17th Jun 2010 07:00
News Release
17 June 2010
Consort Medical plc
Preliminary unaudited results for the year ended 30 April 2010
Consort Medical plc: Strong performance in a challenging year and new product launches in 2010/11
Consort Medical plc (LSE: CSRT), a leader in drug delivery and device technologies, today announces results for the year ended 30 April 2010.
Financial Highlights:
·; Revenues from ongoing products and services broadly flat at £118.6m (2009: £120.3m)
·; Like-for-like operating profit before special items increased by 3% to £19.4m (2009: £18.9m). Operating profit after special items down 7% to £12.2m (2009: £13.1m)
·; Profit before tax and special items down 6% to £16.9m (2009: £17.9m) Profit before tax and after special items down 13% to £10.5m (2009:12.0m)
·; Profit after tax and special items up 6% to £8.1m (2009: £7.6m)
·; Basic earnings per share up by 6% to 27.8p (2009: 26.2p) Adjusted basic earnings per share down 6% at 42.5p (2009: 45.1p)
·; Final dividend maintained at 12.1p per share (2009: 12.1p per share)
Operational Highlights:
·; £16.9m acquisition of The Medical House plc now fully integrated into Bespak and making encouraging progress with three development contracts in fast growing autoinjector space progressing as planned
·; Maintained market share in Bespak Respiratory's core markets with a 10% rise in operating profits and with good progress on a number of new products
·; King Systems transformation programme on schedule and significant progress with R&D pipeline
·; Group cost reduction initiatives delivering higher returns than previously forecast
·; Strengthened management team to take the business forward
Jon Glenn, Chief Executive Officer, commented:
"Consort has delivered a strong performance in a challenging year with a 3% rise in like-for-like operating profits. Our continued investment in organic growth opportunities is expected to lead to new product launches later in 2010 and our cost reduction initiatives are ahead of schedule. We have been delighted with the Bespak Injectables acquisition and have been encouraged by the considerable interest shown by global pharma companies in Bespak's enhanced product capabilities. Overall, we are confident of our prospects for the year ahead."
Enquiries:
|
Consort Medical plc |
Tel: +44 (0) 1442 867920 |
|
Jonathan Glenn, Chief Executive Officer |
|
|
Toby Woolrych, Group Finance Director |
|
|
|
|
|
Brunswick Group LLP |
Tel: +44 (0) 20 7404 5959 |
|
Jon Coles/Justine McIlroy/Will Carnwath |
|
Chairman and Chief Executive's Combined Review
We are pleased to report that Consort Medical has delivered robust results for the last financial year, notwithstanding global recession. We have delivered an encouraging overall financial performance and both divisions made strides towards delivering the promised organic growth in revenues and margins. The Group's strong cash flows and balance sheet have enabled Consort Medical to withstand the global economic recession in good shape, to maintain our dividend payment for the full financial year, and also to continue to invest in both organic and acquisitive growth opportunities. In particular, we have been delighted with our acquisition of The Medical House plc, which opens an important new market for Bespak's unique capabilities.
Group Results
Consort Medical entered the last financial year facing destocking across its markets, a material price reduction in one of Bespak's key contracts and a weak hospital market in the US for King Systems. In this context, we have been pleased with the resilient financial performance in the last year. Revenues and operating profits (before special items) were broadly flat at £118.6m (2009: £120.3m) and £18.7m (2009: £18.9m) respectively. We were particularly pleased that like-for-like operating profits, excluding the impact of The Medical House acquisition, rose by 3% on the back of excellent cost control. Profit before tax and special items fell by 6% due to lower interest income on our cash balances and an increased non-cash pension charge. Profit after tax but before special items fell by 6% to £12.3m and adjusted earnings per share fell by 6% to 42.5p. Including special items, profit before tax fell by 13% to £10.5m, profit after tax rose by 6% to £8.1m and basic earnings per share rose by 6% to 27.8p.
Bespak's respiratory business performed better than expected. While revenues fell by 5% in challenging market conditions to £76.6m, the cost initiatives that we introduced resulted in operating profits increasing by 10% to £14.8m. Operating margins increased for a second successive year from 16.6% to 18.2%. There were encouraging signs that markets were improving as we entered 2010 and the division finished the year strongly. Bespak also made encouraging progress with a number of key development programmes.
King Systems also performed robustly in a market which saw declining hospital procedures in 2009. Revenues in dollars rose by 1% to $65.7m (a 4.5% increase in sterling terms). Operating profits fell by $1.3m (14.8%) to $7.2m which reflects an additional investment of $1.7m in R&D, focussed in particular on a major product launch for 2010, as well as incurring additional costs to drive our manufacturing transformation programme.
Group cash generation continues to be strong, with an EBITDA of £21.6m (2009: £22.0m), and net debt remains tightly managed at 1.5x EBITDA. The Group refinanced its borrowing facilities until October 2013 and we have leverage available to help us deliver our future growth plans. We have laid the foundations for growth by investing our strong cash flow in additional innovation, product development and targeting of new markets. King Systems in particular significantly increased its R&D expenditure in 2009/10 and will rapidly increase its rate of new product introduction.
Strategy
Consort Medical is a healthcare company focused on high margin disposable medical device technologies. Our strategy is to build and strengthen our core business through new product innovation, increased market reach and higher value business models. We will diversify the Group into adjacent markets and technologies which leverage our competencies or utilise our sales channels. We will also continue to manage costs carefully, to maintain and increase margins.
Business performance
Acquisition of The Medical House plc
We acquired The Medical House plc ("TMH") for £16.9m in November 2009. TMH has developed a strong portfolio of autoinjector technologies designed for the delivery of biological drugs, which now make up over 40% of the pharmaceutical industry's development pipeline. TMH has three autoinjector programmes already in late development for major customers as well as a needle-free injector for Merck Serono which was launched in July 2009. The combination of TMH's development expertise with Bespak's manufacturing skills provides pharmaceutical customers with a compelling offering. The acquisition leverages Bespak's unique capabilities into a faster growing market place and also takes it higher up the value chain using a royalty based revenue model, which is in line with the strategy we set out last year. TMH has now been fully integrated into Bespak and rebranded Bespak Injectables. We have already reached our target of realising cost savings of £0.5m per annum - the savings will be achieved in full in the 2010/11 financial year. The costs of the integration were taken partly through normal operating expenses and partly as special items.
Bespak Division
Bespak is a leading drug delivery device manufacturer, with many of the world's top pharmaceutical companies as its largest customers. Bespak moulds or sources over 3 billion parts a year, from valves and actuators to complete devices.
