3rd Mar 2005 07:01
Infast Group PLC03 March 2005 PRELIMINARY STATEMENT 2004 Infast Group plc, the inventory management services group, announces itspreliminary statement for the year ended 31 December 2004. KEY POINTS * Exit from manufacturing completed: - At a cost which was lower than anticipated - Earlier than previously expected * The Group fully focused on value added Inventory Management Services businesses * Merging of two Industrial Divisions providing a single channel to market FINANCIALS * Turnover on continuing operations at £157.1m (2003: £171.4m) * Operating profit before goodwill amortisation and exceptional items of £3.5m (2003: £3.2m) * Final dividend of 0.6p (2003: 1.2p) * Net debt of £13.9m (2003: £12.3m) expected to fall considerably in 2005 Graham Titcombe, Chairman of Infast, said: "2004 was a year of significantchange for Infast. The Board believes that the Group now has the requisitestructure and management resources in place to develop its business. We areconfident about the prospects for the re-shaped Infast businesses in 2005." For further information, please contact: Infast Group plc Tel: 01452 880 500Robert Sternick, Chief ExecutiveJohn Kimber, Finance Director Rawlings Financial PR Limited Tel: 01756 770 376John RawlingsCatriona Valentine CHAIRMAN'S STATEMENT The year ended 31 December 2004 has been one of significant change for theGroup. In July 2004, the Board announced its decision to exit from its manufacturingoperations in order to focus entirely on Inventory Management Services. Thisprocess has been successfully completed with the sale of GKS Centrepiece andPhilidas and the closure and asset disposals at Arnold Wragg. These actions havestreamlined the Group's activities, relieved us of mounting losses and creatednew commercial opportunities for our retained businesses. This has been achieved at a lower than anticipated cost. We expect the totalexceptional charge before goodwill realisation to be £6.5m rather than theoriginal estimate of £8m. Of this sum, a cost of £7.2m is reflected in our 2004results but we expect to gain £0.7m in the current year, following the sale ofthe two related properties. In addition, we expect the cash flow generated fromthe exit process to have a £2m positive effect on the 2005 balance sheet eventhough net cash costs of £1.5m were absorbed in the year under review. During the year we also sought to improve the efficiency and focus of ourInventory Management Services operations. In April we initiated a cost reductionplan in our Premier Automotive division, which is on target to deliver annualsavings of £0.7m. In July we merged the Infast Industrial and Infast Directdivisions, creating a strong single source service channel to the industrialmarket, which should give rise to further cost savings of £0.7m in 2005. The£0.4m costs arising from these actions have been shown as an operatingexceptional item in the accounts. Increased raw material prices, particularly steel, provided a major challenge in2004. The actions taken to pass on these price increases to our customers and toreduce operating costs should alleviate the continued pressure on margins. Financial Results Turnover for the year was £163.8m (2003: £178.4m) of which £157.1m (2003:£171.4m) was contributed by our continuing Inventory Management Servicesoperations. This reduction in turnover was attributable to the expiry of anautomotive contract at the end of 2003 and the exit from an unprofitableindustrial contract in mid 2004. The year on year impact of these two events wasa fall in turnover of over £21m, more than offsetting the growth achievedelsewhere. Operating Profit before goodwill amortisation and exceptional items was £3.5m(2003: £3.2m). This figure includes a £0.8m loss (2003: £1.2m loss) from thediscontinued manufacturing operations. Net debt levels increased to £13.9m in the year (2003: £12.2m) primarily as aresult of the costs incurred during the exit from manufacturing. Stock levelswere also increased during this period to ensure continuity of supplies, whilstsome parts were resourced from overseas manufacturers. We expect net debt tofall considerably in 2005. Dividend The Board recommends the