Premier Farnell plc 28th May 2003
Results for the first quarter to 4th May 2003 for the financial year ending on
1st February 2004.
Key Financials
1stQtr 2003/ 1stQtr 2002/ 1stQtr 2003 1stQtr
4 3 /4
2002/3
�m �m $m
$m
(�1=$1.58)
(�1= $1.44)
Sales 201.8 204.3 318.8 294.2
Operating profit 16.3 21.7 25.8 31.3
Adjusted operating 19.4 22.4 30.7 32.3
profit*
Profit before 12.4 17.8 19.6 25.7
taxation
13.1 18.5 20.7 26.7
Profit before
taxation and goodwill
amortisation
Earnings per share 1.9p 2.1p $0.030 $0.030
Adjusted earnings per 2.5p 2.4p $0.040 $0.035
share*
* before goodwill amortisation and rebranding costs
First Quarter Highlights
* Group sales per day** up 3.3% over first quarter last year
* UK sales per day** up 11% including BuckHickman InOne sales** up 26%
compared to the first quarter last year
* eCommerce sales** up 35% compared to the first quarter last year and sales*
* to US government up 15%
* Benefits of Siebel software already evident
* First quarter impacted by one-off costs of rebranding (�2.4million),
depreciation of front office software (�1.1million) and timing and profile
of marketing and promotional activity
"We are managing the business on the basis of little improvement in markets for
the rest of the year, but we will continue to work to win market share. The
further sales progress we have already made in difficult conditions is evidence
of this. Market share gains were especially strong in the UK, assisted by
recent contracts wins, and sales through eCommerce and eProcurement
partnerships have shown growth in many countries.
"The rebranding of some of our businesses in the Marketing and Distribution
Division, announced in February this year, has been successfully launched.
Customers and suppliers increasingly recognise that InOne businesses are part
of a global group with shared capabilities and consistently high levels of
service."
John Hirst, Group Chief Executive
** Comparison of sales for specific periods is affected by three variables:
1. Changes in exchange rates used to translate the overseas sales in different
currencies into sterling
2. Differences in the number of working days
3. Disposal or acquisition of businesses
To eliminate the impact of these variables and give an accurate comparison, the
percentage change in sales per day is used throughout this statement for
continuing businesses at constant exchange rates.
For further information, contact:
Premier Farnell plc
John Hirst, Group CEO +44 (0) 20 7851 4100
Andrew Fisher, Group Finance +44 (0) 20 7851 4100
Director
+44 (0) 20 7851 4100
Nicholas Ross, Group Director,
Communications
Andrew Lorenz +44 (0) 20 7269 7291
at Financial Dynamics (UK)
Andrew Saunders + 1 212 889 4350
at Taylor Rafferty (NA)
The Company's announcements are published on the Internet atwww.
premierfarnell.com, together with business information, the 2003 Annual Report
and Accounts and links to all other Group websites.
Group interim results are expected to be published in the week beginning 8th
September 2003.
A conference call with John Hirst and Andrew Fisher will take place at 4pm UK
time. To obtain dial-in details please call Andrew Lorenz (UK or mainland
Europe) at Financial Dynamics or Andrew Saunders (US) at Taylor Rafferty at the
above numbers.
Premier Farnell plc
CHAIRMAN'S STATEMENT ON FIRST QUARTER RESULTS FOR THE 13 WEEKS ENDED 4thMAY
2003
Premier Farnell, the leading global marketer and distributor of electronic,
maintenance, repair and operations (MRO) and specialist products and services,
today announces its results for the first quarter period ended 4th May 2003.
NOTE
Comparison of sales for specific periods is affected by three variables:
1. Changes in exchange rates used to translate the overseas sales in different
currencies into sterling
2. Differences in the number of working days
3. Disposal or acquisition of businesses
To eliminate the impact of these variables and give an accurate comparison, the
percentage change in sales per day is used throughout this statement for
continuing businesses at constant exchange rates.
Financial Results
* Group Sales
Group sales for the first quarter were �201.8million (2002/3: �204.3million).
Sales per day in the first quarter were up 3.3% compared to the same period
last year for continuing businesses at constant exchange rates. This increase
reflects strong growth in the UK, in particular, where sales per day increased
11.2%. Group first quarter sales per day were ahead 5.1% against the fourth
quarter last year.
