TIDMROR
RNS Number : 8792H
Rotork PLC
02 March 2010
2 March 2010
Rotork p.l.c.
2009 Full Year Results
+-------------------------+-----------+-----------+--------+-----------+
| | 2009 | 2008 | % | % |
| | | | change | change |
| | | | | (constant |
| | | | | currency) |
+-------------------------+-----------+-----------+--------+-----------+
| Revenue | GBP353.5m | GBP320.2m | +10.4% | +0.5 |
+-------------------------+-----------+-----------+--------+-----------+
| Operating profit | GBP91.5m | GBP74.9m | +22.2% | +7.2 |
+-------------------------+-----------+-----------+--------+-----------+
| Profit before tax | GBP90.9m | GBP75.8m | +20.0% | +5.1 |
+-------------------------+-----------+-----------+--------+-----------+
| Adjusted* profit before | GBP91.5m | GBP76.9m | +19.0% | +4.3 |
| tax | | | | |
+-------------------------+-----------+-----------+--------+-----------+
| Basic earnings per | 74.2p | 62.0p | +19.7% | +4.5 |
| share | | | | |
+-------------------------+-----------+-----------+--------+-----------+
| Adjusted* basic | 74.9p | 63.3p | +18.2% | +3.4 |
| earnings per share | | | | |
+-------------------------+-----------+-----------+--------+-----------+
| Final dividend | 17.25p | 16.75p | | |
| Special dividend | 11.5p | | | |
| | | 0.0p | | |
+-------------------------+-----------+-----------+--------+-----------+
* Adjusted figures are before the amortisation of acquired intangible assets and
property disposal
· Strong growth in operating profits
· Improved operating margins, reflecting management discipline and good
competitive position
· Excellent cash generation, with year end cash balances of GBP78.7m
· Improved return on capital employed
· EPS growth of 19.7%
· High quality order book of GBP129.1m, down 16% at constant currency, but
off an historic high
· Growth opportunities in all markets served
· Special dividend to return GBP10.0m to shareholders
Outlook
Rotork benefits from a focused long term strategy. Our breadth of product
offering, strong balance sheet and international presence provide us with a
solid platform for growth.
Although market conditions remain unsettled we continue to benefit from
investment in product development, new facilities, expanded service capabilities
and improved market penetration.
Quotation activity and the number of projects on our internal tracking system
remain at high levels and whilst uncertainty remains on the timing of projects,
we anticipate continued improvement in infrastructure and energy related
markets.
The board looks forward with confidence to 2010.
For further information, please contact:
+-------------------------------+-------------------------------+
| Rotork p.l.c. | Tel: 01225 733200 |
+-------------------------------+-------------------------------+
| Peter France, Chief Executive | |
+-------------------------------+-------------------------------+
| Bob Slater, Finance Director | |
+-------------------------------+-------------------------------+
| | |
+-------------------------------+-------------------------------+
| Financial Dynamics | Tel: 020 7831 3113 |
+-------------------------------+-------------------------------+
| Jon Simmons/Sophie Kernon | |
+-------------------------------+-------------------------------+
Chairman's Statement
2009 saw Rotork achieve further significant revenue and profit growth - despite
a subdued trading environment in a number of our markets. General market
conditions are showing signs of improvement with increasing project activity and
encouraging levels of quotations. We serve long term growth industries, and are
targeting the Group wide opportunities that these present. We have continued to
invest in our production facilities and product development programmes and are
therefore well positioned to capitalise internationally on the improving market
conditions through the delivery of high quality competitively presented products
and services.
Financial Highlights
For the year, revenue at GBP353.5m was up 10.4% on the prior year and profit
before tax increased by 20.0% to GBP90.9m. We improved Group operating margin
from 23.4% to 25.9%, and closed the year with strong cash balances and a good
order book.
Currency has certainly been a positive influence in the year, both in terms of
our competitive position internationally and in the translation of results of
our international businesses although the volatility that we saw in the first
half settled later in the year. At constant currency the increase in profit
before tax was 5.1% on revenue that was up less than 1%.
Divisional Highlights
Rotork Controls, our largest division accounting for 64.3% of Group revenue, is
the market leader in electric valve actuation. Sales revenue grew in the year by
11.2% to GBP227.3m and operating profit increased by 26.4% to GBP72.6m. While
there have been project delays in a number of sectors and markets, the level of
project activity and quotations made, show that the medium term demand for our
products remains strong across all sectors and geographies that we support. We
continue to reinforce our position as market leader.
Rotork Fluid Systems ('RFS') has been the division most impacted by delays in
activity with around 95% of its business exposed to the oil & gas sector.
Nevertheless revenue grew by 12.6% and operating profit by 17.8%, and improved
operating margin to 14.3% (2008 13.6%). We are now starting to see operational
gains from the restructuring of some of our production facilities and this
should benefit the current year. We believe that we have grown our market share
substantially over the last few years and have brought innovation and technology
to a relatively conservative market and product line. The acquisition of
Flow-Quip in November is a positive step for us, giving access to improved
product application offerings in some new geographic markets, and we expect to
see the benefit of this in 2010.
Rotork Gears performed well in a difficult market although revenue at GBP36.8m
showed no increase over the prior year and operating profit slipped back. Higher
costs of material were experienced during the year and this is taking some time
to be resolved. However, opportunities for growth continue to be good and our
strong position with international valvemakers, supported by our wide product
range and technical excellence, give us confidence for the coming year. Our new
facility in India will begin production in the second quarter and this is an
important development for us in what is an important market that is increasingly
difficult to access through imports.
Cash
Cash generation in the year has again been strong with year end net cash
balances increasing to GBP78.7m which represented cash conversion of 117.1% of
profit in terms of our key performance indicators. Working capital management
has been helped by our inventory reduction programme and good receivables
management. The cash balance was of course after the purchase of Flow-Quip in
November which was settled for GBP4.9m.
Dividend
The Board is recommending a final dividend of 17.25p, which together with the
interim dividend paid in May represents an increase of 9.2% over the 2008
equivalent. This will be payable on 7 May to shareholders on the register on 9
April 2010. In addition the Directors are intending paying a special dividend of
11.5p per share on 23 July to shareholders on the register on 25 June 2010. This
represents a further cash distribution of GBP10.0m.
Corporate governance
Our stakeholders rightly expect us to act in a fair and responsible manner both
inside and outside our companies, and our commitment to high standards of
conduct and performance across our businesses is as strong as ever. We keep
Corporate and Social Responsibility ('CSR') issues high on the agenda at
management meetings and have an ongoing process of refreshing all of our
policies and procedures in these areas. This is dealt with comprehensively in
the business review under Corporate Governance.
Board Changes
Bob Slater joined Rotork in 1989 and has served as Group Finance Director for
the last 12 years. Having aided the recent successful CEO transition Bob has
expressed his wish to retire and consequently will be leaving at the end of
March. On behalf of the Board I would like to thank Bob for his contribution
over many years to the Group's success and wish him well for the future.
Bob will be succeeded by Jonathan Davis who we welcome to the Board. Jonathan
has gained considerable experience of the business initially as Group Financial
Controller and currently as Finance Director of Rotork Controls.
Alex Walker has been a non-executive director since 2001 and for the last few
years has chaired the Remuneration Committee. Having now completed nine years on
the Board Alex will retire at the forthcoming AGM. He leaves with our best
wishes and appreciation of his valued advice and support.
Outlook
Rotork benefits from a focused long term strategy. Our breadth of product
offering, strong balance sheet and international presence provide us with a
solid platform for growth.
Although market conditions remain unsettled we continue to benefit from
investment in product development, new facilities, expanded service capabilities
and improved market penetration.
Quotation activity and the number of projects on our internal tracking system
remain at high levels and whilst uncertainty remains on the timing of projects,
we anticipate continued improvement in infrastructure and energy related
markets.
The board looks forward with confidence to 2010.
Roger Lockwood
Chairman
1 March 2010
Business review
Introduction
Rotork is an international business with operations which span the globe. We
supply actuators, systems and associated products wherever there is a need to
control the flow of liquids or gases through pipes or channels, as well as into
other specialist applications. The end-user industries that we support are
diverse and while we broadly categorise them into the general headings of Oil &
Gas, Water and Power, this does not totally define the very wide range of
engineering applications for our products. Rotork actuators are used in
chemical, energy & power, food, transport and many other industries across the
world and can be broadly classed as being related to infrastructure development
and management.
We have a direct presence in 29 countries, with 15 manufacturing plants, 96
direct service and marketing outlets, and around 1800 staff. In addition to
these facilities we have over 300 sales outlets in a further 59 countries where
we operate through agents and distributors. This network enables Rotork to give
direct local support to customers across the world and is an important facet of
our approach to our markets.
As our operations have grown, both organically and by acquisition, so has the
range of products within the Group's portfolio. With the addition of new
locations this has enabled Rotork to supply into increasingly diverse
applications, industries and geographies.
Year under review
During the past year we have seen disruption in many of our markets as companies
and governments have adopted strategies to deal with the financial issues left
by the financial crisis. As the year unfolded we saw initiatives in many
geographical areas being taken to address this in the form of stimulus packages.
For Rotork, the first quarter was buoyant with order intake ahead of the prior
year, but by the half year we saw some slowing, influenced by project delays and
funding issues in a number of areas. Order intake continued to be slow through
the second half, failing to reflect the buoyant project activity and good level
of sales quotations that we had seen in the various businesses. By the year end
we started to see improved optimism in many areas and indications of projects
being released into live status.
