7th Mar 2008 07:00
Marshalls PLC07 March 2008 Preliminary results for the year ended 31 December 2007 Marshalls plc, the specialist Landscape Products Group, announces a robusttrading performance. Financial Highlights Year ended Year ended Increase 31 December 31 December % 2007 2006Reported:Revenue £402.9m £378.1m 6.6Operating profit £48.8m £47.8m 2.2Profit before tax £42.1m £41.7m 1.0Basic EPS 21.28p 20.34p 4.6Final dividend per share 9.30p 8.85p 5.1 Underlying:Operating profit (Note 3) £51.1m £46.8m 9.2Profit before tax £44.4m £40.8m 9.0Basic EPS 22.43p 19.89p 12.8 Implementation of Strategy Investment for Growth: •Organic and acquisition investment of £25m in strong Public Sector and Commercial markets to grow the business. •Display Centre expansion to 10 sites by mid 2008 to drive sales growth, improve product mix and facilitate installation. •Further marketing investment of £1.8m to promote the Marshalls brand and Display Centre initiatives. •Continuing sponsorship of the Royal Horticultural Society's Chelsea Flower Show. Operational Delivery and Continuing Improvement: • Higher input costs recovered through sales price increases. • Productivity improvements benefited margins. • Sale of surplus properties delivering further cash for investment. Commenting on these results, Graham Holden, Chief Executive, said: "Last year began and ended positively and that momentum has continued into 2008.Our strategy is clear, we are investing for growth and we are continuing todeliver operational improvement. The Public Sector and Commercial market, which represents 55 per cent of theGroup's revenue, remains robust and lead indicators are positive for 2008 and2009. In the Domestic market our survey of installers' order books shows them tobe at a normal level for this time of year. We are continuing with our development plans and will maintain a strong emphasison cash management. The strength of our brand, our efficient manufacturing andsourcing, and our comprehensive distribution network give us confidence for thefuture." Enquiries: Graham Holden Chief Executive Marshalls plc 01484 438900Ian Burrell Finance Director Jon Coles Brunswick Group LLP 0207 404 5959Kate Miller Group Results The 2007 financial year began and ended strongly. The summer was hampered by theexceptionally wet weather but there was strong underlying demand in the PublicSector and Commercial market. Marshalls' revenue at £402.9 million (2006: £378.1 million) increased by 6.6 percent, compared with the prior year. Like for like revenue, excludingacquisitions, was 3.9 per cent ahead at £392.8 million (2006: £378.1 million). Reported operating profit rose by 2.2 per cent to £48.8 million (2006: £47.8million). EBITDA was £70.5 million (2006: £67.7 million), an improvement of 4.3per cent. The net effect of investment in strategic business initiatives and other one-offitems in the year was a net charge against operating profit of £2.3 million(2006: £1.0 million net credit), giving an underlying operating profit of £51.1million (2006: £46.8 million) an increase of 9.2 per cent. Within this net charge the Group has expensed £4.3 million (2006: £2.0 million)in relation to strategic business initiatives during the year. Of this, £3.6million (2006: £2.0 million) relates to a continuation of the LandscapeInstallations strategy and the introduction of additional Display Centres whichremain a key contributor to future growth. Within this is £1.8 million relatingto further marketing costs, including the Royal Horticultural Society ("RHS")Chelsea Flower Show, to support the development of the Display Centres and theMarshalls brand. Strategic business initiatives in the Public Sector and Commercial market havegiven rise to revenue expenditure of £0.7 million during the year. These includethe launch of Woodhouse Landscape Projects which provides design services forprestigious landscape projects, and a significant geographic expansion of thePremier Mortars business which provides ready to use mortar for the buildingtrade. Works closure costs in the year were £0.2 million (2006: £1.1 million) for therelocation of the recently acquired Ollerton business to another of the Group'sStreet Furniture operations. In addition, during the year there has been a netprofit of £2.2 million on property transactions (2005: £0.3 million loss). After the net effect of the strategic business initiatives and other one-offitems, detailed above, profit before tax increased by 