Interim Results
01 Dezember 2003 - 8:01AM
UK Regulatory
RNS Number:6621S
Salvesen (Christian) PLC
01 December 2003
1 December 2003
Interim Results announcement
for the half year to 30 September 2003
Key financials
* Total turnover from continuing operations up #8m to #417m
* Pre-tax profit from continuing operations(1) declined by #5.3m to
#10.1m, reflecting an additional #2.4m charge under FRS17
* Proforma earnings per share from continuing operations* declined by
1.49 pence to 2.68 pence
* Continued strong generation of free cashflow** at #10.4m
* Interim dividend of 1.2p
*Pre exceptional items and goodwill amortisation
**Cash inflow before use of liquid resources, financing, dividends, acquisitions
and disposals
Operational highlights
* Strengthened UK management team
* UK integration completed - cost base reduced by an annualised #4.0m
* New Wickes DIY /home delivery contract signed - clear demonstration
of the benefits of a re-focused sales and marketing function
* Industrial Iberia returns to profit
* Industrial France continues to win market share
Edward Roderick, Chief Executive of Christian Salvesen, commented:
"Our focus over the past six months has been the restructuring of the two UK
divisions into one, which I am pleased to report is now largely complete. The UK
now has a more focused operational structure, with a significantly reduced cost
base and a strengthened management team. We continue to win significant new
business contracts, such as the Wickes DIY contract, one of the largest in the
sector.
"While our focus has been on the UK, we have not lost sight of the importance of
our European operations. I am pleased to report that the underlying increase in
turnover for our European operations as a whole was 5% in the first six months
of this financial year.
Our industrial operation in Iberia has now returned to profit and our French
industrial division continues to win market share, although we are experiencing
some competitive pressures in our food and consumer businesses in France and
Benelux.
"Our priorities during the second half are clear. We aim to further reduce the
cost base, and to exercise tight control of capital expenditure. We will also
maintain our focus on improving the service offering and value we provide to our
existing customers, and on developing the new business pipeline. We are
rigorously enforcing these disciplines across the entire Group and are confident
that our actions will underpin profitability in the short term and provide the
foundations for sustained improvement in the future.
"Overall, the Board anticipates that the outturn for the year will be in line
with expectations."
For further information, please contact:
Christian Salvesen PLC 01.12.03: 020 7357 9477
Edward Roderick, Chief Executive
Julian Steadman, Finance Director
Frances Gibson-Smith, Head of Investor Relations
Thereafter: 01604 662600
Hogarth Partnership (for Christian Salvesen PLC) 020 7357 9477
John Olsen / Tom Leatherbarrow
A briefing for analysts will be held at 0930 on Monday 1st December 2003 at the
Media Centre, The London Stock Exchange. An audio webcast of the presentation
will be available on www.salvesen.com from the afternoon of Monday 1 December
2003.
Chairman's statement
Review of the half year to 30 September 2003
Our financial results reflect continuing difficult trading conditions in the
markets where we operate. We are acting to improve margins through aggressive
cost reduction and are also working harder to boost the sales pipeline. Under a
strengthened management team the results of these actions are beginning to take
effect in the second half of the year.
Overview
Although it is only two months since I took over as Chairman, I have had a year
on the board to get to know and understand the company. It is clear that market
conditions will continue to be competitive, so we must take action to address
those issues affecting our business that we can control.
Total sales from continuing operations, including our share of joint ventures,
grew by 2% to #417m over the six months. At constant exchange rates total sales
declined by 3%. In the UK sales declined by 8% while our mainland European
operations increased their sales by 16% (5% at constant exchange rates). Our
immediate priority is to restore the UK operations to growth and a good level of
profitability as quickly as possible. The first stage of this process has been
the integration of the two UK divisions into a single entity and this is now
largely complete.
