RNS Number:9323Q
Biotrace International PLC
07 September 2005
For Immediate Release 7 September 2005
BIOTRACE INTERNATIONAL PLC
("Biotrace", "the Company" or "the Group")
INTERIM RESULTS
for the six months ended 30 June 2005
and
ACQUISITION OF LEADING EUROPEAN MICROBIOLOGY GROUP
Biotrace International Plc a leading manufacturer of industrial microbiology and
life science products and services, today announces its interim results for the
six months ended 30 June 2005. Also today Biotrace announces the acquisition of
the MicroSafe Group ("MicroSafe") a leading supplier of microbiology products to
food, pharmaceutical and defence sectors based in Italy.
Highlights
Financial
* Revenue up 9% to #13.6M (2004: #12.5M)
* Pre-tax profit up 43% to #1.4M (2004: #1M)
* Operating profits up 58% on corresponding period last year
* Gross margins remain robust at 53%
* Earnings per share up 40% to 2.40p (2004: 1.72p)
* Interim dividend increased to 0.40p (2004: 0.25p)
Operational
* Executive management team strengthened with the appointment of a Group
Operations Director
* Health Protection Agency award for rapid hygiene kits which, with the
growing incidence of hospital acquired infections, are being used to
assess hospital cleanliness and surgical instrument cleanliness
* Purchase of remaining shares in French JV, Biotrace SA
* Acquisition of MicroSafe for #2.5M
- Expands pharmaceutical, defence and food customer base
- Anticipated to double revenues from pharmaceutical and
defence sectors by broadening product offering
- Recurring revenue business model - 80% of turnover from
consumable products
- Earnings enhancing in first full year of operations
Commenting, Terry Clements, Non-executive Chairman of Biotrace, said:
"I am pleased to report a substantial improvement in financial performance of
the Group for the first half of the year compared with the corresponding period
last year. The margin improvement seen in the second half of last year has been
sustained at 53% whilst revenues continue to grow, benefiting from the
contribution from Tecra, acquired in June last year.
"The Company is making good progress and as announced today with the acquisition
of MicroSafe, management is continuing to broaden the business base and build
scale in developing a world class sales channel for industrial diagnostics by
internal growth and appropriate acquisitions. Whilst our markets remain
competitive, the Board is confident that this improvement in financial
performance will continue in the second half of the year."
Further information:
Biotrace International Plc on the day tel: +44 (0) 207 466 5000
Ian Johnson, Chief Executive Officer thereafter tel: +44 (0) 1656 641 492
Peter Morgan, Finance Director
Buchanan Communications tel: +44 (0) 207 466 5000
Tim Anderson/James Strong/Mary Jane Johnson
BIOTRACE INTERNATIONAL PLC
ANNOUNCES INTERIM RESULTS
for the six months ended 30 June 2005
Overview:
There has been a significant improvement in the financial performance of the
Group in the first half of 2005 compared with the corresponding period last
year, with sales up 9% to #13.6M and pre tax profits up 43% to #1.4M. We have
maintained our strong margins at 53% following the improvement seen in the
second half of the last year when margins increased from 48% to 53%. Now with
the integration of Tecra complete and greater operational efficiency we have
seen a 58% improvement in operating profits and net margins up from 7.7% to 10%.
With the acquisition of MicroSafe announced today, we have enhanced our product
line and further expanded our sales resource. This acquisition will expand the
business base and provide the Group with greater scale in the pharmaceutical and
defence markets.
The emphasis on achieving greater scale coupled with continuous improvement in
operational efficiency is beginning to impact positively on the financial
performance. The Company is in a strong position going forward, benefiting from
a high percentage of revenues generated from own brands, recurring sales of
consumables and direct sales.
Financial Review:
The Group has prepared its consolidated financial statements using International
Financial Reporting Standards ("IFRS") from 1 January 2005 and have restated the
comparatives within this financial information in accordance with IFRS. There
are three main adjustments to the statements details of which are set out in
note 11.
* The first affects the charge for goodwill on acquisitions made prior
to 1 January 2004, with no further amortisation being required after that date.
The effect of this increases profits in the period by #0.2M (2004: #0.2M).
* The second is the expensing of share options, which generated a charge
of #0.04M (2004: #0.02M).
* The third is to recognise the dividend payable only after it has been
declared. The interim dividend for 2005 amounting to #0.16M is therefore not
deducted from retained earnings until after 30 June 2005, whilst the 2004 final
dividend previously deducted from retained earnings in 2004, is now deducted in
the first half of 2005.
As announced in our Trading Statement, following a poor first quarter, sales
improved in the second quarter resulting in first half revenues of #13.6M, up 9%
on the corresponding period in 2004 (2004: #12.5M). The continued weakening of
the US dollar against UK Sterling, albeit at a slower rate, gave rise to a
reduction of #0.1M in sales on a constant exchange rate basis. Excluding the
Tecra contribution of #1.2M (2004: #0.1M), underlying sales growth was #0.1M.
Profit before tax increased by 43% to #1.4M (2004: #1.0M). The profit was struck
after non-recurring restructuring charges of #0.1M in the period (2004: Nil) and
intangible asset amortisation of #0.2M (2004: Nil). Profit before restructuring
charges and amortisation was #1.7M (2004: #1.0M) up 71%.
As anticipated at the preliminary results in March gross margin percentage
increased in the period to 53% (2004: 48%) due mainly to the contribution of
Tecra, a favourable product mix and more efficient production.
Overheads, excluding development expenditure, increased from #4.6M to #5.2M as a
result of the acquisition of Tecra. This level of overhead was broadly similar
to the total in the second half of 2004. The restructuring costs of #0.1M
incurred in Europe are expected to yield cost savings of a similar magnitude on
an annual basis. Management is continuing to focus on achieving operational
efficiencies to reduce overheads in the second half of 2005. The Group invested
in technology and product development, incurring R&D costs in the period of
#0.6M (2004: #0.5M), with #0.1M attributable to the inclusion of Tecra for the
first time. In the period the Group invested #0.1M in Ruskinn to develop a new
workstation for the IVF market. Similar levels of expenditure are expected in
the second half and into 2006, with sales revenue anticipated in the second half
of 2006.