1.0 per cent to £42.1million (2006: £41.7 million). Basic earnings per share increased by 4.6 percent to 21.28 (2006: 20.34) pence per share. Underlying earnings per share,before strategic business initiatives expensed, was 22.43 (2006: 19.89) penceper share, an increase of 12.8 per cent. The Board is recommending a final dividend of 9.30 pence (2006: 8.85 pence) perordinary share, an increase of 5.1 per cent. This dividend will be paid on 4July 2008 to shareholders on the register at the close of business on 6 June2008. The ex dividend date will be 4 June 2008. Operating Performance At the heart of Marshalls is a single manufacturing and distribution operationthat supports its two main markets and provides a fundamental competitiveadvantage, delivering industry leading product availability and deliveryperformance. It ensures that Marshalls has the lowest cost to market. TheMarshalls operating strategy is to combine regional manufacturing anddistribution sites, known as Service Centres, with national manufacturing works.The same capital equipment produces products for both the Domestic market andthe Public Sector and Commercial market. The national manufacturing sitesproduce the newly introduced and specialist products that have not reached thecommercial volumes that justify regional manufacture. Marshalls geographicalspread is unique in the industry and provides a competitive advantage. In the Domestic market like for like revenue was slightly ahead of 2006, havingbeen adversely affected by the unusually wet weather in June and July 2007.These severe weather conditions delayed installers and the additional need forflood rectification work in some parts of the country has also divertedtradesmen into lucrative emergency insurance work. Sales prices and mix werearound 4 per cent ahead of the prior year whilst volumes were down by around 3.5per cent. The Group's Domestic strategy continues to be to unlock the potential of thismarket. Landscape Installations is part of the Group's "core" business andsignificant investment is being made annually to create "pull through" demand,improve the product mix and continually develop the Marshalls brand. Theobjective is to deliver a level of service that is "second to none". Marketresearch suggests that our target consumers are relatively recession proof andthat they recognise that a new driveway or garden will add value to theirproperty. Only 20 per cent of Domestic sales are "DIY" with 80 per cent being"Do it for me" projects where a professional carries out the installation. Thislatter market is more resilient as many of these consumers are in the higherwealth and income groups. The Group's Display Centres give the consumer the opportunity to see how theproduct looks in a garden setting so that the market potential for more valueadded products can be unlocked. The Group has a range of tailor made serviceoffers from a fully designed and installed proposition to assistance withproduct choice and ordering. By Easter 2008 there will be 8 operational DisplayCentres and this will include sites in garden centres or out of town retailcentres where there is established footfall. It is anticipated that there willbe 2 further Display Centres established by the middle of 2008. In 2007 Marshalls sponsored the RHS Chelsea Flower Show and this sponsorshipwill continue for a further two years. Marshalls also sponsored a large garden,"The Marshalls Sustainability Garden", which was awarded a silver medal at the2007 Show. The Group's presence at Chelsea and the RHS Hampton Court and RHSTatton Park Flower Shows has significantly increased awareness of the Marshallsbrand and the Group's inspirational design services, innovative products andexpert installation. Installer order books remain at the normal level for this time of year with theend of February 2008 at 8.4 weeks (February 2007: 9.1 weeks, February 2006: 8.4weeks, February 2005: 8.3 weeks). The Public Sector and Commercial market, which now represents 55 per cent of theGroup's revenue, continued to perform well with like for like revenue up 7 percent. Sales prices and mix were 4 per cent ahead with volumes up 3 per cent. Our investment in Public Sector and Commercial growth projects is primarilycapital in nature and these business initiatives are expected to generateexcellent medium term returns and cash flow. The investment is into strongmarkets and is asset backed by minerals or tangible processing plant. Onceestablished, these