LONDON, Feb. 10, 2004 (PRIMEZONE) -- Enodis PLC: Group profit and loss account 13 weeks to 27 December 2003
13 weeks to 27 December 2003 13 weeks to 28 December 2002
Before Exceptional Total Before Except
exception items except ional
al items (note 4) ional items Total
items (note
4)
Notes GBPm GBPm GBPm GBPm GBPm GBPm
(un (un (un (un (un (un
audited) audited) audited)audited)audited)audited)
Turnover
Food 148.0 -- 148.0 156.8 -- 156.8
Equipment
Property 0.3 -- 0.3 -- -- --
Total 2 148.3 -- 148.3 156.8 -- 156.8
turnover
Operating
profit/(loss)
before goodwill
amortisation
Food 12.0 -- 12.0 10.2 -- 10.2
Equipment
Property (0.7) -- (0.7) -- -- --
Corporate (2.3) -- (2.3) (2.1) (1.7) (3.8)
costs
9.0 -- 9.0 8.1 (1.7) 6.4
Goodwill (3.2) -- (3.2) (3.5) -- (3.5)
amortisation
Operating 3 5.8 -- 5.8 4.6 (1.7) 2.9
profit/
(loss)
Profit -- 0.9 0.9 -- 2.5 2.5
/(loss)
on
disposal
of businesses
Profit/ 5.8 0.9 6.7 4.6 0.8 5.4
(loss)
on
ordinary
activities
before
interest
and
taxation
Net (4.6) -- (4.6) (5.6) -- (5.6)
interest
payable
and
similar
charges
Profit/ 1.2 0.9 2.1 (1.0) 0.8 (0.2)
(loss)
on
ordinary
activities
before
taxation
Tax on 5 (0.7) -- (0.7) (0.4) 0.6 0.2
profit/
(loss)
on
ordinary
activities
Profit/ 0.5 0.9 1.4 (1.4) 1.4 --
(loss)
on
ordinary
activities
after
taxation
and
retained
profit/
(loss)
Earnings 6 pence pence
per (unaudited) (unaudited)
share
(pence)
Basic earnings 0.3 --
per share
Adjusted basic 0.9 0.5
earnings per
share
Diluted earnings 0.3 --
per share
Adjusted diluted 0.9 0.5
earnings per
share
Group statement 13 weeks to 13 weeks
of total 27 December to 28
recognised gains 2003 December
and losses GBPm 2002
GBPm
(unaudited) (unaudited)
Retained 1.4 --
profit/(loss)
Currency (7.2) (3.2)
translation
differences on
foreign currency
net investments
Total recognised (5.8) (3.2)
gains and losses
for the period
Prior period 1.4 --
adjustment (note
1)
Total recognised (4.4) (3.2)
gains and losses
since last annual
report
Group profit and loss account
52 weeks to 27 September 2003
52 weeks to 27 September 2003
Before Exceptional Total
exceptional items
items (note 4)
Notes GBPm GBPm GBPm
Turnover
Food Equipment 663.7 -- 663.7
Property 15.7 -- 15.7
2 679.4 -- 679.4
Operating
profit/(loss)
before goodwill
amortisation
Food Equipment 64.9 (4.7) 60.2
Property 5.4 (3.3) 2.1
Corporate costs (9.5) (4.5) (14.0)
60.8 (12.5) 48.3
Goodwill amortisation (13.8) -- (13.8)
Operating 3 47.0 (12.5) 34.5
profit/(loss)
Profit /(loss) on 4 -- 3.3 3.3
disposal of
businesses
Profit/(loss) on 47.0 (9.2) 37.8
ordinary
activities before
interest and
taxation
Net interest (21.9) -- (21.9)
payable and
similar charges
Profit/(loss) on 25.1 (9.2) 15.9
ordinary
activities before
taxation
Tax on 5 (8.2) 1.8 (6.4)
profit/(loss) on
ordinary
activities
Profit/(loss) on 16.9 (7.4) 9.5
ordinary
activities after
taxation
Equity minority (0.1) -- (0.1)
interests
Retained 16.8 (7.4) 9.4
profit/(loss)
Earnings per 6 pence
share (pence)
Basic earnings 2.4
per share
Adjusted basic 7.7
earnings per
share
Diluted 2.4
earnings per
share
Adjusted diluted 7.7
earnings per
share
52 weeks
to
27
September
2003
Group statement of total recognised gains and losses GBPm
Retained 9.4
profit/(loss)
for the
period
Currency translation differences on foreign currency (4.6)
