RNS Number:1508J
Raymarine PLC
01 March 2005
1 March 2005
RAYMARINE
Preliminary Results 2004
(For the year ended 31 December 2004)
RAYMARINE MEETS IPO EXPECTATIONS AND IS STRONGLY POSITIONED FOR GROWTH
Raymarine plc, a world leader in the design and supply of marine electronics for
the leisure marine market, today announces its maiden results since its
flotation on the Official List on 6 December 2004.
Highlights
* Successful flotation at 152p per share
* Turnover at #106.3m up 14%; (20% in constant currency)
* Gross profit margin increased to 29.9% from 25.7%
* Operating profit* up 63% at #17.5m
* Adjusted EPS** at 14.0p ahead of flotation forecast of 13.2p
* Net debt at year end #44.3m
* New borrowing facilities of $135m committed for 5 years
* Current trading and outlook in line with our expectations
*After foreign exchange and before goodwill and exceptional items
**Adjusted diluted pro-forma earnings per share
Malcolm Miller, Chief Executive Officer of Raymarine plc commented:
"The year 2004 has been a very significant one in the development of Raymarine.
We are delighted by the successful outcome of the flotation and are pleased to
be presenting results today that both meet the expectations set at the time of
the float and which represent considerable growth in Raymarine's sales and
profits. Current year trading has started in line with our expectations and we
remain enthusiastic about Raymarine's future prospects."
For further information please contact:
Raymarine
Malcolm Miller, Chief Executive Officer, 02392 693 611 ext. 1311
Tony Osbaldiston, Finance Director, 02392 693 611 ext. 1311
Citigate Dewe Rogerson
Ginny Pulbrook, Director, 0207 282 2945
Financial Highlights
Actual Actual Forecast Actual
Pro forma 2 Pro forma 2
2004 2004 2004 2003
Turnover (#m) 106.3 93.6
Gross profit (#m) 31.8 25.7
Gross margin 29.9% 27.5%
EBITA (#m) 1 17.4 17.4 17.2 10.7
Margin 1 16.4% 11.4%
Earnings per share
Adjusted 1 basic (p) 11.6 15.4 4.5
Adjusted 1 diluted (p) 10.5 14.0 13.2 4.2
Basic (p) (1.7) 0.4
Diluted 3 (p) (1.7) 0.4
1 Earnings after foreign exchange, before interest, tax and amortisation
2 The pro forma figures are intended to illustrate the effect of the refinancing
on 6 December 2004 as if it had taken place on 1 January 2004.
3 In accordance with FRS 14 the diluted basic loss per share is stated at the
same amount as basic as there is no dilutive effect.
Chairman's Statement
The group will remain firmly focused on the marine market for the longer term.
We will maintain our commitment to extending our market leadership by continuing
to develop truly innovative products.
I am pleased to report a year of excellent results across all areas of the
business. The profits forecast contained in the flotation prospectus has been
achieved. Sales grew by 13.6% to #106.3 million and profits before exceptional
items, interest and taxation but after foreign exchange (EBITA) grew by 62% to
#17.4 million. Gross margins increased to 29.9% from 27.5%. The group is in a
strong financial position. Despite substantially increasing our manufacturing
capacity during the year, sustaining a greatly increased level of investment in
new product development, and absorbing the costs of the flotation, the group
reduced its net indebtedness, to #44.3 million (2003: #46.6 million) at the year
end.
The group's debt financing which had originally been set in place in 2001 to
fund the buy out of Raymarine was repaid and new facilities put in place at the
date of the flotation. We now have a five year committed facility of US$135
million provided by a syndicate of banks led by Lloyds TSB. At 31 December 2004
our unused headroom under this facility was approximately #26 million. This will
provide the group with more than adequate resources to fund its organic growth,
take advantage of possible small acquisitions, and enable us to pay a dividend.
It is our intention to pay the maiden dividend in respect of the financial year
2005.
The flotation of Raymarine on 6 December 2004 was a landmark event in the long
and successful history of Raymarine. The Board had given careful consideration
to the future direction of the company and concluded that Raymarine's interests
would be best served through flotation on the London Stock Exchange. While this
has enabled HgCapital to realise a proportion of its investment, HgCapital
retains, along with the management, a significant shareholding in the company.
The flotation was successful at the placing price of 152p and we now have a
secure and diversified shareholder base. I am particularly pleased that as part
of the flotation all employees were given 400 shares each and so now also
participate as owners in the business.
With the flotation of Raymarine Malcolm Miller, Tony Osbaldiston, Terry Carlson
and Kieran Breheny continue in office as executive directors along with Nicholas
Turner and myself as non-executive directors. We are pleased to welcome two new
non-executive directors to the main Board. Peter Ward has been appointed deputy
chairman, senior independent non-executive director, and chairman of the
remuneration and nomination committees, while Paul Boughton joins as chairman of
the audit committee. Peter has a wealth of experience in managing consumer
businesses and brands including Rolls Royce and Cunard. Paul, a chartered
accountant, brings considerable business development and acquisition skills.