Overall, order intake was GBP326.3m, down approximately 5% on the 2008 figure. A
number of our businesses reported order intake higher than the prior year,
including Iberia (up 20%), Russia (up 35%) and Malaysia (up 25%). Asia generally
was the least affected with all but one company showing order intake growth in
the year.
Shipments were strong and at GBP353.5m, Group revenue was up 10.4% on the prior
year and with operating margin increasing in the year by 2.5 points. Profit
before tax was up 20.0% to GBP90.9m, a new record level. The closing order book
was lower than at the start of the year (which itself had been heavily flattered
by currency) but at GBP129.1m it represents a strong position going into 2010.
These figures include the acquisition of Flow-Quip made in November, although
its contribution to the year was modest.
We continue to see medium and long term growth opportunities in all of the
markets that we serve and our margin resilience reflects our competitive
position in many of these markets. Our strengths continue to be in product
design, approach to market and above all close contact with and support of our
customers everywhere. Our growing site service operations are particularly
important to us, not only in growing our direct income streams, but also in
maintaining close customer contact enabling us to also influence future
investment decisions. Our site service businesses continue to be deeply imbedded
within our divisional businesses and we therefore report on them within the
context of each division's performance.
Rotork Controls
This is our largest division accounting for 64.3% of sales revenue. It reported
sales of GBP227.3m in the year, up 11.2% on the prior year. Order intake was
1.7% down on the prior year figure, and at the end of the year Controls made up
nearly 66% of our order book. Both project activity and the level of sales
quotations was good in 2009 and many of the projects that we are working on with
our customers already have engineering clearance and operational support, and
where there have been holdups, this has in most cases been due to issues
relating to the release of funding.
During the year we have invested in our UK, India and Russia businesses in terms
of facilities, systems and people. We are continuing to invest and ensure that
we create further capacity to support our markets in the future. The site
services business in Controls has continued to prosper and we see this as an
important part of our business going forward enabling deeper partnerships with
customers to give them greater on site technical support and visibility of the
performance of their processes.
This is a business that is well established in most of its industrial markets.
The operating margin of the business continues to improve due to operational
gearing as our throughput increases, product mix and attention to cost control.
Rotork Fluid Systems
Supplying pneumatic and hydraulic actuators and systems, Rotork Fluid Systems
('RFS') has been our fastest growing division in recent years. In the year under
review we grew sales revenue by 12.6% to GBP99.7m. Over the last three years
RFS' revenue has grown from GBP40.5m to GBP99.7m, an increase of 146%. This has
been achieved in a growing market, but we have undoubtedly made great progress
in building the business through market share gains due to our customer-oriented
approach and increased variety of product offering through organic product
development, and latterly by acquisition.
The business is largely aimed at supporting the Oil & Gas market, which has been
the most impacted by project delays in 2009. Our order intake into this division
was down 11.9% over the prior year and while there are a number of large
projects available to us, the delays here were worse than in the other parts of
the Group. We have been able to maintain margins during this period and have
improved our engineering and production processes at the major plants in Italy
and Germany, and are able to demonstrate to customers that we have market
leading technology, and the capability and capacity to handle even the largest
projects in the industry.
The site services business within RFS is now gaining critical mass and we are
successfully weaving this into our core product offerings to our customers
internationally. Despite the recent slowing of order intake, we have a high
degree of confidence in this business and the opportunities for us in the medium
term.
Rotork Gears
Rotork Gears is a supplier of gearboxes, adaptors and ancillaries for the valve
industry worldwide and is now the world leader in terms of product portfolio and
geographic reach across many industrial sectors. The division is often a sole
original equipment supplier to major industrial groups. It has created close
partnering arrangements with customers and provides a high quality OEM service,
giving the customer base real product improvements and cost savings in a long
term relationship. We saw softening in valvemaker activity across the world
during the year, and additionally the division was negatively impacted by the
strengthening of the Chinese currency which affected material costs. As a result
operating margin fell by 1.6 points to 21.8% on sales revenue of GBP36.8m. Going
forward, we are very positive about our new production facility in India where
we see good growth prospects and production costs which will support our margin
in 2010.
Rotork Site Services
Rotork Site Services operates through each of the three divisions with dedicated
teams providing on site and workshop support to our customers for the complete
range of products including essential repair, maintenance, factory fit and
outsource maintenance programmes tailored to the customer's requirements. This
business is an important feature in our strategy going forward and we can
demonstrate that we are able to genuinely support customers across the range of
products and the applications that they cover. We are continually making
improvements and structural changes in this business to better enable it to
respond to our customers' increasing demands for an outsourcing business model
in the fields of site service and plant repair and maintenance.
R&D
Investment in our product portfolio is an important part of Rotork's success,
and a major differentiating factor in our competitive landscape. Each of the
three divisions has an active programme of research and development aimed at
refining the product offering, widening its market appeal across sectors, and
bringing technical developments into the product range where they would provide
value for our customers.
The year saw the initial launch of the Control Valve Actuator ('CVA') which has
achieved accolades in many quarters including receiving a flow control
innovation award from an influential US magazine. The range is not yet fully
developed and remains an active part of our development programme into 2010.
During 2009 we also widened our network offering to include the HART protocol
which has become the de-facto standard in the process control industry and have
continued our development of a wireless interface to complement our proprietary
Pakscan system. A second wireless trial site, located in the US, has also been
installed and a product launch is anticipated during the coming year.
We have continued to increase our development resources within the Bath facility
where we are focussing on developing technology for future generation electric
products whilst working with our international supply chain to advance our
current products from both a cost and features perspective.
This has been an important year within the Fluid Systems division where a
Technical Director has been appointed to provide focus for the successful and
growing range of current and planned product developments. A product and
technology roadmap is being put in place to ensure a longer term focus on both
existing products within the portfolio and new products. RFS has also supplied
the largest sub-sea rack and pinion actuator ever built at the Lucca factory.
Measuring over two metres high and five metres in length, the single-acting
spring-return actuator is designed to operate a 24 inch, ANSI class 900 sub-sea
safety isolation ball valve ('SSIV') for the Tuna Gas Gathering Project, off the
coast of Egypt. This project is a continuation of the work with the Gears
division and the hydraulically operated package incorporates a special gearbox
and de-clutch system which enables the actuator's output drive to the valve to
be automatically disconnected and reconnected when maintenance is required.
Following the acquisition in 2008 of the Smart Valve Monitor ('SVM') product
consolidation has been completed and we now look towards building the brand and
additional sales. Further significant developments for the SVM range are now
planned.
The product offering of the Gears division has also been extended with the
development of gearboxes for the American water industry. This project was
completed during 2009 and the product range is now in production. A complete
range of quarter-turn gearboxes has also been designed for building
fire-protection systems and these are now at the product testing and approval
stage. Other gearbox ranges have also benefited from continuous improvement and
design optimisation programmes.
Quality
Commitment to product excellence and customer satisfaction is fundamental to
Rotork and we ensure that it is embedded into our business processes across
design, vendor assurance and production. Rotork manufacturing sites are required
to be registered to the international Quality Management System Standard ISO9001
and also adopt Rotork systems and working practices that are proven and used
across the Group. This process is planned and managed from the main production
site and Group headquarters in Bath.
Our research and development function has a robust design review process for all
new products which ensures that our quality ethos is built in at our own and our
suppliers' facilities. Our business model requires exact control of our
component procurement processes and through our global supply chains we have
created a mutually supportive network of Rotork supplier quality assurance
('SQA') and procurement teams to ensure that our requirements are achieved.