Bespak performed strongly during 2009/10. Operating profit before special items for the year of £14.1m was 5% up on prior year despite a 4% fall in revenues in difficult markets. Operating margins increased from 16.6% to 18.2% benefitting from a range of cost reduction initiatives. The restructuring activities, for which a £2.2m charge was taken as a special item in the current year, delivered savings of £1.7m in the year and is expected to deliver a further £2.2m per annum from next year. This is in addition to savings from our continuous improvement programme amounting to a further annualised £0.8m. The Integrated Aluminium Components Ltd (IAC) subsidiary that was consolidated last year has been returned to profitability.
In our valve business we maintained market share in our core markets. We renewed a major long term contract worth over £30m with one of our larger customers in December, and saw an improvement in overall demand in early 2010. We have made good progress this year on a number of new products from our portfolio of over fifty development programmes. In particular, the primeless (Easifill) valve has been in successful Phase III trials with a customer for a systemic therapeutic application and we anticipate a regulatory filing in 2011. We also have two further valve variants on test with customers for asthma applications: one is scheduled to launch in 2011 and the other in 2012. We have an emerging market valve which is undergoing customer evaluation.
The FDA has issued guidance that all new drugs delivered by an inhaler should have a dose counter and has recommended the retro-fitting of dose counters to existing products. Bespak aims to address this market by offering both its own integrated dose counter ("IDC") and/or a manufacturing capability for those customers who may have developed their own solution. Our own IDC has just successfully completed Phase III clinical trials with a customer for a new product, and we anticipate further progress towards commercialisation in the coming year. We are a supplier of dose counters to a major Pharma company that has one of the only dose counters currently on the market in volume.
Bespak Respiratory's device services business offers unique design for manufacture and manufacturing capability to customers who own their own device technologies. Revenues fell as expected during the period as a result of contractual changes with a major customer which were announced in February 2009. However, excellent progress has been made in the past year in bringing two programmes to an industrialisation phase, including a potentially significant programme that was installed in a bespoke building erected last year.
Bespak Injectables has also made good progress with its currently marketed product and with its development programmes. The cool.clickTM2 needle-free injector device for use with Merck-Serono's human growth hormone drug was launched in July 2009, and initial revenues have been in line with expectations. The first Bespak autoinjector programme, for Dr Reddys Laboratories, is awaiting FDA approval which is anticipated in the late summer of 2010. The second major autoinjector programme, for an undisclosed major Pharma company, has made good progress and filing is expected towards the end of 2010 for a 2011 launch. The third programme, in collaboration with Catalent Pharma Solutions for Stallergenes, has made good progress in stability trials and is expected to file for approval in 2011.
King Systems Division
King Systems is a leading US manufacturer of medical devices used by anaesthetists and emergency practitioners to establish, manage and maintain patient airways: our products are used in around 10 million procedures every year. Products include anaesthesia circuits, masks, breathing bags, laryngeal tubes and visualisation devices.
King Systems delivered revenue growth of 1% to $65.7m in the past year despite a challenging US hospital market and operational difficulties experienced in the third quarter. Operating profits before special items fell to $7.2m, reflecting both significant investment in R&D, which is fully expensed when incurred, and in the implementation of the manufacturing transformation programme. Underlying gross margins rose over the period, reflecting a $1m gain from the early stages of the transformation and $0.5m from the continuous improvement programme.
The US domestic market endured a difficult calendar 2009, with a sharp fall in elective surgeries depressing the entire US hospital market. King Systems performed reasonably well in this context, with consumption data showing consistent slight growth on prior year, although this did not translate fully into revenue due to the operational issues reported on below. Encouraging order intake in early 2010 suggests that we can look for a modest improvement in the US hospital market this year.
We reported in March 2010 that during the third quarter a reorganisation of plant processes and equipment layout at the main Noblesville facility had caused some disruption and loss of production while additional air handling equipment was installed on the circuit assembly lines. King Systems responded quickly, adding extra labour to increase production capacity and where necessary air freighting product direct to customers. Production levels have now returned to normal.
The manufacturing transformation programme has reached the end of its first year on track to deliver $5m of annualised savings by April 2012 as we previously set out. Savings of $1m per annum have now been achieved. The product range has been rationalised and the main Noblesville facility reorganised in order to improve product flow and prepare for the installation of automated production lines. The main circuit and mask automation lines have been designed and orders placed with capital equipment suppliers. These will be built over the course of this year and will be installed and commissioned in early 2011.
King Systems has also significantly increased its R&D expenditure during 2009/10 as planned, with investment tripling over the period. Encouraging progress has been made in developing a platform product scheduled for launch in late 2010. Further smaller product launches have been made and will be made over the coming months, further adding to the organic sales growth of the Division.
Board and management changes
Having successfully delivered The Medical House acquisition, Paul Boughton resigned from the Board after five years as Group Corporate Development Director. We wish him well in the future. The Executive team was completed this year with three important appointments. In November 2009, John Slater joined as Group Legal Counsel and Company Secretary, having previously held similar roles at Celltech Group plc and Vernalis plc. Nick Higgins joined in January 2010 as Director of Corporate Development. Nick has a wealth of experience of transactions in the healthcare industry, having previously been CEO of Intercytex Group plc and prior to that Nick spent eleven years as Chief Business Officer of Acambis plc. Finally, Keyvan Djamarani rejoined the Group on 1 May 2010 as Director of Group Operations, with the remit to drive an optimised global manufacturing footprint and to deliver the transformation programme at King Systems. All three are members of the Group Executive Committee.
Financial review
Revenue from products and services in 2009/10 fell by 1.5% to £118.6m (2009: £120.3m). The reduction was due mainly to destocking of MDI valves and a reduction in income from a key Bespak contract that was extended on less favourable terms in February 2009. Bespak revenues fell by 4.3% to £77.5m, a fall of 5% excluding revenue from The Medical House acquisition. Revenue in King Systems grew by 4.5% to £41.1m (1.3% at constant exchange rate).
Operating profit before special items fell 1% to £18.7m. TMH contributed a loss of £0.7m following the acquisition, which includes some costs of integration. Like-for-like operating profit before special items excluding TMH therefore rose by 3% to £19.4m. Bespak contributed an operating profit before special items of £14.1m, up 5% on prior year despite reduced revenues and acquired losses. Bespak's operating margin of 18.2%, was significantly up from 16.6% last year and from 15.1% in 2008. King Systems contributed an operating profit before special items of £4.6m, with an operating margin of 11.1% (2009: 13.7%). The lower margin was a result of planned investment both in increased R&D and in the transformation programme: gross margins actually rose during the year. We are therefore confident that, although the decline in King Systems' margins is disappointing, they will rise again as increased volumes and reduced costs feed through in the coming year.
