RNS Number:8891P
Laird Group PLC
12 March 2008
THE LAIRD GROUP PLC
AUDITED RESULTS
FOR THE YEAR TO 31 DECEMBER 2007
"AN OUTSTANDING YEAR"
2007 2006
�m �m
Revenue
- Continuing operations 564.3 370.6 + 52%
- Discontinued operations 72.9# 237.7
------------------
637.2 608.3 + 5%
Underlying profit before tax from continuing
operations (i) 72.4 45.5 + 59%
Total underlying profit before tax (i) 76.8 73.3 + 5%
Profit before tax from continuing operations 51.5 39.6 + 30%
Profit for the year 127.7 50.7
Net borrowings 85.4 109.1
Shareholders' funds 448.5 409.2
p/share* p/share*
Underlying earnings from continuing operations(i) 33.1 20.7 + 60%
Total underlying earnings (i) 34.9 31.7 + 10%
Basic earnings from continuing operations 21.4 16.3 + 31%
Dividend (ii) 11.5 10.3 + 12%
Explanatory notes:
i) Laird uses underlying results as key performance indicators. Underlying
profit before tax and underlying earnings per share are stated before
exceptional items, the amortisation of acquired intangible assets, deferred
tax on acquired intangible assets and goodwill, the gain or loss on disposal
of businesses and the impact arising from the fair valuing of financial
instruments. The narrative that follows is based on underlying operating
profit, profit before tax and earnings per share, as the Directors believe
that these provide a more consistent measure of operating performance.
ii) Excludes a special dividend of 50p per share paid in June 2007.
# 2007: four months only
* The weighted average number of shares used to calculate earnings and
dividends per share was 185.9 million in 2007 and 189.2 million in 2006,
following the 8 for 9 share consolidation on 11 June 2007.
Highlights
* Strong growth in revenues and profits driven by continuing market growth,
increased customer demand, market share gains, new product development, the
benefits from acquisitions and a further expansion of our low cost
manufacturing base.
* Revenue from continuing operations up by over 50%, with underlying
operating profit up 45%. Underlying profit before tax for the year was a
record �76.8 million, and underlying earnings from continuing operations
were up 60%.
* New production facility opened in Chennai, our first in India. New
corporate research laboratory opened in Bangalore, India to maintain cutting
edge R&D.
* Further investment in manufacturing capacity expansions and operational
capability.
* Divestment of Security Systems Division:
- Creates focused electronics and technology company
- Crystallised value for shareholders through �100 million capital return
Peter Hill, Chief Executive, said:
"2007 was an outstanding year for Laird. With the disposal of the Security
Systems Division we completed the strategic realignment from a diversified
industrial group to a focused electronics and technology company. This disposal
allowed us to reallocate capital into the fast growing Laird Technologies
business and return �100 million direct to shareholders by way of a special
dividend.
"We saw strong growth as we continue to benefit from the underlying market
demand for our customers' products. Higher speed, power and performance of
electronic devices, as well as the increasing trend to wireless connectivity,
drive an increasing need for our products. We have over recent years broadened
our technology capabilities, allowing us to offer a unique combination of
products and solutions and to increase our revenue per device.
"2007 ended strongly and 2008 has begun well, and we are confident of making
further good progress during the year. The strength of our business, together
with the capabilities of our people, give us the ability to deliver value
through innovation."
For enquiries: The Laird Group PLC Maitland
Peter Hill, Chief Executive Brian Hudspith
Jonathan Silver, Finance Director Charlotte Walsh
Tel: 020 7468 4040 Tel: 020 7379 5151
OVERVIEW
Laird is a leader in the design and supply of customised, performance critical
products and systems for wireless and other advanced electronic applications. We
design, develop and supply the technology that allows people, organisations and
electronic devices to connect effectively and efficiently, locally and globally:
we provide the technology for a connected world.
RESULTS
Laird produced another set of excellent results in 2007. Revenue from our
continuing business, Laird Technologies, was �564.3 million, up 52% (2006,
�370.6 million), driven by continuing market growth, increased customer demand
for our products, market share gains, new product applications and the benefits
from acquisitions. Organic revenue growth was 34%.
Underlying profit before tax from continuing operations was �72.4 million in
2007, up 59% (2006, �45.5 million), helped by economies of scale and a further
expansion of our low cost manufacturing base. Profit growth at constant exchange
rates was 69%.
Return on capital employed for the continuing business was 16.0% (2006, 14.8%),
well in excess of our cost of capital.
Statutory profit before tax from continuing operations in 2007, after
exceptional items, the amortisation of acquired intangibles, the gain or loss on
the disposal of businesses and the fair valuing of financial instruments, was
30% higher at �51.5 million (2006, �39.6 million). As expected, there were
exceptional costs of �10.4 million in the year (2006, nil) arising from the
integration of our acquisitions and a restructuring of our North American
manufacturing operations.
Total underlying profit before tax in 2007, including four months' contribution
from Security Systems prior to its divestment, was �76.8 million (2006,
�73.3 million), with the overall growth of 5% still being achieved despite the
divestment (Security Systems' underlying profit was �23.4 million less in 2007
compared with 2006) and the adverse effects of currency movements. The effect of
currency movements has been to reduce total underlying operating profit in the
year by �5.1 million; at constant exchange rates total underlying profit would
have been 12% higher than in 2006.
Underlying earnings per share from continuing operations increased by 60% to
33.1 pence (2006, 20.7 pence). Total underlying earnings per share in 2007 were
34.9 pence (2006, 31.7 pence).
DIVIDEND
The Board's dividend policy is to increase returns to shareholders progressively
over time, reflecting both the underlying profitability of the Company and the
cash requirements of the business. In line with this policy, the Board is
recommending a final dividend of 7.88 pence per share. This represents a total
dividend for the year of 11.5 pence per share, an increase of 12% compared
with the 10.3 pence per share for 2006 and is in addition to the special
dividend of 50 pence per share paid in June 2007.
DELIVERY OF FOCUS
Over recent years Laird has been transformed from a diversified industrial group
into a focused electronics and technology company, with the divestment of Laird
Security Systems in April 2007 for a total consideration of �242.5 million
completing this phase of our transformation.
Underlying operating profit from Security Systems, prior to its divestment, was
�4.4 million (full year 2006, �27.8 million). Shareholder value will continue to
be increased by the redeployment of capital from Security Systems into our
successful and fast expanding Laird Technologies business. Shareholders
participated directly in the crystallisation of value realised by the disposal,
through a return of capital of approximately �100 million in 2007.
