7th Jun 2005 07:02
Hampson Industries PLC07 June 2005 Embargoed: For Release 7.00 am, 7 June 2005 HAMPSON INDUSTRIES PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2005 Hampson Industries PLC, the aerospace and precision engineering group, announcespreliminary results for the year ended 31 March 2005: Highlights • Hampson returns to growth and profit • Underlying sales increase 6.5% (13.4% including four months from Texstars) • Results in line with expectations • Continuing strong demand from automotive turbo charger market • Emerging recovery in global civil aerospace markets - strong second half sales pick up • Texstars acquisition integrated and performing to expectations • Previously announced major contract wins to provide impetus for future growth • Low cost manufacturing strategy on track 2005 2004 Sales £77.8m £68.6mOperating Profit/(Loss) £2.0m £(0.2)mProfit Before Tax £0.4m £(1.9)mEarnings per Share 0.0p (1.1p)Cash inflow from operating activities £3.3m £5.5mNet Debt £29.8m £24.7m Commenting on the year Chairman Tony Gilroy, said: "We have moved several key strategic initiatives forward, including acquiringTexstars, successfully completing two fund-raisings and bringing our low costmanufacturing strategy close to fruition. At the same time we have demonstrated our improved competitiveness and givenimpetus to future growth by winning major new contracts in aerospace andprecision automotive. We are confident for the fulfilment of our growth strategy, and for prospects in2005/6 and beyond." Further information: Kim Ward, Chief Executive +44 (0) 1384 472941 Howard Kimberley, Finance Director +44 (0) 1384 472946 Marc Popiolek/Jonathan Gollins, Financial Village +44 (0) 20 7872 5442 www.hampson-industries.plc.uk CHAIRMAN'S STATEMENT The year ended 31 March, 2005 saw the Group return to growth, benefiting fromemerging recovery in global civil aerospace markets, strong demand in automotiveand the start-up of previously announced new contracts. Underlying salesincreased by 6.5%, and with four months' trading included from the recentacquisition of Texstars Inc., overall Group sales rose by 13.4% to £77.8m. As expected, the improvement in sales has yet to work through to operatingprofit. Margins in the year were constrained both by the new contract start-upsand by significant increases in energy and metals costs. Profit beforeexceptional items, goodwill amortisation and taxation was a same-again £1.6m(2004: £1.6m) and earnings per share before goodwill amortisation andexceptional items were 0.46p (2004 : 0.77p). After exceptional items and goodwill amortisation, the Group generated a profitbefore tax of £0.4m compared to a loss of £1.9m in the previous year. Basicloss per share was 0.01p (2004: Loss per share 1.14p). The net operatingexceptional charge of £0.6m reflected the cost of steps taken to optimiseproduction capacity at our fast-growing Precision Automotive division, start-upestablishment costs of our new Indian manufacturing facility written off in theperiod, and rationalisation costs at our Precision Industrial Division. The year saw great strides taken in the implementation of our growth strategy.Texstars Inc., a leading supplier of high performance polymer-based compositesfor the aerospace and defence industries, was acquired for £24.7m in December2004 (including expenses) on the back of the year's second major fund-raising.We also advanced our plans for low cost manufacturing in India. As theBangalore greenfield manufacturing venture enters its construction phase andwork on major new aerospace contracts commences, investment in the Group'sfuture must take priority. It is too soon to resume distributions toshareholders, and the Board recommends that no final dividend be paid. Whenappropriate, the Board intends to return to making dividend payments andthereafter to pursue a progressive policy. Aerospace The year saw a number of notable strategic successes, and the first signs ofrecovery in the global civil aerospace market as demand turned around and futureproduction schedules indicated growth. Whilst we saw build rate increasesacross a number of airframe and aero engine programmes during the second half,the positive impact on our airframe business was partially offset by the effectof the UK Ministry of Defence deferring order-placement for spares and repairsfor its older generation military aircraft fleet. We also successfully developed, manufactured and assembled the first sevenpre-production empennage structures for the Eclipse Very Light Jet. Thecertification of the aircraft by Eclipse Aviation Corporation (USA) continues onschedule, with three fully conforming aircraft now in flight test. Investmentin our state-of-the art manufacturing and assembly facilities continues andproduction is expected to commence late in our 2005/06 financial year. During the year, our Aerospace Machining Division commenced deliveries to Snecmaand