Profit before tax and special items fell by 5.5% to £16.9m (2009: £17.9m), but was at the top end of expectations. The fall in profit was largely driven by the economic environment: finance income fell by £0.6m as the interest we received on our cash deposits fell from an average rate of 6% in the previous year to less than 1%. At the same time, the non-cash IAS19 pension charge arising from the Company's pension deficit rose by £0.4m as a result of an increasing deficit attributable to the volatile financial markets.
Profit before tax of £10.5m was 12.5% down on the prior period. Profit after tax and special items increased by 6% to £8.1m. Basic earnings per share therefore increased by 6% to 27.8p while adjusted basic earnings per share fell by 6% to 42.5p.
The taxation charge for the year was £2.4m. The underlying tax charge of £4.6m reflected a rate of 27.2% (2009: 27.1%), considerably lower than anticipated after several longstanding tax matters worth around £0.5m were resolved in our favour during the year.
The Board is pleased to be able to recommend a maintained final dividend per share of 12.1p (2009: 12.1p) such that the total dividend for the period amounts to 19.1p (2009: 19.1p). The final dividend will be paid on 22 October 2010 to shareholders on the register on 24 September 2010. Dividend cover, based on earnings before special items, was 2.2 times (2009: 2.4 times). At the 30 April 2010 share price of 365p this represented a yield of 5.2%.
Special items of £6.4m included £2.4m of continuing amortisation of intangible assets following the acquisition of King Systems in 2005 and TMH in 2009 and £4.0m relating to the transformation programme. The transformation programme has already removed over £2.6m of costs from the business, and in total the programme is expected to remove over £7m per annum of cost across the two Divisions by April 2012. The restructuring charges were higher than previously forecast in the 2009/10 year because some programmes were pulled forward from 2010/11, because of additional disruption costs during the King Systems transformation and because some additional costs were taken in Bespak relating to additional restructuring and the integration of TMH. Overall the three year programme cost has increased from £8.0m to £9.6m but will deliver an additional £2m of annual savings.
In November 2009, Consort Medical plc completed the acquisition of TMH and has been consolidated from that date. A number of significant accounting policy changes were made upon acquisition to reflect the more prudent policies of Consort Medical. In the six months of ownership by Consort Medical, the business made a loss of £0.7m, around half of which relates to integration costs. The main income is to be derived from royalties and profit share once the devices in development are launched to the market. With one device awaiting FDA approval, and two further devices expected to launch in 2011, management continues to expect that the business will be accretive in the next financial year as originally forecast. Now that the business is fully integrated and rebranded as Bespak Injectables, we will continue reporting its revenues separately from the Respiratory business although only one consolidated operating profit number will be reported as the two businesses are run by an integrated management team in a single operating segment.
The Group's Divisions are strongly cash-generative. EBITDA was £21.6m (2009: £22.0m) and cash generated from continuing operations was £21.1m (2009: £23.1m). Capital expenditure of £5.9m was slightly below the previous period (2009: £8.4m). The majority of capital expenditure was at King Systems to support the automation programme. Net debt increased by £14.3m to £33.2m (2009: £18.9m) due to the acquisition of TMH.
In April 2010, the Group refinanced its principal facilities with the Royal Bank of Scotland (RBS) and introduced HSBC as a new relationship bank. In order to eliminate the risk of volatile currency movements affecting our headroom we have split our main facilities into two revolving credit facilities (RCFs) and one sterling term loan. The first RCF is for $56m, against which we had drawn $48m as at 30 April 2010. The second RCF is for £25m, against which nothing had been drawn at year end and which also acted to guarantee the £5.6m of loan notes issued in respect of the acquisition of TMH. The majority of these loan notes were subsequently redeemed in May 2010. An additional £10m term loan has been established which will commence amortisation on 1 July 2011. All of these facilities will expire in October 2013. Margins are variable with a cost of between two and three percent over LIBOR depending upon the level of net debt prevailing at the time. A non-utilisation fee of half the margin is applicable to unused headroom and arrangement fees of around 1.7% (including advisors fees) are to be amortised over the next three years. The Group has maintained its existing US dollar term loan of $5m with RBS, which is being repaid in instalments to finish on 21 December 2010. The Group additionally maintains levels of sterling cash sufficient to meet tax and dividend obligations and to be a reserve in case of an adverse event. These funds are invested with a range of reputable financial institutions approved by the Board.
Gearing at 30 April 2010 was 31% (2009: 20%) and the Group remains comfortably within both its headroom and its covenants. Taking into account the cash balances available, the total headroom at the period end was £42m (2009: £32m).
The Group monitors its foreign currency exposures carefully and seeks to mitigate all material transactional exposures. The Group currently has low exposure to movements in the euro and only a modest exposure to US dollar movements. Where necessary we buy or sell forward currency to protect current period transactions. The Group has a translational exposure with its King Systems Division which is to some extent mitigated by maintaining borrowings in US dollars.
Bespak operates a defined benefit pension scheme in the UK that is closed to new employees, who are eligible to join a defined contribution pension scheme. As at 30 April 2010, the deficit was £13.3m compared with £12.1m as at 30 April 2009. The movement was primarily as a result of gross liabilities increasing to £70m due to declining discount rates, offset by a recovery in asset values. The Company continues to contribute £2.9m annually to reduce the deficit.
The Group considers effective risk management to be a high priority. We are pleased to report that the Group incurred no material financial or business losses despite the riskier economic and business environment.
