22nd Feb 2008 07:00
Spectris PLC22 February 2008 Embargoed until 07.00, Friday 22 February 2008 2007 PRELIMINARY RESULTS Spectris plc, the productivity-enhancing instrumentation and controls company,announces preliminary results for the year ended 31 December 2007. 2007 2006 Change Change at CER** Sales from continuing businesses (£m)# 659.8 642.6 +2.7% +6.5%Adjusted operating profit from 104.3 83.2 +25% +35%continuing businesses (£m)# *Adjusted operating profit (£m) * 104.8 85.7 +22%Adjusted profit before tax (£m)* 98.0 76.3 +28%Adjusted earnings per share (pence)* 58.1 43.7 +33%Dividend (pence) 21.0 17.5 +20% StatutorySales (£m) 668.4 684.5 -2.4%Profit before tax (£m) 118.1 85.6 +38%Basic earnings per share (pence) 70.9 49.4 +44% # Continuing businesses exclude businesses divested * Adjusted figures are stated before amortisation of acquisition-related intangible assets, goodwillimpairment charges, profits or losses on termination or disposal of businesses or major fixed assets,unrealised changes in the fair value of financial instruments, related tax effects and other tax itemswhich do not form part of the underlying tax rate **Constant exchange rates Highlights • Strong performance - sales, profits and cash flow all increase • Growth across all sectors and major geographies • Operating margins of 15.8% • Business groupings aligned with applications and end user industries • Strategic focus on platforms for growth Commenting on the results, John O'Higgins, Chief Executive, said: "2007 was a successful year, in which the company delivered a return on sales inexcess of 15%. Our broad spread of geographies and end user markets, and strongproduct offering, ensure that we are well placed to maintain good progressdespite an economic outlook which is less certain. The current year has startedwell, with encouraging prospects across the multiple industries and regions weserve." CHAIRMAN'S STATEMENT Overview Spectris performed well in 2007, with sales, profits and earnings per share allincreasing compared with the prior year, after adjusting for disposals andacquisitions. Total group sales were £668.4 million compared with £684.5 millionin the prior year. Excluding the effect of disposals during the first half of2007, sales from continuing businesses increased by 2.7% to £659.8 million(2006: £642.6 million), or 6.5% at constant currencies. Total group adjusted operating profit increased by 22% to £104.8 million (2006:£85.7 million)(S). Group operating margins increased by 2.9 percentage points to15.8% of sales. Profit before tax increased by 28% to £98.0 million (2006: £76.3million) and earnings per share increased by 33% to 58.1p (2006: 43.7p).Operating cash conversion was strong, with 99% of operating profit converted tooperating cash. Net proceeds from disposals were £29.8 million. The buy-back of8.9 million shares during 2007 absorbed £79.2 million, with the result that netdebt at the end of the year was £77.3 million, compared with £71.7 million atthe end of December 2006. Net interest costs were £6.7 million, giving anannualised cover of 15.6 times. The Board proposes to pay a final dividend of 15.25p which, combined with theinterim dividend of 5.75p, gives a total of 21.0p (2006: 17.5p), an increase of20%. The dividend will be paid on 20 June 2008 to shareholders on the registerat 30 May 2008. Board changes As previously announced, Andrew Given retired at the May 2007 AGM and JohnHughes joined the Board as a non-executive director in June. Stephen Harris,Business Group Director, resigned from the Board on 31 January 2008. I shall bestanding down at the May 2008 AGM, as announced in November 2006, after twentyyears with the company and will be succeeded as Chairman by John Hughes. To him,to the rest of the Board, and to everyone at Spectris, I convey my thanks andbest wishes for continuing success and prosperity. Outlook 2007 was a successful year, in which the company delivered a return on sales inexcess of 15%. Our broad spread of geographies and end user markets, and strongproduct offering, ensure that we are well placed to maintain good progressdespite an economic outlook which is less certain. The current year has startedwell, with encouraging prospects across the multiple industries and regions weserve. John PoulterChairman (S)Unless otherwise stated, all sales and operating profit figures in the narrative are on a continuing businesses basis and exclude the businesses divested. Figures for operating profit, profit before tax and earnings per share are adjusted measures - for explanation of adjusted figures and reconciliation to the statutory reported figures see Note 2. CHIEF EXECUTIVE'S STATEMENT Overview Spectris delivered a strong performance in 2007, with sales, profits, operatingmargins and cash flow from continuing businesses all improving compared with theprior year. At constant currencies, sales increased by 6.5%, including 1% fromacquisitions, and operating profit increased by 35%. The major geographic regions again showed growth during 2007. The strongestgrowth was seen in Asia, where sales increased by 7% at constant currencies, ledby China. Sales in Europe increased by over 3% at constant currencies. Sales inNorth America increased by 6%, helped by the acquisition of the IPI businessacquired in 2006. Sales in the rest of the world increased by 32%, reflectingthe growing importance of industrialising markets such as Russia, South Americaand Africa. Operating margins improved to 15.8% (2006: 12.9%), as the restructuring andother business improvement actions taken in prior years continued to deliverresults. Strategy Our objective is to deliver shareholder value over the long term by supplyingproductivity-enhancing solutions for our customers. Our strategy is based onfive elements: strengthening market positions through innovation; increasingregional expansion with the focus on emerging markets; growing existingbusinesses through acquisition; focusing on operational excellence; building ourpresence in key strategic growth areas. In order to give better clarity to our operations, we have re-aligned theactivities of our business segments to reflect more closely the applications andend user industries we serve. Going forward, our businesses will be reported infour segments. These are: Materials Analysis, Test & Measurement, In-lineInstrumentation and Industrial Controls. Figures for prior years have beenrestated accordingly. Figures at group level and key performance indicators arenot affected by these changes. For comparative purposes, the key results for thegroup based upon the prior segmentation are shown in Note 2. Two acquisitions were made during the second half of the year. On 2 July,Particle Measuring Systems acquired the distribution activities of QuestTechnologies