net investments
Total recognised gains and (losses) for the period 4.8
Group balance sheet
27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
(restated note (restated
1) note 1)
Fixed assets
Intangible 193.4 225.7 208.8
assets: Goodwill
Tangible assets 76.6 83.6 81.6
Investments 3.9 4.9 4.0
273.9 314.2 294.4
Current assets
Stocks 74.3 76.5 75.2
Debtors 99.7 106.1 118.3
Deferred tax 22.2 25.1 23.8
asset
Cash at bank and 46.0 59.2 77.7
in hand
242.2 266.9 295.0
Creditors falling
due within one
year
Borrowings (31.0) (31.4) (49.3)
Other creditors (151.9) (155.1) (174.6)
(182.9) (186.5) (223.9)
Net current assets 59.3 80.4 71.1
Total assets less 333.2 394.6 365.5
current
liabilities
Financed by:
Creditors falling
due after more
than one year
Borrowings 137.9 199.2 160.2
Provisions for 40.4 42.9 44.6
liabilities and
charges
178.3 242.1 204.8
Capital and
reserves
Called up equity 200.2 200.2 200.2
share capital
Share premium 234.2 234.2 234.2
account
Profit and loss (277.2) (279.5) (271.4)
account
ESOP Trust (2.4) (2.4) (2.4)
Equity 154.8 152.5 160.6
shareholders'
funds
Equity minority 0.1 -- 0.1
interests
333.2 394.6 365.5
Group cash flow statement
13 weeks to 13 weeks to 52 weeks
to
27 December 28 December 27
September
2003 2002 2003
Notes GBPm GBPm GBPm
(unaudited) (unaudited)
Net cash flow from
operations before 12.1 11.0 80.0
exceptional items
Net cash flow -- (0.9) (6.5)
effect of
exceptional items
Net cash (a) 12.1 10.1 73.5
inflow/(outflow)
from operating
activities
Return on
investments and
servicing of
finance
Interest paid (7.1) (8.2) (18.9)
Taxation
Overseas and UK (1.5) (1.5) (7.1)
tax paid
Capital
expenditure and
financial
investment
Payments to (2.1) (1.2) (10.0)
acquire tangible
fixed assets
Receipts from sale -- 0.4 0.6
of tangible fixed
assets
(2.1) (0.8) (9.4)
Acquisitions and
disposals
Disposal of -- -- (1.3)
subsidiary
undertakings
Cash 1.4 (0.4) 36.8
inflow/(outflow)
before financing
Financing
Net increase/(decrease) in (34.0) (12.7) (32.3)
term loans and other
borrowings
Capital element of finance -- (0.2) (0.2)
lease payments
(34.0) (12.9) (32.5)
Increase/(decrease) in (32.6) (13.3) 4.3
cash in the period
Notes to the group cash flow statement
(a) Reconciliation of operating profit/(loss) to net cash
inflow/(outflow) from operating activities
13 weeks to 27 December 13 weeks to 28 December
2003 2002
Before Effect Total Before Effect
excepti of excepti of
onal excepti onal excepti Total
items onal items onal
items items
GBPm GBPm GBPm GBPm GBPm GBPm
(unaudi (unaudi (unaudi (unaudi (unaudi (unaudi
ted) ted) ted) ted) ted) ted)
Operating 5.8 -- 5.8 4.6 (1.7) 2.9
profit/(loss)
Depreciation 3.0 -- 3.0 3.3 -- 3.3
Amortisation 3.2 -- 3.2 3.5 -- 3.5
of goodwill
Increase/(decr (1.9) -- (1.9) (0.2) (0.4) (0.6)
ease) in
provisions
(Increase)/dec (1.4) -- (1.4) 0.3 0.1 0.4
rease in
stock
(Increase)/dec 14.4 -- 14.4 20.2 -- 20.2
rease in
debtors
Increase/(decr (11.0) -- (11.0) (20.7) 1.1 (19.6)
ease) in
creditors
Net cash 12.1 -- 12.1 11.0 (0.9) 10.1
inflow/(outflo
w) from
operating
activities
52 weeks to 27 September 2003
Before Effect of Total
exceptional exceptional
items items
GBPm GBPm GBPm
Operating profit/(loss) 47.0 (12.5) 34.5
Depreciation 12.4 -- 12.4