MTU under contracts achieved last year and we see further growthopportunities with these world-class customers. Aerospace Machining also had amajor success in winning the GKN/Airbus A400M exclusive lifetime programme, forthe first time penetrating the specialist high-speed aluminium airframemachining market. This programme has a likely minimum contract value of $28mexcluding aftermarket and production deliveries commence in 2007. In addition,we gained new business with Rolls-Royce, Goodrich and BOC Edwards, furtherbroadening our customer base. The Texstars acquisition is meeting its pre-acquisition financial performanceexpectations and integration has proceeded smoothly. We see real opportunitiesto offer customers a package solution to their requirements, combining ourfabrications and transparencies technologies to provide integrated cockpitassemblies. Since Texstars joined Hampson, it has received its first productionorders for armoured transparencies to be supplied to United Defence for use asanti-ballistic protection on US Army Bradley fighting vehicles, together withfollow-on orders for F-16 canopies and refurbishments. Precision Engineering Higher demand for automotive turbo chargers lifted sales by 23% to record levelsfor our Precision Automotive Division. However, in servicing this significantincrease in demand, we incurred high levels of overtime working and incrementalcosts which impacted on margins. Action has been taken to improve productionflow and thereby raise capacity. We expect a return to normal operatingmargins, and expect further growth in 2005/06 and beyond. An agreement was signed in November 2004 to establish Hampson Maini EngineeringPrivate Limited in Bangalore, India (70% Hampson ownership). Construction of apurpose-designed manufacturing facility commences shortly, with scope forsignificant capacity expansion on a modular basis going forward. Initialproduction is planned to commence late in the 2005/06 financial year, and ourprincipal customers continue to be highly supportive of our plans to offerintegrated low cost manufacturing. This is another key action in our growthstrategy. The Precision Industrial Division saw a further softening in demand for glasscontainer manufacturing equipment due to continuing de-stocking by several majorcustomers. Restructuring action was therefore taken to balance resources inline with lower demand levels. We have won new business in specialist machiningand further orders for new practice ordnance, which should ensure growth forPrecision Industrial in 2005/06. Outlook Over the 2004/05 financial year, we have moved several key strategic initiativesforward, including acquiring Texstars, successfully completing twofund-raisings, and bringing plans for low cost manufacturing close to fruition.At the same time we have demonstrated our improved competitiveness and givenimpetus to future growth by winning major new contracts in Aerospace andPrecision Automotive. We continue to strengthen our management below Board level through both internaldevelopment and the infusion of new high quality management. We will continueto take all actions necessary to forge sustainable competitiveness and improveshareholder value. In summary, the progress achieved and opportunities being targeted continue toprovide the Board with confidence for the fulfilment of our growth strategy, andfor our prospects in 2005/06 and beyond. Tony Gilroy Chairman 7 June, 2005 CHIEF EXECUTIVE'S REVIEW Commitment to being the most cost-effective, professional and highest qualityprovider of technology-driven manufacturing solutions in our selected markets isa fundamental cornerstone of our growth strategy. This business philosophy,which enshrines our core values, has strengthened the foundations of ourbusiness and established an increasingly competitive position for us over thelast three years, enabling the Group to return to revenue growth in the yearended 31 March, 2005. In a year marked out by a number of strategic successes, the Group's financialstrength was transformed by two highly successful fund raisings and atransformational acquisition that has seen us open up new markets and sources ofprofitable future growth. During the last financial year, we advanced plans toreinforce competitiveness by offering our customers logistics solutions for lowcost sourcing of highly engineered, complex components, as well as gained anumber of new contracts in our aerospace businesses. In the global commercial aerospace market, demand conditions started to improvein the second half of 2004/05, and the growth we have seen - and continue toexpect - from existing and new programmes, has been encouraging. Completion of the Eclipse Very Light Jet pre-production phase was a significantmilestone during the year. The programme has been a great success, andpreparation is now under way to site all the detailed pressed and machined partsat our BHW site