19th Oct 2005 10:23
Dechra Pharmaceuticals PLC19 October 2005 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 19 October 2005 Immediate Release DECHRA PHARMACEUTICALS PLC ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS INTRODUCTION Dechra Pharmaceuticals PLC ("the Group") has previously reported its resultsunder UK Generally Accepted Accounting Principles ("UK GAAP"). Followingadoption of Regulation 1606/2002 by the European Parliament in July 2002 all EUlisted companies are required to report their consolidated financial statementsunder International Financial Reporting Standards ("IFRS") adopted for use inthe EU ("adopted IFRS") for accounting periods beginning on or after 1 January2005. The Group's first annual report under IFRS will be for the year to 30 June2006 with the first IFRS interim results for the six months ending 31 December2005. This announcement explains the main changes that are required to the Group'sfinancial statements on adoption of IFRS. The announcement is set out in thefollowing sections: •Summary of IFRS changes •Basis of preparation •IFRS1 - first time adoption rules •Summarised accounting policy changes and financial effect •Consolidated income statement transition reconciliations for the year ended 30 June 2005 and six months ended 31 December 2004 •Consolidated balance sheet transition reconciliations as at 1 July 2004, 31 December 2004 and 30 June 2005 •Consolidated statement of cash flows for the year ended 30 June 2005 in IFRS format •Consolidated statement of changes in shareholders' equity for the year ended 30 June 2005 SUMMARY OF IFRS CHANGES The changes to the 2005 results arising from the implementation of IFRS aresummarised in the table below. Results for the year ended 30 June 2005 UK GAAP Adjustments IFRS £'000 £'000 £'000 Operating profit before goodwill amortisation 10,976 279 11,255Goodwill amortisation (564) 564 -Operating profit 10,412 843 11,255Net finance cost (1,554) - (1,554)Profit before tax 8,858 843 9,701Tax (2,590) (84) (2,674)Profit after tax 6,268 759 7,027EPS - basic (pence) 12.28p 1.49p 13.77pEPS - adjusted (pence) 13.39p 0.38p 13.77p continued... -2- The main effect of the IFRS changes to the balance sheet is to increase netassets and distributable reserves by £3,120,000 as at 30 June 2005 (31 December2004 : increase of £1,695,000) (1 July 2004: increase of £1,845,000). BASIS OF PREPARATION The financial information presented in this announcement has been prepared onthe basis of the recognition and measurement requirements of IFRSs in issue thatare either endorsed by the EU and effective (or available for early adoption) at30 June 2006 or are expected to be endorsed and effective (or available forearly adoption) at 30 June 2006, the Group's first annual reporting date atwhich it is required to report using adopted IFRSs. Based on these adopted andunadopted IFRSs, the directors have made assumptions about the accountingpolicies expected to be applied, which are summarised later in thisannouncement, when the first annual IFRS financial statements are prepared forthe year ending 30 June 2006. In addition, the adopted IFRSs that will be effective (or available for earlyadoption) in the annual financial statements for the year ending 30 June 2006are still subject to change and to additional interpretations and thereforecannot be determined with certainty. Accordingly, the accounting policies forthat annual period will be determined finally only when the annual financialstatements are prepared for the year ending 30 June 2006. A full set of IFRS accounting policies can be viewed on the Dechra corporateweb-site, www.dechra.com by clicking on the financial information section. IFRS1 - FIRST TIME ADOPTION RULES The Group has applied IFRS1 'First time adoption of International FinancialReporting Standards' in its initial application of IFRS. The Group is requiredto select appropriate accounting policies under IFRS and, subject to a fewexemptions detailed below, apply them retrospectively to its financialstatements such that all comparative information is presented on the same basis.Accordingly this necessitates the restatement of the balance sheet at 1 July2004, the date of transition, (this being the date of the beginning of theearliest financial year for which full comparative information is required) aswell as at 30 June 2005. IFRS1 permits certain exemptions to the full retrospective restatement. Theexemptions that have been adopted by the Group are as follows: Business combinations - business combinations made prior to 1 July 2004 have notbeen restated in accordance with