Operational cash flow remained healthy with a #2.3M inflow in the first half,
increasing by 17% over the corresponding period in 2004. The cash generated
from operations was applied to invest #0.4M in the business as capital
expenditure and pay corporation tax of #0.5M. In addition #0.4M was paid to
shareholders as a final dividend for 2004 whilst scheduled loan repayments
reducing overall borrowings amounted to #0.6M. The Group also settled as
expected the final payment of #0.4M related to the acquisition of International
BioProducts Inc.
Cash in hand at the half year was #0.7M and with borrowings of #3.6M gave a net
debt position of #2.9M. The Group announced in January that the deferred
consideration relating to the acquisition of Fred Baker Scientific Ltd had been
agreed at #0.9M satisfied by the issue of loan notes. These have now been
redeemed in July. Also in July, the Group purchased the minority holding of
shares in Biotrace SA from its joint venture partner for #0.5M. Apart from the
acquisition announced today, no additional consideration is payable in relation
to any prior acquisitions.
The tax charge for the period was #0.4M, #0.1M of this total comprised US tax
which has been relieved against the deferred tax asset on the balance sheet.
Earnings per share for the half year were 2.40p (2004: 1.72p), improving by 40%
period on period. Earnings per share before restructuring costs and
amortisation was 3.01p (2004: 1.78p) up 69%.
The Board has declared an interim dividend of 0.40 pence per share, which will
be paid on 11 October 2005 to shareholders on the register as at 16 September
2005.
Operating Review:
Following a slow first quarter turnover increased 9% compared with the
corresponding period last year, largely as a result of the acquisition of Tecra,
with underlying organic growth cancelled out by further weakening of the US
Dollar compared to the same period last year.
The new de-centralised regional sales structure, within a global coordinated
framework, is providing a more responsive flexible organisation that is able to
respond rapidly to local market conditions. The changeover from distributor
based sales of hygiene products in North America to direct sales in the second
half of 2004 has improved our visibility in this important market and at mid
year, sales of hygiene products exceeded previous levels achieved via the
distributor. The Company also took the opportunity to consolidate its position
in Europe by purchasing the remaining shares in it's French sales subsidiary,
Biotrace SA. 87% of Group sales are now made by direct customer contact.
With a full contribution from Tecra, acquired in June 2004, sales of own brand
products in the period accounted for 82% of Group revenues with sales of
consumables and other repeat business reaching 92% of turnover.
Sales by origin in Europe and the Americas remained static period on period,
with sales in Asia Pacific growing substantially as a result of the contribution
from Tecra, based in Australia. Europe and the Americas account for 46% and 45%
of Group sales respectively, with sales in Asia Pacific growing to 9% of Group
sales.
Industrial:
Industrial sales accounted for 93% of Group turnover and grew 8% to #12.6M in
the first half of the year (2004: #11.8M).
The food, dairy and beverage sector is the largest sector, generating 78% of
Industrial revenues. Most of the world's top manufacturers use the Group's
products for QA/QC and environmental monitoring. 9% of Industrial revenues are
generated from sales of environmental monitoring products to the pharmaceutical
/personal care products sector.
The process water/ environmental sector also generates 9% of Industrial revenues
from sales of rapid microbial detection products. With the growing incidence of
hospital acquired infections, the Biotrace rapid hygiene kits are beginning to
be used to assess hospital cleanliness and surgical instrument cleanliness. The
Health Protection Agency recently awarded these products a high score for their
potential to reduce infections. This emerging business together with other
miscellaneous applications makes up the balance of 4% of Industrial sales. The
acquisition of MicroSafe announced today, will more than double revenues from
the pharmaceutical sector by broadening the Group's product offering and
increasing the customer base. The industrial sales group now have a
comprehensive range of products that allow Biotrace to compete strongly.
Life sciences:
During the period, sales of Ruskinn products, which now generates the entire
revenue of the division, were down 16% to #0.4M (2004: #0.5M) and accounted for
less than 3% of Group turnover. Orders for Ruskinn products are healthy and in
line with full year expectations. Production capacity continues to improve as
does quality and higher sales are therefore anticipated in the second half. The
development of the new range of products for IVF clinics continues to make good
progress with prototypes expected to be placed in trial sites at the beginning
of 2006. Management are seeking to add more scale by introducing a
complementary consumable product to what is otherwise predominantly an
instrument business.
Defence:
Sales of defence products, predominantly reagents, were #0.5M (2004: #0.3M), up
considerably on the same period last year and accounted for 4% of Group turnover
in the period. The higher than expected first half sales are not expected to be
repeated in the second half, although it would appear that from next year there
is some momentum returning to this business as a result of larger numbers of
systems being brought into service in the UK and more interest from overseas
customers. As detailed below, Themis, a MicroSafe Group company with
approximately #0.7M of sales per annum to the Italian defence industry will add
further scale to the division.
Acquisition:
As of today, Biotrace has acquired 62% of Biotrace-MicroSafe srl. The new
company was established to purchase the group of companies previously comprising
the MicroSafe Group. The existing shareholders of the MicroSafe Group will
remain minority shareholders of Biotrace-MicroSafe srl.
The MicroSafe Group is headquartered in Rome, Italy and comprises of four main
businesses. Ascotec srl, based in Rome, manufactures a range of systems for
environmental monitoring for pharmaceutical manufacturers. MicroSafe, having
direct sales organisations in Italy, Hungary, Slovenia and Croatia, is a sales
and marketing company distributing Ascotec products together with a range of
complementary microbiology products, including pre-prepared culture media to the
pharmaceutical industry. The third company is Themis, also based in Rome, which
sells a range of products to the Italian defence industry. The final business
is a 39% shareholding in Target Diagnostica srl, a company based in Milan, whose
business is selling microbiology products to industrial customers, including
food, dairy, beverage and pharmaceutical manufacturers. This business transfers
to Biotrace-MicroSafe srl with the option to gain control in future years.
Key Points
* Direct customer access in the industrial microbiology markets in Italy,
Hungary, Slovenia and Croatia
* Expands pharmaceutical, defence and food customer base
* Additional products and expert knowledge for the pharmaceutical sector
* Recurring revenue business model - 80% of turnover from consumable
products
* Ability to expand sales of Biotrace products into new region
* Ability to expand Ascotec sales outside existing region
MicroSafe had sales of Euro7.7M (#5.3M) and made a pre-tax profit of Euro0.8M (#0.6M)
in the year ended 31 December 2004. MicroSafe had net assets of Euro1.1M (#0.7M)
as at 31 December 2004. The consideration for MicroSafe has been satisfied by an
initial payment of Euro3.2M (#2.2M) in cash and Euro0.5M (#0.3M) in Biotrace ordinary
shares of 10p each at 87.43p per share. Biotrace has the option to purchase the
remaining shares after three years for an additional sum of up to Euro2.3M (#1.6M)
based upon the achievement of certain profit targets by 31 December 2007.