Outlook
Consort has delivered a strong performance in a challenging year with a 3% rise in like-for-like operating profit before special items. Our continued investment in organic growth opportunities is expected to lead to new product launches later in 2010 and our cost reduction initiatives are ahead of schedule. We have been delighted with the Bespak Injectables acquisition and have been encouraged by the considerable interest shown by global pharma companies in Bespak's enhanced product capabilities. Overall, we are confident of our prospects for the year ahead.
|
Consolidated Income Statement |
||||||||
|
For the year ended 30 April 2010 |
|
|
|
|
|
|||
|
|
|
|
2010 |
2010 |
2010 |
2009 |
2009 |
2009 |
|
|
|
|
Before special items |
Special items (note 3) |
Total |
Before special items |
Special items (note 3) |
Total |
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Audited |
Audited |
Audited |
|
|
|
Note |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Continuing operations |
|
|
|
|
|
|
|
|
|
Revenue from products and services |
|
|
118,592 |
- |
118,592 |
120,343 |
- |
120,343 |
|
Revenue from tooling and equipment |
|
|
6,540 |
- |
6,540 |
9,560 |
- |
9,560 |
|
Revenue |
|
2 |
125,132 |
- |
125,132 |
129,903 |
- |
129,903 |
|
Operating expenses |
|
|
(106,459) |
(6,482) |
(112,941) |
(111,045) |
(5,775) |
(116,820) |
|
Operating profit |
|
2 |
18,673 |
(6,482) |
12,191 |
18,858 |
(5,775) |
13,083 |
|
Finance income |
|
|
220 |
- |
220 |
843 |
- |
843 |
|
Finance expenses |
|
|
(1,340) |
- |
(1,340) |
(1,455) |
- |
(1,455) |
|
Other finance expenses |
|
|
(677) |
- |
(677) |
(276) |
- |
(276) |
|
Share of post-tax losses of associate |
|
|
- |
- |
- |
(111) |
- |
(111) |
|
Profit on disposal /(impairment) of investment in associate |
|
|
- |
67 |
67 |
- |
(125) |
(125) |
|
Profit before tax |
|
|
16,876 |
(6,415) |
10,461 |
17,859 |
(5,900) |
11,959 |
|
Taxation |
|
4 |
(4,586) |
2,177 |
(2,409) |
(4,831) |
450 |
(4,381) |
|
Profit for the financial year |
12,290 |
(4,238) |
8,052 |
13,028 |
(5,450) |
7,578 |
||
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share |
|
5 |
|
|
27.8p |
|
|
26.2p |
|
Diluted earnings per ordinary share |
|
5 |
|
|
27.3p |
|
|
26.0p |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP measures: |
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
£000 |
|
|
£000 |
|
Adjusted profit before tax |
|
|
|
|
16,876 |
|
|
17,859 |
|
Adjusted profit after tax |
|
|
|
|
12,290 |
|
|
13,028 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic earnings per ordinary share 5 |
|
42.5p |
|
|
45.1p |
|||
|
Adjusted diluted earnings per ordinary share 5 |
|
41.7p |
|
|
44.8p |
|||
All the profit for the year is attributable to the equity holders of the parent.
|
Consolidated Statement of Comprehensive Income |
|||||||||||
|
For the year ended 30 April 2010 |
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
Audited |
|
|
|
|
|
|
|
|
Note |
|
|
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the financial year |
|
|
|
8,052 |
7,578 |
|
|||||
|
|
|
|
|
|
|
|
|||||
|
Other comprehensive income |
|
|
|
|
|
|
|||||
|
Fair value movements on cash flow hedges |
342 |
(503) |
|
||||||||
|
Deferred tax on fair value movements on cash flow hedges |
(96) |
140 |
|
||||||||
|
Exchange movements on translation of foreign subsidiaries |
(767) |
6,422 |
|
||||||||
|
Deferred tax on exchange movements |
- |
(30) |
|
||||||||
|
Current tax on exchange movements |
138 |
(1,307) |
|
||||||||
|
Actuarial losses on defined benefit pension scheme |
10 |
|
(3,544) |
(5,392) |
|
||||||
|
Deferred tax on actuarial losses |
992 |
1,511 |
|
||||||||
|
Other comprehensive (loss)/income for the year |
|
(2,935) |
841 |
|
|||||||
|
|
|
|
|
||||||||
|
Total comprehensive income for the year |
5,117 |
8,419 |
|||||||||
|
Consolidated Balance Sheet |
|
|
|
|
|
|
|
at 30 April 2010 |
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
2009 |
|
|
|
|
|
Unaudited |
|
Audited |
|
|
Note |
|
|
£000 |
|
£000 |
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
|
48,132 |
|
49,758 |
|
Goodwill |
|
|
|
62,177 |
|
47,870 |
|
Other intangible assets |
|
|
|
17,296 |
|
11,959 |
|
Investment in associates |
|
|
|
- |
|
67 |
|
|
|
|
|
127,605 |
|
109,654 |
|
Current assets |
|
|
|
|
|
|
|
Inventories |
|
|
|
11,962 |
|
12,107 |
|
Trade and other receivables |
6 |
|
|
17,567 |
|
16,056 |
|
Current tax receivable |
|
|
|
94 |
|
- |
|
Cash and cash equivalents |
9 |
|
|
16,097 |
|
19,195 |
|
|
|
|
|
45,720 |
|
47,358 |
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Borrowings |
9 |
|
|
(3,465) |
|
(34,545) |
|
Loan notes |
9 |
|
|
(5,599) |
|
- |
|
Trade and other payables |
7 |
|
|
(21,581) |
|
(18,942) |
|
Current tax payable |
|
|
|
(1,219) |
|
(2,725) |
|
Provisions for other liabilities and charges |
|
|
|
(2,687) |
|
(4,186) |
|
|
|
|
|
(34,551) |
|
(60,398) |
|
Net current assets /(liabilities) |
|
|
|
11,169 |
|
(13,040) |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Borrowings |
9 |
|
|
(40,217) |
|
(3,543) |
|
Deferred taxation |
|
|
|
(6,605) |
|
(5,270) |
|
Defined benefit pension scheme deficit |
10 |
|
|
(13,284) |
|
(12,081) |
|
Provisions for other liabilities and charges |
|
|
|
(3,582) |
|
- |
|
|
|
|
|
(63,688) |
|
(20,894) |
|
Net assets |
|
|
|
75,086 |
|
75,720 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
|
Share capital |
|
|
|
2,895 |
|
2,895 |
|
Share premium |
|
|
|
32,378 |
|
32,378 |
|
Retained earnings |
|
|
|
36,773 |
|
37,024 |
|
Other reserves |
|
|
|
3,040 |
|
3,423 |
|
Total equity |
|
|
|
75,086 |
|
75,720 |
|
|
|
|
|
|
|
|
|
|
||||||
|
Consolidated Statement of Changes in Shareholders' Equity |
||||||
|
|
Share capital |
Share premium |
Retained earnings |
Cash flow hedge reserve |
Translation reserve |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 4 May 2008 (audited) |
2,872 |
31,360 |
38,571 |
(71) |
(1,228) |
71,504 |
|
Profit for the financial period |
- |
- |
7,578 |
- |
- |
7,578 |
|
Other comprehensive (loss)/income for the financial period |
