23rd Mar 2006 07:03
M&C Saatchi PLC23 March 2006 M&C Saatchi plc Preliminary Results for the Year Ended 31st December 2005 M&C Saatchi plc 2005 Preliminary Results M&C Saatchi plc, the international marketing communications Group todayannounces its preliminary results for the year ended 31st December 2005. Financial Highlights •Revenues (gross profit) up 9.4% to £68.0 million (2004: £62.2 million) •Underlying operating profit (before the impact of the European expansion) up 7.5% to £7.8 million (2004: £7.2 million). •Underlying operating margin (before the impact of the European expansion) broadly flat at 11.5% (2004: 11.6%). •Underlying profit before taxation (before the impact of the European expansion) up 11.3% to £9.1 million (2004: £8.1 million). •Cost of European Expansion £1.4 million. •Reported Profit before tax (before the share based payment charge of £0.2 million) of £7.5 million (2004: £8.1 million). •Reported earnings per share (including share based payment charge in 2005) of 7.57p (2004: 9.28p). •Dividend per share up 10% to 2.55p. Note: The above figures (except where stated) are reported before theamortisation of goodwill and share based payment charge Operational Highlights •Strong new business performance, particularly in the second half. Significant new business wins included: Australian Tourism, ITV, Ribena, Cadbury Muller, Direct Line Insurance (M&C Saatchi), Weetabix and Independent News and Media (Walker Media) Nat West Mortgages and Mini (LIDA), Twinings, Perrier Jouet, Orange, Ovaltine and Disney (Talk PR), Carslberg (Sports and Entertainment) , PODS (USA), City National Bank (California), eBay (Asia) and Wyeth (China). •Successful launch of our first European office in Paris in September 2005. Plans are well advanced for Germany and Spain. •Further expansion in Asia adding offices in Bangkok and New Delhi. •New complementary businesses developed: Provenance (luxury brand specialists) and Walker-i (digital media). Commenting on the results, David Kershaw, Chief Executive, said: "I am pleased to report another strong underlying performance across the Group.We have made good progress with our strategy of expansion into new geographiesand new businesses, which is the foundation of our future growth. Our newbusiness performance has also been strong across the Group, which has helped tooffset the financial impact of losing the BA account." For further information please contact M&C Saatchi plc 020 7543 4500David Kershaw, Chief Executive Tulchan Communications 020 7353 4200Miranda AclandPeter Hewer Financial Review Reported revenues (gross profit) increased by 9.4% to £68.0 million. This is our11th successive year of organic revenue growth. On a constant currency basisrevenues grew by 7.9%. While all areas of the business performed well, the key driver of growth hasbeen the UK with revenues up 8.1%, a strong performance given the loss of the BAaccount. Although small in absolute terms, revenue growth was also strong in theUSA at 26.7% . The table below gives details of the revenue and revenue growth by region. 2005 2005 Constant V's 04 Reported Vs 04 2004 Rates Rates -------- ------ -------- ------ -------- £'000 % £'000 % £'000 -------- ------ -------- ------ --------UK 39,470 8.1 39,470 8.1 36,518Asia 24,187 4.6 25,084 8.5 23,126PacificUSA 3,189 25.8 3,211 26.7 2,534Europe 236 - 236 - - -------- ------ -------- ------ -------- Total 67,082 7.9 68,001 9.4 62,178 The underlying performance (which excludes the impact of the European expansion,the amortisation of goodwill and the share based payment charge) shows operatingprofit increased by 7.5% to £7.8 million (2004: £7.2 million). The underlyingoperating margin dropped marginally to 11.5% (2004: 11.6%). This was due to theloss of BA revenues in the fourth quarter and the associated pitch costs. The Groups net interest increased 50% to £1.4 million (2004: £0.9 million) dueprincipally to interest earned on the net proceeds from the float. The underlying profit before tax (excluding the impact of the European expansionof £1.4 million, the amortisation of goodwill of £1.7 million and before theshare based payment charge of £0.2 million) increased by 11.3% to £9.1 million(2004: £8.1 million). The cost of the European expansion reduced the underlyingprofit before tax to £7.6 million. 