MicroSafe's founder, Mr Giovanni Scialo will become Managing Director of
Biotrace-MicroSafe and also lead the business development programme for the
pharmaceutical sector within the Biotrace. The acquisition is expected to be
earnings enhancing in the first full year of operating.
Outlook:
As the strategy to build scale in the industrial diagnostics market continues to
be implemented, Biotrace has moved into the top tier of companies in this field
and completed a significant transition into a truly global, multi-product,
direct sales organisation.
Further opportunities lie ahead to continue building the Group across all its
markets. In order to facilitate continuous improvement in operational
performance and to maximise the synergies of the acquisitions, the Executive
team has recently been strengthened by the appointment of a Group Operations
Director reporting directly to the CEO. As a result of initiatives taken
earlier, the business now has direct control of many of its major markets. This
means that the Group has a more predictable revenue stream from which to
continue to develop its plans.
The significant cash generation from the high level of recurring consumable
product sales will fuel further expansion of the business, by delivering new and
improved products through internal development and by appropriate and
complementary acquisitions. Management is continuing to focus on establishing
further direct customer access in major European markets. The high level of
cash generation coupled with the Board's confidence in the Group has enabled the
Directors to declare an increased interim dividend of 0.40 pence.
With further improvements in financial performance anticipated in the second
half, the Board is confident that its strategy will, over the long term, deliver
sustained growth in sales and profits.
Consolidated Income Statement
Unaudited Restated Restated
Six months (note 11) (note 11)
to 30.06.05 Unaudited Year to
Six months 31.12.04
to 30.06.04
Note #'000 #'000 #'000
Revenue 2 13,559 12,458 26,639
Cost of sales (6,350) (6,465) (13,108)
Gross Profit 7,209 5,993 13,531
Selling, marketing & administrative costs before (5,058) (4,618) (9,664)
restructuring
Restructuring costs 7 (132) - (157)
Total selling, marketing & administrative costs (5,190) (4,618) (9,821)
Research & development costs (581) (462) (1,155)
Total costs (5,771) (5,080) (10,976)
Operating profit before financing costs 2 1,438 913 2,555
Financial income - interest receivable 19 70 83
Financial expenses - interest payable (120) (70) (164)
Net financing costs (101) - (81)
Share of profit and loss in joint venture and associate 31 47 76
Profit before income tax 1,368 960 2,550
Income tax expense 3 (444) (297) (843)
Profit for the period 924 663 1,707
Attributable to :
Equity holders of the company 932 661 1,716
Minority interests (8) 2 (9)
924 663 1,707
Earnings per ordinary share 5
- basic 2.40p 1.72p 4.44p
- diluted 2.39p 1.70p 4.41p
Dividend per share 4 1.15p 1.15p 1.40p
Consolidated Balance Sheet
Unaudited Restated (note Restated
at 30.06.05 11) (note 11)
Unaudited at 31.12.04
at 30.06.04
Notes #'000 #'000 #'000
ASSETS
Intangible assets 13,778 13,281 13,492
Property, plant and equipment 2,664 2,773 2,737
Investments in joint venture 160 150 154
Deferred tax asset 335 711 460
Trade and other receivables 100 100 100
Total non current assets 17,037 17,015 16,943
Inventories 4,579 3,725 3,905
Trade and other receivables 4,938 4,845 5,047
Cash and cash equivalents 724 1,134 758
Total current assets 10,241 9,704 9,710
Total assets 2 27,278 26,719 26,653
EQUITY
Share capital (3,887) (3,868) (3,887)
Share premium (9,921) (9,843) (9,921)
Other reserves (1,079) (396) (703)
Retained earnings (3,310) (1,814) (2,788)
Total equity attributable to shareholders (18,197) (15,921) (17,299)
Minority interest share in net assets (469) (480) (483)
(18,666) (16,401) (17,782)
LIABILITIES
Interest bearing loans and borrowings (2,594) (4,192) (2,917)
Deferred tax liabilities (99) - (99)
Provisions (135) (102) (110)
Total non current liabilities (2,828) (4,294) (3,126)
Trade and other payables (3,606) (3,514) (3,711)
Interest bearing loans and borrowings (1,138) (1,240) (1,143)
Income tax liabilities (41) (437) (183)
Derivative financial instruments (71) - -
Provisions (928) (833) (708)
Total current liabilities 2 (5,784) (6,024) (5,745)
Total liabilities (8,612) (10,318) (8,871)
Total equity and liabilities (27,278) (26,719) (26,653)
Consolidated statement of changes in equity
JUNE 2005 Share Share Reval'n Merger Translation Hedging Retained Minority Total
Capital premium reserve reserve reserve reserve Earnings Interest Equity
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 Jan 05 3,887 9,921 29 390 284 - 2,788 483 17,782
Opening balance IAS 39 - - - - - 20 - - 20
adjustment
Fair value gains / (losses) - - - - - (91) - - (91)
Currency translation & hedging - - - - 447 - - (6) 441
Net income recognized directly - - - - 447 (71) - (6) 370
in equity
Profit for the year - - - - - - 932 (8) 924
Dividends paid - - - - - - (447) - (447)
Share options amortised - - - - - - 37 - 37
Balance at 30 Jun 05 3,887 9,921 29 390 731 (71) 3,310 469 18,666
JUNE 2004 Share Share Reval'n Merger Translation Hedging Retained Minority Total
capital premium reserve reserve reserve reserve Earnings Interest Equity
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 04 3,829 9,707 29 390 - - 1,574 492 16,021
Fair value gains - - - - - - - - -
Currency translation & hedging - - - - (23) - - (10) (33)
Net income recognized directly - - - - (23) - - (10) (33)
in equity
Profit for the year - - - - - - 663 (2) 661
Dividends paid - - - - - - (443) - (443)
Share options amortised - - - - - - 20 - 20
Shares issued 39 136 - - - - - - 175
Balance at 30 June 04 3,868 9,843 29 390 (23) - 1,814 480 16,401
DECEMBER 2004 Share Share Reval'n Merger Translation Hedging Retained Minority Total
capital premium reserve reserve reserve reserve Earnings Interest Equity
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 1 January 04 3,829 9,707 29 390 - - 1,574 492 16,021
Fair value gains - - - - - - - - -
Currency translation & hedging - - - - 284 - - - 284
Net income recognized directly - - - - 284 - - - 284
in equity
Profit for the year - - - - - - 1,716 (9) 1,707
Dividends paid - - - - - - (543) - (543)