LAIRD TECHNOLOGIES
Laird Technologies is the global leader in the design and supply of components
that reduce or prevent interference both within and between electronic devices,
and antennae for mobile handsets. We also provide a variety of other
communication antennae, a wide range of thermal management products, and
complete wireless modules and systems.
We supply components and systems to high growth global electronics markets,
including cellular handsets, telecommunications, asset tracking, satellite radio
and information technology sectors, and also supply the automotive, aerospace
and defence, consumer electronics, medical and industrial markets.
Antennae & Wireless Systems
Year ended 31 December 2007 2006
�m �m Growth
Revenue 257.5 173.1 49%
Underlying operating profit 30.0 19.5 54%
Return on sales 11.7% 11.3%
We design develop and supply components and systems that provide and enhance
connectivity, helping the world to communicate better and faster by voice or
with data.
This Division comprises our cellular antennae products, where we are the global
market leader, our telematics and infrastructure antennae products, where we are
the market leader in North America, and our nascent wireless systems activities.
The Division has integrated the capabilities of Centurion Wireless Technologies
acquired in 2004, RecepTec and Antenex (2006), AeroComm and Cushcraft (2007) and
Ezurio (2008).
Excellence in execution, coupled with the benefits of our leading market and
technology positions were reflected in the Division's strong results in 2007,
with revenues growing by almost 50% to �257.5 million and underlying operating
profit by 54% to �30.0 million.
Organic revenue growth for the Division in the year was 33%, driven
predominantly by exceptionally strong growth in our shipments of cellular
antennae modules and sub-assemblies. These have higher average selling prices as
a result of both the technical complexity of the antennae and their combination
with cameras, acoustic boxes and stereophonic loudspeakers, and other bought in
components. Growth of modules and sub-assemblies is expected to be less in 2008,
with organic growth overall expected to return to historical levels.
The Division's average percentage margin increased slightly in the year, with
the positive "mix" effect of acquisitions and economies of scale more than
offsetting the effect of a greater proportion of bought in components in the
modules. We add value by offering integrated design, manufacturing and RF
testing of the complete module, which has a lower percentage return on sales due
to the higher proportion of bought in components.
In 2007 we also benefited in handset antennae from our positions on both high
volume handsets and the lower volume, but higher functionality models where our
content is often greater. We maintained our strong position with Nokia, the
world's leading handset company, grew our antennae market share with Motorola,
Sony Ericsson and LG, and started selling to the major Taiwanese Original Design
Manufacturers ("ODMs"). We shipped approximately 260 million handset antennae
units, including complementary antennae, up 25% compared with 2006.
In telematics, we saw good growth in our shipments to our major automotive
customers, particularly in North America. We continued to increase the
penetration of our antennae in new vehicles, while reducing our presence as
planned in the low margin consumer retrofit segment.
We also saw growth from our communications and infrastructure antennae in North
America, where our presence was bolstered by our acquisition of Cushcraft in
February 2007. We are adding specialist engineers to our existing sales force in
Europe and Asia, to allow us to begin selling into those markets.
Our wireless systems activity, where we supply fully functioning wireless
modules and which was initiated with the acquisition of AeroComm in January
2007, has been enhanced further with the acquisition of Ezurio in February 2008.
Together, these acquisitions give us an initial foothold in fast growing
wireless M2M (Machine to Machine) sectors such as asset management, healthcare,
telematics, security and electronic point of sale. We see excellent potential in
this area and expect to develop our presence further.
Overall, our ambition is to become the leader in the industrial, consumer and
automotive segments of antennae and wireless communications technology,
geographically diversified and with a wide spread of customers and end user
markets, allowing people, organisations and electronic devices to communicate
better and more effectively.
Electronic Components & Systems
Year ended 31 December 2007 2006
�m �m Growth
Revenue 306.8 197.5 55%
Underlying operating profit 50.0 35.9 39%
Return on sales 16.3% 18.2%
We design, develop and supply throughout the world the high precision,
performance critical components and systems that make electronic devices
function and connect effectively, whether for voice or visual communication or
for high quality data storage and transmission.
This Division designs, manufactures and markets our Electromagnetic Interference
("EMI") shielding products, in which we are the global market leader, together
with our signal integrity and thermal management products; these provide vital
protection for a wide range of electronic devices allowing them to function and
connect effectively. In early 2007 we entered the actuation device business with
the acquisition of M2sys in Korea, growing it rapidly during the year to become
the market leader in the design and supply of these devices, which improve the
physical functionality and versatility of mobile phone handsets.
The benefits of our leading market and technology positions were also evident in
this Division's results in 2007, with revenues growing by 55% to �306.8 million
and underlying operating profit by nearly 40% to �50.0 million.
Organic revenue growth for this Division was 35%, driven predominantly by
exceptionally high year-on-year growth, albeit from a small base, in sales of
actuation devices. We do not expect the same level of growth in this area in
2008, with organic growth overall expected to return to historical levels.
Although the Division's percentage return on sales declined in 2007 this was due
to two specific factors. One was the "mix" effect of acquisitions, which had
lower margins than the Division's average (although we would expect these
margins to increase over time under our ownership). The other was the greater
than normal growth in sales of our high specification actuation devices which
have a higher materials content (and, therefore, lower average percentage
margins) than the rest of the Division's products.
We also saw continuing strong growth in sales of our EMI and thermal interface
products into the notebook PC market, particularly for Dell, HP and Apple. We
continued to see buoyant sales into the server, networking equipment and
telecommunications base station markets, particularly to Cisco, Huawei, Alcatel,
ZTE, Motorola and Ericsson and HP, for our EMI shielding, thermal interface and
signal integrity products.
Our EMI board level shielding sales into the cellular handset market again
delivered double digit organic growth. A reduction in demand from one of our
customers as a result of its own sales decline was offset by an increase in the
penetration of our board level shielding at Sony Ericsson and the achievement of
our first sales of these products to Samsung.
Our EMI shielding sales into the flat screen TV market, predominantly to
Panasonic, Samsung, Hitachi and Philips, again increased, while new products are
being used in the Microsoft Xbox and the Sony PlayStation PS3 games consoles.
EMI shielding sales into the medical and instrumentation markets, and
thermoelectric cooler sales into the industrial, automotive, aerospace and
medical markets have also remained buoyant.
Our largely customised, high precision products and systems are critical in
maintaining and enhancing the integrity and performance of our customers'
electronic devices. We expect that the increasing challenges for our customers
of conducted and radiated EMI and of heat generation as the power, speed and
performance of devices increases, will continue to drive demand for this
Division's products, while design trends in cellular handsets should continue to
drive increasing demand for our actuation products. We aim to be the market
leader in all of these areas, and increasingly to exploit technology and product
convergence between our two Divisions.