payment of a final dividend of 0.6p (2003: 1.2p)bringing the total dividend for the year to 1.0p (2.0p). At this level, thedividend is covered more than two times by the adjusted Earnings per Sharefigure of 2.1p (2003: 2.8p). Strategy and Outlook The Board believes that, following these significant changes, the Group now hasthe requisite structures and management resources in place to develop and expandits Inventory Management Services business. The Group has been particularly active in expanding its products and servicecapabilities both in the United Kingdom and internationally. Despite staticmarkets, we are increasing sales to new and existing customers. These highersales are expected to offset an anticipated reduction in demand from the railcarriage building industry in the United Kingdom in 2005. Turnover for the first two months of 2005 in our continuing operations ismarginally higher than for the same period of 2004. Although too early topredict a clear trend, we are confident about the prospects for the re-shapedInfast businesses in 2005. Graham TitcombeChairman 3 March 2005 CHIEF EXECUTIVE'S STATEMENT The exit from all three manufacturing facilities announced last July hassuccessfully been completed, ahead of schedule and below the projected £8.0million exceptional charge, excluding goodwill realisation. We expect thecurrent charge of £7.2 million will be reduced further to £6.5m with profitsrealised on the sale of property in 2005. Protecting the supply of products to our customers was of fundamental importanceduring this process, which was made more difficult by sizeable steel priceincreases and availability. Substantial work was conducted to re-source many ofthe components to lower cost countries and to secure new supply agreements. Weestablished safety stocks to ensure a smooth transition to the new supply,temporarily impacting our working capital, with no effect to service levels. In the early part of the year, we restructured our Premier Automotive division,improving our productivity and ensuring our costs were commensurate with thelevel of the business. This gave rise to a one-off cost of £0.2m. Annual costsavings are expected to be in the region of £0.7m. In July we announced the merger of two divisions, Infast Direct and InfastIndustrial, into a single division, Infast Industrial, serving the Industrialmarkets with the whole range of our products and services through one channel.This has been accomplished smoothly and is being well received by our customers.The newly streamlined division has already generated some good opportunities andnew orders from existing customers. The merger resulted in a re-organisation cost of £0.2m. Annual cost savings areexpected to be in the region of £0.7m. The restructuring of Premier Automotive and Infast Industrial was made possiblethrough a series of stepped changes in the business, consolidating structures,system implementation, closing DSCs while increasing our capabilities. Webelieve that the newly streamlined divisions add to our services capabilitiesand will enable us to take on new business in the UK, mainland Europe andAmerica. Expansion of Services Additional services were developed during the year, including the InfastTechnical Centre (ITC), providing technical and application engineering support,and the iQLab, which achieved United Kingdom Accreditation Service ('UKAS')approval on its first audit. The iQLab, as a business, is already receivingorders and is capable of performing failure analysis, chemical analysis,metallography, mechanical testing and product finish testing. The iQLabreplenishes our technical capabilities, following our exit from manufacturing,and adds to our services. There was an acceleration in demand for our kitting services in 2004, as westarted to take orders for sub-assembly work. We expect to see continued growthin this area of our business. Export growth has been a key objective for the Group and, in the year underreview, our exports grew by 35%. Part of this growth was achieved by servicingthe French and Belgian operations of some of our existing UK customers. We havealso secured new contracts for inventory management services from new andexisting customers in Germany and Spain. We expect to expand our reach intothese and other countries. 