Chief Executive
1 March 2010
for the year ended 31 December 2009
+-------------------------------------------+-------+-----------+-----------+
| | Notes | 2009 | 2008 |
+-------------------------------------------+-------+-----------+-----------+
| | | GBP'000 | GBP'000 |
+-------------------------------------------+-------+-----------+-----------+
| | | | |
+-------------------------------------------+-------+-----------+-----------+
| Revenue | 2 | 353,521 | 320,207 |
+-------------------------------------------+-------+-----------+-----------+
| Cost of sales | | (187,600) | (176,046) |
+-------------------------------------------+-------+-----------+-----------+
| | | ______ | ______ |
+-------------------------------------------+-------+-----------+-----------+
| Gross profit | | 165,921 | 144,161 |
+-------------------------------------------+-------+-----------+-----------+
| Other income | 4 | 688 | 42 |
+-------------------------------------------+-------+-----------+-----------+
| Distribution costs | | (3,428) | (3,535) |
+-------------------------------------------+-------+-----------+-----------+
| Administrative expenses | | (71,585) | (65,697) |
+-------------------------------------------+-------+-----------+-----------+
| Other expenses | | (59) | (82) |
+-------------------------------------------+-------+-----------+-----------+
| | | | |
+-------------------------------------------+-------+-----------+-----------+
| Operating profit before the amortisation | | 92,103 | 76,014 |
| of acquired intangible assets and the | | | |
| disposal of property | | | |
+-------------------------------------------+-------+-----------+-----------+
| Amortisation of acquired intangible | | (1,153) | (1,125) |
| assets | | | |
+-------------------------------------------+-------+-----------+-----------+
| Disposal of property | | 587 | - |
+-------------------------------------------+-------+-----------+-----------+
| Operating profit | 2 | 91,537 | 74,889 |
+-------------------------------------------+-------+-----------+-----------+
| | | | |
+-------------------------------------------+-------+-----------+-----------+
| Financial income | 5 | 5,784 | 7,073 |
+-------------------------------------------+-------+-----------+-----------+
| Financial expenses | 5 | (6,405) | (6,211) |
+-------------------------------------------+-------+-----------+-----------+
| | | ______ | ______ |
+-------------------------------------------+-------+-----------+-----------+
| Profit before tax | | 90,916 | 75,751 |
+-------------------------------------------+-------+-----------+-----------+
| Income tax expense | 6 | (26,884) | (22,331) |
+-------------------------------------------+-------+-----------+-----------+
| | | ______ | ______ |
+-------------------------------------------+-------+-----------+-----------+
| Profit for the year | | 64,032 | 53,420 |
| | | ===== | ===== |
+-------------------------------------------+-------+-----------+-----------+
| | | | |
+-------------------------------------------+-------+-----------+-----------+
| | | | |
+-------------------------------------------+-------+-----------+-----------+
| | | Pence | Pence |
+-------------------------------------------+-------+-----------+-----------+
| Basic earnings per share | 13 | 74.2 | 62.0 |
+-------------------------------------------+-------+-----------+-----------+
| Diluted earnings per share | 13 | 73.9 | 61.6 |
+-------------------------------------------+-------+-----------+-----------+
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2009
+------------------------------------------+------+----------+---------+
| | | 2009 | 2008 |
+------------------------------------------+------+----------+---------+
| | | GBP'000 | GBP'000 |
+------------------------------------------+------+----------+---------+
| Profit for the year | | 64,032 | 53,420 |
+------------------------------------------+------+----------+---------+
| | | | |
+------------------------------------------+------+----------+---------+
| Other comprehensive income | | | |
+------------------------------------------+------+----------+---------+
| Foreign exchange translation differences | | (11,928) | 23,824 |
+------------------------------------------+------+----------+---------+
| Actuarial (loss) / gain in pension | | (15,547) | 1,290 |
| scheme | | | |
+------------------------------------------+------+----------+---------+
| Movement on deferred tax relating to | | 4,257 | (161) |
| actuarial loss / (gain) | | | |
+------------------------------------------+------+----------+---------+
| Effective portion of changes in fair | | 5,046 | (4,719) |
| value of cash flow hedges, net of tax | | | |
+------------------------------------------+------+----------+---------+
| | | ______ | ______ |
+------------------------------------------+------+----------+---------+
| Income and expenses recognised directly | | (18,172) | 20,234 |
| in equity | | | |
+------------------------------------------+------+----------+---------+
| | | | |
+------------------------------------------+------+----------+---------+
| Total comprehensive income for the year | | 45,860 | 73,654 |
| | | ===== | ===== |
| | | | |
+------------------------------------------+------+----------+---------+
Consolidated Balance Sheet
at 31 December 2009
+------------------------------------------+-------+---------+---------+
| |Notes | 2009 | 2008 |
+------------------------------------------+-------+---------+---------+
| | | GBP'000 | GBP'000 |
+------------------------------------------+-------+---------+---------+
| Assets | | | |
+------------------------------------------+-------+---------+---------+
| Property, plant and equipment | | 23,521 | 23,868 |
+------------------------------------------+-------+---------+---------+
| Intangible assets | 7 | 40,780 | 39,696 |
+------------------------------------------+-------+---------+---------+
| Deferred tax assets | | 11,631 | 10,925 |
+------------------------------------------+-------+---------+---------+
| Other receivables | | 1,119 | 1,137 |
+------------------------------------------+-------+---------+---------+
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total non-current assets | | 77,051 | 75,626 |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| Inventories | 8 | 46,712 | 59,410 |
+------------------------------------------+-------+---------+---------+
| Trade receivables | 9 | 53,791 | 63,694 |
+------------------------------------------+-------+---------+---------+
| Current tax | | 1,818 | 1,752 |
+------------------------------------------+-------+---------+---------+
| Derivative financial instruments | | 942 | - |
+------------------------------------------+-------+---------+---------+
| Other receivables | | 6,197 | 5,578 |
+------------------------------------------+-------+---------+---------+
| Cash and cash equivalents | 10 | 78,676 | 41,390 |
+------------------------------------------+-------+---------+---------+
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total current assets | | 188,136 | 171,824 |
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total assets | | 265,187 | 247,450 |
| | | ===== | ===== |
+------------------------------------------+-------+---------+---------+
| Equity | | | |
+------------------------------------------+-------+---------+---------+
| Issued equity capital | 12 | 4,330 | 4,325 |
+------------------------------------------+-------+---------+---------+
| Share premium | | 7,033 | 6,666 |
+------------------------------------------+-------+---------+---------+
| Reserves | | 14,406 | 21,288 |
+------------------------------------------+-------+---------+---------+
| Retained earnings | | 140,402 | 112,117 |
+------------------------------------------+-------+---------+---------+
| | | | ______ |
| | | _____ | |
+------------------------------------------+-------+---------+---------+
| Total equity | | 166,171 | 144,396 |
| | | ===== | ===== |
+------------------------------------------+-------+---------+---------+
| Liabilities | | | |
+------------------------------------------+-------+---------+---------+
| Interest bearing loans and borrowings | | 162 | 190 |
+------------------------------------------+-------+---------+---------+
| Employee benefits | | 22,549 | 8,637 |
+------------------------------------------+-------+---------+---------+
| Deferred tax liabilities | | 1,970 | 2,806 |
+------------------------------------------+-------+---------+---------+
| Derivative financial instruments | | 127 | 1,686 |
+------------------------------------------+-------+---------+---------+
| Provisions | 11 | 1,664 | 1,660 |
+------------------------------------------+-------+---------+---------+
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total non-current liabilities | | 26,472 | 14,979 |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| Interest bearing loans and borrowings | | 104 | 157 |
+------------------------------------------+-------+---------+---------+
| Trade payables | 14 | 26,350 | 32,803 |
+------------------------------------------+-------+---------+---------+
| Employee benefits | | 7,252 | 7,001 |
+------------------------------------------+-------+---------+---------+
| Current tax | | 9,768 | 12,197 |
+------------------------------------------+-------+---------+---------+
| Derivative financial instruments | | 1,130 | 5,624 |
+------------------------------------------+-------+---------+---------+
| Other payables | | 24,690 | 26,781 |
+------------------------------------------+-------+---------+---------+
| Provisions | 11 | 3,250 | 3,512 |
+------------------------------------------+-------+---------+---------+
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total current liabilities | | 72,544 | 88,075 |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| Total liabilities | | 99,016 | 103,054 |
| | | ______ | ______ |
+------------------------------------------+-------+---------+---------+
| Total equity and liabilities | | 265,187 | 247,450 |
| | | ===== | ===== |
+------------------------------------------+-------+---------+---------+
These financial statements were approved by the Board of Directors on 1 March
2010 and were signed on its behalf by:
PI Franceand RE Slater, Directors.