Amortisation of 13.8 -- 13.8
goodwill
Increase/(decrease) in (2.8) 4.5 1.7
provisions
(Increase)/decrease in 2.6 -- 2.6
stock
(Increase)/decrease in 7.5 -- 7.5
debtors
Increase/(decrease) in (0.5) 1.5 1.0
creditors
Net cash 80.0 (6.5) 73.5
inflow/(outflow) from
operating activities
(b) Reconciliation of net cash flow to movement in net debt
27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Net debt at the start (139.7) (186.1) (186.1)
of period
Increase/(decrease) in (32.6) (13.3) 4.3
net cash in the period
Net 34.0 12.9 32.5
(increase)/decrease in
other loans
Translation 7.9 4.5 9.6
differences
Net debt at the end of (130.4) (182.0) (139.7)
the period
(c) Reconciliation of net debt to balance sheet
27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Cash at bank and in 46.0 59.2 77.7
hand
Short term borrowing (31.0) (31.4) (49.3)
Long term borrowing (137.9) (199.2) (160.2)
(122.9) (171.4) (131.8)
Exclude deferred (7.5) (10.6) (7.9)
financing costs
(130.4) (182.0) (139.7)
Notes to the financial statements
1. Basis of Preparation
The accompanying condensed consolidated financial statements ("quarterly financial statements") have been prepared in accordance with accounting principles generally accepted in the United Kingdom ("UK GAAP"). The quarterly financial statements are unaudited but include all adjustments which the Group's (Enodis plc and subsidiary undertakings) management considers necessary for a fair presentation of the financial position of the Group as of such dates and the operating results and cash flows for the periods. Certain information and footnote disclosures normally included in statutory financial statements prepared in accordance with UK GAAP have been condensed or omitted. The results of operations for the 13 weeks ended 27 December 2003 may not necessarily be indicative of the operating results that may be achieved for the 53 week period ending 2 October 2004.
The quarterly financial statements have been prepared on the basis of the accounting policies set out in the Group's financial statements for the period ended 27 September 2003, other than as noted below in respect of UITF Abstract 38 "Accounting for ESOP Trusts" ("UITF38").
During the period, the Group adopted UITF 38. Consequently the impairments booked against the Group's investment in own shares of GBP1.1m and GBP0.3m, booked in FY01 and FY02 respectively, have been reversed to the profit and loss reserve. The original cost of investment has been reclassified from fixed asset investments to a deduction in equity shareholders' funds. Comparative periods have been restated to reflect this accounting treatment. The Group's ESOP Trust holds 1,269,341 ordinary shares of Enodis plc at a cost of GBP2.4m. At 27 December 2003, the market value of the shares was GBP1.0m.
U.K. GAAP differs in certain significant respects from accounting principles generally accepted in the United States of America ("U.S. GAAP"). The application of the latter would have affected the determination of profit/(loss) to the extent summarised in Note 8 to the quarterly financial statements.
These quarterly financial statements should be read in conjunction with the financial statements and the notes thereto included in the Group's latest Annual Report.
