RNS Number:6468P
Rotork PLC
03 August 2005
3 August 2005
Rotork p.l.c
INTERIM ANNOUNCEMENT
Continued growth in turnover, operating profit and order book
FINANCIAL HIGHLIGHTS
* Turnover increased by 17% to #78.3m (2004: #66.8m)
* Profit from operations increased by 17% to #16.2m (2004: #13.9m)
* EPS 12.7p up 14% (2004: 11.1p)
* Order intake 23% higher than first half of 2004
* Record order book up 29% since June 2004 excluding
impact of PCI acquisition
* Interim dividend of 5.9p up 10% (2004: 5.35p)
* Interim Report and all comparative figures prepared under IFRS
Chief Executive, Bill Whiteley, commenting on the results said:
"2005 has started well and we are pleased to report further strong growth in
each of our divisions. Our worldwide markets were generally favourable with a
continued increase in projects requiring valve automation. The increase was
broadly based with all three divisions increasing order intake and with most of
our geographic and end user markets performing well.
"We are confident of meeting our growth expectations for the year."
For further information, please contact:
Rotork p.l.c. Tel: 01225 733200
Bill Whiteley, Chief Executive
Bob Slater, Finance Director
Financial Dynamics Tel: 020 7269 7224
Sally Lewis
REVIEW OF OPERATIONS
Financial Results
We are pleased to report strong growth in all of our divisions. Turnover
increased by 17% in a period little affected by exchange rate movements. Profit
from operations increased by 17% compared with the 2004 results which have been
restated under International Financial Reporting Standards. Order intake once
again exceeded sales output leading to a new record order book level.
Operating Review
Our worldwide markets were generally favourable with a continued increase in
projects requiring valve automation. The order input increase of over 23% was
slightly flattered by two substantial orders being received towards the end of
the second quarter. The increase was, however, broadly based with each of the
three divisions increasing order intake and with most of our geographic and end
user markets performing well. The largest increases came from the Asia and Far
East region with order intake from China, India and Singapore being particularly
strong. This was supported by good input in North America, RFS in Italy and the
various UK activities. The order book, excluding acquisitions, at the end of
the period was 29% up on the same period last year and 37% up on the end of last
year. Although the impact of currencies was broadly neutral for the comparative
period the order book benefited from the stronger dollar on 30th June 2005.
Electric Actuators
Electric actuator input value was up 22% on the prior year. Most operations
benefited from increased activity albeit in some of these cases the increase in
business was due to projects outside of their territories being placed through
local OEM customers. The power market was particularly active and represented
33% of the input units in the period, up from 23% in the corresponding period.
The main markets for these actuators are China and India which continued to show
impressive growth. However we also had important contract wins in the Middle
East/Africa region and the UK which further boosted this figure. Units ordered
by the oil & gas sector increased by 15% with substantial increases again being
seen in Asia and the Far East although as a percentage of total input it fell
from 37% to 34%. We benefited from an increasing number of Chinese pipeline,
tank farm and refinery projects in addition to a number of large contracts
elsewhere in the region. Actuators being sold into the water market represented
25% of our total units with good levels of business in South East Asia and the
U.S.
Both the IQT and AWT ranges sold well above expectations in the period and had a
positive impact on our ability to win major projects.
Operating profit increased by over 19% in a period where, for once, there was a
broadly neutral currency impact. Profits from the Bath plant were up as we
continued to achieve increased output levels. The service & retrofit
businesses, based in Bath and Leeds, were also very active. In Europe, good
profit increases were achieved in Italy, Germany and Spain. The U.S. continued
to see an impressive increase in its sales and profits as did nearly all of our
Asian and Far Eastern operations. Material costs were kept under good control
although some increases, due to high raw material and energy costs, came through
into our component prices. Actions aimed at strengthening our supply chain were
also responsible for some modest cost increases but a number of initiatives
being worked upon at the moment will mean that savings in component costs should
be re-established next year.
Rotork Fluid System
We continued to achieve rapid growth in this business with total order intake
rising 41%. On a like for like basis, excluding PCI which was purchased during
the first half of the year, order intake was up 29%. In addition to the
continued growth of this business through our international network of sales
companies, a number of large contracts were won by the Italian and U.S.
operations. Due to the timing of these projects the order book climbed by 63%
excluding PCI. The upstream oil and gas, transmission markets and projects
connected with LNG production and shipments remain active. This means that we
are confident that there will be good progress for the year as a whole in spite
of the modest first half performance, when the return on sales was negatively
impacted by losses in the U.S. and Canada. These operations were profitable in
2004 and are forecasting profits for the year as a whole.
