Q3 Results - Part II
05 Agosto 2003 - 4:01AM
UK Regulatory
RNS Number:3229O
Enodis PLC
05 August 2003
Unaudited group profit and loss account
39 weeks to 28 June 2003 (Three Quarters)
39 weeks to 28 June 2003 39 weeks to 29 June 2002
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 4) Total items (note 4) Total
Notes (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
#m #m #m #m #m #m
Turnover
Food Equipment 482.6 - 482.6 595.2 - 595.2
Property - - - - - -
Total turnover - continuing 1, 2 482.6 - 482.6 595.2 - 595.2
operations
Operating profit/(loss) from continuing
operations before goodwill amortisation
Food Equipment 42.2 (1.9) 40.3 49.5 (8.4) 41.1
Property - (2.5) (2.5) - - -
Corporate costs (6.2) (2.8) (9.0) (6.2) (0.3) (6.5)
Continuing operations 36.0 (7.2) 28.8 43.3 (8.7) 34.6
Goodwill amortisation (10.2) - (10.2) (15.2) (48.9) (64.1)
Operating profit/(loss) 3 25.8 (7.2) 18.6 28.1 (57.6) (29.5)
Profit /(loss) on disposal of
business 4 - 2.5 2.5 - (37.3) (37.3)
Profit/(loss) on ordinary
activities before interest
and taxation 25.8 (4.7) 21.1 28.1 (94.9) (66.8)
Net interest payable and (16.4) - (16.4) (22.9) (8.4) (31.3)
similar charges
Profit/(loss) on ordinary 9.4 (4.7) 4.7 5.2 (103.3) (98.1)
activities before taxation
Tax on profit/(loss) on (3.3) - (3.3) (2.5) - (2.5)
ordinary activities
5
Profit/(loss) on ordinary 6.1 (4.7) 1.4 2.7 (103.3) (100.6)
activities after taxation
Equity minority interests - - - (0.2) - (0.2)
Retained profit/(loss) 6.1 (4.7) 1.4 2.5 (103.3) (100.8)
Earnings/(loss) per share 6 pence pence
(pence)
Basic earnings/(loss) per 0.4 (30.1)
share
Adjusted basic earnings/(loss) 4.1 5.3
per share
Diluted earnings/(loss) per 0.4 (30.1)
share
Adjusted diluted earnings/(loss) per 4.1 5.3
share
39 weeks to 39 weeks to
28 June 29 June
2003 2002
(Unaudited) (Unaudited)
Unaudited group statement of total recognised #m #m
gains and (losses)
Gain/(loss) for the period 1.4 (100.8)
Goodwill written back on disposals, previously written - 65.1
off
Currency translation differences on foreign currency net investments (3.9) (2.6)
Total recognised gains and (losses) for the period (2.5) (38.3)
Unaudited group profit and loss account
13 weeks to 28 June 2003 (Third Quarter)
13 weeks to 28 June 2003 13 weeks to 29 June 2002
Before Exceptional Before Exceptional
exceptional items exceptional items
items (note 4) Total items (note 4) Total
Notes (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
#m #m #m #m #m #m
Turnover
Food Equipment 171.1 - 171.7 199.6 - 199.6
Property - - - - - -
Total turnover 1, 2 171.7 - 171.7 199.6 - 199.6
Operating profit/(loss) from continuing
operations before goodwill amortisation
Food Equipment 18.6 (0.3) 18.3 19.1 (4.7) 14.4
Property - - - - - -
Corporate costs (2.1) (0.9) (3.0) (2.0) (0.3) (2.3)
Continuing operations 16.5 (1.2) 15.3 17.1 (5.0) 12.1
Goodwill amortisation (3.4) - (3.4) (5.1) (48.9) (54.0)
Operating profit/(loss) 3 13.1 (1.2) 11.9 12.0 (53.9) (41.9)
Profit /(loss) on disposal of - - - - (40.0) (40.0)
business
Profit/(loss) on ordinary 13.1 (1.2) 11.9 12.0 (93.9) (81.9)
activities before interest and
taxation
Net interest payable and (5.2) - (5.2) (8.0) - (8.0)
similar charges
Profit/(loss) on ordinary 7.9 (1.2) 6.7 4.0 (93.9) (89.9)
activities before taxation
Tax on profit/(loss) on (1.9) - (1.9) (1.1) - (1.1)
ordinary activities
Profit/(loss) on ordinary 6.0 (1.2) 4.8 2.9 (93.9) (91.0)
activities after taxation
Equity minority interests - - - - - -
Retained profit/(loss) 6.0 (1.2) 4.8 2.9 (93.9) (91.0)
Earnings/(loss) per share 6 pence pence
(pence)
Basic earnings/(loss) per share 1.2 (23.4)
Adjusted basic earnings/(loss) per share 2.4 2.1