The accounts in this statement do not comprise full accounts within the meaning of section 240 of the Companies Act 1985. The figures for the 52 weeks to 27 September 2003 are based upon the 2003 Annual Report but do not comprise statutory accounts for that period. The audited financial statements will be delivered to the Registrar of Companies following approval at the Annual General Meeting of the Company on 11 February 2004. The Auditors made an unqualified report on those accounts and their report did not contain any statement under section 237 (2) or (3) of the Companies Act 1985. The figures for the 13 week period to 27 December 2003 and 28 December 2002 have been extracted from underlying accounting records and have not been audited.
2. Turnover
13 weeks to 13 weeks to 52 weeks to
27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Food Service 90.5 100.1 408.4
Equipment - North
America
Food Service 33.8 32.0 144.5
Equipment -
Europe/Asia
Global Food Service 124.3 132.1 552.9
Equipment
Food Retail Equipment 23.7 24.7 110.8
Food Equipment 148.0 156.8 663.7
Property 0.3 -- 15.7
148.3 156.8 679.4
3. Operating profit/(loss)
13 weeks to 27 December 13 weeks to 28 December
2003 2002
Before Total Before
exceptio Exceptio exceptio Exceptio
nal nal nal nal Total
items items items items
GBPm GBPm GBPm GBPm GBPm GBPm
(unaudit (unaudit (unaudit (unaudit (unaudit (unaudit
ed) ed) ed) ed) ed) ed)
Food 9.6 -- 9.6 9.4 -- 9.4
Service
Equipment
-- North
America
Food 1.1 -- 1.1 1.6 -- 1.6
Service
Equipment
-- Europe/
Asia
Global 10.7 -- 10.7 11.0 -- 11.0
Food
Service
Equipment
Food 1.3 -- 1.3 (0.8) -- (0.8)
Retail
Equipment
12.0 -- 12.0 10.2 -- 10.2
Food (3.2) -- (3.2) (3.5) -- (3.5)
Equipment
goodwill
amortisation
Food 8.8 -- 8.8 6.7 -- 6.7
Equipment
Property (0.7) -- (0.7) -- -- --
Corporate (2.3) -- (2.3) (2.1) (1.7) (3.8)
costs
5.8 -- 5.8 4.6 (1.7) 2.9
52 weeks to 27 September 2003
Before exceptional Total
items Exceptional
Items
GBPm GBPm GBPm
Food Service Equipment - North 50.7 (3.0) 47.7
America
Food Service Equipment - 10.2 (1.7) 8.5
Europe/Asia
Global Food Service Equipment 60.9 (4.7) 56.2
Food Retail Equipment 4.0 -- 4.0
64.9 (4.7) 60.2
Food Equipment goodwill (13.8) -- (13.8)
amortisation
Food Equipment 51.1 (4.7) 46.4
Property 5.4 (3.3) 2.1
Corporate costs (9.5) (4.5) (14.0)
47.0 (12.5) 34.5
4. Exceptional items
(a) Operating 13 weeks to 13 weeks to 52 weeks to
exceptional items 27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Restructuring costs - - 6.1
and cost reduction
measures
Vacant leasehold - - 3.3
provisions
Litigation costs - 1.7 3.1
Operating - 1.7 12.5
exceptional items
2003
On 8 April 2003, the Group announced a restructuring and cost reduction programme including salaried headcount reduction and the relocation of the CEO's office to Tampa, Florida. Subsequently, further restructuring programmes were announced in Europe.
In addition, as a result of a slowdown in the property market, GBP3.3m was recognised in respect of vacant leasehold properties.
During 2003, the Group reassessed its accruals for legal costs for defending the claims in the Consolidated Industries litigation following an adverse summary judgement on certain of the claims totalling $8.6m and provided GBP1.7m and GBP1.4m in Q103 and Q403 respectively. The Group believes that the adverse decision is incorrect, and intends to appeal the decision. The Group's view of the outcome of the Consolidated Industries litigation remains unchanged.
