RNS Number:3451O
Danka Business Systems PLC
05 August 2003
Embargoed until: 13.30 5th August 2003
DANKA BUSINESS SYSTEMS PLC
("DANKA", "THE GROUP" OR "THE COMPANY")
DANKA REPORTS FIRST QUARTER RESULTS FOR THE THREE MONTHS
ENDED 30th JUNE,2003
"We saw progress in the mitigation of our past revenue declines in certain
aspects of our business, encouraging signs in our service business and
progress with our Oracle implementation."
Financial and operational highlights for the quarter ended 30th June, 2003:
- Operating profit was #3.0m (Q4 2003: #3.6m; Q1 2002: #10.2m)
- Pre-tax loss of #2.9m (Q4 2003: #1.9m loss; Q1 2002: #5.2m profit)
- Basic earnings per share were 1.0p (Q4 2003: 2.0p; Q1 2002: 3.2p)
- Gross margins were 36.7% (Q4 2003: 37.7%; Q1 2002: 38.6%)
- Strong turnaround of International business
- Successful completion of $175m senior note offering on 1st July,
2003
- #64.4m under existing bank credit facility repaid on 1st July, 2003;
intention to redeem #28.6m zero coupon senior subordinated notes
Danka's Chairman and Chief Executive Officer, Lang Lowrey, commented:
"We saw continued progress in mitigating the decline in our revenues in
certain key aspects of our business; however, we experienced a decline in
our gross margins, almost exclusively in the U.S. equipment and related
sales area," said Lang Lowrey, Danka's Chairman and Chief Executive
Officer. "Some of this decline can be attributed to a larger than
expected shift in the mix of our sales toward lower margin, large
enterprise accounts. Additionally, toward the end of the quarter, we
were affected by changing market conditions in our industry, which appear
to now be dictating lower average sales prices in certain segments of our
equipment portfolio. On the positive side, we did see stabilising trends
in the performance in our retail equipment and related business,
continued positive trends in our service annuity business and a
turnaround in our International business, which contributed measurable,
positive results for the first time in several quarters."
"While we are disappointed with our first quarter financial results, we
saw progress in the mitigation of our past revenue declines in certain
aspects of our business, encouraging signs in our service business and
progress with our Oracle implementation," stated Lowrey. "Toward the end
of the quarter, however, we encountered increasingly competitive market
conditions which placed downward pressure on sales and margins,
particularly in the U.S. field sales force. Our ability to successfully
respond and improve sales and margin performance in light of these
industry conditions, better manage our working capital, timely complete
our Oracle rollout, realise capital spending reductions and cost savings
from the new IT system and move to our new headquarters building remain
the most significant factors to achieving our financial forecast for the
fiscal year," concluded Lowrey.
Danka's Chief Financial Officer, Mark Wolfinger, commented:
"The refinancing was clearly a bright spot for the quarter, and is the
culmination of years of management effort to provide long term financing
for the Company," said Wolfinger. "In the process, we have lowered our
overall cost of capital and significantly extended the maturities of a
large portion of our capital structure. We believe this refinancing has
solidified the financial position of the Company and will allow our
management team to focus on executing our business and process
improvement plans. For the past several years we have been operating
under a credit facility which was extremely expensive, and contained very
onerous financial covenants, which often hampered our ability to exploit
new opportunities," concluded Wolfinger.
For further information please contact:
Danka Business Systems PLC
Paul Dumond, Company Secretary (UK) 020 7605 0150
Don Thurman, Senior VP (USA) 001 770 280 3990
Weber Shandwick Square Mile
Katie Hunt 020 7067 0700
Embargoed until: 13.30 5th August, 2003
DANKA BUSINESS SYSTEMS PLC
("DANKA", "THE GROUP" OR "THE COMPANY")
DANKA REPORTS FIRST QUARTER RESULTS FOR THE THREE MONTHS
ENDED 30th JUNE,2003
Danka Business Systems PLC today announced its first quarter results for
the three months ended 30th June, 2003. Danka also announced that it has
scheduled a conference call for Tuesday, 5th August to discuss these
results.
The Group reported an operating profit of #3.0 million for the first
quarter ended 30th June, 2003 as compared to an operating profit of #10.2
million for the first quarter ended 30th June, 2002. The current year
includes an exceptional credit of #0.4 million related to restructuring.