The acquisition of PCI in March has helped to add new high pressure products and
new markets to this division. This business, which is based in Northern
Germany, was purchased in March for Euro9.8m including deferred consideration.
During our period of ownership it has contributed #2.1m of output with a net to
sales return of 13% before adjustments for IFRS intangible amortisation.
Rotork Gears
Gears' input grew at 6% despite some weaknesses within its business. The order
book, which tends to be shorter within this division due to the nature and
application of its products, grew by 32%. During the half year sales output
grew by 12% and operating profits by a particularly strong 23% due to good
performances at both the Leeds and Losser plants, which have focussed on their
costs of materials and operational efficiency.
Dividend
The interim dividend is to be increased by 10% to 5.9p, and will be payable on
27 September to all shareholders on the register at 2 September 2005.
Outlook
Many of our important geographic and end user markets remain active with
continuing high levels of investment being planned. However we may not benefit
from specific large project orders to the same extent as in the first half of
the year. The output comparisons are flattered by a somewhat production
constrained first half of 2004. Further production increases are anticipated in
the second half, which are supported by the order book at the end of June. This
makes us confident of meeting our growth expectations for the year.
BILL WHITELEY
Chief Executive
2 August 2005
Consolidated Income Statement
Unaudited
First half First half Full year
2005 2004 2004
Notes #000 #000 #000
Revenue 2 78,324 66,829 146,883
Profit from operations 2 16,224 13,871 30,432
Financial income 3 2,169 2,206 4,766
Financial expenses 3 (2,116) (1,829) (3,692)
Profit before tax 16,277 14,248 31,506
Tax expense (5,372) (4,581) (10,508)
Profit for the period 10,905 9,667 20,998
pence pence pence
Basic earnings per share 4 12.7 11.1 24.5
Diluted earnings per share 4 12.6 11.0 24.3
Consolidated Statement of Recognised Income and Expense
Unaudited First half First half Full year
2005 2004 2004
#000 #000 #000
Foreign exchange translation differences 890 (1,792) (1,212)
Cash flow hedges: effective portion of changes (210) - -
in fair value
Actuarial loss in pension scheme - - (5,792)
Movement on deferred tax relating to actuarial - - 237
loss
Net gain / (loss) recognised directly in 680 (1,792) (6,767)
equity
Profit for the period 10,905 9,667 20,998
Total recognised income and expense for the 11,585 7,875 14,231
period
Consolidated Balance Sheet
Unaudited 30 June 30 June 31 Dec
2005 2004 2004
#000 #000 #000
Property, plant and equipment 17,644 14,091 13,877
Intangible assets 21,536 19,955 20,169
Deferred tax assets 5,905 6,500 6,988
Other receivables 231 493 489
Total non-current assets 45,316 41,039 41,523
Inventories 26,310 20,929 21,015
Trade receivables 31,094 27,566 34,060
Income tax receivable 2,147 1,194 2,176
Other receivables 3,887 3,485 2,525
Cash and cash equivalents 20,502 18,794 25,298
Total current assets 83,940 71,968 85,074
Total assets 129,256 113,007 126,597
Issued capital 4,308 4,297 4,300
Preference shares - 47 47
Share premium 5,498 4,871 4,993
Reserves 1,299 (155) 425
Retained earnings 61,299 57,098 58,489
Total equity 72,404 66,158 68,254
Interest bearing loans and borrowings 1,415 163 268
Employee benefits 22,023 17,985 23,569
Deferred tax liabilities 989 740 1,155
Provisions 531 427 521
Total non-current liabilities 24,958 19,315 25,513
Bank overdraft 268 - 473
Interest bearing loans and borrowings 197 61 253
Trade payables 13,909 12,623 15,609
Income tax payable 7,062 6,280 5,779
Other payables 9,396 7,715 9,674
Provisions 1,062 855 1,042
Total current liabilities 31,894 27,534 32,830
Total liabilities 56,852 46,849 58,343
Total equity and liabilities 129,256 113,007 126,597
Consolidated Statement of Cash Flows
Unaudited First half First half Full year
2005 2004 2004
#000 #000 #000
Profit from operations 16,224 13,871 30,432
Amortisation of intangibles 169 47 70
Amortisation of development costs 146 161 322