in Singapore, giving it an increased presence in Asia. On 1November, Servomex acquired Controle Analytique, a leading provider ofspecialist gas analysis products based in Canada. The acquisition enablesServomex to increase its product offering in the global industrial gas marketand also provides opportunities for the company to meet the needs of customersin the semiconductor market. Research and development expenditure increased to £45.2 million, whichrepresents 7% of group sales, enabling the businesses to maintain their leadingmarket positions and continue to meet the productivity challenges theircustomers face. Operating review Materials Analysis Materials Analysis provides a wide range of analytical instrumentation andsystems for particle and material characterisation. The companies in thissegment are Malvern Instruments, PANalytical and Particle Measuring Systems.These businesses generally sell directly to global end user customers andprovide aftermarket services such as technical support, instrument calibrationand replacement consumables. Applications are typically in batch processmanufacturing industries and research and development laboratories. Industriesserved include semiconductor, pharmaceuticals and life sciences, withapplications also in metals, minerals and mining. The total market for materialsanalysis instrumentation is estimated to be around £9 billion. Sales in Materials Analysis increased by 4% to £213.8 million, and by 8% atconstant currencies. Operating profit increased by 15% to £34.8 million andoperating margins improved by 1.6 percentage points to 16.3%. Restructuringcharges were £0.1 million, compared with £0.5 million in the prior year. Salesto the metals, minerals and mining industries represented 33% of total sales in2007, with pharmaceuticals and life sciences representing 22%, research anddevelopment applications 17%, semiconductors and electronics 10%, and otherindustries 18%. The metals and mining industries continued to grow, particularly in Australia,South America and southern Africa, benefiting Malvern and PANalytical. Malvern'sin-line particle characterisation products saw strong growth in areas such ascement and print toners as the productivity benefits achieved by existingcustomers led them to extend the use of these products into their otherfacilities. Demand from the pharmaceutical industry continued to be strong. Malvern'srecently launched Morphologi G3 product, an automated particle characterisationsystem, has been positively received by large pharmaceutical manufacturers, witha significant number of orders already placed. Particle characterisation iscritical to the pharmaceutical industry, from protein size and conformationanalysis at the discovery stage through to on-line analysis during manufacture.Both Malvern and PANalytical have seen good growth for their instrumentationfrom emerging regions such as India and China, where the establishment of R&Dand production centres by leading pharmaceutical manufacturers is increasing, asis the production of drugs by generic manufacturers. At Particle MeasuringSystems good growth in contamination detection systems for the pharmaceuticalindustry compensated for cyclically weaker demand in the semiconductor industry. Investment in research and development continued in the semiconductor industry,benefiting PANalytical. During the year, Particle Measuring Systems launched theAirSentry II product for contamination monitoring in the semiconductor andelectronics industries. This product features a patented ion mobilityspectrometry technique and is used for real-time monitoring of airbornemolecular contamination, a critical factor in semiconductor processing and harddisk drive and liquid crystal display manufacturing. Test and Measurement Test and Measurement supplies test and measuring equipment for research anddevelopment, principally to the aerospace and automotive industries. Furtherapplications are in consumer electronics and the environmental monitoringmarket. The companies in this segment are Bruel & Kjaer Sound and Vibration andHBM. Products include sensors and controls for noise, vibration, weight andstress measurement, data acquisition hardware and software, and advanced dataanalysis applications. Services such as consultancy and instrument calibrationand repair are also offered. The general industrial test and measurement marketis estimated at around £2 billion. Sales in Test and Measurement increased by 3% to £207.5 million, and by 5% atconstant currencies. Operating profit increased by 39% to £26.2 million andoperating margins improved by 3.3 percentage points to 12.6%. Restructuringcharges were £0.1 million compared with £2.1 million in the prior year. Sales tothe transportation industry (primarily automotive and aerospace) represented 32%of total sales in 2007, with machine builders representing 24%, environmentalmonitoring 11%, semiconductor, telecoms and electronics 8%, research anddevelopment 7% and other industries 18%. Demand from the automotive industry continued to grow, particularly in Europe,as manufacturers maintained their new model development programmes andendeavoured to meet the challenge of testing prototypes in ever shorter timeframes. Bruel & Kjaer increased sales to the leading automotive manufacturersand also grew their support and calibration services offering. In September HBMlaunched the QuantumX data acquisition system for test and measurement markets,particularly the automotive and aerospace markets, and a significant order hasalready been received from the BMW Group for the new engine, gearbox and powertrain test stands being developed at their Research and Innovation Center inMunich. In the aerospace industry, the increased use of new carbon fibre compositematerials in lightweight aerospace structures is setting new demands forstructural testing and stress analysis, benefiting HBM. In environmental monitoring, Bruel & Kjaer's airport noise monitoring system wasselected by the Metropolitan Washington Airports Authority, serving ReaganNational Airport and Washington Dulles International Airport. The company alsoinstalled an airport noise and flight track monitoring system at Zurich airportand noise monitoring systems in several cities in China. In-line Instrumentation In-line Instrumentation provides process analytical solutions, asset monitoringand control, gauging, and on-line controls for both primary processingindustries (oil and gas, energy generation, petrochemicals, pulp and paper) andthe converting markets (plastics, rubber, film). The companies in this segmentare Beta LaserMike, Bruel & Kjaer Vibro, BTG, Fusion UV Systems, NDC InfraredEngineering and Servomex. These businesses sell directly to global end usercustomers and systems integrators and