Investment in Research and Development
Our investment in research and development in 2007 was �25.0 million, up 26% and
approximately 4.5% of revenues. Over half our spend is on new development
programmes, including redesigns for product extensions, targeted at near term
customer development platforms and applications. Nearly one quarter of the spend
is in product innovation for future platforms which result in completely new
product families; the remaining spend is on advanced technical research,
offering the greatest future potential. At the end of 2007 we employed
660 qualified engineers and technologists, one quarter of whom had masters'
degrees or doctorates.
The ownership of patents, trade secrets and trademarks are all forms of
intellectual property protection that we utilise, helping us to maintain our
technology leadership positions. In 2007, 121 new patents were granted, more
than double the number granted in 2006, the growth being illustrative of our
increased focus on protecting the intellectual property we create. By the end of
2007 we owned 610 issued patents with a further 506 pending.
We are establishing a network of engineering centres to support the product
design needs of our customers. These centres are strategically located around
the world close to our customer base and will serve the product design needs of
the regions in which they are located. These new design centres will have the
capability to design all Laird Technologies products under one roof, achieving
design synergy across our product lines and enabling us to integrate the full
range of our product offering to our customers.
In December 2007 we opened our new Corporate Research Laboratory in Bangalore,
India providing an advanced technology research capability as well as "horizon
scanning" for potential new technology opportunities.
Laird Technologies is delivering shareholder value through innovation and
technology leadership in the products we offer. We own an industry-leading
patent portfolio, and have a global, multidisciplined engineering skill base
operating from strategically located product design centres that are
increasingly valuable to our customers. We have a unique ability to exploit
product convergence. All of these factors provide us with a technology based
competitive advantage.
Operational Excellence
We focused heavily on operational excellence in 2007. We believe this is a key
differentiator, from supplying our customers "just in time" to being the lowest
cost supplier. We invested in additional manufacturing capacity and in further
developing our operational capabilities, as well as in supply chain management
and continuous improvement.
In the first half of 2007 we completed moves into new, larger manufacturing
facilities in Shanghai in China and Penang in Malaysia, and in the second half
we relocated to our expanded 15,000 square metre facility in Reynosa, Mexico.
These followed our major new plant expansions and relocations in Beijing,
Tianjin and Shenzhen in China in 2006. We increased our capacity utilisation at
all of these plants during the year.
2008 will see our new 16,000 square metre facility in the Nokia Business Park in
Chennai, India, fully on stream, and we are beginning the planning for our "next
wave" of new manufacturing capacity, likely to be in Western China and Vietnam.
In 2007, 81% of Laird Technologies' revenues by origin were from Asia, Eastern
Europe and Mexico (2006, 68%). At the end of the year Laird Technologies had
approximately 14,500 employees in 15 countries of which 12,000 are in Mexico,
Eastern Europe and Asia, the majority of these in China.
Our investment in new production capacity and equipment and in improving our
capabilities continues, underpinning our future growth. Capital expenditure was
�25.6 million, 4.5% of sales and 52% higher than in 2006.
We have carried out a further restructuring of our North American EMI shielding
operations, with the progressive closure of our facility at Delaware Water Gap,
Pennsylvania, and a significant reduction in manufacturing at St. Louis,
Missouri, with the transfer of operations to Mexico and China. These actions
follow the closure of our thermal products manufacturing facility in Trenton,
New Jersey, and the cessation of antennae manufacturing and assembly in Lincoln,
Nebraska. We have also successfully relocated the manufacturing and formulation
of the ferrite compounds for our signal integrity products, as well as the
component manufacturing, from the USA to China. These measures will provide cost
benefits in 2008 and 2009.
2007 saw the majority of the Group's major manufacturing facilities implement
ISO 14001 and OHSAS 18001 integrated Health, Safety and Environmental management
systems, with the remainder targeted for 2008.
We saw good improvements in 2007 in our manufacturing processes and product
quality, as well as cost reductions through our Six Sigma Continuous Improvement
Programme. We now have well established systems and supporting infrastructure,
and will continue to expand and broaden these initiatives across all of Laird
Technologies. These initiatives are allowing us to meet the increasing demands
of our customers, while remaining cost competitive and maintaining our margins.
OUTLOOK
Laird had an outstanding year in 2007. The divestment of the Security Systems
Division in April 2007 completed the transformation of Laird into a focused
electronics and technology company and allowed the return of approximately
�100 million to shareholders in June 2007. Our continuing technology based
business delivered excellent growth in both revenue and operating profits, while
total underlying profit before tax for Laird was again a record. 2007 ended
strongly and 2008 has begun well, and we are confident of making further good
progress during the year. The strength of our business, together with the
capabilities of our people give us the ability to deliver value through
innovation.
FINANCE DIRECTOR'S REPORT
Revenue
Revenue from continuing operations increased by 52% to �564.3 million in 2007
(2006, �370.6 million). There was �72.9 million of revenue from discontinued
operations in 2007 (2006, �237.7 million).
Organic growth from continuing operations is measured by restating 2007 revenue
at 2006 exchange rates and comparing it to the reported revenue for 2006 but
after adjusting 2006 to restate it on a pro-forma basis. The pro-forma
adjustment is the addition of revenue in respect of acquisitions as if we had
owned the acquisitions in 2006 for the same proportion of the year that they
were owned in 2007.
On this basis, organic growth was 34%, 33% for Antenna and Wireless Systems
(AWS) and 35% for Electronic Components and Systems (ECS). This is summarised in
the table below:
Antenna Electronic
& Wireless Components
Systems & Systems Total
�m �m �m
2006 revenue 173.1 197.5 370.6
Adjustment for acquisitions in 2006 29.4 38.8 68.2
-----------------------------
2006 pro-forma revenue 202.5 236.3 438.8
-----------------------------
2007 revenue 257.5 306.8 564.3
Adjustment to restate at constant exchange rates 10.8 12.9 23.7
-----------------------------
2007 revenue at 2006 exchange rates 268.3 319.7 588.0
-----------------------------
Organic growth 33% 35% 34%
-----------------------------
The top five customers accounted for 58% of revenue in 2007 (2006, 53%) and the
top ten customers accounted for 65% (2006, 60%).
Net Margins
Net margins for the continuing business were 14.2% in 2007, lower than in 2006
(14.9%). Margins in 2007 were higher in AWS compared with 2006 but lower in ECS,
with particularly strong growth in products with higher bought-in material
content.
Adjustment
for
Actual acquisitions Pro-forma Actual
� millions 2006 2006 2006 2007
AWS
Revenue 173.1 29.4 202.5 257.5
PBIT 19.5 6.2 25.7 30.0
ROS% 11.3% 21.1% 12.7% 11.7%
ECS
Revenue 197.5 38.8 236.3 306.8
PBIT 35.9 3.6 39.5 50.0
ROS% 18.2% 9.3% 16.7% 16.3%
Profit
Profit before tax from continuing operations was �51.5 million (2006, �39.6
million).