Diluted earnings/(loss) per share 1.2 (23.4)
Adjusted diluted earnings/(loss) per share 2.4 2.1
Unaudited group statement of total recognised 13 weeks to 13 weeks to
gains and (losses) 28 June 29 June
2003 2002
(Unaudited) (Unaudited)
#m #m
Gain/(loss) for the period 4.8 (91.0)
Goodwill/(negative goodwill) written back on
disposals, previously written off - 54.7
Currency translation differences on foreign
currency net investments (2.8) (4.2)
Total recognised gains and (losses) for the period 2.0 (40.5)
Audited group profit and loss account
52 weeks to 28 September 2002 (Full year)
52 weeks to 28 September 2002
Before Exceptional
exceptional items
items (note 4) Total
Notes #m #m #m
Turnover
Food Equipment 777.1 - 777.1
Property 16.1 - 16.1
Total turnover 2 793.2 - 793.2
Operating profit/(loss) from continuing operations
before goodwill amortisation
Food Equipment 67.2 (8.9) 58.3
Property 8.0 - 8.0
Corporate costs (7.9) (0.5) (8.4)
67.3 (9.4) 57.9
Goodwill amortisation/impairment (19.0) (48.9) (67.9)
Operating profit/(loss) 3 48.3 (58.3) (10.0)
Profit/(loss) on disposal of businesses 4 - (38.1) (38.1)
48.3 (96.4) (48.1)
Net interest payable and similar charges (29.3) (8.4) (37.7)
Profit/(loss) on ordinary activities before taxation 19.0 (104.8) (85.8)
Tax on profit/(loss) on ordinary activities 5 (1.2) 0.2 (1.0)
Profit/(loss) on ordinary activities after taxation 17.8 (104.6) (86.8)
Equity minority interests (0.2) - (0.2)
Retained profit/(loss) 17.6 (104.6) (87.0)
Earnings/(loss) per share (pence) 6 pence
Basic earnings/(loss) per share (24.8)
Adjusted basic earnings/(loss) per share 10.4
Diluted earnings/(loss) per share (24.8)
Adjusted diluted earnings/(loss) per share 10.4
Group statement of total recognised gains and (losses) 52 weeks to
28 September
2002
#m
Gain/(loss) for the period (87.0)
Goodwill written back on disposals, previously written off 65.1
Currency translation differences on foreign currency net investments (5.7)
Total recognised gains and (losses) for the period (27.6)
Prior period adjustment 26.9
Total recognised gains and (losses) since last annual report (0.7)
Unaudited group balance sheet
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Fixed assets
Intangible assets: Goodwill 213.3 241.9 235.4
Tangible assets 80.3 89.8 88.0
Investments 5.9 5.9 5.9
299.5 337.6 329.3
Current assets
Stocks 82.7 89.1 77.7
Debtors 117.4 139.5 127.4
Deferred tax asset 23.8 26.7 25.3
Cash at bank and in hand 56.3 48.7 72.7
280.2 304.0 303.1
Creditors falling due within one year
Borrowings (40.7) (12.1) (33.4)
Other creditors (160.7) (183.7) (183.8)
(201.4) (195.8) (217.2)
Net current assets 78.8 108.2 85.9
Total assets less current liabilities 378.3 445.8 415.2
Financed by:
Creditors falling due after more than one year
Borrowings 180.9 250.1 214.1
Provisions for liabilities and charges 43.1 49.6 44.3
224.0 299.7 258.4
Capital and reserves
Called up equity share capital 200.2 200.2 200.2
Share premium account 234.2 234.2 234.2
Profit and loss account (280.1) (288.3) (277.6)
Equity shareholders' funds 154.3 146.1 156.8
378.3 445.8 415.2
Unaudited group cash flow statement
39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
Notes (Unaudited) (Unaudited)
#m #m #m
Net cash flow from operations before exceptional 35.8 48.6 100.0
items
Net cash flow effect of exceptional items (4.4) (23.3) (27.4)
Net cash inflow/(outflow) from operating
activities
(a) 31.4 25.3 72.6
Return on investments and servicing of finance
Interest paid (16.8) (20.1) (23.3)
Financing fees paid - (16.6) (18.9)
(16.8) (36.7) (42.2)
Taxation
Overseas and UK tax paid (6.0) (1.7) (3.3)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (4.9) (8.2) (9.9)
