RNS Number:4922K
Yorkshire Group PLC
29 April 2003
Tuesday, 29th April 2003
THE YORKSHIRE GROUP PLC
2002 PRELIMINARY ANNOUNCEMENT
SUMMARY
Year to 31st December
2002 2001
Turnover #103.8m #120.4m
Operating loss before exceptional items #(8.0)m #(0.4)m
Exceptional costs #(18.9)m #(16.1)m
Loss before taxation #(30.2)m #(19.5)m
Earnings per share before exceptional items (21.1)p (9.4)p
Earnings per share after exceptional items (57.2)p (40.2)p
Net gearing 161% 64%
* Continued structural decline in mature markets
* Poor sales, particularly in second half of year
* Progressing asset disposals with focus on debt reduction
as a priority
* Revised facilities agreed with Group's bankers
* Restructuring of manufacturing operations substantially
complete
Pat Barrett, Chairman, commented:
"Trading conditions deteriorated markedly in the second half, which has
adversely affected the Group's performance, and this poor performance has
continued in 2003, with no recovery in trading conditions apparent in the first
few months in the markets in which the Group operates. The current priorities
of the Group remain the reduction of debt through asset disposals, and active
cash management, particularly in the first months of the year that typically
produce a seasonal cash outflow. I am pleased that, with the continuing support
of our bankers, we are making progress from a number of management initiatives
to conserve cash and reduce our cost base".
Enquiries:
Andrew Dick, Chief Executive Nick Denton
Jim Perrie, Finance Director Tom Leatherbarrow
Tel: 0113 244 3111 The Hogarth Partnership
Tel. 020 7665 4742 Tel: 020 7357 9477
Mob: 07770 272 083
CHAIRMAN'S STATEMENT
Overview
A poor trading performance during the second half of 2002 resulted in a
deterioration in the financial position of the Group to the extent that it
breached covenants on Group banking facilities and required an increase in
banking facilities of #1.5m by the beginning of 2003. In response to this
situation, the Board changed its strategy, as announced on 19th December 2002,
to make its immediate priority a substantial reduction in the level of Group
indebtedness. I am pleased to be able to report that, notwithstanding this
situation, the Group was able to retain the support of its lenders and that
revised banking facilities have been agreed.
When I joined the Board in March last year, the Group had just set itself the
task of building a substantial market presence in Asia to reflect the migration
of a significant proportion of its customer base to that region. It was also
dealing with the effects of decisions previously made including:
* The strategic decision to concentrate exclusively on textile dyes during a
period of unprecedented structural decline of the textile industry within
the mature markets of the Western world. As an example, our US division saw
sales decline by 29% between 2000 and 2002, while our European division
sales declined over the same period by 17%.
* The acquisition of the Viochrom dye business in Greece in 1998 at a cost
of #13m, and subsequent closure of the manufacturing facility and relocation
of production to Leeds at a cost of #6.7m including capital expenditure of
#4.4m.
* The acquisition of the Crompton and Knowles textile dye business in 1999
for #54.1m and the subsequent re-organisation costs in Europe, of more than
#12m, including capital expenditure of #1m. In addition, #3.6m was invested
in capital expenditure in the US business acquired as part of the
transaction.
* Associated with these changes and the identified need to reduce and
streamline the cost base, the three year European restructuring programme
begun in 2001, which involved consolidation of the two Leeds sites into one
at a cost to date of #2.3m, including capital expenditure of #1m.
With the benefit of hindsight, it is clear that the challenges confronted by the
Board were considerably greater than appreciated at the time the major decisions
were made. The cost, in terms of financial and management resources, of
restructuring the European dye business to reduce its costs of production was
excessive given the severe decline in our traditional markets. The Board also
failed to anticipate the scale and speed of the decline in the Group's trading
environment when commitments were made to acquire businesses in America and
Greece and subsequently to invest significant cash resources in either closing
or restructuring them.