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| | Issued | Share | Translation | Capital | Hedging | Retained | Total |
| | equity | | reserve | redemption | reserve | earnings | |
| | capital | premium | | reserve | | | |
| | | | | | | | |
| | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 31 | 4,323 | 6,519 | 1,085 | 1,639 | (544) | 89,430 | 102,452 |
| December 2007 | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Profit for the year | - | - | - | - | - | 53,420 | 53,420 |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Other comprehensive | | | | | | | |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Foreign exchange | - | - | 23,824 | - | - | - | 23,824 |
| translation | | | | | | | |
| differences | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Effective portion | | | | | | | |
| of changes in fair | - | - | - | - | (4,719) | - | (4,719) |
| value of cash flow | | | | | | | |
| hedges | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Actuarial gains and | | | | | | | |
| losses on defined | | | | | | | |
| benefit pension | - | - | - | - | - | 1,129 | 1,129 |
| plans net of tax | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Total other | | | | | | | |
| comprehensive | - | - | 23,824 | - | (4,719) | 1,129 | 20,234 |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Total comprehensive | - | - | 23,824 | - | (4,719) | 54,549 | 73,654 |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Transactions with | | | | | | | |
| owners, recorded | | | | | | | |
| directly in equity | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Equity settled | - | - | - | - | - | (2,419) | (2,419) |
| share based payment | | | | | | | |
| transactions net of | | | | | | | |
| tax | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Share options | 2 | 147 | - | - | - | - | 149 |
| exercised by | | | | | | | |
| employees | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | (3,518) | (3,518) |
| acquired | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | 4,050 | 4,050 |
| awarded under share | | | | | | | |
| schemes | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Preference shares | - | - | - | 3 | - | (5) | (2) |
| redeemed | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Dividends | - | - | - | - | - | (29,970) | (29,970) |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 31 | 4,325 | 6,666 | 24,909 | 1,642 | (5,263) | 112,117 | 144,396 |
| December 2008 | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Profit for the year | - | - | - | - | - | 64,032 | 64,032 |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Other comprehensive | | | | | | | |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Foreign exchange | - | - | (11,928) | - | - | - | (11,928) |
| translation | | | | | | | |
| differences | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Effective portion | - | - | - | - | 5,046 | - | 5,046 |
| of changes in fair | | | | | | | |
| value of cash flow | | | | | | | |
| hedges | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Actuarial gains and | - | - | - | - | - | (11,290) | (11,290) |
| losses on defined | | | | | | | |
| benefit pension | | | | | | | |
| plans net of tax | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Total other | | | | | | | |
| comprehensive | - | - | (11,928) | - | 5,046 | (11,290) | (18,172) |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Total comprehensive | - | - | (11,928) | - | 5,046 | 52,742 | 45,860 |
| income | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Transactions with | | | | | | | |
| owners, recorded | | | | | | | |
| directly in equity | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Equity settled | - | - | - | - | - | 48 | 48 |
| share based payment | | | | | | | |
| transactions net of | | | | | | | |
| tax | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Share options | 5 | 367 | - | - | - | - | 372 |
| exercised by | | | | | | | |
| employees | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | (3,700) | (3,700) |
| acquired | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Own ordinary shares | - | - | - | - | - | 3,297 | 3,297 |
| awarded under share | | | | | | | |
| schemes | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Dividends | - | - | - | - | - | (24,102) | (24,102) |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
| Balance at 31 | 4,330 | 7,033 | 12,981 | 1,642 | (217) | 140,402 | 166,171 |
| December 2009 | | | | | | | |
+---------------------+---------+---------+-------------+------------+---------+----------+----------+
for the year ended 31 December 2009
+---------------------------------+-------+----------+----------+----------+----------+
| |Notes | 2009 | 2009 | 2008 | 2008 |
+---------------------------------+-------+----------+----------+----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-------+----------+----------+----------+----------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Profit for the year | | 64,032 | | 53,420 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Adjustments for: | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Amortisation of intangibles | | 1,153 | | 1,125 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Amortisation of development | | 402 | | 352 | |
| costs | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Depreciation | | 3,549 | | 3,281 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Equity settled share-based | | 872 | | 718 | |
| payment expense | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| (Profit) Loss on sale of property, | (598) | | 25 | |
| plant and equipment | | | | |
+-----------------------------------------+----------+----------+----------+----------+
| Financial income | | (5,784) | | (7,073) | |
+---------------------------------+-------+----------+----------+----------+----------+
| Financial expenses | | 6,405 | | 6,211 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Income tax expense | | 26,884 | | 22,331 | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | ______ | | ______ | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | 96,915 | | 80,390 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Decrease (Increase) in | | 9,680 | | (8,621) | |
| inventories | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Decrease (Increase) in trade | | 5,967 | | (4,293) | |
| and other receivables | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| (Decrease) Increase in trade | | (4,032) | | 5,955 | |
| and other payables | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Difference between pension | | (1,350) | | (823) | |
| charge and cash contribution | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| (Decrease) Increase in | | (257) | | 1,554 | |
| provisions | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Increase (Decrease) in other | 272 | | (299) | |
| employee benefits | | | | |
+-----------------------------------------+----------+----------+----------+----------+
| | | ______ | | ______ | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | 107,195 | | 73,863 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Income taxes paid | | (27,548) | | (22,547) | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | ______ | | ______ | |
+---------------------------------+-------+----------+----------+----------+----------+
| Cash flows from operating | | | 79,647 | | 51,316 |
| activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Investing activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Purchase of property, plant and | | (4,238) | | (4,353) | |
| equipment | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Purchase of intangible assets | | - | | (666) | |
+---------------------------------+-------+----------+----------+----------+----------+
| Development costs capitalised | | (768) | | (817) | |
+---------------------------------+-------+----------+----------+----------+----------+
| Sale of property, plant and | | 908 | | 90 | |
| equipment | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Acquisition of subsidiary, net | | (4,892) | | (12,714) | |
| of cash acquired | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Interest received | | 270 | | 564 | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | ______ | | ______ | |
+---------------------------------+-------+----------+----------+----------+----------+
| Cash flows from investing | | | (8,720) | | (17,896) |
| activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Financing activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Issue of ordinary share capital | | 372 | | 149 | |
+---------------------------------+-------+----------+----------+----------+----------+
| Purchase of ordinary share | | (3,700) | | (3,518) | |
| capital | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Purchase of preference shares | | - | | (5) | |
| treated as debt | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Interest paid | | (176) | | (294) | |
+---------------------------------+-------+----------+----------+----------+----------+
| Repayment of amounts borrowed | | (27) | | (82) | |
+---------------------------------+-------+----------+----------+----------+----------+
| Repayment of finance lease | | (94) | | (87) | |
| liabilities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Dividends paid on ordinary | | (24,102) | | (29,970) | |
| shares | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | ______ | | ______ | |
+---------------------------------+-------+----------+----------+----------+----------+
| Cash flows from financing | | | (27,727) | | (33,807) |
| activities | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| | | | ______ | | ______ |
+---------------------------------+-------+----------+----------+----------+----------+
| Net Increase (decrease) in cash and | | 43,200 | | (387) |
| cash equivalents | | | | |
+-----------------------------------------+----------+----------+----------+----------+
| Cash and cash equivalents at 1 | | | 41,390 | | 38,253 |
| January | | | | | |
+---------------------------------+-------+----------+----------+----------+----------+
| Effect of exchange rate fluctuations | | (5,914) | | 3,524 |
| on cash held | | _____ | | ______ |
+-----------------------------------------+----------+----------+----------+----------+
| Cash and cash equivalents at 31 | 10 | | 78,676 | | 41,390 |
| December | | | ===== | | ===== |
+---------------------------------+-------+----------+----------+----------+----------+
Notes to the Financial Statements
for the year ended 31 December 2009
Except where indicated, values in these notes are in GBP'000.
Rotork p.l.c. is a Company domiciled in England. The consolidated financial
statements of the Company for the year ended 31 December 2009 comprise the
Company and its subsidiaries (together referred to as the 'Group').
The consolidated financial statements of Rotork p.l.c. have been prepared and
approved by the directors in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC
Interpretations and the Companies Act 2006 applicable to companies reporting
under IFRS.
The consolidated financial statements have been prepared under the historical
cost convention subject to the items referred to in the derivative financial
instruments accounting policy below.
New, revised or changes to existing standards in 2009 which have been adopted by
the Group
IAS1 (revised), 'Presentation of financial statements' became effective on 1
January 2009. The revision has resulted in minor changes to the presentation of
the primary statements.
IFRS 8 'Operating segments',became effective on 1 January 2009. The new standard
has not required any additional disclosure or changes to segmental reporting
from that reported in 2008.
IAS23 'Borrowing costs' amendment became effective on 1 January 2009 and
requires borrowing costs which meet certain criteria to be capitalised. The
Group does not currently have any material borrowings or interest costs.
Amendments to IAS32, 'Presentation', IAS39, 'Financial instruments', IFRS2,
'Share-based payment', IFRS7 'Financial instruments: Disclosures' and IAS27
'Consolidated and separate financial statements' became effective in 2009 and
did not have a material impact on the Group.
Interpretations which became effective in 2009
No interpretations which became effective in 2009 were relevant to the Group.
Standards, amendments and interpretations to existing standards that are
effective and have not been early adopted by the Group
IFRS3, 'Business combinations (revised)', will be adopted from 1 January 2010
and will result in future acquisition costs being expensed. The policy up until
31 December 2009 was to include the acquisition costs in the cost of the
investment. The change is not expected to have a material impact on the
financial statements.
Recent accounting developments
Standards, amendments or interpretations which have been issued by the
International Accounting Standards Board or by the IFRIC which have not yet been
adopted are not expected to have a material impact on the Group. Subject to
endorsement by the European Union, these standards, amendments or
interpretations will be adopted in future periods.
The company has considerable financial resources together with a significant
order book, with customers across different geographic areas and industries. As
a consequence, the directors believe that the company is well placed to manage
its business risks successfully despite the current uncertain economic outlook.
The directors have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis in preparing the annual financial
statements.
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries for the year to 31 December 2009. The financial
statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date control ceases. Intragroup
balances and any unrealised gains or losses or income and expenses arising from
intragroup transactions are eliminated in preparing the consolidated financial
statements.
Status of this preliminary announcement
The financial information contained in this preliminary announcement does not
constitute the Company's statutory accounts for the years ended 31 December 2009
or 2008. Statutory accounts for 2008, which were prepared under International
Financial Reporting Standards as adopted by the EU, have been delivered to the
registrar of companies, and those for 2009 will be delivered in due course. The
auditors have reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 237 (2) or (3) of the Companies Act 1985 in
respect of the accounts for 2008 nor a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the accounts for 2009. Full financial
statements for the year ended 31 December 2009, will shortly be posted to
shareholders, and after adoption at the Annual General Meeting on 23 April 2010
will be delivered to the registrar.
2. Operating segments
The management structure and reporting of financial information to the chief
operating decision maker is the basis used to define operating segments.
The Group comprises the following operating segments:
Controls - the design, manufacture and sale of electric valve actuators
Fluid Systems - the design, manufacture and sale of heavy duty pneumatic and
hydraulic valve actuators
Gears - the design, manufacture and sale of gearboxes, adaption and ancillaries
for the valve industry
Unallocated expenses comprise corporate expenses.
Rotork has a worldwide presence in all three operating segments through its
subsidiary selling offices and through an agency network. A full list of
locations can be found at www.rotork.com or on pages 84 and 85 of the 2008
Rotork Annual Report and Accounts.
