RNS Number:4447L
Danka Business Systems PLC
22 May 2003
Embargoed until: 13.30 22nd May 2003
DANKA BUSINESS SYSTEMS PLC
("DANKA", "THE GROUP" OR "THE COMPANY")
DANKA REPORTS FOURTH QUARTER AND FULL YEAR RESULTS FOR THE THREE AND TWELVE
MONTHS ENDED 31ST MARCH, 2003
"Improved operating and pre-tax profit, higher gross margins, increased
cash flow and a significant reduction in total debt"
Danka Business Systems PLC, a leading independent global provider of
office imaging systems and services, today announced its third quarter
and twelve month results for the period ended 31st March 2003.
Financial and operational highlights for the year ended 31st March 2003:
* Improvement in operating profit in the fourth quarter
* Continued increase in gross margins on continuing operations to
37.4% (2002: 35.4%)
* Operating profit from continuing operations* increased by 39.8% to
#21.5m (2002: #15.4m)
* Profit before tax of #4.3m compared to loss before tax* of #8.2m in
the prior year
* Free cash flow** of #63.2m generated (2002: #56.5m)
* Total debt was reduced by 31.8% to #141.9 million
* before exceptional items, profit on discontinued operations and
exceptional gain on refinancing of debt
** excludes net cash inflow from acquisitions and disposals
Danka's Chairman and Chief Executive Officer, Lang Lowrey, commented:
"Overall we are pleased with the progress we have made this year," stated
Lowrey. "Notable among our achievements were:
* the continued realignment of Company strategies to improve gross
margins, generate cash and reduce debt;
* the success achieved by our Danka @ the Desktop and Professional
Services growth initiatives and the positive contribution these
businesses have made to our margin success;
* the incubation of our multi-vendor services business in the U.S.;
* the shift in the Company's installed base to approximately 44%
digital worldwide which, as that percentage continues to increase, will
ultimately place us in a position to grow our services and supplies
revenue, and;
* other initiatives, especially Vision 21, which give us the
opportunity to provide our customers with world class service and
strengthen our business systems.
In the coming fiscal year, we will continue to drive these important
initiatives through the organisation as well as address the other major
challenges which we are confronting, including the continued significant
expenditures on our Vision 21 initiatives over the first two quarters of
this fiscal year," said Lowrey.
Danka's Chief Information Officer, Gene Hatcher, commented:
"We are continuing on our revised schedule for implementing our new
Oracle ERP systems in the U.S., the cornerstone of our Vision 21
reengineering plan," said Gene Hatcher, Danka's Chief Information
Officer. "We devoted substantial time this quarter to ensuring full
functionality in the system before commencing the rollout to the rest of
the U.S. business this summer and we are pleased with the progress we
have made. We expect this investment will ultimately enable Danka to
substantially reduce general and administrative costs, better serve our
customers, and improve process and efficiency in the Company. We will
continue our geographic deployment in the early summer, and currently
expect to convert the remaining 65% of our U.S. business to Oracle by the
late summer or fall. We now project the total cost of the implementation
to be up to $50 million," concluded Hatcher.
For further information please contact:
Danka Business Systems PLC
Paul Dumond, Company Secretary (UK) 020 7605 0150
Sanjay Sood, Senior VP (USA) 001 727 578 4669
Weber Shandwick Square Mile 020 7067 0700
Katie Hunt / Kirsty Hall
Embargoed until: 13.30 22nd May, 2003
DANKA BUSINESS SYSTEMS PLC
("DANKA", "THE GROUP" OR "THE COMPANY")
DANKA REPORTS FOURTH QUARTER AND FULL YEAR RESULTS FOR THE THREE AND TWELVE
MONTHS ENDED 31ST MARCH, 2003
Danka Business Systems PLC today announced its fourth quarter and annual
results for the three months and year ended 31st March, 2003 that show
improved operating and pre-tax profits before exceptional items, higher
gross margin percentages, increased annual cash flow from operations and
a significant reduction in total debt. Danka also announced that it has
scheduled a conference call for Thursday, 22nd May to discuss these
results.