Depreciation 1,357 1,181 2,577
Charge for share schemes 134 76 208
Loss / (profit) on sale of fixed assets 42 - (72)
18,072 15,336 33,537
Increase in inventories (3,680) (2,615) (2,600)
Decrease / (increase) in trade and other receivables 4,225 (815) (6,228)
(Decrease) / increase in trade and other payables (1,551) 220 4,130
Decrease in provisions (16) (443) (130)
Difference between pension charge and cash contribution (753) (5,243) (5,633)
(Decrease) / increase in other employee benefits (794) (191) 748
Income taxes paid (3,933) (3,609) (10,441)
Cash flows from operating activities 11,570 2,640 13,383
Purchase of tangible fixed assets (738) (1,903) (3,099)
Development costs capitalised (120) (51) (102)
Proceeds from sale of tangible fixed assets 11 35 295
Acquisition of subsidiary net of cash acquired (7,256) (784) (912)
Interest received 285 674 973
Cash flows from investing activities (7,818) (2,029) (2,845)
Issue of ordinary share capital 513 333 458
Purchase of ordinary share capital (913) (691) (691)
Purchase of own preference shares - (5) (5)
Interest paid (75) (16) (136)
Repayment of amounts borrowed (319) (33) 188
Repayment of finance lease liabilities (53) (34) (58)
New borrowings 1,503 - -
Dividends on ordinary shares (8,342) (13,157) (17,751)
Dividends on preference shares - (2) (4)
Cash flows from financing activities (7,686) (13,605) (17,999)
Net decrease in cash and cash equivalents (3,934) (12,994) (7,461)
Cash and cash equivalents at 1 January 24,825 32,134 32,134
Effect of exchange rate fluctuations on cash held (657) (346) 152
Cash and cash equivalents at end of period 20,234 18,794 24,825
Notes to the Interim Report
1. Status of Interim Report and accounting policies
The interim report was approved by the Directors on 2 August 2005. It should be
read in conjunction with the 2004 audited IFRS restated accounts announced on 21
June 2005, which contain the accounting policies adopted under IFRS and a
reconciliation of the 2004 income statement and opening and closing balance
sheets from UK GAAP to IFRS.
The financial information for the six months to 30 June 2005 and the comparative
figures for the six months to 30 June 2004 are unaudited and have been prepared
on the basis of the accounting policies set out in the Group's audited IFRS
restated accounts announced on 21 June 2005 for the year ended 31 December 2004.
A reconciliation of the adjustments made to the June 2004 income statement and
balance sheet is shown in note 6.
The directors have assumed that the December 2004 amendment to IAS 19 - Employee
Benefits and the 2005 amendments to IAS 39 will be adopted by the EU in
sufficient time that they will be available for use in the IFRS financial
statements for the year ending 31 December 2005. In addition, the adopted IFRSs
that will be effective (or available for early adoption) in the financial
statements are still subject to change and to additional interpretations and
therefore cannot be determined with certainty. Accordingly the accounting
policies for the year ended 31 December 2005 will be determined finally only
when the financial statements for that year are prepared.
As permitted by IFRS 1, the following standards: IFRS 5 - Non-current Assets
Held for Sale and Discontinued Operations, IAS 32 - Financial Instruments:
Disclosure and Presentation and IAS 39 - Financial Instruments: Recognition and
Measurement have not been applied until 1 January 2005 and accordingly no
adjustment has been made to the 30 June 2004 or 31 December 2004 numbers.
The comparative figures for the financial year ended 31 December 2004 are not
the Company's statutory accounts for that financial year. Those accounts, which
were prepared under UK GAAP, have been reported on by the Company's auditors and
delivered to the registrar of companies. The report of the auditors was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985. The IFRS financial information for the year ended 31
December 2004 is an abridged version of the accounts for that year which
received an unqualified report from the auditors prior to their release on 21
June 2005.