- |
- |
(3,881) |
(363) |
5,085 |
841 |
|
Total comprehensive income /(loss) for the financial period |
- |
- |
3,697 |
(363) |
5,085 |
8,419 |
|
Recognition of share-based payments |
- |
- |
860 |
- |
- |
860 |
|
Movement on tax arising on share-based payments |
- |
- |
(104) |
|
|
(104) |
|
Proceeds from exercise of employee options |
23 |
1,018 |
- |
- |
- |
1,041 |
|
Consideration paid for purchase of own shares (held in trust) |
- |
- |
(472) |
- |
- |
(472) |
|
Equity dividends |
- |
- |
(5,528) |
- |
- |
(5,528) |
|
|
23 |
1,018 |
(5,244) |
- |
- |
(4,203) |
|
Balance at 30 April 2009 (audited) |
2,895 |
32,378 |
37,024 |
(434) |
3,857 |
75,720 |
|
Profit for the financial year |
- |
- |
8,052 |
- |
- |
8,052 |
|
Other comprehensive (loss)/income for the financial year |
- |
- |
(2,552) |
246 |
(629) |
(2,935) |
|
Total comprehensive income/(loss) for the financial year |
- |
- |
5,500 |
246 |
(629) |
5,117 |
|
Recognition of share-based payments |
- |
- |
(11) |
- |
- |
(11) |
|
Movement on tax arising on share-based payments |
- |
- |
37 |
- |
- |
37 |
|
Consideration paid for purchase of own shares (held in trust) |
- |
- |
(249) |
- |
- |
(249) |
|
Equity dividends |
- |
- |
(5,528) |
- |
- |
(5,528) |
|
|
- |
- |
(5,751) |
- |
- |
(5,751) |
|
Balance at 30 April 2010 (unaudited) |
2,895 |
32,378 |
36,773 |
(188) |
3,228 |
75,086 |
|
Consolidated Cash Flow Statement |
||||||||||
|
For the year ended 30 April 2010 |
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
|
|
|
|
|
|
Unaudited |
Audited |
|
|
|
|
|
|
|
Note |
|
|
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
||||
|
Operating profit from continuing operations |
|
|
|
|
12,191 |
13,083 |
||||
|
Depreciation |
|
|
|
|
|
|
6,761 |
6,524 |
||
|
Amortisation |
|
|
|
|
|
|
2,666 |
2,166 |
||
|
Impairment charge |
|
|
|
|
|
- |
2,747 |
|||
|
Impairment reversal against subsidiary held for resale |
|
|
|
|
- |
(2,421) |
||||
|
Loss/(profit) on disposal of property, plant and equipment |
|
|
|
|
22 |
(155) |
||||
|
Loss on disposal of software |
|
|
|
|
- |
16 |
||||
|
Share-based payments |
|
|
|
|
(11) |
860 |
||||
|
Decrease /(increase) in inventories |
|
|
|
|
|
85 |
(992) |
|||
|
(Increase)/decrease in trade and other receivables |
|
|
|
|
(1,093) |
4,965 |
||||
|
Decrease in trade and other payables |
|
|
|
|
(130) |
(2,193) |
||||
|
Increase /(decrease) in provisions |
|
|
|
|
401 |
(1,302) |
||||
|
Decrease /(increase) in financial instruments |
|
|
|
|
165 |
(181) |
||||
|
Cash generated from continuing operations |
|
|
|
|
21,057 |
23,117 |
||||
|
Interest paid |
|
|
|
|
|
|
(1,398) |
(1,475) |
||
|
Tax paid |
|
|
|
|
|
|
|
(3,709) |
(3,520) |
|
|
Net cash inflow from operating activities |
|
|
|
|
15,950 |
18,122 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
||||
|
Purchases of property, plant and equipment |
|
|
|
|
(5,893) |
(8,433) |
||||
|
Purchases of intangible assets |
|
|
|
|
(165) |
(444) |
||||
|
Proceeds from sale of property, plant and equipment |
|
|
|
|
464 |
384 |
||||
|
Interest received |
|
|
|
|
|
|
246 |
855 |
||
|
Proceeds from disposal of investment |
|
|
|
|
|
|
128 |
- |
||
|
Acquisition of subsidiary |
|
|
|
|
|
|
(12,143) |
- |
||
|
Net cash used in investing activities |
|
|
|
|
(17,363) |
(7,638) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
||||
|
Net proceeds from issues of ordinary share capital |
|
|
|
|
- |
1,795 |
||||
|
Purchase of own shares |
|
|
|
|
(249) |
(472) |
||||
|
Equity dividends paid to shareholders |
|
|
|
|
(5,528) |
(5,528) |
||||
|
Proceeds from new bank funding |
|
|
|
|
41,025 |
- |
||||
|
Repayment of amounts borrowed |
|
|
|
|
(4,372) |
(4,208) |
||||
|
Finance lease payments |
|
|
|
|
(57) |
(67) |
||||
|
Payments to fund defined benefit pension scheme deficit |
|
10 |
|
|
(2,763) |
(1,595) |
||||
|
Net cash generated from /(used in) in financing activities |
|
|
|
|
28,056 |
(10,075) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and short-term borrowings |
9 |
|
|
26,643 |
409 |
|||||
|
Effects of exchange rate changes |
|
|
|
|
781 |
(7,105) |
||||
|
(Overdraft) /cash acquired |
|
|
|
|
(740) |
103 |
||||
|
Cash and short-term borrowings at start of period |
|
|
|
|
(10,587) |
(3,994) |
||||
|
Cash and short-term borrowings at end of period |
|
9 |
|
|
16,097 |
(10,587) |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term borrowings consist of: |
|
|
|
|
|
|
||||
|
Cash and cash equivalents |
|
|
|
|
16,097 |
19,195 |
||||
|
Bank overdrafts and short-term loans |
|
|
|
|
- |
(29,782) |
||||
|
Cash and short-term borrowings at end of period |
|
9 |
|
|
16,097 |
(10,587) |
||||
Notes to the accounts
1. Basis of preparation
The results shown for 2010 are unaudited. The results shown for 2009 are audited. The condensed consolidated financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts of the Company in respect of the period ended 30 April 2009 were approved by the Board of Directors on 23 June 2009 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain an emphasis of matter paragraph nor any statement under Section 498 of the Companies Act 2006.
The financial information prepared in accordance with the Group's IFRS accounting policies comprises the consolidated balance sheets as of 30 April 2010 and 30 April 2009, consolidated income statements for the year ended 30 April 2010 and the period 4 May 2008 to 30 April 2009, consolidated statements of comprehensive income, consolidated cash flow statements and consolidated statements of changes in shareholders' equity for the year ended 30 April 2010 and period ended 30 April 2009, together with related notes. This financial information has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority. In preparing this financial information management has used the principal accounting policies as set out in the Group's annual financial statements for the period ended 30 April 2009 with the exception of new standards and amendments to standards as set out below.
