25th Jul 2007 07:30
Renishaw PLC25 July 2007 25th July 2007 Renishaw plc and subsidiary undertakingsPreliminary announcement of results for the year ended 30th June 2007 CONSOLIDATED INCOME STATEMENT 2007 2006 £'000 £'000 Revenue 180,883 175,835 Cost of sales (97,899) (90,901) --------- ---------Gross profit 82,984 84,934 --------- ---------Distribution costs (32,911) (30,782) Administration costs (20,344) (18,684) Exceptional pension curtailment credit 19,460 - --------- ---------Operating profit 49,189 35,468 Financial income 8,180 6,507 Financial expenses (5,237) (3,873) --------- ---------Profit before tax 52,132 38,102 Income tax expense (11,981) (7,621) --------- ---------Profit for the year 40,151 30,481 --------- --------- ************************* Earnings per share (basic and diluted) 55.2p 41.9p Dividend per share arising in respect of the year 22.87p 21.78p Adjusted earnings per share (excluding exceptional item) 35.9p 41.9p CONSOLIDATED BALANCE SHEETat 30th June 2007 2006 £'000 £'000 Assets Property, plant and equipment 69,460 69,081 Intangible assets 13,811 12,543 Investments in associates 6,972 908 Deferred tax assets 4,733 10,606 Employee benefits 5,562 - --------- ---------Total non-current assets 100,538 93,138 --------- --------- Current assets Inventories 36,178 28,359 Trade receivables 37,880 37,717 Current tax 323 183 Other receivables 6,482 6,320 Cash and cash equivalents 20,761 30,728 --------- ---------Total current assets 101,624 103,307 --------- --------- Current liabilities Trade payables 11,223 10,692 Current tax 1,315 1,402 Provisions 693 793 Other payables 8,779 10,239 --------- ---------Total current liabilities 22,010 23,126 --------- --------- --------- ---------Net current assets 79,614 80,181 --------- --------- Liabilities Employee benefits - 18,838 Deferred tax liabilities 12,152 11,745 --------- ---------Total non-current liabilities 12,152 30,583 --------- --------- --------- ---------Total assets less total liabilities 168,000 142,736 --------- --------- Equity Share capital 14,558 14,558 Share premium 42 42 Currency translation reserve (210) 265 Cash flow hedging reserve 1,845 2,007 Retained earnings 151,765 125,864 --------- ---------Total equity 168,000 142,736 --------- --------- CONSOLIDATED STATEMENT OF CASH FLOW 2007 2006 £'000 £'000 Cash flows from operating activities Profit for the year 40,151 30,481 --------- --------- Adjustments for: Amortisation of development costs 2,038 1,397 Amortisation of other intangibles 1,176 703 Depreciation 7,874 7,840 Profit on sale of fixed assets (25) (51) Share of profits from associates 46 - Exceptional pension curtailment credit (19,460) - Financial income (8,180) (6,507) Financial expenses 5,237 3,873 Tax expense 11,981 7,621 --------- --------- 687 14,876 --------- --------- Increase in inventories (7,819) (963) Increase in trade and other receivables (2,936) (4,289) Increase in trade and other payables (336) 2,664 Difference between pension service cost and contributions (266) (1,261) (Decrease)/increase in provisions (100) 161 --------- --------- (11,457) (3,688) --------- --------- Income taxes paid (7,021) (7,605) --------- --------- --------- ---------Cash flows from operating activities 22,360 34,064 --------- --------- Investing activities Purchase of tangible fixed assets (10,037) (12,816) Development costs capitalised (3,624) (3,227) Purchase of other intangibles (865) (4,217) Investment in associate (6,110) (928) Sale of tangible fixed assets 187 399 Interest received 1,710 1,911 --------- ---------Cash flows from investing activities (18,739) (18,878) --------- --------- Financing activities Interest paid (297) (15) Dividends paid (16,101) (14,853) --------- ---------Cash flows from financing activities (16,398) (14,868) --------- --------- Net (decrease)/increase in cash and cash equivalents (12,777) 318 Cash and cash equivalents at beginning of the year 30,728 30,072 Effect of exchange rate fluctuations on cash held 2,810 338 --------- ---------Cash and cash equivalents at end of the year 20,761 30,728 --------- --------- CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 2007 2006 £'000 £'000 Foreign exchange translation differences (475) (390) Actuarial gain/(loss) in the pension schemes 3,144 (147) Effective portion of changes in fair value of cash flow hedges (304) (326) Deferred tax on income and expense recognised in equity (1,151) 280 --------- ---------Profit/(loss) recognised directly in equity 1,214 (583) Profit for the year 40,151 30,481 --------- ---------Total recognised income and expense for the year 41,365 29,898 --------- --------- REVENUE ANALYSIS 2007 2007 at 2006 £'000 2006 £'000 exchange rates £'000 Continental Europe 67,196 67,005 58,945 Far East, including Japan & Australia 50,736 56,185 53,130 North & South America 46,160 50,193 46,708 Rest of World 5,002 5,031 5,539 UK and Ireland 11,789 11,789 11,513 --------- --------- ---------Total Group revenue 180,883 190,203 175,835 --------- --------- --------- ************************* NOTES: 1. The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group") and equity account the Group's interests in associates. The group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("adopted IFRS") and applicable law. 2. The financial information set out above does not constitute the Company's statutory financial statements for the years ended 30th June 2007 or 30th June 2006 but is derived from those financial statements. Statutory financial statements for 2006 have been delivered to the Registrar of companies, whereas those for 2007 will be delivered following the Company's annual general meeting. The auditors have reported on those financial statements; their reports were unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 3. The proposed final dividend of 15.82 net per share for the year ended 30th June 2007 will be paid on 15th October 2007 to shareholders on the register on 14th September 2007. The Chairman's statement to be included in the 2007 Annual report and financialstatements: I report the Company's results for the year ended 30th June 2007. Revenue and Trading Revenue for the year increased by 3% to £180.9m (2006 £175.8m) which representsgrowth of 8% at constant exchange rates. With the exception of co-ordinate measuring machine (CMM) products, where one ofour major customers in Japan has been subject to an export ban, there was