2. Segmental reporting
First half First half Full year First half First half Full year
2005 2004 2004 2005 2004 2004
#000 #000 #000 #000 #000 #000
Revenue Profit from operations
Analysis by operation
Electrics 58,243 50,574 109,345 14,554 12,179 26,054
Gears 9,339 8,334 17,806 1,857 1,507 3,203
Fluid system 13,267 9,976 23,802 784 967 3,016
Unallocated costs - - - (971) (782) (1,841)
Inter-segmental elimination (2,525) (2,055) (4,070) - - -
78,324 66,829 146,883 16,224 13,871 30,432
Segment assets Segment liabilities
Electrics 59,942 55,842 58,083 37,684 33,510 43,081
Gears 13,025 14,024 12,997 2,681 3,126 3,901
Fluid system 27,741 16,653 21,054 6,556 2,969 3,433
Unallocated 28,548 26,488 34,463 9,931 7,244 7,928
129,256 113,007 126,597 56,852 46,849 58,343
Revenue from external customers by location of customer
First half First half Full year
2005 2004 2004
#000 #000 #000
Europe 33,761 29,630 66,036
Americas 22,544 19,877 41,704
Rest of world 22,019 17,322 39,143
78,324 66,829 146,883
Segment assets by location of assets
First half First half Full year
2005 2004 2004
#000 #000 #000
Europe 63,024 52,983 58,494
Americas 23,608 21,513 20,139
Rest of world 14,076 12,023 13,501
Unallocated 28,548 26,488 34,463
129,256 113,007 126,597
3. Financial income / expenses
First half First half Full year
2005 2004 2004
#000 #000 #000
Interest income 309 464 849
Expected return on assets in the pension schemes 1,828 1,738 3,477
Foreign exchange gain 32 4 440
2,169 2,206 4,766
Interest expense (80) (33) (136)
Interest charge on pension scheme liabilities (1,965) (1,778) (3,556)
Foreign exchange loss (71) (18) -
(2,116) (1,829) (3,692)
4. Earnings per share
Earnings per share is calculated using the profit attributable to the ordinary
shareholders for the period and 86.0 million shares (six months to 30 June 2004:
85.7 million; year to 31 December 2004: 85.8 million) being the weighted average
ordinary shares in issue.
Diluted earnings per share is calculated using the profit attributable to the
ordinary shareholders for the period and the weighted average ordinary shares in
issue adjusted to assume conversion of all dilutive potential ordinary shares
under the Group's option schemes and Long-Term Incentive Plan.
5. Reconciliation of movements in equity
Share Preference Share Translation Hedging Capital Retained Total
shares premium reserve reserve redemption earnings
Capital reserve
Equity at 1 January 4,300 47 4,993 (1,212) - 1,637 58,489 68,254
2005
Reclassification of - (47) - - - - - (47)
preference share
capital as debt
under IAS32
Hedging reserve at - - - - 194 - - 194
1 January 2005 on
implementation of
IAS39
Restated equity at 4,300 - 4,993 (1,212) 194 1,637 58,489 68,401
1 January 2005
Profit for the - - - - - - 10,905 10,905
period
Other items in the - - - 890 (210) - - 680
statement of
recognised income
and expense
Equity settled - - - - - - 11 11
transactions net of
tax
Share options 8 - 505 - - - - 513
exercised by
employees
Own ordinary shares - - - - - - (913) (913)
acquired
Own ordinary shares - - - - - - 1,149 1,149
awarded under share
schemes
Dividends to - - - - - - (8,342) (8,342)
shareholders
Equity at 30 June 4,308 - 5,498 (322) (16) 1,637 61,299 72,404
2005
Share Preference Share Translation Hedging Capital Retained Total
Capital shares premium reserve reserve redemption earnings
reserve
Equity at 1 January 4,292 50 4,543 - - 1,634 60,567 71,086
2004
Profit for the - - - - - - 9,667 9,667
period
Other items in the - - - (1,792) - - - (1,792)
statement of
recognised income
and expense
Equity settled - - - - - - 17 17
transactions net of
tax
Share options 5 - 328 - - - - 333
exercised by
employees
Own ordinary shares - - - - - - (691) (691)
acquired
Own ordinary shares - - - - - - 702 702
awarded under share
schemes
Own preference - (3) - - - 3 (5) (5)
shares acquired
Preference share - - - - - - (2) (2)
dividends
Dividends to - - - - - - (13,157) (13,157)
shareholders
Equity at 30 June 4,297 47 4,871 (1,792) - 1,637 57,098 66,158
2004
Share Preference Share Translation Hedging Capital Retained Total
Capital shares premium reserve reserve redemption earnings
reserve
Equity at 1 January 4,292 50 4,543 - - 1,634 60,567 71,086
2004
Profit for the - - - - - - 20,998 20,998
period
Other items in the - - - (1,212) - - (5,555) (6,767)
statement of
recognised income
and expense
Equity settled - - - - - - 228 228
transactions net of
tax
Share options 8 - 450 - - - - 458
exercised by
employees
Own ordinary shares - - - - - - (691) (691)
acquired
Own ordinary shares - - - - - - 702 702
awarded under share
schemes
Own preference - (3) - - - 3 (5) (5)
shares acquired
Preference share - - - - - - (4) (4)
dividends
Dividends to - - - - - - (17,751) (17,751)
