24th Nov 2005 07:00
Scapa Group PLC24 November 2005 24 November 2005 Scapa Group plc Interim Results Scapa Group plc, a global supplier of technical tapes and cable compounds, todayannounced its interim results for the six months ended 30 September 2005,reporting under International Financial Reporting Standards (IFRS). Highlights • Operating profit* of £2.9m - 2% up on the first half of last year - a substantial improvement on the second half • Net debt reduced by £3.6m to £11.6m - including benefit of £5.5m release from Waycross deposit • Important appeal won on asbestos litigation • Reorganisation costs of £1.7m incurred in the first half, with a further £0.7m in Q3, generating annual savings of £2.5m • Headline loss per share* (0.6)p - no interim dividend • Calvin O'Connor appointed Chief Executive *figures exclude reorganisation charges of £1.7m (2004/05 nil). Commenting on the results, Chairman Dr Keith Hopkins said: "The first half of the year showed a good recovery from the poor result in thesecond half of last year due to cost savings, price increases and a reduction inlow margin business. The outlook for the second half continues to lookchallenging with further increases in raw material costs and overall marketdemand looking a little subdued. Our reduction in cost base will however offsetsome of these effects and we expect a modest improvement to the year as awhole. "During the summer work started on a review of options to improve the financialperformance of the Group and this is now being progressed by our new ChiefExecutive. We expect to be able to conclude this review and report toshareholders during the next six months." For further information: Calvin O'Connor Chief Executive Tel: 01254 580 123Colin White Finance DirectorSarah MacLeod Financial Dynamics Tel: 020 7831 3113 Chairman and Chief Executive's Review The first half of the year showed a good recovery from the poor result in thesecond half of last year due to cost savings, price increases and a reduction inlow margin business. Operating profit before reorganisation costs was £2.9mcompared to £2.7m in the first half of last year and £0.6m in the second half of2004/05. Sales turnover was £94.1m in the first half compared to the prior yearof £95.0m. After deducting reorganisation costs of £1.7m operating profit was£1.2m (2004/05 £2.7m). The loss before tax was £0.1m (2004/05 profit £1.6m).There is no interim dividend (2004/05 0.1p). Review of Operations North America North America sales of £32.8m (£32.5m) were a little ahead of the prior year.Operating profit before reorganisation costs at £3.8m was slightly above 2004/05(£3.6m), helped by a stronger US dollar. Strong growth was seen in industrial sales, due to a number of new productlaunches. After excellent growth in recent years medical sales were steady.Automotive sales fell due largely to the loss of a low margin contract. Salesprice increases during the first half across a significant proportion of thecustomer base helped to mitigate the impact of raw material price inflation.Operating costs were reduced significantly following the closure of theMansfield site and consolidation of this business into our Renfrew facility inCanada. Productivity benefits arising from capital investments made in the prioryear also contributed to the lower cost base. Europe Sales in Europe fell by 1% to £57.3m compared with the first half of 2004/05,primarily due to lower sales into the medical and photo-processing sectors. Theoperating loss (before reorganisation costs) for the region reduced by £0.2m to£1.0m due to lower costs, which offset a lower contribution margin. This was asubstantial improvement on the disappointing second half of last year. Targetedprice increases coupled with a reduction in low margin business together withimproved purchasing helped offset the substantial increases seen in our rawmaterial costs. The region continues to promote its 'Customer Now' initiative designed to focusthe whole organisation to drive improvements in customer service levels. This,coupled with improved quality of products, has made a positive impact oncustomer satisfaction. During the first half a review of our European operations