The second stage, as promised in June, was to strengthen the UK and the Group
management teams. In September Brian Gaunt joined us as the new UK Managing
Director and Campbell Fitch was appointed Group Human Resources Director. Both
have a record of success and the company is already benefiting from their
knowledge and experience. In November, Julian Steadman was appointed to the
board as Group Finance Director from a strong list of candidates. He initially
joined us in July to cover that role in an interim capacity while we sought a
permanent replacement for Peter Aspden. We are now seeking a new non-executive
director to replace my predecessor, Jonathan Fry.
To compete effectively, we need a more competitive cost base. Since we began the
integration of our two UK operations we have taken out annual costs totalling
#4m and the new management team will continue to reduce costs and increase
productivity. This work is also progressing in our mainland European businesses.
While bearing down on costs is important, we must also win new business and grow
sales faster. The integration of the UK operations has created a much more
focused sales and marketing function which is able to develop more sophisticated
solutions for customers. Its first substantial win has taken us into the home
delivery market for the first time: the contract for the Wickes DIY chain is one
of the largest in this sector. Our pipeline is developing although these gains
have been partially offset by withdrawals from loss-making contracts and some
business lost on price.
In mainland Europe our businesses have performed better. The Food and Consumer
operations have proved resilient. On the Industrial side we have benefited from
the disposal of our loss-making German business; our operations in Spain are
back in profit and improving all the time; and the network in France is growing
strongly.
Financial results
The reported profit for the half year was #2.1m (2002: #3.0m), equivalent to
earnings per share of 0.77p (2002: 1.13p).
Free cashflow (cash inflow before use of liquid resources, financing, dividends,
acquisitions and disposals) increased by #7.4m to #10.4m. This includes asset
sales of #22.0m and a #6.9m reduction in capital expenditure offset by a
seasonal increase in working capital. After payments relating to the German
disposal and dividends, net debt increased by #2m to #136m.
Looking at the continuing operations before exceptional items and goodwill
amortisation:
* Total turnover, including share of joint ventures, increased by 2% to
#417m. At constant exchange rates there was a decline of 3%
* Operating profit declined by #3.0m to #15.3m
* The operating profit margin declined from 4.5% to 3.7%
* Interest and finance costs increased by #2.3m due to the impact of FRS17
pension calculations
* Profit before tax declined by #5.3m to #10.1m.
* Proforma earnings per share declined by 1.49p to 2.68p
Pre-tax exceptional costs of #3.7m comprise #10.0m for the loss on disposal of
our German business and #3.5m for restructuring in the UK and Spain, offset by a
#9.8m gain from property disposals.
Pensions
In the year ended March 2003, the company adopted FRS17, the accounting policy
for retirement benefits, which has resulted in an additional cost of #2.4m for
the period over the prior year. The September 2003 balance sheet includes a
#65.8m pension deficit (net of tax) which, as required by FRS17, has not been
revalued since 31 March 2003. This does not take into account the recovery in
the global equity markets over the past six months. We have estimated that a
revaluation at 30 September 2003 would show a one third reduction in the pension
deficit to around #45m. Under the previous accounting standard (SSAP24) the
pension charge to the profit and loss account in the first half would have been
#1.2m lower than under FRS17.
Dividend
The board has declared an interim dividend of 1.2p, which is in line with the
dividend policy confirmed at the AGM in July 2003. This is payable on 30 January
2004 to shareholders on the register on 9 January 2004. The ex-dividend date is
7 January 2004.
Operating results
UK business
Half year ended 30 2003 2002 % change
September
Turnover #218m #238m - 8 %
Operating profit* #10.3m #13.6m - 24%
Operating margin* 4.7% 5.7%
* Before exceptional items and goodwill amortisation
Food and Consumer sales were down 13% to #130m and profits fell by #2.6m to
#8.3m. UK retailers have maintained pressure on their supply chain costs, and we
have continued to cut our own costs in response.