shareholders
Equity at 31 4,300 47 4,993 (1,212) - 1,637 58,489 68,254
December 2004
6. Explanation of transition to IFRS
An explanation of the impact of the transition to IFRS on the December 2004
financial statements was included in the audited 2004 accounts restated under
IFRS announced on 21 June 2005. This note identifies the impact of restatement
on the income statement for the six months to June 2004 and the balance sheet at
30 June 2004.
Balance sheets 1 January 2004 30 June 2004
Notes Previous Effect of IFRS Previous Effect of IFRS
GAAP transition to GAAP transition to
IFRS IFRS
Assets
Property, plant and 13,640 - 13,640 14,091 - 14,091
equipment
Intangible assets a, c 19,057 992 20,049 18,484 1,471 19,955
Deferred tax assets b - 6,605 6,605 - 6,500 6,500
Other receivables 486 - 486 493 - 493
_______ _______ _______ _______ _______ _______
Total non-current assets 33,183 7,597 40,780 33,068 7,971 41,039
Inventories 18,570 - 18,570 20,929 - 20,929
Trade receivables 28,973 - 28,973 27,566 - 27,566
Income tax receivable 1,226 - 1,226 - 1,194 1,194
Other receivables b, e 2,767 (954) 1,813 9,453 (5,968) 3,485
Cash and cash equivalents 32,253 - 32,253 18,794 - 18,794
_______ _______ _______ _______ _______ _______
Total current assets 83,789 (954) 82,835 76,742 (4,774) 71,968
_______ _______ _______ _______ _______ _______
Total assets 116,972 6,643 123,615 109,810 3,197 113,007
======= ======= ======= ======= ======= =======
Equity
Issued capital 4,292 - 4,292 4,297 - 4,297
Preference shares 50 - 50 47 - 47
Share premium 4,543 - 4,543 4,871 - 4,871
Reserves d 4,039 (2,405) 1,634 4,042 (4,197) (155)
Retained earnings 49,569 10,998 60,567 47,393 9,705 57,098
_______ _______ _______ _______ _______ _______
Total equity 62,493 8,593 71,086 60,650 5,508 66,158
_______ _______ _______ _______ _______ _______
Liabilities
Interest bearing loans 129 - 129 163 - 163
and borrowings
Employee benefits e 13,653 9,113 22,766 13,511 4,474 17,985
Deferred tax liabilities f 128 665 793 108 632 740
Provisions e 1,612 (1,037) 575 1,618 (1,191) 427
_______ _______ _______ _______ _______ _______
Total non-current 15,522 8,741 24,263 15,400 3,915 19,315
liabilities
Bank overdraft 119 - 119 - - -
Interest bearing loans 118 - 118 61 - 61
and borrowings
Trade payables 12,460 - 12,460 12,623 - 12,623
Income tax payable 5,020 - 5,020 5,086 1,194 6,280
Other payables e , g 20,090 (10,691) 9,399 15,135 (7,420) 7,715
Provisions 1,150 - 1,150 855 - 855
_______ _______ _______ _______ _______ _______
Total current liabilities 38,957 (10,691) 28,266 33,760 (6,226) 27,534
Total liabilities 54,479 (1,950) 52,529 49,160 (2,311) 46,849
_______ _______ _______ _______ _______ _______
Total equity and 116,972 6,643 123,615 109,810 3,197 113,007
liabilities
======= ======= ======= ======= ======= =======
Notes to the explanation of transition to IFRS
Following completion of an actuarial valuation of the main defined benefit
pension scheme in the second half of 2004, the Board decided that the accounting
requirements of FRS17 should be adopted for the 2004 financial statements. This
was reflected as a prior year adjustment in the 2004 accounts. In the 2004
accounts restated under IFRS announced on 21 June 2005 the adjustments arising
from adopting FRS17 were included in the UK GAAP numbers for both 1 January and
31 December 2004. To ensure consistency the UK GAAP numbers for 30 June 2004
have also been restated from those announced last year to reflect FRS17, the
impact of this prior year adjustment is:
First half Full year
2004 2004
#000 #000
Increase in profit from operations 243 633
Increase in financial expenses (39) (79)
Increase in tax expense (61) (137)
Increase in retained profit 143 417
Increase in employee benefits (13,510) (13,885)
a) Intangible assets
No amortisation of goodwill is charged to the income statement in the period
under IFRS. Under UK GAAP #636,000 was charged during the period so this has
been reversed.