During the year, Les Duerdin and Martin McBride left Raymarine. We would like to
thank them for their valuable contributions over the last few years. Stuart
Thompson stepped down as a main Board director upon our reconstitution as a plc,
but continues to contribute to the group as sales and marketing director for the
UK and rest of the world outside the Americas.
Our new "E series" product range for mid to larger boats was successfully
launched at the London Boat Show in January 2005, complementing the "A" and "C"
series ranges launched in 2004. We have a fully committed new product
development programme for 2005 and 2006.
Our research indicates that there are many opportunities to grow the market
itself. This would involve entirely new product concepts delivering incremental
sales. In addition to our substantial research and development investment, we
will look carefully to augment sales with bolt-on acquisitions of product lines
where our marketing and distribution strengths can be leveraged.
The current year has started well and very much in line with expectations. We
believe the outlook for the remainder of the year and beyond to be promising.
Roger Thomas
Chairman
Chief Executive's Review
2004 Overview
2004 has been an important and exciting year in the development of Raymarine
plc. The Board resolved that our ambitions and prospects could best be served by
flotation of the group on the London Stock Exchange. This took place on 6
December with a placing at 152p. We now look forward to fulfilling the potential
of Raymarine on behalf of our investors. I am pleased that our first steps
towards this have been to report profits for 2004 that achieve those of the
profits forecast, which accompanied the flotation.
Raymarine's strong performance in 2004 is highlighted by the increase in both
sales and profits on the prior year (sales #106.3 million up 13.6%; EBITA #17.4
million up 62%), which resulted from the increased investment in new product
development, sales and marketing, and in our management team. Having established
this base during 2004 we are now well placed to further develop the group.
During the year our team has been significantly strengthened both on the plc
Board, where we have been joined by Tony Osbaldiston as finance director, and
Peter Ward and Paul Boughton as Non-Executive directors, and in the executive
management. We now have a good mix of enhanced skills and continuity of
management among our team and I warmly welcome all those who have joined
Raymarine during 2004.
The Raymarine brand
Raymarine has a long history of designing, developing and selling marine
electronics. The majority of our end customers are skippers, owners and charter
companies of leisure boats. These boats are typically power and sail boats of
between twenty and one hundred feet in length. Approximately one third of our
products are sold to boatyards where new boats are being built, and the
remainder goes to installing dealers, agents and individuals for supplementing
existing equipment or for a complete re-fit.
Our customers and the market in which we operate want innovative, safe and
reliable products that can operate in the harshest of conditions. They value our
comprehensive range, the products' networking and integration capabilities
together with extensive channels for supply, installation and support.
Throughout the year we undertake a number of research projects in small focus
groups and web surveys to determine how consumers value and use marine
technology, which features are important and how best we can improve ease of
use.
In the past twelve months we have started to enjoy the rewards from initiatives
that were taken over previous years; investing more heavily in design and
development, exploiting technologies across a wider range of vessels and selling
and marketing in a more pro-active, targeted manner.
Markets
Raymarine is a global leader in the leisure marine electronics market. We sell
worldwide to retailers, boat builders, dealers and distributors. Throughout 2004
all territories experienced growth largely through a combination of new
products, technologies being made available to a wider range of boat sizes and
the more widespread adoption of multifunction systems.
The Americas market, comprising Canada, North and South America is headed by
Terry Carlson. Raymarine products are sold through a well developed network
spanning many countries, although the most significant revenues are in the USA
(50% of world-wide sales). In 2004 total revenues through the Americas grew by
10%.
In North America many of the boat builders that factory fit equipment chose
Raymarine. Several of them purchase directly from us (as opposed to via local
dealers) and we support them through consultation, training and on-site
assistance. Business through this channel grew by 17% in 2004.
Retailers vary from small local stores to large national chains selling a very
wide range of marine merchandise. Our new range of A and C series products were
particularly well targeted and suited to customers of these stores. Business in
2004 almost doubled through these accounts.
Raymarine also sells in the USA through boat dealers and chandleries who install
and service our products and through several mail order catalogues. Revenue
through dealer channels was relatively flat, year on year, as they and their
customers awaited E series (the replacement for the very successful Pathfinder
range) due in 2005.
Across the rest of the world, (excluding the Americas and the UK) and in some 70
countries, we sell through an equally extensive and well established network.
This international business accounted for 39% of worldwide sales in 2004, an
increase of 22% over the previous year. In this region we use distributors, some
of whom have been selling the company's products for more than 25 years.
Particular successes were seen in France where business grew by 26%, Australia
by 53% and Norway by 61%.
In the UK, where we are headquartered, we sell in much the same way as in North
America - direct to several boat-builders, via dealers, chandleries, retailers
(although this sector isn't as well developed as in the USA) and mail order.
Revenues account for 9% of worldwide sales and over the past 12 months increased
by 5%.
Eastern Europe and the Far East remain relatively small although have the
potential to grow, particularly as we introduce a greater number of languages
into menus and self help screens.
Products and technology
We have identified that sales growth can be achieved by introducing new
integrated and networked products as well as increasing the functionality and
performance of existing products. In recent years research and development has
been stepped up but more importantly, during 2004, we benefited significantly
from a flow of well targeted designs.
