RNS Number:8738D
Inveresk PLC
01 June 2006
INVERESK PLC
("Inveresk" or "the Company")
Preliminary Results for 12 months to 31 December 2005
Highlights 2005
* Profit before taxation increased to #3.818m compared to a loss of #0.417m
for the 12 months to 31 December 2004 as restated.
* Implementation of strategic decision to exit from the SBS coated board
market through the sale of the "Gemini" Brand on 9 June 2005 leading to the
closure of Carrongrove Mill on 9 November 2005.
* Redeployment into alternative vocational work of almost all of
Carrongrove's 142 strong workforce made redundant at 9 November 2005.
* The paper industry as a whole faces the need for further consolidation due
to higher energy costs, lower margins and over capacity. Active discussions
taking place concerning strategic alliances, mergers and/or consolidation
of activities.
* All plant and equipment at Caldwells sold and ongoing negotiations for the
sale of equipment at Carrongrove with international buyers.
* Decommissioning of both Caldwells and Carrongrove sites ready for
redevelopment and discussions with relevant Planning Authorities.
* Land assets held in Balance Sheet at valuations based on "existing use"
values within the paper industry. As yet no recognition of open market
values of the sites based on redevelopment potential.
* Overall borrowings significantly reduced to #9.445m (2004 #15.67m).
* Pension Schemes in good order relative to UK industry as a whole.
* Costs under constant review at St Cuthberts with energy costs a major
concern following steep rises.
* Expansion initiatives in Europe and the Far East in an effort to achieve
full capacity utilisation. Established Far Eastern presence in 2006 through
Inveresk Asia Pte Ltd based in Singapore.
* Ongoing Asset Realisation Programme with greater emphasis on real estate
sites at Caldwells in Inverkeithing and Carrongrove near Stirling.
Alan Walker, Chief Executive commented:
"There is very little in the market place for either paper manufacturers or
merchants to draw comfort from. If anything the dismal trading environment which
prevailed on a global basis in 2005 has deteriorated yet further in 2006 if only
due to raw material price increases and soaring energy costs. We are taking
active steps to ensure that the consolidation within the industry continues so
that we can pursue our alternative strategy of converting Inveresk PLC into a
real estate company on a debt free basis."
For further information contact:
Alan Walker Chief Executive Officer 0207 240 1234 (Mobile: 07900 445623)
Gordon Thomson Finance Director 01324 827200
Jan Bernander Chairman (00 46) 708 556 400
CHAIRMAN'S STATEMENT
Results
In the year to 31 December 2005 your Board of Directors continued the necessary
consolidation process within the paper industry by selling its "Gemini" brand
produced at the Carrongrove Mill to local supplier Tullis Russell based in
Glenrothes in Fife. The industry continues to face the need for further
consolidation in the light of higher energy prices, lower margins and over
capacity. The internationally respected brand "Gemini" was sold for #5m, before
professional and associated costs, together with further Service Revenue of #8m
and a carried interest of up to #2m depending on the level of sales tonnes
achieved by the buyers from 9 November 2005 to 8 November 2006. The Carrongrove
Mill closed finally during the first week of November 2005 and of the 142
members of staff who faced redundancy no less than 128 had by the closure date
found new employment and faced different challenges outside the paper industry.
This high level of redeployment was achieved through a number of initiatives
including the use of outplacement consultants, cooperation with the local
Falkirk District Council and in a number of cases retraining of skills.
Against this background of the difficulties facing the paper industry in Europe,
profits after interest but before tax have increased to #3.818m as compared to a
loss of #0.417m for 2004 as restated. These results are materially impacted by
the sale of "Gemini" referred to above together with the significant costs
associated with redundancy and compensation for termination of employment and
mill decommissioning costs incurred in preparing the 38 acre site at Carrongrove
for redevelopment in line with your Board's strategy to become a real estate
company in the future. Sales amounted to #36.385m as compared to #40.711m for
2004 reflecting the closure of production at Carrongrove at the beginning of
November 2005. Operating profits were #6.424m (2004 #0.611m) whilst profits
before interest were #4.328m (2004 #0.569m as restated). Interest charges fell
to #0.880m (2004 #1.102m) as the proceeds from the sale of "Gemini" were used to
reduce borrowings in the second half of the year. Currency influences in 2005
were broadly neutral despite the fact that more than 65% of sales were to
overseas customers. Hedging arrangements remain in place with sales of product
to North America counter balanced to a large extent by purchases of pulp
transacted in US dollars.