in Wigan. We will also establish a dedicated stand-alone cellin Fort Worth, Texas, for final assembly of the complete empennage structurefrom kits supplied on a just-in-time basis from the UK. This combination offacilities is a key element of our manufacturing and logistics strategy toprovide a best-in-class, risk-managed solution to this important customer. The development phase of the new GKN/Airbus A400M contract has got off to a goodstart. Our Birmingham-based design and logistics teams are currently planningfor pre-production deliveries of A400M trailing edge parts to GKN later in 2005. These parts are being manufactured in a state-of-the-art, purpose-acquiredhigh speed machining cell that provides us with a world-leading capability inthin-wall, aluminium airframe component manufacture. Our low cost sourcing and manufacturing solutions are also progressing well. Weare using carefully selected low cost partners for the manufacture of lowercomplexity, higher value parts, while construction of our own manufacturingfacility in Bangalore, India, will commence shortly. The acquisition of Texstars Inc. was a significant move for Hampson. Itsestablished expertise in the development and manufacture of transparencies,composites and polymer-based products enables us to offer complete fabricatedsolutions across the full range of materials used in aerospace sub-assemblies.Texstars Inc. is now fully integrated within the Group, forming the newlyestablished Transparencies, Composites & Plastics Division. The acquisition ofTexstars Inc. not only balances our civil and military aerospace sales moreevenly, but also brings our aftermarket and original equipment sales more intoequilibrium. The civil aerospace market, as reported by most industry observers, is now onthe rebound. Our other main market, for high precision automotive components(primarily for turbo charger applications), continues to show sharp growth andfurther investment will be made to capitalise on this demand in 2005/06. Opportunities to improve sales and margins exist in each of our Divisions, andthe Group now has more high quality customers, and less dependency on any singlecustomer, than ever before. This positions us ideally to look to the futurewith conviction in our strategy and confidence that our people will continue torise to the challenges ahead and exceed expectations in all measurable areas ofperformance. 2005/06 will be a year marked out by significant investment by Hampson inAerospace as well as in Automotive. Chiefly, this will be to support ourparticipation in the Eclipse programme as well as to commission the plannedgreenfield facility in Bangalore. Both of these elements are key constituentsof our growth strategy and will ensure we sustain and accelerate the momentumestablished in 2004/05, building a solid platform for delivery of the value nowembedded in our order books, for the benefit of our shareholders. OPERATIONS REVIEW AEROSPACE Aerospace Fabrications & Assemblies The principal customers of the Group's largest aerospace Division are the globalairframe manufacturers and their tier one suppliers, including Airbus, BAESystems, Boeing, Bombardier, Eclipse Aviation Corporation, GKN Aerospace,Lockheed Martin and many others. Hampson's Aerospace Fabrications & Assemblies Division supplies these globalcustomers with a broad range of products, from critical major airframestructures, assemblies and sub-assemblies, through to small detailed andspecialist parts made from a range of solid and laminated materials. The primary focus during the year under review was to manufacture, deliver andassemble the pre-production empennage sets for the Eclipse 500 certification andtest aircraft and to ensure adequate planning was completed in readiness for thestart of full production in late 2005. During this most important phase of theprogramme, a Hampson team has been co-located at the Eclipse Aviation facilityin Albuquerque, New Mexico, working shoulder-to-shoulder with Eclipse's ownemployees. The knowledge gained during this pre-production phase has enabled us tofine-tune our manufacturing strategy and align our assembly approach to thetechniques pioneered by Eclipse for the assembly of the complete airframe. Ithas also enabled us to minimise project risk through concurrent and valueengineering activities designed to improve manufacturing efficiency and reducecycle times. There are now three flying aircraft in the Eclipse certification programme,which is scheduled for completion in early 2006. Flight tests are on scheduleand the new Pratt & Whitney Canada 610F engine is performing well. In themeantime, the still nascent Very Light Jet ("VLJ") market continues to attractsignificant interest from a number of more larger and established aerospacemanufacturers, with Embraer most latterly confirming its planned participationwith a new VLJ about to be developed. We believe our commitment to