2005 has been the first year that our operating performance has beensignificantly impacted by our expansion strategy in Europe. We opened our firstoffice in continental Europe in Paris in September 2005 and it has had asuccessful first six months. The initial losses of the Paris office plus theongoing development costs associated with the further European expansiontotalled £1.4 million and reduced the operating margin by 2.1pts. This is inline with the strategy set out prior to the float in 2004 and consistent withexpectations. The Group's tax rate, before taking account of the items listed below, increasedby 0.2pts to 33.0%. The impact of the non deductible losses incurred by ourassociate in the UK (0.6pts) and the European start up (2.5pts) increased thereported tax rate to 36.1%. These losses will be carried forward to offsetfuture taxable profits. The profits attributable to the minorities increased to £0.7million (2004: £0.4million). The percentage of the group's profits contributed by profits with newor remaining minorities increased to 11.2% (2004: 8.0%) (before the impact ofthe European expansion). The growth in profits from Walker Media was theprinciple cause. The reported earnings per share decreased due the European expansion to 4.46p(2004: 6.19p) The Board is recommending a final dividend of 1.78p per share making a total of2.55p per share for 2005. This represents an increase of 10% on the equivalentannualised dividend for 2004. The final dividend of 1.78p is payable on the 12thJune 2006 to shareholders on the register as at 12th May 2006. 2004 unaudited proforma accountsExcept where otherwise stated the report refers to the 2004 proforma profit andloss account. This has been prepared to show the Group's results as if thereorganisation placing and admission to AIM had effect from 1st January 2004 andexcludes exceptional costs. Review of Operations The UK The UK region covers our marketing communications operations, comprising M&CSaatchi (advertising), LIDA (direct marketing), Talk PR (public relations),Immediate Sales (integrated marketing), M&C Saatchi Sports and Entertainment,Influence (issue marketing), Play (digital marketing), Provenance (luxury brandspecialists) and our media planning and buying operation Walker Media. Our UK business performed well in 2005 with revenue up by 8.1%. The growth wasled by Walker Media but with all our UK businesses showed good growth. The new business performance in the UK was strong, with the contributions moresignificant in the second half. The new accounts include; ITV, Ribena, CadburyMuller, Direct Line Insurance (M&C Saatchi) Weetabix and Independent News andMedia (Walker Media), NatWest mortgages and Mini (LIDA), Twinings, PerrierJouet, Orange, Ovaltine and Disney (Talk PR) and Carslberg (Sports andEntertainment). An important part of our organic growth strategy in the UK is the ongoingdevelopment of complementary businesses which expand our offering to existingand potential clients. Last year saw the launch of Provenance (luxury brandspecialists) and Walker-i, a subsidiary of Walker Media specialising in digitalmedia. Asia Pacific and Australia On a constant currency basis revenue grew by 4.6% to £24.2 million (2004: £23.1million). This was principally driven by a strong performance from Australiawhich accounts for 66% of the region. There was also a strong performance fromour Malaysian business and contribution from our acquisitions in Thailand andIndia. The most notable new business win was Australian Tourism, but this came at theexpense of the New Zealand Tourism business. There was a small net contributionto revenue this year; the impact will be more significant in 2006. Other wins in the region were: eBay (Asia regional), Spirit of Tasmania FerryService (Australia), Alliance Bank (Malaysia) and Wyeth (China). America On a constant currency