Update on strategy
In view of the expected improvement in the second half of 2002 not
materialising, the Board recognised that urgent remedial action was needed. In
December 2002 the Board announced that it was embarking on a strategic asset
disposal programme to reduce debt levels. The Group has made good progress on
realising assets in line with this strategy. Manufacturing operations in
Australia are being closed and the Australian property assets have been sold at
a premium to book value. Progress has also been made towards realising
substantial sums from the disposal of other Group assets, and we anticipate
making further realisations during the course of 2003.
It is the intention of the Board to balance the need to reduce debt with the
requirement to achieve maximum value for the Group's shareholders. A key
component of this objective is the careful management of the Group's cash
resources. The management team has been strengthened to ensure that this task
is achieved and progress to date has been encouraging.
While our global growth strategy has been put on hold until the effects of the
restructuring and disposal programme are seen to be producing benefits, we
continue to preserve market share in these difficult conditions and to make
progress in developing areas such as China.
Results
An operating loss before interest and exceptional items in the first half of
2002 of #1.8m was added to by a subsequent loss of #6.2m in the second half to
realise a loss on this basis of #8.0m for 2002 from turnover of #103.8m. After
exceptional items of #18.9m and interest expense of #3.3m, the loss before tax
is #30.2m.
By comparison, in 2001 turnover of #120.4m gave rise to an operating loss of
#0.4m before interest and exceptional items. Exceptional items of #16.1m and
interest expense of #3.1m lead to a loss before tax of #19.6m.
The loss per ordinary share is 21.1p before exceptional items (2001-9.4p) and
57.2p after exceptional items (2001-40.2p).
Dividend
The directors did not declare an interim dividend and are not recommending a
final dividend.
Directors and employees
In the period since the Interim Report dated 3rd September 2002, Martin Towers
has left the Group to join Kelda Group plc, being replaced by Jim Perrie as
Interim Group Finance Director. I am delighted that Jim has also joined the
Board at this important time, bringing with him extensive experience and
specialist skills very relevant to the present circumstances.
Paul Davies, Managing Director, Europe stepped down from the Board on 25th
October 2002 and has subsequently left the Group. We have appointed an interim
managing director of the European business in his absence, Mike Brown, who has
successfully strengthened the performance of the business against the background
of a difficult trading environment.
Steve Holland, as Managing Director, Yorkshire Americas, will be concentrating
on tackling the challenges faced by our American business and accordingly will
be stepping down from the Board at the next annual general meeting.
During this difficult period for the Group we continue to be grateful for the
support and understanding shown by our employees.
Outlook
No immediate recovery in trading conditions has been apparent in the first
months of 2003 in the markets in which the Group operates. The current
pre-occupation of the Group is active cash management in the first months of the
year that typically produce a seasonal cash outflow. I am pleased that, with the
continuing support of our bank lenders, we are making progress from a number of
management initiatives to conserve cash and reduce our cost base, and with our
new banking facilities against this background we believe it is appropriate to
prepare the accounts on a going concern basis.
Pat Barrett
Chairman
29th April 2003
CHIEF EXECUTIVE'S REVIEW
Summary
Following a period of relative stabilisation in market conditions during the
first half of 2002 in the wake of significant downturn in activity levels
witnessed during 2001, it was disappointing to find trading conditions weakening
significantly in the latter part of the year as business confidence generally
waned in the face of an uncertain global trading environment. This situation
overwhelmed the positive impacts of a number of management initiatives
undertaken by each regional management team.
Much of the weakening in trading conditions were most strongly felt in the USA.
Our USA based business suffered during the final quarter of 2002 whilst the Asia
Pacific and European businesses with customers in the USA also felt the impact.
This position was confirmed towards the end of 2002, when it became clear that a
return to Group profitability would take longer than previously expected. The
Board quickly appraised the situation and determined, regrettably, that it
should defer its global growth strategy and focus on reducing the Group's debt.
We nevertheless continue to make improvements to the management of our business,
including supply chain improvements, streamlining of product range and improved
control systems to monitor working capital. These should ensure we are well
positioned to take advantage of any upturn in market conditions.
Europe
Turnover in 2002 was #42.6m (2001 #51.0m) with an operating loss of #6.7m before
exceptional items (2001 #1.5m). Exceptional items amounted to #5.4m in 2002
(2001 #5.7m).