IFRS3 'Business Combinations'. Share based payments - IFRS2 'Share-based Payments' has only been applied toawards of share options granted after 7 November 2002 which had not vested by 1January 2005. Financial instruments - IAS32 'Financial Instruments : Disclosure andPresentation' and IAS 39 'Financial Instruments : Recognition and Measurement'have been adopted prospectively from 1 July 2005 with no restatement ofcomparative information which continues to be presented in accordance with UKGAAP. On 1 July 2005 there was an adjustment to reflect the change in treatment ofderivative financial instruments from UK GAAP, which carries such items atamortised cost, to IAS 39, which requires derivatives to be recorded at fairvalue. The impact on the balance sheet at 1 July 2005 was to reduce net assetsby £71,000 net of deferred taxation. Restatement of Balance Sheet and Income Statement Reconciliations required by IFRS1 are presented in this document, showing thedifferences between UK GAAP and IFRS for the balance sheets on transition at 1July 2004, 31 December 2004 and 30 June 2005, together with the incomestatements for the year ended 30 June 2005 and the six months ended 31 December2004. This financial information is unaudited. continued... -3- Cash Flow The adjustments from the conversion to IFRS will have no impact upon the cashflows of the Group although there are a number of presentational differencesunder IFRS. SUMMARISED ACCOUNTING POLICY CHANGES AND FINANCIAL EFFECT The principal changes the Group has made to its accounting policies on adoptionof IFRS to those presented in the relevant UK GAAP financial statements andtheir effect on the financial statements are as follows. 1. Employee Benefits - Share Based Payments Accounting Policy The Group operates a number of equity-settled, share based payment programmesthat allow employees to acquire shares of the Company. The Group also operates aLong Term Incentive Plan for Directors and Senior Executives. The fair value of shares or options granted is recognised as an employee expensein the income statement with a corresponding movement in equity. The fair valueis measured at grant date and spread on a straight line basis over the periodduring which the employees become unconditionally entitled to the shares oroptions (the vesting period). The fair value of the shares or options granted ismeasured using a valuation model, taking into account the terms and conditionsupon which the shares or options were granted. For schemes with no market related performance conditions, the amount recognisedas an expense in the income statement is adjusted to take into account anestimate of the number of shares or options that are expected to vest togetherwith an adjustment to reflect the number of shares or options that actually dovest. In the case of schemes that already contain market related performancecriteria no such adjustments are necessary. The fair value of grants under the Long Term Incentive Plan has been determinedusing the Monte Carlo simulation model. The fair values of options granted under all other share option schemes havebeen determined using the Black-Scholes option pricing model. Financial Effect Under UK GAAP, the cost of granting employee share options recognised in theincome statement is the intrinsic value of the option being the difference inexercise price and market price at the date of grant of the option. Optionsissued under Save As You Earn ("SAYE") schemes were exempt from thisrequirement. Previously the Group has recognised a charge to the incomestatement only in respect of the Long Term Incentive Plan. Under IFRS2 'Share-based Payments', the cost recognised in the income statementis based upon the excess of the fair value of the option over the exercise priceat the date of grant. Although this results in an additional charge in respect of the Group'sApproved, Unapproved and SAYE share option schemes, there is a reduction in thecharge in respect of the Long Term Incentive Plan. The net result is a credit of£55,000 for the year ended 30 June 2005. There is no impact on net assets or distributable reserves as a result of thisadjustment which is taken directly to equity. continued... -4- 2. Dividends Accounting Policy Dividends are recognised in the period in which they are approved by theCompany's shareholders or, in the case of an interim dividend, when the dividendis paid. Financial Effect Under IAS10 'Events After the Balance Sheet Date' final dividends are recognisedin the subsequent accounting period to which they would have been recognisedunder UK GAAP. At 30 June 2005, the