9th Mar 2007 07:00
Marshalls PLC09 March 2007 Preliminary results for the year ended 31 December 2006 Marshalls plc, the specialist Landscape Products Group, announces a robusttrading performance in a flat building materials market. Financial highlights Year ended Year ended Increase 31 December 2006 31 December 2005 % Revenue £378.1m £359.3m 5.2Operating profit £47.8m £44.4m 7.5Profit before tax £41.7m £38.0m 9.7Basic EPS (from continuingoperations) 20.34p 18.55p 9.6Final dividend per share 8.85p 8.40p 5.4 Operating highlights • Continued investment and development in the business to drive future growth: • investment in new technologies including robot handling and machine lay of concrete block paving • further development of an integrated product offering for the Public Sector and Commercial market • creating "pull through" demand in the Domestic business including three operational Drive & Garden Transformation Centres with a fourth to open shortly in North London • promotion of the Marshalls brand including a three year sponsorship of the Royal Horticultural Society's Chelsea Flower Show • Membership of the Ethical Trading Initiative: • independent auditing of the Indian and Chinese natural stone supply chains • Pursuing the strategy of acquiring complementary businesses: • six bolt on acquisitions between May 2006 and February 2007 which enhance the core product offering and provide a solid platform for future growth Commenting on these results, Graham Holden, Chief Executive, said: "We are pleased to announce a robust trading performance for the full yeardespite mixed market conditions. Looking forward, market intelligence shows thatPublic Sector and Commercial demand, which represents half of the Group'srevenue, remains good although the Domestic market is expected to remain subduedduring 2007. We will continue the roll out phase of the consumer initiatives. The RoyalHorticultural Society's Chelsea Flower Show sponsorship, together with thenational launch of the Marshalls design and installation service, will furtherincrease brand awareness and profile. A range of initiatives has also beendeveloped to grow our Public Sector and Commercial business, and the Group'smanagement and workforce are committed to continue this growth strategy anddeliver increased shareholder value. Although poor weather conditions in January and early February meant a flatstart to 2007, the underlying indicators, including the installer order booksand the Barbour ABI Building data, are encouraging and the outlook for the yearis positive." Enquiries: Graham Holden Chief Executive Marshalls plc 0207 404 5959 on 9 March 2007Ian Burrell Finance Director Marshalls plc 01484 438900 thereafter Jon Coles Brunswick Group LLP 0207 404 5959Kate Miller Brunswick Group LLP 0207 404 5959 Group Results Marshalls is pleased to announce a robust trading performance in a flat buildingmaterials market. Marshalls' revenue from continuing operations, includingacquisitions, increased 5.2 per cent to £378.1 million (2005: £359.3 million).Like for like revenue, excluding acquisitions, was 2.6 per cent ahead at £368.8million (2005: £359.3 million). Operating profit rose by 7.5 per cent to £47.8 million (2005: £44.4 million).EBITDA was £67.6 million (2005: £63.4 million), an improvement of 6.7 per cent. The net effect of one-off items in the year was a net credit to operating profitof approximately £1.0 million, giving an underlying operating profit of £46.8million (2005: £46.5 million). The Group expensed £2.0 million (2005: £1.0million) of consumer initiative start up costs as the landscape installationstrategy is a key element of future growth. Works closure costs in the year wereapproximately £1.1 million (2005: £3.0 million) as we reduced the fixed costbase of the business. During the year, following an extensive consultationprocess, the Final Salary section of the Pension Scheme was replaced with aDefined Contribution section for future benefits. This reduces risk and thevolatility of the accounting charge in the Income Statement. As a consequence,there has been a one-off curtailment gain, net of expenses, of £4.4 million(2005: £0.1 million gain). During the year there has also been a small net losson property transactions of £0.3 million (2005: £1.8 million profit). After the net effect of the one-off items detailed above, profit before taxincreased by 9.7 per cent to £41.7 million (2005: £38.0 million). Basic earningsper share from continuing operations increased by 9.6 per cent to 20.34 pence(2005: 