded that it is in the shareholders' interest for TDG to withdraw from
direct operations in that country. In order to be able to offer our customers
the capability of operating with TDG in France we have today announced a
reciprocal alliance with MGF Logistique, a well established French logistics
business focused on serving the needs of customers in the consumer goods
sector. We have transferred our major contract logistics activities to MGF
Logistique, which has preserved employment and gives continuity of excellent
customer service.
We have also announced today an alliance with TTS in order to extend our reach
to the German market. TTS offers extensive coverage throughout Germany and
access to important central European markets.
Operational alliances of this nature can take some time to deliver tangible
results, but as our experience with our alliance with EGL has shown, they can
bring considerable advantages to the process of winning new business with
customers.
Our results for the first half reflect the current market conditions, but we
have maintained margins overall in our ongoing Contract Logistics operations.
Our operating performance is discussed below.
Trading Results
Turnover �m
H1 2003 H1 2002 Change
Contract Logistics
- UK & Ireland 164.5 158.6 +4%
- European Chemicals 55.3 53.6 +3%
- Netherlands 27.4 27.6 -1%
247.2 239.8 +3%
UK Cold Storage 10.1 12.0 -16%
France 18.1 22.3 -19%
Continuing operations 275.4 274.1 -
Discontinued operation - 3.1
275.4 277.2 -1%
Operating Profit �m
Contract Logistics
- UK & Ireland 7.4 8.1 -9%
- European Chemicals 3.4 2.4 +42%
- Netherlands 1.0 1.0 -
11.8 11.5 +3%
UK Cold Storage 0.7 0.9 �(0.2)m
France (0.5) (0.5) -
Continuing operations 12.0 11.9 +1%
Discontinued operation - 0.4
Headline Operating Profit 12.0 12.3 -2%
Interest (2.2) (2.9)
Headline profit before tax 9.8 9.4 +4%
Amortisation of goodwill (0.9) (0.9)
Exceptional operating costs
- UK redundancy costs (0.8) -
- Ireland business (0.3) -
rationalisation costs
Exceptional items
- France disposal and closure (10.9) -
costs
(Loss)/profit on ordinary (3.1) 8.5
activities before tax
Note: References to operating profit in the narrative that follows are before
amortisation of goodwill and exceptional operating costs.
Contract Logistics UK & Ireland
Turnover in the first half in UK & Ireland Contract Logistics was up 4% but
operating profit was 9% lower. The fall in operating profit reflects reduced
margins as a result of lower customer volumes, price pressure and the
difficulty in fully passing on cost increases in the current climate. We have
also been adversely affected by some specific factors including the lower level
of utilisation at our Harlow warehouse in the UK and at our major facility at
Kilcarbery in Ireland following a number of changes in customer requirements.
We have taken steps that will improve the position in both of these facilities
in the second half.
The turnover growth reflects the benefit of business wins particularly with
Kimberly-Clark, Messer, and Procter & Gamble in the UK, and with Diageo in
Ireland, together with expansion of our transport management operations on
behalf of a number of food manufacturing customers. We have also renewed and
extended our relationships with a number of key customers including The Early
Learning Centre (ELC), Honda UK Manufacturing, Exxon and Nestl� in the UK, and
Marks & Spencer, Pilkingtons and Diageo in Ireland. The growth in the first
half is a robust performance in the current environment and comes after two
years of double-digit organic growth.
We continue to invest in enhancing our capabilities in order to ensure that we
can offer our customers innovative solutions that enhance their competitive
position. Our alliance with the freight forwarder EGL enhances our capabilities
in Inbound Logistics, and our ability to offer a seamless integrated service
for the management of extended supply chains was a key factor in the successful
renewal and extension of our relationship with ELC. Inbound Logistics in the
consumer goods sector is an area of significant potential growth for TDG. This
alliance has also facilitated the commencement of a trading relationship with
Asda for the first time. The investment we have made in recent years in
developing our supply chain consultancy capability has resulted in a number of
active consultancy projects, some of which may lead to outsourcing
opportunities for us. We have implemented our Integrated Contract Transport IT
system to support our activities on behalf of Kimberly-Clark in the UK. The
system interfaces with the customer's internal systems and manages vehicle
movements across six different sites through a single central planning
function. This facilitates improved vehicle utilisation, more effective
management of subcontractors and reduced administration costs. We intend to
roll the system out into other areas of our transport business in the UK and
Ireland.