Receipts from sale of tangible fixed assets 0.5 0.8 0.9
(4.4) (7.4) (9.0)
Acquisitions and disposals
Disposal of subsidiary undertakings (1.3) 90.2 88.6
(1.3) 90.2 88.6
Cash inflow/(outflow) before financing 2.9 69.7 106.7
Financing
Issue of shares - 70.3 70.3
Net drawings/(repayment) of borrowings (20.2) (231.1) (242.5)
Issue of 10 3/8% senior subordinated notes - 100.0 100.0
Capital element of finance lease payments (0.3) - (0.5)
(20.5) (60.8) (72.7)
Increase/(decrease) in cash in the period (17.6) 8.9 34.0
Unaudited notes to the group cash flow statement
(a) Reconciliation of operating profit/(loss) to net cash inflow/(outflow)
from operating activities
39 weeks to 28 June 2003 39 weeks to 29 June 2002
Before Effect of Before Effect of
exceptional exceptional exceptional exceptional
items items Total items items Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
#m #m #m #m #m #m
Operating profit/(loss) 25.8 (7.2) 18.6 28.1 (57.6) (29.5)
Depreciation 9.2 - 9.2 12.6 - 12.6
Amortisation /impairment of goodwill 10.2 - 10.2 15.2 48.9 64.1
(Gain)/Loss on sale of fixed assets - - - 0.1 - 0.1
Provisions (net) (2.2) 2.3 0.1 (0.4) (1.0) (1.4)
(Increase)/decrease in stock (5.0) - (5.0) (3.6) 5.5 1.9
(Increase)/decrease in debtors 9.3 - 9.3 16.9 - 16.9
Increase/(decrease) in creditors (11.5) 0.5 (11.0) (20.3) (19.1) (39.4)
Net cash inflow/(outflow) from
operating activities 35.8 (4.4) 31.4 48.6 (23.3) 25.3
52 weeks to 28 September 2002
Before Effect of
exceptional exceptional
items items Total
#m #m #m
Operating profit/(loss) 48.3 (58.3) (10.0)
Depreciation 15.7 - 15.7
Amortisation/impairment of goodwill 19.0 48.9 67.9
Provisions (net) (2.2) (5.6) (7.8)
(Increase)/decrease in stock 5.5 5.9 11.4
(Increase)/decrease in debtors 19.7 - 19.7
Increase/(decrease) in creditors (6.0) (18.3) (24.3)
Net cash inflow/(outflow) from operating activities 100.0 (27.4) 72.6
(b) Reconciliation of net cash flow to movement in net debt
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Net debt at the start of period (186.1) (365.9) (365.9)
Increase/(decrease) in net cash in the period (17.6) 8.9 34.0
Borrowings repaid - 400.4 400.4
Issue of 10 3/8% senior subordinated notes - (100.0) (100.0)
Net (increase)/decrease in other loans 20.2 (169.3) (157.9)
Net (increase)/decrease in finance leases 0.3 - (1.0)
Translation differences 9.2 0.2 4.3
Net debt at the end of the period (174.0) (225.7) (186.1)
(c) Reconciliation of net debt to balance sheet
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Cash at bank and in hand 56.3 48.7 72.7
Short term borrowing (40.7) (12.1) (33.4)
Long term borrowing (180.9) (250.1) (214.1)
(165.3) (213.5) (174.8)
Exclude deferred financing costs (8.7) (12.2) (11.3)
(174.0) (225.7) (186.1)
Notes to the unaudited financial statements
1. Basis of Preparation
The accompanying condensed financial statements ("quarterly financial
statements ") have been prepared in accordance with accounting principles
generally accepted in the United Kingdom ("U.K. GAAP"). The quarterly financial
statements are unaudited but include all adjustments (consisting of normal
recurring adjustments) which the Group's management considers necessary for a
fair presentation of the financial position of the Group as of such dates and
the operating results and cash flows for those periods. Certain information and
footnote disclosures normally included in statutory financial statements
prepared in accordance with U.K. GAAP have been condensed or omitted. The
results of operations for the 39 weeks ended 28 June 2003 may not necessarily be
indicative of the operating results that may be achieved for the entire
financial year.