basis revenue grew by 25.8% to £3.2 million (2004: £2.5million). This was principally driven by the LA office which posted revenuesover 50% higher than 2004. Our American activities were reorganised in 2005. New management was put intoNew York and the office had a successful start winning PODS (Portable on DemandStorage) in June. Other new business wins included; Ghirardelli chocolates, City National Bank andassignments from RBS and Travelex. Europe Our first European office opened in Paris in September last year. M&CSaatchi.GAD, led by Giles Masson, Antoine Barthuel and Daniel Fohr, has had avery successful start and has already won assignments from: Pernod Ricard(Havana Club & Olmeca), S'Miles Loyalty scheme, Branly Museum. Plans are well progressed for further openings in the key markets in Germany andSpain. We expect to be able to make announcements shortly. Outlook We expect the year ahead to be one of further progress and growth across all ofour businesses. The loss of BA will be more significantly felt in 2006 and we see an environmentthat will limit the opportunity for margin growth. From a new business perspective the year has started well. Important newaccounts include Kingsmill (Allied Bakeries) and RBS Retail. Our Paris officehas maintained its excellent progress winning Bordeaux Wines and is currentlypitching for other significant accounts. Walker Media has had an outstandingstart to the year and the New York office has also made good progress recentlywinning AIG insurance. Our investment programme in new offices, through organic start ups or smallacquisitions and new businesses streams, will continue into 2006 and thisstrategy remains the foundation for the company's growth going forward. M&C SAATCHI PLC PRELIMINARY CONSOLIDATED PROFIT AND LOSS ACCOUNT Note Unaudited Unaudited Audited year ended proforma year ended 31-Dec 31-Dec 31-Dec 2005 2004 2004 £000 £000 £000----------------------- ------ -------- -------- -------Turnover- Continuing operations 297,688 106,884 106,884- Acquisitions 596 180,864 108,300----------------------- ------ -------- -------- ------- Turnover 2 298,284 287,748 215,184Cost of sales 3 (230,283) (225,570) (155,807)----------------------- ------ -------- -------- -------Gross profit 68,001 62,178 59,377 Administrative expenses- Ordinary (61,639) (54,944) (52,907)- Exceptional - - (2,795)- Options & long term bonus (185) - -- Amortisation of goodwill (1,688) (1,672) (777)----------------------- ------ -------- -------- -------Administrative expenses 3 (63,512) (56,616) (56,479) Operating profit- Continuing operations 4,480 4,157 2,257- Acquisitions 9 1,405 641----------------------- ------ -------- -------- -------Operating profit 4,489 5,562 2,898 Share of operating profit /(loss)of associates (75) - 352Interest receivable 1,384 931 800Interest payable (29) (30) (30)Profit on ordinary activitiesbefore taxation 5,769 6,463 4,020----------------------- ------ -------- -------- ------- Taxation on profits on ordinaryactivities 4 (2,690) (2,666) (2,033)----------------------- ------ -------- -------- ------- Profit on ordinary activities aftertaxation 3,079 3,797 1,987----------------------- ------ -------- -------- ------- Minority interests (663) (441) (531)----------------------- ------ -------- -------- ------- Profit for the financial year 2,416 3,356 1,456----------------------- ------ -------- -------- ------- Earnings per share- Basic 6 4.46p 6.19p 3.42p- Diluted 6 4.41p 6.14p 3.41p All amounts relate to continuing activities. The reconciliation of movements in shareholders' funds is shown in note 8 to thefinancial statements. Except where otherwise stated this report comments on the unaudited profit andloss account of M&C Saatchi plc (the "Group") for the year to 31st December 2005compared with the unaudited pro forma profit and loss account for the sameperiod in 2004. The report also comments on the numbers before the impact of theamortisation of goodwill. The pro forma report has been prepared to show forillustrative purposes only, the results as if the reorganisation which