Analysis by Operating Segment:
+-----------------------+----------+---------+---------+--------------+--------------+
| | Controls | Fluid | Gears | Eliminations | Consolidated |
| | | Systems | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| | 2009 | 2009 | 2009 | 2009 | 2009 |
+-----------------------+----------+---------+---------+--------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Revenue from external | 227,344 | 99,726 | 26,451 | - | 353,521 |
| customers | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Inter segment revenue | - | - | 10,373 | (10,373) | - |
+-----------------------+----------+---------+---------+--------------+--------------+
| | ______ | ______ | ______ | ______ | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Total revenue | 227,344 | 99,726 | 36,824 | (10,373) | 353,521 |
| | ===== | ===== | ===== | ===== | ===== |
+-----------------------+----------+---------+---------+--------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Segment result | 72,620 | 14,220 | 8,026 | - | 94,866 |
| | ===== | ===== | ===== | ===== | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Unallocated expenses | | | | | (3,329) |
| | | | | | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Operating profit | | | | | 91,537 |
+-----------------------+----------+---------+---------+--------------+--------------+
| Net financing expense | | | | | (621) |
+-----------------------+----------+---------+---------+--------------+--------------+
| Income tax expense | | | | | (26,884) |
| | | | | | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Profit for the year | | | | | 64,032 |
| | | | | | ===== |
+-----------------------+----------+---------+---------+--------------+--------------+
+-----------------------+----------+---------+---------+--------------+--------------+
| | Controls | Fluid | Gears | Eliminations | Consolidated |
| | | Systems | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| | 2008 | 2008 | 2008 | 2008 | 2008 |
+-----------------------+----------+---------+---------+--------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Revenue from external | 204,510 | 88,570 | 27,127 | - | 320,207 |
| customers | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Inter segment revenue | - | - | 9,654 | (9,654) | - |
+-----------------------+----------+---------+---------+--------------+--------------+
| | ______ | ______ | ______ | ______ | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Total revenue | 204,510 | 88,570 | 36,781 | (9,654) | 320,207 |
| | ===== | ===== | ===== | ===== | ===== |
+-----------------------+----------+---------+---------+--------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Segment result | 57,466 | 12,075 | 8,621 | - | 78,162 |
| | ===== | ===== | ===== | ===== | |
+-----------------------+----------+---------+---------+--------------+--------------+
| Unallocated expenses | | | | | (3,273) |
| | | | | | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Operating profit | | | | | 74,889 |
+-----------------------+----------+---------+---------+--------------+--------------+
| Net financing income | | | | | 862 |
+-----------------------+----------+---------+---------+--------------+--------------+
| Income tax expense | | | | | (22,331) |
| | | | | | ______ |
+-----------------------+----------+---------+---------+--------------+--------------+
| Profit for the year | | | | | 53,420 |
| | | | | | ===== |
+-----------------------+----------+---------+---------+--------------+--------------+
+-----------------------+----------+---------+---------+-------------+--------------+
| | Controls | Fluid | Gears | Unallocated | Consolidated |
| | | Systems | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| | 2009 | 2009 | 2009 | 2009 | 2009 |
+-----------------------+----------+---------+---------+-------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Depreciation | 2,262 | 1,040 | 247 | - | 3,549 |
+-----------------------+----------+---------+---------+-------------+--------------+
| Amortisation: | | | | | |
| Other intangibles | - | 1,093 | 60 | - | 1,153 |
| Development costs | 402 | - | - | - | 402 |
+-----------------------+----------+---------+---------+-------------+--------------+
| Non-cash items : | 508 | 72 | 51 | 117 | 748 |
| equity settled | | | | | |
| share-based payments | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Net financing expense | - | - | - | 621 | 621 |
+-----------------------+----------+---------+---------+-------------+--------------+
| Intangible assets | | | | | |
| acquired as part of a | - | 3,595 | - | - | 3,595 |
| business combination | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Capital expenditure | 3,083 | 1,094 | 135 | - | 4,312 |
+-----------------------+----------+---------+---------+-------------+--------------+
+-----------------------+----------+---------+---------+-------------+--------------+
| | Controls | Fluid | Gears | Unallocated | Consolidated |
| | | Systems | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| | 2008 | 2008 | 2008 | 2008 | 2008 |
+-----------------------+----------+---------+---------+-------------+--------------+
| | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Depreciation | 2,167 | 867 | 247 | - | 3,281 |
+-----------------------+----------+---------+---------+-------------+--------------+
| Amortisation: | | | | | |
| Other intangibles | - | 1,070 | 55 | - | 1,125 |
| Development costs | 352 | - | - | - | 352 |
+-----------------------+----------+---------+---------+-------------+--------------+
| Non-cash items : | 365 | 37 | 51 | 265 | 718 |
| equity settled | | | | | |
| share-based payments | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Net financing income | - | - | - | (862) | (862) |
+-----------------------+----------+---------+---------+-------------+--------------+
| Intangible assets | | | | | |
| acquired as part of a | - | 10,466 | - | - | 10,466 |
| business combination | | | | | |
+-----------------------+----------+---------+---------+-------------+--------------+
| Capital expenditure | 2,585 | 2,077 | 232 | - | 4,894 |
+-----------------------+----------+---------+---------+-------------+--------------+
Balance sheets are reviewed by operating subsidiary and operating segment
balance sheets are not prepared, as such no further analysis of operating
segments assets and liabilities are presented.
+-------------------+--------+---------+--------+----------+---------+--------------+
| Geographical | UK | Rest | USA | Other | Rest | Consolidated |
| analysis: | | of | | Americas | of the | |
| | | Europe | | | World | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| | 2009 | 2009 | 2009 | 2009 | 2009 | 2009 |
+-------------------+--------+---------+--------+----------+---------+--------------+
| | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| Revenue from | 29,314 | 117,098 | 65,370 | 33,081 | 108,658 | 353,521 |
| external | | | | | | |
| customers by | | | | | | |
| location of | | | | | | |
| customer | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| Non- current | | | | | | |
| assets | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| - Intangible | 6,869 | 19,217 | 10,207 | 213 | 4,274 | 40,780 |
| assets | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
| - Property, plant | 5,200 | 11,060 | 3,360 | 220 | 3,681 | 23,521 |
| and equipment | | | | | | |
+-------------------+--------+---------+--------+----------+---------+--------------+
+-------------------+--------+---------+--------+----------+--------+--------------+
| | UK | Rest | USA | Other | Rest | Consolidated |
| | | of | | Americas | of the | |
| | | Europe | | | World | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| | 2008 | 2008 | 2008 | 2008 | 2008 | 2008 |
+-------------------+--------+---------+--------+----------+--------+--------------+
| | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| Revenue from | 28,966 | 117,030 | 58,070 | 25,979 | 90,162 | 320,207 |
| external | | | | | | |
| customers by | | | | | | |
| location of | | | | | | |
| customer | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| Non- current | | | | | | |
| assets | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| - Intangible | 6,503 | 21,073 | 7,477 | 213 | 4,430 | 39,696 |
| assets | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
| - Property, plant | 5,340 | 12,170 | 3,174 | 156 | 3,028 | 23,868 |
| and equipment | | | | | | |
+-------------------+--------+---------+--------+----------+--------+--------------+
3. Acquisition of subsidiaries
On 6 November 2009 the Group acquired the trade and assets of Flow-Quip a
designer and manufacturer of valve actuators based in Tulsa, USA. The
acquisition was accounted for using the purchase method.
In the 2 months to 31 December 2009 the business contributed GBP1,378,000 to
Group revenue and GBP163,000 to consolidated operating profit before the
GBP235,000 amortisation charge from the acquired intangible assets. If the
acquisition had occurred on 1 January 2009 the business would have contributed
GBP9,274,000 to Group revenue and GBP1,145,000 to Group operating profit. It is
not practicable to disclose profit before tax or profit attributable to equity
shareholders as the Group manages its Treasury function on a Group basis.
Goodwill has arisen on this acquisition as a result of the value attributed to
staff expertise and the assembled workforce, which did not meet the recognition
criteria for an intangible asset.
The acquisition had the following effect on the Group's assets and liabilities.
+------------------------------------------+-------------+-------------+----------+
| | Pre | Fair | Carrying |
| | acquisition | value | amounts |
| | carrying | adjustments | |
| | amounts | | |
+------------------------------------------+-------------+-------------+----------+
| | | | |
+------------------------------------------+-------------+-------------+----------+
| Property, plant and equipment | 550 | - | 550 |
+------------------------------------------+-------------+-------------+----------+
| Intangible assets | - | 1,487 | 1,487 |
+------------------------------------------+-------------+-------------+----------+
| Inventories | 955 | - | 955 |
+------------------------------------------+-------------+-------------+----------+
| Trade and other receivables | 1,293 | - | 1,293 |
+------------------------------------------+-------------+-------------+----------+
| Trade and other payables | (1,501) | - | (1,501) |
+------------------------------------------+-------------+-------------+----------+
| | ______ | ______ | ______ |
+------------------------------------------+-------------+-------------+----------+
| | 1,297 | 1,487 | 2,784 |
+------------------------------------------+-------------+-------------+----------+
| Goodwill on acquisition | | | 2,108 |
| | | | ______ |
+------------------------------------------+-------------+-------------+----------+
| Consideration paid, satisfied in cash | | 4,892 |
| | | ===== |
+--------------------------------------------------------+-------------+----------+
| | | | |
+------------------------------------------+-------------+-------------+----------+
| Purchase consideration settled in cash | | | 4,892 |
+------------------------------------------+-------------+-------------+----------+
| Cash and cash equivalents in subsidiary | | | - |
| acquired | | | |
| | | | ______ |
+------------------------------------------+-------------+-------------+----------+
| Cash outflow on acquisition | | | 4,892 |
| | | | ===== |
+------------------------------------------+-------------+-------------+----------+
The intangible assets identified comprise customer relationships, brand and
acquired order book.
Acquisitions during 2008
On 30 January 2008 the Group acquired 100% of the share capital of Remote
Controls Sweden AB a designer and manufacturer of valve actuators based in
Falun, Sweden. The acquisition was accounted for using the purchase method of
consolidation.
