18th Jan 2006 07:00
Bespak PLC18 January 2006 For immediate release 18 January 2006 Bespak plc Interim results for the 26 weeks to 29 October 2005 Bespak (LSE: BPK), a leader in specialty medical devices, today announces itsinterim results for the 26 weeks to 29 October 2005. Highlights • Revenue increased 6% to £41.2m (2004: £38.9m). Respiratory sales grew by 10%. • Profit before tax and exceptional items increased 3% to £5.8m (2004: £5.7m). After exceptional items associated with closure of the US manufacturing facility in North Carolina, profit before tax increased to £6.8m (2004: £1.8m). • Earnings per share before exceptional items increased 7% to 16.5p (2004: 15.4p). After exceptional items, earnings per share increased to 20.0p (2004: 0.9p). • Interim dividend of 7.0p per share to be maintained (2004: 7.0p). • Following the recommendations from clinical advisory panels in the US and in Europe, Bespak awaits the approval of Exubera(R). • Delivery of key corporate objective in acquisition of King Systems Corporation, a leading US supplier of disposable airway management products, for US$95m. • Dr. Peter Fellner appointed a non-executive director. Mark Throdahl, Bespak's Chief Executive, commented: "Bespak performed in line with expectations during the first half. Respiratoryshowed strong growth and we await the approval of Exubera(R). Our recentacquisition of King Systems moves Bespak into related markets for airwaymanagement products which will help generate more consistent future sales andearnings performance." For further information, please contact:Bespak plc Tel: +44 (0) 1908 525240Mark Throdahl - Chief ExecutiveMartin Hopcroft - Finance Director Buchanan Communications Tel: +44 (0) 20 7466 5000Tim Thompson / Mark Court / Mary-Jane Johnson About Bespak plcBespak, a leader in specialty medical devices, develops delivery systems for thepharmaceutical industry and disposable airway management products for criticalcare settings. Bespak's product range includes metered dose and dry powderinhalers, actuators, inflation valves, disposable face masks, breathing circuitsand laryngeal tubes. The group, which has facilities in King's Lynn and MiltonKeynes in the UK and Indianapolis and Kent, Ohio, in the US, is quoted on theOfficial List of the London Stock Exchange (LSE: BPK). For more information,please visit www.bespak.com. Nothing in this announcement should be construed as a profit forecast or beinterpreted to mean that the future earnings per share or profits of Bespak willnecessarily be greater than the historic published earnings per share. Bespak plc Interim results for the 26 weeks to 29 October 2005 Overview In the 26 weeks to 29 October 2005, Bespak increased sales of products andservices by 6%, generated 3% growth in profit before tax and exceptionals, andincreased earnings per share before exceptionals by 7% compared with thecorresponding period last year. The Group benefited from continued growth in HFAvalve sales as well as the replenishment of the CFC valve supply chain in the USfollowing the FDA's ruling on the phase-out of CFC aerosol formulations. Also,the Group benefited from the inventory building by US customers in advance ofclosure of our manufacturing facility in Cary, North Carolina. Sales of products and services increased by 6% to £40.5m (2004: £38.3m) and,including sales of tooling and equipment, revenue increased by 6% to £41.2m(2004: £38.9m). Operating profit before exceptionals increased by 3% to £5.7m(2003: £5.5m). Profit before tax and exceptionals increased by 3% to £5.8m(2004: £5.7m). Earnings per share before exceptionals increased by 7% to 16.5p(2004: 15.4p). As a result of our ability to sell the building and certain plant and equipmentat prices higher than anticipated, together with reduced closure costs, anexceptional gain of £0.9m was booked in our US manufacturing operation in Cary,North Carolina. Consequently, profit before tax increased to £6.8m (2004:£1.8m), whilst earnings per share increased to 20.0p (2004: 0.9p). The Board is maintaining an interim dividend of 7.0p per share, which is payableon 27 February 2006 to those shareholders on the register on 27 January 2006.The Group's net cash as at 29 October 2005 increased to £18.8m (2004: £15.0m),reflecting lower-than-planned capital expenditure and disposal of certain USassets. Operational Review Bespak's operations are managed as four divisions: Respiratory, Device andManufacturing