The quarterly financial statements have been prepared on the basis of the
accounting policies set out in the Group's financial statements for the year
ended 28 September 2002.
U.K. GAAP differs in certain significant respects from accounting principles
generally accepted in the United States of America ("U.S. GAAP"). The
application of U.S. GAAP on the retained profit/(loss) is summarised in Note 9
to the quarterly financial statements.
These quarterly financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Group's latest annual
report.
The accounts in this statement do not comprise full accounts within the meaning
of section 240 of the Companies Act 1985. The figures for the 52 weeks to 28
September 2002 are based upon the 2002 Annual Report but do not comprise
statutory accounts for that period. The audited financial statements for the 52
weeks to 28 September 2002 have been delivered to the Registrar of Companies.
The Auditors made an unqualified report on those accounts and their report did
not contain any statement under section 237 (2) or (3) of the Companies Act
1985. The figures for the 39 week period to 28 June 2003 and 29 June 2002 have
been extracted from underlying accounting records and have not been audited.
Freight and shipping revenues have previously either been booked against the
original freight costs or reflected as part of turnover. As of 29 September
2002, we have chosen to adopt a consistent treatment of these revenues as part
of turnover. All comparative disclosures have been reclassified in this
respect. The impact on turnover is:
Period As previously reported Reclassified
#m #m
13 weeks ended 29 June 2002 197.3 199.6
39 weeks ended 29 June 2002 587.3 595.2
52 weeks ended 28 September 2002 783.2 793.2
The reclassification did not have any impact on gross profit or operating profit
for any period.
2. Turnover
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
28 June 29 June 28 June 29 June 28
2003 2002 2003 2002 September
(Unaudited) (Unaudited) (Unaudited) (Unaudited) 2002
#m #m #m #m #m
Food Service Equipment - North America 299.4 356.3 103.1 125.9 474.1
Food Service Equipment - Europe/Asia 104.7 109.9 38.8 36.7 145.0
Global Food Service Equipment 404.1 466.2 141.9 162.6 619.1
Food Retail Equipment 78.5 129.0 29.8 37.0 158.0
Food Equipment 482.6 595.2 171.7 199.6 777.1
Property - - - - 16.1
482.6 595.2 171.7 199.6 793.2
3. Operating profit/(loss)
39 weeks to 28 June 2003 39 weeks to 29 June 2002
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
#m #m #m #m #m #m
Food Service Equipment - 33.4 (1.7) 31.7 42.2 - 42.2
North America
Food Service Equipment - 6.9 (0.2) 6.7 7.0 (2.5) 4.5
Europe/Asia
Global Food Service 40.3 (1.9) 38.4 49.2 (2.5) 46.7
Equipment
Food Retail Equipment 1.9 - 1.9 0.3 (5.9) (5.6)
42.2 (1.9) 40.3 49.5 (8.4) 41.1
Food Equipment (10.2) - (10.2) (15.2) (48.9) (64.1)
goodwill amortisation
Food Equipment 32.0 (1.9) 30.1 34.3 (57.3) (23.0)
Property - (2.5) (2.5) - - -
Corporate costs (6.2) (2.8) (9.0) (6.2) (0.3) (6.5)
25.8 (7.2) 18.6 28.1 (57.6) (29.5)
13 weeks to 28 June 2003 13 weeks to 29 June 2002
Before Before
exceptional Exceptional exceptional Exceptional
items items Total items items Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
#m #m #m #m #m #m
Food Service Equipment 13.3 (0.3) 13.0 17.6 - 17.6
- North America
Food Service Equipment 3.3 - 3.3 2.7 (0.8) 1.9
- Europe/Asia
Global Food Service 16.6 (0.3) 16.3 20.3 (0.8) 19.5
Equipment
Food Retail Equipment 2.0 - 2.0 (1.2) (3.9) (5.1)
18.6 (0.3) 18.3 19.1 (4.7) 14.4