Share options amortised - - - - - - 41 - 41
Shares issued 58 214 - - - - - 272
-
Balance at 31 December 04 3,887 9,921 29 390 284 - 2,788 483 17,782
Consolidated Cash Flow Statement
Unaudited Unaudited
Six months Six months Year at
at 30.06.05 at 30.06.04 31.12.04
#'000 #'000 #'000
Profit for the period 924 663 1,707
Adjustments for:
Depreciation 465 409 889
Amortisation 209 36 221
Amortisation of share options issued to employees 37 20 41
Foreign exchange losses 6 23 (138)
Financial income (19) (70) (83)
Financial expenses 121 70 164
Share in associate results (7) (20) (19)
Gain on sale of property, plant and equipment 2 21 77
Income tax expense 444 297 843
Operating profit before changes in working capital and 2,182 1,449 3,702
provisions
Decrease in accounts receivable 194 576 325
Increase in inventories (547) (50) (249)
Increase / (decrease) in accounts payable 451 (19) (259)
Cash generated from operations 2,280 1,956 3,519
Interest paid (121) (70) (152)
Income tax paid (460) (275) (866)
Net cash from operating activities 1,699 1,611 2,501
Acquisition of subsidiary, net of cash acquired (369) (5,255) (5,468)
Payments to acquire property, plant and equipment (386) (244) (726)
Receipts from sales of property, plant and equipment 43 74 57
Payments to acquire intangible assets - - (4)
Interest received 18 70 83
Net cash used in investing activities (694) (5,355) (6,058)
Proceeds from issue of ordinary shares - 175 272
Proceeds from borrowings - 940 1,151
Repayments of borrowings (585) - (789)
Payment of finance lease liabilities (12) (10) (18)
Dividend paid to equity shareholders (447) (441) (539)
Net cash used in financing activities (1,044) 664 77
Net cash outflow (39) (3,080) (3,480)
Net cash outflow (39) (3,080) (3,480)
Cash and cash equivalents at start of period 758 4,221 4,221
Effect of exchange rate fluctuations on cash held 5 (7) 17
Cash and cash equivalents at end of period 724 1,134 758
The restatement arising from IFRS has resulted in presentational changes only as
no adjustments have a cash impact.
NOTES TO THE INTERIM ACCOUNTS
1. Accounting policies
a) Basis of preparation
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) for interim
financial statements. These are the Group's first IFRS condensed consolidated
interim financial statements for part of the period covered by the first IFRS
annual financial statement and IFRS 1 First-time Adoption of International
Financial Reporting Standards has been applied. The condensed consolidated
interim financial statements do not include all of the information required for
full annual financial statements.
An explanation of how the transition to IFRS has affected the reported financial
position and financial performance of the Group is provided in note 11. The
note includes reconciliations of equity and profit for comparative periods
reported under UK Generally Accepted Accounting Practices (UK GAAP) to those
reported for those periods under IFRS.
EU law (IAS Regulation EC 1606/2002) requires that the next annual consolidated
financial statements of the company, for the year ending 31 December 2005, be
prepared in accordance with International Financial Reporting Standards (IFRS)
adopted for use in the EU ("adopted IFRS").
This interim financial information has been prepared on the basis of the
recognition and measurement requirements of adopted IFRS as at 30 June 2005 that
are effective (or available for early adoption) at 31 December 2005, the Group's
first annual reporting date at which it is required to use adopted IFRS. Based
on these adopted IFRS, the directors have applied the accounting policies, as
set out in note 1, which they expect to apply when the first annual IFRS
financial statements are prepared for the year ending 31 December 2005.
However, the adopted IFRSs that will be effective (or available for early
adoption) in the annual financial statements for the year ending 31 December
2005 are still subject to change and to additional interpretations and therefore
cannot be determined with certainty. Accordingly, the accounting policies for
that annual period will be determined finally only when the annual financial
statements are prepared for the year ending 31 December 2005.
The interim accounts included in this financial information are not audited and
do not constitute full statutory accounts within the meaning of section 240 of
the Companies Act 1985. The comparative figures for the financial year ended 31
December 2004 are not the Company's statutory accounts for that financial year.
Those accounts, which were prepared under UK GAAP, have been reported on by the
Company's auditors and delivered to the registrar of companies. The report of
the auditors was unqualified and did not contain statements under section 237(2)
or (3) of the Companies Act 1985.
b) Significant accounting policies
The condensed consolidated interim financial statements of the Company for the
six months ended 30 June 2005 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group's interest in associates and
jointly controlled entities.
These accounting policies have been applied consistently throughout the Group
for the purposes of these condensed consolidated interim financial statements.
c) Accounting convention
The financial statements have been prepared on a historical cost basis except
that the following assets and liabilities are stated at fair value:
- derivative financial instruments
- hedged items.
d) Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertakings made up to 31 December each year.
The results of subsidiary undertakings acquired or disposed of in the year are
included in the consolidated profit and loss account from the date of
acquisition or up to the date of disposal.
The Group's investment in joint ventures and associates is accounted for using
the equity method. Mansford Biotrace has a financial year of 31 March and
therefore the amount included in the consolidated accounts is derived from
management accounts.
e) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated to
sterling at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in profit or loss. Non-
monetary assets and liabilities that are measured in terms of historical cost in
a foreign currency are translated using the exchange rate at the date of the
transaction.
f) Financial statements of foreign operations.