The management team has progressed the restructuring initiative throughout 2002,
continuing into 2003. The necessary exceptional costs amounting to #3.0m were
largely provided for in the Interim results, with the cash costs likely to be
incurred during the first half of 2003 as funds permit.
The reorganisation of the UK manufacturing base at Kirkstall Road, Leeds has
progressed through the planning stages in 2002 and certain capital costs
incurred. Further cash costs will be incurred during 2003 as manufacturing
transfers to Hunslet Road, Leeds for speciality products augmented by
outsourcing of commodity products. The second half of 2003 is expected to
witness the benefits of this move.
Operational improvements in supply chain management introduced during the second
half of 2002 have started to bear fruit and will result in further improvements
in 2003. A simpler business is emerging with a greater market focus
incorporating better defined responsibilities and management accountability.
Efforts are continuing to make the business more responsive to customer needs.
By the end of 2002, the repositioning of the business to match its cost base
with the levels of expected future demand had resulted in a reduction in the
number of employees by 96 to 520.
Asia Pacific
Turnover in 2002 was #12.7m (2001-#12.6m) with an operating loss of #1.0m before
exceptional items (2001-#0.4m operating profit). Exceptional items amounted to
#0.4m in 2002 (2001- #nil).
2002 has been a year of low cost development for the region into four of the key
markets in the region: China, Taiwan, Indonesia and Korea as a recognised
presence in the region is established. Growth in sales is expected from key
account management and by strengthening our distribution and agency network
throughout the region. Good progress has been made on improving the quality of
our customer base.
In December we announced the closure of our Australian chemical auxiliary
manufacturing facility and will now focus production in Indonesia.
Staff numbers were 140 at year end by comparison to 105 at the beginning of the
year in sales and technical support. The increased cost base, together with
very poor trading in Indonesia towards the end of the year, affected the trading
result in 2002. 2003 is expected to witness the benefit of the additional
resource, together with improved product supply from Europe.
Americas
Turnover in 2002 was #48.5m (2001 - #56.8m) with an operating profit of #0.9m
before exceptional items (2001 - #2.5m). Exceptional operating items amounted
to #0.2m in 2002 (2001 #4.5m).
Business conditions were stable during the first half of 2002, albeit at a low
base, but as the second half progressed, trading conditions became more
difficult with business confidence weakening in both the main domestic USA
market and certain Latin American markets.
Despite the efforts of an experienced management team and a leading market
position, the business reported a loss of #0.7m in the second half of the year,
seasonally the weaker half. Further measures are being taken to reduce the cost
base. The business is well positioned to take advantage of any upturn in market
conditions.
Conclusion
Debt reduction remains the priority for 2003. At the same time we are improving
the business performance through continued cost reduction and developing a more
responsive and commercial approach to our customers throughout the world.
FINANCE DIRECTOR'S REVIEW
Financial review
I joined the Group in January 2003 at a time of unprecedented market upheaval
and difficult trading with the Group having breached its bank facilities.
In the light of ongoing adverse trading conditions and the asset realisation
policy previously announced by the Board an impairment review of fixed assets
has been performed, which has resulted in an exceptional charge of #11.2m. The
Board has also undertaken a review of excess stock, resulting in a provision of
#2.3m.
Given the deteriorating trading conditions and the significant cash outflows the
Group has re-negotiated its banking facilities and new facilities were agreed on
28th April 2003. In agreeing these facilities it has been necessary to incur
#1.2m of advisers fees and other costs and also to write off the un-amortised
issue costs of #0.5m associated with the 1999 $40.5m loan.
New systems have been introduced to monitor and control working capital and
these are having a beneficial effect on cash flow.
Results before exceptional items
The difficult trading conditions experienced throughout 2002 are illustrated by
the 14% reduction in turnover from #120.4m in 2001 to #103.8m in 2002. Whilst
turnover in Asia Pacific in 2002 was comparable to 2001, there was a 15%
reduction in Americas and 17% in Europe by comparison to 2001.
The decline in activity levels inevitably put pressure upon trading performance.