18.55 pence). The Board is recommending a final dividend of 8.85 pence (2005: 8.40 pence) perordinary share, an increase of 5.4 per cent. This dividend will be paid on 6July 2007 to shareholders on the register at the close of business on 8 June2007. The ex dividend date will be 6 June 2007. Operating Performance Overall market conditions were mixed in 2006. The Construction ProductsAssociation ("CPA") estimates that construction output has grown by only 0.9 percent. Half of the revenue of the business continues to be from the Public Sectorand Commercial market and half from the consumer driven Domestic market. Thisprovides a balance to demand as the performance of the two markets can becounter cyclical. The Public Sector and Commercial market was good with the CPAestimating that Other New Work, a proxy for demand, was up by 4.2 per cent in2006. This contrasts with the Domestic market where the CPA estimate thatPrivate Housing Repair, Maintenance and Improvement expenditure, a proxy forDomestic demand, was down by 4.0 per cent. At the heart of Marshalls is a single logistics operation that supports the twomain markets and this provides a fundamental competitive advantage and deliversindustry leading product availability and delivery performance. During the yearthe closure of the Mansfield site, which commenced in 2005, was completed. Thissite did not form part of the Service Centre and National Manufacturingstructure. In the second half of 2006 the Group also moved the manufacture ofits internal paving business from a specialist unit near Bristol to a NationalManufacturing Unit. These two initiatives have given rise to one-off worksclosure costs in the year of £1.1 million and will further reduce the fixed costbase going forward. Investment continues to be made in new technology to improveproductivity, such as robot handling, to make our workplace safer and to reducethe environmental impact of our operations. The Public Sector and Commercial market continued to perform well with like forlike revenue up 5.0 per cent. An important part of Marshalls' strategy for thisbusiness is the development of an integrated product offering for the PublicSector and Commercial market. In response to market demand, and working closelywith architects, designers and contractors, the Group continues to offer designsolutions that combine natural stone and concrete paving, linear drainage,bollards, seating and attractively designed lighting. Marshalls is also leadingthe development of machine lay concrete block paving for large paved areas. Thisimproves cost effectiveness and increases the potential market for this product. In the Domestic market the Group operates under the Marshalls and Stonemarketbrands. Like for like revenue was flat with a robust Installed market offset bythe weaker DIY market. There is continuing investment in a range of consumerinitiatives designed to build the brand, "pull through" demand and facilitatequality design and installation. This is expected to result in increased demandfor the Group's products and services and improve product mix. Drive & Garden Transformation Centres are designed to make a range of servicesavailable to the consumer from the opportunity to see how the product looks in agarden setting to assistance with design and the arrangement of installation.Three Centres are now operational and a fourth, at Enfield in North London, willopen in the spring. The initial results from these Centres are encouraging andthis concept will be developed further in 2007. In order to improve brand recognition further, in December 2006, Marshallsannounced the sponsorship of the Royal Horticultural Society's ("RHS") ChelseaFlower Show for a period of three years commencing in 2007. This provides theplatform to launch a garden design and installation service nationally. TheGroup will also have a presence in 2007 at the Hampton Court and Tatton ParkFlower Shows. The Group now sources significant quantities of natural stone from India andChina. Marshalls is the only industry member from our sector of the EthicalTrading Initiative ("ETI"), an alliance of companies, trade unions andnon-profit organisations that aims to promote respect for the rights of workersworldwide. As a member of ETI, Marshalls has a programme in place to assessworking conditions in suppliers' workplaces. These suppliers are regularly andindependently audited on the ETI nine point base code, which covers workingconditions in the supply chain, to ensure compliance with that code. During 