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated to sterling at
foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated to sterling at the rates
approximating the foreign exchange rates ruling at the dates of the
transactions. Foreign exchange differences arising on retranslation are
recognised directly in a separate component of equity.
g) Accounting for derivative financial instruments
The Group uses forward contracts to reduce its exposure to foreign exchange
risks; it does not use these instruments for trading purposes. Derivative
financial instruments are recognised at fair value, with recognition of any gain
or loss dependent on the nature of the item being hedged. Where derivatives do
not qualify for hedge accounting, the gain or loss on measurement is recognised
immediately in the profit or loss.
h) Cash flow hedges
When a derivative financial instrument is designated a hedge of the variability
in cash flows of a recognised asset or liability, or a highly probable
forecasted transaction, the effective part of any gain or loss on the derivative
financial instrument is recognised directly in equity. When the forecasted
transaction subsequently results in the recognition of a non-financial asset or
non-financial liability, the associated cumulative gain or loss is removed from
equity and included in the initial cost or other carrying amount of the non-
financial asset or liability. If a hedge of a forecasted transaction
subsequently results in the recognition of a financial asset or a financial
liability, then the associated gains and losses that were recognised directly in
the equity are reclassified into profit or loss in the same period or periods
during which the asset acquired or liability assumed affects profit or loss
(i.e. when interest income or expense is recognised).
When a hedging instrument expires or is sold, terminated or exercised, or the
entity revokes designation of the hedge relationship but the hedged forecast
transaction still is expected to occur, the cumulative gain or loss at that
point remains in equity and is recognised in accordance with the above policy
when the transaction occurs. If the hedged transaction is no longer expected to
take place, then the cumulative unrealised gain or loss recognised in equity is
recognised immediately in profit or loss. As permitted IAS 39 has only been
applied from 1 January 2005 with 2004 comparatives in this respect continuing to
be accounted for under UK GAAP.
i) Intangible assets
(i) Goodwill
All business combinations are accounted for by using
the purchase method. Goodwill has been recognised in acquisitions of
subsidiaries, associates and joint ventures. In respect of business
acquisitions that have occurred since 1 January 2004, goodwill represents the
difference between the cost of the acquisition and the fair value of the net
identifiable assets acquired.
The classification and accounting treatment of
business combinations that occurred prior to 1 January 2004 has not been
reconsidered in preparing the Group's opening IFRS balance sheet at 1 January
2004 (see note 11).
Goodwill is stated at cost less any accumulated
impairment losses. Goodwill is allocated to cash-generating units (CGU's) and
is no longer amortised but is tested annually for impairment. Negative goodwill
arising on an acquisition is recognised directly in profit or loss. In respect
of associates, the carrying amount of goodwill is included in the carrying
amount of the investment in the associate.
Impairment of goodwill
The annual impairment review involves comparing the
carrying amount to the estimated recoverable amount (by allocating the goodwill
to CGU's) and recognising an impairment loss if the recoverable amount is lower.
Impairment losses are recognised through the income statement.
(ii) Research and development
Expenditure on research activities is recognised as
an expense when incurred.
Expenditure on development activities, as a result
of the continuous nature of the Group's product developments and technical
uncertainties relating thereto, is not generally capitalised In those
circumstances where research findings are applied to a plan or design for the
production of new or substantially improved products and processes, expenditure
is capitalised if the product or process is technically and commercially
feasible and the Group has sufficient resources to complete the development.
(iii) Other intangible assets
Other intangible assets that are acquired by the
Group are stated at cost accumulated amortisation and impairment losses.
Amortisation of intangible assets
Other intangible assets are amortised on a straight
line basis from the date they are available for use, the estimated useful lives
are as follows:
- patents - 18 years
- trademarks and know how - 20 years
- licences 8-15 years
Other intangible assets are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
j) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. The cost of self constructed assets includes materials,
direct labour and an appropriate proportion of overheads.
Depreciation is charged to profit or loss on a straight-line basis over the
expected useful economic lives of each part of an item of property plant and
equipment.
The principal annual rates used for this purpose are:
Plant and machinery 15%
Tooling and rental instruments 33 1/3%
Motor vehicles 25%
Furniture, fixtures and fittings 15% - 25%
Freehold buildings 2% - 10%
The residual value of assets is reassessed annually.
Impairment of property, plant and equipment
The carrying value of property, plant and equipment is reviewed at
each balance sheet date for indications of impairment. If any such indication
exists, the assets' recoverable amount is calculated and an impairment loss is
recognised where the recoverable amount is less than the carrying value of the
asset.
k) Inventories
Inventories are stated at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and selling expenses.
l) Revenue recognition
(i) Good and services - revenue is recognised in the
income statement when the significant risks and rewards of ownership are
transferred to the customer.
(ii) Warranty or service contract income - revenue is
recognised on a straight line basis over the duration of the contract.
(iii) Government grants:
Grants are initially treated as deferred income in
the balance sheet then:
- government grants that compensate the Group for
expenses incurred, are recognised as revenue to match the expenses incurred.
- government grants that compensate the Group for
the cost of an asset, are recognised as revenue on a systematic basis in the
income statement over the useful life of the asset.
m) Expenses
(i) Operating lease payments are recognised in the income
statement on a straight line basis over the life of the lease taking into
account incentives or fluctuating payments
(ii) Minimum finance lease payments are apportioned
between the finance charge and the reduction of the outstanding liability. The
finance charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining balance of the
liability.
n) Dividends
Dividends are recognised as a liability in the period in which they are
declared.
o) Income tax
Income tax on the profit or loss for the periods presented comprises current and
deferred tax.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantially enacted at the balance
sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. A
deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
p) Employee benefits
(i) Pension costs
The Group does not operate its own pension scheme,
but instead contributes to the personal pension schemes of its employees.
Charges are made to the profit and loss account in the year in which such
contributions fall due.
(ii) Share based payments
The share option programme allows Group employees to
acquire shares of the Company. The fair value of options granted is recognised
as an employee expense with a corresponding
increase in equity. The fair value is measured at
grant date and spread over the period during which the employee become
unconditionally entitled to the options. The fair value of the options granted
is measured using a Black Scholes model, taking into account the terms and
conditions upon which the options were granted. The amount recognised as an
expense is adjusted to reflect the actual number of share options that vest
except where forfeiture is only due to share prices not achieving the threshold
for vesting. Where bonuses are paid to Group senior management based on share
price targets, the estimated bonus is recognised as an expense in the year in
which it arises.
2 Segmental analysis
Segmental information is presented in the condensed consolidated interim
financial statements in respect of the Group's geographical segments which are
the primary basis of segmental reporting.
i) Geographical analysis
The results below are allocated based on the region from which
the businesses are located; this reflects the group's management and internal
reporting structure.
Inter segment pricing is determined on an arms length basis.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
For the purposes of this analysis the following definitions are used:
Europe - includes all of Europe, Middle East and Africa and Russia
Americas - includes all of North and South America and the Caribbean
APAC (Asia Pacific region) - includes Australasia, New Zealand, China,
India, Far East, Asia (apart from Russia)
Corporate - includes the activities of the directors of the
Company and certain central finance and marketing costs not attributable to the
individual regions.