We are pursuing new sectors for growth and early successes include a contract
for Asda's returned electrical goods and an assembly and home delivery contract
for Wickes. We are currently developing a new IT system, BACTRAC, for our
expansion into the reverse logistics sector. Marks & Spencer renewed our general
merchandise contract. We have also won additional business from M&S for its new
concept Lifestore, to be launched next year, and renewed our large frozen food
contract. We also renewed a five-year dedicated contract with Safeway. Other new
business wins included Gate Gourmet and Manor Bakeries.
In the UK food processing business, pricing and volumes were impacted by a good
harvest and market overcapacity. Although our key strength - product quality -
lost some of its edge in a price-dominated market, we won new business with
Morrisons and gained additional business with Tesco and Safeway.
Our market-leading COMET IT system is key to the growth of our Support Services
business. In the UK we won a major five-year contract with Safeway for the
control of trays in its supply chain. COMET has also been installed in our
Spanish operations to control the movement of trays to and from the fruit
growing regions. The push into the European markets continues and a significant
pipeline of opportunity has been identified.
Industrial sales were down 1% to #88m and profits fell by #0.7m to #2.0m. Action
was taken to reduce capacity and costs and to improve vehicle fill rates and
productivity.
Although we have lost a number of contracts, we have won a succession of good
new contracts including SSL, John Lewis/Mereway, Paccar Parts and Vokera.
Renewals included Q8, Comma Oils, Agfa Gevaert and Vauxhall aftersales.
Mainland European business (including joint ventures)
Half year ended 30 September 2003 2002 % change
Total turnover #199m #171m + 16%
Operating profit* #5.0m #4.7m + 6%
Operating margin* 2.5% 2.7%
* From continuing operations before exceptional items and goodwill amortisation
In our European Food and Consumer businesses, at constant exchange rates, sales
rose by 7% to #90m while profits were flat as a result of a bad debt provision
for a customer.
In Benelux, after winning nationwide frozen food business in the Netherlands
from Albert Heijn last year, we have broadened the contract by adding total
transport management. We have won several small contracts in the fast growing
contract catering sector and an important contract with Superunie, a buying
group of 17 regional retailers: this will benefit our joint venture with the
leading Dutch meat business, Dumeco, by driving greater volumes through the
existing chill network infrastructure.
In France we maintained service standards while boosting productivity to meet
market demands. The long hot summer provided one benefit: a 30% rise in ice
cream sales. We renewed contracts with Aldi, Penny Market and Carrefour and won
new business from McCain, Auchan and Panidor.
Our joint venture in Spain and Portugal continued to improve. Outsourcing in the
temperature controlled market is maintaining 10% annual growth and Salvesen has
a strong position with a 20% market share. New business wins include Canela
Foods, Tesco and Procter & Gamble.
Our joint venture in Italy performed as planned, servicing its customers Galbani
and Danone. We continue to pursue opportunities to extend this operation with
new customers.
Our Industrial business in Iberia continues to improve: at constant exchange
rates, sales were 1% ahead at #52m and profits were #0.7m compared with a #0.4m
loss a year earlier. We expect this growth to continue in the second half of the
year. Profits in the full load business increased despite flat sales. The
network is growing well, with sales up 20%, and a significant IT upgrade will
support further growth in the second half. The network now comprises 15% of the
business. Warehousing profits increased despite lower turnover, as we increased
synergies with the network and transport operations.
We have made further progress in reducing the Spanish operation's dependence on
the automotive sector. New business wins from other sectors have cut the
proportion of sales provided by automotive customers from 68% to 58% over the
past two years - despite a recent increase in motor industry activity resulting
from new model launches. In the first half we won new business from non-auto
customers including Saloni (ceramics), Carrefour and Dia (foods), Bershka
(clothes), JVC (electronics), Dynea Resins and Dupont (chemicals) - as well as
Volvo Trucks.
In France our Industrial business continued to win market share, with underlying
sales up by 6%, at constant exchange rates, to #57m. Excessive use of
subcontractors and a strong comparator in the first half of 2002 contributed to
a #0.7m reduction in profits to #1.3m.