2006Marshalls' Indian stone supplier has successfully demonstrated compliance withthe ETI base code. Corporate Activity Marshalls continues to pursue its strategy of acquiring complementary businessesthat provide quality products to enhance the core product offer. On 4 May 2006 the Group acquired a business which specialises in the sale of arange of shelters and associated products, particularly to the Education Sector.In the second half of the year two other small businesses were acquired; abusiness that manufactures temporary kerbs from recycled materials, and abusiness which manufactures high capacity drainage systems which complementMarshalls' existing range of linear drainage products. On 30 November 2006 the Group acquired Scenic Blue, a design and installationfranchising business. Scenic Blue was a Gold Award winner for its show garden atthe RHS Chelsea Flower Show in 2006. It is intended to launch a design andinstallation service nationally at the 2007 RHS Chelsea Flower Show. Since the year end the Group has acquired a natural stone business and abusiness supplying high quality and widely specified seating systems for acombined consideration of £8.3 million. A programme to introduce modern business systems and consolidate all of thesebusinesses into the Group, to deliver synergies and provide a solid platform forfuture organic growth, is in progress. The Group continues to seek opportunities to expand reserves and geographicalcoverage in natural stone. During 2006 Marshalls acquired the rights to developan aggregate reserve in North West England and, following capital investment ofapproximately £2.0 million, operations will commence fully during 2007. Balance Sheet Net assets at 31 December 2006 grew by 10.9 per cent to £184.5 million (2005:£166.3 million), representing 129.0 pence (2005: 116.3 pence) per share. An evaluation of Marshalls' portfolio of commercial properties and mineralassets is being undertaken by CB Richard Ellis and Wardell Armstrongrespectively. The property portfolio is being valued on an existing use basisfor the commercial and mineral portfolio and on a market value basis for thesurplus portfolio. These bases are in accordance with the valuation methodsrecommended by the Royal Institute of Chartered Surveyors. The draft valuationof the property portfolio as at 31 December 2006 is approximately £40.0 millionabove the net book value of the equivalent assets. The liability for defined benefit pension obligations decreased from £65.3million at 31 December 2005 to £41.9 million at 31 December 2006. Following themove to defined contribution for future service, special cash contributions of£10.0 million were made to the Pension Scheme in the second half of the yearand, as a consequence of a change to the actuarial assumptions, there has been aone-off curtailment gain, net of expenses, of £4.4 million. There was also anincrease in the AA corporate bond rate from 4.8 per cent to 5.1 per cent, anincrease in investment returns and a strengthening of the mortality rate whichtogether resulted in an actuarial gain of £7.3 million (net of deferredtaxation) and this has been recorded in the Consolidated Statement of RecognisedIncome and Expenses. Outlook Market intelligence shows that Public Sector and Commercial demand, whichrepresents half of the Group's revenue, remains robust. The latest CPA forecastestimates that the Public Sector and Commercial market will grow by 4.9 per centin 2007 and a further 5.1 per cent in 2008. From 2008 onwards, it is anticipatedthat building for the 2012 Olympics will start to deliver benefit. The Domestic market is more difficult to predict. The CPA is forecasting growthof 1.0 per cent in Private Housing Repair, Maintenance and Improvementexpenditure for 2007 and flat in 2008. Domestic installers' average order booksfrom the latest survey at the end of February 2007 were an encouraging 9.1 weeks(2006: 8.4 weeks). In 2007 the Group will continue the roll out phase of the consumer initiatives.The Royal Horticultural Society's Chelsea Flower Show sponsorship together withthe national launch of the Marshalls design and installation service willfurther increase brand awareness and profile. A range of initiatives has alsobeen developed to grow our Public Sector and Commercial business and the Group'smanagement and workforce are committed to continuing this growth strategy anddelivering increased shareholder value. Although poor weather conditions in January and early February meant a flatstart to 2007, the underlying indicators, including