* Margins, Operating Profit and Foreign Exchange Effects
Despite the impact of the start up of two major contracts in the UK and
customer promotional actions in North America, the gross margin for the Group
was 40.1% (2002/3: 40.9%). Group operating profit in the first quarter, before
the �2.4million one-off costs of rebranding and �0.7million of goodwill
amortisation, was �19.4million (2002/3: �22.4million before goodwill
amortisation of �0.7million). The reduction is due primarily to lower gross
margin and additional depreciation following implementation of the Siebel
customer relationship management (CRM) software in the UK and North America.
The operating margin was 8.1% (2002/3: 10.6%) and the operating margin, before
goodwill amortisation and the one-off rebranding costs, was 9.6% (2002/3:
11.0%).
Weakness of the US dollar against sterling in the quarter resulted in an
adverse currency translation impact on sales of �8.4million, offset by a
favourable euro effect of �3.3million, resulting in a net adverse impact on
sales of �5.1million. The net effect of the weak dollar and strong euro against
sterling resulted in a beneficial impact on profit before tax of �0.2million.
Net interest payable in the quarter was �3.9million, the same as last year, and
was covered 4.4 times by profit before interest and goodwill amortisation.
* Profit Before Taxation
Profit before taxation was �12.4million (2002/3: �17.8million), and profit
before taxation and goodwill amortisation was �13.1million (2002/3: �
18.5million), after charging the �2.4million one-off costs of rebranding.
* Earnings per Share
Earnings per share were 1.9p (2002/3: 2.1p). Adjusted earnings per share,
before rebranding costs and amortisation of goodwill, were 2.5p, up from 2.4p
in the first quarter last year, mainly due to the capital restructuring carried
out last year and the consequent reduction in the preference dividend to �
1.7million from �6.5million in the first quarter last year.
* Balance Sheet and Cash Flow
Net debt amounted to �208.4million, similar to the end of January 2003.
Operating cash flow was 84% of operating profit before goodwill amortisation.
Working capital increased by �5.7million during the quarter with investment in
inventory to enhance the product ranges in the Americas and Europe.
During the quarter, the Company acquired 197,000 Preference Shares in the
market for cancellation, at a cost of �2.3million. The number of Preference
Shares in issue at the end of the quarter was 7.6million.
Operations
Market Overview
Market conditions remained challenging in almost all geographies in which the
Group operates. Although the expected seasonal improvement was observed in the
first quarter, it was muted and affected by the uncertainty created by events
in the Middle East.
The market in North America continued flat, while industrial economic
conditions in the UK and mainland Europe were weaker than last year. In Asia,
where the electronics industry has been more buoyant recently, the market was
erratic, affected by the outbreak of SARS. Despite these effects, the Group
achieved sales growth of 3.3% over the first quarter last year.
Marketing and Distribution Division (MDD) - Overview
The Marketing and Distribution Division comprises Newark InOne, Farnell InOne,
BuckHickman InOne, MCM, an InOne Company and CPC.
1st Qtr 2003/4 1st Qtr 2002/3
�m �m
Sales 176.5 176.6
Operating profit 14.7 19.7
Adjusted operating 17.8 20.4
profit *
Return on sales % 8.3 11.2
Adjusted return on 10.1 11.6
sales %*
*before goodwill amortisation and rebranding costs
Divisional sales increased 2.9% in the first quarter compared to last year
(after taking into account exchange rate movements), and were up 5.0% against
the fourth quarter last year. Operating profit was �17.8million, before
goodwill amortisation of �0.7million and the one-off rebranding costs of �
2.4million taken in the first quarter. The reduction is primarily due to
slightly lower gross margins and additional depreciation of �1.1million,
following deployment of the new front office software.
The strong sales result reflects product range expansion, eCommerce sales
momentum and major customer wins, supported by eProcurement and vendor managed
inventory services. Siebel customer relationship management (CRM) software was
implemented at Farnell InOne in the UK in November 2002, and across Newark
InOne's 46 sales branches and two call centres in March 2003. The CRM software
is already providing a better understanding of the spending patterns of
customers of all sizes, enabling targeted promotion of products and services to
fulfill their needs and showing benefits in the management of marketing
campaigns, quotations and telesales.
The rebranding announced in February this year has been completed in all
countries. There has been a very positive response from employees and evidence
that customers and suppliers now more readily associate the InOne businesses
with a large global group with significant reach and high service levels.