We have taken action to reduce our costs through headcount reduction and
through reducing the complexity of our activities. The cost reduction programme
in the UK which cost �0.8m will generate an annualised saving of around �2m.
The exit from the low value added `groupage' activities in Ireland which cost �
0.3m is profit neutral and will enable management to focus on added value
contract logistics. The �1.1m cost of these actions has been shown as an
exceptional operating cost.
The annualised value of new business wins for UK & Ireland Contract Logistics
in the first half is �25m. Customers are increasingly focused on the
flexibility of the proposed solution as well as operational capability and cost
when deciding on their logistics supplier, and during the first half we have
therefore proposed a growing number of solutions that optimise the use of
existing warehouse capacity and network capability.
Contract Logistics European Chemicals
Our Chemicals logistics business has continued to perform strongly in the first
half of this year, maintaining the encouraging performance in the second half
of last year. The 42% improvement in operating profit was achieved despite
turnover only increasing by 3%. The lower level of turnover growth than
achieved in the last two years reflects our withdrawal from some low margin
non-strategic activity. Progress in our key focus sector of speciality packed
chemicals has continued to be excellent, with double-digit growth in turnover
driven by the implementation of new contracts with Johnson Diversey and Bayer.
Margins have increased to over 6% reflecting reduced volatility in volumes in
our bulk chemicals operations, the benefit of actions taken to reduce costs and
increase flexibility, and the impact of the withdrawal from low margin
turnover.
Although market conditions for many of our customers in the chemicals sector
remain challenging with limited volume growth, we have continued to be
successful in winning new business, with �11m annualised value of new contracts
won by European Chemicals in the first half, including with new customers such
as Gramos Applied, Dunlop and Goldschmidt. We continue to be innovative and
flexible in our service propositions, and we have won a contract which marks
our entry into the distributor sector, which should open up further
possibilities for growth. This approach, combined with our focus on cost
reduction and operational excellence, and our well deserved reputation for
sound implementations, gives us confidence that we will remain aggressively
competitive in the market.
Contract Logistics Netherlands
Reported turnover from our operations in The Netherlands was 1% lower than a
year ago, with operating profit unchanged. The results for 2003 do benefit,
however, from a stronger Euro, with underlying turnover and operating profit
both 10% lower. The reduction in turnover reflects lower volumes with a number
of customers, including those in the historically stable food and consumer
sector, together with our withdrawal from some low margin freight management
activity.
Operating margins have been maintained despite the generally lower volumes and
a change in the mix of activity with Quest. We have benefited from the refocus
of our operations on behalf of our major retail customer and from growth with
Betonson in the construction market as their volumes improved.
We continue to develop our platform for growth in The Netherlands, and the
19,500 sq.m. extension to our ambient food warehousing facility at Nijmegen,
taking it to 44,500 sq.m. was completed at the end of the first half. We are
taking initiatives to strengthen our sales and marketing team and to broaden
our customer prospecting, highlighting the attractions of our Dutch facilities
for serving logistics needs in western Germany and Belgium as well as The
Netherlands. One example of this approach is the extension of our relationship
with SC Johnson through the implementation of the logistics for their recently
acquired insecticides business which services customers in Belgium and
Luxembourg.
UK Cold Storage
Our ongoing UK cold storage operations comprise the Group's 25 public cold
stores and two small ambient facilities. Turnover from these ongoing stores in
the first half was �1.3m lower, reflecting the exit from some low margin
activities and the running down of our operations at a store that will close at
the end of this year. Total turnover was �1.9m lower due to the closure of some
ambient operations last year. Operating profit is �0.2m lower reflecting lower
contribution from the store that will close, and customer losses at two other
stores that have adversely impacted our profits in the short term. Although the
market for public cold storage remains difficult, we continue to increase the
flexibility of our facilities and to enhance the value of the services we can
offer our customers.