Year Results
For the year ended 31st March, 2003, operating profit increased by 70.8%
to #24.2 million from #14.2 million from continuing operations in the
prior year. The current year includes an exceptional credit of #2.7
million related to restructuring and an adjustment to the expected
liability arising on the disposal of certain properties. The prior year
included a charge of #1.2 million for restructuring. Excluding these
exceptional items, operating profit was up 39.8% to #21.5 million for the
current year compared to #15.4 million from continuing operations in the
prior year. The net interest charge for the year to 31st March, 2003
decreased by 27.1% to #17.2m from #23.6m in the prior year.
Profit before tax, exceptional items, profit on discontinued operations
and an exceptional gain on the refinancing of debt for the year ended
31st March, 2003 was #4.3 million compared to a loss of #8.2 million in
the prior year.
For the year ended 31st March, 2003, the Group reported basic earnings of
2.9 pence per share compared to 44.9 pence per share in the prior year
and adjusted basic earnings of 2.2 pence per share and 3.1 pence per
share for those respective periods.
Turnover from continuing operations for the year declined by 16.5% to
#906.0 million from #1,084.8 million. Foreign currency movements
negatively affected the Group's turnover by approximately #33.3 million
for the year, despite the euro movement positively affecting turnover for
the year by #10.8 million. Retail equipment and related revenues from
continuing operations for the year declined 17.9% to #308.5 million from
#375.7 million in the prior year, which includes a #12.1 million negative
foreign currency movement. Retail service, supply, and rental revenues
from continuing operations for the year declined by 17.0% to #542.7
million from #654.0 million in the prior year, which includes a #23.4
million negative foreign currency movement. Overall, the revenue declines
were due to competitive economic and market conditions, the effects of
industry-wide conversion from analogue-to-digital equipment, technology
convergence, the global slowdown in capital spending and the Group's
focus on certain higher-margin sales.
Overall, gross margins significantly increased to 37.4% in the current
year compared to 35.4% in the prior year for continuing operations. The
retail equipment and related sales margin from continuing operations
increased to 34.8% in the current year compared to 26.8% in the prior
year primarily due to margin improvement in the North American and
European business and approximately #6.5 million of incremental lease and
residual payments from a diminishing external lease funding programme.
The overall service, supplies and rentals margin from continuing
operations decreased slightly to 40.7% from 41.7% in the prior year. The
European wholesale gross margin from continuing operations increased to
19.1% from 18.5% in the prior year.
Recurring operating expenses for continuing operations excluding
exceptional items decreased by #51.2 million to #317.0 million representing
35.0% of turnover for the year ended 31st March, 2003 from #368.2 million
representing 33.9% of turnover for the year ended 31st March, 2002. This
decrease was due to declining wage costs as we reduce the Group's
headcount, reduced facility costs as we improve our equipment and parts
distribution network and lower depreciation due to the acceleration of
depreciation for legacy software systems last year offset, in part, by
increased consulting and professional costs associated with the Vision 21
process and systems re-engineering initiative that is designed to improve
customer service and deliver long-term productivity benefits.
The Group generated net cash inflow from operating activities and free cash
flow (defined as operating cashflow less net cash inflow from acquisitions
and disposals) of #117.8 million and #63.2 million, respectively, in the
year ended 31st March, 2003 compared to #115.7 million and #56.5 million in
the prior year (see reconciliation on page 13). Total capital expenditure
in the current year was #27.4 million compared to #31.7 million in the
prior year. Total capital expenditures during the year related to the
Vision 21 project was #8.4 million.
Total debt during the year was reduced by 31.8% to #141.9 million. With
annual EBITDA (earnings before interest, income taxes, depreciation, and
amortisation) of #66.2 million, the total leverage ratio (total debt
divided by the trailing 12-month EBITDA) improved from 2.6 to 1 at 31st
March, 2002 to 2.1 to 1 as at 31st March, 2003. The Group's ratio of total
debt to total debt plus equity shares and non-equity shares decreased from
37.5% at 31st March, 2002 to 29.8% at 31st March, 2003.