Significant wins included contracts from Bostik, Ondeo Nalco, Michelin, Maec,
Monitor and Sigmakalon. Groupe Lafarge and Altavista extended their contracts.
Outlook
We now have a strengthened management team in place. The actions they are taking
to reduce our cost base and to strengthen and broaden our offering to both
existing and new customers will underpin performance in the short term and boost
future growth.
The business remains cash generative and we expect net debt to decline in the
second half of the year as the seasonal working capital position reduces and the
final instalments from asset sales are received.
We believe the changes we have made will leave us in better shape to take
advantage of future opportunities.
The board anticipates that the outturn for the year will be in line with
expectations.
David Fish
Chairman
Group profit and loss account
For the half year ended 30 September 2003
Unaudited
Before
goodwill Goodwill
amortisation amortisation Total for the Total for the
and and half year half year
exceptional exceptional ended ended Year ended
items items 30 September 30 September 31 March
2003 2003 2003 2002 2003
Notes #m #m #m #m #m
===================================================================================================================
Turnover (group and share of joint ventures)
Continuing operations 416.5 - 416.5 409.2 835.8
Discontinued operations 2.8 - 2.8 21.7 41.6
___________________________________________________________________________________________________________________
Total turnover 3 419.3 419.3 430.9 877.4
Less: share of joint ventures' (27.5) - (27.5) (23.4) (47.8)
turnover
___________________________________________________________________________________________________________________
Group turnover 391.8 - 391.8 407.5 829.6
===================================================================================================================
Operating profit
Continuing operations 14.0 - 14.0 17.2 28.8
Continuing operations - exceptional
operating costs 4 - (3.5) (3.5) (5.8) (10.6)
Continuing operations - goodwill
amortisation - (2.2) (2.2) (2.1) (4.2)
Discontinued operations (0.5) - (0.5) (2.2) (5.1)
Discontinued operations - exceptional
operating costs 4 - - - - (2.4)
___________________________________________________________________________________________________________________
Group operating profit/(loss) 13.5 (5.7) 7.8 7.1 6.5
Share of operating profit in
joint ventures/associates 1.3 - 1.3 1.1 2.0
___________________________________________________________________________________________________________________
Total operating profit/(loss) 14.8 (5.7) 9.1 8.2 8.5
Exceptional items 4 - (0.2) (0.2) 1.0 (8.4)
___________________________________________________________________________________________________________________
Profit/(loss) on ordinary activities
before interest and taxation 14.8 (5.9) 8.9 9.2 0.1
Net interest payable (3.6) - (3.6) (3.5) (6.7)
Other finance (cost)/ income 5 (1.6) - (1.6) 0.6 1.1
___________________________________________________________________________________________________________________
Profit /(loss) on ordinary activities
before taxation 3 9.6 (5.9) 3.7 6.3 (5.5)
Tax on profit on ordinary activities 6 (2.9) 1.3 (1.6) (3.3) (2.7)
___________________________________________________________________________________________________________________
Profit/(loss) for the financial 6.7 (4.6) 2.1 3.0 (8.2)
period
========================
Dividend on ordinary shares (3.2) (7.1) (9.6)
___________________________________________________________________________________________________________________
Transfer from reserves
for the financial period (1.1) (4.1) (17.8)
===================================================================================================================
There is no difference between the profit on ordinary activities before taxation and the profit for the financial
period stated above and their historical cost equivalents.