the installer order booksand the Barbour ABI Building data, are encouraging and the outlook for the yearis positive. Graham HoldenChief Executive MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000Revenue 2 378,100 359,310 Net operating costs (330,339) (314,885) ------- -------Operating profit 2 47,761 44,425Financial expenses 4 (14,904) (14,421)Financial income 4 8,846 8,014 ------- -------Profit before tax 2 41,703 38,018Income tax expense 5 (12,623) (11,661) ------- -------Profit after tax but before post tax gain onsale and post tax profit of discontinuedoperation 29,080 26,357Post tax gain on sale and post tax profit ofdiscontinued operation 3 - 31,517 ------- -------Profit for the financial period attributableto equity shareholders of the parent 29,080 57,874 ------- -------Earnings per share (total operations includingpost tax gain on sale in 2005):Basic 7 20.34p 40.73p ------- -------Diluted 7 20.32p 40.71p ------- -------Earnings per share (continuing operations):Basic 7 20.34p 18.55p ------- -------Diluted 7 20.32p 18.54p ------- -------Dividend:Pence per share 6 12.70p 12.10p ------- -------Dividends declared 6 18,158 17,169 ------- ------- MARSHALLS PLC PELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2006 Assets Notes 2006 2005 £'000 £'000Non-current assetsProperty, plant and equipment 202,941 198,030Intangible assets 52,667 46,461Deferred taxation assets 15,018 19,690 ------- ------- 270,626 264,181 ------- -------Current assetsInventories 68,256 67,759Trade and other receivables 34,290 36,598Cash and cash equivalents 22 5,210 ------- ------- 102,568 109,567 ------- -------Total assets 373,194 373,748 ------- -------LiabilitiesCurrent liabilitiesBank overdraft 999 -Trade and other payables 65,547 64,570Interest bearing loans and borrowings 3,565 348 ------- ------- 70,111 64,918 ------- -------Non-current liabilitiesTrade and other payables - 475Interest bearing loans and borrowings 50,064 51,550Employee benefits 8 41,945 65,264Deferred taxation liabilities 26,532 25,201 ------- ------- 118,541 142,490 ------- -------Total liabilities 188,652 207,408 ------- -------Net assets 184,542 166,340 ------- -------EquityCapital and reserves attributable to equityshareholders of the parentShare capital 35,777 35,772Share premium account 2,732 2,694Own shares (453) (102)Capital redemption reserve 73,298 72,573Consolidation reserve (213,067) (213,067)Hedging reserve (6) (2)Retained earnings 286,261 268,472 ------- -------Equity shareholders' funds 184,542 166,340 ------- ------- MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Net cashflow from operating activities(after special pension scheme contributionsof £10,000,000 (2005: £nil)) 9(i) 38,846 42,750 Net cashflow from investing activities 9(ii) (28,033) 35,668 Net cashflow from financing activities 9(iii) (17,000) (56,539) ------- -------Net (decrease)/increase in cash and cashequivalents (6,187) 21,879 Cash and cash equivalents at 1 January 5,210 (16,669) ------- -------Cash and cash equivalents at 31 December (977) 5,210 ------- -------The above includes the operating, investing and financing cashflows of thediscontinued operation disclosed in Note 3. The relevant cash flows of thediscontinued operation are included in Note 9. Reconciliation of Net Cash Flow to Movement in Net Debt 2006 2005 £'000 £'000 Net (decrease)/increase in cash and cash equivalents (6,187) 21,879Cash (inflow)/outflow from (increase)/decrease in debt and lease financing (1,731) 39,910Finance leases acquired on acquisitionof subsidiary undertakings - (238) ------- -------Movement in net debt in the period (7,918) 61,551Net debt at 1 January (46,688) (108,239) ------- -------Net debt at 31 December (54,606) (46,688) ------- ------- MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 £'000 £'000Cash flow hedges: Effective portion of changes infair value (net of deferred taxation) (4) 4Actuarial gains/(losses) (net of deferred taxation) 7,342 (8,563) ------- -------Net expense recognised directly in equity 7,338 (8,559)Profit for the financial period attributable toequity shareholders of the parent 29,080 57,874 ------- -------Total recognised income and expenses for the period(equity shareholders of the parent) 36,418 49,315 ------- ------- MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED NOTES FOR THE YEAR ENDED 31 DECEMBER 2006 1. Basis of Preparation The Consolidated Financial Statements have been prepared on the basis of therequirements of International Financial Reporting Standards (IFRSs) in issue