final dividend for 2005 of £1,789,000 (31December 2004 : £867,000) (1 July 2004 : £1,606,000) has been added back to netassets as part of distributable reserves and will appear as a deduction fromequity in the interim statement for the six months ending 31 December 2005. Thetreatment in the cash flow statement remains the same. 3. Income Taxes - Deferred Tax Accounting Policy Deferred tax is provided using the balance sheet liability method, andrepresents the tax payable or recoverable on most temporary differences whicharise between the carrying amounts of assets and liabilities for financialreporting purposes and the amounts used for taxation purposes (the tax base).Temporary differences are not provided on: goodwill that is not deductible fortax purposes; the initial recognition of assets or liabilities that affectneither accounting nor taxable profit and do not arise from a businesscombination; and differences relating to investments in subsidiaries to theextent that they will probably not reverse in the foreseeable future. The amountof deferred tax provided is based on the expected manner of realisation orsettlement of the carrying amount of assets and liabilities, using tax ratesexpected to apply in the period in which the liability is settled or the assetis realised and is based upon tax rates enacted or substantively enacted at thebalance sheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. Deferred tax assets are reduced to the extent that it is not probablethat the related tax benefit will be realised against future taxable profits.The carrying amounts of deferred tax assets are reviewed at each balance sheetdate. Financial Effect The results under IAS12 in respect of deferred tax can be different from UKGAAP, under which deferred tax is calculated based upon income statement timingdifferences. The overall effect is to increase the deferred tax asset at 30 June 2005 from£4,000 to £406,000. The principal reason for the increase is that deferred taxin respect of share based payments is calculated by reference to a figure whichdiffers from the charge for such payments in the income statement. Deferred taxin respect of share based payments charged directly to the income statement isalso taken to the income statement but any excess tax relief over this amount istaken directly to reserves. continued... -5- 4. Leases Accounting Policy Payments made under operating leases are recognised in the income statement on astraight-line basis over the term of the lease. Lease incentives received arerecognised in the income statement evenly over the period of the lease, as anintegral part of the total lease expense. Financial Effect Under UK GAAP, the benefit of lease incentives received (in the form of rentfree periods) were spread over the period until the rent reverts to marketrates. Under IAS17 'Leases', the benefit must be spread over the entire leaseperiod. The effect is to reduce operating profit by £56,000 for the year ended30 June 2005 (six months ended 31 December 2004 : £54,000). An amount of£145,000 is carried forward at 30 June 2005 to be credited to the incomestatement over future periods. 5. Revenue Accounting Policy Revenue from the sale of goods is recognised in the income statement when thesignificant risks and rewards of ownership have been transferred to the buyer.Appropriate provision is made, based on past experience, for the possible returnof goods and discounts given to customers. Financial Effect Under IAS18 'Revenue' certain items, such as the sale of trading data tosuppliers, have been reclassified to revenue. For the year ended 30 June 2005, both revenue and cost of sales are increased by£2,070,000 (six months ended 31 December 2004 : £1,000,000). There is no impacton profit, earnings per share or net assets. 6. Intangible Fixed Assets Accounting Policy (i) Goodwill All business combinations are accounted for by applying the purchase method.Goodwill represents amounts arising on acquisition of subsidiaries, associatesand joint ventures. In respect of business acquisitions that have occurred since1 July 2004, goodwill represents the difference between the cost of theacquisition and the fair value of the net identifiable assets acquired. In respect of acquisitions prior to this date, goodwill is included on the basisof its deemed cost, which represents the amount recorded under previous GAAP.The classification and accounting treatment of business combinations thatoccurred prior to 1 July 2004 has not been reconsidered in preparing the Group'sopening IFRS balance sheet at 1 July 2004. Goodwill is stated at cost less