Services, Consumer Dispensers and the recently acquired KingSystems Corporation. An update on each is given in turn. Respiratory The Respiratory business designs, manufactures and sells metered dose inhaler(MDI) valves, actuators and accessories to deliver respiratory drugs to the lungand nasal mucosa. Sales grew by 10% to £21.3m (2004: £19.4m). As a result of the Montreal Protocol ozone depletion agreement, thechlorofluorocarbon (CFC) propellant gas used in aerosol asthma formulations isbeing converted to hydrofluoroalkane (HFA). Over the past 8 years, HFA valveshave grown from 10% to 35% of the aerosol asthma market, and the transition tothese new formulations has enabled Bespak to become the MDI market leader byvalue. Bespak has the widest array of HFA valve designs in the industry. While Europe is largely converted to HFA systems, the US is not. In March 2005,the FDA announced that aerosol albuterol formulations containing CFC cannot besold after 31 December 2008. Bespak enjoys strong positions in both CFC and HFAvalves. Bespak's valves are under active consideration by a number of current andprospective customers, and we have been particularly encouraged by marketreception to our new EasifillTM valve, which was launched for sampling in theperiod, requires no priming and provides greater dosing accuracy and reducedwaste. We believe that we have won valve programmes for more than two-thirds ofthe HFA formulations approved around the world. Bespak's HFA sales were 60% ofits total valve sales (2004: 43%) in the period. Last year, we announced our intention to develop the capability to industrialiseand manufacture rubber seals for our HFA valves. This specialised capabilitywill complement the Group's investments in developing proprietary elastomers,whose supply and intellectual property can best be protected if we manufacturethese products ourselves. Based at King's Lynn, this vertical integrationprogramme has made outstanding progress, and we are now manufacturing bulkelastomers for finishing by our suppliers. In December, Bespak was given the 2005 Frost & Sullivan Award for TechnologicalInnovation. This award is given to a company that has demonstrated technologicalsuperiority in its industry. It recognises Bespak's continuous innovations inMDI valves, complemented by its range of manufacturing services topharmaceutical and healthcare companies. Device & Manufacturing Services (DMS) The DMS business provides a comprehensive range of device-related services topharmaceutical and drug delivery companies. Sales increased by 2% to £16.5m(2004: £16.2m), including the inventory build by US customers in anticipation ofthe Cary plant's closing. DMS also benefited from growing sales of Innovata'sClickHaler(R), under license to UCB, Merck Generics in Europe and Otsuka inJapan. The Group is also developing the manufacturing process for Duohaler(R),which is Innovata's next generation device for combination therapies. In conjunction with Nektar Therapeutics, Bespak is developing the manufacturingprocess for the inhaler device that will deliver the world's first inhaledinsulin, Exubera(R). Nektar is collaborating with Pfizer, Inc to develop theinhalation device and formulation process for Exubera(R). Bespak is increasinglyconfident in the prospects for growth from Exubera(R) and awaits regulatoryapproval on both sides of the Atlantic. The European regulatory filing for Exubera(R) was made in February 2004, and inOctober 2005 the Committee for Medicinal Products (CHMP) of the EMEA recommendedits approval. European Union member states have 90 days to comment. The USregulatory filing for Exubera(R) was made in March 2005, and in September theFDA's clinical advisory panel recommended approval of this filing. Pfizer hasindicated that clinical studies show that Exubera(R) is at least equivalent toinjected insulin but is strongly preferred by patients and has stated that "whenapproved by regulators, Exubera(R) will be the most important advance in insulinadministration since injections were introduced 80 years ago". The DMS business continues to bid on a number of new development programmes. Consumer Dispensers This business manufactures pumps for consumer household products, toiletries andfragrances. Sales declined by 3% to £2.7m (2004: £2.8m). However, this autumnthe division launched a new generation fine mist spray pump which showsconsiderable promise, as well as recruiting additional