6 months to 30 June 2005 Europe Americas APAC Corporate Group
#'000 #'000 #'000 #'000 #'000
Sales - external 6,174 6,166 1,219 - 13,559
- Intra group 3,112 1,625 1,517 - 6,254
Total segment revenue 9,286 7,791 2,736 - 19,813
Operating profit 1,254 760 392 (968) 1,438
Share of profit in associates & joint 31 - - - 31
ventures
Net financing costs (60) (40) (19) 18 (101)
Profit before income tax 1,255 679 384 (950) 1,368
Income tax (414) (197) (117) 284 (444)
Profit for period 841 482 267 (666) 924
Included in the above
Depreciation 282 87 96 - 465
Amortisation 37 - 172 - 209
Impairment - - - - -
Balances at 30 June 2005
Segment assets 3,987 9,271 1,679 12,181 27,118
Investment in joint venture 160 - - - 160
Total Assets 4,147 9,271 1,679 12,181 27,278
Segment liabilities (2,167) (4,628) (873) (943) (8,612)
Capital expenditure
- tangible 195 34 157 - 386
- intangible - - 22 - 22
6 months to 30 June 2004 Europe Americas APAC Corporate Group
#'000 #'000 #'000 #'000 #'000
Revenue - external 6,220 6,123 115 - 12,458
- Intra group 2,365 28 84 - 2,477
Total segment revenue 8,585 6,151 199 - 14,935
Operating profit 882 690 45 (704) 913
Share of profit in associates & joint ventures 27 - 20 - 47
Net financing costs - - - - -
Profit before income tax 909 690 65 (704) 960
Income tax (322) (183) (3) 211 (297)
Profit for period 587 507 62 (493) 663
Included in the above
Depreciation 243 160 6 - 409
Amortisation 37 - - - 36
Impairment - - - - -
Balances at 30 June 2004
Segment assets 7,744 9,573 1,574 7,678 26,569
Investment in joint venture 150 - - - 150
Total Assets 7,894 9,573 1,574 7,678 26,719
Segment liabilities (2,358) (6,143) (936) (881) (10,318)
Capital expenditure
- tangible 207 37 - - 244
- intangible - - - - -
ii) Market sector analysis
The results below are allocated based on the market sector to which
the businesses sell - The Life Sciences business has been completely integrated
into the balance sheets of our Industrial companies, so these balances are no
longer separately identifiable.
Industrial Life Science Defence Group
#'000 #'000 #'000 #'000
2005
Revenue from external customers 12,646 379 534 13,559
Balances at 30 June 2005
Assets 26,676 - 442 27,118
Investment in joint venture 160 - - 160
Total assets 26,836 - 442 27,278
Liabilities (8,587) - (25) (8,612)
Capital expenditure
- tangible 384 2 - 386
- intangible 22 - - 22
Industrial Life Science Defence Group
#'000 #'000 #'000 #'000
2004
Revenue from external customers 11,753 451 254 12,458
Balances at 30 June 2004
Assets 25,680 415 474 26,569
Investment in joint venture 150 - - 150
Total assets 25,830 415 474 26,719
Liabilities (10,027) (251) (40) (10,318)
Capital expenditure
- tangible 244 - - 244
- intangible - - - -
3 Taxation
Unaudited Unaudited Unaudited
Six months Six months Year to
31.12.04
to 30.06.05 to 30.06.04
#'000 #'000 #'000
UK taxation at 30% 191 91 288
Overseas taxation 131 67 207
Deferred taxation 122 139 348
444 297 843
4 Dividends
The dividends declared in the relevant periods are as follows:
Dividend description Amount per Payment date Total Based on
share dividend
register
#'000 dated
Final dividend 2003 1.15p 14/05/04 440 23/04/04
Interim dividend 2004 0.25p 08/10/04 97 10/09/04
Final dividend 2004 1.15p 16/05/05 446 15/04/05
Interim dividend 2005 0.40p 11/10/05 155 16/09/05
5 Earnings per share
Earnings per share is based on the profit on ordinary activities after
taxation and minority interests and on 38.9 million ordinary shares in issue
during the period (30 June 2004: 38.5 million ordinary shares; 31 December 2004:
38.6 million ordinary shares). Diluted earnings per share is based on the profit
after taxation and minority interests and 39.0 million (30 June 2004: 39.0
million; 31 December 2004: 38.9 million) ordinary shares. The Group has
calculated an undiluted earnings per share before restructuring and amortisation
in order to inform shareholders of the underlying performance of the Group. The
adjusted earnings per share are calculated in the following ways:
Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
#'000 #'000 #'000
Earnings
Profit for the period attributable to equity 932 661 1,716
holders
Add: Restructuring costs (see note 7) 132 - 157
Less: Tax on restructuring costs (40) - (47)
1,024 661 1,826
In addition basic earning per share before restructuring costs and amortisation has been calculated as follows:
Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
#'000 #'000 #'000
Profit for the period before restructuring costs 1,024 661 1,826
Add: Amortisation of intangibles 209 37 221
Less: Tax on amortisation (63) (11) (66)
1,170 687 1,981
Weighted average number of ordinary shares Number of shares Number of shares Number of shares
Issued ordinary shares at the end of the period 38,865,149 38,675,149 38,865,149
Issued ordinary shares at the start of the period 38,865,149 38,290,149 38,290,149
Weighted average number of shares in period 38,865,149 38,492,319 38,633,574
Diluted number of shares in period 39,033,267 38,991,512 38,899,921
Earnings per ordinary share Pence per share Pence per share Pence per share
- basic 2.40p 1.72p 4.44p
- diluted 2.39p 1.70p 4.41p
- before restructuring costs 2.55p 1.72p 4.73p
- before restructuring costs and amortisation 3.01p 1.78p 5.13p
6 Property, plant and equipment
Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
#'000 #'000 #'000
Acquisitions 386 244 726
Net book value of asset disposals (45) (95) (135)
Commitments for purchase of assets - - 118
7 Restructuring costs
Restructuring costs comprise the following:
Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
#'000 #'000 #'000
Relocation of Lucigen Ltd - - 31
Restructure to regional basis following acquisition of
Tecra 132 - 94
Change to direct distribution in N America - - 32
132 - 157
Provision for restructuring costs at the period end 7 - -
8 Share based payments
In accordance with the transitional provisions in IFRS 1 and IFRS 2, the
recognitions and measurement principles in IFRS 2 have not been applied to
grants made prior to 7 November 2002.