The results achieved through the sale of "Gemini" were broadly in line with our
ambitions and expectations. The performance of the St Cuthberts Mill was
disappointing and, despite the specialised niche nature of both artists and
furniture paper activities, reflected the general depressed state of the
industry as a whole. Sales at #13.574m (2004 #14.456m) demonstrated the lack of
growth in the artists materials sector on a worldwide basis together with the
stagnant market conditions prevailing in the European furniture industry which
has faced massive restructuring, closures as well as consolidation. The mill
produced an operating loss of #1.427m (2004 loss #0.904m) attributed to the
effects of being unable to produce to full capacity utilisation, depressed
margins and, towards the end of the year, dramatic increases in energy costs.
Management focus is currently on the operations at St Cuthberts to drive down
the cost base at the same time as increasing sales through a number of key
international initiatives with the strategic objective of operating to a higher
capacity utilisation as a priority and restoring the mill to profitability.
The results have been affected by the write off of the deferred tax asset. In
addition to the tax charge on capital gains which arises from the sale of
"Gemini" brand, your Board no longer considers it appropriate to recognise a net
deferred tax asset following the closure of the Carrongrove Mill. This decision
is based on the sale of the profitable Carrongrove operations and also on the
Board's current projections for the remaining business including the Asset
Realisation Programme. The Group's unrecognised deferred tax asset at 31
December 2005 was #6.069m (2004: #1.148m) and this amount would be recovered
only if additional suitable taxable profits became available from the same
trade. This decision has no affect whatsoever on the Company's cashflow.
The balance sheet remains in good order as the net effect of the "Gemini" sale
was cash generating. Shareholders will note the decline in working capital
arising from the collection of debtors and the settlement of trade creditors
associated with the "Gemini" business. Overall bank debt reduced to #9.445m
(2004 #15.67m). It remains your Board's foremost intention to be debt free as a
priority so that its alternative strategy in the field of real estate will
produce enhanced shareholder value.
Capital Expenditure
During the run up to the sale of the "Gemini" brand and the closure of the
Carrongrove Mill, capital expenditure was kept to a minimum. This was achieved
through a committed repair and maintenance policy throughout the year and proved
successful. At St Cuthberts there have been a number of key initiatives designed
to improve the efficiency at the finishing end of the mill as well as increasing
the width of our reeling capacity to allow us to meet with the more demanding
requirements of customers who are investing in higher technical printing
machines with greater width. The Company continues to operate stringent policies
with regard to Health & Safety legislation, the burden of which continues to hit
manufacturing industry in the UK in terms of cost and compliance.
Borelands Reservoir
Shareholders will recognise that the above asset was conditionally sold as part
of the Asset Realisation Programme back in 2004 but final completion took place
on 7 April 2005 before the release of our Preliminary Results for 2004. In order
to maintain full and adequate transparency as to the chronology of this
transaction and the recognition of #0.601m profit recorded in the 2004 results,
your directors took great pains to not only explain the circumstances in their
Annual Report and Accounts but also accepted a technical qualification in their
Audit Report for the year ended 31 December 2004 as the Company's Auditors took
the view that the profit related to the exchange of missives in 2005.
Although your Directors believe the position was fully understood by readers of
the Accounts including bankers, suppliers and shareholders the Financial
Reporting Review Panel have raised this issue with us as part of their review of
public companies accounts and it has been agreed that this profit of #0.601m
should more correctly appear within the Accounts to 31 December 2005 rather than
in the previous year - a matter of timing. As this issue has only been raised
with us recently the parties have agreed to make this alteration within the 2005
Annual Report and Accounts by way of a "prior year" adjustment which is fully
explained in the notes to the financial statements.