Food Equipment (3.4) - (3.4) (5.1) (48.9) (54.0)
goodwill amortisation
Food Equipment 15.2 (0.3) 14.9 14.0 (53.6) (39.6)
Property - - - - - -
Corporate costs (2.1) (0.9) (3.0) (2.0) (0.3) (2.3)
13.1 (1.2) 11.9 12.0 (53.9) (41.9)
52 weeks to 28 September 2002
Before
exceptional Exceptional
items items Total
#m #m #m
Food Service Equipment - North America 60.8 0.2 61.0
Food Service Equipment - Europe/Asia 9.7 (2.5) 7.2
Global Food Service Equipment 70.5 (2.3) 68.2
Food Retail Equipment (3.3) (6.6) (9.9)
67.2 (8.9) 58.3
Food Equipment goodwill amortisation/impairment (19.0) (48.9) (67.9)
Food Equipment 48.2 (57.8) (9.6)
Property 8.0 - 8.0
Corporate costs (7.9) (0.5) (8.4)
48.3 (58.3) (10.0)
4. Exceptional items
(a) Operating exceptional items 39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Restructuring costs, cost reduction measures and
inventory write downs
3.0 8.7 9.4
Vacant leasehold provisions 2.5 - -
Legal fee accruals 1.7 - -
7.2 8.7 9.4
Goodwill impairment - 48.9 48.9
Operating exceptional items 7.2 57.6 58.3
On 8 April 2003, the Group announced a restructuring and cost reduction
programme including salaried headcount reduction and the relocation of the CEO's
office to Tampa, Florida. The total cost of these actions is expected to be
approximately #4.6m and #3.0m has been recognised in the accounts year to date.
In addition, as a result of a slowdown in the property market, #2.5m has been
recognised in respect of vacant leasehold properties.
The Group has reassessed its accruals for legal costs for defending the claims
in the Consolidated Industries litigation following an adverse summary judgement
on some of the claims totalling $8.6m. The Group believes that the adverse
decision is incorrect, and intends to appeal the decision. The Group's view of
the outcome of the Consolidated litigation remains unchanged.
Restructuring costs in the 39 weeks to 29 June 2002 and the 52 weeks to 28
September 2002 principally represent costs associated with the closure of excess
operating capacity in our Food Retail Equipment Group. This includes the write
down of inventory at Kysor Warren reflecting the decline in the business and
employee termination costs that resulted from a headcount reduction of 30.
There was also further rationalisation of administration functions and
simplification of management structures in the European businesses within the
Global Food Service Equipment Group.
Following downturns in the US economy, in particular in the retail markets, it
was necessary to reassess the carrying value of goodwill in respect of the
Scotsman acquisition during 2001 and 2002. In accordance with the methodology
presented in FRS11 "Impairment of Fixed Assets and Goodwill", which requires
consideration of the net present value of estimated future cash flows, the fair
value was reassessed and compared to the carrying value of net assets, including
the carrying value of the goodwill. In 2001, an impairment of #100m was booked.
In 2002, due to the poor performance of Kysor Warren, the carrying value of
goodwill was written down by a further #48.9m.
(b) Disposal of businesses 39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Profit/(loss) on disposals 2.5 (37.3) (38.1)
In February 2003, the Group paid #1.3m to release it from the majority of the
warranties and indemnities that were given at the time of the disposal of one of
its subsidiaries. As a result, associated accruals of #2.5m have been credited
to the profit and loss account in the 39 weeks ended 28 June 2003.