2004 Markets We witnessed a change in the mix of business in 2004. Demand for the Jaguarmodels reduced, whilst our volumes increased for the successful new Land Rovermodels - Freelander, Range Rover and Discovery 3. The agricultural market in the UK and US also reduced, as a result of delays tonew model introductions. This affected the results of Premier Automotive andInfast USA. We are confident, however, that this was a temporary slow down. In contrast, demand for construction-related equipment was good with the timelyintroduction of new, higher specification vehicles fuelling demand. Orders for rail products also remained strong throughout the year, as wecompleted a major rail contract. Although that contract has now ended, due tolower demand for carriages in the UK, further orders will continue at reducedlevels. Significant new contract wins, replacing the rail business, have beenreceived from a number of existing and new customers both in the UK andinternationally. Infast USA, which was impacted by lower agriculture business and industrialaction at a customer site, received a major new order, which included a customerplant transfer and facility start up. This project was completed in November2004 and the full benefits of the contract are now flowing in 2005. IBS2 The implementation of the J D Edwards system rollout achieved its objectives in2004 in both the UK and USA, completing the roll-out at Premier AutomotiveDivision and planned sites for the US. The focus is now on completing theroll-out for Industrial Division and the remaining US sites. Human Resources development Training and development programmes, linked to succession planning and therecruitment of new skills to service the business and International markets,continued throughout the year. I would like to congratulate our high achievers in 2004 and give a specialmention to our Divisional winners Donna Wheatley, Richard Jursons, Bill Vajdaand Karen Eve, as well as this year's Group winner Erica Kirk of our IndustrialDivision. I also wish to thank all the Infast Employees for their contributions,high degree of motivation and success in improving the business. Management Priorities for 2005 * Increase profitability through sourcing, continuous productivity improvements and new products and services. * Continue growth in cash generation thereby reducing debt. * Expansion of our products and services internationally and through single channels. * Continuous development of our people and I.T. systems through empowerment and knowledge. * Growth in shareholder value. Moving Forward with Inventory Management Services Market demand for our products and services is very encouraging in the UK, USand now Europe. The European expansion of our services started in 2004 into fourcountries and will continue to accelerate as we increase our customer base inthese and other territories while remaining vigilant on overheads. We believe Infast to be well positioned for providing more products and servicesto current and new customers in the UK and abroad in addition we will continueto develop the level of our services and are confident in achieving good growth. Robert SternickChief Executive Officer 3 March 2005 FINANCE DIRECTOR'S REVIEW Operating Results Group turnover decreased by 8% in the year to £163.8m (2003: £178.4m). Thisdecrease was in line with expectations in our main continuing operations and wasfurther added to by our phased exit from manufacturing. The exit from manufacturing started in May 2004 and was completed in February2005. Consequently, the results of these operations have been included in theseaccounts as discontinued. Group operating profit (pre goodwill amortisation and exceptional items) was£3.5m (2003: £3.2m), after deducting operating losses of £0.8m (2003: £1.2m)from the discontinued operations. Operating profit from continuing operations asa percentage of sales (pre goodwill amortisation and exceptional items) rosemarginally to 2.7% (2003: 2.6%). Overall operating profit increased to £1.9m(2003: £1.5m) largely due to the action taken to exit from manufacturing. Loss