This alteration does not have any impact whatsoever on either the Company's tax
position or cashflow.
Asset Realisation Programme
Plant & Equipment
All plant and equipment at the Caldwells Mill has now been sold. The
decommissioning of the Carrongrove Mill following its closure on 9 November 2005
is moving fast to completion and we are in active negotiation with a number of
international buyers over the sale of the paper making machine and associated
plant. The proceeds will fall to cash and be applied to the further reduction of
debt.
Land for future development
Inverkeithing
The site on the shores of the River Forth at Inverkeithing known as Caldwells
Mill is now ready for redevelopment as an integral part of the Structure Plan of
Fife Council. This is a potentially massive scheme which will over time
transform the entire area surrounding Inverkeithing Bay to the benefit of the
community as a whole. There has been much press speculation associated with
Fife's plan including, inter alia, residential housing, infrastructure, hotels,
schools and supermarkets as well as river crossings by hovercraft under plans to
create a new link between Fife and Edinburgh. The Structure Plan was ratified by
Fife Council at the end of April 2006 and it will be submitted shortly for
Ministerial approval and this should herald the commencement of the project on a
long term basis. We are working closely with professional advisers and adjacent
land owners in respect of our strategically positioned 18.1 acre site. We
believe the development of this industrial wasteland at the gateway to the
Kingdom of Fife will promote substantial benefits to the local community and the
sale of the site to a host of prospective buyers will accrue substantial
financial returns to shareholders.
Carrongrove
As already intimated above, the closure of Carrongrove and its subsequent
decommissioning provides the platform for the redevelopment of this 38.2 acre
site on the outskirts of Denny located between the motorways joining the cities
of Glasgow and Edinburgh, with Stirling 6 miles away. Denny's origins as a
mining town have long since passed with the decline of the coal industry and its
town centre is scheduled for reconstruction. We are working with our
professional advisers in conjunction with Falkirk District Council to find
alternative uses for this large and attractive rural site. Recent advertising
has resulted in a high level of interest on the part of national developers
seeking to acquire the site for redevelopment. Under such circumstances the
intrinsic value of this site, as in the case of Inverkeithing, is deemed to be
significantly greater than the value attributed within the books of account and
should over time produce attractive financial returns to shareholders. We also
anticipate that the redevelopment of the site will offer future prosperity
within the local community.
The medium term development of these valuable acres of real estate is consistent
with your Board's strategic decision to major on the attractive returns
available to shareholders in preference to the difficulties faced within the UK
manufacturing scene generally and particularly in an industry where paper as a
commodity is suffering in real terms from its lowest point over the past 50 year
cycle. Competitive pressures on a global basis allied to over capacity,
increases in energy costs and static demand leading to lower margins has
convinced your Board to look for alternative strategies in order to maximise
returns to shareholders.
Dividend
As a result of the current year's loss after tax, contributed to by the write
off of deferred tax as required by FRS 19 "Deferred Tax", we are restricted at
present from the payment of dividends through the absence of distributable
reserves. In any event at this crossroads as the Company forges its new strategy
of becoming more reliant on its real estate assets, it is considered to be more
prudent at this time to focus on the future of St Cuthberts and the elimination
of borrowings before addressing the provision of financial returns to
shareholders arising from the realisation of the real estate portfolio in due
course.
The Board
As a Board we remain ever vigilant to the issue of costs and their control.
Central costs remain under review now that the exposure to the paper industry is
confined to St Cuthberts in Somerset. Following the sale of the "Gemini" brand
and the closure of Carrongrove allied to its decommissioning, Roland MacLeod,
who was appointed to the Board by my predecessor back in 2002, resigned as a
director on 24 May 2006 and will be leaving the Company in due course. We would
like to thank Roland for his efforts on behalf of the Company and in particular
for his contribution to the "Gemini" brand and Carrongrove site.
