RNS Number:0735Z
Renishaw PLC
25 July 2002
Renishaw plc
24th July 2002
Renishaw plc and subsidiary undertakings
Preliminary announcement of results for the year ended 30th June 2002
PROFIT AND LOSS ACCOUNT 2002 2001
£'000 £'000
Turnover 104,490 125,348
Cost of Sales 56,273 60,416
Gross Profit 48,217 64,932
Distribution Costs 21,524 22,321
Administration Costs 13,245 14,668
Operating Profit 13,448 27,943
Interest receivable less payable 1,974 2,252
Other finance income 640 600
Profit on ordinary activities before taxation 16,062 30,795
Taxation 880 6,082
Profit for the financial year 15,182 24,713
Dividends 11,573 11,020
Retained Profit for the financial year 3,609 13,693
Earnings per share (basic and diluted) 20.9p 34.0p
Dividend per share 15.90p 15.14p
BALANCE SHEET 2002 2001
£'000 £'000
Fixed Assets 49,088 46,075
Current Assets:
Stock 22,076 22,130
Debtors 27,206 30,634
Cash (net) 35,656 39,295
Creditors due within one year (18,176) (25,540)
Net current assets 66,762 66,519
Provisions for liabilities and charges (3,035) (2,952)
Pension liability (5,130) (320)
Net assets, equal to shareholders' funds 107,685 109,322
CASH FLOW STATEMENT 2002 2001
£'000 £'000
Net cash inflow from operating activities 18,291 24,471
Interest received (net) 2,113 2,180
Tax paid (5,195) (6,407)
Capital Expenditure:
Purchase of tangible fixed assets (8,962) (10,544)
Sale of tangible fixed assets 427 83
(8,535) (10,461)
Dividends paid (11,195) (10,038)
Decrease in cash before exchange rate changes (4,521) (255)
Analysis of changes in cash at bank during the year:
Decrease in cash before exchange rate changes (4,521) (255)
Effect of foreign exchange rate changes 882 (117)
(3,639) (372)
Net cash at bank at 1st July 2001 39,295 39,667
Net cash at bank at 30th June 2002 35,656 39,295
TURNOVER ANALYSIS BY COUNTRY 2002 2001 2002 at 2001
£'000 £'000 exchange rates
£'000
USA 31,041 41,812 31,071
Germany 16,642 19,054 16,409
Japan 11,956 17,208 13,041
Far East (excluding Japan) 10,207 9,432 10,217
Italy 8,310 9,017 8,258
France 4,719 5,030 4,614
Other Overseas Countries 11,894 11,580 12,078
Total overseas turnover 94,769 113,133 95,688
UK 9,721 12,215 9,721
Total Group Turnover 104,490 125,348 105,409
NOTES:
1. The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 30th June 2002 or 30th
June 2001, but is derived from those financial statements. Statutory
financial statements for 2001 have been delivered to the Registrar of
companies, whereas those for 2002 will be delivered following the Company's
annual general meeting. The auditors have reported on those financial
statements; their reports were unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
2. The proposed final dividend of 10.82p per share for the year ended 30th June
2002 will be paid on 21st October 2002 to shareholders on the register on
20th September 2002.
The Chairman's statement to be included in the 2002 Annual report and financial
statements:
Trading Results
The world economic downturn and consequent subdued demand for the Company's
products have affected the Group throughout the year.
After deducting £1.4m in respect of the early retirement and voluntary
redundancy programme, operating profit for the year ended 30 June 2002 was
£13.4m compared with £27.9m for 2001. Profit before tax amounted to £16.1m (2001
£30.8m) and profit after tax £15.2m, with the benefit in particular of released
prior year provisions, giving earnings per share of 20.9p (2001 34p).
After a 4% increase in sales in the second half compared to the first half,
turnover for the year amounted to £104.5m (2001 £125.3m). At constant exchange
rates, turnover would have been £0.9m higher than reported. There was, however,
a profit of £4.0m (2001 £1.3m) arising from the Company's continuing policy of
hedging certain expected foreign currency income streams by way of forward
currency contracts.
Although turnover increased in local currency terms in several markets, eg, the
Far East countries (excluding Japan), South America and Switzerland, overall
turnover was particularly affected by reductions in the UK, Japan, Germany and
the USA, our principal market. All product divisions experienced a reduction in
their sales compared with the previous year.
Manufacturing
We have continued to invest in new technology and machinery to improve quality
even further, reduce lead-times and create efficiencies in our manufacturing
operations. Our machine shop at New Mills and the Woodchester site have
benefited from new investment, with a number of machines purchased and new
kitting stations and carousels implemented on our automated milling, turning and
inspection centres to improve productivity. The refurbishment to the Woodchester
site continues and we expect to transfer much of our UK production activities to
Woodchester during the current financial year.