the majority of sales are for new andupgraded production facilities. All businesses provide aftermarket services. Theglobal market for in-line instrumentation is estimated to be in excess of £1billion. Sales in In-line Instrumentation increased by 2% to £200.2 million, and by 6% atconstant currencies. Operating profit increased by 32% to £34.7 million andoperating margins improved by 3.9 percentage points to 17.3%. Restructuringcharges were £0.7 million in 2007, compared with £5.1 million in the prior year.Sales to the pulp and paper industry represented 36% of total sales in 2007,with the converting businesses representing 29%, energy generation 12% and otherindustries 23%. Investment in capital-intensive facilities in the continuous process industrieswas strong. In the pulp and paper industry, the need to reduce production costsand become more energy-efficient has led to a shift in production facilitiesfrom the west to regions such as South America and Asia. This has benefited BTG,particularly the Duroblade business where, in response to the industry focus onpaper quality, the company has moved from producing ceramic blades to developingblades tailored for different types of paper applications. In the past twoyears, BTG has launched a number of new products for metering and doctoringsolutions for specific coating processes and is a recognised innovator in thismarket. Good demand in the energy and petrochemical markets benefited Bruel & KjaerVibro and Servomex, as producers expanded their processing facilities in thelight of higher oil prices. Bruel & Kjaer Vibro received a number of high valueorders from oil and gas customers for its condition monitoring systems. AtServomex, demand for gas analysers was strong in the hydrocarbon business inNorth America and Canada and in the industrial gas business in Europe and theMiddle East. On 1 November, Servomex acquired Controle Analytique, a leadingprovider of specialist gas analysis products based in Canada, enabling thecompany to increase its product offering in the global industrial gas market. In the converting industry, Fusion UV Systems, NDC and Beta LaserMike all sawgood sales growth. Fusion UV Systems benefited from continued growth in the flatpanel display market, one of the fastest-growing sectors in the electronicsindustry, as the quality and size of flat panel televisions increases. Fusion'sUV technology is used to cure the anti-reflective functionalised film applied tothe screen. Good demand from the converting market in China benefited both BetaLaserMike and NDC in their respective markets. Industrial Controls Industrial Controls supplies automation and controls for general manufacturingprocesses. The companies in this segment are Microscan and Red Lion Controls,which supply bar code scanners, panel meters, human machine interfaces,industrial controllers and networking products. This segment sells indirectly toend users via distributors as well as directly to original equipmentmanufacturers (OEMs), with a significant proportion of repeat business fromexisting customers. The total market for industrial controls is estimated to bein excess of £10 billion. Sales in Industrial Controls were £38.3 million, compared with £38.9 million in2006. Sales increased by 6% at constant currencies. Operating profit increasedby 10% to £8.6 million and operating margins improved by 2.4 percentage pointsto 22.5%. Sales through distributor channels represented 82% of total sales in2007, with the semiconductor, electronics and telecoms industries representing7%, pharmaceuticals 4% and other industries 7%. Microscan saw strong sales growth in Europe and Asia, in part due to theincreasing move of electronics assembly operations to Asia, particularly China,Taiwan and Korea. The company launched the Quadrus MINI Velocity scanner, theworld's fastest mini imager, which can read up to 45 bar codes per second. Red Lion Controls also grew sales internationally, with its human machineinterface and data station products proving particularly successful. Humanmachine interfaces are being used increasingly in industrial applications,displacing traditional analogue displays, due to the increased operational dataand better interfacing with other plant systems they are able to provide. Looking ahead Over the longer term we are well positioned, both in terms of geographicexposure and end user markets. We have a clearly defined strategy which willdeliver both top- line and bottom-line performance. John O'HigginsChief Executive FINANCIAL REVIEW Introduction Spectris uses adjusted figures as key performance measures in addition to thosereported under IFRS. Adjusted figures are stated before amortisation ofacquisition-related intangible assets, goodwill impairment charges, profits orlosses on the termination or disposal of businesses or major fixed assets,unrealised changes in the fair value of financial instruments, related taxeffects and other tax items which do not form part of the underlying tax rate.Unless otherwise stated all profit and earnings figures referred to below areadjusted measures. The Spectrum and Ircon businesses were divested in February 2007 and June 2007respectively (as described further below). The results of these two businessesare not considered to be sufficiently material to be presented as discontinuedoperations under IFRS. However, in order to aid understanding of the results forthe ongoing business, references below to the sales and operating profit resultsfor "continuing businesses" exclude the results of these two businesses and thebusiness sold in April 2006 (Arcom). Operating performance 2007 2006 Increase/ (Decrease)Total groupSales (£m) 668.4 684.5 (2.4%)Operating profit (£m) 104.8 85.7 22%Operating margin 15.7% 12.5% 3.2pp Continuing businessesSales (£m) 659.8 642.6 2.7%Operating profit (£m) 104.3 83.2 25%Operating margin 15.8% 12.9% 2.9pp Total group sales decreased by 2.4% (1.3% increase at constant currencies) andsales in continuing businesses increased by 2.7% (6.5% at constant currencies).The year-on-year impact on sales from acquisitions (acquired in 2006 and 2007)was approximately £6.8 million or 1% of sales. Adjusted operating profit rose by 22% overall (32% at constant currencies) andby 25% (35% at constant currencies) in continuing businesses, with operatingmargins improving from 12.5% to 15.7% overall, and from 12.9% to 15.8% on acontinuing businesses basis. This growth in operating profit was driven by theincrease in sales, an increase in restructuring benefits, a decrease inrestructuring costs, and good cost control. The year-on-year impact on profitsfrom acquisitions was approximately £1.3 million or 1% of profits. Net interest costs, including IAS 19 pension charges but excluding derivativefair value movements, reduced