For the 2004 season we launched new smart pilot course computers that use
advanced steering technology software to ensure a vessel is able to maintain a
straight course in varying sea and weather conditions. During the year we added
the A and C series range of products.
A series is a rugged stand-alone product range designed for small boats. It
comprises entry level communication devices, chartplotters and fishfinders. The
latest range of fishfinders combine state of the art colour display technology
with Raymarine's High Definition Fish Imaging for enhanced fishfinder
performance. Using digitally adaptive transmitter/receiver technology, the
fishfinders target fish and bottom structure with clarity and colour separation.
C series offers multifunction systems that combine chartplotters, fishfinders
and radar displays on a single LCD screen and aimed at small and mid-sized
boats. It can be completely customised, allowing you to page through your choice
of displays or create custom windows of any combination of inputs.
H6 was launched towards the end of the season to offer owners and skippers of
larger boats a complete entertainment, camera and crew safety system as part of
a larger fully integrated control network. With H6 the boat builder can create a
command centre at every helm station where each navigation centre is controlled
by use of a track ball, sweeping a cursor across two 15" high resolution flat
panel displays. Operating independently of the system is an entertainment
console with 12 channel Dolby 5.1 surround sound, integrated DVD/CD players and
inputs for terrestrial and satellite TV.
People
Our people are central to our achievements and above all I want to thank them
for their efforts and hard work in what has been an exciting and challenging
year. Not only did we achieve record sales and profits, we did this while
preparing for a successful Listing on the London Stock Exchange.
Many of our team have been with the company more than twenty years and
throughout have gained enormous experience in the demands and dynamics of the
marine industry. Newcomers have arrived to add expertise in product and sales
management, quality, finance and IT.
The number of permanent employees grew from an average of 549 in 2003 to an
average of 566 in 2004 reflecting not only the higher level of sales activity,
but also an increase in manpower efficiency.
Supply chain
Raymarine aims to get products to customers exactly when they are needed and
through the most efficient sources of supply.
Throughout 2004 we struggled to keep pace with demand. New products, many of
which were launched mid-season, performed better than expected and they pulled
through increased sales of component parts of the integrated network that supply
radar, GPS and depth sounder information. Consequently production shifts in our
Portsmouth facility were increased and components were expedited at higher than
planned expense to feed requirements.
Towards the end of the season we realised that if we were launching a similar
number of new products in 2005 we would need an increase in production
capability. The optimum solution in the short term was to increase the number of
production cells and purchase a new surface mount component placement line for
the Portsmouth plant.
In the mid term we are reviewing all sources of supply including those at the
electronic manufacturing services (EMS) companies we use in Mexico and Taiwan.
We are also undertaking a detailed examination of inventory levels and
logistics. Nigel Stacey, director of global supply chain, who brings with him a
wealth of experience, now heads this area. We must continue to produce 'best in
class' products at the lowest possible cost and distribute them efficiently to
all of our customers worldwide.
Future
In the past twelve months we believe that we have increased sales at a faster
rate than growth in the leisure marine electronics market. Primarily this has
been achieved by close attention to the detail of new product development,
product management, engineering, sales and marketing.
We also believe that we can expand the market by introducing new technologies,
integrating them into systems and marketing them aggressively. Examples are
wireless, engine monitoring, vessel control and entertainment.
Through all of this Raymarine will maintain leadership in a market that is
undergoing change as boat building consolidates, channels become focussed and as
the consumer needs greater control and ease of use on boats that are growing in
size and complexity.
Looking ahead we plan to continue to capitalise on all these strengths, launch a
similar number of new products in 2005 and increase efficiencies through common
architecture, software re-use, and reorganising our supply chain.
The 2005 financial year has started well with trading matching our expectations
and we remain enthusiastic about Raymarine's future prospects."
Malcolm Miller
Chief Executive Officer
Financial Review
Results
Turnover increased by 13.6% over the previous year to #106.3m, and operating
profit before goodwill, other intangibles and exceptional items increased by 52%
to #14.1m.
Set out below is a comparison of the results for the year with the forecast,
which was included in the Listing Particulars, and with the previous year.
Raymarine achieved the forecast included in the Listing Particulars. The
group's EBITA after foreign exchange gains from hedging but before exceptional
items was #17.4m (operating profit #14.1m plus foreign exchange gains #3.3m)
compared to the forecast of #17.2m in the Listing Particulars. At the operating
profit level the actual result was below the forecast by #0.1m due to the effect
of foreign exchange movements, which are beyond the group's control, on the
operating profits before the offsetting contribution from the group's currency
hedges.
Prospectus
Pro forma pro forma
Actual Forecast Actual actual2 forecast2
2004 2004 2003 2004 2004
#000 #000 #000 #000 #000
Operating profit1 14,126 14,219 9,311 14,126 14,219
Net interest payable excluding
foreign exchange
(6,378) (6,356) (6,414) (2,258) (2,176)
Foreign exchange gains 3,277 3,026 1,437 3,277 3,026
Net interest payable (3,101) (3,330) (4,977) 1,019 850
Profit before taxation1 11,025 10,889 4,334 15,145 15,069
Taxation1 (2,354) (2,948) (851) (3,590) (4,169)
Profit for the financial year1 8,671 7,941 3,483 11,555 10,900
1 Before goodwill, other intangibles and exceptional items
2The pro forma figures are intended to illustrate the effect of the refinancing
on 6 December 2004 as if it had taken place on 1 January 2004.