Pensions
As shareholders will be fully aware much controversy exists in the media
regarding accounting for pension schemes, as required under FRS 17 "Retirement
Benefits", faced by many Boards of Directors whose companies are listed on the
London Stock Market. The attention of shareholders is drawn to Note 24 of the
Annual Report and Accounts which provides details of the two Defined Benefit
Schemes operated by the Company and which were closed to new entrants some years
ago. On an amalgamated basis at 31 December 2005 the net pensions' deficit as
measured under FRS 17 amounted to #1.595m. Since the balance sheet date both the
UK Stock Market and bond yields have increased significantly and in the view of
your directors the two schemes taken together may now be in net surplus.
Your Board of Directors is currently in the process of taking independent
actuarial advice in relation to the management of the Company's pension funds
going forward and in particular their liabilities. A number of initiatives have
been considered and discussions are ongoing with the Trustees of the two schemes
with a view to managing the pension position in a cohesive and professional
manner. The Trustees have, with the approval of the Company, taken appropriate
steps to consolidate the legal and actuarial advisers to both schemes to ensure
the efficient use of resources. We will keep shareholders fully appraised as to
the outcome of the review of our pensions' policy.
Health & Safety and Environmental Policies
The Company remains committed to ensuring a safe place to work for all members
of staff and where appropriate for suppliers and subcontractors to the business.
It also recognises the need for sound policies for the environment and is
committed to meeting its responsibilities in ensuring that the Company and its
suppliers comply with relevant regulations and codes of practice. Strict
adherence to these policies has been maintained throughout the period covered by
this report.
Employees
During what has been an often difficult trading environment, Inveresk staff have
through their hard work and commitment produced a result which compares
favourably against most if not all competitors engaged within the same sectors
of the industry.
We salute their efforts on the Company's behalf as we embark on the fulfilment
of our new strategic plan.
Current Trading and Outlook
There is little doubt that 2005 can be regarded as a most difficult year with
tough trading conditions throughout the paper industry. Our vision was to exit
from one of our core markets through the sale of the "Gemini" SBS brand. The
first quarter of 2006 has started positively at St Cuthberts with volumes
performing more or less to budget expectations. After a quiet Easter period the
market remains volatile, however, and it is evident that customers are embracing
the same challenges as ourselves in terms of margin pressure derived from static
sales prices whilst raw material prices and energy costs are rising
disproportionately. A more streamlined management structure has been introduced
at St Cuthberts designed to promote efficiency whilst maintaining flexibility,
technical service and the innovative approach for which we have gained an
enviable reputation.
A number of key initiatives also have been introduced at St Cuthberts to promote
efficiency with a meaner and leaner management team. Opportunities exist for
increased volumes of pre-impregnated surface based papers (PIP's) in
international markets. In order to facilitate this expansion we have recently
established a sales presence in the Far East through Inveresk Asia Pte Ltd which
will seek to penetrate markets throughout the Far East and Asia from a base in
Singapore. At the same time your Board of Directors is actively engaged in
discussions with a number of international competitors about possible scenarios
which include strategic alliances, mergers and/or consolidation within the
specialist areas in which we operate. The alternative strategy to which I have
referred above involving the harvesting of shareholder value within the
Company's real estate portfolio will figure prominently in the period ahead. In
view of the general state of the paper industry we are indeed fortunate to have
the benefit of a portfolio of quality land assets which is ripe for future
development.
I believe the achievements during the year ended 31 December 2005 provide a
useful platform from which the Company can further develop its transformation
into a real estate company and continue to improve its financial performance and
the advancement of shareholder value.