was undertaken and asa result a programme of cost reduction was implemented that will save £1.5m onan annual basis. The exceptional cost of the redundancies in the first half was£1.6m. A second part of this programme has recently been put into placecomprising a further consolidation at our Ashton site in the UK and the closureof the Group headquarters. The cost incurred of £0.7m will be taken in thesecond half with an estimated annual benefit of £0.7m. Asia Sales by Scapa Asia fell by 9% to £4.0m and operating profit as a consequencewas £0.2m lower than last year at £0.1m. The temporary loss of a key contractwas the major contributor to the fall in sales. During the last 18 months wehave built up a strong distribution network and look to leverage this againstthe many opportunities available to us in the region. Profit before tax and taxation charge Reorganisation charges totalled £1.7m (2004/05 nil) and related to redundanciesin both Europe (£1.6m) and North America (£0.1m). Net bank interest was £0.4m (2004/05 £0.3m) and other finance charges (discounton litigation provision and IAS 19 finance cost) were £0.9m (2004/05 £0.8m). Theloss before tax was £0.1m (2004/05 profit of £1.6m). All bank covenants werecomplied with at 30 September 2005, as expected. The tax charge of £2.4m included underlying taxation payable of £2.0m and aprior year adjustment of £0.4m. No benefit has been recognised for potentialfuture tax credits for loss making entities (primarily the UK), as there islittle expectation of recovery within the foreseeable future. The 2004/05 taxcharge, after restating for IFRS purposes, was £0.3m, and included the benefitof a favourable settlement of prior year issues totalling £1.1m. The headline loss per share, pre reorganisation costs, was 0.6p (0.9p profit inthe first half of 2004/05). Cash flow and balance sheet Net cash inflow from operating activities (before reorganisation costs) was£2.6m (2004/05 £0.2m). Trading working capital as at 30 September 2005 washigher than at 31 March 2005 for seasonal reasons, resulting in a £1.6m tradingworking capital cash outflow (2004/05 £4.1m outflow). Additional top-uppayments into the pension funds totalled £1.4m (2004/05 £1.4m). Reorganisationspend totalled £1.8m (2004/05 £0.4m). Asbestos litigation defence spendtotalled £0.9m (2004/05 £0.4m), with the increase in spend reflecting greateractivity. Capital investment in the first half was substantially lower than theprior year at £0.7m (2004/05 £2.9m) and reflected careful management ofexpenditure. In September 2005 an agreement was reached with J.M.Voith A.G. to release afurther US$10m (£5.5m) from the Waycross deposit. As a consequence the remainingbalance of US$10m will be held on escrow for an additional two years until 31December 2011. With the benefit of this release, overall net debt (excluding theremaining Waycross deposit) was £3.6m lower than at 31 March 2005, at £11.6m. The IAS 19 pension deficit as at 30 September 2005 was £47.2m (31 March 2005£45.6m). This increase was primarily the result of a reduction in the discountrate used to value future pension liabilities. This increase was offset in partby increases in the value of pension assets over the period. A revaluation ofthe UK pension schemes will be carried out in 2006. Accounting standards The Group adopted International Financial Reporting Standards (IFRS) as from 1April 2005. Consequently prior year comparatives have been re-stated inaccordance with these standards. The impact of these adjustments on prior yearfinancial information was disclosed in the Group's IFRS restatement announcementissued on 31 October 2005 and posted on our website. A summary of the impact onthe income statement and on equity is given in note 8 to these accounts. Asbestos litigation As shareholders are aware, the Group continues to be involved in a number ofcases in the USA arising from the alleged exposure of paper mill workers toasbestos in a product that was part of a business whose assets were sold toJ.M.Voith A.G. in July 1999. Prior to 2003 the company had won all the casesagainst it, or the company had been dismissed or the case had been abandonedbefore going to court. In October 