* The Americas
1st Qtr 2003/4 1st Qtr 2002/3
�m �m
Sales 77.3 87.2
Operating profit 6.4 9.7
Adjusted operating profit 7.6 9.7
*
Return on sales % 8.3 11.1
Adjusted return on sales 9.8 11.1
% *
*before rebranding costs
In the Americas, sales in the first quarter were 3.2% below the relatively
strong first quarter last year (after taking into account exchange rate
movements), which benefited from what proved to be a short-lived improvement in
demand for electronic components. Sales increased 1.6% compared with the fourth
quarter. The adverse effect on sales of the weaker dollar was �7.1million. The
return on sales was lower in the quarter due to the combined effect of reduced
sales, depreciation on the Siebel CRM software and increased marketing and
promotional activity. The adverse effect on operating profit of the weaker
dollar was �0.5million.
At Newark InOne, the introduction of a much wider range of passive components
in March this year has already generated additional sales, especially to larger
customers, and a major expansion of the semiconductor range was implemented in
May. The marketing initiative to manage more customers' stockrooms has
continued and sales to customers adopting eProcurement solutions were strong.
The "Not in Catalogue" (NIC) service was enhanced and added to the Newark
website, helping customers efficiently find products not usually stocked, and
enabling them to order on line. Programmes, such as these, encourage closer
relationships with large and small customers and with both senior procurement
management and design and maintenance engineers.
In Brazil and Mexico, sales continued to increase in difficult market
conditions and targeted customers began to purchase more regularly. For MCM, an
InOne company, sales were 3.3% below the first quarter last year. MCM achieved
some success by focusing on new market segments and value added services.
* Europe and Asia Pacific
1st Qtr 2003/4 1st Qtr 2002/3
�m �m
Sales 99.2 89.4
Operating profit 8.3 10.0
Adjusted operating 10.2 10.7
profit *
Return on sales % 8.4 11.2
Adjusted return on 10.3 12.0
sales %*
*before goodwill amortisation and rebranding costs
Sales in Europe and Asia Pacific in the first quarter were up 8.4% (after
taking into account exchange rate movements) compared to the same period last
year and 7.9% ahead of the fourth quarter last year. The beneficial effect on
sales of the stronger euro was �2.5million. The adjusted operating profit was
slightly below last year, while the return on sales reduced, due largely to the
additional depreciation for the new front office software and investment in
business expansion, including the new warehouse in Liege. The beneficial effect
on operating profit of the stronger euro was �0.6million.
In the UK, sales increased 11.2% in the first quarter compared to last year and
were 8.1% ahead of the fourth quarter of 2002/3. At Farnell InOne, first
quarter sales were 2.4% below last year, but 7.0% over the previous quarter.
BuckHickman InOne continued its recent good performance, with sales up 26.4%
compared to the first quarter last year, and 14.5% above the fourth quarter
last year, including the benefit of the two major contracts recently secured.
The health and safety segment, in particular, showed excellent growth with
sales more than 48% above the first quarter last year. CPC again continued to
make progress with first quarter sales 9.9% ahead of last year.
Most mainland European markets remained weak, particularly in comparison to the
same period in 2002. Sales in the first quarter, however, were up 1.3% over the
same period last year and 6.5% above the fourth quarter last year. In Germany
and Austria, sales in the first quarter increased by 4.5% over the same period
last year, due to continuing focus on key customers, an extended product range
in the new catalogue and good performance in targeted market segments.
In Australia, where the market was quiet, first quarter sales were 4.9% ahead
of the same period last year and 16.4% above the fourth quarter, supported by
progress with major customers and value added services. In Asia, sales
increased by 14.7% over last year through concentration on sectors with growth
opportunities. In this market, which includes the operations of many North
American electronics manufacturing groups, the rebranding of the local
businesses to Farnell Newark InOne provides the ideal platform to enhance
availability of the extensive range of Newark products.
* Focus on Major Customers Continues
The major contracts announced with Vauxhall in October 2002 and Rolls-Royce in
March 2003, continued to make good progress. Two further smaller contracts have
been won in the UK and improved sales were recorded in most countries in the
first quarter, as relationships developed. In Germany, sales increased,
particularly with Daimler Chrysler, where some 1,200 engineers are able to
purchase from Farnell InOne through Covisint, the automotive industry's
eProcurement portal.