Excluding this exceptional item, the operating profit would be #2.6
million for the current year. The Group recorded a pre-tax loss of #2.9
million for the quarter ended 30th June, 2003 compared to a pre-tax
profit for the quarter ended 30th June, 2002 of #5.2 million.
The Group reported basic earnings of 1.0 pence per share in the first
quarter ended 30th June, 2003 compared to earnings of 3.2 pence per share
in the corresponding period of the prior year and adjusted basic earnings
of 0.8 pence per share and 3.2 pence per share for those respective
quarters.
Turnover for the first quarter declined by 13.2% to #206.4 million from
#237.9 million in the prior year first quarter. Foreign currency
movements negatively affected the Group's turnover by approximately #4.3
million during the first quarter, despite the euro movement positively
affecting turnover by #7.4 million. Overall, the Group's revenues
continue to be negatively affected by increasing competitive economic and
market conditions, especially in the United States, technology
convergence and the global slowdown in capital spending. Retail equipment
and related revenues for the first quarter declined 7.6% to #69.7 million
from #75.5 million in the prior year first quarter which includes a #1.9
million negative foreign currency movement in the current quarter. This
decrease in retail equipment and related revenues was due to reduced
sales in all segments. Retail maintenance revenues for the first quarter
declined by 16.5% to #102.6 million from #122.8 million in the prior year
first quarter which includes a #2.9 million negative foreign currency
movement in the current quarter. This decline was mainly due to the
continuing industry-wide conversion from analogue-to-digital equipment.
Retail supplies and rental revenues for the first quarter declined by
22.5% to #19.7 million from #25.4 million in the prior year first
quarter, which includes a #1.0 million negative foreign currency movement
in the current quarter, primarily due to the downsizing of the U.S.
rental business.
Overall gross margins declined to 36.7% in the first quarter from 38.6%
in the prior year first quarter. The retail equipment and related sales
margin decreased to 30.7% from 35.4% in the prior year first quarter
primarily due to lower margins in the North American business. First
quarter retail equipment and related sales revenue gross margin was
negatively affected by a #2.5 million decrease in lease and residual
payments from a diminishing external lease funding programme which
contributed #3.1 million to gross margin in the prior year first quarter.
Gross margins for maintenance decreased slightly to 41.9% from 42.0%.
Overall, North American gross margins declined to 40.1% from 42.9% in the
prior year first quarter while European gross margins were relatively
flat at 32.3% and International gross margins increased to 37.1% from
34.1% in the prior year first quarter. The European wholesale gross
margins increased to 20.0% from 18.3%.
"We saw continued progress in mitigating the decline in our revenues in
certain key aspects of our business; however, we experienced a decline in
our gross margins, almost exclusively in the U.S. equipment and related
sales area," said Lang Lowrey, Danka's Chairman and Chief Executive
Officer. "Some of this decline can be attributed to a larger than
expected shift in the mix of our sales toward lower margin, large
enterprise accounts. Additionally, toward the end of the quarter, we
were affected by changing market conditions in our industry, which appear
to now be dictating lower average sales prices in certain segments of our
equipment portfolio. On the positive side, we did see stabilising trends
in the performance in our retail equipment and related business,
continued positive trends in our service annuity business and a
turnaround in our International business, which contributed measurable,
positive results for the first time in several quarters."
Recurring operating expenses decreased by #8.6 million to #73.1 million
for the quarter ended 30th June, 2003 from #81.7 million for the quarter
ended 30th June, 2002. The decrease was due, in part, to a negative
foreign currency movement of #2.5 million. The Group incurred #1.9
million in Vision 21 and ancillary expenses during the first quarter as
well as almost #0.4 million in expenses on the new corporate headquarters
building. Recurring operating expenses increased to 35.4% of turnover in
the first quarter from 34.3% of turnover in the prior year first quarter.
"We continue to be challenged with a cost structure which is too high,"
stated Lowrey. "Our ability to reduce costs will be instrumental to our
achieving acceptable financial results for the balance of this year.