investments will be cash generating for many years. Wecontinue to invest in new technology, such as robot handling and machine lay ofconcrete block paving, to build competitive advantage and make our workplacesafer and more environmentally friendly. We currently have 60 robots installedacross the Group and these continue to improve manufacturing efficiency. The Group continues to focus on sustainability, which is an integral part of theMarshalls culture. This includes the elimination of waste and the better use ofresources in line with the Group's commercial objectives. Marshalls'sustainability plan sets out to deliver benefit to the environment, recognisesocial progress and generate economic growth. There is a Group wide strategy ofimplementing and operating to independently audited and accredited systems forproduct quality, environmental management and health and safety. In June 2007 Marshalls won the Premier Award for Process Improvement fromBusiness Commitment to the Environment. As a mark of the Group's work in thearea of biodiversity, the Maltby site is the first active manufacturing site inthe UK to be accredited with the Wildlife Trust's Biodiversity Benchmark forLand Management. The Group continues to source significant quantities of natural stone from Indiaand China. Marshalls was the first company from the UK Building Materials sectorto be a member of the Ethical Trading Initiative ("ETI"). Our objective is toensure that our supply chain is operating to a high standard of integrity andethics. The Group is also working closely with Ashridge, an international leader intailored executive education, to develop the knowledge, skills and practices ofits management team in order to enhance leadership potential and to facilitatesuccession planning. Corporate Activity Marshalls continues to acquire complementary businesses that provide qualityproducts to enhance the core product offer. During 2007 the Group has invested£12.8 million directly into acquisitions and these businesses have added £10.1million to revenue in the year. The Group added to its street furniture product portfolio with the acquisitionof Ollerton, a supplier of high quality and widely specified seating systems. Aprogramme is well underway to introduce modern business systems and integrateall our street furniture businesses, to deliver synergies and provide a solidplatform for future organic growth. The Group continues to seek opportunities to expand reserves and geographicalcoverage in natural stone and during 2007 two businesses were acquired.Marshalls' natural stone business includes paving, walling, aggregates, ready touse mortar and architectural masonry. Since the year end the Group has securedaccess to significant further reserves of limestone for walling and cladding.Additional investment in plant is planned for 2008 to extend the existing rangeof walling products. The Group has also been developing a sand and gravelreserve on the outskirts of Manchester and a natural stone reserve beside theM62 in West Yorkshire. At 31 December 2007 the Group's mineral reservescomprised 8.5 million tonnes of block stone and 48.1 million tonnes ofaggregates which represent over 70 and 20 years' supply respectively at currentextraction rates. Balance Sheet Net assets at 31 December 2007 were £200.6 million (2006: £184.5 million). Tradereceivables have increased to £35.7 million (2006: £28.6 million) at the yearend due to higher revenues in November and December 2007. Inventories were higher due mainly to the commercially beneficial forwardpurchasing of £7.7 million of imported natural stone to mitigate cost increasesin transportation. The impact of this and reduced sales in the summer months dueto the severe weather conditions caused inventory to remain higher at the yearend. It is planned to manage these stocks down during 2008 and 2009. The liability for defined benefit pension obligations decreased from £41.9million at 31 December 2006 to £17.8 million at 31 December 2007. This reductionwas partly due to the impact of further contributions by the Group to the Schemeand an increase in the AA corporate bond rate from 5.1 per cent to 5.8 per cent.The change in discount rate, together with a strengthening of the mortality rateand other changes to the assumptions, has resulted in an actuarial gain of £12.6million (net of deferred taxation) (2006: £7.3 million) and this has beenrecorded in the Consolidated Statement of Recognised