In the Americas, sales to national account customers in the first quarter were
slightly below last year, reflecting uncertainty created by recent world
events. However, sales to the US government increased 15% over the same period
last year, despite the delayed budget release. Four new major accounts were
added in the first quarter, including Boeing and Rockwell Automation.
* Continued Growth in eCommerce Sales
Sales per day through eCommerce channels again increased with revenues up 35%
compared to the first quarter last year. Website sales per day in Europe and
Asia Pacific, mainly to small and medium sized customers, rose by 109%, with
significant increases in the UK, Germany and Spain, in particular. Further
major enhancements to the Group's websites will be introduced over the rest of
this year.
Sales to eProcurement partners continued to grow in the first quarter with the
Americas up 29% and Europe and Asia Pacific up substantially, from a low base
last year. New partnership agreements were signed with a number of
organisations including Whirlpool and Southwest Airlines in North America and
General Electric (UK) and Kimberly-Clarke in Europe.
Industrial Products Division
1st Qtr 2003/4 1st Qtr 2002/3
�m �m
Sales : 25.3 24.4
Continuing businesses - 3.3
Businesses sold ____ ____
Total 25.3 27.7
Operating Profit 3.6 3.9
Return on sales % 14.2 14.1
The Industrial Products Division achieved sales in the first quarter of �
25.3million, up 6.1% on last year (for continuing businesses and after taking
into account exchange rate movements). Despite difficult markets for all
businesses, the performance was robust and the operating margin maintained.
* Akron Brass
Akron Brass increased sales 7.8% in the first quarter over last year. The
original equipment market was firm and success was achieved in both the
industrial and international markets. New product sales continued to be ahead
of expectations.
* TPC Wire and Cable
TPC Wire and Cable's sales increased 9.3% over the first quarter last year in a
tight automotive market. Sales focus on Mexico and Canada, targeted industrial
segments and new product introductions enabled the company to make good
progress.
* Kent
Kent operates across Europe where economic conditions remained difficult but,
despite this, sales increased by 2.2% over the first quarter last year. The
Kent range of products was recommended for use by two major car manufacturers
in France and sales of a new product range exceeded expectations, particularly,
in France and Spain. Sales force productivity continued to improve following
the change in remuneration structure last year.
Outlook
World economic prospects remain clouded with no new sustained trends in either
our North American or European markets. Good sales growth in Europe and Asia
was achieved, despite low activity in the electronics market, by concentrating
on further improving services to customers.
The Group continues to manage its business on the basis of little improvement
in markets for the rest of this year. It will pursue its strategy to develop
and enhance its range of products and services to build relationships and
satisfy the needs of large and small customers. When markets return to a
healthier level, the Group should make significant progress.
Sir Malcolm Bates
Chairman
28th May 2003
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the United
States Private Securities Litigation Reform Act of 1995: The U.S. Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. This press release contains certain forward-looking
statements relating to the business of the Group and certain of its plans and
objectives, including, but not limited to, future capital expenditures, future
ordinary expenditures and future actions to be taken by the Group in connection
with such capital and ordinary expenditures, the introduction of new
information technology and e-commerce platforms, the expected benefits and
future actions to be taken by the Group in respect of certain sales and
marketing initiatives, operating efficiencies and economies of scale. By their
nature forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future.