The profit after tax for the year from discontinued operations of �88.0 million
(2006, �19.9 million) includes a gain of �89.3 million on the sale of Laird
Security Systems less a charge of �4.0 million for disposals made in prior
years.
The total surplus on the Security Systems disposal was �108.8 million, of which
�89.3 million is disclosed within the discontinued results and the balance of
�19.5 million, being the reversal of exchange translation movements since 1
January 2004 on the Division, is disclosed in the Statement of Recognised Income
and Expense. Operating profit from discontinued activities up to disposal was
�4.4 million on which there is a tax charge of �1.1 million.
Underlying profit
Total underlying profit before tax in the year was �76.8 million (2006, �73.3
million). Underlying profit is defined as profit before tax, exceptional items,
amortisation of acquired intangible assets, the gain or loss on sale of
businesses and the impact arising from the fair valuing of financial
instruments, as set out in note 7. Underlying profit from continuing operations
before tax was �72.4 million (2006, �45.5 million).
Exceptional Costs
There were �12.5 million of exceptional costs in 2007 (2006, �nil). Laird
Technologies incurred restructuring costs of �10.4 million in the USA and
Europe. Early repayment of a US$ Private Placement note resulted in an
exceptional finance charge of �1.5 million. This arose due to the divestment of
a company which issued the notes as part of the divestment of Laird Security
Systems. The remaining �0.6 million was a charge in relation to restructuring
Laird Security Systems itself. The cash spend on exceptional items was �4.6
million.
Finance costs
Finance costs, excluding the exceptional finance charge of �1.5 million
described above and a gain on the fair valuing of financial instruments of �1.2
million (2006, gain of �0.2 million) were �7.6 million compared to the �9.9
million in 2006. Interest cover was 11.1 times, well above the minimum of 2.5
required by the covenant in the Group's principal loan agreements.
Taxation
The underlying tax charge on total underlying profit before tax is equivalent to
an average tax rate of 15.5% compared with 18.1% in 2006. Profits in the USA are
subject to a relatively low charge and should remain so for many years in part
due to tax deductions for amortised goodwill resulting from acquisitions. A
significant proportion of profits are also from jurisdictions with low tax rates
or with tax incentives. An analysis of the total tax charge is given in note 4.
Going forward, the average tax rate is likely to rise given the increases in tax
rates in China and this could mean an underlying rate of around 18% in 2008, and
20-22% in the medium term.
Underlying Earnings
Underlying profit before tax was 5% up on 2006 and total underlying earnings per
share of 34.9p were up by 10% (note 7). There were less shares in issue on
average in 2007 following the share consolidation in June 2007. Underlying
earnings are based on underlying profit less underlying tax and exclude deferred
tax on acquired intangible assets and goodwill.
Cash Flow
Analysis of cash flow
�m �m
Discontinued Continuing
Operating profit 4.4 80.0
Depreciation / asset disposal gain 1.7 10.4
--------------------------
6.1 90.4
Increase in working capital* (10.8) (25.6)
Capital expenditure less disposals (1.9) (25.6)
--------------------------
Operating cash flow (6.6) 39.2
--------------------------
Total operating cash flow 32.6
Finance costs (8.2)
Taxation (7.7)
-------------
Trading cash flow surplus 16.7
Dividends (120.0)
Acquisitions (81.4)
Disposals 219.9
Exceptional costs (4.6)
Additional pension contributions (13.6)
Share issues 3.2
Exchange translation movement 3.5
-------------
Reduction in net borrowings 23.7
-------------
* after adjusting for creditor increases on exceptional items of �3.9 million.
There was a trading cash outflow in the discontinued activities prior to their
disposal as a result of a working capital outflow.
In the continuing business there was a working capital increase of �25.6
million. The principal driver of the increase was organic growth. In addition,
December 2007 itself being a high revenue month compared to previous years and
compared to our expectations and some cash receipts that would normally be
received prior to the month end were received following the month end.
Capital expenditure of �25.6 million in the continuing business was over twice
the level of depreciation largely due to the continuing expansion in capacity to
meet demand, with much of the expenditure occurring in Asia, and with new plants
in Mexico and India.
Net borrowings and debt facilities
Overall, there was a �23.7 million reduction in net borrowings to �85.4 million.
The trading cash flow surplus was dwarfed by the �120.0 million paid out in
dividends which included a special dividend of approximately �100 million
following the sale of Laird Security Systems. Other major cash flow items
included the expenditure on acquisitions of �81.4 million and the proceeds from
disposals of �219.9 million.
Taking into account the acquisitions, net borrowings were 0.8 times earnings
before exceptional items, interest, tax, depreciation and amortisation, 23% of
the maximum permitted of 3.5 times in the principal loan covenants. A key
consideration for financial planning is to maintain sufficient headroom between
borrowings and the ceiling set by the covenants. In circumstances where this
ratio is expected to rise above 2.5, other than in the short term, the Group
will either seek to agree with its lenders that the ratio can exceed the loan
covenant maximum of 3.5 temporarily or reduce borrowings by raising alternative
forms of finance.
Due regard is given to maintaining committed loan finance which exceeds one year
and ensuring that committed finance is available that exceeds the Group's
expected borrowing requirements. In August 2007, the Group extended the term of
its 5 year bilateral revolving credit facilities of �195.0 million from August
2011 to August 2012. These facilities, together with the US$ private placement
facilities, the vast majority of which expire between 2008 and 2016, provide
committed facilities totalling �276.2 million.
Currency
The average and period end exchange rates are set out in note 2. A significant
proportion of revenues are in US$ or currencies which are linked to the US$.
Each US$0.01 movement approximates to an annual impact of �375,000 on profit.
The year on year movement in average exchange rates reduced continuing
underlying profit by �5.5 million.
The majority of the Group's assets are held overseas and these are hedged in
part by foreign currency loans. The translation impact of exchange rate
movements at the end of 2007 compared with the end of 2006 increased
shareholders' funds by �4.9 million.
Pensions
IFRIC 14 has been adopted in 2007 for the first time and allows pension
surpluses to be taken onto the balance sheet dependent on the rules of
individual schemes. There is an overall defined pension scheme surplus of �8.1
million. �13.6 million of the increase in asset values was due to additional
contributions over and above the current service cost of which �10.2 million
related to the divestment of Laird Security Systems. In 2006, there was an
overall deficit of �10.4 million after excluding surplus assets of �0.4 million.