Income and Expenses. In the second half of the year the Group made payments totalling £6.9 million toacquire 2,425,000 Treasury Shares. The shares may also be used to satisfy awardsunder the Group's Long Term Incentive Plan. This acquisition of Treasury Sharesincreased the Group's gearing ratio by approximately 5 per cent. The Group alsoredeemed all of the remaining B shares that were issued as part of the return of£75 million to shareholders in 2004. The net cash outflow was £2.4 million. Gearing at 31 December 2007 was 48.3 per cent (2006: 29.6 per cent) withinterest covered strongly at 7.3 times (2006: 7.8 times). Outlook The outlook for the Public Sector and Commercial market, which now representsapproximately 55 per cent of the Group's revenue, is positive. We have goodvisibility of demand and lead indicators continue to be positive. TheConstruction Products Association ("CPA") forecasts that the Public Sector andCommercial other new work market will grow by 4.6 per cent in 2008 and a further4.2 per cent in 2009. The effective implementation of the investment plansoutlined in the 2007 Comprehensive Spending Review will be central to thissustained growth over the next three years and from 2009 onwards it isanticipated that building for the 2012 Olympics will also gather momentum. The Domestic market is more difficult to predict against the current backdrop oflower consumer confidence, tougher loan conditions and a general housing marketthat has begun to slow. The CPA is forecasting a flat market in private housingrepair, maintenance and improvement expenditure for 2008. Our Domesticinstallers' average order books from the latest survey at the end of February2008 are 8.4 weeks, a normal level for this time of year. With our ongoingprogramme of investment in Display Centres we remain well positioned. We are continuing with our development plans and will maintain a strong emphasison cash management. The strength of our brand, our efficient manufacturing andsourcing, and our comprehensive distribution network give us confidence for thefuture. Graham HoldenChief Executive MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 Notes 2007 2006 £'000 £'000Revenue 2 402,926 378,100 Net operating costs (354,116) (330,339) ------- ------- Operating profit 2 48,810 47,761Financial expenses 4 (17,596) (14,904)Financial income 4 10,889 8,846 ------- ------- Profit before tax 2 42,103 41,703Income tax expense 5 (11,852) (12,623) ------- -------Profit for the financial period attributable to equity shareholdersof the parent 30,251 29,080 ======= ======= Earnings per share: Basic 7 21.28p 20.34p ======= =======Diluted 7 21.19p 20.32p ======= =======Dividend: Pence per share 6 13.40p 12.70p ======= =======Dividends declared 6 19,098 18,158 ======= ======= MARSHALLS PLC PELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007 Assets Notes 2007 2006 £'000 £'000Non-current assets Property, plant and equipment 209,313 202,941Intangible assets 60,147 52,667Deferred taxation assets 7,055 15,018 ------- ------- 276,515 270,626 ------- -------Current assets Inventories 82,920 68,256Trade and other receivables 42,866 34,290Cash and cash equivalents 19 22Assets held for sale 8,199 - ------- ------- 134,004 102,568 ------- -------Total assets 410,519 373,194 ======= ======= Liabilities Current liabilities Bank overdraft 27,840 999Trade and other payables 60,236 57,362Corporation tax 8,710 8,185Interest bearing loans and borrowings 7,234 3,565 ------- ------- 104,020 70,111 ------- -------Non-current liabilities Interest bearing loans and borrowings 61,871 50,064Employee benefits 8 17,795 41,945Deferred taxation liabilities 26,192 26,532 ------- ------- 105,858 118,541 ------- -------Total liabilities 209,878 188,652 ======= =======Net assets 200,641 184,542 ======= =======Equity Capital and reserves attributable to equityshareholders of the parent Share capital 35,777 35,777Share premium account 2,734 2,732Own shares (8,866) (453)Capital redemption reserve 75,394 73,298Consolidation reserve (213,067) (213,067)Hedging reserve (3) (6)Retained earnings 308,672 286,261 ------- -------Equity shareholders' funds 200,641 184,542 ======= ======= MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 Notes 2007 2006 £'000 £'000 Net cashflow from operating activities 9(i) 27,666 38,846 Net cashflow from investing activities 9(ii) (41,577) (28,033) Net cashflow from financing activities 9(iii) (12,933) (17,000) ------- -------Net