Jan Bernander
Chairman
1 June 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the financial year ended 31 December 2005
Year ended Year ended
31 December 31 December
2005 2004
Total Total
(restated)
#'000 #'000
---------- ----------
Turnover
Continuing operations 13,574 14,456
Discontinued operations 22,811 26,255
---------- ----------
36,385 40,711
Cost of Sales (30,834) (33,824)
---------- ----------
Gross profit 5,551 6,887
Distribution costs (3,503) (3,620)
Administrative expenses (3,144) (2,656)
Other operating income 7,520 -
---------- ----------
Group operating profit/(loss)
---------- ----------
Continuing operations (1,991) (1,072)
Discontinued operations 8,415 1,683
---------- ----------
6,424 611
Fundamental reorganisation (charge)/credit (7) 58
Loss on sale and termination of businesses (2,695) (100)
Gain on sale of fixed assets 606 -
---------- ----------
Profit before interest 4,328 569
Net interest payable - Group (880) (1,102)
Other finance income 370 116
---------- ----------
Profit/(loss) on ordinary activities before taxation 3,818 (417)
Taxation on profit/(loss) on ordinary activities (4,897) -
---------- ----------
Loss on ordinary activities after taxation (1,079) (417)
---------- ----------
Loss for the financial year (1,079) (417)
---------- ----------
Basic loss per share - total (0.8) p (0.3) p
Basic loss per share - continuing operations (0.9) p (0.5) p
Diluted loss per share - total (0.8) p (0.3) p
Diluted loss per share - continuing operations (0.9) p (0.5) p
Additional earnings per share measures are included in
note 4
CONSOLIDATED BALANCE SHEET
At 31 December 2005
2005 2004
(restated)
#'000 #'000
---------- ----------
Fixed assets
Tangible assets 10,410 23,980
---------- ----------
Current assets
Properties held for sale 10,005 -
Stocks 2,989 4,565
Debtors 5,462 7,812
Debtors - deferred taxation - 3,750
Cash at bank and in hand 16 60
---------- ----------
18,472 16,187
Creditors: amounts falling due within one year
Bank overdrafts and short term debt (3,923) (8,961)
Other creditors (6,048) (8,472)
---------- ----------
(9,971) (17,433)
---------- ----------
Net current assets/(liabilities) 8,501 (1,246)
---------- ----------
Total assets less current liabilities 18,911 22,734
Creditors: amounts falling due after more than one (5,538) (6,769)
year
Provisions for liabilities and charges (575) (271)
---------- ----------
Net assets excluding pension assets/(liabilities) 12,798 15,694
Pension assets/(liabilities)
Defined benefit schemes with net assets 2,173 3,655
Defined benefit schemes with net liabilities (3,768) (3,125)
---------- ----------
Net assets including pension assets/(liabilities) 11,203 16,224
---------- ----------
Capital and reserves
Called up share capital 1,438 1,438
Revaluation reserve 11,220 11,260
Profit and loss account (1,455) 3,526
---------- ----------
Total shareholders' funds 11,203 16,224
---------- ----------
CONSOLIDATED CASH FLOW STATEMENT
for the financial year ended 31 December 2005
Year ended Year ended
31 December 31 December
2005 2004
(restated)
#'000 #'000
---------- ----------
Net cash inflow from operating activities 7,788 895
Returns on investment and servicing of finance (980) (1,059)
Capital expenditure and financial investment 341 930
Acquisitions and disposals (564) -
Equity dividends paid (360) (360)
---------- ----------
Net cash inflow before financing 6,225 406
Financing (1,231) -
---------- ----------
Increase in cash in the year 4,994 406
---------- ----------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Year ended Year ended
31 December 31 December
2005 2004
#'000 #'000
---------- ----------
Increase in cash in the year 4,994 406
Cash outflow from debt and lease financing 1,231 -
---------- ----------
Change in net debt resulting from cash flows 6,225 406
Net debt at beginning of the year (15,670) (16,076)
---------- ----------
Net debt at end of the year (9,445) (15,670)
---------- ----------
Notes to the accounts
Note 1
The financial information set out above does not constitute the Company's
statutory accounts for years ended 31 December 2005 or 2004 but is derived from
those accounts. Statutory accounts for 2004 have been delivered to the Registrar
of Companies, and those for 2005 will be delivered following the Company's
Annual General Meeting. The auditors have reported on those accounts; their
report for 2004 was qualified in respect of a disagreement as to the recording
of a sale of land which in their opinion did not take place until 2005 and
therefore should not have been recorded in the accounts for the year ended 31
December 2004.