Realisation of a large measure of cost savings requires us to continue
making significant expenditures on our Vision 21, Oracle 11i ERP system
and its related, ancillary cost which we do not expect to continue in the
second half of the year. We currently expect that we can complete our
implementation during our third fiscal quarter, which will allow us to
continue the transition away from the expensive manual operation of our
outdated legacy systems and processes. The efficiencies we expect to
achieve from a single, integrated ERP system, coupled with the
anticipated decline in ancillary expenses, should provide a significant
cost saving opportunity, particularly in the second half of the fiscal
year."
Net cash inflow from operations in the first quarter was #3.7 million
compared to #29.7 million in the prior year first quarter. Free cash flow
(defined as net cash flow before use of resources and financing, less net
cash inflow from acquisitions and disposals) was a negative #11.4 million
in the first quarter compared to a positive #16.9 million in the prior
year first quarter (see reconciliation to U.K. GAAP at note 6). Net
capital expenditure in the first quarter was #8.6 million compared to
#5.4 million in the prior year first quarter. Capital expenditure during
the quarter related to the Vision 21 project and the new corporate
headquarters building were #4.0 million and #0.7 million respectively.
In addition, stocks increased by #1.8 million and debtors decreased by
#3.8 million respectively.
"We expect to improve our working capital performance during the second
quarter," stated Mark Wolfinger, Danka's Chief Financial Officer. "Cash
generation and management of working capital has been the cornerstone of
our balance sheet improvements over the past two years. During the
quarter we incurred significant, necessary capital expenditures on Vision
21 and on the consolidation of our expensive, inefficient corporate
campus buildings into our new corporate headquarters building. We are
very focused on the investments in working capital that occurred this
quarter and expect improvement in this area during the second quarter,
which is our slowest quarter seasonally, and during which we will
continue to have significant expenses on Vision 21 and our corporate
campus consolidation."
On 2nd July, 2003, Danka announced the completion of the offering of $175
million (#105.2 million) in new 11% senior unsecured notes due 2010 and a
$50 million (#30 million) senior secured revolving credit facility.
Danka used the net proceeds from the new senior notes to repay the
remaining #64.4 million of outstanding indebtedness under its existing
bank credit facility. Danka will use a portion of the proceeds to redeem
its #28.6 million of zero coupon senior subordinated notes due 1st April,
2004. The Company has issued notice to holders of the zero coupon notes
that it will redeem the notes at their par value on or about 18th August,
2003.
"The refinancing was clearly a bright spot for the quarter, and is the
culmination of years of management effort to provide long term financing
for the Company," said Wolfinger. "In the process, we have lowered our
overall cost of capital and significantly extended the maturities of a
large portion of our capital structure. We believe this refinancing has
solidified the financial position of the Company and will allow our
management team to focus on executing our business and process
improvement plans. For the past several years we have been operating
under a credit facility which was extremely expensive, and contained very
onerous financial covenants, which often hampered our ability to exploit
new opportunities," concluded Wolfinger.
The senior notes have a fixed annual interest rate of 11% and an 11.5%
yield to maturity. The new senior credit facility will bear interest at
a range of between 1.75% and 2.5% over LIBOR, depending on the amount of
borrowings outstanding. Because the refinancing closed on 1st July,
2003, unamortised debt issuance costs, anniversary fees and amendment
fees, after tax, of #9.0 million relating to the credit facility
refinanced on 1st July, 2003, will be charged to earnings in the quarter
ending 30th September, 2003.
Danka resumed the rollout of its Oracle 11i, ERP system to the remainder
of its U.S. business on 1st August, 2003. Danka had halted further
geographical rollouts over the past six months to focus on adding needed
system functionality and to address adequately certain issues such as
systems performance and data conversion and to focus on key areas of
needed improvement. Danka had previously implemented the system in
approximately one-third of its U.S. business. The 1st August rollout
will convert an additional 15% of the Group's U.S. business, bringing the
total conversion to approximately fifty percent. The Group currently
expects to complete the final two phases of the rollout by Autumn of this
year, on budget, as previously announced.
Danka's Chief Information Officer, Gene Hatcher, commented, "I am pleased
that we have met the necessary requirements to continue with the rollout.