Reconciliation of profit on continuing operations before taxation, exceptional items and goodwill amortisation
Unaudited
Half year Half year
ended ended Year ended
30 September 30 September 31 March
2003 2002 2003
#m #m #m
===================================================================================================================
Total operating profit before taxation 9.1 8.2 8.5
Operating loss from discontinued operations 0.5 2.2 5.1
Exceptional operating costs 3.5 5.8 13.0
___________________________________________________________________________________________________________________
Total operating profit on continuing operations before exceptional items 13.1 16.2 26.6
Goodwill amortisation 2.2 2.1 4.2
___________________________________________________________________________________________________________________
Total operating profit on continuing operations before exceptional items
and goodwill amortisation 15.3 18.3 30.8
Net interest payable (3.6) (3.5) (6.7)
Other finance (cost)/income (1.6) 0.6 1.1
___________________________________________________________________________________________________________________
Profit on continuing operations before taxation, exceptional items and
goodwill amortisation 10.1 15.4 25.2
===================================================================================================================
Group profit and loss account continued
For the half year ended 30 September 2003
Unaudited
Half year ended Half year ended Year ended
Notes 30 September 30 September 31 March
2003 2002 2003
==================================================================================================================
Earnings per share - basic 7
On published earnings 0.77p 1.13p (3.09p)
Adjustment for exceptional items net of tax 0.97p 1.69p 7.38p
Adjustment for goodwill amortisation net of tax 0.79p 0.75p 1.40p
__________________________________________________________________________________________________________________
Excluding goodwill amortisation and exceptional items 2.53p 3.57p 5.69p
==================================================================================================================
Earnings per share - diluted 7
On published earnings 0.77p 1.13p (3.09p)
==================================================================================================================
Dividend per ordinary share 1.20p 2.65p 3.65p
==================================================================================================================
Statement of total recognised gains and losses
For the half year ended 30 September 2003
Unaudited
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
#m #m #m
==================================================================================================================
Profit/(loss) for the financial period 2.1 3.0 (8.2)
Exchange translation effect on foreign currency net (0.2) 0.8 1.4
investments
Actuarial loss recognised in the pension scheme - - (74.2)
Deferred tax relating to pension liability - - 18.3
__________________________________________________________________________________________________________________
Total recognised gains and losses for the period 1.9 3.8 (62.7)
Prior year adjustment (FRS17 adoption) - (11.3) (11.3)
__________________________________________________________________________________________________________________
Total gains and losses recognised since last annual report 1.9 (7.5) (74.0)
==================================================================================================================
Reconciliation of group movements in shareholders' funds
For the half year ended 30 September 2003
Unaudited
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
#m #m #m
==================================================================================================================
Profit/(loss) for the financial period 2.1 3.0 (8.2)
Dividends (3.2) (7.1) (9.6)
__________________________________________________________________________________________________________________
(1.1) (4.1) (17.8)
Exchange translation effect on foreign currency net investments (0.2) 0.8 1.4
Actuarial loss recognised in the pension scheme - - (74.2)
Deferred tax relating to pension liability - - 18.3
Share buyback - (0.1) (0.7)
__________________________________________________________________________________________________________________
Net movement in shareholders' funds for the period (1.3) (3.4) (73.0)
Shareholders' funds at start of period 44.2 117.2 117.2
__________________________________________________________________________________________________________________
Shareholders' funds at end of period 42.9 113.8 44.2
==================================================================================================================
Group balance sheet
As at 30 September 2003
Unaudited
30 September 30 September 31 March
2003 2002 2003
#m #m #m
===============================================================================================================
Fixed assets
Intangible assets 70.4 68.0 72.0
Tangible assets 186.6 213.1 205.5
Investments in joint ventures:
Share of gross assets 15.8 13.1 12.8
Share of gross liabilities (11.6) (9.8) (8.9)
4.2 3.3 3.9
Investments in associated undertakings 0.8 0.7 0.8
Investment in own shares 0.3 0.4 0.3
_______________________________________________________________________________________________________________
262.3 285.5 282.5
_______________________________________________________________________________________________________________
Current assets
Stocks 32.3 26.1 21.9
Debtors 158.4 161.0 138.2
Investments - 0.3 -
Cash at bank and in hand 33.9 32.2 40.1
_______________________________________________________________________________________________________________
224.6 219.6 200.2
_______________________________________________________________________________________________________________
Current liabilities