For grants subsequent to this date the fair values of services received
in return for share options granted to employees are measured by reference to
the fair value of share options granted. The estimate of the fair value of the
services received is measured based on a Black Scholes model (with the
contractual life of the option and expectations of early exercise incorporated
into the model). The recipient is required to remain an employee of the company
for 3 years before the options can be exercised and in addition for the 1997
option scheme the share price must outperform the movement of the FTSE small cap
index by 2% p.a. over a 3 year period.
The terms and conditions of the share options granted during the six
months ended 30th June 2005 were as follows:
Grant Number of share Vesting conditions Contractual life of
options option
date
Options granted to directors 22-03-05 200,000 3 years of service 7 years
Options granted to senior employees 14-04-05 45,000 3 years of service 7-10 years
The principal assumptions used in assessing the fair value of share options were
as follows:
Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
Fair value at measurement date #0.35-#0.42 #0.39 #0.43-#0.45
Share price #0.93-#0.95 #0.86 #1.04
Exercise price #0.93-#0.95 #0.86 #1.04
Expected volatility (see note below) 45%-52% 45%-52% 45%-52%
Option life 7-10 years 7 years 7-10 years
Expected dividends 1.8% 1.8% 1.8%
Risk-free interest rate 4.3% 4.3% 4.3%
The expected volatility is based on the historic volatility (calculated based on
weighted average remaining life of the share options).
9 Financial instruments
i) Hedging fluctuations in foreign currency
The Group is exposed to foreign currency risk on sales,
purchases and borrowings that are denominated in a currency other than Pound
Sterling. The currencies giving rise to this risk are primarily US Dollars,
Australian Dollars and Euro.
The Group uses forward exchange contracts to hedge its foreign
currency risk. The forward exchange contracts have maturities of less than one
year after the balance sheet date.
In respect of other monetary assets and liabilities held in
currencies other than sterling the Group ensures that the net exposure is kept
to an acceptable level by buying or selling foreign currencies at spot rates
where necessary to address short-term imbalances.
The principal repayment amounts of the Group's U.S. Dollar bank
loans are naturally hedged by trading cash flows.
ii) Forecasted transactions
The Group classifies its forward exchange contracts hedging
forecasted transactions as cash flow hedges and measures them at fair value.
The fair value of forward exchange contracts at 1 January 2005 was adjusted
against the opening balance of the hedging reserve at that date (see note 11).
The net fair value of forward exchange contracts used as hedges of forecasted
transaction at 30 June 2005 was #71,000 liability, recognised in fair value
derivatives.
iii) Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that
economically hedge monetary assets and liabilities in foreign currencies and for
which no hedge accounting is applied are recognised in profits or loss. Both
the changes in fair value of the forward contracts and the foreign exchange
gains and losses relating to the monetary items are recognised as part of "net
financing costs". The fair value of forward exchange contracts used as economic
hedges of monetary assets and liabilities in foreign currencies at 30 June 2005
was # nil (31 December 2004: nil) recognised in fair value derivatives.
iv) Fair values
The carrying amount of financial instruments is shown below. The
fair value of these instruments approximates to the carrying value because of
the short maturity of the deposits and borrowings and because the interest rates
are based on floating money market rates in the USA and UK.
To estimate the fair values of forward exchange contracts, they
are marked to market either using listed market prices or by discounting the
contractual forward price and deducting the current spot rate.
Financial Instruments Unaudited Unaudited
Six months Six months Year to
to 30.06.05 to 30.06.04 31.12.04
#'000 #'000 #'000
Cash and cash equivalents 724 1,134 758
Loans - due within 1 year (1,138) (1,240) (1,143)
Loans - due after more than 1 year (2,594) (4,192) (2,917)
Finance leases (12) (31) (24)
Loan with joint venture 100 100 100
(2,920) (4,229) (3,226)
10 Related party transactions
Mansford Biotrace Ltd
The Directors consider the material transactions undertaken by the Group
during the year with Mansford Biotrace Ltd were as follows:
Type of Transaction Amount of transaction in the Amount due from/(to) related
period ending : party at :
30.06.05 30.06.04 30.06.05 30.06.04
#'000 #'000 #'000 #'000
Sale of leasehold premises - - 100 100
Issue of loan stock - - 139 139
Rent charges (68) (68) - -
Tecra Holdings PTY Limited
With the acquisition of International Bioproducts Inc in September 2003,
the Group acquired a 21% holding in Tecra Holdings Pty Limited, a company
registered in Australia. International Bioproducts Inc is a distributor of Tecra
products in North America. Following the acquisition of Tecra Holdings Pty
Limited in June 2004, the transactions and balances previously treated as
related party transactions have been included in the consolidated accounts for
the Group.
11 Transition to IFRS
As stated in the accounting policies note, these are the Group's first
condensed consolidated interim financial statements for part of the period
covered by the first IFRS annual consolidated financial statements prepared in
accordance with IFRS.
The accounting policies have been applied in preparing the condensed
consolidated interim financial statements for the six months ended 30 June 2005,
the comparative information for the six months ended 30 June 2004, the
comparatives for the year ended 31 December 2004 and the preparation of an
opening IFRS balance sheet at 1 January 2004 (the Group's date of transition).
In preparing its opening IFRS balance sheet, comparative information for
the six months ended 30 June 2004 and for the year ended 31 December 2004, the
Group has adjusted amounts reported previously in financial statements prepared
in accordance with UK GAAP.
An explanation of how the transition from UK GAAP to IFRS has affected
the Group's financial position, financial performance and cash flows is set out
in the following tables and the notes that accompany the tables.
Notes to the adjustments made for the transition to IFRS from UK GAAP:
Dividends
Under UK GAAP dividends proposed were included in the group accounts and
dividends proposed and paid were shown on the face of the profits and loss
account. In accordance with IFRS we have only included dividends paid in these
accounts and they are shown as a movement on reserves. The details of the
dividends paid and proposed are shown in note 4.
Share options
In accordance with IFRS 2 share options granted since 7 November 2002
have been valued at the date of grant and this value is being amortised over the
vesting period of the options in issue. This charge is effective from 1 January
2004 and the equivalent amount is credited to retained profits in the balance
sheet.