decrease in cash and cash equivalents (26,844) (6,187) Cash and cash equivalents at 1 January (977) 5,210 ------- -------Cash and cash equivalents at 31 December (27,821) (977) ======= ======= Reconciliation of Net Cash Flow to Movement in Net Debt 2007 2006 £'000 £'000 Net decrease in cash and cash equivalents (26,844) (6,187)Cash inflow from increase in debt andlease financing (14,890) (1,731)Finance leases acquired on acquisitionof subsidiary undertakings (586) - ------- -------Movement in net debt in the period (42,320) (7,918)Net debt at 1 January (54,606) (46,688) ------- -------Net debt at 31 December (96,926) (54,606) ======= ======= AUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2007 2007 2006 £'000 £'000Cash flow hedges: Effective portion of changes infair value (net of deferred taxation) 3 (4)Actuarial gains (net of deferred taxation) 12,610 7,342 ------- -------Net expense recognised directly in equity 12,613 7,338Profit for the financial period attributable toequity shareholders of the parent 30,251 29,080 ------- -------Total recognised income and expenses for the period (attributable to equity shareholders of theparent) 42,864 36,418 ======= ======= MARSHALLS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS AUDITED CONSOLIDATED NOTES FOR THE YEAR ENDED 31 DECEMBER 2007 1. Basis of Preparation The Consolidated Financial Statements have been prepared on the basis of therequirements of International Financial Reporting Standards as adopted by theEuropean Union ("adopted IFRSs") and effective at 31 December 2007. The accounting policies have been applied consistently throughout the Group forthe purposes of these Consolidated Financial Statements and are also set out onthe Company's website (www.marshalls.co.uk). The Consolidated Financial Statements are presented in sterling, rounded to thenearest thousand. The preparation of financial statements in conformity with adopted IFRSsrequires management to make judgements, estimates and assumptions that affectthe application of policies and reported amounts of assets and liabilities,income and expenses. The estimates and associated assumptions are based onhistorical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis ofmaking the judgements about carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from theseestimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. 2. Segmental analysis Revenue Operating Profit 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Continuing operations 402,926 378,100 48,810 47,761 ======= =======Financial income and expenses (net) (6,707) (6,058) ------ ------Profit on ordinary activities before taxation 42,103 41,703 ====== ====== The Directors have undertaken a review of the Group's continuing operations andits associated business risks and consider that the continuing operations shouldbe reported as a single business segment. The Directors consider that thecontinuing operations represent one product offering with similar risks andrewards and should be managed and reported as a single business segment in linewith the Group's internal reporting framework. 2007 2006 £'000 £'000Geographical destination of revenue:United Kingdom 400,253 374,627Rest of the world 2,673 3,473 -------- -------- 402,926 378,100 ======== ======== All revenue originates in the United Kingdom from continuing operations andthere is no material inter-segmental turnover. 3. Underlying operating profit Underlying operating profit, which is used in the Financial Highlights, is asfollows: 2007 2006 £'000 £'000Operating profit: underlying 51,149 46,819Strategic business initiatives:Landscape Installations (3,627) (2,006)Strategic business initiatives:Commercial Expansion (712) -Works closure costs (160) (1,135)Curtailment gains (net of expenses) - 4,367Net profit / (loss) on asset andproperty disposals 2,160 (284) -------- --------Operating profit: reported 48,810 47,761 ======== ======== 4. Financial expenses and income 2007 2006 £'000 £'000(a) Financial expensesInterest expense on bank loans, overdraftsand loan notes 4,721 2,406Interest on obligations under the definedbenefit pension scheme 10,506 10,107Debenture interest expense 2,275 2,275B share dividend expense 42 92Finance lease interest expense 52 24 -------- -------- 17,596 14,904 ======== ======== (b) Financial incomeExpected return on scheme assets under thedefined benefit pension scheme 10,875 8,802Interest receivable and similar income 14 44 -------- -------- 