2003 a jury in Baltimore, Maryland, USA returned an award of up toUS$3.5m (£1.9m) against Scapa Dryer Fabrics Inc. We are now pleased to reportthat this wholly unexpected judgement was subsequently reversed on appeal on 17November this year. A second adverse verdict in Louisiana in July 2004 awarding in total US$187,500(approximately £100,000) plus costs and interest to eight plaintiffs has finallybeen confirmed by the judge, leading to the commencement of the appeal processin March 2005. In May 2005 a jury returned a verdict in favour of Scapa DryerFabrics Inc. in a case in Baltimore City Circuit Court, Maryland, USA. This hassince been appealed by the plaintiff's Counsel. The Group has continued to be dismissed from cases. During the first six monthsof the financial year to 30 September 2005 the Group has been dismissed from 47cases covering approximately 977 plaintiffs. In the USA no Scapa Group companynor any of our insurance carriers has admitted liability to date, nor made anypayment to any plaintiff under our policies. Accordingly, our insurance coverageremains intact and the Board will continue to defend vigorously the outstandingclaims. The Board During the period there were a number of changes to the Board. Richard Perry,the Finance Director of Fenner plc, was appointed as a Non-Executive Directorwith effect from 1 June 2005 and became Chairman of the Audit Committee on thatdate. Tony Watson resigned as Director with effect from 1 June 2005. CalvinO'Connor, previously Managing Director of British Vita's Industrial Polymersbusiness, was appointed Chief Executive on 10 October 2005. Prospects The outlook for the second half continues to look challenging, with furtherincreases in raw material costs and overall market demand looking a littlesubdued. Our reduction in cost base will however offset some of these effectsand we expect a modest improvement to the year as a whole. During the summer work started on a review of options to improve the financialperformance of the Group and this is now being progressed by our new ChiefExecutive. We expect to be able to conclude this review and report toshareholders during the next six months. Dr Keith Hopkins, ChairmanCalvin O'Connor, Chief Executive Consolidated Income StatementFor the half year ended 30 September 2005 (unaudited) All on continuing operations Note Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Restated) (Restated) £m £m £m Turnover 2 94.1 95.0 188.2 Operating profit/(loss) 2 1.2 2.7 (1.2) Operating profit before exceptional items 2.9 2.7 3.3Reorganisation costs 3 (1.7) - (0.9)Property, plant and equipment impairment 3 - - (3.6) _____ _____ _____Operating profit/(loss) 2 1.2 2.7 (1.2) _____ _____ _____ Interest payable (0.8) (0.6) (1.3)Interest receivable 0.4 0.3 0.6 _____ _____ _____ (0.4) (0.3) (0.7)Discount on litigation provision (0.2) (0.2) (0.5)IAS 19 finance costs (0.7) (0.6) (1.2) _____ _____ _____Net finance costs (1.3) (1.1) (2.4) _____ _____ _____(Loss)/profit on ordinary activities before (0.1) 1.6 (3.6)taxation Taxation 4 (2.4) (0.3) 5.8 _____ _____ _____ (Loss)/profit on ordinary activities after (2.5) 1.3 2.2taxation Minority interests - - (0.1) _____ _____ _____Retained (loss)/profit for the period (2.5) 1.3 2.1 _____ _____ _____Basic and diluted (loss)/earnings per share (p) (1.7) 0.9 1.5 _____ _____ _____ Consolidated Statement of Recognised Income and ExpenseFor the half year ended 30 September 2005 (unaudited) All on continuing operations Note Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Restated) (Restated) £m £m £m Retained (loss)/profit for the period (2.5) 1.3 2.1Exchange differences on translating foreign 2.6 1.3 1.3operationsActuarial gains and losses (2.4) (0.5) (7.3) _____ _____ _____Total recognised income and expense for the (2.3) 2.1 (3.9)periodIFRS transition adjustment (IAS 39) 5 0.3 - - _____ _____ _____Total recognised income and expense (2.0) 2.1 (3.9) _____ _____ _____ Consolidated Balance SheetAs at 30 September 2005 (unaudited) Note Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Restated) (Restated) £m £m £mAssetsNon-current assetsGoodwill 21.8 21.4 21.0Property, plant & equipment 51.0 58.1 52.3Deferred tax asset 