France
The sharp reduction in turnover in our operations in France reflects the action
taken at the end of last year to exit from a number of unprofitable contracts.
The operating loss of �0.5m is unchanged despite this action reflecting the
challenging market conditions.
France disposal and closure costs
As part of the implementation of the decision to withdraw from direct
operations in France, two operations have been closed during the first half,
and five operations have been transferred to MGF Logistique for a nominal
consideration. Letters of Intent have also been agreed for the disposal of
other operations. The cost of these actions, together with a provision to write
down the carrying value of fixed assets and the La Fl�che business to estimated
net realisable value, has been charged as an exceptional item. Further charges
are anticipated in the second half reflecting the estimated cost of withdrawal
from the remaining operations, which will take the total charge to around �16m,
of which approximately �9m is cash and �7m non-cash asset write downs. The
estimated proceeds from asset disposals are �14m which should, therefore,
exceed the cash costs by approximately �5m. The proceeds are expected to be
received over the next 12 months.
Cash flow and movement in net debt
�m H1 2003 H1 2002
Headline Operating Profit 12.0 12.3
Depreciation/Grant amortisation 11.3 11.5
EBITDA 23.3 23.8
Capital expenditure (10.8) (11.1)
Working capital (0.1) (13.9)
Asset disposals NBV 1.2 1.3
Interest (1.6) (2.9)
Tax 0.4 (0.3)
Free cash flow 12.4 (3.1)
Property disposals 3.6 9.0
Exceptional cash flows (3.2) (3.4)
Cash inflow before dividends 12.8 2.5
Dividends (5.9)
Shares issued 0.1
Exchange (3.6)
Movement in net debt 3.4
Opening net debt (37.2)
Closing net debt (33.8)
The Group's cash inflow before dividends was �12.8m. Capital expenditure, net
of asset disposals, continues to run below depreciation. Working capital levels
have been maintained. The net cash inflow relating to tax reflects the refund
in the UK of ACT paid in prior years following the resolution of a number of
outstanding items with the Inland Revenue, and a refund in The Netherlands due
to an overpayment last year. Interest payments benefit from interest received
from the Inland Revenue relating to the tax refund.
Property disposal proceeds in the first half of �3.6m reflect the sale of
property that has become surplus to operational requirements, and includes �
1.0m of proceeds from the exercise we have launched to realise value from 14
properties which have development potential and that will become surplus to our
operational requirements over the next three years. We are actively seeking
planning permission for these properties to boost their value and we expect to
generate proceeds in excess of �15m over the next three years.
The exceptional cash flows of �3.2m reflect cash payments related to the
exceptional operating costs and non-operating exceptional items charged this
year and in prior years.
The strengthening of the Euro against sterling from Euro1.535 : �1 at the year end
to Euro1.44 : �1 at 30 June has resulted in a �3.6m increase in the sterling
equivalent of our Euro denominated debt.