occurredimmediately prior to its admission to trading on AIM on 14th July 2004, hadoccurred on 1st January 2004. The reorganisation included the acquisition of M&CSaatchi Worldwide Ltd by M&C Saatchi plc and the acquisition of a further 29% ofWalker Media Holdings share capital resulting in a 75% holding. At the same timea number of key executives who held shares in their operating companies hadtheir interest acquired by M&C Saatchi plc. Full details were set out in theadmission document. The directors believe that the presentation of the financialhighlights and the financial report on this basis provide a clearerunderstanding of the Group's results. M&C SAATCHI PLC PRELIMINARY CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Audited Year ended Year ended 31-Dec 31-Dec 2005 2004 £000 £000----------------------- -------- -------Profit for the financial year- Group 2,497 1,140- Associates (81) 316----------------------- -------- ------- 2,416 1,456 Exchange differences on retranslation of openingreserves (50) 260----------------------- -------- -------Total recognised gains and losses for the financialyear 2,366 1,716----------------------- -------- ------- M&C SAATCHI PLC PRELIMINARY CONSOLIDATED BALANCE SHEET Note Unaudited Unaudited Audited Audited At At At At 31-Dec 31-Dec 31-Dec 31-Dec 2005 2005 2004 2004 £000 £000 £000 £000----------------------- ------ -------- -------- ------- -------Fixed assetsIntangible assets 14,592 16,158Tangible assets 3,194 3,047Investments 100 15----------------------- ------ -------- -------- ------- ------- 17,886 19,220Current assetsWork in progress 3,277 3,368Debtors- Due within one year 50,552 46,374- Due after more than oneyear 578 731Cash at bank and in hand 20,486 17,323----------------------- ------ -------- -------- ------- ------- 74,893 67,796Creditors- Amounts falling duewithin one year 58,969 55,351----------------------- ------ -------- -------- ------- -------Net current assets 15,924 12,445----------------------- ------ -------- -------- ------- -------Total assets less currentliabilities 33,810 31,665 Creditors- Amounts falling due aftermore than one year 868 774Provisions for liabilitiesand charges 404 218----------------------- ------ -------- -------- ------- ------- 32,538 30,673----------------------- ------ -------- -------- ------- ------- Capital and reservesShare capital 7 542 542Share premium account 7 9,618 9,618Merger reserve 7 14,756 15,959Share option reserve 7 599 514Profit and loss account 7 6,101 3,577----------------------- ------ -------- -------- ------- -------Shareholders' funds -equity 7 31,616 30,210Minority interests - equity 922 463----------------------- ------ -------- -------- ------- ------- 32,538 30,673----------------------- ------ -------- -------- ------- ------- M&C SAATCHI PLC PRELIMINARY CONSOLIDATED CASH FLOW STATEMENT Note Unaudited Unaudited Audited Audited Year ended Year ended Year ended Year ended 31-Dec 31-Dec 31-Dec 31-Dec 2005 2005 2004 2004 £000 £000 £000 £000----------------------- ------ -------- -------- ------- -------Cash inflow fromoperating activities 9 6,596 4,953Dividend receivedfrom associates - 728 Returns on investments andservicing of financeInterest received 1,384 687Interest paid (8) (3)Interest element offinance leaserental payments (15) (27)Minority interestdividend paid (428) (1,296)----------------------- ------ -------- -------- ------- -------Net cash outflowfrom return oninvestment andservicing of finance 933 (639) TaxationUK taxation paid (1,498) (1,136)Overseas taxationpaid (567) (664)----------------------- ------ -------- -------- ------- ------- (2,065) (1,800)Capital expenditure andfinancial investmentPurchase of tangiblefixed assets (1,289) (922)Sale of tangiblefixed assets 37 417Sale of a part share ofa subsidiaryundertakings - 527----------------------- ------ -------- -------- ------- -------Net cashinflow/(outflow)from capitalexpenditure andfinancial investment (1,252) 22 Acquisitions anddisposalsInvestment insubsidiary (369) (382)Cash acquired withsubsidiaryundertakings 187 2,243Investment