1.6 0.9 3.5Other 0.1 - 0.1 _____ _____ _____ 74.5 80.4 76.9 Current assetsInventory 21.1 20.7 19.3Trade and other receivables 45.3 44.6 43.8Financial assets - derivative financial 5 0.5 - -instrumentsCurrent asset investments 5.6 11.5 10.9Cash and cash equivalents 5.7 8.3 8.1 _____ _____ _____ 78.2 85.1 82.1LiabilitiesCurrent liabilitiesFinancial liabilities- Borrowings and other financial liabilities (1.1) (2.4) (3.1)- Derivative financial instruments 5 (0.6) - -Trade and other payables (32.9) (33.4) (32.7)Current tax liabilities (0.2) (1.4) -Provisions (2.2) (1.7) (2.1) _____ _____ _____ (37.0) (38.9) (37.9) Net current assets 41.2 46.2 44.2 Non-current liabilitiesFinancial liabilities- Borrowings and other financial liabilities (16.2) (22.9) (20.2)Other non-current liabilities (1.9) (1.9) (2.0)Deferred tax liabilities (2.5) (4.7) (3.0)Retirement benefit obligations (47.2) (39.7) (45.6)Provisions (9.7) (11.1) (10.1) _____ _____ _____ (77.5) (80.3) (80.9) _____ _____ _____NET ASSETS 38.2 46.3 40.2 _____ _____ _____Shareholders' equityOrdinary shares 7.2 7.2 7.2Retained earnings 27.1 37.7 31.7Translation reserve 3.9 1.3 1.3 _____ _____ _____Total shareholders' equity 38.2 46.2 40.2 Minority interest - 0.1 - _____ _____ _____ TOTAL EQUITY 6 38.2 46.3 40.2 _____ _____ _____ Condensed consolidated Cash Flow StatementFor the half year ended 30 September 2005 (unaudited) Note Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 £m £m £m Cash flows from operating activitiesNet cashflow from operations 7 (0.1) (0.6) 1.5 Cash generated from operations before 7 2.6 0.2 3.7reorganisation and legacy cash flowsCash flows from reorganisation and prior year 7 (2.7) (0.8) (2.2)disposals _____ _____ _____Net cashflow from operations (0.1) (0.6) 1.5 _____ _____ _____ Net interest paid (0.5) (0.2) (0.4)Income tax paid (0.4) - - _____ _____ _____Net cash (absorbed by)/generated from operating (1.0) (0.8) 1.1activities _____ _____ _____ Cash flows from investing activities Acquisition of subsidiary - - (0.3)Purchase of property, plant & equipment (0.7) (2.9) (4.6)Proceeds from sale of property, plant & 0.1 - 0.1equipmentProceeds from receipt of government grant - - 0.5Proceeds from release of $10m Waycross deposit 5.5 - -Net (payments)/receipts in respect of forward (0.1) 1.0 1.8contracts _____ _____ _____Net cash received/(used) in investing 4.8 (1.9) (2.5)activities _____ _____ _____ Cash flows from financing activities Repayment of borrowings (4.6) (0.8) (1.9)Dividends paid to company shareholders - (0.4) (0.5) _____ _____ _____Net cash used in financing activities (4.6) (1.2) (2.4) _____ _____ _____ Net decrease in cash and cash equivalents (0.8) (3.9) (3.8) Cash and cash equivalents at beginning of the 5.7 9.6 9.6yearExchange gains or losses on cash and cash 0.3 0.2 (0.1)equivalents _____ _____ _____Cash and cash equivalents at end of the year 5.2 5.9 5.7 _____ _____ _____ Notes 1. Basis of preparation The financial statements for the half year ended 30 September 2005 are unauditedand do not comprise statutory accounts within the meaning of section 240 of theCompanies Act 1985. The information provided within this document has beenprepared in accordance with International Financial Reporting Standards (IFRS)on the basis that all existing standards in issue from the InternationalAccounting Standards Board (IASB) will be fully endorsed by the EU. Thecomparative financial information for the six months ended 30 September 2004 andthe year-ended 31 March 2005 has also been prepared on this basis and isunaudited. As permitted the Group has early adopted the amendment to IAS 19 "EmployeeBenefits - Actuarial Gains and Losses" that was published by the IASB inDecember 2004. The directors expect that this amendment will be fully adopted bythe EU and will therefore be available for use in the IFRS financial statementsfor the year ended 31 March 2006. During the remainder of the financial year further standards and interpretationsmay be issued that will be applicable for accounting periods ending on or after1 January 2005. In addition, further changes may be made as a result ofdecisions made by the EU. As a result the accounting policies cannot bedetermined