Following the divestment of Laird Security Systems, there are now only 15 active
members in the defined benefit plans. There was a change in the assumptions used
to calculate liabilities; the bond rate used to discount liabilities was 5.7% in
2007 compared to 5.1% in 2006, which has reduced liabilities by �8.0 million.
These changes have been offset in part by an increase in the inflation
assumption.
Shareholders' Funds
Shareholders' funds at the 2007 year end were �448.5 million (2006, �409.2
million). The reconciliation is set out in note 11.
Return on Capital Employed
Return on capital employed (profit before interest and tax over shareholders'
funds plus net borrowings) for the continuing business was 16.0% compared to
14.8% in 2006.
Group income statement
for the year to 31 December 2007
2007 2006
�m �m
Note
Continuing operations
1 Revenue 564.3 370.6
---------------------
Operating profit before amortisation of acquired 80.0 55.4
intangible assets and exceptional items
Amortisation of acquired intangible assets (10.2) (6.1)
3 Exceptional items (10.4) -
---------------------
Operating profit 59.4 49.3
Finance revenue 2.8 2.1
Finance costs (11.2) (12.5)
Financial instruments - fair value adjustment 1.2 0.2
Other net finance revenue - pension 0.8 0.5
3 Exceptional finance costs (1.5) -
---------------------
Profit before tax from continuing operations 51.5 39.6
4 Taxation (11.8) (8.8)
---------------------
Profit for the year from continuing operations 39.7 30.8
Discontinued operations
5 Profit for the year from discontinued 88.0 19.9
operations
---------------------
Profit for the year 127.7 50.7
---------------------
6 Earnings per share
Basic from continuing operations 21.4p 16.3p
Diluted from continuing operations 21.2p 16.2p
Basic on profit for the year 68.7p 26.8p
Diluted on profit for the year 68.0p 26.6p
7 Underlying profit before tax*
Continuing 72.4 45.5
Total 76.8 73.3
Underlying basic earnings per share*
Continuing 33.1p 20.7p
Total 34.9p 31.7p
8 Dividends declared / proposed
Dividends 120.1 20.5
Dividend per share 61.5p 10.30p
* before amortisation of acquired intangible assets, exceptional items, deferred
tax on acquired intangible assets and goodwill, the gain or loss on disposal
of businesses, and the impact arising from the fair valuing of financial
instruments
Statement of recognised income and expense
for the year to 31 December 2007
Note 2007 2006
(restated)
�m �m
Profit for the year 127.7 50.7
Actuarial gains on retirement benefit obligations 3.0 4.7
Deferred tax on actuarial gains / losses (1.7) -
Exchange differences on retranslation of overseas 3.2 (48.4)
net investments
5 Exchange losses transferred to discontinued in 19.5 -
income statement
Exchange differences on net investment hedges 1.7 17.8
Financial instruments - losses on cash flow hedges - (0.3)
taken to equity
Tax on exchange differences 0.7 (1.1)
---------------------
Total income and expense recognised directly in 26.4 (27.3)
equity
---------------------
Total income and expense recognised for the year 154.1 23.4
---------------------
Effect of adoption of IFRIC 14 0.5
-----------
Group balance sheet
As at 31 December 2007
2007 2006
(restated)
Note �m �m
Assets
Non-current assets
Property, plant and equipment 76.1 86.6
Intangible assets 451.0 429.7
Deferred tax assets 1.4 0.1
9 Retirement benefit assets 12.3 0.5
Other non-current assets 0.7 3.5
---------------------------
541.5 520.4
---------------------------
Current assets
Inventories 55.4 69.6
Trade and other receivables 159.9 123.5
Income tax receivable 2.0 0.7
10 Cash 32.8 44.0
---------------------------
250.1 237.8
---------------------------
Liabilities
Current liabilities
10 Borrowings (9.4) (4.9)
Derivative financial instruments - (0.3)
Trade and other payables (132.8) (106.8)
Current tax liabilities (9.1) (3.9)
Provisions (7.1) (0.9)
---------------------------
(158.4) (116.8)
---------------------------
Net current assets 91.7 121.0
---------------------------
Non-current liabilities
10 Borrowings (108.8) (148.2)
Derivative financial instruments - (1.2)
Income tax payable (22.0) (22.7)
Deferred tax liabilities (43.9) (33.7)
9 Retirement benefit obligations (4.2) (10.9)
Other non-current liabilities (2.1) (5.9)
Provisions (3.7) (9.6)
---------------------------
(184.7) (232.2)
---------------------------
Net assets 448.5 409.2
---------------------------
Capital and reserves
11 Equity share capital 49.8 49.5
11 Share premium 268.9 266.0
11 Retained earnings 128.4 155.4
11 Translation reserve 3.3 (59.0)
11 Treasury shares (1.9) (2.7)
---------------------------
Total shareholders' equity 448.5 409.2
---------------------------
Group cash flow statement
for the year to 31 December 2007
2007 2006
Note �m �m
12 Cash flows from operating activities
Cash generated from operations 42.4 80.8
Tax paid (7.7) (3.4)
------------------
Net cash flows from operating activities 34.7 77.4
------------------
Cash flow from investing activities
Interest received 2.9 2.1
12 Acquisition of businesses (net of cash acquired) (81.4) (102.0)
Purchase of property, plant and equipment (27.9) (22.9)
12 Inflow / (outflow) from sale of businesses 219.9 (8.5)
Proceeds from sales of property, plant and equipment 0.5 3.4
------------------
Net cash flows from investing activities 114.0 (127.9)
------------------
Cash flows from financing activities
Interest paid (12.5) (11.8)
Net proceeds from issue of ordinary share capital 3.2 118.5
Movement in treasury shares - (0.7)
Decrease in borrowings (32.3) (11.4)
Dividends paid to shareholders (120.0) (19.4)
------------------
Net cash flows from financing activities (161.6) 75.2
------------------
Effects of movements in foreign exchange rates 1.3 (2.4)
------------------
(Decrease) / increase in cash and cash equivalents for (11.6) 22.3
the year
Cash and cash equivalents at 1 January 44.0 21.7
------------------
Cash and cash equivalents at 31 December 32.4 44.0
------------------
Notes to the financial statements
for the year ended 31 December 2007
1 Segmental analysis
Following the disposal of Laird Security Systems during the year and the
implementation of a new organisation structure, the Group has changed its
primary reporting format to the two segments Antenna and Wireless Systems, and
Electronic Components and Systems. The segments Antenna and Wireless Systems and
Electronic Components and Systems were aggregated as Laird Technologies in the
2006 Report and Accounts. Comparative information for 2006 has been restated to
reflect these segments.