on sale and closure on businesses A total charge of £14.7m has been made in these accounts to reflect our exitfrom manufacturing. Of this charge £7.5m relates to goodwill previously writtenoff to reserves. This item, therefore, is a presentational issue which has noimpact on the reserves. The remainder of the charge, £7.2m, relates to the costsof exit and asset write-downs arising from the sale and closure of thebusinesses. Provisions have been included in this figure for the expected costsand asset write-downs on the sale of Philidas completed in 2005. Following the exit from manufacturing, the Group has two surplus freeholdproperties both of which are under negotiation for sale. It is expected thatthese properties will realise approximately £2.3m in cash and a surplus of £0.7mto book value which will then be reflected in the profit and loss account. Financing The Group's net debt position at the end of the year was £13.9m (2003: £12.3m),giving rise to gearing of 32% (2003: 25%). Capital expenditure in the year was £3.2m (2003: £4.0m), whilst asset disposals(excluding those associated with the manufacturing exit) raised £0.4m (2003:£0.1m). The depreciation charge was £3.0m (2003: £3.1m). Capital expenditure waslower in the year, principally due to a lower spend in manufacturing operations.Main areas of spend continue to be in IT projects and materials handlingequipment. The major item of expenditure in the year was a robotic warehousemanagement system for the Industrial division Free cash flow (operating cash flow adjusted for interest, taxation and fixedasset acquisitions and disposals) was £2.2m (2003: £4.4m) after deducting a netspend of £1.5m (2003: Nil) resulting from the sale and closure of businesses. Net interest costs in the year were £0.6m (2003: £0.5m). Interest payable fellto £0.7m (2003: £0.8m) benefiting from lower average interest rates paid and theweaker US Dollar, which affected the translation of the interest paid in USDollars. Interest receivable consisted primarily of an interest payment receivedon the Haden International Group loan. A significant proportion of the Group's core debt needs continue to bedenominated in US dollars. This US Dollar debt is in part provided by a PrivatePlacement loan. The balance outstanding on this loan at the end of the year was$7.1m and is being repaid by equal instalments in February 2005 and February2006. The balance of the Group's debt was made up of £1.6m of finance leases andshort-term bank debt of £8.6m both of which attract a variable rate of interest. The Group's short-term bank facilities totalled £13.5m at the year-end and havesubsequently been renewed at this level for a further 12 months. The Group's liquidity and interest rate risk are managed centrally followingguidelines laid down by the Board. The Group's objective is to maintain abalance of continuity of funding and flexibility through the use of borrowingswith a range of maturities attracting both fixed and variable interest rates. Currency Hedging The Group aims to minimise the risk associated with foreign currencyfluctuations by using a combination of foreign currency borrowings to hedgeforeign currency denominated assets and forward contracts to hedge known tradingexposures. Forward contracts are used only to manage risk and speculation is notpermitted. The US Dollar debt largely hedges our US dollar net assets and the interest onthese loans also provide an effective hedge against US earnings. Taxation The overall tax credit for the year was £1.3m (2003: charge of £0.2m), whichrepresents an effective rate of 28% on losses pre goodwill amortisation andrealisation. This net credit reflected a charge of £1.1m on profit beforeexceptional items and a credit of £2.4m on the exceptional items. Net corporation tax receivable at the end of the year was £0.1m (2003: £Nil) thebalance sheet also reflects a deferred tax asset of £0.3m (2003: Nil). Pensions The Group continues to adopt the transitional arrangements for reporting underFRS17. The Group's defined benefit scheme, which was closed to new members in 1992, hada deficit after tax at the end of the year calculated in accordance with FRS17of £2.1m (2003: £1.9m deficit). Dividend A final dividend of 0.6p is proposed, bringing the year's total to 1.0p (2003:2.0p). This will have a total cash cost of £1.1m. Although the payment of thisis not covered by the profit on ordinary activities after taxation, it iscovered by adjusted earnings and is also covered by free cash flow. Implementation of International Financial Reporting Standards The European Union is seeking to harmonise standards of financial reportingacross its member states and is therefore requiring the adoption ofInternational Financial Reporting Standards (IFRS). The adoption timetablerequires that the Company's 2005 Interim Statement and Report and Accounts beprepared in accordance with the new rules. It is currently too early to quantify the impact of adopting IFRS on the Group'sresults and financial position. We have undertaken an exercise to identify thekey areas that will be affected by preparing the Group results under IFRS, whichare in the areas of accounting for pensions, goodwill, deferred taxation andshare-based payments. In addition the presentation and disclosure in thefinancial statements will be noticeably different. John KimberFinance Director 3 March 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31st December 2004 Before Before exceptional Exceptional exceptional Exceptional items items Audited items items Audited 2004 2004 2004 2003 2003 2003 Notes £m £m £m £m £m £mTurnoverContinuing operations 157.1 - 157.1 171.4 - 171.4Discontinued operations 6.7 - 6.7 7.0 - 7.0 -------- -------- -------- -------- -------- -------- 2 163.8 - 163.8 178.4 - 178.4 -------- -------- -------- -------- -------- -------- Operating costsGoodwill amortisation (1.2) - (1.2) (1.3) - (1.3)Other operating costs (161.3) (0.4) (161.7) (175.2) (0.4) (175.6)Release of provision for closure costs 1.0 - 1.0 - - - -------- -------- -------- -------- -------- -------- 3 (161.5) (0.4) (161.9) (176.5) (0.4) (176.9)Operating profit/(loss)Continuing operations 3.1 (0.4) 2.7 3.1 (0.2) 2.9Discontinued operations (1.8) - (1.8) (1.2) (0.2) (1.4)Release of provision for closurecosts 1.0 - 1.0 - - - -------- -------- -------- -------- -------- -------- 2.3 (0.4) 1.9 1.9 (0.4) 1.5Loss on sale and closure of businesses - discontinued operations - (14.7) (14.7) - - - -------- -------- -------- -------- -------- -------- Profit/(loss) on ordinary activitiesbefore interest 2.3 (15.1) (12.8) 1.9 (0.4) 1.5Net interest (0.6) - (0.6) (0.5) - (0.5) -------- -------- -------- -------- -------- -------- Profit/(loss) on ordinary activitiesbefore taxation 1.7 (15.1) (13.4) 1.4 (0.4) 1.0Taxation on (loss)/profit on ordinary activities 4 (1.1) 2.4 1.3 (0.3) 0.1 (0.2) -------- -------- -------- -------- -------- -------- Profit/(loss) on ordinary activitiesafter taxation 0.6 (12.7) (12.1) 1.1 (0.3) 0.8Dividends 6 (1.1) (2.3) -------- --------Retained loss for the financial year (13.2) (1.5) ======== ======== Basic and diluted (loss)/earnings per share (p) 7 (10.6) 0.7 Adjusted basic earnings per share (p) 7 2.1 2.8 CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the year ended 31 December 2004 2004 2003 Audited Audited £m £m (Loss)/profit for the financial year (12.1) 0.8Exchange adjustments (0.2) (0.3) -------- --------Total recognised gains and losses in the year (12.3) 0.5 ======== ======== CONSOLIDATED BALANCE SHEETAs at 31 December 2004 2004 2003 Audited Audited £m £mFixed assetsIntangible assets 16.6 18.1Tangible assets 13.3 16.2Investments 0.7 0.8 -------- -------- 30.6 35.1Current assetsStocks 25.7 28.4Debtors 32.8 34.0 -------- -------- 58.5 62.4Creditors:Amounts falling due within one year (41.5) (42.7) -------- --------Net current assets 17.0 19.7 -------- -------- Total assets less current liabilities 47.6 54.8 Creditors:Amounts falling due after more than one year (2.9) (4.2) Provisions for liabilities and charges (0.7) (0.7) -------- -------- 44.0 49.9 ======== ========Capital and reservesCalled up share capital 22.9 22.9Share premium account 9.8 9.8Other reserves 4.0 4.0Profit and loss account 7.0 12.9 -------- --------Equity shareholders' funds 43.7 49.6Equity minority interest 0.3 0.3 -------- -------- 44.0 49.9 ======== ======== CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 December 2004 Notes 2004 2003 Audited Audited £m £m Net cash inflow from operating activities* 9 2.6 8.6 Returns on investments and servicing of financeInterest received 0.1 0.3Interest paid (0.7) (0.7)Interest element of finance lease rentals (0.1) (0.1) -------- -------- Net cash outflow from returns on investmentsand servicing of finance (0.7) (0.5) Tax refunded/(paid) 0.3 (0.2) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (1.5) (3.6)Receipts from the disposal of tangible fixed 0.8 0.1assets -------- -------- Net cash outflow from capital expenditure andfinancial investment (0.7) (3.5) Acquisitions and disposalsDeferred consideration from sale of subsidiary - 1.8 Equity dividends paid (1.9) (2.3) -------- --------Net cash (outflow)/inflow before financing (0.4) 3.9 -------- --------FinancingRepayment of finance lease obligations (0.8) (0.7)Repayment of medium term loans (2.0) (2.2) -------- --------Net cash outflow from financing (2.8) (2.9) -------- --------(Decrease)/increase in cash** (3.2) 1.0 ======== ======== * Included within net cash outflow from operating activities are costs amountingto £1.9m (2003: Nil) that have resulted from the sale and closure of businesses.Also within receipts from disposal or tangible fixed assets are proceeds £0.4m(2003: Nil) resulting from the sale and closure of businesses. ** Under FRS 1 (revised), cash is defined as cash in hand plus deposits lessoverdrafts, each of which are repayable on demand. Bank deposits, which are notrepayable on demand are treated as liquid resources, and not cash, in the cashflow statement but are netted off against bank overdrafts in the balance sheetwhere there is right of set-off. NOTES TO THE ACCOUNTS 1. Basis of Preparation The accounts have been prepared in accordance with applicable accountingstandards under the historical cost convention and using the accounting policiesas set out on pages 31 and 32 of the Annual Report and Accounts 2003. The above results and these notes do not constitute statutory accounts (withinthe meaning of section 240 of the Companies Act 1985). The statutory accountsfor 2003, on which the auditors gave an unqualified opinion, have been filedwith the Registrar of Companies. The statutory accounts for 2004, on which anauditors' unqualified report has been made, will be delivered to the Registrarfollowing the Company's forthcoming Annual General Meeting. 2. Segmental Analysis Turnover, operating profit and capital employed all relate to the Group's soleactivity of the provision of inventory management services. 3. Exceptional Items 2004 2003 £m £mOperating exceptional itemsRestructuring costsContinuing operations (0.4) (0.2)Discontinued operations - (0.2) ------- ------- (0.4) (0.4) ======= ======= There was a cash outflow in respect of the 2004 charge of £0.3m. The 2003 chargegave rise to a cash outflow of £0.2m in 2003 and £0.2m in 2004. 2004 2003 £m £mNon-operating exceptional items (discontinued operations):Loss on termination and sale of businessesCosts incurred and asset write offs (7.2) -Goodwill previously written off now realised (7.5) - ------- ------- (14.7) - ======= ======= The above charge relates to the Group's decision to exit from its manufacturing operations which is now completed, consequently these operations are shown as discontinued in these accounts. There was a net cash outflow of £1.5m relating to this charge in the year. 4. Taxation 2004 2003(Credit)/charge: UK Overseas Total UK Overseas Total £m £m £m £m £m £m Current tax on profits forthe period (0.1) - (0.1) 0.6 - 0.6Adjustments in respect ofprevious years (0.2) - (0.2) (0.5) - (0.5) ------- ------- ------- ------- ------- ------- (0.3) - (0.3) 0.1 - 0.1Deferred taxOriginating and reversal oftiming differences (0.6) - (0.6) 0.1 - 0.1Adjustments in respect ofprevious years (0.4) - (0.4) - - - ------- ------- ------- ------- ------- ------- (1.0) - (1.0) 0.1 - 0.1 ------- ------- ------- ------- ------- ------- (1.3) - (1.3) 0.2 - 0.2 ======= ======= ======= ======= ======= ======= Included within the tax chargeare the following amounts of tax arising on sale and closure of businesses:Current tax (2.0) - (2.0) - - -Deferred tax (0.3) - (0.3) - - - ------- ------- ------- ------- ------- ------- (2.3) - (2.3) - - - ======= ======= ======= ======= ======= ======= The tax credit of £1.3m (2003: charge £0.2m) includes a tax credit of £0.1m(2003: £0.1m) relating to operating exceptional costs incurred during the yearof £0.4m (2003: £0.4m). The effective tax rate, excluding goodwill amortisation and realisation, was 28%(2003: 9%). 