with certainty and therefore may require updating when the annualfinancial statements are prepared for the year ending 31 March 2006. On 31 October 2005 the Group published an IFRS restatement announcement, copiesof which are available on the Scapa website at www.scapa.com. This announcementincluded a description of the likely impact of the transition from UK GenerallyAccepted Accounting Practices (UK GAAP) to IFRS on the Group's profit or lossand equity, and the reconciliations required by IFRS 1 "First Time Adoption ofIFRS". Reconciliations of the effect of the transition from UK GAAP to IFRS areprovided in note 8 and these should be read in conjunction with the IFRSrestatement announcement. The Group accounting policies set out in the 2005 annual report have beenrevised where required to conform to IFRS. These revised accounting policieswere set out in full in the IFRS restatement announcement. These have beenapplied consistently to all periods included in this report with the exceptionof those policies relating to financial instruments (IAS 32 and IAS 39). TheGroup has taken the exemption available under IFRS 1 not to restate comparativesand these standards have only been applied from 1 April 2005. As a result thefinancial instruments included within the comparatives for September 2004 andMarch 2005 are still accounted for in accordance with UK GAAP. The adjustmentmade to reserves as a result of adopting IAS 32 and IAS 39 on 1 April 2005 isdetailed in note 5. 2. Segmental information Primary reporting format - geographical segments At 30 September 2005 the Group is organised into three geographical segments:Europe, North America and Asia. All operating costs of the Group are allocatedbetween these segments. All on continuing operations Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 (Restated) (Restated) £m £m £mBy origin: RevenueEurope 60.2 61.6 121.9North America 34.2 34.0 66.4Asia 4.4 5.1 10.2 _____ _____ _____ 98.8 100.7 198.5Inter-segment revenue (4.7) (5.7) (10.3) _____ _____ _____ 94.1 95.0 188.2 _____ _____ _____ Operating profit/(loss) Europe (2.6) (1.2) (6.0)North America 3.7 3.6 4.3Asia 0.1 0.3 0.5 _____ _____ _____ 1.2 2.7 (1.2) Operating profit/(loss) before exceptional costs Europe (1.0) (1.2) (3.6)North America 3.8 3.6 6.4Asia 0.1 0.3 0.5 _____ _____ _____ 2.9 2.7 3.3Exceptional costs Europe (1.6) - (2.4)North America (0.1) - (2.1) _____ _____ _____ (1.7) - (4.5) _____ _____ _____Net finance costs (1.3) (1.1) (2.4) _____ _____ _____ (Loss)/profit on ordinary activities before taxation (0.1) 1.6 (3.6) _____ _____ _____ 3. Exceptional items Reorganisation costs incurred in the half year ended 30 September 2005 amountedto £1.7m and related to redundancies in both Europe and North America. Reorganisation costs incurred in the year ended 31 March 2005 totalled £0.9m.These included costs associated with the transfer and consolidation of the cablewrapping tape business from its site in the US to Scapa's Canadian plant andexpenses relating to the on-going European restructuring and cost reductionprogramme. In addition as part of the Group's routine review of plant and equipmentvaluations the value of assets at two Scapa sites were written down during theyear ended 31 March 2005. 4. Taxation The tax charge of £2.4m included underlying taxation payable of £2.0m and aprior year adjustment of £0.4m. No benefit has been recognised for potentialfuture tax credits for loss making entities (primarily in the UK), as there islittle expectation of recovery within the foreseeable future. The 2004/05 taxcharge, after restating for IFRS purposes, was £0.3m and included the benefit ofa favourable settlement of prior year issues totalling £1.1m. 5. Financial instruments As noted in note 1 'Basis of Preparation', the Group has taken the exemption notto restate comparatives for IAS 32 "Financial Instruments: Disclosure andPresentation" and IAS 39 "Financial Instruments: Recognition and Measurement",which came into effect for accounting periods beginning on or after 1 January2005. The adoption of these standards on 1 April 2005 resulted in therecognition of a number of financial instruments in the opening balance sheet onthis