Creditors: amounts falling due within one year
Borrowings (4.4) (16.1) (4.4)
Trade and other creditors (186.4) (193.4) (176.2)
_______________________________________________________________________________________________________________
(190.8) (209.5) (180.6)
_______________________________________________________________________________________________________________
Net current assets 33.8 10.1 19.6
_______________________________________________________________________________________________________________
Total assets less current liabilities 296.1 295.6 302.1
Long term liabilities
Creditors: amounts falling due beyond one year
Borrowings (165.0) (147.9) (169.0)
Other creditors (6.1) (5.7) (6.5)
Provisions for liabilities and charges (16.3) (18.6) (17.9)
_______________________________________________________________________________________________________________
Net assets excluding net pension liabilities 108.7 123.4 108.7
Net pension liabilities (65.8) (9.6) (64.5)
_______________________________________________________________________________________________________________
Net assets including net pension liabilities 42.9 113.8 44.2
===============================================================================================================
Capital and reserves
Called up share capital 74.6 74.9 74.6
Share premium account 43.8 43.8 43.8
Capital redemption reserve 3.8 3.6 3.8
Profit and loss account (79.3) (8.5) (78.0)
_______________________________________________________________________________________________________________
Equity shareholders' funds 42.9 113.8 44.2
===============================================================================================================
Group cashflow statement summary
For the half year ended 30 September 2003
Unaudited
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
#m #m #m
================================================================================================================
Total operating profit 9.1 8.2 8.5
Share of profit in joint ventures and associates (1.3) (1.1) (2.0)
Goodwill amortisation 2.2 2.1 4.2
Exceptional items 3.5 5.8 13.0
Depreciation charges 15.8 17.7 35.3
________________________________________________________________________________________________________________
Earnings before interest, tax, depreciation, amortisation and
exceptional items (EBITDA) 29.3 32.7 59.0
Difference between pension charge and cash contributions 1.3 - (0.4)
(Increase)/decrease in working capital (23.2) (7.8) 8.8
Exceptional items (4.1) (4.3) (9.6)
________________________________________________________________________________________________________________
Net cash inflow from operating activities 3.3 20.6 57.8
Dividends received from joint ventures 0.6 0.2 0.6
Net cash outflow from returns on investment
and servicing of finance (3.5) (2.6) (6.9)
Tax paid (0.4) (2.2) (3.3)
________________________________________________________________________________________________________________
Funds generated from operations - 16.0 48.2
Capital expenditure and financial investment
Purchase of tangible fixed assets (11.6) (18.5) (40.9)
Proceeds on disposal of tangible fixed assets 22.0 5.5 13.3
________________________________________________________________________________________________________________
Net cash inflow/(outflow) for capital expenditure and
financial investment 10.4 (13.0) (27.6)
________________________________________________________________________________________________________________
Funds generated before acquisitions and sales of businesses 10.4 3.0 20.6
Sale of business (1.0) - -
Acquisitions - (2.8) (2.8)
Cash disposed of with subsidiary undertakings (7.9) - -
Equity dividends paid (2.5) (10.5) (17.6)
________________________________________________________________________________________________________________
Net cash (outflow)/inflow before use of liquid
resources and financing (1.0) (10.3) 0.2
Management of liquid resources
Increase in short term deposits (2.7) (2.4) (3.8)
Financing
Buy-back of ordinary share capital - (0.1) (0.7)
(Decrease)/increase in debt/finance leases (5.1) 11.1 7.0
________________________________________________________________________________________________________________
Net cash (outflow)/inflow from financing (5.1) 11.0 6.3
________________________________________________________________________________________________________________
(Decrease)/increase in cash in the period (8.8) (1.7) 2.7
================================================================================================================
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
Reconciliation of net cashflow to movement in net debt #m #m #m
================================================================================================================
(Decrease)/increase in cash (8.8) (1.7) 2.7
Cash outflow/(inflow) from decrease/(increase) in debt 5.1 (11.1) (7.0)
Cash outflow from increase in liquid resources 2.7 2.4 3.8
________________________________________________________________________________________________________________
Changes in net debt resulting from cashflows (1.0) (10.4) (0.5)
Translation difference (1.2) (3.1) (14.5)
________________________________________________________________________________________________________________
Movement in net debt in the period (2.2) (13.5) (15.0)
Opening net debt (133.3) (118.3) (118.3)
________________________________________________________________________________________________________________
Closing net debt (135.5) (131.8) (133.3)
================================================================================================================
Notes to the interim statements
Unaudited
1 Basis of reporting
These interim results have been prepared on the basis of accounting policies
which are consistent with those set out in the report and accounts of the Group
for the year ended 31 March 2003.