growthin all product line revenue - in particular machine tool and dental.Geographically, there was substantial growth in Europe. Profit Operating profit for the year, excluding an exceptional non-cash pensioncurtailment credit, reduced to £29.7m (2006 £35.5m), due to a number of factorsparticularly exchange rate movements, primarily the US Dollar and Japanese Yen(with an adverse profit effect of £7m) and difficulties in the CMM market.Profit before tax and exceptional item was £32.7m (2006 £38.1m), resulting inearnings per share of 35.9p (2006 41.9p). Sales and Marketing The Group's worldwide marketing programmes continue, with the many new officesgrowing and prospering as they have become fully established, particularly inthe Far East, including China and India. The Group participates worldwide in excess of 100 exhibitions annually whichcontribute significantly to the recognition of the Group's products and tosales. Manufacturing The Group's UK manufacturing facilities at Stonehouse, Woodchester (includingthe new automated stores), New Mills and also in Ireland have continued toinvest in additional equipment to improve efficiencies and are preparing for theintroduction of a new manufacturing Enterprise Resource Planning (ERP) businesssystem. At Pune in India, the production facilities are now fully operationaland the range of products being manufactured there is being extended. Research and Development Research and Development during the year amounted to £31.1m including associatedengineering costs (2006 £29.3m) prior to the capitalisation of development costs(net of amortisation) of £1.6m (2006 £1.8m) giving a net profit and loss chargeof £29.5m (2006 £27.5m). RevoTM is now in production and is being extensively tested and integrated byOEMs and major end user customers worldwide. Several Revos are being used intheir production and are delivering significant improvements for them inthroughput and productivity. A number of new products have been introduced during the year. In addition tothose referred to in the interim statement, recent products include the XL80laser and XC80 compensator, which provide significant improvements to theproduct offerings in the laser and calibration market. The TRS2 tool recognitionsystem has been introduced, which provides rapid broken tool detection on a widerange of machine tools. Our spectroscopy product line has recently introducedStreamlineTM technology, which enables very fast production of Raman chemicalimages. Investments During the year, the Group acquired, for £6.1m, a 20% interest in Delcam plc,which specialises in advanced CAD/CAM software product development solutions forthe manufacturing industry. Delcam is listed on the London Stock Exchange's AIMmarket. Renishaw and Delcam have worked together for many years and share commonmetrology interests and customers. Renishaw believes that closer cooperationwith Delcam will enhance the sales of both companies and will provideopportunities for developing software to support Renishaw's products. Since the year end, Renishaw has acquired a 75% interest in D3 TechnologiesLimited ("D3"), a company set up in collaboration with the University ofStrathclyde and others to exploit certain patents related to Surface EnhancedRaman Spectroscopy ("SERS") and to develop SERS for molecular diagnostics andtrace detection. The investment in D3 will comprise cash of £1.85m and thesupply of instrumentation, with a combined value of approximately £5m over thenext 5 years. Part of the D3 investment has been used to purchase for £850,000 the businessand assets of the analytical business unit ("ABU") operated by MesophotonicsLimited, a spin-out company from the University of Southampton. The ABU developsand manufactures substrates used in SERS applications. Balance Sheet Capital expenditure during the year on tangible fixed assets was £9.7m (2006£13.2m). Net cash balances, after the capital expenditure during the year, theinvestment in Delcam plc and increase in working capital, were £20.8m (2006£30.7m). Pension Fund Following the announcement with the Interim results and completion of theconsultation process with fund members, future accrual for current members ofthe UK pension scheme ceased on 5th April 2007. A new defined contributionpension scheme was established on 6th April 2007. As a result of the changes, anexceptional non-cash curtailment credit of £19.5m has been incorporated in theConsolidated income statement as required by IAS 19. The Queen's Award for Enterprise 2007 On 21st April 2007, the birthday of Her Majesty the Queen, it was announced thatRenishaw had been honoured with a Queen's Award for Enterprise: Innovation 2007for the RMP60 and RMI probe system. This is the 12th Queen's Award in theCompany's history. The award was made to the Company for the development of a radio transmissionspindle probe system used on computer numerically controlled (CNC) machinetools. The systems are able to measure work pieces, provide off-set fixtures,control in-cycle processes and inspect work being machined automatically. Personnel The numbers of those employed by the Group in the UK and overseas increased by150 to 2,154 (2006 2,004). I thank all our employees for their contribution tothe Group during this challenging year. Prospects and Dividend For the purposes of budgeting for the financial year, we are not expecting tosee any benefit from an improvement in foreign exchange rates. Nevertheless, ifcurrent rates of order intake continue we would expect to see sales growthapproaching double digits, assisted by the anticipated recommencement ofbusiness in the second half of the current financial year with our Japanesecustomer whose export activities have been restricted in the past year. In viewof last year's trading performance we are also taking steps to address the costbase of the Group, with the objective of restoring our operating margin to itsprevious level. I am optimistic about the prospects for continuing long-termgrowth. Your Board proposes a final dividend of 15.82p per share giving a total for theyear of 22.87p (2006 21.78p). Sir David R McMurtry, CBE, RDI, CEng, FIMechE, FREngChairman & Chief Executive25th July 2007 Enquiries: B R Taylor 01453 524445 A C G Roberts 01453 524445 Registered office: New Mills, Wotton-under-Edge, Gloucestershire. GL12 8JRTelephone: 01453 524524 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Renishaw