any accumulated impairment losses. Goodwill isno longer amortised but is allocated to cash generating units and is testedannually for impairment. continued... -6- (ii) Research and Development Costs Expenditure on research activities, undertaken with the prospect of gaining newscientific or technical knowledge and understanding, is recognised in the incomestatement as an expense is incurred. The Group is also engaged in development activity with a view to bringing newpharmaceutical products to market. Costs of development are capitalised in thebalance sheet unless those costs cannot be measured reliably or it is notprobable that future economic benefits will flow to the Group, in which case therelevant costs are expensed to the income statement as incurred. Due to thestrict regulatory process involved, there is inherent uncertainty as to thetechnical feasibility of development projects often until regulatory approval isachieved, with the possibility of failure even at a late stage. The Groupconsiders that this uncertainty means that the criteria for capitalisation arenot met unless it is probable that regulatory approval will be achieved and theproject is commercially viable. Where development costs are capitalised, the expenditure includes the cost ofmaterials, direct labour and an appropriate proportion of overheads. Capitalised development expenditure is stated at cost less accumulatedamortisation and impairment losses. (iii) Other Intangible Assets Other intangible assets that are acquired by the Group are stated at cost lessaccumulated amortisation and impairment losses. (iv) Subsequent Expenditure Subsequent expenditure on capitalised intangible assets is capitalised only whenit increases the future economic benefits embodied in the specific asset towhich it relates. All other expenditure is expensed as incurred. (v) Amortisation Amortisation is charged to the income statement on a straight-line basis overthe estimated useful lives of intangible assets unless such lives areindefinite. Goodwill and intangible assets with an indefinite useful life aresystematically tested for impairment at each balance sheet date. Otherintangible assets are amortised from the date that they are available for use.The estimated useful lives are as follows: software 5 yearscapitalised development costs 5 - 10 yearspatent rights Period of patentmarketing authorisations Indefinite lifeproduct rights Period of product rights Financial Effect (i) Goodwill Under UK GAAP, goodwill was amortised over its estimated useful life. UnderIFRS3 'Business Combinations', goodwill is not amortised but is subject toannual impairment review. The financial effect is that goodwill on acquisitionsmade up to 30 June 2004 is frozen at its 30 June 2004 level of £4,385,000.Goodwill charged to the income statement for the year ended 30 June 2005 of£564,000 (six months ended 31 December 2004 : £282,000) is added back to theincome statement and shareholders' funds. continued... -7- (ii) Development Costs Under UK GAAP the accounting policy of the Group was, in general, to write offall development expenditure to the income statement as incurred. Under IAS38'Intangible Assets', development costs must be capitalised provided they meetthe following criteria: • the technical feasibility of completing the intangible asset is established; • there is an intention to complete or sell the asset; • the Group has the ability to use or sell the asset; • the asset will generate probable future economic benefits; • the Group has available adequate technical, financial and other resources to complete the development of the asset; and • the expenditure attributable to the asset in the course of its development can be measured reliably. As part of its transitional work, the Group has reviewed all developmentprojects to determine whether the criteria in IAS 38 were met. A total of£280,000 of expenditure incurred (less amortisation) in the year ended 30 June2005 (six months ended 31 December 2004 : £130,000) has now been capitalised. Atotal of £510,000 of development costs has been capitalised and is included inthe balance sheet at 30 June 2005 (31 December 2004 : £360,000) (1 July 2004 :£230,000) as an intangible fixed asset. (iii) Software Costs Under IAS38, software costs are classed as intangible assets rather thantangible assets. As at 30 June 2005, £255,000 of software costs have beenreclassified (31 December 2004: £203,000) (1 July 2004: £nil). There is noimpact on the income statement or net assets. -8- Consolidated Income Statement For the Year Ended 30 June 2005 UK IFRS2 IAS17 IAS18 IFRS3 