this sectorthrough our major involvement in the Eclipse 500 programme will stand us ingreat stead to benefit from the additional opportunities these new programmeswill bring. Meanwhile, our successful fulfilment of the A380 contracts for customers such asHDA in Australia, Ruag in Switzerland and Airbus in the UK, played a valuablepart in the first flight of this ground-breaking aircraft on 5 April, 2005. Although the Division saw an increase in demand on a number of commercialaerospace programmes during the second half year, performance was held back by adeferral of ordering of military spares and repairs by the UK MOD. This wasdriven by an increase in the number of older operational aircraft beingcannibalised for spare parts (such as the Tornado F3) as well as an ongoingreassessment by the MOD of its consolidated strategy for procurement which haslead to continuing delays in order placement activity. With civil aerospace volumes now increasing, the Fabrications & AssembliesDivision is looking forward to sustained growth on existing programmes(particularly Airbus), and further new order intake, targeted particularly atwork packages that offer the potential to add value through increased elementsof sub-assembly activity and the integration of manufactured components from ourextended low-cost supply chain. Aerospace Machining Hampson's Aerospace Machining Division operates from 3 manufacturing sites inthe UK. A specialist in the manufacture of performance-critical gas turbine components,this Division's customer base includes the world's major aero-enginemanufacturers and their larger suppliers. Complex components are manufactured,assembled and tested in its facilities for a wide range of civil and militaryaerospace applications, as well as for applications in the industrial and marinepower generation markets. All three manufacturing sites within the Aerospace Machining Division securednew orders during the year and are well positioned to continue to benefit fromthe rebound in civil aerospace demand. During the year end 31 March, 2005, the Division successfully developed andsupplied pre-production sets of highly complex, thin-walled aluminium componentsfor the Eclipse 500, and in so doing confirmed its ability to competeeffectively in the previously untapped market sector for machined components forairframe applications. The addition of this process capability - the high speedmachining of very thin components from solid aluminium billet - helped securethe Airbus A400M trailing edge contract win, in partnership with GKN. Thismajor contract also demonstrated the effective leveraging of skills between theGroup's businesses, as the detailed pressed components will be manufactured atour Fabrications & Assemblies facility in Wigan. In addition to winning GKN and Airbus work, additional turbine engine componentwork was also secured in the year from MTU, Rolls-Royce and Snecma on the TP400,Trent 900/1000, GP 7000, M88 and AS146 programmes, positioning the Division wellfor future growth as these relatively young programmes mature. As part of ouroperational improvement strategy, modular cells have now been established at ourtwo larger facilities dedicated to engine rings, airframe, rapid response and tocertain key customers. The Division gained new quality approvals during the year and continues to applythe highest manufacturing process standards to differentiate itself as a leadingglobal supplier. This differentiation is underpinned by our clearly focusedstrategy to add value to our customers by securing and integrating less complexcomponents through our low cost supply channels, supported by core skills inengineering, supply chain and complex logistics management, that we havesystematically developed over the last eighteen months. With our increased competitiveness, new work already secured, and the impact ofimproving market conditions, we expect to see improved results in 2005/06 andbeyond. Transparencies, Composites and Plastics Texstars Inc. was acquired on 3 December, 2004, and constitutes the newly-formedTransparencies, Composites and Plastics Division. One of the premiertransparency companies in the USA, it was one of the first to develop the 550knot bird strike canopy for the US government, the first to supply a JointStrike Fighter canopy and the only approved single source to the (now cancelled)Comanche "stealth" helicopter. Texstars' role in these innovative projects has ensured continuous dialogue withthe US government to gain opportunities on future aerospace and militaryprogrammes, positioning the business well for future growth. In addition to the canopy business, Texstars has also improved its position incomposite and plastic parts, supplying civil and military aerospace platforms aswell as the rapid transit markets via Bombardier and Siemens. One of the major successes of this business during the last year was thecommencement of supply of the