10,889 8,846 ======== ======== 5. Income tax expense 2007 2006 £'000 £'000Current tax expenseCurrent year 11,027 11,004Adjustments for prior years (1,321) (947) -------- -------- 9,706 10,057 Deferred taxation expenseOrigination and reversal of temporary differences:Current year 1,983 2,235Adjustments for prior years 163 331 -------- --------Income tax expense in the ConsolidatedIncome Statement 11,852 12,623 ======== ======== Reconciliation of effective tax rate 2007 2007 2006 2006 % £'000 % £'000 Profit before tax 100.0 42,103 100.0 41,703 ----- ------ ----- ------Tax using domestic corporationtax rate 30.0 12,631 30.0 12,511Disallowed amortisation ofintangible assets 0.4 161 0.3 107Net items not taxable 2.8 1,179 1.5 621Adjustments for prior years (2.7) (1,158) (1.5) (616)Impact of change in tax rate on (2.3) (961) - -deferred taxation ----- ------ ----- ------ 28.2 11,852 30.3 12,623 ===== ====== ===== ====== The net amount of deferred taxation debited to the Consolidated Statement ofRecognised Income and Expenses in the year was £5,172,000 (2006: £3,146,000). 6. Dividends Ordinary dividends: equity shares 2007 2006 per share £'000 per share £'0002006 Final: paid 6 July 2007 8.85p 12,653 8.40p 12,0102007 Interim: paid 7 December 2007 4.55p 6,445 4.30p 6,148 ------ ------ ------ ------ 13.40p 19,098 12.70p 18,158 ====== ====== ====== ====== The Directors are recommending a final dividend of 9.30 (2006: 8.85) pence pershare. This dividend has not been provided at 31 December 2007. 7. Earnings per share Basic earnings per share of 21.28 (2006: 20.34) pence per share is calculated bydividing the profit attributable to ordinary shareholders of £30,251,000 (2006:£29,080,000) by the weighted average number of shares in issue during the yearof 142,159,560 (2006: 142,949,818). Profit attributable to ordinary shareholders 2007 2006 £'000 £'000 Profit attributable to ordinary shareholders 30,251 29,080 ====== ====== Weighted average number of ordinary shares 2007 2006 Issued ordinary shares at 1 January 142,949,818 143,087,712Effect of shares issued in the year - 14,536Effect of shares transferred into employeebenefit trust (366,765) (152,430)Effect of treasury shares acquiredin the year (423,493) - ----------- -----------Weighted average number of ordinary shareat 31 December 142,159,560 142,949,818 =========== =========== Diluted earnings per share of 21.19 (2006: 20.32) pence per share is calculatedby dividing the profit attributable to ordinary shares, and potentially dilutiveordinary shares, of £30,251,000 (2006: £29,080,000) by the weighted averagenumber of shares in issue during the year of 142,159,560 (2006: 142,949,818)plus dilutive shares of 572,479 (2006: 152,430) which totals 142,732,039 (2006:143,102,248). Weighted average number of ordinary shares (diluted) 2007 2006Weighted average number of ordinary sharesat 31 December 142,159,560 142,949,818Effect of shares transferred into employee benefittrust 523,201 152,430Effect of treasury shares 49,278 - ----------- -----------Weighted average number of ordinary sharesat 31 December 142,732,039 143,102,248 =========== =========== 8. Employee benefits The Group operates the Marshalls plc Pension Scheme (the "Scheme") which hasboth a defined benefit and a defined contribution section. The assets of theScheme are held in separately managed funds which are independent of the Group'sfinances. After extensive consultation with the employees affected and theirrepresentatives, the Group introduced a new defined contribution section to theScheme to replace the existing defined benefit section which closed to futureservice accrual on 1 July 2006. Following this change the Company has madespecial cash contributions to the Scheme. 2007 2006 £'000 £'000 Present value of funded obligations (194,782) (209,152)Fair value of scheme assets 176,987 167,207 ----------- -----------Recognised liability for defined benefitobligations (see below) (17,795) (41,945) =========== =========== Movements in the net liability for defined benefit obligations recognised in thebalance sheet 2007 2006 £'000 £'000Net liability for defined benefit obligationsat 1 January (41,945) (65,264)Contributions received 4,900 10,960Gain recognised in the Consolidated Income Statement 1,468 1,870Actuarial gains recognised in the Consolidated Statementof Recognised Income and Expenses 17,782 10,489 ------- -------Net liability for the defined benefit obligationsat 31 December (17,795) (41,945) ======= ======= 9. Notes to the cash flow statement 2007 2006 £'000 £'0009(i) Cashflows from operating activities Profit before tax 42,103 41,703Adjustments for:Depreciation 21,059 19,530Amortisation 661 357Negative goodwill (700) -(Gain)/loss on sale of property, plant & equipment (2,856) 66Equity settled share based expenses 744 250Financial income and expenses (net) 6,707 6,058 ------- -------Operating cashflow before changes in working capital, employee benefits andpension scheme contributions 67,718 67,964(Increase)/decrease in trade and other receivables (7,403) 2,323Increase in inventories (13,815) (53)Increase/(decrease) in trade and other payables 2,723 (3,197)Decrease in employee benefits (1,099) (2,968)Pension scheme contributions (4,400) (10,000) ------- -------Cash generated from the operations 43,724 54,069Financial expenses paid (6,729) (4,265)Non equity dividends paid (42) (149)Income tax paid (9,287) (10,809) ------- -------Net cash flow from operating activities 27,666 38,846 ------- -------9(ii) Cash flows from investing activities Proceeds from sale of property, plant and equipment 2,960 565Financial income received 14 44Acquisition of subsidiaries (12,604) (4,157)Bank (overdraft)/balance acquired with subsidiaries (240) 79Acquisition of property, plant & equipment (30,605) (24,564)Acquisition of intangible assets (1,102) - ------- -------Net cash flow from investing activities (41,577) (28,033) ------- -------9(iii) Cash flows from financing activities Proceeds from issue of share capital - 43Payments to acquire own shares (8,413) (453)Net decrease in other debt and finance leases (414) (302)Redemption of B shares (2,408) (848)Increase in borrowings 17,400 2,758Payment of transaction costs - (40)Equity dividends paid (19,098) (18,158) ------- -------Net cash flow from financing activities (12,933) (17,000) ------- -------10. Analysis of net debt 1 January Cash flow Other non cash 31 December 2007 changes 2007 £'000 £'000 £'000 £'000 Cash at bank and in hand 22 (3) - 19Overdrafts (999) (26,601) (240) (27,840) ----- ------- ----- ------- (977) (26,604) (240) (27,821) Debt due within one year (3,423) (15,304) - (18,727)Debt due after one year (50,000) - - (50,000)Finance leases (206) 414 (586) (378) ------ ------- ----- ------- (54,606) (41,494) (826) (96,926) ====== ======= ===== ======= 11. Annual General Meeting The Annual General Meeting will be held at Birkby Grange, Birkby Hall Road,Birkby, Huddersfield, West Yorkshire HD2 2YA at 12.00 (noon) on Thursday 15 May2008. 12. Other The financial information set out above does not constitute the Company'sconsolidated statutory accounts for the years ended 31 December 2007 or 2006 butis derived from those accounts. Statutory accounts for the year ended 31December 2006 have been delivered to the Registrar of Companies, and those forthe year ended 31 December 2007 will be delivered following the Company's AnnualGeneral Meeting. The auditors have reported on those accounts; their reportswere unqualified and did not contain statements under section 237(2) or (3) ofthe Companies Act 1985. Forward Looking Statements This Preliminary Announcement of Results for the year ended 31 December 2007contains certain forward looking statements with respect to the Group'sfinancial condition, its results, strategy, plans and objectives. The forwardlooking statements contained in this document are not forecasts or guarantees offuture performance and are subject to risks, uncertainties and other factors.Some of these factors are beyond the Group's control, are difficult to predictand could cause actual results to differ materially from those expressed,implied or forecast in the forward looking statements. These factors include,but are not limited to, the fact that the Group operates in a highly competitiveenvironment, is subject to the effects of government regulation and is reliantupon technology, which is subject to risk, change and development. Other factorsinclude risks inherent in the implementation of large scale capital expenditureprojects and the Group's ability to continue to communicate and market itsservices effectively. All forward looking statements in this document are based on information knownto the Group as at 7 March 2008. The Group has no obligation publicly to updateor revise any forward looking statements, whether as a result of new informationor future events. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Marshalls