The profit before tax (before goodwill, other intangibles and exceptional items)
was #11.0m, #0.1m better than the forecast. On a pro forma basis, the result
was #15.1m. The pro forma tax charge was #0.6m better than the forecast
primarily because of a one-off tax credit received in December relating to group
relief that was in respect of a period prior to the transfer of the business
from Raytheon. This had not been included in the Prospectus forecast as it was
not sufficiently certain at the time.
The adjusted actual profit before tax is #6.7m better than in 2003, reflecting
the 13.6% increase in turnover, and improved gross margin to 29.9% as against
27.5% in 2003. We were also able to reduce distribution and administration
expenses as a percentage of turnover, resulting in an improvement in the
adjusted operating margin to 13.3% from 9.9%. Profit before tax was also
favourably affected by #1.8m of additional foreign exchange gains.
Reported pre tax profit was affected by exceptional items in both 2004 and 2003.
A reconciliation of the adjusted results with the reported (loss)/profit after
tax is set out below.
Actual Actual
2004 2003
#000 #000
Profit for the financial year (as above) 8,671 3,483
Tax on exceptional items 648 167
Exceptional items (8,028) (674)
Goodwill and other intangibles (2,568) (2,670)
Reported (loss)/profit after taxation (1,277) 306
Research and development
In order to maintain and develop its competitive position, it is vital that the
group continues to develop a stream of new products and product enhancements.
During 2004, the group invested #8.1m in research and development (2003: #8.6m).
Exceptional items
The costs of the Listing process and rearranging the group's loan finance
amounted to #7.3m. In addition, #0.7m of other one-off costs were incurred,
relating to a major expansion of manufacturing space involving a move to a new
head office and new IT system, and the legal costs of settling a claim in the
USA.
Interest
Net interest payable of #3.1m comprised net interest charges of #6.4m offset by
#3.3m of foreign exchange gains arising on hedging contracts maturing during the
year. Until the Listing on 6 December 2004, finance charges were up to 12% on
some of the loans. The pro forma interest charge, which illustrates the effect
of the refinancing as if it had been in place throughout the year, is #4.1m
lower at #2.3m, excluding hedging gains.
Tax
The tax charge on the profit before goodwill, other intangibles and exceptional
items was #2.4m (2003: #0.9m), giving an effective tax rate of 21% (2003: 20%).
Tax relief on the exceptional items only reduced the tax charge by #0.7m as
#5.9m was not available for tax relief.
Dividends
No dividend was paid in the year, and, as indicated in the Listing Particulars,
no dividend is proposed in respect of 2004. In future, the directors intend to
declare an interim and final dividend in respect of each financial year. The
directors expect that dividends will reflect the group's trading performance and
prospects and the Board's intention is to pay a dividend in respect of 2005.
Earnings per share
The adjusted basic EPS, before goodwill, other intangibles and exceptional
items, was 11.6p (2003: 4.5p), and on a pro forma basis was 15.4p. When diluted
for the warrants and options, the adjusted proforma EPS was 14.0p, compared with
13.2p in the Prospectus. The basic loss per share was 1.7p compared with an
earnings per share of 0.4p in 2003.
Listing and share capital changes
In November 2004, the number of shares in issue was increased from 128,582 to
77.1m by two bonus issues of 49 for 1 and 11 for 1. On 6 December 2004, 2.4m
warrants and 3.0m share options were exercised.
The company was successfully listed on the London Stock Exchange on 6 December
2004. 52.1m shares, representing 63% of the issued share capital, were placed
at a price of 152p. Also on 6 December 2004, 174,772 shares were gifted to
employees through the UK Share Incentive Plan and 51,750 through the US Share
Incentive Plan to ensure widespread employee participation in ownership of the
group.
After adjusting for the bonus issues and allowing for the own shares held by the
Employee Benefit Trust, the average number of shares in issue during the year
was 74.9m (2003: 77.1m), and the diluted average was 82.6m (2003: 83.6m). If
there are no further changes in the share capital, the average number of shares
in issue in 2005 will be 82.8m.
Capital expenditure
Capital expenditure was #4.3m, including #1.5m on tooling and test equipment for
new products. The project to expand the production facilities in Portsmouth,
including installation of a further surface mount component placement line,
incurred #1.1m of capital expenditure, and there was #1.3m capitalised in
respect of new IT systems.
Cash flow and net debt
Earnings before interest, tax, depreciation and amortisation, (before
exceptional items and after foreign exchange), was #19.7m, or 18.5% of turnover,
compared with 13.9% the previous year. The cash inflow from operating
activities was #9.5m. This was after a net working capital outflow of #1.3m due
to business growth. Net debt reduced by #2.3m to #44.3m.