Development costs of #992,000 at 1 January 2004 and #882,000 at 30 June 2004
that qualified for recognition as an intangible asset under IFRSs had not been
recognised under UK GAAP. They are recognised under IFRS at the date of
transition and at 30 June 2004 respectively. During the first half of 2004
#161,000 of development expenditure was amortised and #51,000 of costs expensed
under UK GAAP were capitalised.
Total adjustments to intangibles are made up as follows:
1 January 2004 30 June
2004
Reverse goodwill amortised through the income statement - 636
Capitalised development costs 992 882
Amortised intangible assets - (47)
992 1,471
b) Deferred tax assets
Under UK GAAP the defined benefit pension scheme liability was reflected in the
financial statements net of deferred taxation. On transition to IFRS this has
been shown in the accounts as a deferred tax asset. The deferred tax asset on
accumulated actuarial gains and losses at 1 January 2004 was #5,850,000, the tax
credit in the period was #62,000 resulting in an asset of #5,788,000 at 30 June
2004. Deferred tax assets which were shown within debtors have been transferred
to non-current assets and deferred tax has been provided on the share based
payments and the amortisation of intangibles:
1 January 2004 Movement 30 June
2004
Deferred tax asset
Previously in employee benefits under UK GAAP 5,850 (62) 5,788
Previously in other receivables under UK GAAP 954 14 968
Amortisation of intangibles - 14 14
Share based payments 155 (71) 84
Set off of tax (354) - (354)
_____ _____ _____
Total 6,605 (105) 6,500
===== ===== =====
c) Acquisition of subsidiary
The acquisition of Deanquip Valve Automation in January 2004 has been restated
under IFRS3. As a consequence of applying IFRS3 the acquisition has been
re-examined with a view to identifying specific intangibles. As a result
intangibles previously treated as goodwill and amortised over 20 years are now
being held on the balance sheet and are amortised over their estimated useful
lives. The intangible assets identified and the charge to the accounts in 2004
in respect of these intangibles is as follows:
Intangible at Amortisation
acquisition charge in 2004
Company name 31 10
Customer relationships 233 8
Order backlog at acquisition 25 25
Agency agreements 60 6
Currency adjustment - (2)
_____ _____
349 47
Goodwill 322 -
_____ _____
671 47
===== =====
The intangible amortisation for the period has been charged partly in cost of
sales (#37,000) and partly in administration expenses (#10,000).
d) Reserves
A number of reserves are required under IFRS which were not recorded under UK
GAAP. The breakdown of this movement at 30 June 2004 is as follows:
UK GAAP Adjustment IFRS
Capital redemption reserve 1,637 - 1,637
Revaluation reserve 2,405 (2,405) -
Translation reserve - (1,792) (1,792)
_____ _____ _____
Total 4,042 (4,197) (155)
===== ===== =====
The revaluation reserve is eliminated under IFRS as on first time adoption the
value at which the assets are held is deemed to be cost.
The translation reserve historically under UK GAAP has been included in the
retained earnings reserve.
e) Employee benefits
Rotork adopted FRS17 for the 2004 year end under UK GAAP. Liabilities under the
Group defined benefit pension schemes were shown on the face of the balance
sheet but were stated net of the associated deferred tax asset. Under IFRS the
deferred tax has been transferred to non-current assets (see note b) and the
pension liability shown gross under employee liabilities. At 1 January 2004 the
gross liability was #19,503,000 and at 30 June 2004, #19,299,000.