We learned a great deal from the problems encountered in the first one-
third of our rollout and have improved the integration and communication
between our corporate IT and U.S. business units. As a result, we have
been able to develop functionality to support our improved business
processes. We believe these efforts have set the stage for the
substantial completion of our U.S. implementation by this Autumn."
"While we are disappointed with our first quarter financial results, we
saw progress in the mitigation of our past revenue declines in certain
aspects of our business, encouraging signs in our service business and
progress with our Oracle implementation," stated Lowrey. "Toward the end
of the quarter, however, we encountered increasingly competitive market
conditions which placed downward pressure on sales and margins,
particularly in the U.S. field sales force. Our ability to successfully
respond and improve sales and margin performance in light of these
industry conditions, better manage our working capital, timely complete
our Oracle rollout, realise capital spending reductions and cost savings
from the new IT system and move to our new headquarters building remain
the most significant factors to achieving our financial forecast for the
fiscal year," concluded Lowrey.
Conference Call
A conference call to discuss Danka's first quarter results has been
scheduled for Tuesday, 5th August at 4:00 p.m. (U.K. time). Please call +
1-212-748-2716 or if in the U.K. call + 1-800-894-4904 to participate in
the call. If you are unable to participate in the call, you may access a
recorded audio playback by dialling + 1-402-977-9140 (U.K. callers to
call + 1-800-633-8284) and enter conference ID number 21155894. The
recording will be available via an instant replay service until Sunday,
17th August at 6:00pm (U.K. time).
The financial information for the quarters ended 30th June, 2003 and 2002
is unaudited and does not constitute full accounts within the meaning of
Section 240 of the Companies Act 1985. The financial information for the
year ended 31st March, 2003 has been extracted from the audited accounts
for that year which have not been filed with the Registrar of Companies.
The full accounts for the year ended 31st March, 2003 have been given an
unqualified audit report, which did not contain a statement under Section
237(2) or (3) of the Companies Act 1985.
-Ends-
For further information please contact:
Danka Business Systems PLC
Paul Dumond, Company Secretary (UK) 020 7605 0150
Don Thurman, Senior VP (USA) 001 770 280 3990
Weber Shandwick Square Mile
Katie Hunt 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, Danka 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 should strengthen Danka'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 herein, 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 our plans or objectives, forecasts of
market trends and other matters, are forward-looking statements, and
contain information relating to us that is based on our beliefs as well
as assumptions, made by, and information currently available to us. The
words "goal", "anticipate", "expect", "believe" and similar expressions
as they relate to us 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 harbour 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 inability to successfully implement
our strategy; (ii) any inability to comply with the financial or other
covenants in our debt instruments; (iii) any material adverse change in
financial markets, the economy or in our financial position; (iv)
increased competition in our industry and the discounting of products by
our competitors; (v) new competition as the 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, colour products, multifunction products and
high-volume copiers, or to continue to bring current products to the
marketplace at competitive costs and prices; (vii) any inability to
arrange financing for our customers' purchases of equipment from us;
(viii) any inability to enhance and unify our management information
systems successfully; (ix) any inability to record and process key data
due to ineffective implementation of business processes and policies;
(x) any negative impact from the loss of a key vendor or customer; (xi)
any negative impact from the loss of any of our senior or key management
personnel; (xii) any change in economic conditions in domestic or
international markets where we operate or have material investments which
may affect demand for our products or services; (xiii) any negative
impact from the international scope of our operations; (xiv) fluctuations
in foreign currencies; (xv) any inability to achieve or maintain cost
savings; (xvi) any incurrence of tax liabilities beyond our current
expectations, which could adversely affect our liquidity; (xvii) any
delayed or lost sales and other effects related to the commercial and
economic disruption caused by past or future terrorist attacks, the
related war on terror, the fear of additional terrorist attacks or any
outbreak of the Severe Acute Respiratory Syndrome (SARS); and (xviii)
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 at 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.
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
calculated as earnings from continuing operations before income taxes,
interest expense, depreciation and amortisation and free cash flow that
is calculated as net cash provided by operating activities less net
capital expenditure. 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 profit and loss account, balance sheet or statement of cash flows.