The operating loss before exceptional items of #7.9m compares with a loss of
#0.4m in 2001.
The Europe operating loss increased from #1.4m in 2001 to #6.7m in 2002 during
the period of business restructuring and before planned savings in fixed costs
could be realised. Margins have remained under severe competitive pressure with
the disposal of low margin non-core stock further depressing margins achieved,
as the business is re-positioned around a reduced product range.
The Americas business reported an operating loss during the second half of 2002
of #0.7m in weak trading conditions around and subsequent to the Thanksgiving
holiday period. The operating profit of #0.9m in 2002 compares to #2.5m in 2001.
The Asia Pacific business maintained turnover during 2002 at #12.6m by
comparison to 2001. However the costs of establishing a Hong Kong based regional
team, coupled with a weak result from Indonesia in the final months of 2002,
lead to an operating loss of #1.0m in 2002 by comparison to an operating profit
of #0.4m in 2001.
Exceptional items
The exceptional costs for 2002 amounts to #18.9m by comparison to #16.1m in
2001.
The market driven changes in our business have led us to a fundamental
re-examination of our operations, and exceptional costs have arisen from that
process.
As identified above we have reviewed the carrying value of assets in all
divisions and have written down the carrying value of plant and machinery by
#11.2m reflecting the adverse trading conditions in our main markets. As we
have announced an asset realisation policy we consider it commercially
sensitive, and therefore inappropriate, to identify in these accounts a
geographic analysis of the write downs.
Flowing from our consideration of the markets we serve we have provided for
significant restructuring costs in our operations to align them with their
market environments.
We have incurred or provided #3.1m in Europe for restructuring, redundancies and
relocation, of which #2.6m was reported in the Interim results, #0.1m in the
Americas for redundancies and #0.3m for the closure of our Australian factory, a
total of #3.5m. In addition to this we have provided #0.2m arising from bad
debt provisions in Asia and the US.
As part of our management of stock we have rationalised product lines, written
off excess stocks and reviewed manufacturing stock holdings leading to a #2.3m
stock provision and write-off.
The poor trading conditions necessitated the provision of additional facilities
from our lenders and the renegotiation of bank facilities to reflect current
trading and the asset realisation strategy. In doing so we incurred #1.2m of
professional fees and other restructuring costs centrally and wrote off the
un-amortised issue costs of the 1999 $40.5m loan.
Cash flow
The weak trading performance during the second half of 2002 placed the Group's
cash resources under further strain at a time of continuing restructuring costs.
An operating loss after interest of #30.2m arose during this period, in
addition to which fundamental reorganisation costs paid amounted to #3.5m.
Net debt increased to #40.2m by year-end, having been #34.8m at both 30th June
2002 and last year end.
The increase in net debt during 2002 at a time of losses and exceptional costs
has been restricted by active working capital management and improved reporting
systems that together have facilitated an enhanced focus upon cash management.
This focus remains in place in 2003.
During 2002, working capital improvements generated a positive cash flow of
#8.4m. Stocks declined by #3.8m during 2002. The year end stock figure of #35.7m
has reduced from its peak of #54.3m at 30th June 2001. Further working capital
improvement has come from improved credit control procedures in reducing debtors
and, where appropriate, re-negotiating payment terms with suppliers.
Fundamental re-organisation costs paid in 2002 but provided for in prior years
include #2.0m in respect of Crompton and Knowles Europe, #0.3m in respect of
Viochrom, #0.5m against corporate costs and #0.7m attributable to the current
European restructuring programme.
Replacement capital expenditure has been kept to a minimum to allow committed
expenditure associated with the business restructuring, especially in Europe, to
proceed. Total capital expenditure of #4.6m compares with the depreciation
charge of #3.6m.
Balance sheet
Net assets of the Group are #25.6m at 31st December 2002 with balance sheet
gearing of 161%.
Borrowing facilities
The Group has various borrowing facilities available to it. The principal
facility is a term loan and multi currency revolving credit facility secured by
fixed and floating changes over certain assets of certain Group companies. The
term loan amounts to $40.5m and is repayable in full in December 2004. The
revolving credit facility expires at the same time. The Board is confident that
following the expiry of these facilities adequate new facilities can be
negotiated.