IAS38 IFRS GAAP Share Lease Other Goodwill Development IFRS Based Incentive Income Amortisation Costs Format Payments £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue 208,197 - - 2,070 - - 210,267 Cost of (178,480) - - (2,070) - - (180,550)sales --------------------------------------------------------------------------------- Gross 29,717 - - - - - 29,717profit Operatingexpenses (19,305) 55 (56) - 564 280 (18,462) --------------------------------------------------------------------------------- Operating 10,412 55 (56) - 564 280 11,255profit Finance 355 - - - - - 355income Finance (1,909) - - - - - (1,909)expense --------------------------------------------------------------------------------- Profitbefore 8,858 55 (56) - 564 280 9,701taxation Income taxexpense (2,590) (17) 17 - - (84) (2,674) --------------------------------------------------------------------------------- Profitattributable 6,268 38 (39) - 564 196 7,027toequityholders ofthe parent --------------------------------------------------------------------------------- Earnings pershare (pence) Basic 12.28p 13.77p ------- ------- Diluted 12.08p 13.54p ------- ------- -9- Consolidated Income Statement For the Six Months Ended 31 December 2004 UK IFRS2 IAS17 IAS18 IFRS3 IAS38 IFRS GAAP Share Lease Other Goodwill Development IFRS Based Incentive Income Amortisation Costs Format Payments £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue 103,263 - - 1,000 - - 104,263 Cost of (89,023) - - (1,000) - - (90,023)sales -------------------------------------------------------------------------------- Gross 14,240 - - - - - 14,240profit Operatingexpenses (9,097) 34 (54) - 282 130 (8,705) -------------------------------------------------------------------------------- Operating 5,143 34 (54) - 282 130 5,535profit Finance 161 - - - - - 161income Finance (937) - - - - - (937)expense ------------------------------------------------------------------------------- Profitbefore 4,367 34 (54) - 282 130 4,759taxation Income taxexpense (1,418) (10) 16 - - (39) (1,451) -------------------------------------------------------------------------------Profitattributable 2,949 24 (38) - 282 91 3,308toequityholders ofthe parent =============================================================================== Earnings pershare(pence) Basic 5.78p 6.49p ======== ======== Diluted 5.69p 6.38p ======== ======== -10- Consolidated Balance Sheet At 30 June 2005 UK IAS10 IAS12 IAS17 IFRS3 IAS38 IAS38 IFRS GAAP Proposed Deferred Lease Goodwill Development Software IFRS Dividend Tax Incentive Amortisation Costs Format £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentAssets Intangibleassets - goodwill 3,821 - - - 564 - - 4,385- software - - - - - - 255 255- other intangibles 1,889 - - - - 510 - 2,399 Property,plant & 5,201 - - - - - (255) 4,946equipment Deferred - - 406 - - - - 406taxes ----------------------------------------------------------------------------------------- Totalnon-current 10,911 - 406 - 564 510 - 12,391assets ----------------------------------------------------------------------------------------- CurrentAssets Inventories 20,390 - - - - - - 20,390 Trade andother 33,708 - - - - - - 33,708receivables Deferred 4 - (4) - - - - -taxes ---------------------------------------------------------------------------------------- Cash and 13,924 - - - - - - 13,924cashequivalents ----------------------------------------------------------------------------------------Total currentassets 68,026 - (4) - - - - 68,022 ---------------------------------------------------------------------------------------- Total 78,937 - 402 - 564 510 - 80,413assets ---------------------------------------------------------------------------------------- CurrentLiabilities Borrowings (1,502) - - - - - - (1,502) Trade andother (41,826) - - (145) - - - (41,971)payables Current taxliabilities (2,057) - - - - - - (2,057) Proposeddividend (1,789) 1,789 - - - - - - ---------------------------------------------------------------------------------------- Total currentliabilities (47,174) 1,789 - (145) - - - (45,530) ---------------------------------------------------------------------------------------- -11- UK IAS10 IAS12 IAS17 IFRS3 IAS38 IAS38 IFRS GAAP Proposed Deferred Lease Goodwill Development Software IFRS Dividend Tax Incentive Amortisation Costs Format £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentLiabilities Borrowings (17,281) - - - - - - (17,281) Provisions - - - - - - - - Deferred - - - - - - - -taxes --------------------------------------------------------------------------------------------- Totalnon-current (17,281) - - - - - - (17,281)liabilities ============================================================================================= Totalliabilities (64,455) 1,789 - (145) - - - (62,811) ============================================================================================= Net assets 14,482 1,789 402 (145) 564 510 - 17,602 ============================================================================================= Equity Issued sharecapital 511 - - - - - - 511 Share premiumaccount 26,953 - - - - - - 26,953 Merger 1,720 - - - - - - 1,720reserve Retainedearnings (14,702) 1,789 402 (145) 564 510 - (11,582) --------------------------------------------------------------------------------------------- Equityholders 14,482 1,789 402 (145) 564 510 - 17,602fundsattributableto theparent ============================================================================================= -12- Consolidated Balance Sheet At 31 December 2004 UK IAS10 IAS12 IAS17 IFRS3 IAS38 IAS38 IFRS GAAP Proposed Deferred Lease Goodwill Development Software IFRS Dividend Tax Incentive Amortisation Costs Format £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentAssets Intangibleassets- goodwill 4,103 - - - 282 - - 4,385- software - - - - - - 203 203- other intangibles 789 - - - - 360 - 1,149 Property,plant & 5,276 - - - - - (203) 5,073equipment Deferred - - 155 - - - - 155taxes ---------------------------------------------------------------------------------------- Totalnon-current 10,168 - 155 - 282 360 - 10,965assets ---------------------------------------------------------------------------------------- CurrentAssetsInventories 24,394 - - - - - - 24,394 Trade andother 31,466 - - - - - - 31,466receivables Deferred - - - - - - - -taxes Cash and 6,224 - - - - - - 6,224cashequivalents ---------------------------------------------------------------------------------------- Total 62,084 - - - - - - 62,084currentassets ---------------------------------------------------------------------------------------- Total 72,252 - 155 - 282 360 - 73,049assets ---------------------------------------------------------------------------------------- CurrentLiabilities Borrowings (1,506) - - - - - - (1,506) Trade andother (37,726) - - (143) - - - (37,869)payables Current taxliabilities (1,793) - - - - - - (1,793) Proposeddividend (867) 867 - - - - - - ----------------------------------------------------------------------------------------- Total currentliabilities (41,892) 867 - (143) - - - (41,168) ----------------------------------------------------------------------------------------- -13- UK IAS10 IAS12 IAS17 IFRS3 IAS38 IAS38 IFRS GAAP Proposed Deferred Lease Goodwill Development Software IFRS Dividend Tax Incentive Amortisation Costs Format £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentLiabilities Borrowings (17,903) - - - - - - (17,903) Provisions - - - - - - - - Deferred (174) - 174 - - - - -taxes --------------------------------------------------------------------------------------------- Totalnon-current (18,077) - 174 - - - - (17,903)liabilities ============================================================================================= Totalliabilities (59,969) 867 174 (143) - - - (59,071) ============================================================================================= Net assets 12,283 867 329 (143) 282 360 - 13,978 ============================================================================================= Equity Called-upshare capital 510 - - - - - - 510 Share premiumaccount 26,828 - - - - - - 26,828 Merger 1,720 - - - - - - 1,720reserve Retainedearnings (16,775) 867 329 (143) 282 360 - (15,080) ---------------------------------------------------------------------------------------------Equityholders 12,283 867 329 (143) 282 360 - 13,978fundsattributableto theparent ============================================================================================= -14- Opening Consolidated IFRS Balance Sheet At 1 July 2004 UK IAS10 IAS12 IAS17 IAS38 IFRS GAAP Proposed Deferred Lease Development IFRS Dividend Tax Incentive Costs Format £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentAssets Intangibleassets- goodwill 4,385 - - - - 4,385- software - - - - - -- other 789 - - - 230 1,019 intangibles Property,plant & 5,224 - - - - 5,224equipment Deferred - - - - - -taxes --------------------------------------------------------------------- Totalnon-current 10,398 - - - 230 10,628assets --------------------------------------------------------------------- CurrentAssets Inventories 16,979 - - - - 16,979 Trade andother 32,889 - - - - 