from £9.4 million to £6.8 million. After takingaccount of lower interest costs, adjusted profit before tax increased by 28%from £76.3 million to £98.0 million. Unadjusted operating profit, after including goodwill impairment charges of nil(2006: £1.2 million) and acquisition-related intangible asset amortisation of£1.9 million (2006: £1.8 million), increased by 24% from £82.7 million to £102.9million. Unadjusted profit before tax increased by 38% from £85.6 million to £118.1million. In addition to goodwill impairment charges, acquisition-relatedintangible asset amortisation charges, and profit on disposal of businesses, the2007 unadjusted result includes an unrealised gain of £3.0 million on thegroup's cross-currency interest rate swaps (2006: unrealised gain of £2.8million). Acquisitions and disposals During the year, two of the group's businesses made acquisitions. The totalconsideration, including acquisition expenses and net debt acquired, as well asdeferred and contingent consideration expected to be paid in future years, was£6.6 million. The largest of these acquisitions took place close to the end of2007. These acquisitions contributed £0.6 million of sales during the year.Prior year acquisitions contributed £6.2 million. In February 2007, Spectris sold the Spectrum business to Illinois Tools WorksInc and in June 2007 the Ircon business to Fluke Electronics Corporation fortotal net proceeds (after taking account of transaction costs) of £29.8 million,giving rise to a profit on disposal of £19.0 million (2006: £9.5 million). Taxation The effective tax rate on profits was 28.0% (2006: 28.8%) compared with theweighted average statutory tax rate of 32.3% (2006: 32.1%). The group benefitedfrom utilising brought forward tax losses which had not previously beenrecognised on the balance sheet, and from the favourable closure of prior yeartax returns. The weighted average statutory tax rate is expected to reduce infuture by approximately two percentage points in line with reduced corporate taxrates on profits in several countries where the group operates, principallyGermany. Whilst the effective tax rate is expected to move closer to theweighted average rate over time, it is not expected to increase substantially inthe near future. Earnings per share Adjusted earnings per share increased by 33% from 43.7p to 58.1p, reflecting thenet impact of a 28% increase in adjusted profit before tax and the reduced taxrates. Basic earnings per share increased by 44% from 49.4p to 70.9p. The differencesbetween the two measures are shown in the table below. 2007 2006 Pence Pence Basic earnings per share 70.9 49.4Goodwill impairment charges and acquisition-related intangible 1.6 2.4asset amortisationProfit on disposal of business (15.6) (7.6)Unrealised changes in fair value of financial instruments (2.4) (2.3)Tax effect of the above and other tax items that do not form part 3.6 1.8of the underlying tax rate ____ ____Adjusted earnings per share 58.1 43.7 The weighted average number of shares outstanding during the year decreased from124.3 million to 121.6 million. This decrease arose largely as a result of theshare buy-back programme. Cash Flow 2007 2006Operating cash flow £m £mAdjusted operating profit 104.8 85.7Add back: depreciation 13.1 13.2Working capital movement/other (1.5) 3.1Net cash flow from operating activities before capital expenditure 116.4 102.0Capital expenditure (12.7) (10.5)Operating cash flow 103.7 91.5Cash conversion 99% 107% Non-operating cash flowTax paid (23.8) (21.5)Net interest paid (6.3) (11.2)Dividends paid (22.2) (20.2)Acquisitions (6.0) (13.6)Disposals 29.8 13.3Share buy-back (79.2) -Exercise of share options 4.1 5.3(Purchase)/sale of own shares by Employee Benefit Trust (1.6) 0.9Exchange/other (4.1) 3.7Total non-operating cash flow (109.3) (43.3)Operating cash flow 103.7 91.5Movement in net debt (5.6) 48.2 Cash conversion of operating profit to operating cash was 99% (2006: 107%). Thiswas achieved mainly through continued control of working capital. The year endworking capital expressed as a percentage of sales reduced from 14.8% to 14.2%.Average working capital expressed as a percentage of sales reduced from 13.7% to13.5%. Capital expenditure during the year equated to 1.9% of sales (2006: 1.5%) and,at £12.7 million (2006: £10.5 million), was 97% of depreciation (2006: 80%). The level of tax paid in 2007 was higher than in 2006 due primarily to theincrease in profits. Overall, net debt increased by £5.6 million (2006: reduction of £48.2 million)from £71.7 million to £77.3 million. Interest cost, excluding the financingcharge arising from IAS 19, was covered by adjusted operating profit 15.6 times(2006: 9.4 times), providing significant headroom over and above bankingcovenants which require a minimum of 3 times cover. Financing and Treasury The group finances its operations from both retained earnings and third-partyborrowings, the majority of which are currently at fixed rates of interest. The group's principal borrowings relate to its 2000 and 2003 US PrivatePlacement loan notes. The $100 million 2003 US Private Placement has beenswapped into euro-denominated borrowings using a cross-currency interest rateswap. At the year end, 96% of group borrowings were at fixed interest rates (2006:97%). The ageing profile at the year end showed that 3% of debt is due tomature within one year (2006: 4%), 31% of debt is due to mature in between oneand five years (2006: 31%) and the remaining 66% in more than five years (2006:65%). Share buy-back The group completed the £75 million share buy-back programme announced inFebruary 2007 in November 2007, and subsequently extended the programme byadditional share repurchases up to the limit granted by the shareholders at the2007 AGM. Currency The group has both translational and transactional currency exposures.Translational exposures arise on the translation of overseas company resultsinto sterling. Transactional exposures arise where the currency of sale orpurchase invoices differs from the functional currency in which each companyprepares its local accounts. The transactional exposures include situationswhere foreign currency denominated trade debtor, trade creditor and cashbalances are held. The largest transactional exposures are to the US dollar and, to a lesserextent, the euro and the Japanese yen. The largest translational exposures areto the US dollar, the euro and the Danish krone. The table below shows the keyaverage exchange rates during 2007 and 2006. Translational currency exposuresare not hedged. 