Primary reporting format - business segments
Antenna & Electronic Laird
Wireless Components Security
Systems & Systems Systems Total
2007 2006 2007 2006 2007 2006 2007 2006
�m �m �m �m �m �m �m �m
Continuing operations
Total revenue 257.5 173.1 311.2 199.0 - - 568.7 372.1
Elimination of sales to other segments - - (4.4) (1.5) - - (4.4) (1.5)
Revenue from customers 257.5 173.1 306.8 197.5 - - 564.3 370.6
--------------------------------------------------------------
Segment profit before: 30.0 19.5 50.0 35.9 - - 80.0 55.4
Amortisation of acquired
intangible assets (6.7) (4.6) (3.5) (1.5) - - (10.2) (6.1)
Exceptional items (1.7) - (8.7) - - - (10.4) -
--------------------------------------------------------------
Operating profit 21.6 14.9 37.8 34.4 - - 59.4 49.3
--------------------------------------------------------------
Finance revenue 2.8 2.1
Finance costs (11.2) (12.5)
Fair value adjustment on interest rate swap 1.2 0.2
Other finance revenue - pension 0.8 0.5
Exceptional finance costs (1.5) -
----------------
Profit before tax 51.5 39.6
Taxation (11.8) (8.8)
----------------
Profit for the year from continuing operations 39.7 30.8
----------------
Discontinued operations
Revenue - - - - 72.9 237.7 72.9 237.7
--------------------------------------------------------------
Segment profit before: - - - - 4.4 27.8 4.4 27.8
Amortisation of acquired intangible assets - - - - (0.3) (1.0) (0.3) (1.0)
Exceptional items - - - - (0.6) - (0.6) -
Operating profit - - - - 3.5 26.8 3.5 26.8
Taxation - - - - (1.1) (7.4) (1.1) (7.4)
--------------------------------------------------------------
Profit after tax from discontinued operations - - - - 2.4 19.4 2.4 19.4
--------------------------------------------------------------
Profit before tax on current year disposal - - - - 89.3 - 89.3 -
--------------------------------------------------------------
Loss before tax on prior year disposal* (4.0) (2.1)
Taxation * 0.3 2.6
----------------
Profit from discontinued operations 88.0 19.9
----------------
Profit for the year 127.7 50.7
----------------
* These relate to other business segments disposed of in years prior to 2007.
Antenna & Electronic Laird
Wireless Components Security
Systems & Systems Systems Total
2007 2006 2007 2006 2007 2006 2007 2006
(restated)
�m �m �m �m �m �m �m �m
Segment assets 374.0 256.4 385.9 332.5 - 164.5 759.9 753.4
Unallocated assets - - - - - - 31.7 4.3
----------------------------------------------------------------
Total assets 374.0 256.4 385.9 332.5 - 164.5 791.6 757.7
----------------------------------------------------------------
Segment liabilities 69.8 36.9 56.0 42.4 - 33.9 125.8 113.2
Unallocated liabilities
- borrowings - - - - - - 118.2 153.1
- other - - - - - - 99.2 82.7
----------------------------------------------------------------
Total liabilities 69.8 36.9 56.0 42.4 - 33.9 343.2 349.0
----------------------------------------------------------------
Other segment items
Capital expenditure 14.9 9.6 15.3 11.1 2.0 6.3 32.2 27.0
Acquisition of businesses 72.6 40.0 18.2 62.3 - 13.4 90.8 115.7
----------------------------------------------------------------
Total additions 87.5 49.6 33.5 73.4 2.0 19.7 123.0 142.7
----------------------------------------------------------------
Depreciation 3.7 2.2 9.4 5.8 1.7 5.3 14.8 13.3
----------------------------------------------------------------
Amortisation of intangible assets 8.2 5.3 3.9 1.7 0.3 1.0 12.4 8.0
----------------------------------------------------------------
The segment revenue analysis in the table below is based on the location of the
customer. Segment assets and additions during the year are based on location of
production.
Segment revenue Segment assets Asset additions
2007 2006 2007 2006 2007 2006
(restated)
�m �m �m �m �m �m
Continuing operations
United Kingdom 7.8 6.7 6.1 5.3 0.7 -
North America 126.9 104.7 429.2 350.5 79.4 83.7
Continental Europe 94.2 71.4 119.3 89.4 3.7 23.1
Asia 324.9 179.0 205.3 143.7 37.2 16.5
Rest of World 10.5 8.8 - - - -
-----------------------------------------------------
564.3 370.6 759.9 588.9 121.0 123.3
Discontinued operations
United Kingdom 42.1 124.7 - 92.4 1.0 6.4
North America 28.8 107.7 - 66.2 1.0 13.0
Continental Europe 0.1 4.4 - - - -
Asia 1.4 0.5 - 5.9 - -
Rest of World 0.5 0.4 - - - -
-----------------------------------------------------
72.9 237.7 - 164.5 2.0 19.4
Total continuing and
discontinued 637.2 608.3 759.9 753.4 123.0 142.7
Unallocated - - 31.7 4.3 - -
-----------------------------------------------------
637.2 608.3 791.6 757.7 123.0 142.7
-----------------------------------------------------
2 Exchange rates
The results and cash flows of overseas subsidiaries are translated into sterling
using weighted average rates of exchange for the year. The principal rates used
were as follows:
Average Closing
2007 2006 2007 2006
Euros 1.46 1.47 1.36 1.48
US dollars 2.00 1.85 1.99 1.96
Renminbi 15.22 14.70 14.54 15.28
3 Exceptional items
2007 2006
�m �m
Continuing operations:
Antenna and Wireless Systems
Asset write downs (0.2) -
Other restructuring (0.9) -
Acquisition related payments (0.6) -
Electronic Components and Systems
Asset write downs (2.9) -
Other restructuring (5.8) -
-----------------
(10.4) -
Finance costs incurred on the early repayment of Private
Placement notes (1.5) -
Discontinued operations:
Laird Security Systems
Restructuring costs (0.6) -
-----------------
(12.5) -
-----------------
Note
(a) Finance costs of �1.5m (2006, �nil) were incurred on the early repayment of
US$ Private Placement notes. This arose due to the divestment of a company
which issued the notes.
(b) The total cash outlay for exceptional costs in 2007 was �4.6m (2006, �0.5m).
(c) The tax effect on exceptional items is a �1.6m tax credit (2006, �nil).