5. Analysis of net debt As at Other non As at 31 1 January cash Exchange December 2004 Cash flows movements movements 2004 £m £m £m £m £m Bank overdraft 5.7 3.2 - (0.3) 8.6Medium term loan 6.0 (2.0) - (0.3) 3.7Finance leases 0.6 (0.8) 1.8 - 1.6 ------ ------ ------ ------ ------Net debt 12.3 0.4 1.8 (0.6) 13.9 ====== ====== ====== ====== ====== The non cash movement represents the inception of finance leases. Debt falls due as shown in the table below: Within Within one Within two one year to two years to five years Total £m £m £m £m Bank overdraft 8.6 - - 8.6Medium term loan 1.9 1.8 - 3.7Finance leases 0.5 0.5 0.6 1.6 ------ ------ ------ ------Net debt at 31 December 2004 11.0 2.3 0.6 13.9 ====== ====== ====== ======Net debt at 31 December 2003 8.1 2.1 2.1 12.3 ====== ====== ====== ====== All of the Group's borrowings, excluding hire purchase debt, are on an unsecuredbasis. 6. Dividend The proposed final dividend of 0.6p per Ordinary share is payable on 3 June 2005to shareholders on the register on 6 May 2005. 7. Loss / earnings per share The calculation of basic loss per share of 10.6p (2003: basic earnings 0.7p) isbased on the Group loss after tax of £12.1m (2003: profit £0.8m) and on theweighted average number of 20p ordinary shares in issue during the year of114.3m (2003: 114.3m). The calculation of diluted loss per share of 10.6p (2003: earnings of 0.7p) isbased on the Group loss after tax of £12.1m (2003: profit £0.8m) and 114.4m(2003: 114.6m) ordinary shares as shown below: 2004 2003 Number of Number of shares shares Weighted average number of shares 114.3 114.3Share Options 0.1 0.3 -------- -------- 114.4 114.6 ======== ======== Adjusted basic earnings per share is calculated as follows: Earnings Earnings per share 2004 2003 2004 2003 £m £m pence penceBasic (loss)/earnings and (loss)/earnings per share (12.1) 0.8 (10.6) 0.7 Basic (loss)/earnings and (loss)/earnings per share attributable to:Loss on sale and closure of businesses 14.7 - 12.9 -Tax on loss on sale and closure of businesses (2.3) - (2.0) -Operating exceptional items - continuingoperations 0.4 0.2 0.4 0.2Tax credit on operating exceptional items (0.1) (0.1) (0.1) (0.1)Goodwill amortisation 1.2 1.3 1.0 1.1Discontinued operations (after tax) 0.6 1.0 0.5 0.9 ------ ------ ------ ------Adjusted basic earnings and earnings per 2.4 3.2 2.1 2.8share ====== ====== ====== ====== The adjusted basic earnings per share is presented so as to show more clearlythe underlying performance of the Group for continuing operations. 8. Reconciliation of net cash flow to movement in net debt 2004 2003 £m £m (Decrease)/increase in cash as shown in cash flow statement (3.2) 1.0Adjust for:Repayment of medium term loan 2.0 2.2Finance lease repayments 0.8 0.7 ------- -------Change in net debt resulting from cash flow (0.4) 3.9 New finance leases (1.8) (0.4)Exchange movements 0.6 0.7 ------- -------Movement in net debt in the year (1.6) 4.2Net debt at as at 1 January 2004 (12.3) (16.5) ------- -------Net debt as at 31 December 2004 (13.9) (12.3) ======= ======= 9. Reconciliation of operating profit to net cash inflow from operating activities 2004 2003 £m £m Operating profit before exceptional costs 2.3 1.5Operating exceptional costs (0.4) - ------- ------- 1.9 1.5Depreciation 3.0 3.1Amortisation of goodwill 1.2 1.3Loss/(profit) on sale of tangible fixed assets 0.1 (0.1)Decrease/(increase) in stocks 0.5 (2.7)Decrease in debtors 0.9 4.5(Decrease)/increase in creditors (3.1) 1.7Movement on provision - (0.6)Exchange adjustments - (0.1) ------- ------- 4.5 8.6Costs of sale and closure of businesses (1.9) - ------- ------- 2.6 8.6 ======= ======= This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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