Actual expenditures made and actions taken may differ materially from the
Group's expectations contained in the forward-looking statements as a result of
various factors, many of which are beyond the control of the Group. These
factors include, but are not limited to, the implementation of cost-saving
initiatives to offset current market conditions, integration of new personnel
and new information systems, continued use and acceptance of e-commerce
programs and systems and the impact on other distribution systems, the ability
to expand into new markets and territories, the implementation of new sales and
marketing initiatives, changes in demand for electronic, electrical,
electromagnetic and industrial products, rapid changes in distribution of
products and customer expectations, the ability to introduce and customers'
acceptance of new services, products and product lines, product availability,
the impact of competitive pricing, fluctuations in foreign currencies, and
changes in interest rates and overall market conditions, particularly the
impact of changes in world-wide and national economie
Consolidated Profit and Loss Account
For the 13 weeks ended 4th May 2003
2003/4 2002/3 2002/3 2003/4 2002/3 2002/3
First First Full First First Full
quarter quarter year quarter quarter year
unaudited unaudited audited unaudited unaudited audited
Notes �m �m �m $m $m $m
Turnover 1 201.8 204.3 759.0 318.8 294.2 1,161.3
Operating profit
- before rebranding 19.4 22.4 82.9 30.7 32.3 126.9
costs and amortisation
of goodwill
- rebranding costs 2 (2.4) - - (3.8) - -
- amortisation of (0.7) (0.7) (2.6) (1.1) (1.0) (4.0)
goodwill
Total operating profit 1 16.3 21.7 80.3 25.8 31.3 122.9
Loss on disposal of - - (4.8) - - (7.4)
businesses
Net interest payable (3.9) (3.9) (15.7) (6.2) (5.6) (24.0)
Profit before taxation 12.4 17.8 59.8 19.6 25.7 91.5
Taxation 3 (4.0) (5.6) (18.2) (6.3) (8.1) (27.9)
Profit after taxation 8.4 12.2 41.6 13.3 17.6 63.6
Preference dividends (1.7) (6.5) (10.8) (2.7) (9.4) (16.5)
(non-equity)
Profit attributable to 6.7 5.7 30.8 10.6 8.2 47.1
ordinary shareholders
Ordinary dividends - - (32.6) - - (49.9)
(equity)
Retained profit/(loss) 6.7 5.7 (1.8) 10.6 8.2 (2.8)
Earnings per share 4
Basic 1.9p 2.1p 9.3p $0.030 $0.030 $0.142
Diluted 1.8p 2.1p 9.3p $0.028 $0.030 $0.142
Earnings per share before
rebranding costs,
amortisation of 4
goodwill and disposals
Basic 2.5p 2.4p 11.2p $0.040 $0.035 $0.171
Diluted 2.5p 2.3p 11.2p $0.040 $0.033 $0.171
The translation of sterling into US dollars has been presented for convenience
purposes only using the average exchange rate for the 13 weeks of 1.58 (2002/3:
first quarter 1.44 and full year 1.53).
Statement of Total Recognised Gains and Losses
For the 13 weeks ended 4th May 2003
2003/4 2002/3 2002/3
First First Full
quarter quarter year
unaudited unaudited audited
�m �m �m
Profit after taxation 8.4 12.2 41.6
Currency translation 5.2 (0.2) (0.3)
adjustments
Total recognised gains 13.6 12.0 41.3
for the period
Consolidated Balance
Sheet
As at 4th May 2003
4th May 5th May 2nd 4th May 5th May 2nd
February February
2003 2002 2003 2003 2002 2003
unaudited unaudited audited unaudited unaudited audited
Notes �m �m �m $m $m $m
Fixed Assets
Intangible assets 47.8 50.4 48.5 76.5 74.1 79.5
Tangible assets 113.4 112.5 112.9 181.4 165.4 185.2
Interests in own 0.1 0.4 0.2 0.2 0.6 0.3
shares
161.3 163.3 161.6 258.1 240.1 265.0
Current Assets
Stocks 160.3 149.2 147.8 256.5 219.3 242.4
Debtors - due within 130.6 136.9 121.8 208.9 201.2 199.8
one year
Debtors - due after 85.7 85.1 82.2 137.1 125.1 134.8
more than one year
Cash at bank and in 30.1 35.0 29.6 48.2 51.5 48.5
hand
406.7 406.2 381.4 650.7 597.1 625.5
Creditors - due
within one year
Loans and overdrafts (97.4) (20.3) (97.3) (155.8) (29.8) (159.6)
Other (172.0) (166.6) (157.4) (275.2) (245.0) (258.1)
(269.4) (186.9) (254.7) (431.0) (274.8) (417.7)
Net current assets 137.3 219.3 126.7 219.7 322.3 207.8
Total assets less 298.6 382.6 288.3 477.8 562.4 472.8
current liabilities
Creditors - due
after more than one
year
Loans (141.1) (222.3) (141.5) (225.8) (326.8) (232.1)
Provisions for 5 (44.4) (42.8) (43.3) (71.0) (62.9) (71.0)
liabilities and
charges
Net assets 113.1 117.5 103.5 181.0 172.7 169.7
Equity shareholders' (10.9) (354.2) (23.2) (17.4) (520.7) (38.1)
funds
Non-equity 124.0 471.7 126.7 198.4 693.4 207.8
shareholders' funds
Total shareholders' 113.1 117.5 103.5 181.0 172.7 169.7
funds
The translation of sterling into US dollars has been presented for convenience
purposes only using the period-end exchange rate of 1.60
(5th May 2002: 1.47, 2nd February 2003: 1.64).