Goodwill
Under UK GAAP the Group's policy was to amortise goodwill over 20 years.
Under IFRS 3 there is no amortisation of goodwill, so goodwill amortisation
charged in 2004 has been excluded from the restated accounts and the carrying
value of goodwill on the balance sheet is retained at the value stated under UK
GAAP at the start of 2004.
Foreign exchange forward contracts
Under UK GAAP the notional gains and losses on future forward exchange
contracts were noted in the accounts, but not recognised in the results for the
Group. Under IFRS the fair value of these contracts is recognised in the balance
sheet at the period end date, with the equivalent amount shown in the hedging
reserve. This treatment is permissible as the contracts are 100% effective as a
hedge of future cash flows.
Gains or losses included in the hedging reserve are then recycled to
profit or loss when the forecasted transaction occurs. This change in
accounting has been applied only from 1 January 2005 as an opening balance
adjustment at that date.
Impairment reviews
Under IFRS an impairment review is required every year for tangible and
intangible assets that have not been amortised. An impairment review of goodwill
has been carried out and no adjustments are required.
Reconciliation between comparative figures under IFRS and previously published
data (UK GAAP).
Profit and Loss account UK GAAP Share options Goodwill Adjusted IFRS
6 months to 30 June 2004
#'000 #'000 #'000 #'000
Revenue 12,458 12,458
Cost of sales (6,465) (6,465)
Gross Profit 5,993 5,993
Selling and distribution expenses (4,775) (20) 177 (4,618)
Development costs (462) (462)
Profit before interest and taxation 756 (20) 177 913
Share of operating profit in joint venture 47 47
& associate
Finance income 70 70
Finance costs (70) (70)
Profit before tax 803 (20) 177 960
Tax expense (297) (297)
Net profit 506 (20) 177 663
Profit and Loss account UK GAAP Share Goodwill Adjusted
Year to 31 December 2004 options IFRS
#'000 #'000 #'000 #'000
Revenue 26,639 26,639
Cost of sales (13,108) (13,108)
Gross Profit 13,531 13,531
Selling and distribution expenses (10,162) (41) 382 (9,821)
Development costs (1,155) (1,155)
Profit before interest and taxation 2,214 (41) 382 2,555
Share of operating profit in joint venture 76 76
& associate
Finance income 83 83
Finance costs (164) (164)
Profit before tax 2,209 (41) 382 2,550
Tax expense (843) (843)
Net profit 1,366 (41) 382 1,707
Consolidated balance sheet 30 June UK GAAP Dividends Translation Goodwill Adjusted
2004 Reserve IFRS
#'000 #'000 #'000 #'000 #'000
Intangible assets 13,104 177 13,281
Property, plant and equipment 2,773 2,773
Investments in joint venture 150 150
Deferred tax asset 711 711
Trade and other receivables 100 100
NON CURRENT ASSETS 16,838 - 177 17,015
Inventories 3,725 3,725
Trade and other receivables 4,845 4,845
Cash and cash equivalents 1,134 1,134
CURRENT ASSETS 9,704 - - 9,704
Total assets 26,542 - 177 26,719
Share capital (3,868) (3,868)
Share premium (9,843) (9,843)
Other reserves (419) 23 (396)
Retained earnings (1,514) (100) (23) (177) (1,814)
SHAREHOLDERS EQUITY (15,644) (100) - (177) (15,921)
Minority interest (480) - - (480)
Total equity (16,124) (100) (177) (16,401)
Borrowings (4,192) (4,192)
Deferred tax liabilities - -
Provisions (102) (102)
Other payables - -
Non current liabilities (4,294) - - (4,294)
Trade and other payables (3,614) 100 (3,514)
Interest bearing loans and borrowings (1,240) (1,240)
Income tax liabilities (437) (437)
Derivative financial instruments - -
Provisions (833) (833)
Current liabilities (6,124) 100 - (6,024)
-
-
Total liabilities (10,418) 100 - (10,318)
Total equity and liabilities (26,542) - (177) (26,719)
UK GAAP Dividends Translation Goodwill Adjusted IFRS
reserve
Consolidated balance sheet
31 December 2004
#'000 #'000 #'000 #'000 #'000
Intangible assets 13,110 382 13,492
Property, plant and equipment 2,737 2,737
Investments in joint venture 154 154
Deferred tax asset 460 460
Trade and other receivables 100 100
NON CURRENT ASSETS 16,561 - - 382 16,943
Inventories 3,905 3,905
Trade and other receivables 5,047 5,047
Cash and cash equivalents 758 758
CURRENT ASSETS 9,710 - - - 9,710
Total assets 26,271 - - 382 26,653
Share capital (3,887) (3,887)
Share premium (9,921) (9,921)
Other reserves (419) (284) (703)
Retained earnings (2,243) (447) 284 (382) (2,788)
SHAREHOLDERS EQUITY (16,470) (447) - (382) (17,299)
Minority interest (483) - - (483)
Total equity (16,953) (447) - (382) (17,782)
Borrowings (2,917) (2,917)
Deferred tax liabilities (99) (99)
Provisions (110) (110)
Non current liabilities (3,126) - - - (3,126)
Borrowings (1,143) (1,143)
Income tax liabilities (183) (183)
Provisions (708) (708)
Trade and other payables (4,158) 447 (3,711)
Current liabilities (6,192) 447 - - (5,745)
- - - -
Total liabilities (9,318) 447 - - (8,871)
Total equity and liabilities (26,271) - - (382) (26,653)
Opening balance sheet for IFRS - 1 January 2004.
The only adjustment required to the opening balance sheet at 1 January 2004 is
the reversal of the dividend proposed for 2003 but not yet declared at the end
of the year. This added #443,000 to the opening reserves as shown below:
Balance under Dividend Balance under
UK GAAP Adjustment IFRS
#'000 #'000 #'000
Net assets 24,926 - 24,926
Retained earnings (1,131) (443) (1,574)
Shareholders Equity (15,086) (443) (15,529)
Total Equity (15,578) (443) (16,021)
Liabilities (7,973) 443 (7,530)
Opening balance sheet - 1 January 2005.
As permitted, IAS 39 has been applied only from 1 January 2005 with an opening
balance adjustment of #20,000 made to a hedging reserve to recognise the fair
value of forward contracts at 1 January 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UUUCWBUPAGBQ
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