During the 52 weeks to 28 September 2002, the Group disposed of Sammic SA,
Belshaw Bros Inc, Austral Refrigeration Pty Ltd, Aladdin Temp-Rite and Prolon
LLC. The Group realised a loss on these disposals of #41.4m after writing off
goodwill of #65.1m previously charged against reserves.
In December 2001, #2.1m was paid to Nobia AB in respect of the value of net
assets transferred following the sale of the Building and Consumer Products
business in June 2001. As part of the disposal proceeds the Group had received
a #20.0m vendor loan note and share warrants. In June 2002, Nobia AB's shares
were listed on the Stockholm Stock Exchange and the Group received #24.4m being
#20.0m for the vendor loan note, #0.4m compensation for early repayment of the
note and #4.0m for the sale of the shares arising from the exercise of the
warrants. After writing off deferred finance fees arising from the early
repayment of debt and other associated costs, the net profit on disposal was
#3.3m.
The net cash consideration, after expenses, of all the above disposals has been
used to repay debt.
(c) Net interest payable and similar charges 39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Deferred financing fees written off - 4.2 4.2
Refinancing fees - 4.2 4.2
- 8.4 8.4
Deferred finance fees written off of #4.2m in the 39 weeks to 29 June 2002 and
the 52 weeks to 28 September 2002 related to amounts previously capitalised in
respect of the multi-currency revolving credit facility that was replaced by the
refinancing announced on 20 February 2002.
Refinancing fees represent amounts paid to banks in relation to the termination
of our previous multi-currency revolving credit facility and costs associated
with the bridging facility under the Group's new arrangements.
5. Taxation
(a) Analysis of charge in period 39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
(Unaudited)Q (Unaudited)
#m #m #m
The tax charge for the current period comprised:
UK taxation at 30% (2002:30%) - - -
Foreign taxation - current year 3.3 3.1 5.8
- prior year - - (3.8)
3.3 3.1 2.0
Tax relief on exceptional items - deferred taxation - - (0.2)
3.3 3.1 1.8
Deferred taxation - (0.6) (0.8)
3.3 2.5 1.0
(b) The Group tax rate benefits from the effect of tax losses brought forward. A current tax charge arises
principally because of profits arising in overseas countries where there are no available losses.
6. Earnings/(loss) per share
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
28 June 29 June 28 June 29 June 28
2003 2002 2003 2002 September
(Unaudited) (Unaudited) (Unaudited) (Unaudited) 2002
#m #m #m #m #m
Basic and diluted loss attributable to 1.4 (100.8) 4.8 (91.0) (87.0)
shareholders
m m m m m
Basic and diluted weighted average number of 399.2 334.9 399.2 389.2 351.0
shares
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
28 June 29 June 28 June 29 June 28
2003 2002 2003 2002 September
(Unaudited) (Unaudited) (Unaudited) (Unaudited) 2002
pence pence pence pence pence
Basic Profit/(loss) per share 0.4 (30.1) 1.2 (23.4) (24.8)
Effect per share of exceptional items 1.2 16.2 0.3 11.6 15.9
Effect per share of goodwill amortisation and
impairment 2.5 19.2 0.9 13.9 19.3
Adjusted basic earnings per share 4.1 5.3 2.4 2.1 10.4
Diluted Profit/(loss) per share 0.4 (30.1) 1.2 (23.4) (24.8)
Effect per share of exceptional items 1.2 16.2 0.3 11.6 15.9
Effect per share of goodwill amortisation and
impairment 2.5 19.2 0.9 13.9 19.3
Adjusted diluted earnings per share 4.1 5.3 2.4 2.1 10.4
Adjusted earnings per share before exceptional items (note 4) and goodwill
amortisation are disclosed to reflect the underlying performance of the Group.
7. Contingencies
In February 2003, a Group company received a letter from a third party alleging
a breach of contract claim in the amount of #6.9m which was revised to #4.0m on
31 July 2003. The company is still in the early stages of investigating whether
the claim has any validity.