In the 12 months to 31 December 2008 the subsidiary contributed GBP18,261,000 to
Group revenue and GBP2,208,000 to consolidated operating profit before the
GBP985,000 amortisation charge from the acquired intangible assets. It is not
practicable to disclose profit before tax as the Group manages its Treasury
function on a group basis. Similarly it is not practicable to disclose profit
attributable to equity shareholders, as acquired businesses have been merged
with existing group companies in the period since the acquisition. If the
acquisition had occurred on 1 January 2008 the results would not have been
materially different.
Goodwill has arisen on this acquisition as a result of the value attributed to
staff expertise and the assembled workforce, which did not meet the recognition
criteria for an intangible asset, and post acquisition synergies within the
Fluid Systems division.
The acquisition had the following effect on the Group's assets and liabilities.
+------------------------------------------+-------------+-------------+----------+
| | Pre | Fair | Carrying |
| | acquisition | value | amounts |
| | carrying | adjustments | |
| | amounts | | |
+------------------------------------------+-------------+-------------+----------+
| | | | |
+------------------------------------------+-------------+-------------+----------+
| Property, plant and equipment | 1,115 | - | 1,115 |
+------------------------------------------+-------------+-------------+----------+
| Intangible assets | - | 4,755 | 4,755 |
+------------------------------------------+-------------+-------------+----------+
| Inventories | 2,905 | - | 2,905 |
+------------------------------------------+-------------+-------------+----------+
| Trade and other receivables | 2,335 | - | 2,335 |
+------------------------------------------+-------------+-------------+----------+
| Cash and cash equivalents | 587 | | 587 |
+------------------------------------------+-------------+-------------+----------+
| Trade and other payables | (2,616) | - | (2,616) |
+------------------------------------------+-------------+-------------+----------+
| Deferred tax liabilities | (105) | (1,331) | (1,436) |
+------------------------------------------+-------------+-------------+----------+
| Borrowings | (55) | - | (55) |
| | ______ | ______ | ______ |
+------------------------------------------+-------------+-------------+----------+
| | 4,166 | 3,424 | 7,590 |
+------------------------------------------+-------------+-------------+----------+
| Goodwill on acquisition | | | 5,711 |
| | | | ______ |
+------------------------------------------+-------------+-------------+----------+
| Consideration paid, satisfied in cash (including | | 13,301 |
| GBP162,000 expenses) | | ===== |
+--------------------------------------------------------+-------------+----------+
| | | | |
+------------------------------------------+-------------+-------------+----------+
| Purchase consideration settled in cash | | | 13,301 |
+------------------------------------------+-------------+-------------+----------+
| Cash and cash equivalents in subsidiary | | | (587) |
| acquired | | | |
| | | | ______ |
+------------------------------------------+-------------+-------------+----------+
| Cash outflow on acquisition | | | 12,714 |
| | | | ===== |
+------------------------------------------+-------------+-------------+----------+
The intangible assets identified comprise customer relationships, brand and
acquired order book.
4. Other income
+----------------------------------------------------+--------+--------+
| | 2009 | 2008 |
+----------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------+--------+--------+
| Gain on disposal of property, plant and equipment | 654 | 32 |
+----------------------------------------------------+--------+--------+
| Non-executive fees receivable | 34 | 10 |
+----------------------------------------------------+--------+--------+
| Other | - | - |
| | _____ | ______ |
+----------------------------------------------------+--------+--------+
| | 688 | 42 |
| | ===== | ===== |
+----------------------------------------------------+--------+--------+
Included in gain on disposal of property, plant and equipment is a profit of
GBP587,000 in relation to the sale of a Spanish building.
5. Net financing income
+----------------------------------------------------+----------+---------+
| Recognised in the income statement | 2009 | 2008 |
+----------------------------------------------------+----------+---------+
| | | |
+----------------------------------------------------+----------+---------+
| Interest income | 226 | 562 |
+----------------------------------------------------+----------+---------+
| Expected return on assets in the pension schemes | 5,408 | 5,896 |
+----------------------------------------------------+----------+---------+
| Foreign exchange gains | 150 | 615 |
| | ______ | ______ |
+----------------------------------------------------+----------+---------+
| | 5,784 | 7,073 |
| | ===== | ===== |
+----------------------------------------------------+----------+---------+
| | | |
+----------------------------------------------------+----------+---------+
| Interest expense | 167 | 296 |
+----------------------------------------------------+----------+---------+
| Interest charge on pension scheme liabilities | 5,449 | 5,538 |
+----------------------------------------------------+----------+---------+
| Foreign exchange losses | 789 | 377 |
| | ______ | ______ |
+----------------------------------------------------+----------+---------+
| | 6,405 | 6,211 |
| | ===== | ===== |
+----------------------------------------------------+----------+---------+
| | | |
+----------------------------------------------------+----------+---------+
| Recognised in equity | | |
+----------------------------------------------------+----------+---------+
| | | |
+----------------------------------------------------+----------+---------+
| Effective portion of changes in fair value of cash | (217) | (5,263) |
| flow hedges | | |
+----------------------------------------------------+----------+---------+
| Fair value of cash flow hedges transferred to | 5,263 | 544 |
| income statement | | |
+----------------------------------------------------+----------+---------+
| Foreign currency translation differences for | (11,928) | 23,824 |
| foreign operations | ______ | ______ |
+----------------------------------------------------+----------+---------+
| | (6,882) | 19,105 |
| | ===== | ===== |
+----------------------------------------------------+----------+---------+
| Recognised in: | | |
+----------------------------------------------------+----------+---------+
| Hedging reserve | 5,046 | (4,719) |
+----------------------------------------------------+----------+---------+
| Translation reserve | (11,928) | 23,824 |
| | ______ | ______ |
+----------------------------------------------------+----------+---------+
| | (6,882) | 19,105 |
| | ===== | ===== |
+----------------------------------------------------+----------+---------+
6. Income tax expense
+-----------------------------------+---------+--------+---------+---------+
| | 2009 | 2009 | 2008 | 2008 |
+-----------------------------------+---------+--------+---------+---------+
| Current tax: | | | | |
+-----------------------------------+---------+--------+---------+---------+
| UK corporation tax on profits for | 13,757 | | 17,570 | |
| the year | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Double tax relief | (6,074) | | (8,789) | |
+-----------------------------------+---------+--------+---------+---------+
| Adjustment in respect of prior | (146) | | (152) | |
| years | ______ | | ______ | |
+-----------------------------------+---------+--------+---------+---------+
| | | 7,537 | | 8,629 |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Overseas tax on profits for the | 18,560 | | 15,921 | |
| year | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Adjustment in respect of prior | (9) | | (15) | |
| years | ______ | | ______ | |
+-----------------------------------+---------+--------+---------+---------+
| | | 18,551 | | 15,906 |
+-----------------------------------+---------+--------+---------+---------+
| | | ______ | | ______ |
+-----------------------------------+---------+--------+---------+---------+
| Total current tax | | 26,088 | | 24,535 |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
| Deferred tax: | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Origination and reversal of other | 704 | | (2,354) | |
| temporary differences | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Adjustment in respect of prior | 92 | | 150 | |
| years | ______ | | ______ | |
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Total deferred tax | | 796 | | (2,204) |
+-----------------------------------+---------+--------+---------+---------+
| | | _____ | | _____ |
+-----------------------------------+---------+--------+---------+---------+
| Total tax charge for year | | 26,884 | | 22,331 |
| | | ===== | | ===== |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Effective tax rate (based on | | 29.6% | | 29.5% |
| profit before tax) | | | | |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Profit before tax | | 90,916 | | 75,751 |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Profit before tax multiplied by | | 25,456 | | 21,589 |
| standard rate of corporation tax | | | | |
| in the UK of 28.0% (2008: 28.5%) | | | | |
+-----------------------------------+---------+--------+---------+---------+
| | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Effects of: | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Non deductible items | | 1,468 | | 1,640 |
+-----------------------------------+---------+--------+---------+---------+
| Utilisation of overseas tax | | (898) | | (1,154) |
| holidays and losses | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Different tax rates on overseas | | 921 | | 273 |
| earnings | | | | |
+-----------------------------------+---------+--------+---------+---------+
| Adjustments to tax charge in | | (63) | | (17) |
| respect of prior years | | ______ | | ______ |
+-----------------------------------+---------+--------+---------+---------+
| Total tax charge for year | | 26,884 | | 22,331 |
| | | ===== | | ===== |
+-----------------------------------+---------+--------+---------+---------+
A tax credit of GBP670,000 (2008: expense GBP471,000) in respect of share based
payments has been recognised directly in equity in the year.
The Group continues to expect its effective rate of corporation tax to be
slightly higher than the standard UK rate due to higher rates of tax in the US,
Canada, France, Germany, Italy, Japan and India.
There is an unrecognised deferred tax liability for temporary differences
associated with investments in subsidiaries. Rotork p.l.c. controls the dividend
policies of its subsidiaries and subsequently the timing of the reversal of the
temporary differences. It is not practical to quantify the unprovided temporary
differences as acknowledged within paragraph 40 of IAS 12.