"Overall we are pleased with the progress we have made this year," stated
Lang Lowrey, Danka's Chairman and Chief Executive Officer. "Notable among
our achievements were:
* the continued realignment of Company strategies to improve gross
margins, generate cash and reduce debt;
* the success achieved by our Danka @ the Desktop and Professional
Services growth initiatives and the positive contribution these
businesses have made to our margin success;
* the incubation of our multi-vendor services business in the U.S.;
* the shift in the Company's installed base to approximately 44% digital
worldwide which, as that percentage continues to increase, will ultimately
place us in a position to grow our services and supplies revenue, and;
* other initiatives, especially Vision 21, which give us the opportunity
to provide our customers with world class service and strengthen our
business systems.
In the coming fiscal year, we will continue to drive these important
initiatives through the organisation as well as address the other major
challenges which we are confronting, including the continued significant
expenditures on our Vision 21 initiatives over the first two quarters of
this fiscal year," said Lowrey.
"We are continuing on our revised schedule for implementing our new Oracle
ERP systems in the U.S., the cornerstone of our Vision 21 reengineering
plan," said Gene Hatcher, Danka's Chief Information Officer. "We devoted
substantial time this quarter to ensuring full functionality in the system
before commencing the rollout to the rest of the U.S. business this summer
and we are pleased with the progress we have made. We expect this
investment will ultimately enable Danka to substantially reduce general and
administrative costs, better serve our customers, and improve process and
efficiency in the Company. We will continue our geographic deployment in
the early summer, and currently expect to convert the remaining 65% of our
U.S. business to Oracle by the late summer or fall. We now project the
total cost of the implementation to be up to $50 million," concluded
Hatcher.
Fourth Quarter Results
The Group reported an operating profit of #3.6 million for the fourth
quarter of the year ended 31st March, 2003 as compared to an operating loss
of #1.5 million for the fourth quarter of the year ended 31st March, 2002
from continuing operations and excluding exceptional items. The Group
recorded a pre-tax loss of #1.9 million for the quarter ended 31st March,
2003 compared to a pre-tax loss for the quarter ended 31st March, 2002 of
#3.2 million, excluding #0.9 million loss from discontinued operations, a
#3.1 million increase in the gain on disposal of Danka Services
International and exceptional charges of #0.4 million. Including these
items, the pre-tax loss for the quarter ended 31st March, 2002 was #1.4
million.
The Group reported a basic loss of 2.0 pence per share in the fourth
quarter of the year ended 31st March, 2003 compared to earnings of 1.1
pence per share in the corresponding period of the prior year and adjusted
basic losses of 2.0 pence per share and 2.4 pence per share for those
respective quarters.
Turnover from continuing operations for the fourth quarter declined by
14.8% to #222.0 million from #260.4 million in the prior year fourth
quarter. Foreign currency movements negatively affected the Group's
turnover by approximately #10.5 million during the fourth quarter, despite
the euro movement positively affecting turnover by #5.6 million. Retail
equipment and related revenues for the fourth quarter declined 13.0% to
#79.2 million from #91.1 million in the prior year fourth quarter which
includes a #4.3 million negative foreign currency movement in the current
quarter. This decrease in retail equipment and related revenues was due to
reduced sales in the European and International segments while the North
American segment's retail equipment and related sales were flat from the
prior year after adjusting for the negative foreign currency movement of
the U.S. and Canadian dollar. Retail service, supply, and rental revenues
for the fourth quarter declined by 17.3% to #128.2 million from #155.0
million in the prior year fourth quarter which includes a #7.3 million
negative foreign currency movement in the current quarter. Overall, the
Group's revenues continue to be negatively impacted by competitive economic
and market conditions, technology convergence, the global slowdown in
capital spending and the Group's focus on certain higher margin retail
equipment sales.
Overall gross margins improved slightly to 37.7% in the fourth quarter from
37.6% from continuing operations in the prior year fourth quarter. The
retail equipment and related sales margin increased to 37.2% from 35.5% due
to an increase in the North American retail equipment sales margin from the
prior year fourth quarter. Gross margins for service, supplies, and rentals
declined slightly to 40.1% from 40.6% primarily due to declining margins in
the International segment. The fourth quarter gross margins were positively
impacted by #1.2 million of lease and residual payments from an external
lease funding programme.