very complex, gold-coated, EA6B transparenciesthat protect the pilot and navigator on this specialist US radar jammingaircraft. In addition, newly-developed Transparent Armour Gun Shields (TAGS)have been supplied to United Defence for use on their Bradley fighting vehicles.Texstars now supply six military vehicles with TAGS and are looking to move onto other platforms. Marketing of Texstars into Europe and the marketing of Hampson's aerospacebusinesses into the US has begun, and many synergistic opportunities have beenidentified. Future growth from this well-regarded business will come from more widespreadinstallation of transparent gun shields, from the increasing sophistication ofcanopy technology and from new composite structures and sub-assemblies. We aredelighted with the performance the business has generated in the four months wehave owned it, and above all with the professionalism and enthusiasticcontribution of its people to the development of the Hampson Group at thisexciting phase in our development. PRECISION ENGINEERING Precision Automotive The growth in demand for turbo charger components over the last few years hasbeen very significant, and the year just ended was no exception. Sales grew by23% and the order book remains at a record level. Whilst providing us with a firm foundation of opportunity going into 2005/06,the speed and scale of the additional volumes required by our customers in 2004/05 caused some disruption to existing manufacturing lines. This resulted ininefficient labour patterns, some process bottlenecks and other incrementalcosts associated with breaching our effective short term manufacturing capacitylimits. As a consequence, the second half year saw extensive restructuring,management changes, the installation of new equipment and a revisedmanufacturing strategy that has seen margins now restored to more normal levelsby the year end. In addition to gaining new sales, the Division focused on securing a jointventure, 70 per cent owned by Hampson, in Bangalore, India. This willmanufacture low-complexity components for turbo charger customers. Inpreparation for the move, cellular manufacturing has been taken to new levelswith external assistance from the Kaizen Institute to develop a state-of-the-artfactory layout. Land in Bangalore has now been purchased, senior personnelhired, construction of the first building is about to begin and stock buildshave commenced to buffer supplies to existing customers where work is to betransferred. The objective is to move low complexity work to the new facilityin Bangalore, and to expand high complexity work into the space vacated in theUK. Already a global business, the India presence will position the Division forgrowth in the Asian turbo charger market in addition to providing a highlycompetitive source of supply to our global customer base. Precision Industrial The Precision Industrial Division saw sales rise modestly due to the delivery ofa contract for the supply of practice ordnance. Demand for the Division's coreproducts for the glass container handling industries remained patchy throughoutthe year, as a result of continued de-stocking actions by major customersfollowing industry consolidation activity that has seen a number of glassmanufacturing plants change ownership. Margins in the year were adversely impacted by the increased cost of castingstogether with the costs of accommodating revised quality and finishingspecifications for the UK MOD contract, which were substantially absorbed byLattimer. The learning and development work undertaken has, however, enabledLattimer to improve its competitiveness with respect to future follow-oncontracts expected in 2005/06 from the UK MOD and other export customers andthese are expected to yield more positive margins. Restructuring action was undertaken at the Division during the year to reducethe overhead base and align business performance more closely to market demandlevels. This saw headcount reduced by 25%. Since the end of the financial year end, production has commenced on the supplyof machined components for a new customer in the off highway market and based oncurrent indications, activity levels are expected to rise substantially in 2005/06, providing a counter-balance to the more volatile glass market, where thelimited forward order horizon makes future demand levels difficult to predict. Kim Ward Chief Executive 7 June, 2005 At a Board Meeting of Hampson Industries PLC held today it was recommended thatno final dividend be paid on the Company's Ordinary share capital, making atotal dividend of nil for the year (2004: nil). The results for the year are asfollows: GROUP PROFIT AND LOSS ACCOUNT For the year ended 31 March 2005 Continuing activities before exceptional items and Goodwill amortisation Acquisitions Total Exceptional amortisation Total £'000 £'000 £'000 £'000 £'000 £'000 Turnover 72,978 4,784 77,762 - - 77,762 