7. Intangible assets
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| | Goodwill | Development | Other | Total | Goodwill | Development | Other | Total |
| | | costs | intangibles | | | costs | intangibles | |
| | | | | | | | | |
| | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Cost | | | | | | | | |
| Balance at 1 | 32,792 | 3,879 | 6,941 | 43,612 | 21,527 | 3,062 | 805 | 25,394 |
| January | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Exchange | (1,696) | - | (19) | (1,715) | 5,554 | - | 715 | 6,269 |
| differences | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Internally | - | 768 | - | 768 | - | 817 | - | 817 |
| developed | | | | | | | | |
| during the | | | | | | | | |
| year | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Reduction in | - | - | - | - | - | - | - | - |
| deferred | | | | | | | | |
| consideration | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Additions | - | - | - | - | - | - | 666 | 666 |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Acquisition | 2,108 | - | 1,487 | 3,595 | 5,711 | - | 4,755 | 10,466 |
| through | | | | | | | | |
| business | ______ | ______ | ______ | _____ | ______ | ______ | ______ | _____ |
| combinations | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Balance at | 33,204 | 4,647 | 8,409 | 46,260 | 32,792 | 3,879 | 6,941 | 43,612 |
| 31 December | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Amortisation | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Balance at 1 | - | 2,153 | 1,763 | 3,916 | - | 1,801 | 452 | 2,253 |
| January | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Exchange | - | - | 9 | 9 | - | - | 186 | 186 |
| differences | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Amortisation | - | 402 | 1,153 | 1,555 | - | 352 | 1,125 | 1,477 |
| for the year | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| | ______ | ______ | ______ | _____ | ______ | ______ | ______ | _____ |
| | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Balance at | - | 2,555 | 2,925 | 5,480 | - | 2,153 | 1,763 | 3,916 |
| 31 December | | | | | | | | |
| | _____ | _____ | _____ | _____ | _____ | _____ | _____ | _____ |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
| Net book | 33,204 | 2,092 | 5,484 | 40,780 | 32,792 | 1,726 | 5,178 | 39,696 |
| value at 31 | ===== | ===== | ===== | ===== | ===== | ===== | ===== | ===== |
| December | | | | | | | | |
| | | | | | 21,527 | 1,261 | 353 | 23,141 |
| Net book | | | | | ===== | ===== | ===== | ===== |
| value at 31 | | | | | | | | |
| December | | | | | | | | |
| 2007 | | | | | | | | |
+---------------+----------+-------------+-------------+---------+----------+-------------+-------------+--------+
The amortisation charge in both years is recognised within administrative
expenses in the income statement. Other intangibles include customer
relationships, order books, intellectual property, agency agreements and trading
names of acquired companies.
Goodwill is allocated to the Group's cash generating units ('CGUs') identified
according to business segment. A segment level summary of goodwill allocation is
presented below.
+---------------------------------------------------+---------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Controls | 6,687 | 7,240 |
+---------------------------------------------------+---------+--------+
| Fluid Systems | 18,753 | 17,490 |
+---------------------------------------------------+---------+--------+
| Gears | 7,764 | 8,062 |
+---------------------------------------------------+---------+--------+
| | _____ | _____ |
+---------------------------------------------------+---------+--------+
| | 33,204 | 32,792 |
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
The recoverable amounts of all CGUs are based on value in use calculations.
These calculations use cash flow projections and are based on actual operating
results and the latest Group three year plan. The three year plan is based on
management's view of the future and experience of past performance. Cash flows
for the remainder of the next twenty years are extrapolated using a 2% growth
rate which reflects the long-term nature of many of the markets the Group
serves. This rate has been consistently bettered in the past so is believed to
represent a prudent estimate. The discount rate used is 9.8% (2008: 11%), this
represents a reasonable rate for a market participant in this sector. The
discount rate of each business segment is not materially different to 9.8%. For
the Goodwill to become impaired in the CGU with the minimum headroom, the
discount rate would have to increase by 40%. On this basis each business segment
has sufficient headroom and therefore no impairment write downs are required.
8. Inventories
+---------------------------------------------------+---------+---------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+---------+
| | | |
+---------------------------------------------------+---------+---------+
| Raw materials and consumables | 26,998 | 31,937 |
+---------------------------------------------------+---------+---------+
| Work in progress | 13,692 | 18,411 |
+---------------------------------------------------+---------+---------+
| Finished goods | 6,022 | 9,062 |
| | ______ | ______ |
+---------------------------------------------------+---------+---------+
| | 46,712 | 59,410 |
| | ===== | ===== |
+---------------------------------------------------+---------+---------+
Included in cost of sales was GBP140,728,000 (2008: GBP134,769,000) in respect
of inventories consumed in the year.
9. Trade and other receivables
+---------------------------------------------------+---------+---------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+---------+
| Non-current assets: | | |
+---------------------------------------------------+---------+---------+
| Insurance policy | 995 | 976 |
+---------------------------------------------------+---------+---------+
| Other | 124 | 161 |
| | _____ | _____ |
+---------------------------------------------------+---------+---------+
| Other receivables | 1,119 | 1,137 |
| | ===== | ===== |
+---------------------------------------------------+---------+---------+
| | | |
+---------------------------------------------------+---------+---------+
| Current assets: | | |
+---------------------------------------------------+---------+---------+
| Trade receivables | 55,384 | 65,062 |
+---------------------------------------------------+---------+---------+
| Less provision for impairment of receivables | (1,593) | (1,368) |
| | ______ | ______ |
+---------------------------------------------------+---------+---------+
| Trade receivables - net | 53,791 | 63,694 |
| | ===== | ===== |
+---------------------------------------------------+---------+---------+
| | | |
+---------------------------------------------------+---------+---------+
| Corporation tax | 1,818 | 1,752 |
| | ______ | ______ |
+---------------------------------------------------+---------+---------+
| Current tax | 1,818 | 1,752 |
| | ===== | ===== |
+---------------------------------------------------+---------+---------+
| | | |
+---------------------------------------------------+---------+---------+
| Other non-trade receivables | 3,729 | 3,714 |
+---------------------------------------------------+---------+---------+
| Prepayments and accrued income | 2,468 | 1,864 |
| | ______ | ______ |
+---------------------------------------------------+---------+---------+
| Other receivables | 6,197 | 5,578 |
| | ===== | ===== |
+---------------------------------------------------+---------+---------+
+------------------------------+---------+---------+---------+---------+
| | | | 2009 | 2008 |
+------------------------------+---------+---------+---------+---------+
| | | | | |
+------------------------------+---------+---------+---------+---------+
| Bank balances | | | 29,704 | 23,654 |
+------------------------------+---------+---------+---------+---------+
| Cash in hand | | | 89 | 92 |
+------------------------------+---------+---------+---------+---------+
| Short-term deposits | | | 48,883 | 17,644 |
| | | | ______ | ______ |
+------------------------------+---------+---------+---------+---------+
| Cash and cash equivalents | | | 78,676 | 41,390 |
+------------------------------+---------+---------+---------+---------+
| Bank overdrafts | | | - | - |
| | | | ______ | ______ |
+------------------------------+---------+---------+---------+---------+
| Cash and cash equivalents in | | | 78,676 | 41,390 |
| the consolidated statement | | | ===== | ===== |
| of cash flows | | | | |
+------------------------------+---------+---------+---------+---------+
11. Provisions
+---------------------------------------+----------+---------------+---------+
| | Warranty | Deferred | |
| | | consideration | Total |
| | | | |
| | 2009 | 2009 | 2009 |
| | | | |
+---------------------------------------+----------+---------------+---------+
| Balance at 1 January 2009 | 4,979 | 193 | 5,172 |
+---------------------------------------+----------+---------------+---------+
| Exchange differences | (371) | - | (371) |
+---------------------------------------+----------+---------------+---------+
| Provisions used during the year | (1,133) | (193) | (1,326) |
+---------------------------------------+----------+---------------+---------+
| Charged in the year | 1,439 | - | 1,439 |
| | ______ | _____ | _____ |
+---------------------------------------+----------+---------------+---------+
| Balance at 31 December 2009 | 4,914 | - | 4,914 |
+---------------------------------------+----------+---------------+---------+
| | ===== | ===== | ===== |
+---------------------------------------+----------+---------------+---------+
| Maturity at 31 December 2009 | | | |
+---------------------------------------+----------+---------------+---------+
| Non-current | 1,664 | - | 1,664 |
+---------------------------------------+----------+---------------+---------+
| Current | 3,250 | - | 3,250 |
| | ______ | _____ | _____ |
| | 4,914 | - | 4,914 |
| | ===== | ===== | ===== |
+---------------------------------------+----------+---------------+---------+
| | | | |
+---------------------------------------+----------+---------------+---------+
| Maturity at 31 December 2008 | | | |
+---------------------------------------+----------+---------------+---------+
| Non-current | 1,660 | - | 1,660 |
+---------------------------------------+----------+---------------+---------+
| Current | 3,319 | 193 | 3,512 |
| | ______ | _____ | _____ |
| | 4,979 | 193 | 5,172 |
| | ===== | ===== | ===== |
+---------------------------------------+----------+---------------+---------+
The warranty provision is based on estimates made from historical warranty data
associated with similar products and services. The provision relates mainly to
products sold during the last 12 months, the typical warranty period is now 18
months.
The deferred consideration arose on the acquisition of PC Intertechnik during
2005, this amount was settled during 2009.