8. Foreign currency translation
The results of subsidiary companies reporting in currencies other than Pounds
Sterling, principally US dollars, have been translated at the following rates:
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
28 June 29 June 28 June 29 June 28
2003 2002 2003 2002 September
(Unaudited) (Unaudited) (Unaudited) (Unaudited) 2002
Average exchange Rate #1= US$ 1.60 1.45 1.62 1.47 1.47
Closing exchange Rate #1 =US$ 1.65 1.52 1.65 1.52 1.55
9. Supplementary information for US Investors
Reconciliation to generally accepted accounting principles in the United States
of America
The quarterly financial statements have been prepared in accordance with UK
GAAP, which differs in certain significant respects from US GAAP. The following
is a summary of the adjustments to operating profit/(loss) and net profit/(loss)
for the period required when reconciling such amounts recorded in the
consolidated financial statements to the corresponding amounts in accordance
with US GAAP, considering the differences between UK GAAP and US GAAP.
39 weeks to 39 weeks to 52 weeks to
28 June 29 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Retained profit/(loss) in accordance with UK GAAP 1.4 (100.8) (87.0)
Items increasing/(decreasing) UK GAAP operating profit/
(loss)(*):
- Goodwill amortisation 10.2 (11.1) (13.5)
- Pension costs (1.5) 0.9 (2.5)
- Sale/leaseback transactions - - 0.1
- Share option plans - - 1.1
- Restructuring charges - (0.4) (0.4)
- Derivative instruments 0.1 (3.7) (4.0)
- Other - (0.5) (0.7)
- Loss contingency - - 2.4
Items increasing/(decreasing) UK GAAP other non-operating profit/(loss):
- Deferred taxation (2.6) (6.3) (16.5)
- Capitalised interest 0.3 - -
- Gain on sale of businesses - 18.0 18.0
Net profit/(loss) in accordance with US GAAP 7.9 (103.9) (103.0)
Net profit/(loss) in accordance with US GAAP is represented by:
Net profit/(loss) from continuing operations 5.4 (103.9) (103.0)
Gain on sale of discontinued operations 2.5 - -
Net profit/(loss) in accordance with US GAAP 7.9 (103.9) (103.0)
(*) All adjustments exclude the effect of taxes, with all tax related
adjustments included within the deferred taxation line item.
Description of differences
A discussion of the material variations in the accounting principles, practices
and methods used in preparing the audited consolidated financial statements in
accordance with UK GAAP from the principles, practices and methods generally
accepted in the US is provided in the annual report as of 28 September 2002.
There are no new material variations between UK GAAP and US GAAP accounting
principles, practices and methods used in preparing the unaudited consolidated
interim financial statements other than those discussed below.
9. Supplementary information for US investors
Adoption of new accounting standards
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and other
Intangible Assets". SFAS 142 is effective for fiscal years beginning after 15
December 2001 for all goodwill and other intangible assets recognised in an
entity's statement of financial position at that date, regardless of when those
assets were initially recognised. SFAS 142 requires, among other things, the
discontinuance of goodwill amortisation and an annual test for impairment. In
addition, the standard includes provisions for the reclassification of certain
existing recognised intangibles as goodwill, reassessment of the useful lives of
existing recognised intangibles, reclassification of certain intangibles out of
previously reported goodwill and the identification of reporting units for
purposes of assessing potential future impairments of goodwill.