commercial personnel tostrengthen our customer-facing presence on continental Europe. King Systems Corporation On 22 December, Bespak acquired King Systems Corporation, a leading USmanufacturer of disposable airway management products, for an aggregateconsideration of US$85m (less net debt to be assumed by Bespak), assuming thatKing's earnings before interest, taxes and depreciation are US$9.3m for the yearended 31 December 2005. A further US$10m in cash will be paid approximately oneyear from now assuming King's EBITDA grows to US$11m for the year ended 31December 2006. King manufactures disposable anaesthesia masks, breathing circuits, andlaryngeal tubes. It is a stable business with consistent growth in recent yearsand strong growth in 2005. King strengthens Bespak's footprint in the large USmarket and is a complementary business with many manufacturing similarities tothe Respiratory and DMS businesses. King's experienced management team, whichbuilt the business, is incentivised and committed to stay. King is a platformfor future acquisitions in a large and fragmented anaesthesiology andrespiratory care disposables markets here and in the US. We will manage King asa stand-alone division of Bespak. Cary Closure In September, the Group closed its manufacturing facility in Cary, NorthCarolina. Over the preceding year, we have worked with customers on the orderlytransfer of certain production to our facilities in King's Lynn and MiltonKeynes. These transfers were accomplished on time and under budget. In December,the Group completed the sale of the Cary site for US$5.3m and as a resultincurred an exceptional gain of US$0.8 million (which is included in theexceptional income) on the provision made one year ago. Directors After completing two complete terms, Sir John Chisholm retired as anon-executive director at the AGM. The Board would like to thank him for hisvaluable contribution. In November, we appointed Dr Peter Fellner to the Board. Dr. Fellner is Chairmanof Vernalis plc and Astex Therapeutics Ltd. He is a Non-Executive Director ofUCB SA, Qinetiq Group plc, Evotec AG and Isis Innovation Ltd. From 1990 to 2003he was Chief Executive of Celltech Group plc, following which he was Chairmanuntil 2004, when the business was acquired by UCB. Growth strategy Bespak's strategy is to capitalise on its leading position as a manufacturer ofspecialty medical devices by growing organically and by acquisition. We believethat the Group can continue to grow market share in MDI valves through itsresearch and development programmes, and we aim to develop several new valveplatforms by 2006 and grow the business internationally. We plan to build onpast successes in Device & Manufacturing Services by adding new programmes eachyear. Our overall objective is to build a strong and consistent sales and earningstrack record by complementing organic growth with selective acquisitions thateither infill current businesses or take the Group into new, but related,product areas. The acquisition of King Systems in December is an attractivefirst step in our strategy to diversify into medical devices sold to hospitalcustomers, broadens the Group's business beyond pharmaceutical developmentprogrammes, and adds substantially to its scale. International financial reporting standards The interim results for the 26 weeks to 29 October 2005 are the first to beprepared under International Financial Reporting Standards. Full details of thechanges in accounting policies were published on 13 January 2006 and areavailable on the Group's website (www.bespak.com). Outlook The Board is optimistic about the Group's growth prospects, particularly becauseof the improved business mix accomplished by the acquisition of King Systems.Three key issues will impact future performance. Firstly, US customers arecontinuing to develop their marketing plans for the replacement of CFC with HFAin albuterol formulations, and we will continue to benefit from the continuedgrowth in HFA valves. Secondly, Bespak awaits the approval of Exubera(R) inEurope and the USA. Thirdly, we anticipate continued growth from the acquisitionof King Systems. In the second half, as previously indicated, we anticipate additionalexpenditure to strengthen the business, cost increases in energy and rawmaterials, and the reversal of inventory building by customers of previouslyUS-manufactured products transferred to the UK. Nevertheless, we anticipate