Recurring operating expenses decreased by #19.3 million to #80.0 million
representing 36.0% of turnover for the quarter ended 31st March, 2003 from
#99.3 million representing 38.1% of turnover for the quarter ended 31st
March, 2002 excluding exceptional charges. Recurring operating expenses
were positively affected by declining payroll costs as the result of
reduced headcount and lower depreciation costs that were offset by
increased expense and professional fees associated with the Vision 21
programme and additional bad debt expense.
"We saw some encouraging signs in our business in the fourth quarter,"
commented Lang Lowrey. "We continued to generate strong gross margins,
particularly in the U.S., where our hardware gross margins exceeded 40% for
the first time in the last five years. It is evident that our operational
and strategic initiatives that centre around bringing value to our
customers have taken root and are providing tangible benefits to the
Company and its customers," said Lowrey. "We also continued to generate
strong, positive cash flow and closed the quarter with #54.7 million in
total cash which is up from #44.8 million in our third quarter."
Conference Call
A conference call to discuss Danka's fourth quarter and full year results
has been scheduled for Thursday, 22nd May at 4:00 p.m. (U.K. time). Please
call + 1-706-643-9560 to participate in the call. If you are unable to
participate in the call, you may access a recorded audio playback by
dialling + 1-706-645-9291 and enter conference ID number 467251. The
recording will be available via an instant replay service until Friday,
30th May at 10:00pm (U.K. time).
The financial information contained in this announcement for the quarters
ended 31st March, 2003 and 2002 and for the year ended 31st March, 2003 is
unaudited and does not constitute full statutory accounts within the
meaning of Section 240 of the United Kingdom Companies Act 1985. Statutory
accounts for the year ended 31st March, 2002 have been delivered to the
Registrar of Companies for England and Wales. The auditors' report on those
statutory accounts was unqualifed and did not contain a statement either
under Section 237(2) or 237(3) of the Companies Act 1985.
-Ends-
For further information please contact:
Danka Business Systems PLC
Paul Dumond, Company Secretary (UK) 020 7605 0150
Keith Nelsen, Senior VP (USA) 001 727 579 2801
Weber Shandwick Square Mile
Katie Hunt/Kirsty Hall 020 7067 0700
About Danka
Danka delivers value to clients worldwide by using its expert technical and
professional services to implement effective document information
solutions. As one of the largest independent providers of office imaging
systems and services, the Company enables choice, convenience, and
continuity. Danka's vision is to empower customers to benefit fully from
the convergence of image and document technologies in a connected
environment. This approach will strengthen the Company's client
relationships and expand its strategic value.
Note to Editors:
Danka Business Systems PLC, headquartered in London, and St. Petersburg,
Florida, is one of the world's leading suppliers of office imaging
equipment, supplies and services. Danka provides office products and
services globally in 25 countries around the world. Danka's ordinary
shares are listed on the London Stock Exchange and its ADSs are listed on
NASDAQ. For additional information about copier, printer and other office
imaging products, and information regarding the Group's U.S. filings with
the Securities and Exchange Commission, please visit Danka's web site at
www.danka.com.