12. Capital and reserves
Share capital and share premium
+----------------+------------+----------+----------------+------------+----------+----------------+
| | 5p | 5p | GBP1 | 5p | 5p | GBP1 |
| | Ordinary |Ordinary |Non-redeemable | Ordinary |Ordinary |Non-redeemable |
| | shares | shares | preference | shares | shares | preference |
| |Authorised | Issued | shares |Authorised | Issued | shares |
| | | and | | | and | |
| | | fully | | | fully | |
| | | paid up | | | paid up | |
+----------------+------------+----------+----------------+------------+----------+----------------+
| | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
| | | | | | | |
+----------------+------------+----------+----------------+------------+----------+----------------+
| At 1 January | 5,449 | 4,325 | 42 | 5,449 | 4,323 | 45 |
+----------------+------------+----------+----------------+------------+----------+----------------+
| Preference | - | - | - | - | - | (3) |
| shares | | | | | | |
| redeemed | | | | | | |
+----------------+------------+----------+----------------+------------+----------+----------------+
| Issued under | - | 5 | - | - | 2 | - |
| employee share | | | | | | |
| schemes | _____ | _____ | _____ | _____ | _____ | _____ |
+----------------+------------+----------+----------------+------------+----------+----------------+
| At 31 December | 5,449 | 4,330 | 42 | 5,449 | 4,325 | 42 |
+----------------+------------+----------+----------------+------------+----------+----------------+
| | ===== | ===== | ===== | ===== | ===== | ===== |
+----------------+------------+----------+----------------+------------+----------+----------------+
| | | | | | | |
+----------------+------------+----------+----------------+------------+----------+----------------+
| Number of | 108,990 | 86,613 | | 108,990 | 86,510 | |
| shares (000) | ===== | ===== | | ===== | ===== | |
+----------------+------------+----------+----------------+------------+----------+----------------+
The ordinary shareholders are entitled to receive dividends as declared and are
entitled to vote at meetings of the Company.
The Group issued 12,246 Ordinary shares during the year under the Share option
scheme (2008: 18,835) at prices between 285p and 387p (2008: 285p and 387p). The
Group issued 90,615 (2008: 21,951) under the Sharesave plan at prices between
320p and 592p (2008: 462p).
The Group received proceeds of GBP372,000 (2008: GBP149,000) in respect of the
102,861 (2008: 40,786) Ordinary shares issued during the year: GBP5,000 (2008:
GBP2,000) was credited to share capital and GBP367,000 (2008: GBP147,000) to
share premium.
The preference shareholders take priority over the ordinary shareholders when
there is a distribution upon winding up the Company or on a reduction of equity
involving a return of capital. The holders of preference shares are entitled to
vote at a general meeting of the Company if a preference dividend is in arrears
for six months or the business of the meeting includes the consideration of a
resolution for winding up the Company or the alteration of the preference
shareholders' rights.
Within the retained earnings reserve are own shares held. The investment in own
shares represents 363,196 (2008: 413,302) ordinary shares of the Company held in
trust for the benefit of directors and employees for future payments under the
Share Incentive Plan and Long-term incentive plan. The dividends on these shares
have been waived.
The translation reserve comprises all foreign exchange differences arising from
the translation of the financial statements of foreign operations.
Capital redemption reserve
The capital redemption reserve arises when the Company redeems shares wholly out
of distributable profits.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change
in the fair value of cash flow hedging instruments that are determined to be an
effective hedge.
Dividends
The following dividends were paid in the year per qualifying ordinary share:
+---------------------------------------------------+---------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| 16.75p final dividend (2008: 14.0p) | 14,470 | 12,075 |
+---------------------------------------------------+---------+--------+
| 11.15p interim dividend (2008: 9.25p) | 9,632 | 7,979 |
+---------------------------------------------------+---------+--------+
| 2008 additional interim dividend 11.5p | - | 9,916 |
| | _____ | _____ |
+---------------------------------------------------+---------+--------+
| | 24,102 | 29,970 |
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
After the balance sheet date the following dividends per qualifying ordinary
share were proposed by the directors. The dividends have not been provided for
and there are no corporation tax consequences.
+---------------------------------------------------+---------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+--------+
| Final proposed dividend per qualifying ordinary | | |
| share | | |
+---------------------------------------------------+---------+--------+
| 17.25p | 14,943 | |
| | ===== | |
+---------------------------------------------------+---------+--------+
| 16.75p | | 14,490 |
| | | ===== |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Additional interim dividend per qualifying | | |
| ordinary share proposed for 2010 | | |
+---------------------------------------------------+---------+--------+
| 11.5p | 9,960 | |
| | ===== | |
+---------------------------------------------------+---------+--------+
13. Earnings per share
Earnings per share is calculated for both the current and previous years using
the profit attributable to the ordinary shareholders for the year. The earnings
per share calculation is based on 86.3m shares (2008: 86.1m shares) being the
weighted average number of ordinary shares in issue (net of own ordinary shares
held) for the year.
+---------------------------------------------------+-----------------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+-----------------+--------+
| | | |
+---------------------------------------------------+-----------------+--------+
| Net profit attributable to ordinary shareholders | 64,032 | 53,420 |
| | ===== | ===== |
+---------------------------------------------------+-----------------+--------+
| | | |
| Weighted average number of ordinary shares | | |
| | | |
+---------------------------------------------------+-----------------+--------+
| Issued ordinary shares at 1 January | 86,096 | 86,024 |
+---------------------------------------------------+-----------------+--------+
| Effect of own shares held | 172 | 99 |
+---------------------------------------------------+-----------------+--------+
| Effect of shares issued under Share option | 13 | 21 |
| schemes / Sharesave plans | _____ | _____ |
+---------------------------------------------------+-----------------+--------+
| Weighted average number of ordinary shares for | 86,281 | 86,144 |
| the year ended 31 December | ===== | ===== |
+---------------------------------------------------+-----------------+--------+
| | | |
+---------------------------------------------------+-----------------+--------+
| Basic earnings per share | 74.2p | 62.0p |
+---------------------------------------------------+-----------------+--------+
Diluted earnings per share
Diluted earnings per share is based on the profit for the year attributable to
the ordinary shareholders and 86.7m shares (2008: 86.7m shares). The number of
shares is equal to the weighted average number of ordinary shares in issue (net
of own ordinary shares held) adjusted to assume conversion of all potentially
dilutive ordinary shares. The Company has three categories of potentially
dilutive ordinary shares: those share options granted to employees under the
Share option scheme and Sharesave plan where the exercise price is less than the
average market price of the Company's ordinary shares during the year and
contingently issuable shares awarded under the Long-term incentive plan.
+---------------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+---------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------+-----------+-----------+
| Net profit attributable to ordinary shareholders | 64,032 | 53,420 |
| | ===== | ===== |
+---------------------------------------------------+-----------+-----------+
| | | |
| Weighted average number of ordinary shares | | |
| (diluted) | | |
| | | |
+---------------------------------------------------+-----------+-----------+
| Weighted average number of ordinary shares for | 86,281 | 86,144 |
| the year ended 31 December | | |
+---------------------------------------------------+-----------+-----------+
| Effect of share options in issue | 11 | 17 |
+---------------------------------------------------+-----------+-----------+
| Effect of Sharesave options in issue | 68 | 116 |
+---------------------------------------------------+-----------+-----------+
| Effect of LTIP shares in issue | 327 | 416 |
| | ----_____ | ----_____ |
+---------------------------------------------------+-----------+-----------+
| Weighted average number of ordinary shares | 86,687 | 86,693 |
| (diluted) for the year ended 31 December | ===== | ===== |
+---------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------+-----------+-----------+
| Diluted earnings per share | 73.9p | 61.6p |
+---------------------------------------------------+-----------+-----------+
14. Trade and other payables
+---------------------------------------------------+---------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Trade payables | 26,031 | 32,096 |
+---------------------------------------------------+---------+--------+
| Bills of exchange | 319 | 707 |
| | ______ | ______ |
+---------------------------------------------------+---------+--------+
| Trade payables | 26,350 | 32,803 |
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Corporation tax | 9,768 | 12,197 |
| | ______ | ______ |
+---------------------------------------------------+---------+--------+
| Current tax | 9,768 | 12,197 |
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Other taxes and social security | 3,627 | 3,636 |
+---------------------------------------------------+---------+--------+
| Non-trade payables and accrued expenses | 21,063 | 23,145 |
+---------------------------------------------------+---------+--------+
| | ______ | ______ |
+---------------------------------------------------+---------+--------+
| Other payables | 24,690 | 26,781 |
+---------------------------------------------------+---------+--------+
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
15. Related parties
The Group has a related party relationship with its subsidiaries and with its
directors and key management. A list of subsidiaries is shown on pages 84 to 85
of the 2008 Rotork Annual Report and Accounts. Transactions between two
subsidiaries for the sale and purchase of products or the subsidiary and parent
for management charges are priced on an arms length basis.
Sales to subsidiaries and associates of BAE Systems p.l.c., a related party by
virtue of non-executive director IG King's directorship of that company,
totalled GBP20,000 during the year (2008: GBP32,000) and GBP19,000 was
outstanding at 31 December 2009 (2008: GBPnil).
The emoluments of those members of the management team, including directors, who
are responsible for planning, directing and controlling the activities of the
Group were:
+---------------------------------------------------+---------+--------+
| | 2009 | 2008 |
+---------------------------------------------------+---------+--------+
| | | |
+---------------------------------------------------+---------+--------+
| Emoluments including social security costs | 2,455 | 2,535 |
+---------------------------------------------------+---------+--------+
| Post employment benefits | 424 | 388 |
+---------------------------------------------------+---------+--------+
| Share-based payments | 843 | 760 |
| | _____ | _____ |
+---------------------------------------------------+---------+--------+
| | 3,722 | 3,683 |
| | ===== | ===== |
+---------------------------------------------------+---------+--------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Rotork (LSE:ROR)
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Rotork (LSE:ROR)
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から 7 2023 まで 7 2024