in - -associate ----------------------- ------ -------- -------- ------- ------- (182) 1,861 Equity dividendspaid (1,045) (2,313)----------------------- ------ -------- -------- ------- -------Net cashinflow/(outflow)before financing 2,985 2,812 FinancingShare placement - 10,537Share placementcosts - (835)Shares issued tominorities insubsidiaries 124 107Repayment of bankloans - (21)Capital element offinance lease rentalpayments (142) (225)--------------------------- -------- -------- ------- -------Net cashinflow/(outflow)from financing (18) 9,563----------------------- ------ -------- -------- ------- -------Increase/(decrease)in cash in the year 11 2,967 12,375----------------------- ------ -------- -------- ------- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 1. Statutory informationThe financial information contained in this announcement, for the years ended31st December 2005 or 2004, does not constitute statutory financial statementswithin the meaning of section 240 of the Companies act 1985. The financialinformation for the year ended 31st December 2004 is derived from the statutoryaccounts for that year which have been delivered to the Registrar of Companies.The auditors reported on those accounts was unqualified. The statutory accountsfor the year ended 31st December 2004 will be finalised on the basis of thefinancial information presented by the directors in this unaudited preliminaryannouncement and will be delivered to the Registrar of Companies following thecompany's annual general meeting. The audit report for the year ended 31stDecember 2005 has yet to be signed. The preliminary announcement was approved by the board of directors on 22ndMarch 2006. M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 2. Turnover, profit and net assetsTurnover and profit before taxation are attributable to the provision ofadvertising and marketing services. Unaudited Unaudited Audited pro forma 2005 2004 2004 £000 £000 £000----------------------- -------- --- -------- --- ------- TurnoverAnalysis by geographical market: By origin and destinationUK 245,926 241,373 168,809Asia and Australia 45,636 41,736 41,736America 6,417 4,639 4,639Europe 305 - ------------------------ -------- --- -------- --- ------- 298,284 287,748 215,184----------------------- -------- --- -------- --- ------- Gross profitAnalysis by geographical market: By originUK 39,470 36,518 33,717Asia and Australia 25,084 23,126 23,126America 3,211 2,534 2,534Europe 236 - ------------------------ -------- --- -------- --- ------- 68,001 62,178 59,377----------------------- -------- --- -------- --- ------- Operating profit/(loss) - excluding amortisation of goodwillAnalysis by geographical market: By originUK 5,811 4,348 789Asia and Australia 2,117 2,686 2,686America (322) 200 200Europe (1,429) - ------------------------ -------- --- -------- --- ------- 6,177 7,234 3,675----------------------- -------- --- -------- --- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 2. Turnover, profit and net assets CONTINUED Unaudited Unaudited Audited pro forma 2005 2004 2004 £000 £000 £000---------------------- -------- --- -------- --- -------Operating profit/(loss)Analysis by geographical market: By originUK 4,123 2,676 12Asia and Australia 2,117 2,686 2,686America (322) 200 200Europe (1,429) - ----------------------- -------- --- -------- --- ------- 4,489 5,562 2,898----------------------- -------- --- -------- --- ------- Profit/(loss) before taxationAnalysis by geographical market: By originUK 5,318 3,528 1,085Asia and Australia 2,202 2,736 2,736America (319) 199 199Europe (1,432) - ----------------------- -------- --- -------- --- ------- 5,769 6,463 4,020----------------------- -------- --- -------- --- ------- Unaudited Audited 2005 2004 £000 £000----------------------- -------- --- -------- --- ------- Net assets/(liabilities)Analysis by geographical market: By originUK 32,008 30,574Asia and Australia 3,646 2,466America (1,950) (2,367)Europe (1,166) ------------------------ -------- --- -------- --- ------- 32,538 