The following statement is included pursuant to US securities laws:
Forward-Looking Statements: Certain statements contained in this press
release, or otherwise made by our officers, including statements related to
our future performance and our outlook for our businesses and respective
markets, projections, statements of management's plans or objectives,
forecasts of market trends and other matters, are forward-looking
statements, and contain information relating to us that is based on the
beliefs of our management as well as assumptions, made by, and information
currently available to, our management. The words "goal", "anticipate",
"expect", "believe" and similar expressions as they relate to us or our
management are intended to identify forward-looking statements, although
not all forward looking statements contain such identifying words. No
assurance can be given that the results in any forward-looking statement
will be achieved. For the forward-looking statements, we claim the
protection of the safe harbor for forward-looking statements provided for
in the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and assumptions that
could cause actual results to differ materially from those reflected in the
forward-looking statements. Factors that might cause such actual results to
differ materially from those reflected in any forward-looking statements
include, but are not limited to, the following: (i) any material adverse
change in financial markets or in our financial position; (ii) any
inability to successfully implement our strategy, (iii) any inability to
achieve or maintain cost savings; (iv) increased competition in our
industry and the discounting of products by our competitors; (v) new
competition as a result of evolving technology; (vi) any inability by us to
procure, or any inability by us to continue to gain access to and
successfully distribute, new products, including digital products, color
products, multifunction products and high-volume copiers, or to continue to
bring current products to the marketplace at competitive costs and prices;
(vii) any negative impact from the loss of any of our key senior management
personnel, (viii) any negative impact from the loss of a key vendor; (ix)
fluctuations in foreign currencies; (x) any change in economic conditions
in domestic or international markets where we operate or have material
investments which may affect demand for our services; (xi) any inability to
achieve minimum equipment leasing commitments under our customer financing
arrangements; (xii) any inability to comply with the financial or other
covenants in our debt instruments, (xiii) any delayed or lost sales and
other impacts related to the commercial and economic disruption caused by
past or future terrorist attacks, the related war on terrorism, the fear of
additional terrorist attacks or the war in Iraq; and (xiv) other risks
including those risks identified in any of our filings with the Securities
and Exchange Commission. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect our analysis only as of
the date they are made. Except as required by applicable law, we undertake
no obligation, and do not intend, to update these forward-looking
statements to reflect events or circumstances that arise after the date
they are made. Furthermore, as a matter of policy, we do not generally make
any specific projections as to future earnings nor do we endorse any
projections regarding future performance which may be made by others
outside our company.
Danka is a registered trademark and Danka @ the Desktop is a trademark of
Danka Business Systems PLC. All other trademarks are the property of their
respective owners.
This press release contains information regarding EBITDA that is computed
as earnings from continuing operations before income taxes, interest
expense, depreciation and amortization and free cash flow that is computed
as net cash provided by operating activities less capital expenditures plus
proceeds from the sale of property and equipment. These measures are non-
GAAP financial measures, defined as numerical measures of our financial
performance that exclude or include amounts so as to be different than the
most directly comparable measure calculated and presented in accordance
with GAAP in our statement of operations, balance sheet or statement of
cash flows. Pursuant to the requirements of Regulation G, we have provided
a reconciliation of these non-GAAP financial measures to the most directly
comparable GAAP financial measures.
Although EBITDA and free cash flow represent non-GAAP financial measures,
management considers these measures to be key operating metrics of our
business. Management uses these measures in its planning and budgeting
processes, to monitor and evaluate its financial and operating results and
to measure performance of its separate divisions. Management also believes
that EBITDA and free cash flow are useful to investors because it provides
an analysis of financial and operating results using the same measures that
management uses in evaluating the Company. Management expects that such
measures provide investors with the means to evaluate our financial and
operating results against other companies within our industry. In
addition, management believes that these measures are meaningful to
investors in evaluating our ability to meet our future debt service
requirements, to fund our capital expenditures and working capital
requirements. Our calculation of EBITDA and free cash flow may not be
consistent with the calculation of these measures by other companies in our
industry. EBITDA and free cash flow are not measurements of financial
performance under GAAP and should not be considered as an alternative to
operating income (loss) as an indicator of our operating performance or
cash flows from operating activities as a measure of liquidity or any other
measures of performance derived in accordance with GAAP.