With respect to goodwill amortisation, the Group adopted SFAS No. 142, effective
29 September 2002.
A reconciliation of previously reported net profit/(loss) and earning/(loss) per
share to the amounts adjusted for the exclusion of the amortisation of goodwill
under US GAAP is as follows:
39 weeks to 39 weeks to 52 weeks to
28 June 28 June 28 September
2003 2002 2002
(Unaudited) (Unaudited)
#m #m #m
Reported net profit/(loss) in accordance with US GAAP 7.9 (103.9) (103.0)
Add: Goodwill amortisation - 26.3 32.5
Adjusted net profit/(loss) in accordance with US GAAP 7.9 (77.6) (70.5)
Basic and diluted profit/(loss) per share in accordance with
US GAAP 2.0p (31.0)p (29.3)p
Add: Goodwill amortisation - 7.8p 9.2p
Adjusted basic and diluted profit/(loss) per share in
accordance with US GAAP 2.0p (23.2)p (20.1)p
At 28 June 2003 the Group had goodwill of #391.0m under US GAAP. The Group is
undertaking the second step of its goodwill impairment test in its Food
Equipment Segments, which will be completed by 27 September 2003. If impairment
arises, the Group will record such impairment as a cumulative effect of
accounting change effective 29 September 2002. The cumulative effect of
accounting change recorded could be material to the consolidated results of
operations and financial position under US GAAP.
Other unaudited financial information
(i) Reconciliation of like-for-like information in the 39 weeks to 28 June
2003 (Three Quarters)
39 weeks to 39 weeks to Effect of Like-for-like Like-for-like
28 June 29 June Effect of Foreign Q3 YTD
2003 2002 Disposals Exchange 2002
a) Turnover #m #m #m #m #m %
Food Service Equipment 299.4 356.3 (25.0) (29.8) 301.5 (1%)
- North America
Food Service Equipment 104.7 109.9 (8.0) 4.7 106.6 (2%)
- Europe/Asia
Global Food Service Equipment 404.1 466.2 (33.0) (25.1) 408.1 (1%)
Food Retail Equipment 78.5 129.0 (27.0) (10.0) 92.0 (15%)
Food Equipment 482.6 595.2 (60.0) (35.1) 500.1 (3%)
b) Operating profit before exceptional items, goodwill amortisation and corporate costs
Food Service Equipment
- North America 33.4 42.2 (1.7) (3.6) 36.9 (9%)
Food Service Equipment
- Europe/Asia 6.9 7.0 (0.5) 0.6 7.1 (3%)
Global Food Service Equipment 40.3 49.2 (2.2) (3.0) 44.0 (8%)
Food Retail Equipment 1.9 0.3 (2.2) 0.3 (1.6) n/m
Food Equipment 42.2 49.5 (4.4) (2.7) 42.4 (0%)
(ii) Reconciliation of like-for-like information for the 13 weeks to 28 June
2003 (Third quarter)
13 weeks to 13 weeks to Effect of Like-for-like Like-for-like
28 June 29 June Effect of Foreign Q3
2003 2002 Disposals Exchange 2002
a) Turnover #m #m #m #m #m %
Food Service Equipment
- North America 103.1 125.9 (3.9) (10.6) 111.4 (7%)
Food Service Equipment
- Europe/Asia 38.8 36.7 (0.6) 2.5 38.6 1%
Global Food Service Equipment 141.9 162.6 (4.5) (8.1) 150.0 (5%)
Food Retail Equipment 29.8 37.0 (2.7) (3.3) 31.0 (4%)
Food Equipment 171.7 199.6 (7.2) (11.4) 181.0 (5%)
b) Operating profit before exceptional items, goodwill amortisation and corporate costs
Food Service Equipment
- North America 13.3 17.6 (0.1) (1.5) 16.0 (17%)
Food Service Equipment
- Europe/Asia 3.3 2.7 - 0.3 3.0 10%
Global Food Service Equipment 16.6 20.3 (0.1) (1.2) 19.0 (13%)
Food Retail Equipment 2.0 (1.2) (0.1) 0.2 (1.1) n/m
Food Equipment 18.6 19.1 (0.2) (1.0) 17.9 4%
(iii)Reconciliation of non-UK GAAP measures
Adjusted Group profit/(loss) before tax
39 weeks to 39 weeks to 13 weeks to 13 weeks to
28 June 29 June 28 June 28 June
2003 2002 2003 2002
#m #m #m #m
Profit/(loss) before tax 4.7 (98.1) 6.7 (89.9)
Add back:
Goodwill amortisation 10.2 15.2 3.4 5.1
Exceptional items 4.7 103.3 1.2 93.9
Adjusted Group profit/(loss) before tax 19.6 20.4 11.3 9.1
This information is provided by RNS
The company news service from the London Stock Exchange
END
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