andadopted by the EU and effective (or available for early adoption) at 31 December2006. The IFRS accounting policies have been applied consistently to all periodspresented in these Consolidated Financial Statements. The accounting policieshave been applied consistently throughout the Group for the purposes of theseConsolidated Financial Statements and are set out on the Company's website(www.marshalls.co.uk). The Consolidated Financial Statements are presented in sterling, rounded to thenearest thousand. The preparation of financial statements in conformity with IFRSs requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgementsabout carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. 2. Segmental analysis Revenue Operating Profit 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Continuing operations 378,100 359,310 47,761 44,425 ------- -------Financial income and expenses (net) (6,058) (6,407) ------ ------Profit on ordinary activities beforetaxation 41,703 38,018 ------ ------The Directors have undertaken a review of the Group's continuing operations andits associated business risks and consider that the continuing operationsshould be reported as a single business segment. The Directors consider that thecontinuing operations represent one product offering with similar risks andrewards and should be managed and reported as a single business segment in linewith the Group's internal reporting framework. 2006 2005 £'000 £'000Geographical destination of revenue:United Kingdom 374,627 356,051Rest of the world 3,473 3,259 ------- ------- 378,100 359,310 ------- -------All revenue originates in the United Kingdom from continuing operations andthere is no material inter-segmental turnover. Segmental information for the discontinued operations is included in Note 3below. 3. Discontinued operations On 4 January 2005 Marshalls Clay Products Limited was sold to Hanson PLC for acash consideration of £65.0 million (including the repayment of all intergroupindebtedness) and a post-tax gain of £31.5 million was realised. The results ofthis former business have been disclosed under discontinued operations in theConsolidated Income Statement. The cash flow disclosures in respect of thesediscontinued operations are shown in Note 9. There is no tax arising in the yearin respect of the gain on sale of discontinued operations. 4. Financial expenses and income 2006 2005 £'000 £'000(a) Financial expensesInterest expense on bank loans, overdrafts andloan notes 2,406 2,487Interest on obligations under the defined benefitpension scheme 10,107 9,505Debenture interest expense 2,275 2,275B share dividend expense 92 132Finance lease interest expense 24 22 ------- ------- 14,904 14,421 ------- -------(b) Financial incomeExpected return on scheme assets underthe defined benefit pension scheme 8,802 7,953Interest receivable and similar income 44 61 ------- ------- 8,846 8,014 ------- -------5. Income tax expense 2006 2005 £'000 £'000Current tax expenseCurrent year 11,004 12,165Adjustments for prior year (947) (274) ------- ------- 10,057 11,891Deferred taxation expenseOrigination and reversal of temporary differencesCurrent year 2,235 371Adjustments for prior year 331 (601) ------- -------Income tax expense in the Consolidated Income Statement 12,623 11,661 ------- ------- Reconciliation of effective tax rate 2006 2006 2005 2005 % £'000 % £'000 Profit before tax 100.0 41,703 100.0 38,018 ----- ------ ----- ------Tax using domestic corporation tax rate 30.0 12,511 30.0 11,405 Disallowed amortisation of intangiblefixed assets 0.3 107 0.2 77Net items not taxable 1.5 621 2.8 1,054Prior year items (1.5) (616) (2.3) (875) ----- ------ ----- ------ 30.3 12,623 30.7 11,661 ----- ------ ----- ------The net amount of deferred taxation credited to the Consolidated Statement ofRecognised Income and Expenses in the year was £3,146,000 (2005: £3,677,000). 