Overall, the Group's net debt reduced by �3.4m in the first half to �33.8m at
30 June.
TDG plc
Consolidated Profit and Loss Account
Notes Half year Half year Year to
to 30 June to 30 June 31 December
2003 2002 2002
�'m �'m �'m
Turnover
Continuing operations 275.4 274.1 562.3
Discontinued operation - 3.1 4.3
275.4 277.2 566.6
Operating expenses (263.4) (264.9) (538.6)
Exceptional operating costs 4 (1.1) - (2.5)
Amortisation of goodwill - (0.9) (0.8) (1.7)
continuing
Amortisation of goodwill - - (0.1) (0.1)
discontinued
Net operating expenses (265.4) (265.8) (542.9)
Operating profit
Continuing operations 10.0 11.1 23.3
Discontinued operation - 0.3 0.4
10.0 11.4 23.7
Exceptional items
Profit on sale of properties - - 0.8
(Loss)/profit on disposal/ 5 (10.9) - 3.3
termination of operations
(Loss)/profit on ordinary activities (0.9) 11.4 27.8
before interest
Net interest payable (2.2) (2.9) (5.4)
(Loss)/profit on ordinary activities (3.1) 8.5 22.4
before tax
Analysed as:
Headline profit before tax 9.8 9.4 22.6
Exceptional operating costs (1.1) - (2.5)
Amortisation of goodwill (0.9) (0.9) (1.8)
Exceptional items (10.9) - 4.1
(Loss)/profit on ordinary activities (3.1) 8.5 22.4
before tax
Tax on (loss)/profit on ordinary 6 (2.2) (2.8) (5.5)
activities
(Loss)/profit for the period (5.3) 5.7 16.9
Dividends including non-equity 7 (4.2) (4.1) (10.0)
Transfer (from)/to reserves (9.5) 1.6 6.9
(Loss)/earnings per Ordinary Share
Basic 8 (6.7)p 7.2p 21.5p
Diluted 8 (6.7)p 7.1p 21.4p
Headline earnings per Ordinary Share
Basic 8 9.1p 8.4p 20.1p
Consolidated Balance Sheet
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
Fixed assets
Intangible assets 27.9 35.2 30.4
Tangible assets 217.7 236.0 223.0
Investments 1.8 2.0 1.6
247.4 273.2 255.0
Current assets
Stocks 1.4 1.4 1.3
Debtors 104.6 124.0 111.0
Bank deposits 31.3 4.7 24.3
Cash at bank 12.9 12.1 9.6
150.2 142.2 146.2
Creditors: amounts falling due within
one year
Borrowings 11.4 7.0 21.0
Other creditors 127.8 138.6 129.1
Net current assets/(liabilities) 11.0 (3.4) (3.9)
Total assets less current liabilities 258.4 269.8 251.1
Creditors: amounts falling due after
more
than one year
Borrowings 66.6 70.2 50.1
Deferred income 8.4 9.1 8.9
Provisions for liabilities and charges 10.7 14.5 10.7
85.7 93.8 69.7
172.7 176.0 181.4
Capital and reserves
Equity share capital 0.8 0.8 0.8
Non-equity share capital 0.4 0.4 0.4
1.2 1.2 1.2
Reserves attributable to equity 171.5 174.8 180.2
shareholders
172.7 176.0 181.4
Consolidated Cash Flow Statement
Half year Half year Year to
to to
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
Net cash inflow from operating 19.7 6.0 35.8
activities (Note 9)
Returns on investments and servicing
of finance
Net interest paid (1.6) (2.9) (5.5)
Taxation 0.4 (0.3) (5.4)
Capital expenditure
Purchase of tangible fixed assets (10.8) (11.1) (17.9)
Investment grants received - - 0.2
Sale of tangible fixed assets 5.1 10.8 12.7
Net cash outflow from capital (5.7) (0.3) (5.0)
expenditure
12.8 2.5 19.9
Acquisitions and disposals
Sale of businesses - - 12.5
Deferred consideration paid for - (1.8) (4.3)
purchase of businesses
Net cash (outflow)/inflow from - (1.8) 8.2
acquisitions and disposals
Equity dividends paid (5.9) (5.8) (9.9)
Cash inflow/(outflow) before use 6.9 (5.1) 18.2
of liquid resources and financing
Management of liquid resources
(Increase)/decrease in short-term (7.0) 1.2 (18.5)
bank deposits
Financing
Issue of Ordinary Share capital 0.1 0.1 0.4
Repayment of amounts borrowed (7.0) (1.6) (6.9)
Further draw down of medium-term 8.4 0.5 3.2
loans
1.5 (1.0) (3.3)
Increase/(decrease) in cash in 1.4 (4.9) (3.6)
the period
Reconciliation to net debt
Increase/(decrease) in cash 1.4 (4.9) (3.6)
in the period
(Increase)/decrease in debt (1.4) 1.1 3.7
Cash inflow/(outflow) from increase/ 7.0 (1.2) 18.5