someimprovements to offset these cost pressures. We have demonstrated our ability to implement growth initiatives and deliver onour strategic objective to acquire a medical device business that sells tonon-pharmaceutical customers. The Board has good reason to be positive about theGroup's growth prospects. Mark C. ThrodahlChief Executive17 January 2006 Consolidated Income Statement (unaudited)For the 26 weeks to 29 October 2005 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 Note £000 £000 £000 --------- --------- --------- Sales of products and services 40,498 38,344 77,894 Sales of tooling and equipment 724 595 1,492 --------- --------- ---------Revenue 2 41,222 38,939 79,386 Operating expenses (35,527) (33,414) (68,831) Exceptional operatingincome/(expenses) 3 938 (3,867) (6,066) --------- --------- --------- Operating profit 6,633 1,658 4,489 --------- --------- --------- Operating profit beforeexceptionals 5,695 5,525 10,555 Exceptional operatingincome/(expenses) 938 (3,867) (6,066) --------- --------- --------- Operating profit 6,633 1,658 4,489 --------- --------- --------- Net finance income 4 138 156 344 Share of joint ventures andassociates (7) (22) (17) --------- --------- ---------Profit before tax 6,764 1,792 4,816 Taxation 5 (1,410) (1,540) (2,498) --------- --------- ---------Profit for the financial period 5,354 252 2,318 --------- --------- --------- Basic earnings per share beforeexceptionals 6 16.5p 15.4p 31.3pBasic earnings/(loss) per shareon exceptionals 6 3.5p (14.5p) (22.6p) --------- --------- ---------Basic earnings per share 6 20.0p 0.9p 8.7p --------- --------- ---------Diluted earnings per sharebefore exceptionals 6 16.3p 15.2p 30.9pDiluted earnings/(loss) per shareon exceptionals 6 3.4p (14.3p) (22.4p) --------- --------- ---------Diluted earnings per share 6 19.7p 0.9p 8.5p --------- --------- --------- All amounts relate to continuing operations. Consolidated Balance Sheet (unaudited)At 29 October 2005 29 October 30 October 30 April 2005 2004 2004 Note £000 £000 £000 --------- --------- --------- Non-current assetsProperty, plant and equipment 47,328 53,154 51,159Intangible assets 94 205 130Investment in associates 262 286 269Available-for-sale financial assets - 236 77 --------- --------- --------- 47,684 53,881 51,635 --------- --------- --------- --------- --------- ---------Non-current assets held for resale 8 2,986 - - --------- --------- --------- Current assetsInventories 5,759 4,982 6,082Trade and other receivables 13,905 11,962 14,616Financial instruments - 84 88Cash and cash equivalents 22,822 21,114 20,302 --------- --------- --------- 42,486 38,142 41,088 --------- --------- --------- Current liabilitiesShort-term borrowings andoverdrafts (4,019) (6,084) (2,887)Financial instruments (35) - -Trade and other payables (10,159) (9,006) (11,621)Current tax liabilities (1,436) (1,816) (1,618)Provisions (416) - (2,054) --------- --------- --------- (16,065) (16,906) (18,180) --------- --------- --------- --------- --------- ---------Net current assets 26,421 21,236 22,908 --------- --------- --------- Non-current liabilitiesDeferred taxation (79) (919) (443)Retirement benefit obligations (17,060) (15,285) (15,703)Provisions - (268) -Other liabilities - (798) (399) --------- --------- --------- (17,139) (17,270) (16,545) --------- --------- --------- --------- --------- ---------Net assets 59,952 57,847 57,998 --------- --------- --------- Shareholders' equityShare capital 2,684 2,681 2,681Share premium 23,191 23,051 23,051Retained earnings 34,077 32,115 32,266 --------- --------- ---------Total equity 59,952 57,847 57,998 --------- --------- --------- The financial statements were approved by the Board on 17 January 2006 Consolidated Cash Flow Statement (unaudited)For the 26 weeks to 29 October 2005 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 Note £000 £000 £000 --------- --------- --------- Cash flows from operatingactivitiesOperating profit before 6,633 1,658 4,489taxationDepreciation and amortisation 3,477 3,961 7,637Impairment (credit)/charge (699) 3,867 3,784Decrease/(increase) ininventories 374 978 (171)Decrease/(increase) in tradeand other receivables 1,069 (1,473) (4,169)(Decrease)/increase in trade andother payables (1,777) (1,762) 198(Decrease)/increase in (1,824) 11 1,887provisionsOther non-cash movements 139 265 563 --------- --------- ---------Cash generated from operations 7,392 7,505 14,218 Interest paid (35) (59) (157) Tax paid (1,644) (1,120) (2,608) --------- --------- ---------Net cash inflow from operatingactivities 5,713 6,326 11,453 --------- --------- --------- Cash flows from investingactivitiesPurchases of property, plant andequipment (2,078) (1,016) (2,590)Proceeds from sale ofproperty,plant and equipment 398 - 4Purchase of other assets - (8) -Disposal of other assets 82 - 66Interest received 440 422 900 --------- --------- ---------Net cash used in investingactivities (1,158) (602) (1,620) --------- --------- --------- Cash flows from financingactivitiesNet proceeds from issue ofordinary share capital 231 10 12Equity dividends paid toshareholders (3,241) (3,237) (5,111) --------- --------- ---------Net cash used in financingactivities (3,010) (3,227) (5,099) --------- --------- --------- Net increase in cash andcash equivalents 9 1,545 2,497 4,734 Effects of exchange rate (157) 213 361changesCash and cash equivalents atstart of period 17,415 12,320 12,320 --------- --------- ---------Cash and cash equivalents at endof period 18,803 15,030 17,415 --------- --------- ---------Cash and cash equivalentsconsist of:Cash and cash equivalents 22,822 21,114 20,302Overdrafts and short-term loans (4,019) (6,084) (2,887) --------- --------- --------- 18,803 15,030 17,415 --------- --------- --------- Consolidated Statement of Changes in Equity (unaudited)For the 26 weeks to 29 October 2005 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 Note £000 £000 £000 --------- --------- --------- Total equity at start of period 57,998 62,318 62,318Profit for the period 5,354 252 2,318Exchange differences on translation offoreign subsidiaries 85 (39) (142)Movements due to share-basedpayments 420 157 397Actuarial losses on definedbenefitpension scheme (949) (2,291) (2,546)Taxation on items taken directlyto equity 285 687 764Equity dividends 7 (3,241) (3,237) (5,111) --------- --------- ---------Total equity at end of period 59,952 57,847 57,998 --------- --------- --------- Notes to the Accounts 1. Basis of preparation and accounting policies For all periods up to and including the 52 weeks to 30 April 2005, Bespak plcprepared its financial statements in accordance with UK Generally AcceptedAccounting Principles (UK GAAP). From 1 May 2005, Bespak plc is required toprepare consolidated financial statements in accordance with InternationalFinancial Reporting Standards (IFRS) as endorsed by the European Union (EU). Thefirst results reported under IFRS are for the 26 weeks to 29 October 2005 andthe comparative information is also presented in accordance with IFRS. On 13January 2006, the Group reported on the impact of IFRS on its results for the 26weeks to 30 October 2004 and the 52 weeks to 30 April 2005, including the mostsignificant accounting policies. Details are provided in the document 'Adoptionof International Financial Reporting Standards (IFRS)' that is available on theGroup's website (www.bespak.com) or from the Company Secretary. The financial information has been prepared in accordance with all IFRS andIFRIC interpretations that had been published by 29 October 2005 and apply toaccounting periods beginning on or after 1 May 2005. The standards used arethose endorsed by the EU together with those standards and interpretations thathave been issued by the IASB but had not been endorsed by the EU by 29 October2005. The 2004 comparative information has, as permitted by the exemption inIFRS 1, not been prepared in accordance with IAS 32 'Financial instruments:Disclosure and presentation' and IAS 39 'Financial instruments: Recognition andmeasurement'. Further standards and interpretations may be issued that will beapplicable for financial years beginning on or after 1 May 2005 or that areapplicable to later accounting periods but may be adopted early. Therefore, theGroup's first full IFRS financial statements to 29 April 2006 may be prepared inaccordance with some different accounting policies from the financialinformation presented here. IFRS is currently being applied in the UnitedKingdom and in a large number of other countries simultaneously for the firsttime. Furthermore, due to a number of new and revised Standards included withinthe body of Standards that comprise IFRS, there is not yet a significant body ofestablished practice on which to draw in forming opinions regardinginterpretation and application. Accordingly, practice is continuing to evolve.At this preliminary stage therefore, the full financial effect of reportingunder IFRS as it will be applied and reported on in the Group's first IFRSfinancial statements cannot be determined with certainty and may be subject tochange. This interim report is unaudited and does not constitute audited accounts withinthe meaning of the Companies Act 1985. The accounts for the year ended 30 April2005, on which the auditors gave an unqualified audit opinion, were prepared inaccordance with UK GAAP and have been filed with the Registrar of Companies. 