The figures for the year ended 31 March 2003 are derived from the latest report
and accounts, which have been delivered to the Registrar of Companies on which
the report of the auditors was unqualified.
2 Exchange rates
The exchange rates used for the translation of euro into sterling were:
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
==================================================================================================================
Average rate - profit and loss account 1.43 1.58 1.55
Period end rate - balance sheet 1.45 1.59 1.46
==================================================================================================================
3 Segmental analysis
Turnover Profit/(loss) before tax
====================================== ====================================
30 September 30 September 31 March 30 September 30 September 31 March
2003 2002 2003 2003 2002 2003
#m #m #m #m #m #m
==================================================================================================================
By geographical area and by class
of business
Food and Consumer - United Kingdom 130.4 149.3 305.5 8.3 10.9 15.1
- Mainland Europe
- Group 62.2 52.8 106.7 1.7 2.0 4.0
- Joint ventures 27.5 23.4 47.8 1.3 1.1 2.0
__________________________________________________________________________________________________________________
Total Food and Consumer 220.1 225.5 460.0 11.3 14.0 21.1
__________________________________________________________________________________________________________________
Industrial - United Kingdom 87.6 88.5 180.7 2.0 2.7 6.0
- Iberia 51.5 46.2 92.7 0.7 (0.4) (0.2)
- France 57.3 49.0 102.4 1.3 2.0 3.9
__________________________________________________________________________________________________________________
Total Industrial 196.4 183.7 375.8 4.0 4.3 9.7
__________________________________________________________________________________________________________________
416.5 409.2 835.8 15.3 18.3 30.8
Discontinued operations
Industrial - Germany 2.8 21.7 41.6 (0.5) (2.2) (5.1)
__________________________________________________________________________________________________________________
419.3 430.9 877.4 14.8 16.1 25.7
Goodwill amortisation
Food and Consumer - United Kingdom - - - (0.1) (0.1)
Industrial - Mainland Europe - - - (2.2) (2.0) (4.1)
__________________________________________________________________________________________________________________
419.3 430.9 877.4 12.6 14.0 21.5
Exceptional items
Food and Consumer - United Kingdom - - - 8.7 (5.1) (7.3)
- Mainland Europe - - - (0.7) - (2.6)
Industrial - United Kingdom - - - (1.0) - -
- Iberia - - - (0.7) - -
- France - - - - - (0.7)
- Germany - - - (10.0) (0.7) (12.0)
Unallocated items - - - - 1.0 1.2
__________________________________________________________________________________________________________________
419.3 430.9 877.4 8.9 9.2 0.1
Unallocated net interest payable - - - (3.6) (3.5) (6.7)
Unallocated other finance cost income - - - (1.6) 0.6 1.1
__________________________________________________________________________________________________________________
419.3 430.9 877.4 3.7 6.3 (5.5)
==================================================================================================================
Notes to the interim statements continued
Unaudited
Half year ended Half year ended Year ended
4 Exceptional items 30 September 30 September 31 March
2003 2002 2003
#m #m #m
================================================================================================================
Exceptional items - trading items
Restructuring costs (3.5) (0.7) (3.9)
Site closure costs - - (1.3)
Provision for customer claim - - (2.6)
Impairment of goodwill - (3.7) (3.7)
Integration costs - (1.4) (1.5)
________________________________________________________________________________________________________________
(3.5) (5.8) (13.0)
Non-trading exceptional items
Gains on disposal of fixed assets 9.8 - -
Surpluses in respect of businesses sold in prior years - 1.0 1.2
Loss on disposal of discontinued operations (19.6) - -
Less utilisation of prior year provision 9.6 - (9.6)
________________________________________________________________________________________________________________
(0.2) 1.0 (8.4)
________________________________________________________________________________________________________________
(3.7) (4.8) (21.4)