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 May 2009.
IAS 1 (revised), 'Presentation of financial statements'. The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement.
Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income).
The Group has elected to present two statements: an income statement and a statement of comprehensive income. The financial statements have been prepared under the revised disclosure requirements. Comparative information has been re-presented so that it also conforms with the revised standard.
IFRS 2 (amendment), 'Share-based payment'. The amendment to IFRS 2 has resulted in a change in the Group's accounting policy for share-based payments. Prior to the adoption of the amendment to IFRS 2 any cancellations made by employees under the Group's save as you earn schemes resulted in the reversal of all charges recognised to date. The amendment requires that cancellations are treated as accelerated vestings and all remaining charges are immediately recognised in the income statement with the credit recognised in equity. The impact on prior years is immaterial, consequently no restatement of comparative information has been made.
IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, identified as the executive committee, allocates resources to, and assess the performance of, the two divisions.
The amendments to IFRS 7, 'Financial instruments', expand the disclosures required in respect of fair value measurements and liquidity risk. The Group has elected not to provide comparative information for these expanded disclosures in the current year in accordance with the transitional reliefs offered in these amendments.
IAS 23 (revised) 'Borrowing costs'. The revision to the standard requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs has been removed. The Group applied IAS 23 (revised) from 1 May 2009, but the standard is currently not applicable to the Group as there are no qualifying assets.
Other new standards and amendments had no significant impact on the amounts reported in these financial statements.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 May 2009 and have not been early adopted:
IFRS 3 (revised), 'Business combinations' is effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. The Group will apply IFRS 3 (revised) to all business combinations from 1 May 2010 onwards.
IFRS 9, "Financial instruments on classification and measurement". This is the first part of a new standard to replace IAS 39. Published by the IASB in November 2009, this is effective for annual periods beginning on or after 1 January 2013. This standard is not yet endorsed by the EU.
Amendment to IFRS 2, "Share-based payments group cash-settled transactions".
Annual improvements 2009. This is a collection of amendments to 12 standards as part of the IASB programme on annual improvement.
Amendment to IFRIC 14, "Prepayments of a minimum funding requirement" relates to companies that are required to make minimum funding contributions to a defined benefit pension plan.
Non-GAAP performance measures
The directors believe that the 'adjusted' profit and earnings per share measures provide additional useful information for shareholders on the underlying performance of the business. These measures are consistent with how business performance is measured internally. The adjusted profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with 'adjusted' profit measures used by other companies. The adjustments made to reported profit before tax are to exclude the following special costs:
• Exceptional income and charges. These are largely one-off in nature and therefore create volatility in reported earnings; and
• Amortisation of acquisition-related intangible assets.
|
2. Segmental information |
|
|
|
|
|
|
|
The analysis by business segment is presented in accordance with the basis set out in IFRS 8 'Operating segments'.
The Group has two divisions. Bespak is the drug delivery device division, a market leader in the supply of valves and other devices for respiratory applications to global pharmaceutical companies. During the year it acquired The Medical House plc, which is expected to broaden its franchise into the fast growing autoinjector market. King Systems is a leading supplier of life-saving patient care solutions to the USA anaesthesia market, including breathing circuits, face masks and other disposable airway management and airway visualisation products.
The chief operating decision-maker has been identified as the executive committee. This committee is responsible for the executive management of the Group and comprises the Chief Executive, the Group Finance Director, the Corporate Development Director, the Company Secretary/General Counsel, the general managers of the Group's businesses and the Director of Human Resources. This committee meets monthly to make decisions on operational and strategic matters other than those reserved for the Board.
The executive committee assesses the performance of the operating segments based on a measure of adjusted operating profit. This measurement basis excludes the effects of special items from the operating segments. Special items are non-recurring costs that do not reflect the underlying business performance. Currently, employee severance costs, plant restructuring costs, the impairment of related fixed assets and the amortisation of acquisition-related intangibles are presented in special items.
Net assets exclude taxation, net debt and investment in associates, which are managed on a central basis. These are part of the reconciliation to total net assets. |
||||||
|
(a) Revenue from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by business |
|
|
2010 |
|
|
2009 |
|
|
|
|
£000 |
|
|
£000 |
|
Revenue from products and services |
|
|
77,654 |
|
|
81,232 |
|
Revenue from tooling and equipment |
|
|
6,540 |
|
|
9,560 |
|
Bespak - Drug delivery (UK by origin) |
|
|
84,194 |
|
|
90,792 |
|
King Systems - Anaesthesia (USA by origin) |
|
|
41,140 |
|
|
39,387 |
|
Total revenues |
|
|
125,334 |
|
|
130,179 |
|
Intra segment revenues |
|
(202) |
|
|
(276) |
|
|
Total revenue |
|
|
125,132 |
|
|
129,903 |
|
|
|
|
|
|
|
|
|
Revenue by destination |
|
|
2010 |
|
|
2009 |
|
|
|
|
£000 |
|
|
£000 |