(decrease) in liquid resources
Change in net debt resulting from 7.0 (5.0) 18.6
cash flows
Translation difference (3.6) (3.1) (3.5)
Decrease/(increase) in net debt 3.4 (8.1) 15.1
in the period
Net debt at 1 January (37.2) (52.3) (52.3)
Net debt at end of period (33.8) (60.4) (37.2)
Statement of Total Recognised Gains and Losses
Half year Half year Year to
to to
31 December
30 June 30 June
2002
2003 2002
�'m
�'m �'m
(Loss)/profit for the period (5.3) 5.7 16.9
Net translation gains on foreign 0.7 0.8 0.6
currency
net investments
Total gains and losses recognised for (4.6) 6.5 17.5
the period
Reconciliation of Movements in Shareholders' Funds
Half year Half year Year to
to to
31 December
30 June 30 June
2002
2003 2002
�'m
�'m �'m
(Loss)/profit for the period (5.3) 5.7 16.9
Dividends (4.2) (4.1) (10.0)
Net translation gains on foreign 0.7 0.8 0.6
currency
net investments
Equity share capital issued 0.1 0.1 0.4
Net (decrease)/increase in shareholders' (8.7) 2.5 7.9
funds
Shareholders' funds at 1 January 181.4 173.5 173.5
Shareholders' funds at end of period 172.7 176.0 181.4
Segmental analysis
Turnover Operating profit
Half year Half Year to Half year Half Year to
year year
to 30 June to 30 31 to 30 June to 30 31
June December June December
2003 2002 2002 2003 2002 2002
�'m �'m �'m �'m �'m �'m
Business
activities
Continuing
operations
Contract Logistics
UK & Ireland 164.5 158.6 330.0 7.4 8.1 18.4
European Chemicals 55.3 53.6 109.1 3.4 2.4 5.7
Netherlands 27.4 27.6 55.1 1.0 1.0 1.9
247.2 239.8 494.2 11.8 11.5 26.0
UK Cold Storage 10.1 12.0 24.3 0.7 0.9 2.9
France 18.1 22.3 43.8 (0.5) (0.5) (1.4)
275.4 274.1 562.3 12.0 11.9 27.5
Discontinued
operation
Data Services - 3.1 4.3 - 0.4 0.5
275.4 277.2 566.6 12.0 12.3 28.0
Exceptional
operating costs
UK & Ireland (1.1) - -
France - - (2.5)
Amortisation of
goodwill
Continuing (0.9) (0.8) (1.7)
operations
Discontinued - (0.1) (0.1)
operation
(2.0) (0.9) (4.3)
275.4 277.2 566.6 10.0 11.4 23.7
Net assets
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
Business activities
Continuing operations
Contract Logistics
UK & Ireland 93.9 102.8 101.2
European Chemicals 33.5 38.3 33.5
Netherlands 55.5 54.3 50.4
182.9 195.4 185.1
UK Cold Storage 23.4 23.9 25.6
France 6.9 20.6 14.6
213.2 239.9 225.3
Discontinued operation
Data Services 4.0 11.0 4.0
217.2 250.9 229.3
Turnover Operating profit
Half year Half year Year to Half Half Year to
year year
to 30 to 30 31 December to 30 to 30 31
June June June June December
2003 2002 2002 2003 2002 2002
�'m �'m �'m �'m �'m �'m
Geographical
analysis
United Kingdom
Continuing 198.1 189.1 400.6 11.4 11.1 25.6
operations
Discontinued - 3.1 4.3 - 0.4 0.5
operation
198.1 192.2 404.9 11.4 11.5 26.1
Continental Europe
Continuing 77.3 85.0 161.7 0.6 0.8 1.9
operations
275.4 277.2 566.6 12.0 12.3 28.0
Exceptional
operating costs
United Kingdom (0.8) - -
Continental Europe (0.3) - (2.5)
(1.1) - (2.5)
Amortisation of
goodwill
United Kingdom - (0.1) (0.1) (0.2)
continuing
United Kingdom - - (0.1) (0.1)
discontinued
Continental Europe (0.8) (0.7) (1.5)
(0.9) (0.9) (1.8)
275.4 277.2 566.6 10.0 11.4 23.7
Net assets
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
Geographical analysis
United Kingdom
Continuing operations 139.6 156.4 146.5
Discontinued operation 4.0 11.0 4.0
143.6 167.4 150.5
Continental Europe
Continuing operations 73.6 83.5 78.8
217.2 250.9 229.3
Net assets reconciliation
As above 217.2 250.9 229.3
Net borrowings (33.8) (60.4) (37.2)
Provisions for liabilities and charges (10.7) (14.5) (10.7)
172.7 176.0 181.4
TDG plc
Notes on the Interim Accounts
1. These unaudited interim statements do not constitute statutory accounts and
have been prepared on the basis of the accounting policies set out in the 2002
Annual Report and Accounts.