date, increasing reserves by £0.3m. At 30 September 2005 financial assets of £0.5m and financial liabilities of£0.6m have been recognised in the Balance Sheet relating to the fair value ofderivative financial instruments in place across the Group at this date. It is Group policy to hedge account for instruments used to hedge againstexchange differences arising from the translation of the net investment inforeign entities. Accordingly gains and losses on the revaluation of theseinstruments at each balance sheet date are recognised directly in equity.Movements in instruments used to hedge against the exposure to exchangedifferences due to the timing of cash flows are taken through the incomestatement as it is not Group policy to hedge account for these instruments. 6. Reconciliation of closing equity Share Retained Translation Equity Minority Total Capital Earnings Reserve holders of Interests Equity the parent At 1 April 2004 7.2 37.3 - 44.5 0.1 44.6 Retained profit for the period - 1.3 - 1.3 - 1.3Exchange differences on translating - - 1.3 1.3 - 1.3foreign operationsActuarial gains and losses - (0.5) - (0.5) - (0.5)Dividends - (0.4) - (0.4) - (0.4) _____ _____ _____ _____ _____ _____ At 30 September 2004 7.2 37.7 1.3 46.2 0.1 46.3 Retained profit for the period - 0.8 - 0.8 0.1 0.9Exchange differences on translating - - - - 0.1 0.1foreign operationsActuarial gains and losses - (6.8) - (6.8) - (6.8)Dividends - (0.1) - (0.1) - (0.1)Share based payments - 0.1 - 0.1 - 0.1Acquisition of remaining 25% holding in - - - - (0.3) (0.3)Scapa Hong Kong Ltd _____ _____ _____ _____ _____ _____ At 31 March 2005 7.2 31.7 1.3 40.2 - 40.2 IFRS transition adjustments - 0.3 - 0.3 - 0.3 _____ _____ _____ _____ _____ _____ At 1 April 2005 7.2 32.0 1.3 40.5 - 40.5 Retained profit for the period - (2.5) - (2.5) - (2.5)Exchange differences on translating - - 2.6 2.6 - 2.6foreign operationsActuarial gains and losses - (2.4) - (2.4) - (2.4) _____ _____ _____ _____ _____ _____ At 30 September 2005 7.2 27.1 3.9 38.2 - 38.2 _____ _____ _____ _____ _____ _____ 7. Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from operating activities Half year ended Half year ended Year ended 30 September 2005 30 September 2004 31 March 2005 £m £m £m Operating profit/(loss) 1.2 2.7 (1.2) Adjustments for:Depreciation 3.2 3.5 6.9(Profit)/loss on disposal of fixed assets (0.1) - 0.2Impairment of tangible fixed assets - - 3.6Movements in fair value of financial instruments 0.2 - -Pensions payments in excess of charge (1.4) (1.4) (3.0) Changes in working capital:Inventories (1.2) (3.0) (1.6)Trade debtors (0.3) 0.1 (0.8)Trade creditors (0.1) (1.2) (1.5) _____ _____ _____Trading working capital (1.6) (4.1) (3.9)Other debtors (0.6) (0.5) 1.2Other creditors - - (1.2)Net movement in other provisions - - 0.2Net movement in reorganisation provisions (0.1) (0.4) (0.2)Net movement in provisions in respect of prior year (0.9) (0.4) (1.1)disposals _____ _____ _____ Cash (absorbed by)/generated from operations (0.1) (0.6) 1.5 _____ _____ _____ Cash generated from operations before reorganisation 2.6 0.2 3.7and legacy cash flowsCash flows from reorganisation and prior year (2.7) (0.8) (2.2)disposals _____ _____ _____Cash (absorbed by)/generated from operations (0.1) (0.6) 1.5 _____ _____ _____ 8. Restatement of comparative data in accordance with the transition to IFRS The Group has been reporting its results in accordance with IFRS since 1 April2005. Previous financial information was reported in accordance with UK GAAP.All comparative data included in this report has been restated accordingly withthe exception of financial instruments as the Group has taken the exemption notto restate comparatives for IAS 32 and IAS 39. In accordance with the requirements of IFRS 1 the following reconciliations havebeen provided in this report: • A reconciliation of profit/(loss) under UK GAAP for the half year ended 30 September 2004 to the profit/(loss) under IFRS for the half year ended 30 September 2004 • A reconciliation of profit/(loss) under UK GAAP for the year ended 31 March 2005 to the profit/(loss) under IFRS for the year ended 31 March 2005 • A reconciliation of equity at 1 April 2004 under UK GAAP to 