The undrawn balance under the committed facilities at 31st December 2002 is
#2.3m (2001 #8.2m).
We breached certain covenants of our bank facilities in November and December,
and failed to pay the capital repayment due in December. In the period to 28th
April the Group operated without formal facilities but with the continuing
support of its lenders who made available #1.5m of additional facilities whilst
new facilities and covenants were agreed.
The Group closely managed and monitored its borrowings in the period to 28th
April, at which date new facilities were agreed for the period to November 2004.
The primary changes in the facilities are a covenanted reduction of #17m in
borrowings during 2003 which is expected to be primarily met through the
realisation of assets, a rolling up of all interest until asset realisations
take place and no regular capital repayments other than the #17m covenants as
above. Any residual balances under the term loan and revolving credit facility
must be repaid in full at the end of November 2004.
YORKSHIRE GROUP PLC
2002 PRELIMINARY RESULTS
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31st December 2002
Before Before
exceptional Exceptional exceptional Exceptional
Note items items 2002 items items 2001
#'000 #'000 #'000 #'000 #'000 #'000
Turnover 2 103,799 - 103,799 120,426 - 120,426
Cost of sales 4 (79,148) (14,944) (94,092) (85,383) (8,995) (94,378)
Gross profit 24,651 (14,944) 9,707 35,043 (8,995) 26,048
Other operating expenses 4 (32,599) (3,439) (36,038) (35,485) (7,113) (42,598)
Operating loss 3 (7,948) (18,383) (26,331) (442) (16,108) (16,550)
Net interest 4 (3,332) (506) (3,838) (3,015)
Loss on ordinary activities
before taxation (11,280) (18,889) (30,169) (19,565)
Tax on loss on ordinary activities 5 208 (1,401)
Loss on ordinary activities
after taxation (29,961) (20,966)
Minority interest - equity 30 (41)
Loss for the financial year (29,931) (21,007)
Dividends - on equity shares - -
Transfer from reserves
for the financial year (29,931) (21,007)
Basic and diluted loss per ordinary share
before exceptional items (21.1) p (9.4) p
exceptional items less attributable tax (36.1) p (30.8) p
Basic and diluted loss per ordinary
share
6 (57.2) p (40.2) p
YORKSHIRE GROUP PLC
BALANCE SHEETS
at 31st December 2002
Group Company
2002 2001 2002 2001
#'000 #'000 #'000 #'000
Fixed assets
Tangible assets 33,340 45,558 669 810
Investments 23 23 65,959 98,666
33,363 45,581 66,628 99,476
Current assets
Stocks 35,688 43,263 - -
Debtors 21,780 25,421 7,934 8,410
Cash at bank and in hand 2,681 3,334 1,334 -
60,149 72,018 9,268 8,410
Current liabilities
Creditors-amounts falling due within one year (62,924) (26,531) (37,716) (10,305)
Net current (liabilities) / assets (2,775) 45,487 (28,448) (1,895)
Total assets less current liabilities 30,588 91,068 38,180 97,581
Creditors-amounts falling due after more than
one year - (30,345) (116) (30,559)
Provisions for liabilities and charges (5,009) (6,063) (683) -
Net assets 25,579 54,660 37,381 67,022
Capital and reserves
Called up share capital 13,076 13,076 13,076 13,076
Share premium account 26,760 26,760 26,760 26,760
Revaluation reserve 550 550 319 319
Capital redemption reserve 300 300 300 300
Profit and loss account (15,717) 13,427 (3,074) 26,567
Equity shareholders' funds 24,969 54,113 37,381 67,022
Equity minority interest 610 547 - -
Total capital employed 25,579 54,660 37,381 67,022
YORKSHIRE GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31st December 2002
2002 2001
Note #'000 #'000
Net cash (outflow)/inflow from operating activities 7 (1,338) 676
Returns on investments and servicing of finance
Interest received 58 223
Interest paid (3,160) (2,818)
(3,102) (2,595)
Taxation
Taxation received (760) 1,254
Taxation paid 1,090 (2,915)
330 (1,661)
Capital expenditure and financial investment
Purchase of tangible fixed assets (4,571) (8,643)
Sale of tangible fixed assets 516 172