Movement in
Shareholders' Funds
For the 13 weeks
ended 4th May 2003
2003/4 2002/3 2002/3
First First Full
quarter quarter year
unaudited unaudited audited
�m �m �m
Profit after 8.4 12.2 41.6
taxation
Dividends
preference (1.7) (6.5) (10.8)
ordinary - - (32.6)
6.7 5.7 (1.8)
New share capital - 0.5 0.7
subscribed
Purchase of own (2.3) - (8.3)
preference shares
Preference share - - (0.9)
conversion costs
Goodwill reinstated - - 2.6
on disposal of
businesses
Currency translation 5.2 (0.2) (0.3)
adjustment
Net change in 9.6 6.0 (8.0)
shareholders' funds
Opening 103.5 111.5 111.5
shareholders' funds
Closing 113.1 117.5 103.5
shareholders' funds
Summarised Consolidated Cash Flow Statement
For the 13 weeks ended 4th May 2003
2003/4 2002/3 2002/3 2003/4 2002/3 2002/3
First First Full First First Full
quarter quarter year quarter quarter year
unaudited unaudited audited unaudited unaudited audited
�m �m �m $m $m $m
Operating profit 16.3 21.7 80.3 25.8 31.3 122.9
Depreciation and 3.7 3.0 11.6 5.8 4.3 17.7
non-cash items
Working capital (5.7) 1.7 0.1 (9.0) 2.4 0.2
Net cash inflow
from operating
activities 14.3 26.4 92.0 22.6 38.0 140.8
Net interest (0.4) (0.1) (15.8) (0.6) (0.1) (24.2)
payable
Preference - - (10.8) - - (16.5)
dividends
Taxation paid (4.2) (2.2) (12.7) (6.7) (3.2) (19.4)
Purchase of (4.6) (4.7) (24.9) (7.3) (6.8) (38.1)
tangible fixed
assets
Sale of tangible 1.1 0.1 1.7 1.7 0.1 2.6
fixed assets
Disposal of businesses - (0.3) 3.3 - (0.4) 5.0
(net of costs)
Ordinary - - (28.1) - - (43.0)
dividends paid
Cash inflow
before use of
liquid
resources and 6.2 19.2 4.7 9.7 27.6 7.2
financing
Issue of ordinary - 0.5 0.7 - 0.7 1.1
shares
Purchase of own (2.3) - (8.3) (3.6) - (12.7)
preference shares
Preference share - - (0.9) - - (1.4)
conversion costs
New bank loans 42.7 - 29.1 67.5 - 44.5
Repayment of bank (44.0) (10.0) (23.0) (69.5) (14.4) (35.2)
loans
Increase in cash 2.6 9.7 2.3 4.1 13.9 3.5
Reconciliation of
net debt
Net debt at (209.2) (236.4) (236.4)
beginning of
period
Increase in cash 2.6 9.7 2.3
Decrease/ 1.3 10.0 (6.1)
(increase) in
debt
Exchange movement (3.1) 9.1 31.0
Net debt at end (208.4) (207.6) (209.2)
of period
The translation of sterling into US dollars has been presented for convenience
purposes only using the average exchange rate for the 13 weeks of 1.58 (2002/3:
first quarter 1.44 and full year 1.53).