1 April 2004 under IFRS • A reconciliation of equity at 30 September 2004 under UK GAAP to 30 September 2004 under IFRS • A reconciliation of equity at 31 March 2005 under UK GAAP to 31 March 2005 under IFRS Detailed explanations of the above reconciliations have been provided in theIFRS restatement announcement made on 31 October 2005 which should be read inconjunction with the interim report. Group Income Statement for the half year ended 30 September 2004 UK GAAP Adjustments IFRS Employee Goodwill Taxation Benefits Turnover 95.0 - - - 95.0 Operating profit before goodwill amortisation 2.8 (0.1) - - 2.7Goodwill amortisation (0.7) - 0.7 - - _____ _____ _____ _____ _____Total operating profit 2.1 (0.1) 0.7 - 2.7 Net finance costs (1.1) - - - (1.1) _____ _____ _____ _____ _____Profit on ordinary activities before taxation 1.0 (0.1) 0.7 - 1.6 Taxation - - - (0.3) (0.3) _____ _____ _____ _____ _____Retained profit for the period 1.0 (0.1) 0.7 (0.3) 1.3 _____ _____ _____ _____ _____ Basic and diluted earnings per share (p) 0.7 (0.1) 0.5 (0.2) 0.9 _____ _____ _____ _____ _____ Group Income Statement for the year ended 31 March 2005 UK GAAP Adjustments IFRS Loss on Employee Goodwill Taxation disposal Benefits Turnover 188.2 - - - - 188.2 Operating profit before goodwill amortisation 3.6 (0.2) (0.1) - - 3.3Goodwill amortisation (1.4) - - 1.4 - - _____ _____ _____ _____ _____ _____Operating profit before exceptional items 2.2 (0.2) (0.1) 1.4 - 3.3 Reorganisation costs (0.9) - - - - (0.9)Property, plant and equipment impairment (3.6) - - - - (3.6) _____ _____ _____ _____ _____ _____Total operating loss (2.3) (0.2) (0.1) 1.4 - (1.2) Loss on disposal of fixed assets (0.2) 0.2 - - - - _____ _____ _____ _____ _____ _____Loss on ordinary activities before interest and (2.5) - (0.1) 1.4 - (1.2)taxation Net finance costs (2.4) - - - - (2.4) _____ _____ _____ _____ _____ _____Loss on ordinary activities before taxation (4.9) - (0.1) 1.4 - (3.6) Taxation 6.3 - - - (0.5) 5.8 _____ _____ _____ _____ _____ _____Profit on ordinary activities after taxation 1.4 - (0.1) 1.4 (0.5) 2.2 Minority interests (0.1) - - - - (0.1) _____ _____ _____ _____ _____ _____Retained profit for the period 1.3 - (0.1) 1.4 (0.5) 2.1 _____ _____ _____ _____ _____ _____Basic and diluted earnings per share (p) 0.9 - (0.1) 1.0 (0.3) 1.5 _____ _____ _____ _____ _____ _____ Group equity at 1 April 2004 Share Retained Translation Equity Minority Total Capital Earnings Reserve holders of Interests Equity the parent UK GAAP 7.2 37.1 - 44.3 0.1 44.4 IFRS adjustments:Employee benefits - (1.2) - (1.2) - (1.2)Taxation - 1.0 - 1.0 - 1.0Dividend - 0.4 - 0.4 - 0.4 _____ _____ _____ _____ _____ _____IFRS 7.2 37.3 - 44.5 0.1 44.6 _____ _____ _____ _____ _____ _____ Group equity at 30 September 2004 Share Retained Translation Equity Minority Total Capital Earnings Reserve holders of Interests Equity the parent UK GAAP 7.2 38.8 - 46.0 0.1 46.1 IFRS adjustments:Employee benefits - (1.3) - (1.3) - (1.3)Goodwill - 0.7 - 0.7 - 0.7Exchange differences - (1.3) 1.3 - - -Dividend - 0.1 - 0.1 - 0.1Taxation - 0.7 - 0.7 - 0.7 _____ _____ _____ _____ _____ _____ IFRS 7.2 37.7 1.3 46.2 0.1 46.3 _____ _____ _____ _____ _____ _____ Group equity at 31 March 2005 Share Retained Translation Equity Minority Total Capital Earnings Reserve holders of Interests Equity the parent UK GAAP 7.2 32.4 - 39.6 - 39.6 IFRS adjustments:Employee benefits - (1.3) - (1.3) - (1.3)Goodwill - 1.4 - 1.4 - 1.4Exchange differences - (1.3) 1.3 - - -Taxation - 0.5 - 0.5 - 0.5 _____ _____ _____ _____ _____ _____ IFRS 7.2 31.7 1.3 40.2 - 40.2 _____ _____ _____ _____ _____ _____ 9. Audit basis and statutory accounts The financial information included within this report is unaudited. Thecomparative figures for the year ended 31 March 2005 are on an IFRS basis andtherefore differ from the financial information included in the Group's auditedstatutory accounts for that period. These accounts were prepared under UK GAAPand have been delivered to the Registrar of Companies. The report of theauditors was unqualified and did not contain a statement under section 237 ofthe Companies Act 1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SCPA.L