2. Segmental analysis Revenue by business 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- Respiratory 21,331 19,367 39,681Device & Manufacturing Services 16,488 16,201 32,836Consumer Dispensers 2,679 2,776 5,377 --------- --------- ---------Sales of products and services 40,498 38,344 77,894Sales of tooling and equipment 724 595 1,492 --------- --------- --------- 41,222 38,939 79,386 --------- --------- --------- --------- --------- --------- Revenue by destination 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- United Kingdom 11,428 12,776 23,613United States of America 16,986 12,666 27,808Europe 9,275 9,722 20,276Rest of the World 3,533 3,775 7,689 --------- --------- --------- 41,222 38,939 79,386 --------- --------- --------- --------- --------- ---------Revenue by origin 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- United Kingdom 37,327 33,635 67,882United States of America 6,812 8,835 18,923 --------- --------- ---------Total sales 44,139 42,470 86,805Intra-group sales (2,917) (3,531) (7,419) --------- --------- --------- 41,222 38,939 79,386 --------- --------- --------- 2. Segmental analysis (continued) Operating profit by origin 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- ---------United Kingdom --------- --------- ---------Operating profit before exceptionals 4,878 5,381 9,022 --------- --------- ---------United States of AmericaOperating profit before exceptionals 817 144 1,533Exceptional operatingincome/(expenses) 938 (3,867) (6,066) --------- --------- --------- 1,755 (3,723) (4,533) --------- --------- ---------GroupOperating profit before exceptionals 5,695 5,525 10,555Exceptional operatingincome/(expenses) 938 (3,867) (6,066) --------- --------- --------- 6,633 1,658 4,489 --------- --------- --------- --------- --------- --------- Net operating assets by origin 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- United Kingdom 55,907 56,260 55,091United States of America 985 4,323 4,964 --------- --------- ---------Allocated net operating assets 56,892 60,583 60,055Investments 262 522 346Non-current assets held for sale 2,986 - -Taxation (1,515) (2,735) (2,061)Retirement benefit obligations andprovisions (17,476) (15,553) (17,757)Cash and cash equivalents 18,803 15,030 17,415 --------- --------- ---------Net assets 59,952 57,847 57,998 --------- --------- --------- --------- --------- --------- Exchange rates 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 --------- --------- --------- Average rate of exchange US$: £1 1.80 1.81 1.85Closing rate of exchange US$ : £1 1.78 1.83 1.91 3. Exceptional items 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- Exceptional operatingincome/(expenses) 938 (3,867) (6,066)Taxation - - - --------- --------- ---------Exceptional items after tax 938 (3,867) (6,066) --------- --------- --------- The exceptional operating expenses in the 26 weeks to 29 October 2005 comprisethe reversal of closure provisions and impairment provisions against thecarrying value of the Group's fixed assets in the United States, followingclosure of the manufacturing facility in North Carolina. The exceptionaloperating expenses in the 26 weeks to 30 October 2004 comprised an impairmentcharge for the land and buildings. The exceptional operating expenses in the 52weeks to 30 April 2005 comprised an impairment charge for the land, buildings,plant and equipment, together with a provision for closure costs. 