Danka Business Systems PLC
Group Profit and Loss Account
For the Year Ended 31st March, 2003
31st March, 2003 31st March, 2002
-------------------- ------------------------------------------------
Continuing Discontinued
Operations Operations Total
#000 #000 #000 #000
Note (Unaudited) (Audited) (Audited) (Audited)
--------- ---------- ---------- ---------
Turnover 2 905,956 1,084,836 52,226 1,137,062
Cost of sales (567,406) (701,189) (42,344) (743,533)
--------- ---------- -------- --------
Gross profit 2 338,550 383,647 9,882 393,529
Distribution
costs (126,769) (137,404) (1,136) (138,540)
Administrative
expenses
Recurring (190,254) (230,842) (4,871) (235,713)
Exceptional 2,672 (1,237) - (1,237)
--------- ---------- -------- --------
(187,582) (232,079) (4,871) (236,950)
--------- ---------- -------- --------
Operating profit 24,199 14,164 3,875 18,039
---------- --------
Profit on disposal
of discontinued
operations - 122,349
--------- ---------
Profit on ordinary
activities before
interest 24,199 140,388
Interest
receivable and
similar income 5,074 6,119
Interest payable
and similar
charges (22,289) (29,732)
Exceptional
gain on
refinancing of
debt - 32,991
--------- ---------
Profit on ordinary
activities
before taxation 6,984 149,766
Tax credit/ (charge)
on profit on
ordinary activities 175 (24,561)
--------- ---------
Profit for the financial
period 7,159 125,205
Additional financial
costs of non-equity
shares 164 (13,824)
--------- ---------
Retained profit
for the financial
period 7,323 111,381
========= =========
Earnings per
share: 4
Basic (after
exceptional
items) 2.9p 44.9p
Diluted (after
exceptional
items) 2.9p 44.5p
Adjusted basic
(before
exceptional
items) 2.2p 3.1p
Adjusted diluted
(before
exceptional
items) 2.2p 3.1p
Average exchange $1.545 $1.433
rate #1= --------- ---------
Danka Business Systems PLC
Group Profit and Loss Account
For the Quarter Ended 31st March, 2003
31st March
--------------------------------------------------------
Continuing Discontinued
Operations Operations Total
2003 2002 2002 2002
#000 #000 #000 #000
Note (Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------- -------- -------- --------
Turnover 2 221,952 260,448 - 260,448
Cost of sales (138,337) (162,621) (872) (163,493)
--------- -------- -------- --------
Gross profit 2 83,615 97,827 872 96,955
Distribution costs (31,358) (34,024) - (34,024)
Administrative expenses
--------- -------- -------- --------
Recurring (48,627) (65,258) - (65,258)
Exceptional - (429) - (429)
--------- -------- -------- --------
(48,627) (65,687) - (65,687)
--------- -------- -------- --------
Operating profit/(loss) 3,630 (1,884) (872) (2,756)
--------- -------- -------- --------
Adjustment to gain on
disposal of discontinued
operations - 3,106
--------- --------
Profit on ordinary
activities before
interest 3,630 350
Interest receivable
and similar income 840 3,213
Interest payable and
similar charges (6,403) (4,929)
--------- --------
Loss on ordinary
activities before
taxation (1,933) (1,366)
Tax credit on profit
on ordinary activities 2,315 10,653
--------- --------
Profit for the financial
period 382 9,287
--------- --------
Additional financial
costs of non-equity
shares (5,248) (6,395)
--------- --------
Retained (loss)/profit
for the financial period (4,900) 2,892
========= ========
(Loss)/Earnings per
share: 4
Basic (after
exceptional items) (2.0)p 1.1p
Diluted (after
exceptional items) (2.0)p 1.1p
Adjusted basic (before
exceptional items) (2.0)p (2.4)p
Adjusted diluted (before
exceptional items) (2.0)p (2.4)p
Average exchange rate #1= $1.603 $1.444
--------- --------
Danka Business Systems PLC
Group Balance Sheet
At 31st March, 2003
31st March 31st March
2003 2002
#000 #000
(Unaudited) (Audited)
----------- ----------
Fixed assets
Intangible assets 1,717 2,157
Tangible assets 67,966 81,839
----------- ----------
69,683 83,996
Current assets
Stocks 70,780 91,623
Debtors (of which #55,430,000 (2002 - #51,266,000)
fall due after more than one year) 238,361 266,823
Investments (of which #3,492,000 (2002 - nil) fall
due after more than one year) 4,022 140
Cash at bank and in hand 51,215 41,581
----------- ----------
364,378 400,167
Creditors: amounts falling due within one year
Convertible subordinated loan notes - (11,216)
Bank and other loans (35,452) (13,938)
Other creditors (236,764) (222,643)
----------- ----------
(272,216) (247,797)
Net current assets 92,162 152,370
----------- ----------
Total assets less current liabilities 161,845 236,366
Creditors: amounts falling due after more than one year
Bank and other loans (106,425) (182,896)
Other creditors (10,182) (9,087)
----------- ----------
(116,607) (191,983)
Provisions for liabilities and charges (7,426) (11,955)
----------- ----------
Net assets 37,812 32,428
=========== ==========
Capital and reserves
Called up share capital 3,289 3,277
Share premium account 331,220 344,116
Profit and loss account (296,697) (314,965)
----------- ----------
Equity shareholders' deficit (135,153) (140,701)