Operating Profit Before Exceptional Items 2,076 965 3,041 - (514) 2,527 Exceptional items - - - (572) - (572) Total Operating Profit 2,076 965 3,041 (572) (514) 1,955 Loss on discontinued - - - (129) - (129)operations Profit before interest 2,076 965 3,041 (701) (514) 1,826 Interest payable (net) (1,314) 6 (1,308) - - (1,308) Other finance costs (net) -retirement benefits (133) - (133) - - (133) Profit on ordinary activitiesbefore taxation 629 971 1,600 (701) (514) 385 Taxation (475) Loss on ordinary activitiesafter tax (90) Minority Interests (equity) 59 Loss for the financial year (31) Dividends on non-equity shares - Loss attributable to ordinary (31)shareholders Dividends on equity shares Interim - Final - Loss transferred to reserves (31) Earnings per 5p ordinary shareContinuing activities* 0.46pBasic and diluted (0.01)p * Based on earnings of continuing activities before exceptional items and goodwill amortisation GROUP PROFIT AND LOSS ACCOUNT For the year ended 31 March 2004 Continuing activities before exceptional items and Goodwill amortisation Acquisitions Total Exceptional amortisation Total £'000 £'000 £'000 £'000 £'000 £'000 Turnover 68,556 - 68,556 - - 68,556 Operating Profit Before exceptional items 3,200 - 3,200 - (202) 2,998 Exceptional items - - - (3,245) - (3,245) Total Operating Profit 3,200 - 3,200 (3,245) (202) (247) Loss on discontinued - - - - - -operations Profit before interest 3,200 - 3,200 (3,245) (202) (247) Interest payable (net) (1,433) - (1,433) - - (1,433) Other finance costs (net) -retirement benefits (177) - (177) - - (177) Profit on ordinary activitiesbefore taxation 1,590 - 1,590 (3,245) (202) (1,857) Taxation 731 Loss on ordinary activitiesafter tax (1,126) Minority Interests (equity) - Loss for the financial year (1,126) Dividends on non-equity shares (215) Loss attributable to ordinary (1,341)shareholders Dividends on equity shares Interim - Final - Loss transferred to reserves (1,341) Earnings per 5p ordinary shareContinuing activities* 0.77pBasic and diluted (1.14)p * Based on earnings of continuing activities before exceptional items and goodwill amortisation GROUP BALANCE SHEET As at 31 March 2005 2004 £'000 £'000 £'000 £'000 Fixed assetsIntangible fixed assets 23,159 2,692Tangible fixed assets 27,524 21,299 50,683 23,991 Current assetsStocks 19,031 15,104Debtors 19,755 15,109Cash at bank and in hand 3,227 3,404 42,013 33,617Creditors - amounts fallingdue within one year (21,756) (16,039) Net current assets 20,257 17,578 Total assets less current 70,940 41,569liabilities Creditors - amounts falling (31,491) (26,657)due after more than one year Provisions for liabilities and (1,108) (1,472)charges Retirement benefit liabilities (2,289) (2,217) 36,052 11,223 Capital and reserves Called-up share capital 13,775 5,908 Reserves 22,336 5,315 Shareholders' Funds - Equity 36,111 11,223 Minority Interest - Equity (59) - 36,052 11,223 The Financial Statements were approved by the Board of Directors on 7 June, 2005 and were signed on itsbehalf by: J A Gilroy - Chairman H F Kimberley - Finance Director GROUP CASH FLOW STATEMENT For the year ended 31 March 2005 2004 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 3,280 5,511 Returns on investments and servicing of finance Interest receivedInterest paid 48 22Interest element of finance lease rental (1,072) (1,260)payments (190) (196)Non-equity dividends paid - (397) (1,214) (1,831) TaxationCorporation tax paid (61) (443) Capital expenditurePurchase of tangible fixed assets (3,293) (1,011)Sale of tangible fixed assets - 112Development Expenditure (1,893) - (5,186) (899) Acquisitions and disposals Acquisitions (24,459) -Net cash acquired with subsidiary undertakings 241 -Disposals 100 50 (24,118) 50 Cash (outflow)/inflow before financing (27,299) 2,388 FinancingNet proceeds of ordinary share issues 24,832 -Redemption and cancellation of preference - (5,583)sharesNew borrowings 4,000 4,500Capital element of finance lease rental (1,671) (1,841)payments Repayment of loans (11) (511) 27,150 (3,435) Decrease in cash (149) (1,047) Reconciliation to movement in net debt Decrease in cash (149) (1,047) Increase in debt and lease financing (2,318) (2,148) Change in net debt from cash flows (2,467) (3,195)New finance leases (2,574) (1,554)Translation difference (28) (198) Movement in net debt in the year (5,069) (4,947)Net debt at the start of the year (24,696) (19,749)Net debt at the end of the year (29,765) (24,696) OTHER PRIMARY STATEMENTS Statement of Total Recognised Gains & LossesFor the years ended 31 March 2005 2004 £'000 £'000Loss for the financial year (31) (1,126)Currency translation difference on net foreign 6 (721)investmentActuarial losses on retirement benefit schemes 116 76Deferred tax credit related thereto (35) (25)Total recognised gains and losses for the financial year 56 (1,796) Note of Historical Cost Profits and LossesFor the years ended 31 March 