================================================================================================================
Half year ended Half year ended Year ended
5 Other finance cost income 30 September 30 September 31 March
2003 2002 2003
#m #m #m
================================================================================================================
Expected return on pension scheme assets 4.2 5.8 11.9
Interest on pension scheme liabilities (5.8) (5.2) (10.8)
________________________________________________________________________________________________________________
Net (cost)/ return (1.6) 0.6 1.1
================================================================================================================
6 Tax on profit on ordinary activities
Half year ended Half year ended Year ended
30 September 30 September 31 March
2003 2002 2003
#m #m #m
================================================================================================================
UK 0.2 2.9 3.3
Overseas 1.4 0.4 (0.6)
________________________________________________________________________________________________________________
1.6 3.3 2.7
================================================================================================================
7 Earnings per share
Basic earnings per share are calculated on a weighted average number of the
shares in issue during the period of 264.7 million (31 March 2003 - 265.3
million, 30 September 2002 - 265.9 million).
Diluted earnings per share for the half year ended 30 September 2003 have been
calculated using a weighted average number of shares of 264.7 million (31 March
2003 - 265.3 million, 30 September 2002 - 266.5 million).
Notes to the interim statements continued
Unaudited
8 Disposal of business
On 21 May 2003 the Group completed the sale of its German Industrial business to
the Managing Director of the business for a nominal consideration.
Included in exceptional items in the year to 31 March 2003 was an amount of
#9.6m representing the impairment of the consolidated net assets of the business
to be disposed of.
#m
=================================================================================================================
Tangible fixed assets 14.0
Stocks 0.1
Debtors 6.2
Creditors (8.7)
Provisions (1.6)
Investments 0.2
_________________________________________________________________________________________________________________
10.2
Exchange translation difference in conversion from profit and loss account average rate to closing
balance sheet rate (0.6)
_________________________________________________________________________________________________________________
Provision for loss on disposal of business at 31 March 2003 9.6
Movement in net assets between 1 April 2003 and completion 1.1
Transaction cost 1.0
Cash disposed of with business 7.9
_________________________________________________________________________________________________________________
Total loss on disposal 19.6
=================================================================================================================
The business in the year to 31 March 2003 produced a cash outflow from operating
activities of #8.6m, received #0.3m in respect of interest and paid #0.5m in
respect of capital expenditure.
9 Pension commitment
The pension liability has not been revalued at 30 September 2003. This is in
accordance with FRS17 which does not require revaluations for interim accounts.
The reorganisation programme in the UK did not have a significant enough effect
on the Group's pension scheme to require a revaluation to be performed. The
change in the liability at the half year resulted from the timing of
contributions to the scheme.
Independent review report to Christian Salvesen PLC
Introduction
We have been instructed by the company to review the financial information which
comprised Group profit and loss account, statement of total recognised gains and
losses, Group balance sheet, Group cashflow statement summary as at 30 September
2003, comparative figures and associated notes. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the information.
Director's responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied, unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial statements as presented for the half year ended
30 September 2003.
PricewaterhouseCoopers LLP
Chartered Accountants
East Midlands
1 December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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