2007 2006 (average) (average) US $ 2.00 1.84Euro 1.46 1.47Yen 236 214 Forward exchange contracts are used to hedge forecast sale transactions wherethere is reasonable certainty of an exposure. At 31 December 2007, approximately61% of the estimated US dollar and Japanese yen exposures for 2008 were hedgedusing forward exchange contacts. Defined benefit pension schemes Operating profit includes a defined benefit pension scheme current servicecharge of £0.9 million (2006: £0.8 million). The net pension liability in thebalance sheet (before taking account of the related deferred tax asset) hasreduced to £11.1 million (2006: £18.8 million), largely as a consequence of cashcontributions into the schemes and actuarial gains on the scheme assets. During2007, the group made cash contributions into the defined benefit pension schemeamounting to £3.1 million (2006: £3.3 million). Clive WatsonGroup Finance Director Contact: John O'Higgins, Chief Executive, Spectris plc Tel: 01784 470470 Clive Watson, Group Finance Director, Spectris plc Tel: 01784 470470 Richard Mountain, Financial Dynamics Tel: 020 7269 7186 A table of results is attached. The meeting with analysts will be available as a live webcast on the company'swebsite at www.spectris.com, commencing at 08.30, and a recording will be postedon the website shortly after the meeting. Copies of this notice are available to the public from the registered office atStation Road, Egham, Surrey TW20 9NP, and on the company's website atwww.spectris.com. CONSOLIDATED INCOME STATEMENTFor the year ended 31 December 2007 Notes 2007 2006 £m £m Continuing operations3 Revenue 668.4 684.5 Cost of sales (283.8) (288.7) Gross profit 384.6 395.8 Indirect production and engineering expenses (57.4) (60.8) Sales and marketing expenses (158.0) (171.6) Administrative expenses (66.3) (80.7) 102.9 82.7 3 Operating profit Profit on disposal of businesses 19.0 9.54 Financial income 9.6 9.04 Finance costs (13.4) (15.6) Profit before tax 118.1 85.65 Taxation - UK (2.6) (0.5)5 Taxation - Overseas (29.3) (23.7) Total taxation (31.9) (24.2) Profit after tax for the year from continuing operations 86.2 61.4 attributable to equity shareholders 7 Basic earnings per share 70.9p 49.4p7 Diluted earnings per share 70.6p 49.2p6 Interim dividends paid and final dividends proposed for the 21.0p 17.5p year (per share)6 Dividends paid during the year (per share) 18.3p 16.2p Spectris uses adjusted figures as key performance measures in addition to thosereported under adopted IFRS. Adjusted figures are stated before amortisation ofacquisition-related intangible assets, goodwill impairment charges, profits orlosses on termination or disposal of businesses or major fixed assets,unrealised changes in the fair value of financial instruments, related taxeffects and other tax items which do not form part of the underlying tax rate. Reconciliations showing how the adjusted performance measures are derived fromthose reported under adopted IFRS are set out in Note 2. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 31 December 2007 2007 2006 £m £mNet (loss)/gain on effective portion of changes in fair value of (1.1) 1.7forward exchange contractsAssociated deferred tax on changes in fair value of forward exchange 0.3 (0.5)contractsNet (loss)/gain on changes in fair value of effective portion of net (6.3) 7.6investment hedgesActuarial gains arising on pension schemes 5.9 2.2Current and deferred tax on actuarial gains on pension schemes (3.7) (0.6)Foreign exchange movements on translation of overseas operations 26.0 (19.9)Current and deferred tax on foreign exchange movements recognised (0.6) (0.1)directly in equity Net income/(expense) recognised in equity in respect of year 20.5 (9.6) Profit for the year 86.2 61.4 Total recognised income and expense for the year attributable to 106.7 51.8equity shareholders CONSOLIDATED BALANCE SHEETAt 31 December 2007 2007 2006 £m £mAssetsNon-current assetsGoodwill 223.1 207.4Other intangible assets 12.2 8.0Property, plant & equipment 87.7 83.2Deferred tax asset 25.7 37.6 348.7 336.2Current assetsInventories 92.8 81.6Taxation recoverable - 0.5Trade and other receivables 153.7 145.4Derivative financial instruments 0.1 1.3Cash and cash equivalents 51.4 51.0Assets held for sale 1.2 17.3 299.2 297.1Total assets 647.9 633.3 LiabilitiesCurrent liabilitiesShort-term borrowings (4.4) (4.3)Trade and other payables (141.7) (124.2)Current tax liabilities (32.8) (32.9)Provisions (21.5) (21.8)Liabilities held for sale - (6.0) (200.4) (189.2)Net current assets 98.8 107.9Non-current liabilitiesMedium and long-term borrowings (108.1) (108.6)Derivative financial instruments (16.1) (12.8)Other payables (8.4) (8.8)Retirement benefit obligations (11.1) (18.8)Deferred tax liability (1.0) (1.0) (144.7) (150.0)Total liabilities (345.1) (339.2)Net assets 302.8 294.1 EquityIssued share capital 6.2 6.2Share premium 231.4 231.1Retained earnings 63.8 74.0Translation reserve (2.1) (21.8)Hedging reserve 0.1 1.2Merger reserve 3.1 3.1Capital redemption reserve 0.3 0.3Equity shareholders' funds 302.8 294.1Total equity and liabilities 647.9 633.3 CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2007 Notes 2007 2006 £m £m Cash flows from operating activities Profit after tax 86.2 61.4 Adjustments for:5 Tax 31.9 24.2 Profit on disposal of businesses (19.0) (9.5)4 Finance costs 13.4 15.64 Financial income (9.6) (9.0) Depreciation 13.1 13.2 Amortisation of intangible assets 2.0 1.9 Goodwill reduction - 1.2 (Gain)/loss on sale of property, plant & equipment (0.6) 0.5 Equity settled share-based payment expense 0.9 0.6 Operating profit before changes in working capital and 118.3 100.1 provisions Increase in trade and other receivables (2.0) (8.9) Increase in inventories (6.9) (1.0) Increase in trade and other payables 10.1 4.4 (Decrease)/increase in provisions and employee benefits (4.5) 7.4 Corporation tax paid (23.8) (21.5) Net cash from operating activities 91.2 80.5 Cash flows from investing activities Purchase of property, plant & equipment (12.7) (10.5) Proceeds from sale of property, plant & equipment 1.4 - Acquisition of businesses, net of cash acquired (6.0) (13.6) Disposal of businesses 29.8 13.3 Interest received 1.9 2.0 Net cash flows used in investing activities 14.4 (8.8) Cash flows from financing activities Interest paid (8.2) (13.2)6 Dividends paid to equity holders of the parent (22.2) (20.2) Share options exercised by issue of share capital 0.2 1.5 Share options exercised from shares held by Employee 1.0 3.8 Benefit Trust Share options exercised from treasury shares 2.9 - (Purchase)/sale of own shares by Employee Benefit Trust (1.6) 0.9 Purchase of own shares - treasury shares (79.2) - Cancellation of cross-currency swap - (2.9) Repayment of borrowings - (65.9) Decrease in finance lease liabilities (0.1) (0.4) Net cash flows used in financing activities (107.2) (96.4) Net decrease in cash and cash equivalents (1.6) (24.7) Cash and cash equivalents at beginning of year 47.0 76.1 Effect of