5th Sep 2005 07:02
The Vitec Group PLC05 September 2005 For immediate release 5 September 2005 The Vitec Group plc Half Year Results to 30 June 2005 The Vitec Group plc, the international supplier of products, services andsolutions to the Broadcast, Entertainment and Media industries, announces itsresults for the half year to 30 June 2005, in accordance with InternationalFinancial Reporting Standards as expected to be adopted by the European Union("IFRS"). H1 2005 H1 2004 % Change ------- ------- --------Revenue £89.6m £89.1m +0.6 Before significant items*Operating profit £8.1m £7.6m + 6.6Pre-tax profit £7.3m £7.0m + 4.3Basic EPS 10.0p 9.3p + 7.5 After significant items*Operating profit £7.7m £7.7m -Pre-tax profit £6.9m £7.1m -2.8Basic EPS 9.0p 9.5p -5.3 Interim dividend 6.1p 6.1p - * Significant items comprise restructuring costs, negative goodwill andnon-interest finance charges KEY POINTS • Continued improvement in revenue and operating profit**, on reported and constant currency bases • Operating profit** in constant currency up 21% • EPS** up 7.5% • Photographic driven by continued growth in digital SLR camera sales • Broadcast Systems benefiting from stronger demand for robotic and studio pedestals • Restructurings delivering the expected benefits • Kata acquisition trading in line with expectations • Interim dividend maintained ** Before significant items Commenting on the results, Gareth Rhys Williams, Chief Executive, said: "The Group has grown revenue for the third successive year, despite the adverseimpact of the weaker dollar. This growth, coming from the continued demand foraccessories for digital SLR cameras and robotic systems, and from increasedsales of studio camera supports, was achieved against a background of weakdemand on the Continent for our products, a flat US rentals market and ourpolicy of improving margins within Air Traffic Control intercom systems. "We continue to develop market-leading products and to improve the underlyingbusiness performance, offsetting the adverse currency impacts and lack of majorsporting events this year. Going forward, the Board views the second half of2005 with confidence." EnquiriesThe Vitec Group plc Gareth Rhys Williams 020 8939 4650 Alastair Hewgill 020 8939 4650Financial Dynamics Rob Gurner 020 7269 7291 Results Overview The Group is reporting its interim results under IFRS for the first time,including a restatement of the 2004 interim results. Whilst IFRS has no effecton sales or cash flows, it does affect the presentation of the income statementand the balance sheet. In the remainder of the statement profits are reportedbefore significant items (which comprise restructuring costs, negative goodwilland non-interest finance charges), which we believe appropriately reflects theoperating performance of the Group. We are pleased to report that sales have increased for the third year insuccession, despite the adverse effects of the weaker dollar. Headline salesgrew by £0.5m to £89.6m, including £0.2m relating to the Kata acquisition. Afteradjusting for adverse foreign exchange (FX) movements, the sales growth was3.1%. This growth is more modest than in 2004, and reflects continued weakdemand in mainland Europe, flat demand in our US rentals business and adeliberate policy of improving margins within air traffic control (ATC) systems,having entered that market strongly last year. Three years ago we embarked on our Consolidate - Leverage - Grow strategy, whichinitially involved a complex series of plant closures. Last year we announcedthat we would be rationalising the commercial side of our Broadcast Systemsdivision, which is continuing. These actions are yielding the benefits weexpected and have contributed to the increase in operating profit of 6.6% to£8.1m, or 21.3% before the effects of FX. After net financial expenses and areduced tax rate, our adjusted basic earnings per share under IFRS increased by7.5% to 10.0p. Kata, a leading manufacturer of high end broadcast and photographic camera bags,acquired at the end of May, continues to trade in line with expectations. The Board has declared an unchanged interim dividend of 6.1p per share in linewith expectations. Photographic H1 2005 H1 2004---------------- -------- --------Revenue £36.0m £34.8m---------------- -------- --------Operating Profit* £5.6m £6.0m---------------- -------- --------Operating Margin* 15.6% 17.2%---------------- -------- --------*before significant items The Photographic Division continues to perform well, with an underlying increasein sales of 5.6%, reduced to 3.4% by the effects of FX. Growth was, as expected,not as strong as 