(4,055) (8,471)
Acquisitions and disposals - (232)
Equity dividends paid - (1,569)
Financing
New bank loans 3,715 15,748
Repayment of loans (2,715) (5,625)
1,000 10,123
Decrease in cash in the period (7,165) (3,729)
YORKSHIRE GROUP PLC
OTHER FINANCIAL STATEMENTS
for the year ended 31st December 2002
Group
2002 2001
#'000 #'000
Statement of total recognised gains
and losses
Loss for the financial year (29,931) (21,007)
Currency translation differences on foreign
currency net investments 787 (289)
Total gains and losses recognised in the
year (29,144) (21,296)
Group Company
Reconciliation of movements in shareholders' 2002 2001 2002 2001
funds
#'000 #'000 #'000 #'000
Loss for the financial year (29,931) (21,007) (28,767) (30,742)
Currency translation differences 787 (289) (874) 283
Net decrease in shareholders' funds
in the year (29,144) (21,296) (29,641) (30,459)
Equity shareholders' funds at 1st January
54,113 75,409 67,022 97,481
Equity shareholders' funds at 31st December 24,969 54,113 37,381 67,022
YORKSHIRE GROUP PLC
NOTES
1. Preparation of financial statements
This preliminary announcement was approved by the Board on 28th April 2003 and agreed with the auditors on
29th April 2003. The financial statements for the year ended 31st December 2002 have been prepared on the
basis of the accounting policies as set out in the Group's annual report for 2001. The abridged financial
information presented above is based on the full accounts of the Group for 2002 and 2001, on which the
auditors have given an unqualified report. The full accounts for 2002 have not yet been filed with the
Registrar of Companies.
Due to continued trading difficulties, the Group re-negotiated its borrowing facilities on 28th April 2003,
which extend to 30th November 2004. The terms of these borrowing facilities require compliance with a wide
range of financial covenants, certain of which are measured by earnings. The directors' have recently prepared
forecasts which show compliance with these covenants. The borrowing facilities require a #17m reduction in net
debt in the very near future, subject to certain circumstances in which the Group and the banks may agree to
extend the timescale for this reduction, this will require the realisation of assets, which when achieved may
require adjustment to certain covenants as provided in the facility agreement. The Board are confident that
they are sufficiently advanced with various options which will achieve the necessary debt reduction within the
required timescale. As with all businesses ongoing compliance will be dependant on future trading performance
and delivery of the Group's strategy, in this case including asset realisation.
The validity of the going concern assumption depends on the Group's ability to maintain compliance through the
achievement of its forecasts, or in certain cases the disposal of individual assets whilst there is
uncertainty of the outcome of the matters referred to above, the directors' believe it is appropriate for the
accounts to be prepared on a going concern basis. The Board also continues to pursue a range of options to
reduce debt and strengthen the balance sheet.
New accounting policy
In preparing the accounts for the year ended 31st December 2002 the Group has adopted FRS 19
"Deferred tax". The adoption of FRS 19 has resulted in a change in accounting policy for deferred
tax, deferred tax is now recognised on a full provision basis. Previously, deferred tax was
provided for on a partial provision basis, whereby provision was made on all timing differences to
the extent that they were expected to reverse in the future without replacement. This change in
accounting policy has not resulted in a prior year adjustment for either the Group or the Company.
YORKSHIRE GROUP PLC
NOTES
2. Turnover
Turnover represents sales by group companies after eliminating intra-group transactions.