|
United Kingdom |
|
|
23,932 |
|
|
31,949 |
|
United States of America |
|
|
49,465 |
|
|
46,608 |
|
Europe |
|
|
43,902 |
|
|
40,529 |
|
Rest of the World |
|
|
7,833 |
|
|
10,817 |
|
Revenue |
|
|
125,132 |
|
|
129,903 |
|
|
|
|
|
|
|
|
|
(b) Operating profit from continuing operations |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
2009 |
|
|
|
|
£000 |
|
£000 |
|
Bespak - Drug delivery |
|
|
14,091 |
|
13,476 |
|
Special items |
|
|
(3,010) |
|
(2,864) |
|
Bespak - Drug delivery after special items |
|
|
11,081 |
|
10,612 |
|
|
|
|
|
|
|
|
King Systems - Anaesthesia |
|
|
4,582 |
|
5,382 |
|
Special items |
|
|
(3,472) |
|
(2,911) |
|
King Systems - Anaesthesia after special items |
|
|
1,110 |
|
2,471 |
|
|
|
|
|
|
|
|
Operating profit before special items |
|
|
18,673 |
|
18,858 |
|
Special items |
|
|
(6,482) |
|
(5,775) |
|
Operating profit after special items |
|
|
12,191 |
|
13,083 |
|
|
|
|
|
|
|
|
(c) Net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets by business segment |
|
|
2010 |
|
2009 |
|
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
Bespak - Drug delivery |
|
|
44,963 |
|
30,437 |
|
King Systems - Anaesthesia |
|
|
71,037 |
|
72,104 |
|
Total reportable segments |
|
|
116,000 |
|
102,541 |
|
Unallocated assets |
|
|
16,191 |
|
19,262 |
|
Unallocated liabilities |
|
|
(57,105) |
|
(46,083) |
|
Net assets |
|
|
75,086 |
|
75,720 |
|
|
|
|
|
|
|
|
Unallocated assets comprise: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
16,097 |
|
19,195 |
|
Current tax receivable |
|
|
94 |
|
- |
|
Investment in associates |
|
|
- |
|
67 |
|
Total |
|
|
16,191 |
|
19,262 |
|
|
|
|
|
|
|
|
Unallocated liabilities comprise: |
|
|
|
|
|
|
Total borrowings |
|
|
(49,281) |
|
(38,088) |
|
Taxation |
|
|
(7,824) |
|
(7,995) |
|
Total |
|
|
(57,105) |
|
(46,083) |
|
|
|
|
|
|
|
|
Exchange rates |
|
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
Average rate of exchange - USD: £ Sterling |
|
|
1.60 |
|
1.68 |
|
Closing rate of exchange - USD: £ Sterling |
|
|
1.53 |
|
1.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Special items |
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
£000 |
|
|
£000 |
|
|
|
|
|
|
|
|
|
Employee severance costs |
|
|
(2,702) |
|
|
(1,044) |
|
Plant restructuring costs |
|
|
(1,380) |
|
|
(2,393) |
|
Impairment charge against fixed assets |
- |
|
|
(2,733) |
||
|
Impairment reversal against subsidiary originally held for resale |
- |
|
|
2,421 |
||
|
|
|
|
(4,082) |
|
|
(3,749) |
|
Amortisation of acquisition-related intangible assets |
|
(2,400) |
|
|
(2,026) |
|
|
Special items charged to operating expenses |
|
|
(6,482) |
|
|
(5,775) |
|
Gain on disposal/(impairment) of investment in associate |
|
|
67 |
|
|
(125) |
|
Special items before taxation |
|
|
(6,415) |
|
|
(5,900) |
|
Tax on special items |
|
|
2,177 |
|
|
1,833 |
|
Special tax item |
|
|
- |
|
|
(1,383) |
|
Total tax credit in special items |
|
|
2,177 |
|
|
450 |
|
Special items after taxation |
|
|
(4,238) |
|
|
(5,450) |
Employee severance costs are in respect of the restructuring of the Bespak Division at King's Lynn and at Integrated Aluminium Components Limited, changes in the Group Executive team and the transformation of manufacturing at the King Systems Division in the USA.
Plant restructuring costs include provision for an onerous property lease and certain costs associated with the restructuring at King Systems.
The impairment charge in the prior year arose on Bespak's property at Milton Keynes where manufacturing ceased in June 2008, on the fixed assets at Integrated Aluminium Components Limited, and on certain assets at King Systems.
In the period ended 3 May 2008, an impairment charge of £2.421m was made against the carrying value of Integrated Aluminium Components Limited, a business acquired with a view to re-sale. As a result of the decision to retain the Integrated Aluminium Components Limited business, the impairment charge of £2.421m was reversed in the accounting period ended 30 April 2009.
The gain on disposal of investment in associate (2009: impairment charge) related to the sale of the Group's investment in Emergent Respiratory Products Inc.
In 2009 there was a special tax charge for the period of £1.383m relating to the change in legislation on industrial buildings allowances (note 4).
|
4. Taxation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
£000 |
|
|
£000 |
|
UK corporation tax |
|
|
890 |
|
|
2,446 |
|
Overseas taxation |
|
|
1,412 |
|
|
484 |
|
Deferred taxation |
|
|
107 |
|
|
1,451 |
|
|
|
|
2,409 |
|
|
4,381 |
|
The tax charge is analysed between: |
|
|
|
|
|
|
|
Tax on profit before special items |
|
|
4,586 |
|
|
4,831 |
|
Tax on special items |
|
|
(2,177) |
|
|
(1,833) |
|
Special tax item |
|
|
- |
|
|
1,383 |
|
|
|
|
2,409 |
|
|
4,381 |
|
5. Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
£000 |
|
|
£000 |
|
The calculation of earnings per ordinary share is based on the following: |
|
|
|
|||
|
|
|
|
|
|
|
|
|
Profit for the financial year |
|
|
8,052 |
|
|
7,578 |
|
|
|
|
|
|
|
|
|
Profit for the period from continuing operations |
8,052 |
|
|
7,578 |
||
|
Add back: Special items after taxation |
|
|
4,238 |
|
|
5,450 |
|
Adjusted profit for the financial period |
|
|
12,290 |
|
|
13,028 |
|
|
|
|
|
|
|
|
|
|
Number |
|
|
Number |
||
|
Weighted average number of ordinary shares in issue for basic earnings |
28,943,922 |
|
|
28,902,773 |
||
|
Weighted average number of shares owned by Employee Share Ownership Trust |
|
|
(6,496) |
|
|
(417) |
|
Average number of ordinary shares for in issue for basic earnings |
|
28,937,426 |
|
|
28,902,356 |
|
|
Dilutive impact of share options outstanding |
|
|
522,236 |
|
|
198,506 |
|
Diluted weighted average number of ordinary shares in issue |
|
29,459,662 |
|
|
29,100,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pence |
|
|
Pence |
|
Basic earnings per ordinary share |
|
|
27.8 |
|
|
26.2 |
|
Adjusted basic earnings per ordinary share |
|
|
42.5 |
|
|
45.1 |
|
Diluted earnings per ordinary share |
|
|
27.3 |
|
|
26.0 |
|
Adjusted diluted earnings per ordinary share |
|
|
41.7 |
|
|
44.8 |
The number of shares in issue at the year end was 28,943,922. No options over ordinary shares have been exercised since 30 April 2010.