Note 2
PRIOR YEAR ADJUSTMENTS
As a result of adopting FRS 21 "Events after the balance sheet date", a prior
year adjustment has been made in respect of the recognition of proposed
dividends. The adjustment has not affected the reported net assets at 31
December 2005, but has increased the reported net assets at 31 December 2004 by
#360,000.
As fully explained in the financial statements for the year ended 31 December
2004 the profit on the sale of a piece of land, which was entered into on 24
March 2005 and concluded on 7 April 2005, was recorded as a profit in the
financial statements for the year ended 31 December 2004 as the directors
believed at that time that the sale in 2005 was a substitute for a conditional
sale of the same piece of land which was entered into in August 2004. The sale
recorded in the 2004 financial statements did not conclude post the 2004 year
end as the purchaser was unable to proceed to completion. The auditors qualified
their opinion on the financial statements for the year ended 31 December 2004 in
relation to this accounting treatment, as they believed that the two
transactions were separate and that the conclusion of the April 2005 sale was a
non-adjusting event so far as the 2004 financial statements were concerned.
After further discussions and consideration, the directors now agree that the
accounting treatment adopted in the financial statements for the year ended 31
December 2004 was incorrect and have restated the comparative figures in the
financial statements for the year ended 31 December 2005. The effect of this
prior year adjustment is to decrease the loss for the year ended 31 December
2005 by #601,000 with a corresponding change in the profit previously reported
for the year ended 31 December 2004 of #184,000 into a loss for that year of
#417,000, and to reduce Group and Company debtors at 31 December 2004 by
#650,000 and reduce Group and Company provisions at 31 December 2004 by #49,000.
Note 3
EXCEPTIONAL ITEMS
Exceptional charges/(credits) included within the profit on ordinary activities
before taxation are analysed as follows:
Year ended Year ended
31 December 31 December
2005 2004
(restated)
#'000 #'000
---------- ----------
Cost of Sales - Operating exceptional costs
New product development - 119
Mill restructuring - 310
---------- ----------
- 429
---------- ----------
Administrative expenses - Operating exceptional charge
/(credit)
Goodwill impairment charge 564 -
Release of onerous lease provision - (142)
---------- ----------
564 (142)
---------- ----------
Fundamental reorganisation costs
Restructuring costs 7 -
Release of unused provisions - (58)
---------- ----------
7 (58)
---------- ----------
Loss on sale and termination of businesses
Sale of intellectual property and related assets (4,768) -
Loss on termination of paperboard business 7,466 -
Pension curtailment following termination of (194) -
paperboard business
Loss on sale of Graphics business 192 278
Release of unused provisions (1) (178)
---------- ----------
2,695 100
---------- ----------
Gain on sale of fixed assets (606) -
---------- ----------
Total exceptional charges 2,660 329
---------- ----------
The tax effect of the exceptional charges is #174,000 credit (2004: #nil).
The loss on the termination of the paperboard business principally comprised
termination and redundancy payments to employees and the write down of plant and
equipment and stock to their realisable amounts.
Note 4
EARNINGS/(LOSS) PER SHARE
Year ended Year ended Year ended Year ended
31 December 31 December 31 December 31 December
2005 2004 2005 2004
Earnings/ Earnings/ Earnings/ Earnings/
(loss) (loss) (loss) (loss)
(restated) (restated)
#'000 #'000 pence per pence per
share share
--------- ---------- ---------- ----------
Basic - continuing operations (1,220) (733) (0.9) (0.5)
Basic - discontinued operations 141 316 0.1 0.2
--------- ---------- ---------- ----------
Basic - Total (1,079) (417) (0.8) (0.3)
Adjusted for:
Exceptional charge 2,660 329 2.0 0.2
Tax relief on exceptional (174) - (0.1) -
charges/(credits)
Exceptional deferred tax charge 3,750 - 2.7 -
--------- ---------- ---------- ----------
Adjusted basic - Total 5,157 (88) 3.8 (0.1)
--------- ---------- ---------- ----------
Diluted - continuing operations (1,220) (733) (0.9) (0.5)
Diluted - discontinued 141 316 0.1 0.2
operations --------- ---------- ---------- ----------
Diluted - Total (1,079) (417) (0.8) (0.3)
--------- ---------- ---------- ----------
The adjusted figures are shown to provide shareholders with additional
information on operations before exceptional items.