30,673----------------------- -------- --- -------- --- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 3. Cost of sales and administrative expenses Unaudited Unaudited Audited proforma 2005 2004 2004 £000 £000 £000 ----------------------- -------- --- -------- --- -------Cost of salesContinuing operations 229,869 50,554 50,554Acquisitions 414 175,016 105,253----------------------- -------- --- -------- --- ------- 230,283 225,570 155,807 ----------------------- -------- --- -------- --- ------- Administrative expensesContinuing operations 63,339 54,210 54,073Acquisitions 173 2,406 2,406----------------------- -------- --- -------- --- ------- 63,512 56,616 56,479----------------------- -------- --- -------- --- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 4. TAXATION ON PROFITS FROM ORDINARY ACTIVITIES Unaudited Unaudited Audited Audited Year ended Year ended Year ended Year ended 2005 2005 2004 2004 £000 £000 £000 £000----------------------- -------- -------- -------- -------Current tax UK corporation tax onprofits for the year 1,991 1,204Overseas tax payable 605 1,024Adjustment in respectof previous years 53 15Associates - 148----------------------- -------- -------- -------- -------Total current tax 2,649 2,391Deferred taxOrigination andreversal of timingdifferences 41 (358)Movement in deferredtax provision 41 (358)----------------------- -------- -------- -------- -------Taxation on profit onordinary activities 2,690 2,033----------------------- -------- -------- -------- ------- The tax assessed for the year differs from that obtained by using the standard rate of corporation tax in the UK. The differences are explained below: Unaudited Audited Year ended Year ended 2005 2004 £000 £000----------------------- -------- ------- -------- -------Profit on ordinaryactivities before tax 5,769 4,020 Profit on ordinary activities at the standardrate of corporationtax in the UK of 30%(2003: 30%) 1,731 1,206 Effects of:Expenses not deductiblefor tax 258 150Float expenses notdeductible for tax - 379Goodwill amortisation 506 233Exchange adjustmenttaken to reservessubject to tax - 81Tax losses Carriedforward 204 31Differences betweencapital allowances anddepreciation 30 (25)Short term timingdifferences (163) 175Short term timing differences due to provision onoptionsand phantom bonusaccruals 49 214Adjustment to taxcharge in respect ofprevious years 53 15Tax rate differences (19) (68)----------------------- -------- ------- -------- -------Current tax charge foryear 2,649 2,391----------------------- -------- ------- -------- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 5. Dividends Unaudited Audited Year ended Year ended 2005 2004 £000 £000 -------- -------Paid prior to reorganisation and flotation(1) Ordinary shares of £1:£0 per share (2004: £144) - 1,800 Ordinary shares of £1:£0 per share(2004: £135(2)) - 338 'B' shares of £1:£0per share (2004: £41,100) - 164 'C' shares of £1:£0 er share (2004: £10,924) - 11----------------------- -------- ------- - 2,313 Interim dividend ofM&C Saatchi plcInterim dividend of 0.77p per share (2004: Nil) 416 -M&C Saatchi plc (3) (2004: 1.16p) 629 ------------------------ -------- ------- 1,045 2,313 -------- ------- (1) These 2004 dividends were paid by M&C Saatchi Worldwide Limited (theprevious ultimate holding company of the M&C Saatchi Group). Its share capitalbefore reorganisation consisted of 12,500 ordinary shares of £1, 4 B shares of£1 and 1 C share of £1.(2) This 2004 Dividend waived by all the ordinary £1 shareholders with theexception of Charles Saatchi, who held 2,500 shares.