Non-equity shareholders' funds 172,965 173,129
----------- ----------
Shareholders' funds 37,812 32,428
----------- ----------
Closing exchange rate #1= $1.575 $1.425
=========== ==========
Danka Business Systems PLC
Group Cash Flow Statement
For the Quarter Ended 31st March, 2003
31st March
-----------------
2003 2002
#000 #000
(Unaudited) (Unaudited)
--------- ---------
Net cash inflow from operating activities 24,857 39,033
Net cash outflow from returns on investments
and servicing of finance (4,604) (2,750)
Total taxes paid 613 11,825
Net cash outflow for capital expenditure (8,007) (7,268)
Net cash inflow/(outflow) from acquisitions
and disposals 3,559 (1,158)
--------- ---------
Net cash inflow before use of resources and
financing 16,418 39,682
Management of liquid resources (4,018) 39
Net cash outflow from financing (6,582) (31,155)
--------- ---------
Increase in cash 5,818 8,566
========= =========
Danka Business Systems PLC
Group Cash Flow Statement
For the Year Ended 31st March, 2003
31st March
-----------------
2003 2002
#000 #000
(Unaudited) (Audited)
--------- ---------
Net cash inflow from operating activities 117,781 115,668
Net cash outflow from returns on investments
and servicing of finance (27,219) (36,332)
Total taxes received 121 8,876
Net cash outflow for capital expenditure (27,447) (31,724)
Net cash inflow from acquisitions and disposals 3,559 193,601
-------- --------
Net cash inflow before use of resources and
financing 66,795 250,089
Management of liquid resources (3,969) 169
Net cash outflow from financing (48,984) (256,800)
-------- --------
Increase/(decrease) in cash 13,842 (6,542)
======== ========
Notes to the Group Profit and Loss Account
1. The financial information for the quarters ended 31st March 2003 and 2002 and
for the year ended 31st March, 2003 is unaudited and does not constitute full
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The financial information for the year ended 31st March, 2002 has been extracted
from the audited accounts for that year which have been filed with the Registrar
of Companies. The full accounts for the year ended 31st March, 2002 have been
given an unqualified audit report, which did not contain a statement under
Section 237(2) or (3) of the Companies Act 1985.
2. Analysis of Turnover and Gross Profit
Quarter Ended
--------------------------------------------------
31st March, 2002
--------------------------------------------------
31st March Continuing Discontinued
2003 Operations Operations Total
#000 #000 #000 #000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------- --------- -------- ---------
Turnover
Retail equipment
sales 79,232 91,050 - 91,050
Retail supplies,
maintenance
and rental
sales 128,245 155,029 - 155,029
Wholesale sales 14,475 14,369 - 14,369
-------- --------- -------- ---------
221,952 260,448 - 260,448
-------- --------- -------- ---------
Gross profit
Retail equipment
sales 29,484 32,299 - 32,299
Retail supplies,
maintenance
and rental
sales 51,371 62,967 (872) 62,095
Wholesale sales 2,760 2,561 - 2,561
-------- --------- -------- ---------
83,615 97,827 (872) 96,955
-------- --------- -------- ---------
Years Ended
-------------------------------------------------
31st March, 2002
-------------------------------------------------
31st March Continuing Discontinued
2003 Operations Operations Total
#000 #000 #000 #000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
-------- -------- -------- ---------
Turnover
Retail equipment
sales 308,503 375,710 4,067 379,777
Retail supplies,
maintenance
and rental
sales 542,748 654,034 48,159 702,193
Wholesale sales 54,705 55,092 - 55,092
-------- -------- -------- ---------
905,956 1,084,836 52,226 1,137,062
-------- -------- -------- ---------
Gross profit
Retail equipment
sales 107,317 100,747 1,290 102,037
Retail supplies,
maintenance and
rental sales 220,810 272,720 8,592 281,312
Wholesale sales 10,423 10,180 - 10,180
-------- -------- -------- ---------
338,550 383,647 9,882 393,529
-------- -------- -------- ---------
3. Reconciliation of the weighted average number of basic and diluted
ordinary shares in issue
Fourth Quarter Ended Year Ended
31st March 31st March
--------------- --------------
2003 2002 2003 2002
-------- -------- -------- --------
Average number of
ordinary shares in
issue - basic 249,353,220 248,598,678 248,562,732 247,869,141
Average outstanding
options 9,236,719 5,413,816 7,737,187 2,192,974
Average number of
ordinary shares in
issue - diluted 258,589,939 254,012,494 256,299,919 250,062,115
4. The calculations of the earnings per share are based on the (loss)/
profit on ordinary activities after taxation and the finance costs on non-equity
shares and the basic and diluted weighted average number of ordinary shares in
issue during the period. In order to provide a trend measure of underlying
performance, Group (loss)/profit on ordinary activities after taxation and the
finance costs on non-equity shares has been adjusted to exclude exceptional
items and basic (loss)/earnings per share recalculated.