Earnings per share are calculated for the issued shares excluding those
registered in the name of The Inveresk ESOP Trustee Company Limited in
accordance with UITF 13 and those held as Treasury shares.
The weighted average number of shares used in each calculation is as follows:
Year ended Year ended
31 December 31 December
2005 2004
Number of Number of
shares shares
(000s) (000s)
---------- ---------
Average of shares in issue during the financial year 136,334 139,531
Adjustment for the dilutive effect of employee and 1,897 1,143
director share options ---------- ---------
Average of shares in issue during the financial year 138,231 140,674
diluted ---------- ---------
Note 5
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the financial year ended 31 December 2005
Year ended Year ended
31 December 31 December
2005 2004
(restated)
#'000 #'000
---------- ----------
Loss for the financial year (1,079) (417)
Dividends (360) (360)
---------- ----------
Retained loss for the financial year (1,439) (777)
Treasury shares purchased (266) -
Shares purchased by ESOP trust (126) (417)
Share options expensed 1 50
Other recognised (losses)/gains for the financial year (3,191) 113
---------- ----------
Net decrease in shareholders' funds (5,021) (1,031)
Shareholders' funds at the beginning of financial year 16,224 17,255
(originally #16,465,000 restated for prior year
adjustment of #241,000, note 2)
---------- ----------
Shareholders' funds at the end of the financial year 11,203 16,224
---------- ----------
Note 6
RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING
ACTIVITIES
Year ended Year ended
31 December 31 December
2005 2004
(restated)
#'000 #'000
---------- ----------
Group operating profit 6,424 611
Exceptional charges (2,096) (42)
Depreciation charges 3,507 1,068
Impairment of goodwill 564 -
Expensing of share options 1 50
Amortisation of government grants (2) (2)
Gain on sale of tangible fixed assets - (1)
Gain on sale of tangible fixed assets - exceptional (615) -
items
Pension curtailments (194) -
Movement on net pension asset/liability (561) (1,045)
Decrease in Stocks 1,576 277
Decrease/(increase) in Debtors 2,350 (4)
(Decrease)/increase in Creditors (3,470) 313
Increase/(decrease) in provisions 304 (330)
---------- ----------
Net cash inflow from operating activities 7,788 895
---------- ----------
Note 7
ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN CASH FLOW STATEMENT
Year ended Year ended
31 December 31 December
2005 2004
(restated)
#'000 #'000
---------- ----------
Returns on investment and servicing finance
Interest received 24 26
Interest paid (1,004) (1,085)
---------- ----------
(980) (1,059)
---------- ----------
Capital expenditure
Purchase of tangible fixed assets (301) (719)
Purchase of own shares by ESOP (126) (417)
Purchase of own shares - Treasury shares (266) -
Sale of tangible fixed assets 1,034 2,066
---------- ----------
341 930
---------- ----------
Acquisitions and disposals
Purchase of subsidiary (564) -
---------- ----------
(564) -
---------- ----------
Financing
Bank and other loans repaid (1,231) -
---------- ----------
(1,231) -
---------- ----------
Note 8
TAX ON PROFIT ON ORDINARY ACTIVITIES
Year ended Year ended
31 December 31 December
2005 2004
#'000 #'000
---------- ----------
Current tax
Corporation tax at 30% 1,147 -
Deferred tax
Origination/reversal of timing differences 3,750 -
---------- ----------
Total excluding pension scheme movements 4,897 -
---------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR VFLFXQEBFBBX
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