2004 partly because the one-off reduction in productionleadtime in 2004 was not replicated in 2005. Operating profit was £5.6m, 6.7%below last year, but would have increased before FX effects. Underlyingoperating margins before FX effects increased marginally. Sales in our US distribution business, Bogen Imaging, were good but theperformances of its sister businesses in mainland Europe were disappointing,reflecting the more challenging trading environment they faced. The Litecbusiness grew strongly and benefited from the closer linkage with the IFFproduct range of lighting support systems. Together they have a very attractiverange of lighting structures that will enable them to grow quickly. Litec'sproducts were used extensively in the Live8 staging in Rome. A further step in growing the Photographic business has come from the successfulacquisition of Kata on 31 May 2005. The division's strategy includes expandingthe range of in-house or third party accessories that are sold through ourdistribution businesses and we are delighted that the Kata products are now partof the Vitec portfolio. Kata has a strong reputation for quality and innovationand we believe it has significant potential. The IT rollout has now been completed in all of the long-standing divisionalcompanies following the implementations at Bogen Imaging Italy and at Litec.Within the tripod businesses, Gitzo France has been reorganised with somefurther functions moving to Italy, where the manufacturing and supply chainperformance continues to improve. Broadcast Systems H1 2005 H1 2004---------------- -------- --------Revenue £40.9m £41.0m---------------- -------- --------Operating Profit* £2.2m £1.4m---------------- -------- --------Operating Margin* 5.4% 3.4%---------------- -------- --------*before significant items Underlying sales within Broadcast Systems grew 2.3% in the first half, but wereflat in sterling terms after the adverse effects of FX. Operating profit grew by57.1% to £2.2m, reflecting the increased cost savings from restructuringactions. New product introductions remain a key feature of our strategy and it waspleasing to receive the Star Award at NAB (the major broadcast US tradeshow) forthe new 'Eclipse Pico' product, targeted at outside broadcast vans, amongstseveral others. The Broadcast market remains patchy, nevertheless two of our three broadcastbusinesses are now performing very well. In camera support a strong finish to the first half produced an excellentimprovement over last year. All markets, with the exception of Japan, areperforming well and with sales of robotic products remaining steady it isencouraging that demand for studio products has improved. High Definitionproduction (HD) is also driving the demand for higher end equipment,particularly for sports applications, despite reductions in average camerasizes. Broadcast intercoms remains a difficult area, with slow order intake in thefirst quarter, especially in Europe where the market remains weak. After a glutof ATC orders in 2004, we have focused on more profitable contracts in 2005which has resulted in lower sales. The large multi-site voice communicationsproject shipped to the European Space Agency last year was used successfully inmonitoring the Soyuz mission in April. The FreeSpeak and CellCom digitalwireless products are gaining acceptance and the market opportunity will beincreased as the US market opens to us following the approval of the underlyingtechnology by the FCC. The process to gain a product licence has now begun. Our portable power business, Anton Bauer, had a successful first half, includingdesigning and delivering over $0.3m of custom power supply units to Panavisionfor exclusive use on their new 'Genesis' HD Super 35 digital cinematographycamera system. This system is being employed in Australia on the new 'Superman'movie. While Anton Bauer's strongest market has traditionally been the US,significant sales have also been made to major rentals and broadcast companiesin Russia, Hong Kong (Cable TV), Canada (City TV), Sweden (24/7) and Malaysia(TV3 and RTM). We continue to develop non-broadcast applications and the growthin this area is also encouraging. Broadcast Services H1 2005 H1 2004---------------- -------- --------Revenue £12.7m £13.3m---------------- -------- --------Operating Profit* £0.3m £0.2m---------------- -------- --------Operating Margin* 2.4% 1.5%---------------- -------- --------*before significant items US dollar revenue was broadly flat compared with 2004, a US PresidentialElection year. Sterling revenue slipped 4.5% to £12.7m but sterling operatingprofit rose by £0.1m to £0.3m. We began supplying HD broadcast rental equipment to American Idol, which was thetop-rated television programme in the US, and renewed our agreements with twomore Top-10 programmes, Survivor and The Apprentice. However, general marketdemand was lacklustre, following the strong growth last year. The US networksappear to have launched fewer new high-end live events and reality showprogrammes that demand our specialist skills in the first half than they had inprior periods. Nevertheless, planned investments in HD equipment, now that standards arestabilizing, have meant that we were able to fulfill a higher proportion ofcontracts with our own equipment this year, rather than using expensivesub-rentals from third parties. Those cost savings, along with previouslyinstituted structural operating improvements, allowed us to generate slightlyhigher profits in the first half of 2005. Our aim will be to track our 2004 performance in the second half of 2005 -despite not having the benefits of additional rentals arising from the AthensOlympics and US Presidential Election. Tax As a result of actions taken by the Group, our tax rate has reduced by 2%, inline with the guidance given in March. However, instead of last year's UK GAAPrate of 42% reducing to 40%, the application of IFRS has increased our taxcharge by 4%, all of which is deferred and non-cash, giving an estimated rate of44% for 2005. Of this, 16% is deferred and 28% current. However, due principallyto the benefit of the exceptional tax credit on the sale of the ALU business in2003 and brought forward tax losses, we expect to pay little or no tax in 2005(2004 £1.4m paid). In the first half there was a net tax receipt of £0.7mbecause of a historic UK tax rebate. Board Changes John Potter, who joined the Board in 1999 and who will have served almost sevenyears on the Board by Christmas, will be stepping down in the New Year,following the appointment of a successor, the search for whom has commenced. Outlook We have had an encouraging start to the second half, with order intake remainingsatisfactory, and while the boost we received last year from the Olympics willnot be repeated and we are exposed to movements in exchange rates, Kata willmake a full contribution in the second half. Overall the Board views the outlookfor the full year with confidence. Michael Harper Gareth Rhys WilliamsChairman Chief Executive Consolidated income statementFor the half year ended 30 June 2005 (unaudited) Half year to June 2005 Half year to June 2004 Year to 31 ----------------------------- --------------------------- December 2004 Before Significant Total Before Significant Total significant items(1) significant items(1) items items -------- -------- ------ -------- -------- ------ -------- £m £m £m £m £m £m £m-------------- -------- -------- ------ -------- -------- ------ --------RevenueExistingoperations 89.4 89.4 89.1 89.1 185.4Acquisitions 0.2 0.2 - - --------------- -------- -------- ------ -------- -------- ------ --------Continuingoperations 89.6 89.6 89.1 89.1 185.4 Operatingprofit beforesignificantitemsExistingoperations 8.0 8.0 7.6 7.6 17.7Acquisitions 0.1 0.1 - - --------------- -------- -------- ------ -------- -------- ------ --------Continuingoperations 8.1 8.1 7.6 7.6 17.7 SignificantitemsRestructuringcosts (0.4) (0.4) (0.5) (0.5) (2.1)Goodwillimpairment - - - - (0.7)Negativegoodwill - - 0.6 0.6 0.6-------------- -------- -------- ------ -------- -------- ------ --------Operatingprofit 8.1 (0.4) 7.7 7.6 0.1 7.7 15.5 Financialincome 0.1 - 0.1 0.2 0.2 0.4 0.3Financialexpense (0.9) - (0.9) (0.8) (0.2) (1.0) (1.7)-------------- -------- -------- ------ -------- -------- ------ --------Net financialexpense (0.8) - (0.8) (0.6) - (0.6) (1.4)-------------- -------- -------- ------ -------- -------- ------ --------Profit beforetax 7.3 (0.4) 6.9 7.0 0.1 7.1 14.1 Current tax (2.0) - (2.0) (2.2) - (2.2) (4.3)Deferred tax (1.2) - (1.2) (1.0) - (1.0) (2.2)-------------- -------- -------- ------ -------- -------- ------ --------Taxation (3.2) - (3.2) (3.2) - (3.2) (6.5)-------------- -------- -------- ------ -------- -------- ------ --------Profit for theperiodattributableto equityshareholders 4.1 (0.4) 3.7 3.8 0.1 3.9 7.6-------------- -------- -------- ------ -------- -------- ------ -------- Basic earnings per share 9.0p 9.5p 18.5pDiluted earnings per share 9.0p 9.5p 18.4p-------------- ------ ------ -------- Average exchange rates :Euro 1.45 1.48 1.47US$ 1.88 1.82 1.82-------------- ------ ------ -------- (1) See Note 2 Consolidated balance sheetFor the half year ended 30 June 2005 (unaudited)------------------- --------- --------- --------- As