Prior to the Listing, the group entered into a $135m five year revolving credit
facility. This was used to repay the existing loans and loan notes. In
addition, a #9m overdraft facility was established. At the year end, the
headroom on these facilities was #26.2m.
Financial instruments and risk management
The group does not enter into speculative financial transactions and uses
financial instruments for certain risk management purposes only.
The group's operating transactions are entered into in several different
currencies. Normally, it generates a surplus of US Dollars, and converts these
into Sterling, Euros and Japanese Yen regularly throughout the year. The group
seeks to progressively source more of its components in US Dollars to naturally
hedge this exposure. To further reduce the impact of foreign exchange movements
on operating cash flows, the group enters into forward currency transactions to
fix the translation rates for the majority of cash conversion in advance. The
group has forward currency transactions in place up to the end of the first
quarter of 2006.
With regard to net interest rate risk, the group normally reduces exposure by
using a combination of fixed and floating rate debt. It also aims to match the
currency of its borrowings with the main transaction currencies. Although all
the debt was at floating rates at the year end, it is intended to move some to
fixed rates during the coming year.
Accounting policies
There were no changes to the group's accounting policies during the year.
From 2005, the group will be required to adopt International Financial Reporting
Standards (IFRS). The adoption will be first reflected in the group's financial
statements for the half year ending 30 June 2005. The group has conducted a
review of the changes that will be required, and is currently working on the
conversion process.
Tony Osbaldiston
Finance Director
Consolidated profit and loss account
for the year ended 31 December 2004
Note Excluding Excluding
goodwill, Goodwill, goodwill, Goodwill,
other other other other
intangibles intangibles intangibles intangibles
and and and and
exceptional exceptional 2004 exceptional exceptional 2003
items items Total items items Total
#000 #000 #000 #000 #000 #000
Turnover 2 106,268 - 106,268 93,616 - 93,616
Cost of sales (74,428) - (74,428) (67,867) - (67,867)
Gross profit 31,840 - 31,840 25,749 - 25,749
Distribution costs (8,992) - (8,992) (8,223) - (8,223)
Administrative expenses
- Administrative expenses
excluding exceptional items (8,722) (2,568) (11,290) (8,215) (2,670) (10,885)
- Exceptional items 4 - (8,028) (8,028) - (674) (674)
(8,722) (10,596) (19,318) (8,215) (3,344) (11,559)
Operating profit 14,126 (10,596) 3,530 9,311 (3,344) 5,967
Net interest payable
- Net interest payable 5 (6,378) (6,414)
excluding foreign exchange
- Foreign exchange gains 3,277 1,437
(3,101) (4,977)
Profit on ordinary activities 3-5 429 990
before taxation
Tax on profit on ordinary 6 (1,706) (684)
activities
(Loss)/profit on ordinary
activities after taxation and
retained profit for the
financial year (1,277) 306
Earnings per share Adjusted 1 Basic Adjusted 1 Basic
(p) (p) (p) (p)
Basic 7 11.6 (1.7) 4.5 0.4
Diluted 2 7 10.5 (1.7) 4.2 0.4
Pro forma diluted 3 7 14.0 n/a n/a n/a
Pro forma cash diluted 3 7 16.8 n/a n/a n/a
1 Before goodwill, other intangibles and exceptional items.
2 In accordance with FRS 14 the diluted basic loss per share is stated at the
same amount as basic as there is no dilutive effect.
3 The pro forma figures are intended to illustrate the effect of the refinancing
on 6 December 2004 as if it had taken place on 1 January 2004.
All results relate to continuing activities.
No note of historical cost profits and losses is given as there are no material
differences between the results as set out in the consolidated profit and loss
account, and their historical cost equivalents.