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
they provide an analysis of financial and operating results used by
management in evaluating Danka. 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 expenditure 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 Quarter Ended 30th June, 2003
30th June
__________________________
2003 2002
#000 #000
Note (Unaudited) (Unaudited)
____________ ___________
Turnover 2 206,383 237,876
Cost of sales (130,629) (146,032)
____________ ___________
Gross profit 2 75,754 91,844
Distribution costs (29,978) (33,911)
Administrative expenses
Recurring (43,135) (47,781)
Exceptional 367 -
____________ ___________
(42,768) (47,781)
____________ ___________
Profit on ordinary activities
before interest 3,008 10,152
Interest receivable and similar
income 356 390
Interest payable and similar
charges (6,289) (5,360)
____________ ___________
(Loss)/profit on ordinary
activities before taxation (2,925) 5,182
Tax credit/(charge) on
(loss)/profit on ordinary
activities 1,609 (1,005)
____________ ___________
(Loss)/profit for the financial
period (1,316) 4,177
Additional financial costs of
non-equity shares 3,693 3,708
____________ ___________
Retained profit for the
financial period 2,377 7,885
============ ===========
Earnings per share: 4 ____________ ___________
Basic (after exceptional
items) 1.0p 3.2p
Diluted (after exceptional
items) 0.9p 3.1p
Adjusted basic (before
exceptional items) 0.8p 3.2p
Adjusted diluted (before
exceptional items) 0.8p 3.1p
Average exchange rate #1= $1.617 $1.459
____________ ___________
Danka Business Systems PLC
Group Balance Sheet
At 30th June, 2003
30th June 31st March
2003 2003
#000 #000
(Unaudited) (Audited)
____________ ___________
Fixed assets
Intangible assets 1,570 1,717
Tangible assets 65,665 67,966
____________ ___________
67,235 69,683
Current assets ____________ ___________
Stocks - finished goods and goods for resale 68,765 70,780
Debtors (of which #52,489,000 (March
2003 - #55,430,000) fall due after more
than one year) 222,845 238,361
Investments (of which nil (March 2003 -
#3,492,000) fall due after more than
one year) 838 4,022
Cash at bank and in hand 35,413 51,215
____________ ___________
327,861 364,378
Creditors: amounts falling due within
one year ____________ ___________
Bank and other loans (49,046) (35,452)
Other creditors (210,634) (236,764)
____________ ___________
(259,680) (272,216)
Net current assets 68,181 92,162
____________ ___________
Total assets less current liabilities 135,416 161,845
Creditors: amounts falling due after
more than one year ____________ ___________
Bank and other loans (81,202) (106,425)
Other creditors (10,213) (10,182)
____________ ___________
(91,415) (116,607)
Provisions for liabilities and charges (7,661) (7,426)
____________ ___________
Net assets 36,340 37,812
============ ===========
Capital and reserves
Called up share capital 3,287 3,289
Share premium account 324,179 331,220
Profit and loss account (291,126) (296,697)
____________ ___________
Equity shareholders' deficit (132,932) (135,153)
Non-equity shareholders' funds 169,272 172,965
____________ ___________
Shareholders' funds 36,340 37,812
============ ===========
Closing exchange rate #1= $1.664 $1.575
============ ===========
Danka Business Systems PLC
Group Cash Flow Statement
For the Quarter Ended 30th June, 2003
30th June
_________________________
2003 2002
#000 #000
(Unaudited) (Unaudited)
____________ ___________
Net cash inflow from operating activities 3,725 29,650
Net cash outflow from returns on
investments and servicing of finance (6,084) (7,378)
Total taxes (paid)/received (491) 11
Net cash outflow for capital expenditure (8,587) (5,397)
____________ ___________
Net cash (outflow)/inflow before use of
resources and financing (11,437) 16,886
Management of liquid resources 3,054 (14)
Net cash outflow from financing (5,055) (31,972)
____________ ___________
Decrease in cash (13,438) (15,100)
============ ===========
Notes to the Group Profit and Loss Account
1.The financial information for the quarters ended 30th June, 2003 and
2002 is unaudited and does not constitute full accounts within the
meaning of Section 240 of the Companies Act 1985. The financial
information for the year ended 31st March, 2003 has been extracted from
the audited accounts for that year which have not been filed with the
Registrar of Companies. The full accounts for the year ended 31st March,