2005 2004 £'000 £'000 Profit/(loss) on ordinary activities before taxation 385 (1,857)Realisation of property valuation gains in prior years - -Historical cost profit/(loss) on ordinary activitiesbefore taxation 385 (1,857)Historical cost loss for the year retained aftertaxation and dividends (31) (1,341) Reconciliation of Movements in Consolidated Shareholders' FundsFor the years ended 31 March 2005 2004 £'000 £'000 Loss for the financial year (31) (1,126)Dividends - (215) (31) (1,341) Other recognised gains & losses relating to the year 87 (670)Issue of Ordinary Share Capital 24,832 -Redemption of Preference Shares - (5,583)Net increase to/(reduction from) Shareholders' Funds 24,888 (7,594)Opening Shareholders' Funds * 11,223 18,817Closing Shareholders' Funds 36,111 11,223 NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The figures and financial information for the year ended 31 March, 2005 do notconstitute the full statutory financial statements for the year. The statutoryfinancial statements for the year ended 31 March, 2004 have been filed with theRegistrar of Companies. The auditors have reported on the 2004 and 2005 financial statements. Thesereports were unqualified and did not contain any statements under Section 237(2)or 237(3) of the Companies Act 1985. 2. Segmental analysis Turnover is based on the amount receivable for goods and services providedduring the year after eliminating intra-group transactions and value added tax. Turnover, operating profit/(loss) and net assets/(liabilities) were as follows: Turnover Operating Profit/ Net Assets/ (loss) (liabilities) 2005 2004 2005 2004 2005 2004 £'000 £'000 £'000 £'000 £'000 £'000 By activity:Aerospace 50,386 45,363 2,093 1,028 32,443 24,208Precision Engineering 27,376 23,193 3,033 3,482 11,708 9,850Head Office costs - - (2,085) (1,310) - -Non-operating, interestbearing and miscellaneousassets and liabilities - - - - (8,099) (22,835) Continuing operations 77,762 68,556 3,041 3,200 36,052 11,223Exceptional items - - (572) (3,245) - -Goodwill amortisation - - (514) (202) - - 77,762 68,556 (1,955) (247) 36,052 11,223 By country of origin:United Kingdom- home sales 49,175 48,531- export sales 18,888 14,654 68,063 63,185 1,381 2,718North America - USA 9,699 5,371 1,660 482Exceptional items - - (572) (3,245)Goodwill amortisation - - (514) (202) 77,762 68,556 (1,955) (247) 3. Exceptional items The exceptional items relate mainly to Group restructuring and rationalisationcosts £0.4m (2004: £2.3m), and start up costs for a new operation in India £0.2m(2004: £nil). Non-operating exceptional items of £0.1m (2004: £nil) wereincurred in relation to the discharge during the year of liabilities associatedwith a previously discontinued operation. Other exceptional costs in 2004included professional fees in relation to assistance with the bid for thesubstantial Eclipse contract (£0.6m), consultancy costs associated with businessdevelopment activities (£0.1m) and a provision for costs associated with avacant property (£0.2m). Exceptional items are included within Cost of sales, £0.2m (2004: £1.5m), andAdministrative expenses, £0.4m (2004: £1.7m). The new cash inflow from exceptional fixed asset disposals was £nil (2004:£nil). The net cash outflow from other exceptional items charged during the yearamounted to £0.6m (2004: £1.5m). 4. Taxation Year to Year to 31 March 31 March 2005 2004 £'000 £'000 United Kingdom corporation tax charge at 30% (2004: 30%)On (loss) / profit for the year (87) -Adjustment in respect of prior years 76 260Overseas corporation tax - 48Total current tax charge (11) 308 Deferred taxationOrigination and reversal of timing differences 571 (505)Adjustment in respect of prior years (85) (534) Total tax charge/(credit) 475 (731) 5. Earnings per share Earnings per share have been calculated on the following bases: Year to Year to 31 March 2005 31 March 2004 Earnings Number of 5p Earnings Number of ordinary 5p ordinary £'000 shares £'000 shares Continuing activities before exceptionalitems and goodwill amortisation 1,021 221,018,157 910 118,147,246Basic (31) 221,018,157 (1,341) 118,147,246 Taking into account the potential exercise of share options has an anti-dilutiveeffect and therefore diluted earnings per share equates to basic earnings pershare. The Group's financial statements for the year ended 31 March, 2005 will be sentto shareholders during the week commencing 18 July 2005. The Annual General Meeting will be held on Tuesday, 30 August, 2005. Group Headquarters and Registered Office: Registrars & Transfer Office: 7 Harbour Buildings, Waterfront West Neville Registrars Limited, Neville HouseDudley Road, Brierley Hill, 18 Laurel Lane, HalesowenWest Midlands, DY5 1LN West Midlands, B63 3DA Tel: +44 (0) 1384 485345Fax: +44 (0) 1384 472962Website: www.hampson-industries.plc.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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