Fourth Quarter Ended 31st March
2003 2002
--------------- --------------
Pence Pence
#000 Per Share #000 Per Share
-------- ------- ------- -------
Basic (loss)/earnings (4,900) (2.0) 2,892 1.1
Exceptional items arising
in respect of:
Restructuring of worldwide
operations - - 450 0.2
Profit on disposal of DSI - - (9,226) (3.7)
-------- ------- ------- -------
Adjusted basic loss (4,900) (2.0) (5,584) (2.4)
-------- ------- ------- -------
Basic (loss)/earnings (4,900) (2.0) 2,892 1.1
Share options - - - -
-------- ------- ------- -------
Diluted (loss)/earnings (4,900) (2.0) 2,892 1.1
-------- ------- ------- -------
Adjusted basic (before
exceptional items) (4,900) (2.0) (5,584) (2.4)
Share options - - - -
-------- ------- ------- -------
Adjusted diluted (before
exceptional items) (4,900) (2.0) (5,584) (2.4)
-------- ------- ------- -------
Year Ended 31st March
---------------------------
2003 2002
--------------- --------------
Pence Pence
#000 Per Share #000 Per Share
-------- ------- ------- -------
Basic earnings 7,323 2.9 111,381 44.9
Exceptional items arising
in respect of:
Restructuring of worldwide
operations (281) (0.1) 1,034 0.4
Profit on bond exchange - - (23,089) (9.3)
Reversal of liability on
disposal of property (1,450) (0.6) - -
Profit on disposal of DSI - - (81,607) (32.9)
-------- ------- ------- -------
Adjusted basic earnings 5,592 2.2 7,719 3.1
-------- ------- ------- -------
Basic earnings 7,323 2.9 111,381 44.9
Share options - - - (0.4)
-------- ------- ------- -------
Diluted earnings 7,323 2.9 111,381 44.5
-------- ------- ------- -------
Adjusted basic (before
exceptional items) 5,592 2.2 7,719 3.1
Share options - - - -
-------- ------- ------- -------
Adjusted diluted (before
exceptional items) 5,592 2.2 7,719 3.1
-------- ------- ------- -------
5. The following is a reconciliation of retained profit to EBITDA
(earnings before interest, taxes and depreciation and amortisation) excluding
the profit on disposal of discontinued operations and exceptional gain on
refinancing of debt:
Year Ended 31st March
---------------------
2003 2002
#000 #000
-------- -------
Profit on ordinary activities before interest 24,199 18,039
Interest receivable and similar charges 5,074 6,119
Depreciation and amortisation 36,880 55,133
-------- -------
EBITDA 66,153 79,291
======== =======
6. The following is a reconciliation of net cash inflow before use
of resources and financing to free cash flow (net cash inflow before
use of resources and financing less net cash inflow from acquisitions
and disposals):
Year Ended 31st March
----------------------
2003 2002
#000 #000
-------- -------
Net cash inflow before use of resources and financing 66,795 250,089
Net cash inflow from acquisitions and disposals 3,559 193,601
-------- -------
Free cash flow 63,236 56,488
======== =======
7. Copies of this report will be available from the Company's registered
office at Masters House, 107 Hammersmith Road, London W14 0QH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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