Notes
1 Segment information
2003/4 2002/3 2002/3 2003/4 2002/3 2002/3
First First Full First First Full
quarter quarter year quarter quarter year
unaudited unaudited audited unaudited unaudited audited
�m �m �m $m $m $m
Turnover
Marketing and
Distribution
Division
Americas 77.3 87.2 311.6 122.1 125.6 476.7
Europe and Asia 99.2 89.4 348.6 156.7 128.7 533.4
Pacific
176.5 176.6 660.2 278.8 254.3 1,010.1
Industrial Products 25.3 27.7 98.8 40.0 39.9 151.2
Division
201.8 204.3 759.0 318.8 294.2 1,161.3
Operating profit
Marketing and
Distribution
Division
Americas
- before rebranding 7.6 9.7 33.0 12.1 14.0 50.5
costs
- rebranding costs (1.2) - - (1.9) - -
(note 2)
6.4 9.7 33.0 10.2 14.0 50.5
Europe and Asia
Pacific
- before rebranding
costs and
amortisation of 10.2 10.7 42.2 16.1 15.4 64.6
goodwill
- rebranding costs (1.2) - - (1.9) - -
(note 2)
- amortisation of (0.7) (0.7) (2.6) (1.1) (1.0) (4.0)
goodwill
8.3 10.0 39.6 13.1 14.4 60.6
Total Marketing and 14.7 19.7 72.6 23.3 28.4 111.1
Distribution
Division
Industrial Products 3.6 3.9 15.2 5.7 5.6 23.3
Division
Head Office costs (2.0) (1.9) (7.5) (3.2) (2.7) (11.5)
16.3 21.7 80.3 25.8 31.3 122.9
The first quarter of 2002/3 includes sales of �3.3m and an operating loss of �
0.1m in respect of DA Lubricants, part of the Industrial Products Division,
which was sold in June 2002.
2 Rebranding
On 27th February 2003, the Group announced the rebranding of four businesses of
the Marketing and Distribution Division to demonstrate to customers and
suppliers the close alignment and global collaboration between these
businesses. The new trading names are Newark InOne, Farnell InOne, BuckHickman
InOne, and MCM, an InOne Company.
The operating profit of the Marketing and Distribution Division for the quarter
ended 4th May 2003, reflects the one-off cost of the rebranding of �2.4m, of
which �1.2m relates to the Americas and �1.2m relates to Europe and Asia
Pacific.
3 Taxation
The taxation charge includes provision at an effective rate for the period,
excluding goodwill amortisation, of 30.7% (2002/3: 30.5%), being the estimated
effective rate of taxation for the year ending 1st February 2004.
4 Earnings per share
Basic earnings per share are based on the profit attributable to ordinary
shareholders and the weighted average number of ordinary shares in issue during
the period, excluding those shares held by the Premier Farnell Executive Trust.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume issue of all dilutive potential ordinary shares,
i.e. those share options granted to employees where the exercise price is less
than the average market price of the Company's ordinary shares during the
period.
Reconciliations of earnings and the weighted average number of shares used in
the calculations are set out below.
2003/4 2002/3 2002/3
First First Full
quarter quarter year
unaudited unaudited audited
�m �m �m
Profit attributable to ordinary 6.7 5.7 30.8
shareholders
Rebranding costs 2.4 - -
Loss on disposal of - - 4.8
businesses
Tax attributable to rebranding/ (0.7) - (0.9)
disposal of businesses
Amortisation of 0.7 0.7 2.6
goodwill
Profit attributable to ordinary shareholders before rebranding costs,
amortisation of goodwill and 9.1 6.4 37.3
disposals
Number Number Number
Weighted average number of 362,134,230 272,039,332 331,570,659
shares
Dilutive effect of 198,262 1,410,705 850,520
share options
Diluted weighted average number 362,332,492 273,450,037 332,421,179
of shares
Earnings per share before rebranding costs, amortisation of goodwill and loss
on disposal of businesses have been disclosed in order to facilitate
comparison.
5 Provisions for liabilities and charges
Provisions for liabilities and charges comprise deferred taxation of �37.5m
(5th May 2002: �36.5m, 2nd February 2003: �36.6m), provision for overseas
post-retirement obligations of �5.4m (5th May 2002: �4.8m, 2nd February 2003: �
5.2m) and provision for dilapidation costs on leased properties of �1.5m (5th
May 2002: �1.5m, 2nd February 2003: �1.5m).
6 Purchase and cancellation of preference shares
On 19th March 2003 the Company purchased and cancelled a total of 197,000 of
its own preference shares at a cost of �2.3m. The total number of preference
shares in issue on 4th May 2003 was 7.6 million (2nd February 2003:
7.8million).
7 Basis of preparation
The unaudited consolidated financial information for the 13 weeks ended 4th May
2003 has been prepared applying the accounting policies disclosed in the
Group's 2003 Annual Report and Accounts which have been delivered to the
Registrar of Companies and which contain an unqualified audit report.
The principal average exchange rates used to translate the Group's overseas
profits were as follows:
2003/4 2002/3 2002/3
First First Full
quarter quarter year
US dollar 1.58 1.44 1.53
Euro 1.45 1.63 1.58
Australian dollar 2.58 2.72 2.78
END