(b) Disposal of 13 weeks to 13 weeks to 52 weeks to
businesses 27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Profit/(loss) on 0.9 2.5 3.3
disposals
2004
In November 2003, the majority of warranties and indemnities that the Group gave at the time of the disposal of one of its subsidiaries expired. As a result, excess provisions of GBP0.9m have been credited to the profit and loss account.
2003 In February 2003, the Group paid GBP1.3m to release it from the majority of the warranties and indemnities that were given at the time of the disposal of one of its subsidiaries. As a result, excess accruals of GBP2.5m, along with GBP0.8m from other disposals were credited to the profit and loss account in Q103 and Q403 respectively.
5. Taxation
(a) Analysis of 13 weeks to 13 weeks to 52 weeks to
charge in period 27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
The tax charge for
the current period
comprised:
UK taxation at 30% - - -
(2003:30%)
Foreign taxation
- current year 0.7 0.4 7.4
- prior year - - (0.7)
0.7 0.4 6.7
Deferred taxation - - 1.5
0.7 0.4 8.2
Tax relief on - (0.6) (1.8)
exceptional items
0.7 (0.2) 6.4
(b) The Group tax rate benefits from the effect of tax losses
brought forward. A current tax charge arises principally because of
profits arising in overseas countries where there are no available
losses.
6. Earnings/(loss) per share
13 weeks to 13 weeks to 52 Weeks to
December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
(unaudited) (unaudited)
Retained 1.4 - 9.4
profit/(loss)
attributable to
shareholders
m m m
Basic weighted 399.2 399.2 399.2
average number of
shares
Diluted weighted 400.7 399.2 399.2
average number of
shares
13 weeks to 13 weeks to 52 weeks to
27 December 28 December 27 September
2003 2002 2003
pence pence pence
(unaudited) (unaudited)
Basic earnings per 0.3 - 2.4
share
Effect per share of (0.2) (0.4) 1.8
exceptional items
Effect per share of 0.8 0.9 3.5
goodwill amortisation
Adjusted basic 0.9 0.5 7.7
earnings per share
Diluted earnings per share 0.3 - 2.4
Effect per share of exceptional items (0.2) (0.4) 1.8
Effect per share of goodwill amortisation 0.8 0.9 3.5
Adjusted diluted earnings per share 0.9 0.5 7.7
Adjusted earnings per share before exceptional items (note 4) and goodwill amortisation are disclosed to reflect the underlying performance of the Group.
7. Foreign currency translation
The results of subsidiary companies reporting in currencies other than Pounds Sterling, principally US dollars, have been translated at the following rates:
13 weeks to 13 weeks to 52 weeks to
27 December 28 December 27 September
2003 2002 2003
(unaudited) (unaudited)
Average exchange Rate 1.71 1.57 1.60
GBP1= US$
Closing exchange Rate 1.78 1.60 1.66
GBP1 =US$
8. Supplementary information for US Investors
Reconciliation to generally accepted accounting principles in the United States of America
The consolidated financial statements have been prepared in accordance with UK GAAP, which differs from US GAAP. The following is a summary of adjustments to operating profit/(loss) and retained profit/(loss) for the period required when reconciling such amounts recorded in the consolidated financial statements to the corresponding amounts in accordance with US GAAP. This note does not include all disclosures required by US GAAP.