(3) In line with FRS 21, dividends agreed after balance sheet date are notaccrued in the accounts. The proposed final 2005 dividend is 1.78p per share,making a total dividend per share of 2.55p (£1,382k) for the year. M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 6. Earnings per shareBasic and diluted earnings per share are calculated by dividing profit after taxand minority interest by the number of shares in issue during the year.Earnings per share are calculated as follows: Unaudited Audited Year ended Year ended 2005 2004 £000 £000 - -------- --------BasicProfit for the year £2,416,000 £1,456,000 Weighted average number of ordinary shares 54,206,799 42,542,000 Basic earnings per share 4.46p 3.42p DilutedProfit for the year £2,416,000 £1,456,000 Weighted average number of ordinary shares 54,747,997 42,732,000 Basic earnings per share 4.41p 3.41p On 31st December 2005 there were 670,634 (2004: 411,050) outstanding options.The weighted average for the year was 541,198 (2004:190,322). M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 7. Reserves Ordinary Share Share Profit share premium Merger option and loss capital account reserve reserve account Totalgroup £000 £000 £000 £000 £000 £000------------------ ------- ------- ------- ------- ------- -------At 1 January 2005(audited) 542 9,618 15,959 514 3,577 30,210Exchange differences - - - - (50) (50)Issue of options - - - 85 - 85Merger reserverelease on goodwillamortisation - - (1,203) - 1,203 -Dividends - - - - (1,045) (1,045)Retained profit forthe year - - - - 2,416 2,416------------------ ------- ------- ------- ------- ------- -------At 31 December 2005(unaudited) 542 9,618 14,756 599 6,101 31,616------------------ ------- ------- ------- ------- ------- ------- 8. Reconciliation of movement in shareholders' funds Unaudited Audited Year ended Year ended 2005 2004 group group £000 £000----------------------- -------- -------Profit for the financial year- Group 2,497 1,140- Associates (81) 316Dividend (1,045) (2,313)----------------------- -------- ------- 1,371 (857) Exchange differences (50) 260Issue of shares - 27,155Share issue cost - (835)Issue of options 85 514----------------------- -------- ------- Net addition/(reduction) toshareholders' funds 1,406 26,237Opening shareholders' funds 30,210 3,973----------------------- -------- -------Closing shareholders' funds 31,616 30,210----------------------- -------- ------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 9. NET CASH INFLOW FROM OPERATING ACTIVITIES Unaudited Audited Year ended Year ended 2005 2004 £000 £000----------------------- -------- -------Operating profit 4,489 2,898Amortisation of intangible fixed assets 1,688 777Non cash flow expenses associated withreorganisation - 460Depreciation 1,183 1,167(Loss)/ (profit) on sale of tangible fixed assets 59 (34)Decrease / (increase) in work in progress 224 (2,062)(Increase) in debtors (3,482) (16,233)Increase in creditors 2,428 17,902Option charge 85 -Exchange differences (78) 78----------------------- -------- ------- 6,596 4,953----------------------- -------- ------- 10. ANALYSIS OF CHANGES IN NET FUNDS Balance at Balance at 01-Jan Cash Finance Exchange 31-Dec 2005 inflow leases movements 2005 (Audited) (Unaudited) £000 £000 £000 £000 £000--------------- -------- ------- ------- --------- ---------Cash at bank and in hand 17,323 2,967 - 196 20,486Overdrafts - (29) - - (29)--------------- -------- ------- ------- --------- --------- 17,323 2,938 - 196 20,457Finance leases (244) 142 (14) (12) (128)--------------- -------- ------- ------- --------- ---------Total 17,079 3,080 (14) 184 20,329--------------- -------- ------- ------- --------- --------- M&C SAATCHI PLC NOTES FORMING PART OF THE PRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED31st DECEMBER 2005 (Continued) 11. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Unaudited Unaudited Audited Audited Year ended Year ended Year ended Year ended 2005 2005 2004 2004 £000 £000 £000 £000----------------------- -------- -------- ------- -------Increase in cash in theyear 2,967 12,375Cash outflow from decreaseIn lease financing 142 225Inception of financeleases (14) (31)Exchange differences 184 (87)Overdraft (29) -Cash outflow fromrepayment of bank loan - 21----------------------- -------- -------- ------- -------Movement in net funds inthe year 3,250 12,503Net funds at start of year 17,079 4,576----------------------- -------- -------- ------- -------Net funds at end of year 20,329 17,079----------------------- -------- -------- ------- ------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
M&C Saatchi