Under IFRS certain liabilities have been reclassified as employee benefits from
payables and provisions. These are:
1 January 2004 Movement 30 June
2004
UK GAAP employee benefit (defined benefit 13,653 (142) 13,511
pension scheme deficit net of deferred tax)
Transfer to deferred tax assets (see note b) 5,850 (62) 5,788
Transfer from other receivables - pension - (5,000) (5,000)
lump sum contribution
Transfer from provisions 1,037 154 1,191
Transfer from other payables - non share 1,447 9 1,456
based payment accruals
Transfer from other payables - share based 1,102 375 1,477
payment accruals
Adjustment of share based payments to IFRS (323) (115) (438)
______ ______ ______
Total 22,766 (4,781) 17,985
====== ====== ======
f) Deferred taxation liabilities
Under UK GAAP certain properties had been revalued. This revaluation was shown
within reserves as a separate reserve but under IFRS this has been consolidated
into retained earnings. On transition, following IFRS1 the past revaluations
have been adopted as deemed cost. As a consequence deferred tax of #722,000 has
been provided on the balance at 1 January and 30 June 2004. In addition, the
capitalisation of development costs has led a reduction in the historic charge
to the income statement and requires the creation of a deferred tax liability.
The liability at 1 January 2004 was #297,000 reducing by #33,000 during the year
to #264,000 at 30 June 2004.
1 January 2004 Movement 30 June
2004
Deferred tax liability
UK GAAP deferred tax liabilities 128 (20) 108
Revaluation reserve tax liability 722 - 722
Capitalised development costs liability 297 (33) 264
Set off of tax (354) - (354)
_____ _____ _____
Total 793 (53) 740
===== ===== =====
g) Other payables
Under UK GAAP dividends are accounted for once proposed but IFRS only reports
dividends as a charge to the accounts once paid. Reversal of the proposed
dividend has reduced other payables by #4,487,000. Together with the #2,933,000
transfer in respect of UK GAAP employee benefits noted above this accounts for
the #7,420,000 reduction in other payables.
Income statement Notes Previous Effect of IFRS
GAAP transition
to IFRS
Revenue 66,829 - 66,829
Profit from operations a, c, h, j 13,346 525 13,871
Net financial income j 390 (13) 377
_______ _______ _______
Profit before tax 13,736 512 14,248
Tax expense i (4,616) 35 (4,581)
_______ _______ _______
Net profit for the year 9,120 547 9,667
======= ======= =======
Basic earnings per share 10.5p 0.6p 11.1p
Diluted earnings per share 10.4p 0.6p 11.0p
h) Employee share schemes
The Group applied IFRS2 to its active share based payment arrangements at 1
January 2004 except for those granted before 7 November 2002 and not vested by
date of transition or 1 January 2005. The effect of accounting for equity
settled share based payment transactions at fair value is to increase profit
from operations by #33,000. The increase in profit reflects the reversal of
provisions made under UK GAAP for the Long-Term Incentive Plan offsetting the
charges for the option and Save As You Earn schemes.
i) Tax expense
The income tax charge in the income statement has changed as a result by the tax
effect of some of the UK GAAP to IFRS adjustments. The analysis of the net
change is:
Amortisation of intangibles (see note b) 14
Capitalised development costs (see note f) 33
Cash settled share based payments 13
Equity settled share based payments (25)
_____
35
=====
j) Exchange gains and losses
Under UK GAAP exchange gains and losses were reported in operating profit.
Under IFRS any gains and losses resulting from retranslation of currency
deposits are shown in net financial income which has resulted in profit from
operations being increased by #13,000 and net financial income being reduced by
the same amount.
7. Shareholder information
This interim report is being sent to all shareholders and copies are available
to the public from the Registered Office at the address below. The interim
report is also available on the company's website at www.rotork.com.
We offer shareholders a dividend reinvestment plan (DRIP) under which
shareholders can reinvest their cash dividends in the company, by buying shares
in the market at competitive dealing rates. If you have already elected to join
the DRIP, there is no further action for you to take.
If you would like to join for the first time, please contact our registrars
below.
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Share dividend helpline number - 0870 241 3018
8. Group information
Secretary and registered office:
Stephen Rhys Jones
Rotork plc
Rotork House
Brassmill Lane
Bath BA1 3JQ
Company website:
www.rotork.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QLLFBEVBLBBK
Rotork (LSE:ROR)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Rotork (LSE:ROR)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024