at 30 June As at 30 June As at 31 December 2005 2004 2004 £m £m £m------------------- --------- --------- ---------AssetsNon-current assetsGoodwill 15.7 10.5 9.6Intangible assets 3.1 3.0 3.2Property, plant andequipment 30.7 32.7 30.7Deferred taxassets 6.3 7.6 7.2------------------- --------- --------- --------- 55.8 53.8 50.7------------------- --------- --------- --------- Current assetsInventories 37.0 34.1 32.6Trade and otherreceivables 37.5 38.9 35.2Current tax assets 2.4 2.4 2.3Cash and cash equivalents 12.1 6.8 14.4------------------- --------- --------- --------- 89.0 82.2 84.5------------------- --------- --------- ---------Total assets 144.8 136.0 135.2------------------- --------- --------- --------- LiabilitiesCurrent liabilitiesBank loans and overdrafts 5.4 - 25.7Trade and other payables 27.2 27.9 27.5Current tax liabilities 1.5 0.4 2.6Provisions 2.8 3.9 3.4------------------- --------- --------- --------- 36.9 32.2 59.2------------------- --------- --------- --------- Non-current liabilitiesBank loans 25.5 28.4 -Other creditors 0.2 0.3 0.1Provisions 11.3 7.8 9.4Deferred tax liabilities 6.8 2.3 2.4------------------- --------- --------- --------- 43.8 38.8 11.9------------------- --------- --------- ---------Total liabilities 80.7 71.0 71.1------------------- --------- --------- ---------Net assets 64.1 65.0 64.1------------------- --------- --------- --------- Shareholders' equityShare capital includingshare premium 11.0 10.9 10.9Retained earnings andother reserves 53.1 54.1 53.2------------------- --------- --------- ---------Total equity 64.1 65.0 64.1------------------- --------- --------- --------- Consolidated statement of recognised income and expenseFor the half year ended 30 June 2005 (unaudited) ---------------------------- -------- -------- -------- Half year to Half year to Year to 31 June 2005 June 2004 December 2004 £m £m £m---------------------------- -------- -------- --------Profit for the period 3.7 3.9 7.6Actuarial loss on post-employmentobligations (0.3) (0.2) (0.5)Currency translation differences onforeign net investments (0.2) (2.2) (4.0)---------------------------- -------- -------- --------Total recognised income andexpense in the period 3.2 1.5 3.1---------------------------- -------- -------- -------- Statement of changes in equityFor the half year ended 30 June 2005 (unaudited) ---------------------------- -------- -------- -------- Half year to Half year to Year to 31 June 2005 June 2004 December 2004 £m £m £m---------------------------- -------- -------- --------Profit for the period 3.7 3.9 7.6Dividends paid (3.6) (6.8) (9.3)---------------------------- -------- -------- --------Retained profit/(loss)for the period 0.1 (2.9) (1.7) Currency translation differences onforeign net investments (0.2) (2.2) (4.0) Gains on derivative financialinstruments (including IAS39 transition adjustments) 0.1 - - New share capital subscribed 0.1 0.1 0.1 Share based payments 0.2 0.1 0.1 Actuarial loss on post-employmentobligations (0.3) (0.2) (0.5)---------------------------- -------- -------- --------Net decrease in equity - (5.1) (6.0) Opening equity 64.1 70.1 70.1---------------------------- -------- -------- --------Closing equity 64.1 65.0 64.1---------------------------- -------- -------- -------- Consolidated cash flow statementFor the half year ended 30 June 2005 (unaudited) ---------------------------- -------- -------- -------- Half year to Half year to Year to 31 June 2005 June 2004 December 2004 £m £m £m---------------------------- -------- -------- --------Cash flows from operatingactivitiesProfit for the period 3.7 3.9 7.6Adjustments for :Impairment of goodwill - - 0.7Negative goodwill - (0.6) (0.6)Depreciation 4.9 5.1 10.2Movement in post-employmentobligations (0.1) 0.1 0.2Charge for share based payments 0.2 0.1 0.1Financial income (0.1) (0.4) (0.3)Financial expense 0.9 1.0 1.7Taxation 3.2 3.2 6.5Working capital andother items (7.3) (7.4) (3.6)---------------------------- -------- -------- --------Cash generated from operations 5.4 5.0 22.5Interest received - - 0.1Interest paid (0.8) (0.7) (1.7)Tax received/(paid) 0.7 (0.8) (1.4)---------------------------- -------- -------- --------Net cash from operatingactivities 5.3 3.5 19.5---------------------------- -------- -------- -------- Cash flows from investing activities Proceeds from sale ofproperty, plant and equipment 0.2 0.2 1.6Purchase of property, plant andequipment (4.6) (6.0) (10.0)Purchase of subsidiary undertakings (4.4) (1.5) (1.5)---------------------------- -------- -------- --------Net cash from investingactivities (8.8) (7.3) (9.9)---------------------------- -------- -------- -------- Cash flows from financing activitiesProceeds from the issue of shares 0.1 0.1 0.1Net receipt/(repayment) of loans 1.4 2.4 (1.6)Equity dividends paid (3.6) (6.8) (9.3)---------------------------- -------- -------- --------Net cash from financingactivities (2.1) (4.3) (10.8)---------------------------- -------- -------- --------Net decrease in cash andcash equivalents (5.6) (8.1) (1.2)---------------------------- -------- -------- -------- Reconciliation of decrease in cash and cash equivalents to movement in net debtFor the half year ended 30 June 2005 (unaudited) ---------------------------- -------- -------- -------- Half year to Half year to Year to 31 June 2005 June 2004 December 2004 £m £m £m---------------------------- -------- -------- --------Decrease in cash and cashequivalents (5.6) (8.1) (1.2)Net (receipt)/repayment of loans (1.4) (2.4) 1.6---------------------------- -------- -------- --------(Increase)/reduction in netdebt resulting from cash flows (7.0) (10.5) 0.4Exchange rate movements (0.5) (0.7) (1.3)---------------------------- -------- -------- --------Movements in net debt inthe period (7.5) (11.2) (0.9)Net debt at 1 January (11.3) (10.4) (10.4)---------------------------- -------- -------- --------Closing net debt (18.8) (21.6) (11.3)---------------------------- -------- -------- -------- Analysis of net debtCash and cash equivalents 12.1 6.8 14.4Overdrafts (5.4) - (1.0)---------------------------- -------- -------- -------- 6.7 6.8 13.4Debt due after one year (25.5) (28.4) -Debt due within one year - - (24.7)---------------------------- -------- -------- --------Total (18.8) (21.6) (11.3)---------------------------- -------- -------- -------- Segmental analysis of revenue and operating profitFor the half year ended 30 June 2005 (unaudited) ---------------------- -------- -------- ------- -------- 2005 2004 2005 2004 £m £m £m £m---------------------- -------- -------- ------- --------Class of business Revenue Operating profitBroadcast systems 40.9 41.0 2.2 1.4Photographic 36.0 34.8 5.6 6.0Broadcast services 12.7 13.3 0.3 0.2---------------------- -------- -------- ------- -------- 89.6 89.1 8.1 7.6 Restructuring costs (0.4) (0.5)Negative goodwill - 0.6---------------------- -------- -------- ------- -------- 89.6 89.1 7.7 7.7---------------------- -------- -------- ------- --------Geographical revenue By destination By origin---------------------- -------- -------- ------- --------United Kingdom 5.0 4.9 11.8 10.9The rest of Europe 25.9 25.1 26.9 28.8The Americas 44.9 45.3 49.3 46.6Asia and Australasia 11.6 11.7 1.6 2.8Africa and Middle East 2.2 2.1 - ----------------------- -------- -------- ------- -------- 89.6 89.1 89.6 89.1---------------------- -------- -------- ------- -------- Notes to the interim financial statements 1 Basis of preparation EU law (IAS Regulation EC 1606/2002) requires that thenext annual consolidated financial statements of the Vitec Group PLC ("theGroup"), for the year ended 31 December 2005, be prepared in accordance withInternational Financial Reporting Standards adopted for use in the EU ("IFRSs").The Group adopted IFRS with effect from 1 January 2005. The Group's transitiondate is 1 January 2004, being the start date of the earliest period for whichthe Group presents full comparative information in our 2005 Annual Report andAccounts. This interim information has been prepared on the basis of therecognition and measurement requirements of IFRS in issue that either areendorsed by the EU and effective at 31 December 2005 or are expected to beendorsed and effective at 31 December 2005, the Group's first annual reportingdate at which it is required to use adopted IFRS'. Based on these adopted andunadopted IFRSs, the directors have made assumptions about the accountingpolicies expected to be applied when the first annual IFRS financial statementsare prepared for the year ending 31 December 2005. These accounting policies andreconciliations of our financial statements from UK GAAP to IFRS at key datesare available on our web site at www.vitecgroup.com. However, these IFRS' are still subject to change and to additionalinterpretations and therefore cannot be determined with certainty. Inparticular, the amendment to IAS 19 ("Employee Benefits - Actuarial Gains andLosses, Group Plans & Disclosure") has yet to be adopted by the EU. Accordingly,the accounting policies for that annual period will be determined finally onlywhen the annual financial statements are prepared for the year ended 31 December2005. The financial information set out above is unaudited and does not comprisestatutory accounts within the meaning of Section 240 of the Companies Act 1985.The interim financial statements have been prepared under IFRS and comparativefigures for the first half and full year 2004 have been re-stated accordingly.Reconciliations of profit and net assets from UK GAAP to IFRS are shown for thesix months to June 30 2004. The statutory accounts for the year ended 31 December 2004 prepared inaccordance with UK GAAP have been filed with the Registrar of Companies. Theauditors have reported on the 2004 accounts; their report was unqualified anddid not contain a statement under section 237(2) or (3) of the Companies Act1985. 