32,889receivables Deferred - - - - - -taxes Cash and cash - - - - - -equivalents --------------------------------------------------------------------- Total currentassets 49,868 - - - - 49,868 --------------------------------------------------------------------- Total 60,266 - - - 230 60,496assets --------------------------------------------------------------------- CurrentLiabilities Borrowings (5,347) - - - - (5,347) Trade andother (36,944) - - (89) - (37,033)payables Current taxliabilities (1,275) - - - - (1,275) Proposed (1,606) 1,606 - - - -dividend ---------------------------------------------------------------------- Total currentliabilities (45,172) 1,606 - (89) - (43,655) ---------------------------------------------------------------------- -15- UK IAS10 IAS12 IAS17 IAS38 IFRS GAAP Proposed Deferred Lease Development IFRS Dividend Tax Incentive Costs Format £'000 £'000 £'000 £'000 £'000 £'000 Non-CurrentLiabilities Borrowings (4,763) - - - - (4,763) Provisions - - - - - - Deferred (174) - 98 - - (76)taxes ----------------------------------------------------------------- Totalnon-current (4,937) - 98 - - (4,839)liabilities ----------------------------------------------------------------- Total (50,109) 1,606 98 (89) - (48,494)liabilities ================================================================= Net assets 10,157 1,606 98 (89) 230 12,002 ================================================================== Equity Called-upshare 510 - - - - 510capital Share premiumaccount 26,784 - - - - 26,784 Merger 1,720 - - - - 1,720reserve Retained (18,857) 1,606 98 (89) 230 (17,012)earnings ------------------------------------------------------------------ Equityholdersfunds 10,157 1,606 98 (89) 230 12,002attributableto the parent ================================================================== -16- Consolidated Statement of Cash Flows Under IFRS Year ended 30 June 2005 £'000 Cash flows from operating activitiesProfit for the period 7,027 Adjustments for:Depreciation 935Amortisation 41Gain on sale of property, plant and equipment (42)Finance income (355)Finance expense 1,909Equity-settled share-based expenses 488Income tax expense 2,674 ---------Operating profit before changes in working capital 12,677Increase in inventories (3,411)Increase in trade and other receivables (787)Increase in trade and other payables 5,070 ---------Cash generated from operations 13,549Interest paid (2,022)Income taxes paid (1,996) ---------Net cash from operating activities 9,531 Cash flows from investment activitiesProceeds from sale of property, plant and equipment 140Interest received 355Purchase of property, plant and equipment (644)Capitalised development expenditure (321)Purchase of other intangible fixed assets (1,100) ---------Net cash from investing activities (1,570) Cash flows from financing activitiesProceeds from the issue of share capital 138New borrowings 13,160Repayment of borrowings (1,538)Dividends paid (2,473) ---------Net cash from financing activities 9,287 Net increase in cash and cash equivalents 17,248Cash and cash equivalents at start of period (3,324) ---------Cash and cash equivalents at end of period 13,924 ========= Reconciliation of net cash to movement in net borrowingsNet increase in cash and cash equivalents 17,248Repayment of borrowings 1,538New borrowings (13,160)New finance leases (438)Other non-cash changes 63 ---------Movement in net borrowings in the period 5,251Net borrowings at start of period (10,110) ---------Net borrowings at end of period (4,859) ========= -17- Consolidated Statement of Changes in Shareholders' Equity Year Ended 30 June 2005 Issued Share Merger Retained Total Capital Premium Reserve Earnings £'000 £'000 £'000 £'000 £'000 At 1 July 2004 under UK GAAP 510 26,784 1,720 (18,857) 10,157Proposed dividend - - - 1,606 1,606Deferred tax - - - 98 98Lease incentive - - - (89) (89)Development costs - - - 230 230 ---------------------------------------------- At 1 July 2004 under IFRS 510 26,784 1,720 (17,012) 12,002 Profit for the year and totalrecognised income and expensefor the year - - - 7,027 7,027 Dividends paid - - - (2,473) (2,473) Share-based paymentsincluding deferred tax takendirectly to equity - - - 876 876 Shares issued 1 169 - - 170 ----------------------------------------------At 30 June 2005 511 26,953 1,720 (11,582) 17,602 ============================================== Enquiries:Simon Evans, Group Finance DirectorDechra(R) Pharmaceuticals PLCTel: 01782 771100Mobile: 07775 642220www.dechra.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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