Marketing
Investment has continued in our worldwide marketing activities. During the year,
offices have been established in Hungary and Austria. Furthermore, new
subsidiaries have been established in the Czech Republic and Poland and a new
company has just been registered in Russia.
A refreshed Renishaw website was successfully launched in September 2001 and is
attracting in excess of 30,000 unique visitors every month. We have also
introduced 6 new foreign language Renishaw websites - Chinese, German, Czech,
French, Italian and Spanish - and more are planned.
The Group exhibited at over 80 trade shows during the year throughout the world.
Research and development
Our commitment to a high level of investment in research and development to
remain at the leading edge of our technologies has been maintained during the
year, with a total investment of £19.4m, including associated engineering costs,
compared with £18.4m in 2001, an increase of 5%. Each of our 7 product divisions
has introduced new products during the year, which have been well received by
their markets. New products include the SP25M compact versatile scanning probe,
the SP80, a high-activity fixed scanning probe, the Triclone, a tripod-based
machine initially targeted at the dental scanning market and the RESR, a highly
accurate one-piece rotary encoder system.
Capital expenditure
Capital expenditure during the year amounted to £8.9m and has included the
completion and occupation of the new offices in Switzerland and Germany and the
acquisition of our new offices in the Czech Republic. Additional investment has
been incurred at our Woodchester site in preparation for the further transfer of
production from New Mills. Continued implementation of the group financial,
distribution and CADCAM hardware and software has also taken place during the
year.
Awards
Early in April, we were honoured with the Gauge and Tool Makers Association
"World Class Award 2002" in the Metrology category.
Later in April, we were proud to receive three awards at the prestigious
International Machine Tool Industry Awards presentation. Two awards were for
product excellence (for our ultra compact inspection probe, OMP40 and our
non-contact tool setting system, NC1) and the third was a special award, the
Metalworking Production Grand Prix Award, for being the overall event winner.
In June, we received the ImechE Award for Product Innovation for the third
consecutive year. This award is one of the Manufacturing for Excellence Awards
organised by the Institution of Mechanical Engineers and is recognised as the
premier awards scheme for manufacturing in the UK.
Personnel
The Board is pleased to announce the appointment to the Board of Geoffrey
McFarland with effect from today. Geoffrey has been with the Company for 8 years
and has been the Director of Group Engineering for the last 12 months, prior to
which he was the Director and General Manager of our CMM product division. He
will submit himself for election at the forthcoming annual general meeting.
In an extremely difficult year, the pressures on our worldwide staff have been
considerable. I am therefore especially pleased to record here the Board's
appreciation of their continuing enthusiasm, dedication and commitment.
Investor in People
Renishaw was one of the first companies to achieve the Investor in People (IIP)
standard, which provides a national framework for recognising organisations that
have committed to training and employee development. We were delighted to learn
recently that we had successfully passed our third IIP re-assessment (previous
re-assessments having taken place in 1995 and 1998).
Pension fund
There has been much public discussion of pension schemes and associated
accounting standards. After very careful consideration, your Board has confirmed
the continuation of the Company's Defined Benefit Scheme with an increased
employee contribution rate from 4% to 6% of salary to maintain the current 1/
60th accrual rate. However, for those employees who wish to continue the 4%
contribution, the accrual rate changes to 1/80th salary. The Company's
contribution rate has been increased from 10.5% to approximately 15% of employee
salaries. The Company has continued the incorporation of FRS 17, the pensions
accounting standard, as was first done last year.
Prospects and dividend
In view of the severity of the downturn, particularly in world manufacturing,
the results for the year demonstrate the resilience and strengths of Renishaw,
its diverse range of products, worldwide representation and strong balance
sheet. I am pleased, moreover, to note that the Company has been able to sustain
its product development programmes during these difficult conditions.
For growth to return, we must wait for recovery in manufacturing and the
principal industries we serve, such as aerospace, telecommunications,
engineering and semi-conductor. In the longer term, your Board continues to have
every confidence in the Group's prospects and in resuming strong growth and
progress.
Reflecting the Group's strong financial position, your Board proposes a final
dividend of 10.82p per share, giving a total for the year of 15.9p, an increase
of 5% over that for 2001.
Sir D R McMurtry, CBE, RDI, CEng, FIMechE, FREng
Chairman & Chief Executive
24th July 2002
Enquiries: B R Taylor 020 7568 4753 (today only)
A C G Roberts 020 7568 4753 (today only)
Registered office: New Mills, Wotton-under-Edge, Gloucestershire. GL12 8JR
Telephone: 01453 524524
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