2. The results for the year ended 31 December 2002 have been abridged from the
Group's published financial statements which have been reported on by the
Group's auditors and filed with the Registrar of Companies. The report of the
auditors was unqualified and did not contain a statement under S237 (2) or (3)
of the Companies Act 1985.
3. All amounts denominated in overseas currencies for the Consolidated Profit
and Loss Account have been translated into sterling at the appropriate average
rates for the periods. Period end rates have been used to translate all
overseas amounts included in the Consolidated Balance Sheet.
4. Exceptional operating costs
Half year to Half year to Year to
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
UK - redundancy costs 0.8 - -
Ireland - business 0.3 - -
rationalisation costs
France - costs of exiting - - 2.5
unprofitable contracts
1.1 - 2.5
5. (Loss)/profit on disposal/termination of operations
Half year Half year to Year to
to
30 June 31 December
30 June
2002 2002
2003
�'m �'m
�'m
Continuing operations
Loss on disposal/termination of (10.9) - -
part of the French operations
Discontinued operation
Profit on the disposal of the Data - - 3.3
Services business
(10.9) - 3.3
6. The tax charge is based on the (loss)/profit on ordinary
activities for the period and is made up as follows:
Half year to Half year to Year to
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
United Kingdom tax at 2.2 2.6 7.2
30% (2002 30%)
Deferred tax (0.1) (0.1) (3.8)
2.1 2.5 3.4
Overseas tax 0.1 0.3 2.1
2.2 2.8 5.5
Analysed as :-
Tax charge on headline 2.6 2.8 6.8
earnings
Tax credit on exceptional (0.3) - -
operating costs
Tax credit on exceptional (0.1) - (1.3)
items
2.2 2.8 5.5
7. Dividends
An interim dividend of 5.25 pence per Ordinary Share (2002: 5.25 pence) is
payable on 1 October 2003 to members on the Register on 29 August 2003.
8. The calculations of (loss)/earnings per Ordinary Share are based on the
following earnings and number of shares in issue:
Half year to Half year to Year to
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
(Loss)/profit for the period (5.3) 5.7 16.9
Exceptional operating costs 1.1 - 2.5
Amortisation of goodwill 0.9 0.9 1.8
Tax credit on exceptional (0.3) - -
operating costs
Exceptional items 10.9 - (4.1)
Tax credit on exceptional (0.1) - (1.3)
items
Headline earnings 7.2 6.6 15.8
Weighted average shares in 79,100 78,655 78,723
issue
for the period (`000)
Calculation of shares under 232 1,083 386
option per FRS 14 (`000)
Diluted weighted average 79,332 79,738 79,109
shares (`000)
There is no difference in earnings for the calculation of diluted earnings per
share.
9. Reconciliation of operating profit to net cash inflow from operating
activities
Half year to Half year to Year to
30 June 30 June 31 December
2003 2002 2002
�'m �'m �'m
Operating profit before 12.0 12.3 28.0
exceptional operating costs
and amortisation of goodwill
Depreciation charge 11.8 12.0 23.2
Profit on sale of tangible (0.3) (0.5) (0.6)
fixed assets
Release of investment grants (0.5) (0.5) (0.9)
Increase in stocks - (0.1) -
Decrease/(increase) in 4.9 (10.9) (3.2)
debtors
Decrease in creditors (5.0) (2.9) (6.0)
22.9 9.4 40.5
Exceptional cash flows (3.2) (3.4) (4.7)
Net cash inflow from 19.7 6.0 35.8
operating
activities
END