foreign exchange rate changes 2.0 (4.4) Cash and cash equivalents at end of year 47.4 47.0 Reconciliation of changes in cash and cash equivalents to movements in net debt 2007 2006 £m £m Net decrease in cash and cash equivalents (1.6) (24.7) Repayment of borrowings - 65.9 Decrease in finance lease liabilities 0.1 0.4 Effect of foreign exchange rate changes (4.1) 6.6 Movement in net debt (5.6) 48.2 Net debt at start of year (71.7) (119.9) Net debt at end of year (77.3) (71.7) RECONCILIATION OF MOVEMENT IN CAPITAL AND RESERVESFor the year ended 31 December 2007 Capital Share Share Retained Translation Hedging Merger redemption Total capital premium earnings reserve reserve reserve reserve equity £m £m £m £m £m £m £m £m Equity at 1 January 2006 (restated)* 6.2 229.1 26.8 (9.5) (0.5) 3.1 0.3 255.5 Gains and losses - year ended 31 December 2006Total recognised income and expense - - 62.4 (12.3) 1.7 - - 51.8 Distributions to and transactions withshareholdersEquity dividends paid - - (20.2) - - - - (20.2)Share-based payments - - 0.6 - - - - 0.6Share options exercised from shares - - 3.8 - - - - 3.8held by Employee Benefit TrustSale of own shares by Employee - - 0.9 - - - - 0.9Benefit TrustExercise of equity share options - 2.0 (0.3) - - - - 1.7Equity at 31 December 2006 6.2 231.1 74.0 (21.8) 1.2 3.1 0.3 294.1(restated)* Gains and losses - year ended 31 December 2007Total recognised income and expense - - 88.1 19.7 (1.1) - - 106.7 Distributions to and transactions withshareholdersEquity dividends paid - - (22.2) - - - - (22.2)Share-based payments - - 0.9 - - - - 0.9Own shares (treasury) purchased - - (79.2) - - - - (79.2)Own shares (Employee Benefit Trust) - - (1.6) - - - - (1.6)purchasedShare options exercised from own shares - - 2.9 - - - - 2.9(treasury) purchasedShare options exercised by issue of - 0.3 (0.1) - - - - 0.2share capitalShare options exercised from shares held by Employee Benefit Trust - - 1.0 - - - - 1.0 Equity at 31 December 2007 6.2 231.4 63.8 (2.1) 0.1 3.1 0.3 302.8 * An amount of £6.7m has been transferred from the Translation reserve toRetained earnings as at 1 January 2006. This reflects the cumulative translationgain that should have been recycled into Financial income and expense prior tothat date. NOTES TO THE ACCOUNTS 1. PRINCIPAL ACCOUNTING POLICIES AND BASIS OF PREPARATION Spectris plc is a limited company incorporated and domiciled in the UnitedKingdom under the Companies Act 1985, whose shares are publicly traded on theLondon Stock Exchange. The group's financial statements have been prepared and approved by thedirectors in accordance with International Financial Reporting Standards asadopted by the EU (adopted IFRS). The financial statements are prepared rounded to the nearest hundred thousand onthe historical cost basis except that derivative financial instruments arestated at fair value and assets classified as held for sale are stated at thelower of carrying amount and fair value less costs to sell. The preparation of financial statements in conformity with adopted IFRS requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and the reported amount of assets and liabilities,income and expenses. The estimates and associated assumptions are continuallyevaluated and are based on historical experience and various other factors thatare believed to be reasonable under the circumstances. Actual results may differfrom these estimates. The estimates and assumptions that have a significanteffect on the carrying amount of assets and liabilities are noted withinspecific accounting policies. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects only thatperiod or in the period of the revision and future periods if the revisionaffects both current and future periods. The accounting policies have been applied consistently by group entities to allperiods presented in these financial statements. The financial statements were authorised for issue by the directors on 22February 2008. 2. ADJUSTED PERFORMANCE MEASURES Spectris uses adjusted figures as key performance measures in addition to thosereported under adopted IFRS. Adjusted figures are stated before amortisation ofacquisition-related intangible assets, goodwill impairment charges, profits orlosses on termination or disposal of businesses or major fixed assets,unrealised changes in the fair value of financial instruments, related taxeffects and other tax items which do not form part of the underlying tax rate(see Note 5). The business segments for which information has been included in these accountsare different from those disclosed in prior years. The results of the groupbased upon the 2006 segmentation are shown at the end of this Note. The newdisclosures for business segments reflect the manner in which the business iscurrently managed by the Board of Directors. Prior year comparatives have beenrestated accordingly. The adjusted performance measures are derived from the reported figures underadopted IFRS as follows: Adjusted sales 2007 2006 £m £mSales as reported under adopted IFRS 668.4 684.5Divested businesses (8.6) (41.9)Adjusted sales for continuing businesses 659.8 642.6 Adjusted sales by segment - 2007 Materials Test & In-line Industrial 2007 Analysis Measurement Instrumentation Controls Total £m £m £m £m £mSales as reported under adopted IFRS 213.8 207.5 208.8 38.3 668.4Divested businesses - - (8.6) - (8.6)Adjusted sales for continuing businesses 213.8 207.5 200.2 38.3 659.8 Adjusted sales by segment - 2006restated Materials Test & In-line Industrial 2006 Analysis Measurement Instrumentation Controls Total £m £m £m £m £mSales as reported under adopted IFRS 205.7 201.5 234.5 42.8 684.5Divested businesses - - (38.0) (3.9) (41.9)Adjusted sales for continuing businesses 205.7 201.5 196.5 38.9 642.6 Adjusted operating profit 2007 2006 £m £mOperating profit as reported under adopted IFRS 102.9 82.7Amortisation of acquisition-related intangible 1.9 1.8assetsGoodwill reduction - 1.2Adjusted operating profit 104.8 85.7Divested businesses (0.5) (2.5)Adjusted operating profit for continuing businesses 104.3 83.2Restructuring charges for continuing businesses 0.9 7.7Adjusted operating profit for continuing businessesbefore restructuring charges 105.2 90.9 Adjusted operating profit by segment - Materials Test & In-line Industrial 20072007 Analysis Measurement Instrumentation Controls Total £m £m £m £m £mSegment result under adopted IFRS 33.5 26.0 34.8 8.6 102.9Amortisation of acquisition-related intangible assets 1.3 0.2 0.4 - 1.9Adjusted operating profit 34.8 26.2 35.2 8.6 104.8Divested businesses - - (0.5) - (0.5)Adjusted operating profit for continuingbusinesses 34.8 26.2 34.7 8.6 104.3Restructuring charges for continuingbusinesses 0.1 0.1 0.7 - 0.9Adjusted operating profit for continuingbusinesses before