4. Net finance income 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- Interest receivable 468 445 894Expected return on defined benefitpension scheme assets 764 733 1,505 --------- --------- ---------Interest income 1,232 1,178 2,399 --------- --------- --------- Interest payable (74) (83) (157)Interest cost on defined benefitpension scheme liabilities (1,020) (939) (1,898) --------- --------- ---------Interest expense (1,094) (1,022) (2,055) --------- --------- --------- --------- --------- ---------Net finance income 138 156 344 --------- --------- --------- 5. Taxation The tax charge for the 26 weeks to 29 October 2005 is based on the estimatedeffective tax rate for the full year. 6. Earnings per share 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- Profit before tax 6,764 1,792 4,816Exceptional operating(income)/expenses (938) 3,867 6,066 --------- --------- ---------Profit before tax and exceptionals 5,826 5,659 10,882Taxation (1,410) (1,540) (2,498) --------- --------- ---------Profit after tax before exceptionals 4,416 4,119 8,384Exceptional operating income/(expenses) after tax 938 (3,867) (6,066) --------- --------- ---------Profit for the financial period 5,354 252 2,318 --------- --------- --------- Weighted average number of ordinaryshares in issue (shares) 26,815,740 26,805,889 26,805,889Shares owned by Employee ShareOwnership --------- --------- ---------Trusts (shares) (16,141) (42,664) (34,114) --------- --------- ---------Basic average number of ordinaryshares in issue (shares) 26,799,599 26,763,225 26,771,775Dilutive impact of share optionsoutstanding (shares) 346,816 255,674 353,691 --------- --------- ---------Diluted average number of ordinaryshares in --------- --------- ---------issue (shares) 27,146,415 27,018,899 27,125,466 --------- --------- --------- Basic earnings per share beforeexceptional items (pence) 16.5p 15.4p 31.3pBasic profit/(loss) per share onexceptional --------- --------- ---------items (pence) 3.5p (14.5p) (22.6p) --------- --------- ---------Basic earnings per share (pence) 20.0p 0.9p 8.7p --------- --------- --------- Diluted earnings per share beforeexceptional items (pence) 16.3p 15.2p 30.9pDiluted profit/(loss) per share onexceptional items (pence) 3.4p (14.3p) (22.4p) --------- --------- ---------Diluted earnings per share (pence) 19.7p 0.9p 8.5p --------- --------- --------- 7. Dividends 26 weeks to 26 weeks to 52 weeks to 29 October 30 October 30 April 2005 2004 2005 £000 £000 £000 --------- --------- --------- Final dividend paid of 12.1p pershare (2004: 12.1p) 3,241 3,237 3,237Interim dividend paid of 7.0p pershare (2004: 7.0p) - - 1,874 --------- --------- --------- 3,241 3,237 5,111 --------- --------- --------- An interim dividend of 7.0p per share (2004: 7.0p) is proposed to be paid inrespect of the 26 weeks to 29 October 2005. 8. Non-current assets held for resale The property in North Carolina has been categorised as an asset held for resale,such that depreciation is no longer charged. The property was sold in December2005 for its carrying value at October 2005 of US$5.3 million (£3.0 million). 9. Reconciliation of net cash flow to movement in net cash Cash and cash Short-term Total net equivalents borrowings cash £000 £000 £000 --------- --------- --------- At 1 May 2005 20,302 (2,887) 17,415Cash flow for the period 2,475 (930) 1,545Exchange rate adjustments 45 (202) (157) --------- --------- ---------At 29 October 2005 22,822 (4,019) 18,803 --------- --------- --------- Net cash inflow from operating activities includes an outflow of £1,352,000 inthe 26 weeks to 29 October 2005, an outflow of £nil in the 26 weeks to 30October 2004 and an outflow of £235,000 in the 52 weeks to 30 April 2005relating to exceptional operating income/expenses. 10. Transition from UK GAAP to IFRS The impact of the adoption of IFRS on the income for the 26 weeks to 30 October2004 and the 52 weeks to 30 April 2005 is as follows: 26 weeks to 52 weeks to 30 October 30 April 2004 2005 £000 £000 --------- --------- Profit for the financial period (UK GAAP) 306 2,728Share-based payments (65) (236)Pension charges (272) (486)Holiday pay 167 8Associates - 22Financial instruments 120 124Deferred taxation (4) 158 --------- ---------Profit for the financial period (IFRS) 252 2,318 --------- --------- The impact of the adoption of IFRS on total equity at 2 May 2004, at 30 October2004 and at 30 April 2005 is as follows: 2 May 30 October 30 April 2004 2004 2005 £000 £000 £000 --------- --------- --------- Total equity (UK GAAP) 67,983 66,513 65,594Pension deficit (12,647) (15,210) (15,679)Holiday pay (289) (122) (281)Proposed dividend 3,237 1,875 3,241Financial instruments (36) 84 88Deferred taxation 4,070 4,707 5,035 --------- --------- ---------Total equity (IFRS) 62,318 57,847 57,998 --------- --------- --------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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