Balance sheet
at 31 December 2004
Group Company
Note 2004 2003 2004 2003
#000 #000 #000 #000
Fixed assets
Intangible assets 8 32,989 36,621 259 297
Tangible assets 9 9,526 7,587 - -
42,515 44,208 259 297
Current assets
Stocks 10 18,979 11,030 - -
Debtors 11 15,625 13,536 11,201 3,028
Cash at bank and in hand 8,117 11,671 154 -
42,721 36,237 11,355 3,028
Creditors: amounts falling due within one year 12 (23,487) (15,340) (5,779) (763)
Net current assets 19,234 20,897 5,576 2,265
Total assets less current liabilities 61,749 65,105 5,835 2,562
Creditors: amounts falling due after more than
one year 13 (52,367) (55,241) - -
Provisions for liabilities and charges 14 (4,580) (5,239) - -
Net assets 4,802 4,625 5,835 2,562
Capital and reserves
Called up share capital 828 1 828 1
Share premium account 3,166 3,424 3,166 3,424
Other reserves - (570) - -
Profit and loss account 808 1,770 1,841 (863)
Equity shareholders' funds 4,802 4,625 5,835 2,562
These Preliminary financial statements were approved by the Board of directors
on 28 February 2005
Consolidated statement of total recognised gains and losses
for the year ended 31 December 2004
2004 2003
#000 #000
(Loss)/profit for the financial year (1,277) 306
Currency translation differences on foreign currency net investments (413) (158)
Total recognised gains and losses since the last annual report (1,690) 148
Reconciliations of movements in shareholders' funds
for the year ended 31 December 2004
Group 2004 2003
#000 #000
(Loss)/profit for the financial year (1,277) 306
New share capital subscribed 569 274
Transactions though EBT 106 (570)
Grant of options and shares below fair value 1,111 -
Other recognised gains and losses relating to the year (332) (158)
Net addition to/(reduction in) shareholders' funds 177 (148)
Opening shareholders' funds 4,625 4,773
Closing shareholders' funds 4,802 4,625
Company 2004 2003
#000 #000
Profit/(loss) for the financial year 2,382 (190)
New share capital subscribed 569 274
Grant of options and shares below fair value 1,111 -
Transactions though EBT (383) -
Other recognised gains and losses relating to the year (406) (283)
Net addition to/(reduction in) shareholders' funds 3,273 (199)
Opening shareholders' funds 2,562 2,761
Closing shareholders' funds 5,835 2,562
Consolidated cash flow statement
for the year ended 31 December 2004
Note 2004 2003
#000 #000
Cash flow from operating activities 16 9,490 14,744
Returns on investments and servicing of finance 17 (2,552) (3,765)
Taxation (1,000) (345)
Capital expenditure 17 (4,293) (3,997)
Cash inflow before financing 1,645 6,637
Financing 17 (4,292) (3,047)
(Decrease)/increase in cash in year (2,647) 3,590
Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2004
2004 2003
#000 #000
(Decrease)/increase in cash in year (2,647) 3,590
Cash outflow from increase in debt and lease 4,561 2,751
financing
Change in net debt resulting from cash flows 1,914 6,341
Rolled up interest on debt - (676)
Loan issue costs incurred 395 -
Loan issue costs amortisation (1,098) (273)
Exchange differences 1,092 1,645
Movement in net debt in year 2,303 7,037
Net debt at beginning of year (46,565) (53,602)
Net debt at end of year (44,262) (46,565)
Notes to the Preliminary financial statements
1 Report and Accounts
The financial information set out in these preliminary financial statements does
not constitute the company's statutory accounts for the years ended 31 December
2004 or 2003. The financial information for 2003 is derived from the statutory
accounts for 2003 which have been delivered to the Registrar of Companies and
those for 2004 will be delivered following the company's annual general meeting.
The auditors have reported on those accounts; their reports were unqualified
and did not contain statements under section 237(2) or (3) of the Companies Act
1985.
2 Segmental information
All turnover arose from the group's principal activity being the manufacture and
marketing of marine electronic equipment for use in the leisure boating market.
The table below sets out information for each of the group's geographic areas of
operation.
United Kingdom Americas Rest of World Total
2004 2003 2004 2003 2004 2003 2004 2003
#000 #000 #000 #000 #000 #000 #000 #000
Turnover
Turnover by destination: 4.8% +9.6% 21.6%
9,616 9,178 55,443 50,566 41,209 33,872 106,268 93,616
Sales to third parties 53,036
Turnover by origin:
Total sales 87,927 80,193 54,832 50,698 - - 142,759) 130,891
Intersegment sales (36,347) (36,518) (144) (757) - - (36,491) (37,275)
Sales to third parties 51,580 43,675 54,688 49,941 - - 106,268) 93,616
Segment profit/(loss)
before interest and taxation 2,362 8,692 1,168 (2,725) - - 3,530) 5,967
Interest (2,533) (4,231) (568) (746) - - (3,101) (4,977)
(Loss)/profit on ordinary (171) 4,461 600 (3,471) - - 429) 990
activities before taxation
Net assets 4,543 4,298 259 327 - - 4,802) 4,625
3 Profit on ordinary activities before taxation
2004 2003
#000 #000
Group
(a) Profit on ordinary activities before goodwill, other intangibles,
exceptional items and taxation is stated after charging:
Auditors' remuneration:
Audit 137 81
Fees paid to the auditors and associates in respect of other 23 -
services
Depreciation and other amounts written off tangible fixed assets:
Owned 2,281 2,239
Leased 12 13
Loss on disposal of fixed assets 73 -
Rentals payable under operating leases:
Plant and machinery 677 644
Hire of other assets 1,191 1,133
Research and development 8,140 8,580
Exchange loss on operating activities 465 29
(b) Goodwill, other intangible and exceptional items comprise:
Fees paid to the auditors and associates in respect of the Listing on the LSE 723 -
Other costs in respect of the Listing on the LSE 6,578 -
Amortisation of intangible fixed assets
Goodwill 1,803 1,806
Other intangible fixed assets 765 864
Other exceptional costs 727 674
10,596 3,344
Company
Profit on ordinary activities before taxation is stated after charging:
Auditors' remuneration:
Audit 14 7
Fees paid to the auditors and associates in respect of the Listing on 723 -
the LSE
Fees paid to the auditors and associates in respect of other services 23 -
4 Administrative expenses - exceptional items
2004 2003
#000 #000
Listing on the London Stock Exchange 7,301 -
Change of premises 157 -
New IT system 213 375
Aborted acquisition costs 9 119
Legal costs of claim 348 180
8,028 674
The exceptional costs in 2004 include costs relating to the successful flotation
on the London Stock Exchange on 6 December 2004 together with the cost of moving
to a new head office, costs relating to the on-going implementation of a new IT
system and the legal costs of settling a claim in the USA. The tax effect of the
exceptional items was a credit of #648,000 (2003: #167,000).