restructuring charges 34.9 26.3 35.4 8.6 105.2 Adjusted operating profit by segment - Materials Test & In-line Industrial 20062006 restated Analysis Measurement Instrumentation Controls Total £m £m £m £m £mSegment result under adopted IFRS 28.2 18.4 28.1 8.0 82.7Amortisation of acquisition-related intangible assets 1.1 0.6 0.1 - 1.8Goodwill impairment charge 1.2 - - - 1.2Adjusted operating profit 30.5 19.0 28.2 8.0 85.7Divested businesses - - (2.3) (0.2) (2.5)Corporate cost reallocation (0.2) (0.2) 0.4 - -Adjusted operating profit for continuingbusinesses 30.3 18.8 26.3 7.8 83.2Restructuring charges for continuingbusinesses 0.5 2.1 5.1 - 7.7Adjusted operating profit for continuingbusinesses before restructuring charges 30.8 20.9 31.4 7.8 90.9 The adjustment for corporate cost reallocation is a consequence of theadjustment for divested businesses and reallocates all corporate costs to thecontinuing businesses. Adjusted profit before tax 2007 2006 £m £mProfit before tax as reported under adopted IFRS 118.1 85.6Amortisation of acquisition-related intangible assets 1.9 1.8Goodwill reduction - 1.2Profit on disposal of businesses (19.0) (9.5)Unrealised change in fair value of cross-currency interest (3.0) (2.8)rate swapsAdjusted profit before tax 98.0 76.3 Operating cash flow 2007 2006 £m £mNet cash from operating activities under adopted IFRS 91.2 80.5Corporation tax paid 23.8 21.5Purchase of property, plant & equipment (12.7) (10.5)Proceeds from sale of property, plant & equipment 1.4 -Operating cash flow for management purposes 103.7 91.5 Adjusted earnings per share 2007 2006 £m £mProfit after tax as reported under adopted IFRS 86.2 61.4Adjusted for:Amortisation of acquisition-related intangible 1.9 1.8assetsGoodwill reduction - 1.2Profit on disposal of businesses (19.0) (9.5)Unrealised change in fair value of cross-currency interest rate swaps (3.0) (2.8)Tax effect of the above 4.5 3.4Other tax items not forming part of the underlying tax rate - (1.2)Adjusted earnings 70.6 54.3Weighted average number of shares outstanding (millions) 121.6 124.3Adjusted earnings per share (pence) 58.1 43.7 Adjusted diluted earnings per share 2007 2006Adjusted earnings (as above) (£m) 70.6 54.3Diluted weighted average number of shares outstanding (millions) 122.1 124.7Adjusted diluted earnings per share (pence) 57.8 43.5 Analysis of net debt for management purposes 2007 2006 £m £mBank overdrafts 4.0 4.0Bank loans - secured 2.5 2.7Unsecured loan notes 106.0 106.1Cross-currency interest rate swaps - currency portion 16.2 9.8Finance lease liabilities - 0.1Total borrowings 128.7 122.7Cash balances (51.4) (51.0)Net debt 77.3 71.7 Analysis of revenue by geographical destination 2007 2006for continuing businesses £m £mUK 28.5 28.6Continental Europe 254.6 244.5North America 152.5 157.0Japan 53.6 55.5China 55.0 49.0Rest of Asia Pacific 73.1 74.7Rest of the world 42.5 33.3Total continuing businesses 659.8 642.6Divested businesses 8.6 41.9Group total 668.4 684.5 Results of the group based upon the 2006 segmentation Process In-line Electronic Total Total Technology Instrumentation Controls 2007 2006 2007 2006 2007 2006 2007 2006 £m £m £m £m £m £m £m £mSales 352.3 343.6 177.7 202.2 138.4 138.7 668.4 684.5Divested businesses - (8.6) (38.0) (3.9) (8.6) (41.9) - -Sales for continuing 352.3 343.6 169.1 164.2 138.4 134.8 659.8 642.6businessesOperating profit 52.0 42.6 29.7 22.9 21.2 17.2 102.9 82.7 Amortisation of intangibles 1.5 1.7 0.4 0.1 - - 1.9 1.8Goodwill reduction - 1.2 - - - - - 1.2Adjusted operating profit 53.5 45.5 30.1 23.0 21.2 17.2 104.8 85.7Divested businesses - - (0.5) (2.3) - (0.2) (0.5) (2.5)Corporate cost reallocation* - (0.3) - 0.4 - (0.1) - - Adjusted operating profit for 53.5 45.2 29.6 21.1 21.2 16.9 104.3 83.2continuing businessesRestructuring charges for 0.2 1.9 0.7 5.1 0.7 0.9 7.7continuing businesses -Adjusted operating profit for 53.7 47.1 30.3 26.2 21.2 17.6 105.2 90.9continuing businesses beforerestructuring chargesReturn on sales after 15.2% 13.2% 17.5% 12.9% 15.3% 12.5% 15.8% 12.9%restructuringReturn on sales before 15.2% 13.7% 17.9% 16.0% 15.3% 13.1% 15.9% 14.1%restructuring * Reallocates corporate costs from divested businesses to continuing businesses. 3. SEGMENTAL INFORMATION The group's primary reporting format is business segments and its secondaryformat is geographical segments. The companies within each business segment aredetailed in the Operating Review section of the preliminary statement. The business segments for which information has been included in these accountsare different from those disclosed in prior years. The new disclosures reflectthe manner in which the business is currently managed by the Board of Directors.Prior year comparatives have been restated accordingly. a) Business segments Segment revenue Inter-segment External customer Segment result revenue revenue 2007 2006 2007 2006 2007 2006 2007 2006 Restated Restated Restated Restated £m £m £m £m £m £m £m £mMaterials Analysis 214.1 206.0 (0.3) (0.3) 213.8 205.7 33.5 28.2Test & Measurement 208.1 202.2 (0.6) (0.7) 207.5 201.5 26.0 18.4In-line Instrumentation 209.3 235.2 (0.5) (0.7) 208.8 234.5 34.8 28.1Industrial Controls 38.3 42.8 - - 38.3 42.8 8.6 8.0Eliminate inter-segment (1.4) (1.7) 1.4 1.7 - -sales - -Total continuing operations 668.4 684.5 - - 668.4 684.5 102.9 82.7Profit on disposal of 19.0 9.5businessesFinancial income 9.6 9.0Finance costs (13.4) (15.6)Profit before tax 118.1 85.6Tax (31.9) (24.2)Profit after tax 86.2 61.4 Inter-segment pricing is on an arm's length basis. Segments are presented on thebasis of actual inter-segment charges made. Profit on disposal of business of£19.0m (2006: £9.5m) relates to the In-line Instrumentation segment (2006:Electronic Controls segment). Segment assets Segment liabilities 2007 2006 2007 2006 Restated Restated £m £m £m £mMaterials Analysis 199.8 184.6 (67.8) (59.1)Test & Measurement 191.9 179.8 (53.6) (50.6)In-line Instrumentation 169.2 167.0 (46.1) (45.4)Industrial Controls 9.8 9.9 (4.1) (5.2)Total segment assets and liabilities 570.7 541.3 (171.6) (160.3)Cash and borrowings 51.4 51.0 (112.5) (112.9)Derivative financial instruments 0.1 1.3 (16.1) (12.8)Net pension liability - - (11.1) (18.8)Taxation (including amounts disclosed within 25.7 39.7 (33.8) (34.4)assets and liabilities held for sale)Consolidated total assets and liabilities 647.9 633.3 (345.1) (339.2) Additions to Depreciation and Impairment non-current assets amortisation charges 2007 2006 2007 2006 2007 2006 Restated Restated £m £m £m £m £m £mMaterials Analysis 4.2 6.1 4.3 3.6 - -Test & Measurement 3.5 5.8 6.3 6.8 - -In-line Instrumentation 10.8 5.5 4.2 4.4 - -Industrial Controls 0.4 0.3 0.3 0.3 - - 18.9 17.7 15.1 15.1 - - b) Geographical segments The group's business operations are each located in several