2002 2001
#'000 #'000
Geographical destination analysis of Group turnover
Continental Europe 34,282 45,243
Asia 11,948 11,646
Australasia 1,381 1,254
North and South America 48,724 53,780
Africa and the Middle East 2,067 3,872
98,402 115,795
UK 5,397 4,631
Total turnover 103,799 120,426
Divisional analysis of Group turnover
Europe 42,626 51,055
Asia Pacific 12,653 12,564
Americas 48,520 56,807
103,799 120,426
3. Divisional analysis of group
operating loss
Before
Exceptional
exceptional
items items 2002 2001
#'000 #'000 #'000 #'000
Europe (6,711) (5,415) (12,126) (7,272)
Asia Pacific (1,011) (370) (1,381) 350
Americas 892 (186) 706 (2,032)
Group services (1,118) (1,218) (2,336) (2,119)
(7,948) (7,189) (15,137) (11,073)
Amortisation and impairment review
- (11,194) (11,194) (5,477)
Operating loss (7,948) (18,383) (26,331) (16,550)
4. Exceptional items Restructur-ing
European Impair-ment
business Americas Corporate Asia review Total
costs Pacific 2002 2001
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Fixed asset write downs - - - - - - 3,305
Impairment review - - - - 11,194 11,194 1,910
Stock writedowns / provisions 2,257 - - - - 2,257 3,199
Business rationalisation costs 1,427 66 - - - 1,493 947
Release of surplus accrual - - - - - - (837)
Prepayments to pension scheme - - - - - - 471
Charged as cost of sales 3,684 66 - - 11,194 14,944 8,995
Bad debt provisions - 120 - 37 - 157 803
Business rationalisation costs 1,731 - 1,218 333 - 3,282 681
Intangible asset impairment - - - - - - 5,206
Prepayments to pension scheme - - - - - - 423
Charged as administrative expenses 1,731 120 1,218 370 - 3,439 7,113
Unamortised issue costs on 1999
$40.5m loan - - 506 - - 506 -
Charged as interest payable &
similar charges - - 506 - - 506 -
Total 5,415 186 1,724 370 11,194 18,889 16,108
The Finance Director's Review provides further information concerning the exceptional items.
The impairment review of fixed assets uses a pre-tax discount rate of 7.3% for the value in
use calculations.
5. Tax on loss on ordinary activities Restated
Analysis of charge in period 2002 2001
#'000 #'000
UK corporation tax:
Current tax on income for the year - 13
Adjustments in respect of prior periods (72) (1,400)
Group Loss relief - -
Double taxation relief - -
(72) (1,387)
Foreign tax:
Current tax on income for the period (112) 1,178
Adjustment in respect of prior years (58) 1,809
Total current tax (242) 1,600
Deferred tax
Origination and reversal of timing differences 34 (199)
Tax on loss on ordinary activities (208) 1,401
YORKSHIRE GROUP PLC
NOTES
6. Earnings per ordinary share 2002 2001
#'000 #'000
Losses used in the earnings per share calculation are as follows:
Loss for the financial year (29,931) (21,007)
Exceptional items (less attributable tax) 18,889 16,108
Loss before exceptionals (11,042) (4,899)
Weighted average number of shares 52,303,337 52,303,337
Diluted earnings per share have been calculated for 2002 and 2001 under FRS 14 and no dilution
arises in either year.
7. Reconciliation of operating loss to net cash flow from operating activities
Operating loss on ordinary activities before interest (26,331) (16,550)
Fundamental reorganisation costs paid (3,470) (9,228)
Depreciation of tangible fixed assets 3,662 4,242
Amortisation of intangible assets - 271
Impairment review 11,194 7,116
Stock writedown / provisions 2,257 -
Fixed asset writedown - 3,305
Prepayments to pension scheme - 894
Profit on sale of fixed assets (97) (61)
Decrease in stock 3,758 5,946
Decrease in debtors 2,365 3,647
Increase/(decrease) in creditors 2,309 (4,063)
Net increase in provisions 3,015 5,157
Net cash (out) / inflow from operating activities (1,338) 676
8. Reconciliation of net cash flow to movement in net debt
Decrease in cash in the period (7,165) (3,729)
Bank loan advances (3,715) (15,748)
Repayment of loans 2,715 5,625
Change in net debt resulting from cash flows (8,165) (13,852)
Translation differences 2,756 (801)
Movement in net debt in the period (5,409) (14,653)
Opening net debt (34,786) (20,133)
Closing net debt (40,195) (34,786)
This information is provided by RNS
The company news service from the London Stock Exchange
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