6. Dividends Ordinary dividends: equity shares 2006 2005 per share £'000 per share £'0002005 Final: paid 7 July 2006 8.40p 12,010 8.00p 11,3532006 Interim: paid 8 December 2006 4.30p 6,148 4.10p 5,816 ------ ------ ------ ------ 12.70p 18,158 12.10p 17,169 ------ ------ ------ ------7. Earnings per share Basic earnings per share on total operations of 20.34 (2005: 40.73) pence pershare is calculated by dividing the profit attributable to ordinary shareholdersfrom total operations of £29,080,000 (2005: £57,874,000) by the weighted averagenumber of shares in issue during the year of 142,949,818 (2005: 142,106,234). Basic earnings per share on continuing operations of 20.34 (2005: 18.55) penceper share is calculated by dividing the profit attributable to ordinaryshareholders from continuing operations of £29,080,000 (2005: £26,357,000) bythe weighted average number of shares in issue during the year of 142,949,818(2005: 142,106,234). Basic earnings per share for discontinued operations of nil (2005: 22.18) penceper share is calculated by dividing the profit attributable to ordinaryshareholders from discontinued operations of nil (2005: £31,517,000) (see Note3) by the weighted average number of shares in issue during the year of142,949,818 (2005: 142,106,234). Profit attributable to ordinary shareholders 2006 2005Profit attributable to ordinary shareholders: £'000 £'000 - Continuing operations 29,080 26,357- Discontinued operations - 31,517 ------ ------Total 29,080 57,874 ------ ------Weighted average number of ordinary shares 2006 2005 Issued ordinary shares at 1 January 143,087,712 141,913,313Effect of shares issued in the year 14,536 192,921Effect of shares transferred into employeebenefit trust (152,430) - ----------- -----------Weighted average number of ordinary shares at31 December 142,949,818 142,106,234 ----------- ----------- Diluted earnings per share on total operations of 20.32 (2005: 40.71) pence pershare is calculated by dividing the profit attributable to ordinary shares, andpotentially dilutive ordinary shares, from total operations of £29,080,000(2005: £57,874,000) by the weighted average number of shares in issue during theyear of 142,949,818 (2005: 142,106,234) plus dilutive shares of 152,430 (2005:44,303) which totals 143,102,248 (2005: 142,150,537). Diluted earnings per share on continuing operations of 20.32 (2005: 18.54) penceper share is calculated by dividing profit attributable to ordinary shares, andpotentially dilutive ordinary shares, from continuing operations of £29,080,000(2005: £26,357,000) by the weighted average number of shares in issue during theyear of 142,949,818 (2005: 142,106,234), plus dilutive shares of 152,430 (2005:44,303) which totals 143,102,248 (2005: 142,150,537). Diluted earnings per share for discontinued operations of nil (2005: 22.17)pence per share is calculated by dividing profit attributable to ordinaryshares, and potentially dilutive ordinary shares, from discontinued operationsof £nil (2005: £31,517,000) by the weighted average number of shares in issueduring the year of 142,949,818 (2005: 142,106,234), plus dilutive shares of152,430 (2005: 44,303) which totals 143,102,248 (2005: 142,150,537). Weighted average number of ordinary shares (diluted) 2006 2005Weighted average number of ordinary shares at 31December 142,949,818 142,106,234Effect of share options in issue - 44,303Effect of shares transferred into employeebenefit trust 152,430 - ----------- -----------Weighted average number of ordinary shares at 31December 143,102,248 142,150,537 ----------- -----------8. Employee benefits The Group operates the Marshalls plc Pension Scheme (the "Scheme") which hasboth a defined benefit and a defined contribution section. The assets of theScheme are held in separately managed funds which are independent of the Group'sfinances. After extensive consultation with the employees affected and theirrepresentatives, the Group introduced a new defined contribution section to theScheme to replace the existing defined benefit section which closed to futureservice accrual on 1 July 2006. Following this change the Company has madespecial cash contributions amounting to £10.0 million to the Scheme. 2006 2005 £'000 £'000 Present value of funded obligations (209,152) (212,245)Fair value of scheme assets 167,207 146,981 ------- -------Recognised liability for defined benefit obligations(see below) (41,945) (65,264) ------- ------- Movements in the net liability for defined benefit obligations recognised in thebalance sheet 2006 2005 £'000 £'000Net liability for defined benefit obligations at 1January (65,264) (50,855)Contributions received 10,960 1,695Gain/(expense) recognised in the Consolidated IncomeStatement 1,870 (3,862)Actuarial gains/(losses) 10,489 (12,242) ------- -------Net liability for the defined benefit obligations at 31December (41,945) (65,264) ------- -------9. Notes to the cash flow statement 2006 2005 Continuing Discont- Group Continuing Discont- Group operations inued operations inued operations operations £'000 £'000 £'000 £'000 £'000 £'000 9(i) Cashflows fromoperating activitiesProfit before tax 41,703 - 41,703 38,018 - 38,018Adjustments for:Depreciation 