Included in exceptional items is #877,000 (2003: #nil) in respect of employers'
national insurance contributions due in respect of the gain made on the exercise
of share options by UK employees.
5 Net interest payable excluding foreign exchange
2004 2003
#000 #000
Interest receivable (286) (256)
Interest payable on bank loans 2,312 2,762
Interest payable on subordinated loan stock 4,352 3,908
6,378 6,414
Raymarine's debt facilities were refinanced on 6 December 2004 and replaced with
facilities under a $135,000,000 syndicated revolving credit with an initial
interest charge of 95 basis points over dollar and sterling LIBOR for dollar and
sterling drawdowns respectively. Had the terms of the new facility applied
throughout 2004 the interest charge would have been #2,258,000.
6 Taxation
2004 2003
#000 #000
UK corporation tax
UK corporation tax at 30% (2003: 30%) 1,611 329
Adjustments in respect of prior period: (319) (287)
Current tax charge for the year 1,292 42
Deferred tax
Origination and reversal of timing
differences arising in the year at 30%
(2003: 30%) 488 734
Adjustments in respect of prior period: (74) (92)
1,706 684
7 Earnings per share
The calculations of basic and diluted earnings per share (EPS) are based on the
loss on ordinary activities after taxation of #1,277,000 (2003: profit #306,000)
divided by the weighted average number of ordinary shares below:
2004 2003
Number Number
Weighted average number of shares for basic calculations 74,941,092 77,149,200
Dilutive effect of employee share options 5,423,532 4,070,400
RBS Warrants 2,217,657 2,387,400
Weighted average number of shares for diluted calculations 82,582,281 83,607,000
The adjusted basic EPS and adjusted cash EPS measures are in to demonstrate
recurring elements of the results of the group before amortisation of goodwill
and other intangibles, and exceptional items. Both the adjusted basic and cash
measures of EPS use the same weighted average number of ordinary shares as the
basic EPS measure. A reconciliation of the earnings used in these measures is
set out below.
2004 EPS 2003 EPS
#000 (p) #000 (p)
Earnings for basic EPS calculation (1,277) (1.7) 306 0.4
Exceptional items 8,028 10.7 674 0.9
Tax effect of this adjustment (648) (0.8) (167) (0.2)
Goodwill and other intangibles amortisation 2,568 3.4 2,670 3.4
Earnings for adjusted basic EPS calculation 8,671 11.6 3,483 4.5
Depreciation 2,292 3.0 2,252 2.9
Earnings for adjusted cash EPS calculation 10,963 14.6 5,735 7.4
The pro forma adjusted EPS measure is intended to illustrate the effect on the
adjusted EPS of the refinancing that took place on 6 December 2004 as if it had
taken place on 1 January 2004. It uses the same weighted average number of
ordinary shares as the adjusted EPS measure. A reconciliation of the earnings
used in the measures is set out below.
2004 EPS
#000 Basic (p) Diluted
(p)
Earnings for adjusted EPS calculation 8,671 11.6 10.5
Adjustment to the interest charge 4,120 5.5 5.0
Tax effect of this adjustment (1,236) (1.7) (1.5)
Earnings for pro forma adjusted EPS calculation 11,555 15.4 14.0
Depreciation 2,292 3.1 2.8
Earnings for pro forma adjusted cash EPS calculation 13,847 18.5 16.8
8 Intangible fixed assets
Goodwill Other Total
Group #000 #000 #000
Cost
At beginning of year 36,337 7,865 44,202
Exchange differences (802) (611) (1,413)
At end of year 35,535 7,254 42,789
Amortisation
At beginning of year 5,287 2,294 7,581
Exchange differences (131) (218) (349)
Charge for the year 1,803 765 2,568
At end of year 6,959 2,841 9,800
Net book value
At 31 December 2004 28,576 4,413 32,989
At 31 December 2003 31,050 5,571 36,621
Other intangible fixed assets includes concessions, patents, licences and
trademarks.
Company Acquisition costs
Cost #000
At beginning of year 348
Exchange differences (26)
At end of year 322
Amortisation
At beginning of year 51
Exchange differences (5)
Charge for the year 17
At end of year 63
Net book value
At 31 December 2004 259
At 31 December 2003 297
9 Tangible fixed assets
Short leasehold Fixtures, fittings,
land Plant and tools and
and buildings machinery equipment Total
Group #000 #000 #000 #000
Cost
At beginning of year 1,094 5,697 16,727 23,518
Exchange differences (9) (32) 28 (13)
Additions 534 1,260 2,499 4,293
Disposals (492) (150) (849) (1,491)
At end of year 1,127 6,775 18,405 26,307
Depreciation
At beginning of year 677 3,431 11,823 15,931
Exchange differences (7) 23 (40) (24)
Charge for the year 232 607 1,453 2,292
Disposals (490) (150) (778) (1,418)
At end of year 412 3,911 12,458 16,781
Net book value
At 31 December 2004 715 2,864 5,947 9,526
At 31 December 2003 417 2,266 4,904 7,587
Included in the total net book value of fixtures, fittings, tools and equipment
is #20,368 (2003: #34,132) in respect of assets held under finance leases.