|
|
|
|
|
|
|
6. Trade and other receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
£000 |
£000 |
|
Trade receivables |
|
|
15,079 |
13,979 |
|
Less: Provision for impairment of receivables |
|
(57) |
(135) |
|
|
Trade receivables - net |
|
15,022 |
13,844 |
|
|
Amounts receivable from associated undertaking |
|
- |
21 |
|
|
Other receivables |
|
|
596 |
861 |
|
Other taxation |
|
|
591 |
251 |
|
Derivative financial instruments |
|
|
13 |
178 |
|
Prepayments and accrued income |
|
|
1,345 |
901 |
|
|
|
|
17,567 |
16,056 |
|
7. Trade and other payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
£000 |
£000 |
|
Amounts falling due within one year: |
|
|
|
|
|
Trade payables |
|
|
9,199 |
7,559 |
|
Other taxation and social security |
|
|
506 |
624 |
|
Derivative financial instruments |
|
|
260 |
602 |
|
Other creditors |
|
|
3,542 |
3,014 |
|
Accruals and deferred income |
|
|
8,074 |
7,143 |
|
|
|
|
21,581 |
18,942 |
|
8. Analysis of net debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
£000 |
£000 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
16,097 |
19,195 |
|
Overdrafts |
|
|
- |
(93) |
|
Revolving loan (USD) |
|
|
(31,025) |
(29,689) |
|
Term loan (USD) |
|
|
(3,429) |
(8,266) |
|
Term loan (GBP) |
|
|
(10,000) |
- |
|
Loan notes |
|
|
(5,599) |
- |
|
Finance leases |
|
|
(40) |
(40) |
|
Unamortised loan arrangement costs |
|
|
812 |
- |
|
|
|
|
(33,184) |
(18,893) |
|
Cash and cash equivalents comprise cash at bank and in hand plus short-term deposits. |
|||||
|
|
|
|
|
|
|
|
Short-term loans in 2009 included a revolving loan for $44m/£29.690m drawn against a $55m/£40m (whichever was the higher) facility that was due to expire in December 2010. The Group re-negotiated its banking facilities in April 2010; the existing loan was replaced with a revised revolver that expires in October 2013. The new revolving loan has been classified as a non-current liability.
|
|||||
|
9. Reconciliation of net cash flow to movement in net debt |
||||
|
|
|
|
|
|
|
|
Cash and cash equivalents |
Current borrowings |
Non-current borrowings |
Net debt |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
At 30 April 2009 |
19,195 |
(34,545) |
(3,543) |
(18,893) |
|
Cash flow for the period |
(2,261) |
28,904 |
- |
26,643 |
|
Overdraft and finance leases acquired |
(740) |
(36) |
(22) |
(798) |
|
Proceeds from new bank funding |
- |
- |
(41,025) |
(41,025) |
|
Issue of loan notes |
- |
(5,599) |
- |
(5,599) |
|
Loan repayments |
- |
4,372 |
- |
4,372 |
|
Finance leases - capital repayments |
- |
57 |
- |
57 |
|
Re-categorise from non-current to current |
- |
(3,561) |
3,561 |
- |
|
Unamortised loan arrangement fees |
- |
- |
812 |
812 |
|
Effects of exchange rate changes |
(97) |
1,344 |
- |
1,247 |
|
At 30 April 2010 |
16,097 |
(9,064) |
(40,217) |
(33,184) |
|
|
|
|
|
|
|
Net debt at 30 April 2010 comprises: |
|
|
|
|
|
Cash and short-term borrowings |
16,097 |
- |
- |
16,097 |
|
Revolving loan |
- |
- |
(31,025) |
(31,025) |
|
Bank term loans |
- |
(3,429) |
(10,000) |
(13,429) |
|
Loan notes |
- |
(5,599) |
- |
(5,599) |
|
Finance leases |
- |
(36) |
(4) |
(40) |
|
Unamortised loan arrangement fees |
- |
- |
812 |
812 |
|
At 30 April 2010 |
16,097 |
(9,064) |
(40,217) |
(33,184) |
|
10. Defined benefit pension scheme deficit |
|
|
|
|
|
|
2010 |
2009 |
|
|
|
Total |
Total |
|
|
|
£000 |
£000 |
|
|
|
|
|
|
Pension deficit at start of period |
|
12,081 |
7,759 |
|
Current service cost |
|
928 |
1,622 |
|
Expected return on plan assets |
|
(2,873) |
(3,134) |
|
Interest cost |
|
3,550 |
3,410 |
|
Actuarial losses |
|
3,544 |
5,392 |
|
Regular employer contributions |
|
(1,183) |
(1,373) |
|
Employer contributions - deficit funding |
|
(2,763) |
(1,595) |
|
Pension deficit at end of year |
|
13,284 |
12,081 |
|
11. Acquisition |
|
|
|
|
|
|
|
|
|
|
|
|
|
On 5 November 2009, the Group acquired 100% of the shareholding of The Medical House plc for total consideration and acquisition costs of £17.7 million. The Medical House plc is the parent company of a group of companies involved in the design and development of disposable autoinjector systems and reusable needle-free injectors. The purchase has been accounted for as an acquisition.
From the date of acquisition to 30 April 2010, The Medical House contributed £0.81 million to revenue, made an operating loss before special items of £0.74 million and a loss before tax of £1.24 million.
Details of the net assets acquired and goodwill are as follows: |
|||||
|
|
|
|
|
|
|
|
Purchase consideration |
|
|
|
|
|
|
|
|
|
|
£000 |
|
|
|
|
|
|
|
|
|
Cash payable |
|
|
|
11,316 |
|
|
Loan notes issuable |
|
|
|
5,599 |
|
|
Direct costs relating to the acquisition |
|
|
|
827 |
|
|
Total purchase consideration |
|
|
|
17,742 |
|
|
Fair value of net identifiable assets and liabilities acquired (see below) |
(1,942) |
||||
|
Goodwill |
|
|
|
15,800 |
|
|
|
|
|
|
|
|
|
The assets and liabilities arising from the acquisition are as follows: |
|
|
|||
|
|
|
Acquiree's |
Fair |
Provisional |
|
|
|
|
carrying |
Value |
fair |
|
|
|
|
amount |
adjustments |
value |
|
|
|
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
670 |
- |
670 |
|
|
Intangible assets |
|
2,423 |
5,865 |
8,288 |
|
|
Inventories |
|
103 |
- |
103 |
|
|
Receivables |
|
704 |
- |
704 |
|
|
Payables |
|
(1,517) |
- |
(1,517) |
|
|
Deferred income |
|
(187) |
(1,500) |
(1,687) |
|
|
Bank borrowings and other loans |
|
(798) |
(1,500) |
(2,298) |
|
|
Net deferred tax assets/(liabilities) |
|
567 |
(2,888) |
(2,321) |
|
|
Net identifiable assets acquired |
|
1,965 |
(23) |
1,942 |
|
|
12. Principal risks and uncertainties |
|
|
|
|
|
The principal risks and uncertainties which could impact the Group's long-term performance remain those detailed on pages 20 and 21 of the Group's 2009 Annual Report and Accounts, a copy of which is available on the Group's website: www.consortmedical.com. |
|
Related Shares:
CSRT.L