2 Significant items are those items of financial performance that thedirectors consider should be separately disclosed to assist in the understandingof the underlying trading and financial performance achieved by the Group and inmaking projections of future results. Amounts taken account of relating to operating items include the costs of majorrestructuring programmes and amounts relating to the credit arising on negativegoodwill arising on acquisitions or charges made for the impairment ofcapitalised goodwill. The Group uses options as part of its hedging of future cash flows. Under IFRS,the Group is able to hedge account for the intrinsic value of such options, butis not permitted to hedge account for the time value of such options. This timevalue is therefore marked-to-market at each balance sheet date. As such optionsare held to maturity, the ultimate net amount charged to the income statement inrespect of any one option will always equate to the initial premium paid forthat option. However, as a result of the mark to market, this may introducevolatile income and expenses between periods and such amounts are thereforebeing identified as non-interest finance significant items. Under IFRS, currency translation differences arising on long-term intra-groupfunding loans that are similar in nature to equity are charged/credited toreserves. Amounts relating to the currency translation differences arising oncertain other intra-group funding balances that do not meet this strict criteriabut that are very similar in nature are included within non-interest financesignificant items. In the half year to June 2005 significant items comprise restructuring costs of£0.4 million (2004: £0.5 million) in the Broadcast Systems Division, negativegoodwill of £nil (2004: £0.6 million) in the Broadcast Services Division,financial income of £nil (2004: £0.2 million) relating to changes in fair valueof financial instruments, and financial expense of £nil (2004: £0.2 million)relating to net foreign exchange losses. 3 Financial income comprises net finance income on post employment benefits of£0.1 million (2004: £0.2 million) and changes in fair value of financialinstruments of £nil (2004: £0.2 million). Financial expense comprises interestexpense of £0.9 million (2004: £0.8 million) and net foreign exchange loss of£nil (2004: £0.2 million). 4 The tax rate on profits before significant items for the half year isestimated at 44% on the basis of the anticipated tax rates which will apply forthe full year, and the charge comprises current tax £2.0 million (2004: £2.2million) and deferred tax £1.2 million (2004: £1.0 million). The tax credit onsignificant items was £nil (2004: £nil). 5 Earnings per share Basic earnings per share of 9.0 pence (2004: 9.5 pence) isbased on profit for the period attributable to equity shareholders of £3.7million (2004: £3.9 million) and the weighted average number of shares of41,082,140 (2004: 41,045,922). Adjusted basic earnings per share of 10.0 pence(2004: 9.3 pence) is based on profit for the period attributable to equityshareholders but before significant items, using the same number of shares.Diluted earnings per share of 9.0 pence (2004: 9.5 pence) is based on profit forthe period attributable to equity shareholders and the weighted average numberof shares as adjusted for the weighted number of shares under option, of41,238,319 (2004: 41,260,547). 6 Interim dividend The directors have declared an interim dividend of 6.1 penceper share, which will absorb £2.5 million (2004: 6.1 pence absorbing £2.5million). The dividend will be paid on 3 November 2005 to shareholders on theregister at the close of business on 30 September 2005. 