2003 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 30th June
___________________________
2003 2002
#000 #000
(Unaudited) (Unaudited)
____________ ___________
Turnover
Retail equipment and
related sales 69,732 75,451
Retail maintenance 102,593 122,818
Retail supplies and
rental sales 19,687 25,394
Wholesale sales 14,371 14,213
____________ ___________
206,383 237,876
____________ ___________
Gross profit
Retail equipment and
related sales 21,375 26,675
Retail maintenance 42,953 51,534
Retail supplies and
rental sales 8,551 11,034
Wholesale sales 2,875 2,601
____________ ___________
75,754 91,844
____________ ___________
Year Ended
31st March
2003
__________
#000
(Audited)
__________
Turnover
Retail equipment and
related sales 308,503
Retail maintenance 451,052
Retail supplies and rental
sales 91,696
Wholesale sales 54,705
__________
905,956
__________
Gross profit
Retail equipment and
related sales 107,317
Retail maintenance 181,563
Retail supplies and rental
sales 39,247
Wholesale sales 10,423
__________
338,550
__________
3.Reconciliation of the weighted average number of basic and diluted
ordinary shares in issue
Quarter Ended Year Ended
30th June 31st March
__________________________ ____________
2003 2002 2003
____________ ___________ ____________
Average number of ordinary
shares in issue - basic 249,604,664 248,084,622 248,562,732
Average outstanding share
options 8,141,045 8,742,953 7,737,187
____________ ___________ ____________
Average number of ordinary
shares in issue - diluted 257,745,709 256,827,575 256,299,919
____________ ___________ ____________
4.The calculations of the earnings per share are based on the 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 profit on ordinary activities after taxation
and the finance costs on non-equity shares has been adjusted to exclude
exceptional items and basic earnings per share recalculated.
Quarter Ended 30th June
2003 2002
___________________ ___________________
Pence Pence
#000 Per Share #000 Per Share
________ __________ ________ __________
Basic earnings 2,377 1.0 7,885 3.2
Exceptional items arising in
respect of:
Restructuring of worldwide
operations (367) (0.2) - -
________ __________ ________ __________
Adjusted basic earnings 2,010 0.8 7,885 3.2
________ __________ ________ __________
Basic earnings 2,377 1.0 7,885 3.2
Share options - (0.1) - (0.1)
________ __________ ________ __________
Diluted earnings 2,377 0.9 7,885 3.1
________ __________ ________ __________
Adjusted basic (before
exceptional items) 2,010 0.8 7,885 3.2
Share options - - - (0.1)
________ __________ ________ __________
Adjusted diluted (before
exceptional items) 2,010 0.8 7,885 3.1
________ __________ ________ __________
Year Ended 31st March
________________________
2003
________________________
Pence
#000 Per Share
__________ __________
Basic earnings 7,323 2.9
Exceptional items arising in
respect of:
Restructuring of worldwide operations (281) (0.1)
Reversal of liability on
disposal of property (1,450) (0.6)
__________ __________
Adjusted basic earnings 5,592 2.2
__________ __________
Basic earnings 7,323 2.9
Share options - -
__________ __________
Diluted earnings 7,323 2.9
__________ __________
Adjusted basic (before
exceptional items) 5,592 2.2
Share options - -
__________ __________
Adjusted diluted (before
exceptional items) 5,592 2.2
__________ __________
5.The following is a reconciliation of profit on ordinary activities
before interest to EBITDA (earnings before interest, taxes and depreciation
and amortisation):
Quarter Ended 30th June
________________________
2003 2002
#000 #000
(Unaudited) (Unaudited)
__________ __________
Profit on ordinary activities
before interest 3,008 10,152
Interest receivable and similar
charges 356 390
Depreciation and amortisation 7,358 9,843
__________ __________
EBITDA 10,722 20,385
__________ __________
6.The following is a reconciliation of net cash flow 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):
Quarter Ended 30th June
________________________
2003 2002
___________ ___________
#000 #000
(Unaudited) (Unaudited)
___________ ___________
Net cash (outflow)/inflow
before use of resources and
financing (11,437) 16,886
Net cash inflow from
acquisitions and disposals - -
___________ ___________
Free cash flow (11,437) 16,886
___________ ___________
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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