Depreciation for the year on these assets was #11,718 (2003: #13,236).
10 Stocks
Group Group
2004 2003
#000 #000
Raw materials and consumables 5,943 1,960
Work in progress 3,941 2,649
Finished goods and goods for resale 9,095 6,421
18,979 11,030
11 Debtors
Group Group Company Company
2004 2003 2004 2003
#000 #000 #000 #000
Trade debtors 11,993 10,199 - -
Amounts owed by group undertakings - - 10,585 2,458
Employee Benefit Trust - - - 500
Corporation tax - - 614 69
Other debtors 1,401 1,206 - -
Prepayments and accrued income 1,859 1,319 2 1
Deferred tax asset 372 812 - -
15,625 13,536 11,201 3,028
The deferred tax asset is recoverable in more than one year.
12 Creditors: amounts falling due within one year
Group Group Company Company
2004 2003 2004 2003
#000 #000 #000 #000
Bank loans (note 13) - 2,980 - -
Obligations under finance leases 12 15 - -
Trade creditors 10,850 7,453 - -
Amounts owed to group undertakings - - 3,599 709
Corporation tax 1,587 840 - -
Other creditors including taxation and social
security 4,027 324 5 -
Accruals and deferred income
7,011 3,728 2,175 54
23,487 15,340 5,779 763
13 Creditors: amounts falling due after more than one year
Group 2004 2003
#000 #000
Bank loans 52,357 55,216
Obligations under finance leases 10 25
52,367 55,241
Analysis of debt:
2004 2003
#000 #000
Debt can be analysed as falling due:
In one year or less, or on demand - 2,980
Between one and two years - 3,466
Between two and five years 52,357 8,146
In five years or more - 43,604
52,357 58,196
14 Provisions for liabilities and charges
Warranty
provisions
#000
Group
At beginning of year 5,239
Exchange differences (38)
Utilised during year (3,219)
Charge for the year 2,598
At end of year 4,580
The warranty provision reflects the best estimate of future claims under product
warranties, which are given for two to three years from date of sale to the end
user.
15 Pension scheme
The group operates a defined contribution pension scheme for Raymarine UK
Limited (formerly Raymarine Limited). The pension cost charge for the year
represents contributions payable by the group to the fund and amounted to
#331,000 (2003: #319,000).
Contributions amounting to #49,000 (2003: #8) were payable to the fund at 31
December 2004 and are included in creditors.
The group leased its Raymarine Inc. employees from ADP TotalSource during the
entire year of 2003. ADP TotalSource operates a defined contribution scheme.
The pension cost charge for the year represents contributions payable by the
company to various funds and amounted to #345,000 (2003: #358,000).
Contributions amounting to #64,000 at 31 December 2004 (2003: #77,000) were
payable to the ADP TotalSource defined contribution scheme and are included in
creditors.
16 Reconciliation of operating profit to cash flow from operating
activities
2004 2003
#000 #000
Operating profit 3,530 5,967
Exchange differences 2,287 1,156
Depreciation and amortisation 4,860 4,922
Loss on disposal of fixed assets 73 -
(Increase)/decrease in stocks (8,807) 1,076
Increase in debtors (3,518) (2,643)
Increase in creditors 11,065 4,266
Net cash inflow from operating activities 9,490 14,744
17 Analysis of cash flows
2004 2003
#000 #000 #000 #000
Returns on investment and servicing of
finance
Interest received 286 256
Interest paid (6,115) (5,691)
Foreign exchange gain 3,277 1,670
(2,552) (3,765)
Capital expenditure
Purchase of tangible fixed assets (4,293) (3,998)
Sale of plant and machinery - 1
(4,293) (3,997)
Financing
Issue of ordinary share capital 1,914 274
Repurchase of share capital (1,250) (570)
Capital element of finance lease payments (15) (12)
New borrowings 52,357 -
Repayment of borrowings (56,903) (2,739)
New debt issuance costs (395) -
(4,292) (3,047)
Shareholder Information
Report and accounts
Copies of the 2004 report and accounts will be sent to shareholders and will be
available after 20 May 2005 from the Company Secretary, Raymarine plc, Quay
Point, Northarbour Road, Portsmouth, Hampshire PO6 3TD. The preliminary
statement of results will be available on Raymarine's website. Our website
address is www.raymarine.com.
Shareholder enquiries
Lloyds TSB Registrars maintain the company's share register. Enquiries about
shareholdings should be addressed to the Registrars at The Causeway, Worthing,
West Sussex BN99 6DA (telephone 0870 600 3964).
Annual General Meeting
The AGM will be held in the Convocation Room, Church House, Dean's Yard,
Westminster, London SW1P 3NZ on Friday 20 May 2005 at 2pm.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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