7 Acquisition On 31 May 2005 the Group acquired the business and assets of KataInternational Limited and Kata Professional (Kimchi & Tishler) Limited ("Kata"),the designer and manufacturer of premium protective carrying bags for camerasand accessories in the photographic and broadcast markets. The net cashconsideration (after taking account of £0.1 million cash in the business at theacquisition date) amounted to US$8.1 million (£4.4 million) and there is anestimated deferred consideration of US$3.6 million (£2.0 million) conditionalupon future sales and profitability targets. Based on a provisional assessmentof the fair values of the tangible and intangible assets, goodwill of £6.0million arose on acquisition. The results of Kata have been included in the Photographic Division 8 Copies of this statement will be sent to all shareholders on the shareregister as at 5 September 2005. Copies are available on application to theCompany Secretary. 9. IFRS transition adjustments Consolidated income statementFor the half year ended 30 June 2004 (unaudited)-------------------------- ----------- ---------- --------- Reformatted UK GAAP Total IFRS Restated in as previously Adjustments accordance with reported (1) IFRS £m £m £m-------------------------- ----------- ---------- ---------RevenueExisting operations 89.1 - 89.1Acquisitions - - --------------------------- ----------- ---------- ---------Continuing operations 89.1 - 89.1-------------------------- ----------- ---------- --------- Operating profit beforesignificant itemsExisting operations 7.6 - 7.6Acquisitions - - --------------------------- ----------- ---------- ---------Continuing operations 7.6 - 7.6 Significant itemsRestructuring costs (0.5) - (0.5)Goodwill amortisation (0.8) 0.8 -Negative goodwill - 0.6 0.6-------------------------- ----------- ---------- --------- Operating profit 6.3 1.4 7.7Financial income - 0.4 0.4Financial expense (0.8) (0.2) (1.0)-------------------------- ----------- ---------- ---------Net financial expense (0.8) 0.2 (0.6)-------------------------- ----------- ---------- ---------Profit before tax 5.5 1.6 7.1 Current tax (2.5) 0.3 (2.2)Deferred tax (0.4) (0.6) (1.0)-------------------------- ----------- ---------- ---------Taxation (2.9) (0.3) (3.2)-------------------------- ----------- ---------- ---------Profit for the periodattributable to equityshareholders 2.6 1.3 3.9-------------------------- ----------- ---------- --------- -------------------------- ----------- ---------- ---------Basic earnings per share 6.4p 9.5p-------------------------- ----------- ---------- ---------Diluted earnings per share 6.3p 9.5p-------------------------- ----------- ---------- --------- -------------------------- ----------- ---------- ---------Average exchange rates :-------------------------- ----------- ---------- ---------Euro 1.48 1.48 1.48-------------------------- ----------- ---------- ---------US$ 1.82 1.82 1.82-------------------------- ----------- ---------- --------- (1) The total IFRS adjustments are analysed on the following page Analysis of IFRS adjustments to the consolidated income statementFor the half year ended 30 June 2004 (unaudited) Total Employee Development Goodwill Nega- Tax Forex Other adjustments benefits costs amorti- tive UK sation good- will £m £m £m £m £m £m £m £m------------ -------- -------- -------- -------- -------- ------ ------ ------Revenue Existing - - - - - - - -operations Acquisitions - - - - - - - ------------- -------- -------- -------- -------- -------- ------ ------ ------Continuing - - - - - - - -operations Operating profitbeforesignificantitems Existing - (0.1) 0.1 - - - - -operations Acquisitions - - - - - - - ------------- -------- -------- -------- -------- -------- ------ ------ ------Continuing - (0.1) 0.1 - - - - -operations Significantitems Restructuring - - - - - - - -costs Goodwill 0.8 - - 0.8 - - - -amortisation Negative 0.6 - - - 0.6 - - -goodwill ------------ -------- -------- -------- -------- -------- ------ ------ ------Operating profit 1.4 (0.1) 0.1 0.8 0.6 - - - Financial income 0.4 0.2 - - - - - 0.2 Financial (0.2) - - - - - (0.2) -expense------------ -------- -------- -------- -------- -------- ------ ------ ------Net financial 0.2 0.2 - - - - (0.2) 0.2expense ------------ -------- -------- -------- -------- -------- ------ ------ ------Profit before 1.6 0.1 0.1 0.8 0.6 - (0.2) 0.2tax Current tax 0.3 - - - - 0.3 - - Deferred tax (0.6) - - - - (0.6) - ------------- -------- -------- -------- -------- -------- ------ ------ ------Taxation (0.3) - - - - (0.3) - ------------- -------- -------- -------- -------- -------- ------ ------ ------Profit for theperiodattributable to 1.3 0.1 0.1 0.8 0.6 (0.3) (0.2) 0.2equityshareholders------------ -------- -------- -------- -------- -------- ------ ------ ------ Consolidated balance sheetFor the half year ended 30 June 2004 (unaudited) Reformatted Total IFRS Restated in UK