4 Taxation
2007 2006
�m �m
The tax charge in the income statement is disclosed as follows:
Tax charge on continuing operations 11.8 8.8
Tax charge on discontinued operations 0.8 4.8
----------------
12.6 13.6
----------------
Reconciliation of the total tax charge / (credit) for the year
The tax charge / (credit) in the income statement for the year is lower than the
standard rate of corporation tax in the UK of 30% (2006, 30%). The differences
are reconciled below:
2007 2006
�m �m
Profit before tax from continuing operations 51.5 39.6
Profit before tax from discontinued operations 88.8 24.7
----------------
Profit before tax 140.3 64.3
----------------
Profit before tax multiplied by the standard rate of
corporation tax in the UK of 30% (2006, 30%) 42.1 19.3
Effects of:
Expenses not deductible for tax purposes 7.4 4.6
Non taxable profit on disposal (25.6)
Regional tax incentives (12.4) (9.7)
Overseas tax rate differences 2.6 2.4
Adjustments in respect of prior years (4.4) (4.8)
Unrelieved tax losses 2.9 1.8
----------------
Total tax expense reported in the income statement 12.6 13.6
----------------
5 Discontinued operations
2007 2006
�m �m
Results from discontinued operations:
Revenue 72.9 237.7
----------------
Operating profit before: 4.4 27.8
Amortisation of acquired intangible assets (0.3) (1.0)
Exceptional items (0.6) -
Taxation (1.1) (7.4)
----------------
Profit after tax from discontinued operations 2.4 19.4
Profit on disposal of businesses:
Profit before transfer from translation reserve 108.8 -
Transfer from translation reserve (19.5) -
----------------
Profit on current year disposals 89.3 -
Loss on prior year disposals (4.0) (2.1)
Taxation 0.3 2.6
----------------
Profit after tax on disposals 85.6 0.5
----------------
Profit from discontinued operations 88.0 19.9
----------------
The results from discontinued operations are the results from Laird Security
Systems, which was disposed of on 27 April 2007 for a total consideration of
�242.5m.
6 Earnings per share
The calculation of basic and diluted earnings per share is based on the profit
for the year divided by the daily average of the number of shares in issue
during the year. Diluted earnings per share is based on the same profits but
with the number of shares increased to reflect the daily average effect of
relevant share options granted but not yet exercised where performance
conditions have been met and shares contingently issuable.
2007 2006
�m �m
Profit
Profit after tax from continuing operations 39.7 30.8
Profit from discontinued operations 88.0 19.9
------------------------
Profit for the year 127.7 50.7
------------------------
Number Number
of shares of shares
(m) (m)
Weighted average shares
Basic weighted average shares 185.9 189.2
Options 1.8 1.5
------------------------
Diluted weighted average shares 187.7 190.7
------------------------
Earnings per share Pence Pence
Basic from continuing operations 21.4 16.3
------------------------
Diluted from continuing operations 21.2 16.2
------------------------
Basic from discontinued operations 47.3 10.5
------------------------
Diluted from discontinued operations 46.9 10.4
------------------------
Basic on profit for the year 68.7 26.8
------------------------
Diluted on profit for the year 68.0 26.6
------------------------
7 Underlying results
Underlying profit and earnings per share are shown as the Board considers them
to be relevant guides to the performance of the Group. The tax charge for the
year is equivalent to 15.5% (2006, 18.1%) of underlying profit before tax.
2007 2006
�m �m
Profit
Continuing profit before amortisation of acquired intangible
assets and exceptional items 80.0 55.4
Finance revenue 2.8 2.1
Finance costs (11.2) (12.5)
Other finance revenue - pension 0.8 0.5
----------------
Continuing underlying profit before tax 72.4 45.5
Discontinued operating profit before amortisation of acquired
intangible assets and exceptional items 4.4 27.8
----------------
Total underlying profit before tax 76.8 73.3
----------------
Tax
The underlying tax charge is calculated as follows:
Underlying tax on continuing operations 10.8 6.3
Underlying tax on discontinued operations 1.1 7.0
----------------
Total underlying tax 11.9 13.3
Continuing underlying tax rate 14.9% 13.8%
Total underlying tax rate 15.5% 18.1%
Tax relief on exceptional items (1.6) -
Deferred tax on goodwill and acquired intangible assets 2.2 2.5
Tax on prior period discontinued operations (0.3) (2.2)
Tax on fair value movement financial instruments 0.4 -
----------------
Total tax charge 12.6 13.6
----------------
Analysis of tax charge:
Tax on profit from continuing operations 11.8 8.8
Tax on discontinued operations 0.8 4.8
----------------
Total tax charge 12.6 13.6
----------------
Earnings per share Pence Pence
Continuing underlying earnings per share - basic 33.1 20.7
----------------
Total underlying earnings per share - basic 34.9 31.7
----------------
Total underlying earnings per share - diluted 34.6 31.5
----------------
8 Dividends paid and proposed
On 11 March 2008 the Board declared, subject to approval from shareholders, a
final dividend of 7.88p per share (2006, 6.45p). The final dividend will be
paid on 6 June 2008 to shareholders registered on 2 May 2008. Dividends paid
are charged to retained earnings on the earlier of the date of payment or the
date on which they become a legal liability of the Company.
Total Dividends Dividends paid Dividends
declared/
proposed*
2007 2006 2007 2006
�m �m �m �m
Final 2005 - 12.8 - -
Interim 2006 - 6.6 - 6.6
Final 2006 13.9 - - 13.9
Special 2007 99.7 - 99.7 -
Interim 2007 6.4 - 6.4 -
Final 2007 - - 14.0 -
----------------------------------------
120.0 19.4 120.1 20.5
----------------------------------------
Dividends per share Dividends paid Dividends
declared/
proposed*
2007 2006 2007 2006
Pence Pence Pence Pence
Final 2005 - 6.45 - -
Interim 2006 - 3.35 - 3.35
Final 2006 6.95 - - 6.95
Special 2007 50.00 - 50.00 -
Interim 2007 3.62 - 3.62 -
Final 2007 - - 7.88 -
----------------------------------------
60.57 9.80 61.50 10.30
----------------------------------------
* attributable to the period
9 Retirement benefit obligations
The Group has adopted IFRIC 14 which, depending on the rules of individual
schemes, allows the Group to recognise pensions surpluses on the balance sheet
where there is an unconditional right to a refund. The resultant aggregate net
pension asset under IAS 19 is �8.1m (2006, �10.4m deficit).