geographicallocations and sell on to external customers in all parts of the world. The following is an analysis of revenue by geographical destination: Materials Test & In-line Industrial Total Total Analysis Measurement Instrumentation Controls 2007 2006 £m £m £m £m £m £mUK 9.4 8.6 10.2 1.5 29.7 36.3Continental Europe 66.2 112.4 70.7 7.2 256.5 253.5North America 50.0 23.5 58.9 24.2 156.6 176.4Japan 18.9 16.5 17.9 0.4 53.7 55.8China 18.7 14.4 21.2 1.1 55.4 50.1Rest of Asia Pacific 33.9 19.0 17.3 3.4 73.6 76.9Rest of the world 16.7 13.1 12.6 0.5 42.9 35.5 213.8 207.5 208.8 38.3 668.4 684.5 The following is an analysis of the carrying amount of segment assets, andadditions to property, plant and equipment and intangible assets, analysed bythe geographical area in which the assets are located. Carrying amount of Additions to segment assets non-current assets 2007 2006 2007 2006 £m £m £m £mUK 58.4 63.1 3.9 1.8Continental Europe 385.6 355.6 5.5 5.9North America 84.5 84.2 7.8 7.7Japan 15.0 13.9 0.1 0.1China 10.5 10.1 0.6 0.3Rest of Asia Pacific 12.0 11.6 0.9 1.3Rest of the world 4.7 2.8 0.1 0.6 570.7 541.3 18.9 17.7 4. FINANCE COSTS AND FINANCIAL INCOME 2007 2006Financial income £m £mBank interest receivable 1.8 2.0Change in fair value of cross-currency interest rate swaps 3.0 2.8Expected return on pension scheme assets 4.8 4.2 9.6 9.0 2007 2006Finance costs £m £mInterest payable on bank loans and overdrafts 8.2 0.5Interest payable on other loans 0.3 10.6Total interest payable 8.5 11.1Interest cost on pension scheme liabilities 4.9 4.5 13.4 15.6 Interest costs of £6.7m (2006: £9.1m) for the purposes of the calculation ofinterest cover comprise of bank interest receivable of £1.8m (2006: £2.0m) andinterest payable on bank and other loans and overdrafts of £8.5m (2006: £11.1m). 5. TAXATION UK Overseas 2007 UK Overseas 2006 Total Total £m £m £m £m £m £mCurrent tax charge - 27.8 27.8 0.9 21.4 22.3Adjustments in respect of (0.3) (3.6) (3.9) (0.1) (0.5) (0.6)current tax of prior yearsDeferred tax - origination and 2.9 5.1 8.0 (0.3) 2.8 2.5reversal of temporarydifferences 2.6 29.3 31.9 0.5 23.7 24.2 The standard rate of corporation tax for the year, based on the weighted averageof tax rates applied to the group's profits, is 32.3% (2006: 32.1%). The taxcharge for the year is lower than the standard rate of corporation tax for thereasons set out in the following reconciliation: 2007 2006 £m £mProfit before taxation 118.1 85.6Corporation tax at standard rate of 32.3% (2006: 32.1%) 38.2 27.5Non-taxable income and gains (4.1) (1.7)Non-deductible expenditure 1.7 1.2Movements on unrecognised deferred tax assets - (0.6)Other current year items (0.1) (0.1)Taxation on other dividend flows 0.1 -Change in tax rates 0.5 -Other adjustments to prior year current and deferred tax (4.4) (2.1)chargesTotal taxation 31.9 24.2 The aggregate current and deferred tax charge relating to items that are chargeddirectly to equity is as follows: 2007 2006 £m £m 4.0 1.2 The following tax charges relate to items of income and expense that areexcluded from the group's adjusted performance measures. Tax on items of income and expense that are excluded from the 2007 2006group's adjusted profit before tax £m £m 0.9 0.8 Tax charge on unrealised change in fair value ofcross-currency interest rate swapsTax credit on amortisation of intangible assets and goodwill (0.5) (0.6)impairment chargeTax charge on disposal of subsidiary undertakings 4.1 3.2Total tax charge 4.5 3.4 Other tax items not forming part of the underlying tax rate 2007 2006 £m £mMaterial transfers from unrecognised tax assets - (1.2)Total tax credit - (1.2) The effective adjusted tax rate for the period was 28.0% (2006: 28.8%) as setout in the reconciliation below: Reconciliation of total tax charge on adopted IFRS basis to adjusted tax 2007 2006charge £m £mTotal tax charge on adopted IFRS basis 31.9 24.2Tax charge on items of income and expense that are excluded from the group's (4.5) (3.4)adjusted profit before taxOther tax items not forming part of the underlying tax rate - 1.2Adjusted tax charge 27.4 22.0Adjusted profit before tax 98.0 76.3Adjusted effective tax rate 28.0% 28.8% 6. DIVIDENDS 2007 2006Amounts recognised and paid as distributions to equity holders in the £m £myearFinal dividend for the year ended 31 December 2006 of 12.5p 15.4 14.0(2005: 11.2p) per shareInterim dividend for the year ended 31 December 2007 of 5.75p 6.8 6.2(2006: 5.0p) per share 22.2 20.2 Amounts arising in respect of the year 2007 2006 £m £mInterim dividend for the year ended 31 December 2007 of 6.8 6.25.75p (2006: 5.0p) per shareProposed final dividend for the year ended 31 December 2007 of 15.25p(2006: 12.5p) per share 17.5 15.6 24.3 21.8 The proposed final dividend is subject to approval by shareholders at the AnnualGeneral Meeting and has not been included as a liability in these financialstatements. 7. EARNINGS PER SHARE Basic earnings per share amounts are calculated by dividing net profit for theyear attributable to ordinary equity shareholders of the parent by the weightedaverage number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profitattributable to ordinary shareholders by the weighted average number of ordinaryshares outstanding during the year but adjusted for the effects of dilutiveoptions. Basic earnings per share 2007 2006 Profit after tax (£m) 86.2 61.4Weighted average number of shares outstanding (millions) 121.6 124.3Basic earnings per share (pence) 70.9 49.4 Diluted earnings per share 2007 2006 Profit after tax per income statement (£m) 86.2 61.4Basic weighted average number of shares outstanding (millions) 121.6 124.3Weighted average number of dilutive 5p ordinary shares under option 1.0 1.6(millions)Weighted average number of 5p ordinary shares that would have been (0.5) (1.2)issued at average market value from proceeds of dilutive share options(millions)Diluted weighted average number of shares outstanding (millions) 122.1 124.7Diluted earnings per share (pence) 70.6 49.2 8. COMPANY INFORMATION The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 December 2007 or 2006 but is derivedfrom those accounts. Statutory accounts for 2006 have been delivered to theRegistrar of Companies. The auditors have reported on those accounts; theirreport was unqualified and did not contain statements under section 237(2) or(3) of the Companies Act 1985. The statutory accounts for 2007 will be deliveredfollowing the company's Annual General Meeting. 9. ANNUAL REPORT Copies of the annual report, which will be posted to shareholders on 20 March2008, may be obtained from the registered office at Station Road, Egham, SurreyTW20 9NP. The report will also be available on the company's website atwww.spectris.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Spectris