GAAP as Adjustments accordance with previously (1) IFRS reported £m £m £m------------------------- --------- ---------- ---------AssetsNon current assetsGoodwill 8.9 1.6 10.5Intangible assets 0.3 2.7 3.0Property, plant and equipment 35.7 (3.0) 32.7Deferred tax assets - 7.6 7.6------------------------- --------- ---------- --------- 44.9 8.9 53.8------------------------- --------- ---------- ---------Current assetsInventories 34.1 - 34.1Trade and other receivables 39.7 (0.8) 38.9Current tax assets 2.6 (0.2) 2.4Cash and cash equivalents 6.8 - 6.8------------------------- --------- ---------- --------- 83.2 (1.0) 82.2------------------------- --------- ---------- ---------Total assets 128.1 7.9 136.0------------------------- --------- ---------- --------- LiabilitiesCurrent liabilitiesBank loans and overdrafts - - -Trade and other payables 30.3 (2.4) 27.9Current tax liabilities 1.5 (1.1) 0.4Provisions 7.2 (3.3) 3.9------------------------- --------- ---------- --------- 39.0 (6.8) 32.2------------------------- --------- ---------- ---------Non current liabilitiesBank loans 28.4 - 28.4Other creditors 0.2 0.1 0.3Provisions - 7.8 7.8Deferred tax liabilities 3.5 (1.2) 2.3------------------------- --------- ---------- --------- 32.1 6.7 38.8------------------------- --------- ---------- ---------Total liabilities 71.1 (0.1) 71.0------------------------- --------- ---------- ---------Net assets 57.0 8.0 65.0------------------------- --------- ---------- --------- Shareholders' equityShare capital includingshare premium 10.9 - 10.9Retained earnings andother reserves 46.1 8.0 54.1------------------------- --------- ---------- ---------Total equity 57.0 8.0 65.0------------------------- --------- ---------- --------- (1) The total IFRS adjustments are analysed on the following page Analysis of IFRS adjustments to the consolidated balance sheetFor the half year ended 30 June 2004 (unaudited) Total Emplo- Emplo- Emplo- Share Tax Devel- Posi- Nega- Divi- Recla- Forex Other adjus- yee yee yee based opment tive tive dends ssifi- tments benef- benef- benef- paym- costs good- good- catio- its its its ents will will ns UK Italy Germany £m £m £m £m £m £m £m £m £m £m £m £m £m------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ AssetsNon currentassetsGoodwill 1.6 - - - - - - 0.8 0.8 - - - -Intangibleassets 2.7 - - - - - (0.4) - - - 3.1 - -Property,plant andequipment (3.0) - - - - - - - - - (3.0) - -Deferred taxassets 7.6 - - - - - - - - - 7.6 - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 8.9 - - - - - (0.4) 0.8 0.8 - 7.7 - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Current -assetsInventories -Trade andotherreceivables (0.8) (1.1) (0.7) - - - - - - - 0.1 - 0.9 Current taxassets (0.2) - - - - - - - - - (0.2) - -Cash and cash - - - - - - - - - - - -equivalents------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ (1.0) (1.1) (0.7) - - - - - - - (0.1) - 0.9------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Total assets 7.9 (1.1) (0.7) - - - (0.4) 0.8 0.8 - 7.6 - 0.9------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Liabilities -Current -liabilitiesBank loans and overdrafts - - - - - - - - - - - - -Trade andother payables (2.4) - - - 0.1 - - - - (2.5) - - - Current taxliabilities (1.1) - - - - (0.9) - - - - (0.2) - -Provisions (3.3) - (0.6) 0.1 - - - - - - (2.8) - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Currentliabilities (6.8) - (0.6) 0.1 0.1 (0.9) - - - (2.5) (3.0) - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Bank loans - - - - - - - - - - - - -Othercreditors 0.1 - - - - - - - - - 0.1 - -Provisions 7.8 5.0 - - - - - - - - 2.8 -Deferred taxliabilities (1.2) - - - - 1.2 - - - - (2.4) - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Non currentliabilities 6.7 5.0 - - - 1.2 - - - - 0.5 - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Totalliabilities (0.1) 5.0 (0.6) 0.1 0.1 0.3 - - - (2.5) (2.5) - -------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Net assets 8.0 (6.1) (0.1) (0.1) (0.1) (0.3) (0.4) 0.8 0.8 2.5 10.1 - 0.9------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Shareholders' -equityShare capital - - - - - - - - - - - - -including sharepremiumIFRSadjustments at01.01.04 10.3 (6.0) - (0.1) - - (0.5) - 0.1 6.8 10.0 - -Other reserves (3.6) (0.2) (0.1) - (0.1) - - - 0.1 (4.3) 0.1 0.2 0.7Profit andloss 1.3 0.1 - - - (0.3) 0.1 0.8 0.6 - - (0.2) 0.2------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------Total equity 8.0 (6.1) (0.1) (0.1) (0.1) (0.3) (0.4) 0.8 0.8 2.5 10.1 - 0.9------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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