19,530 - 19,530 18,716 - 18,716Amortisation 357 - 357 259 259Loss/(gain) onsale of property,plant and equipment 66 - 66 (1,545) - (1,545)Equity settled sharebased expenses 250 - 250 - - -Financial income andexpenses (net) 6,058 - 6,058 6,407 - 6,407 ----- ----- ----- ----- ----- -----Operating cashflowbefore changesin working capital,provisions andspecial pension schemecontributions 67,964 - 67,964 61,855 - 61,855 Decrease/(increase)in trade and otherreceivables 2,323 - 2,323 (533) - (533)(Increase) ininventories (53) - (53) (6,805) - (6,805)(Decrease)/increasein trade and otherpayables (3,197) - (3,197) 3,336 - 3,336(Decrease)/increasein employeebenefits (2,968) - (2,968) 1,225 - 1,225Special pensionschemecontributions (10,000) - (10,000) - - - ------- ----- ------- ----- ----- -----Cash generatedfrom theoperations 54,069 - 54,069 59,078 - 59,078Financialexpenses paid (4,265) - (4,265) (4,969) - (4,969)Non equitydividends paid (149) - (149) (75) - (75)Income tax paid (10,809) - (10,809) (11,284) - (11,284) ------- ----- ------- ------- ----- -------Net cash flowfrom operatingactivities (afterspecial pensionschemecontributions) 38,846 - 38,846 42,750 - 42,750 ------ ----- ------ ------ ----- ------9(ii) Cash flows frominvesting activitiesProceeds from saleof property, plantand equipment 565 - 565 3,172 - 3,172Financial incomereceived 44 - 44 61 - 61Disposal of subsidiary,net of cashdisposed of - - - - 65,000 65,000Acquisition ofsubsidiaries (4,157) - (4,157) (9,406) - (9,406)Bank balanceacquired withsubsidiaries 79 - 79 664 - 664Acquisition ofproperty, plantand equipment (24,564) - (24,564) (23,823) - (23,823) ------ ----- ------ ------ ----- ------Net cash flowfrom investingactivities (28,033) - (28,033) (29,332) 65,000 35,668 ------ ----- ------ ------ ------ ------9(iii) Cash flowsfrom financingactivitiesProceeds from issueof share capital 43 - 43 2,701 - 2,701Payments to acquireown shares (453) - (453) - -(Decrease) in otherdebt and financeleases (302) - (302) (293) - (293)Redemption ofB shares (848) - (848) (1,102) - (1,102)Increase in/(repayment of)borrowings 2,758 - 2,758 (38,281) - (38,281)Payment oftransaction costs (40) - (40) (118) (2,277) (2,395)Equity dividendspaid (18,158) - (18,158) (17,169) - (17,169) ------ ----- ------ ------ ----- ------Net cash flowfrom financingactivities (17,000) - (17,000) (54,262) (2,277)(56,539) ------ ----- ------ ------ ----- ------ 10. Annual General Meeting The Annual General Meeting will be held at Birkby Grange, Birkby Hall Road,Birkby, Huddersfield, West Yorkshire HD2 2YA at 12.00 (noon) on Wednesday 16 May2007. 11. Other The financial information set out above does not constitute the Company'sconsolidated statutory accounts for the years ended 31 December 2006 or 2005 butis derived from those accounts. Statutory accounts for the year ended 31December 2005 have been delivered to the Registrar of Companies, and those forthe year ended 31 December 2006 will be delivered following the Company's AnnualGeneral Meeting. The auditors have reported on those accounts; their reportswere unqualified and did not contain statements under section 237(2) or (3) ofthe Companies Act 1985. Forward Looking Statements This Preliminary Announcement of Results for the year ended 31 December 2006contains certain forward looking statements with respect to the Group'sfinancial condition, its results, strategy, plans and objectives. The forwardlooking statements contained in this document are not forecasts or guarantees offuture performance and are subject to risks, uncertainties and other factors.Some of these factors are beyond the Group's control, are difficult to predictand could cause actual results to differ materially from those expressed,implied or forecast in the forward looking statements. These factors include,but are not limited to, the fact that the Group operates in a highly competitiveenvironment, is subject to the effects of government regulation and is reliantupon technology, which is subject to risk, change and development. Other factorsinclude risks inherent in the implementation of large scale capital expenditureprojects and the Group's ability to continue to communicate and market itsservices effectively. All forward looking statements in this document are based on information knownto the Group as at 9 March 2007. The Group has no obligation publicly to updateor revise any forward looking statements, whether as a result of new informationor future events. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Marshalls