The market value of the schemes' assets, the present value of the schemes'
liabilities and the net pension assets and liability under IAS 19 at 31 December
were as follows:
Schemes
Schemes in
in surplus
surplus with a
with a right to a Other
right to a Other refund schemes Total
refund schemes Total (restated) (restated) (restated)
2007 2007 2007 2006 2006 2006
�m �m �m �m �m �m
Annuities 3.9 4.9 8.8 - 10.3 10.3
Equities 32.9 8.3 41.2 4.2 41.3 45.5
Gilts and bonds 31.0 9.8 40.8 - 27.3 27.3
Other including cash 7.0 0.1 7.1 - 0.1 0.1
---------------------------------------------------------------
Total market value of assets 74.8 23.1 97.9 4.2 79.0 83.2
Present value of scheme (62.3) (26.6) (88.9) (3.3) (89.9) (93.2)
liabilities ---------------------------------------------------------------
Funded status 12.5 (3.5) 9.0 0.9 (10.9) (10.0)
---------------------------------------------------------------
Disallowed assets (0.2) (0.7) (0.9) (0.4) - (0.4)
---------------------------------------------------------------
Surplus/(deficit) in 12.3 (4.2) 8.1 0.5 (10.9) (10.4)
the schemes ---------------------------------------------------------------
10 Analysis of movements in net borrowings
Period to 31 December 2007
At 1 At 31
January Cash Acquisitions Non-cash Exchange December
2007 flow and disposals changes differences 2007
�m �m �m �m �m �m
Cash at bank 44.0 (12.5) - - 1.3 32.8
Overdrafts - (0.4) - - - (0.4)
Loans due within one
year (4.7) (5.0) 0.6 - 0.1 (9.0)
Loans due after more
than one year (148.1) 37.2 - - 2.1 (108.8)
Finance leases (0.3) 0.1 0.2 - - -
--------------------------------------------------------------------
Total (109.1) 19.4 0.8 - 3.5 (85.4)
--------------------------------------------------------------------
Period to 31 December 2006
At 1 At 31
January Cash Non-cash Exchange December
2006 flow Acquisitions changes differences 2006
�m �m �m �m �m �m
Cash at bank 23.9 22.5 - - (2.4) 44.0
Overdrafts (2.2) 2.2 - - - -
Loans due within (4.2) 3.0 (4.0) - 0.5 (4.7)
one year
Loans due after (165.0) 8.0 (7.6) - 16.5 (148.1)
more than one year
Finance leases (0.6) 0.3 - - - (0.3)
--------------------------------------------------------------------
Total (148.1) 36.0 (11.6) - 14.6 (109.1)
--------------------------------------------------------------------
11 Reconciliation of movements in equity
Ordinary
share Share Retained Translation Treasury
capital premium earnings reserve shares Total
�m �m �m �m �m �m
At 1 January 2006 40.0 155.5 119.9 (28.4) (2.7) 284.3
Total recognised income
and expense for the year - - 54.0 (30.6) - 23.4
Issue of shares - 9.4 108.2 - - - 117.6
Rights Issue
Exercise of share options 0.1 0.9 - - - 1.0
Issue of shares on
acquisition of business - 1.4 - - - 1.4
Share based payments - - 1.6 - - 1.6
Purchase of treasury shares - - - - (0.7) (0.7)
Vesting of LTIPs - - (0.7) - 0.7 -
Dividends paid - - (19.4) - - (19.4)
--------------------------------------------------------------------
At 1 January 2007 49.5 266.0 155.4 (59.0) (2.7) 409.2
Total recognised
income and expense - - 129.7 24.4 - 154.1
for the year
Transfer between reserves - - (37.9) 37.9 - -
Exercise of share options 0.3 2.9 - - - 3.2
Share based payments - - 2.0 - - 2.0
Vesting of LTIPs - - (0.8) - 0.8 -
Dividends paid - - (120.0) - - (120.0)
--------------------------------------------------------------------
At 31 December 2007 49.8 268.9 128.4 3.3 (1.9) 448.5
--------------------------------------------------------------------
12 Additional cash flow information
Cash generation from operations
Continuing operations 2007 2006
�m �m
Net profit after taxation 39.7 30.8
Depreciation and other non-cash items
Depreciation 10.3 7.9
Amortisation of capitalised development costs 2.0 1.0
Exceptional fixed asset write downs 3.1 -
Loss on disposal of fixed assets 0.1 -
Capitalised development costs (3.8) (3.5)
Share based payments 1.8 1.6
Amortisation of acquired intangible assets 10.2 6.1
Financial instruments - fair value adjustment (1.2) (0.2)
Pension charges 0.2 0.7
Other net finance costs 9.1 9.9
Taxation 11.8 8.8
Pension contributions (14.1) (2.9)
Changes in working capital
Inventories (19.6) (2.4)
Trade and other receivables (41.5) (17.7)
Trade, other payables and provisions 39.5 13.2
-------------------
(21.6) (6.9)
-------------------
Cash generated from continuing operations 47.6 53.3
-------------------
Discontinued operations
Net profit after taxation 88.0 19.9
(Profit) / loss on disposal of businesses before taxation (85.3) 2.1
Depreciation and other non-cash items
Depreciation 1.7 5.3
Profit on disposal of fixed assets - (0.7)
Amortisation of acquired intangible assets 0.3 1.0
Taxation 0.8 4.8
Changes in working capital (10.7) (4.9)
-------------------
Cash flow from discontinued operations (5.2) 27.5
-------------------
Cash generated from operations 42.4 80.8
-------------------
Notes
(a) Working capital movements from continuing operations are after creditor
increases of �3.9m (2006, �nil) in respect of exceptional costs of
redundancy and restructuring.
Net cash outflow on acquisitions and disposals
2007 2006
�m �m
Acquisition of businesses
Consideration:
Cash consideration (80.6) (97.6)
Net cash acquired 1.6 0.9
-------------------
(79.0) (96.7)
Deferred consideration paid (2.4) (5.3)
-------------------
Net cash outflow on acquisition of businesses (81.4) (102.0)
-------------------
Borrowings acquired - (11.6)
-------------------
Disposal of businesses
Consideration:
Net cash consideration
Current year disposals 219.4 -
Prior year disposals (0.2) (8.5)
-------------------
Net cash consideration 219.2 (8.5)
Cash disposed of (0.1) -
Borrowings disposed of 0.8 -
-------------------
Net cash inflow / (outflow) on disposal of businesses 219.9 (8.5)
-------------------
Gross consideration for the disposal in 2007 was �242.5m of which �12.5m was
deferred for one year.
13 Other information
The financial information for the year ended 31 December 2007 set out above has
been extracted from the 2007 Annual Report and Accounts which have been audited
by Ernst & Young LLP who have given an unqualified audit opinion. The Accounts
for 2007 are expected to be filed following the Company's Annual General Meeting
to be held on 9 May 2008. The Company's 2007 Annual Report and Accounts,
including the notice of Annual General Meeting, will be posted to shareholders.
The proposed final dividend will be paid on 6 June 2008 to shareholders
registered on 2 May 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GUUBAWUPRPGG
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