13 weeks 13 weeks to 52 weeks to
to 28 December 27
27 September
December 2002 2003
2003
GBPm GBPm GBPm
(restated)
Retained profit/(loss) in 1.4 0.0 9.4
accordance with UK GAAP
Items
increasing/(decreasing)
UK GAAP operating
profit/(loss)(*):
- Goodwill amortisation 3.2 3.5 13.5
- Pension costs (0.1) (0.5) 2.2
- Leasing transactions - - (0.1)
- Share option plans - - 0.1
- Restructuring charges (0.8) - 0.8
- Derivative instruments - - 0.1
- Long-lived assets - - (0.5)
- Loss contingencies - - 1.8
Items increasing/(decreasing) UK
GAAP non-operating
profit/(loss):
- Deferred taxation (1.6) (0.4) (36.9)
- Capitalised interest 0.2 0.1 0.4
Retained profit/(loss) in 2.3 2.7 (9.2)
accordance with US GAAP
before cumulative effect
of change in accounting
principle
Cumulative effect of - (84.9) (84.9)
change in accounting
principle
Retained profit/(loss) in 2.3 (82.2) (94.1)
accordance with US GAAP
Retained profit/(loss) in accordance with US GAAP is represented
by:
Net profit/(loss) from continuing 2.3 0.2 (11.7)
operations
Gain on sale of discontinued operations - 2.5 2.5
Cumulative effect of change in - (84.9) (84.9)
accounting principle
Retained profit/(loss) in accordance 2.3 (82.2) (94.1)
with US GAAP
(*) All adjustments exclude the effect of taxes, with all tax related adjustments included within the deferred taxation line item.
Description of differences
A discussion of the material variations in the accounting principles, practices and methods used in preparing the audited consolidated financial statements in accordance with UK GAAP from the principles, practices and methods generally accepted in the United States of America is provided in the Annual Report at 27 September 2003. There are no new material variations between UK GAAP and US GAAP accounting principles, practices and methods used in preparing these consolidated financial statements.
8. Supplementary information for US investors (continued)
Adoption of new accounting standards
Effective from 29 September 2002, under US GAAP, the Group adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). In accordance with SFAS 142, goodwill is no longer amortised but instead is subject to a transitional impairment test in the year of adoption as well as annual impairment tests. Using discounted cash flow valuation methods and also considering the Group's market capitalisation, the Group reviewed the fair values of each of its reporting units. As a result of the transitional impairment test, the Group recorded a goodwill impairment charge of GBP84.9 million in its Global Food Service Equipment segment. The amount was calculated in the fourth quarter of Fiscal 2003 and recorded as a cumulative effective of a change in accounting principle as at 29 September 2002, as required under SFAS 142.
Other unaudited financial information
(i) Reconciliation of like-for-like information for the 13 weeks to 27 December 2003
13 13 Effect Like-for-like Like-for-like
weeks weeks of
to to Foreign 28 December
27 28 Exchange 2002
December December
2003 2002
GBPm GBPm GBPm %
a) Turnover
Food 90.5 100.1 (6.9) 93.2 (3%)
Service
Equipment
- North
America
Food 33.8 32.0 1.5 33.5 1%
Service
Equipment
-
Europe/Asia
Global 124.3 132.1 (5.4) 126.7 (2%)
Food
Service
Equipment
Food 23.7 24.7 (1.7) 23.0 3%
Retail
Equipment
Food 148.0 156.8 (7.1) 149.7 (1%)
Equipment
b) Operating profit before exceptional items, goodwill
amortisation, property and corporate costs
Food 9.6 9.4 (0.5) 8.9 8%
Service
Equipment
- North
America
Food 1.1 1.6 0.1 1.7 (35%)
Service
Equipment
-
Europe/Asia
Global 10.7 11.0 (0.4) 10.6 1%
Food
Service
Equipment
Food 1.3 (0.8) 0.1 (0.7) n/m
Retail
Equipment
Food 12.0 10.2 (0.3) 9.9 21%
Equipment
(ii) Reconciliation of non-UK GAAP measures
Adjusted Group profit/(loss) before tax
13 weeks to 13 weeks to 52 weeks to
27 December 28 December 27 September
2003 2002 2003
GBPm GBPm GBPm
Profit/(loss) before 2.1 (0.2) 15.9
tax
Add back:
Goodwill amortisation 3.2 3.5 13.8
Exceptional (0.9) (0.8) 9.2
profit/(loss)
Adjusted Group 4.4 2.5 38.9
profit/(loss) before
tax
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