4 December 2003
SECURICOR PLC
PRELIMINARY RESULTS ANNOUNCEMENT
Securicor, the international security solutions group, today announces its
preliminary results for the year to 30 September 2003.
Highlights
* Organic turnover growth of 5.1%
* Underlying EBITA of �80.2 million (2002: �80.0 million excluding one-off
Euro effect)
* Underlying earnings per share up 7% to 7.3p
* Full year dividend up 14% per share to 2.4p
* Special dividend of �75 million (12p per share) paid in July
* Sale of all non-core businesses completed
* Strong cashflow and balance sheet
Lord Sharman, Chairman of Securicor, commenting on the results, said:
"At the half year, we indicated that difficult market conditions would impact
some of our businesses in the second half. Despite these market difficulties,
our businesses have performed well overall, maintaining the focus on service
delivery and customer retention whilst driving out costs. We continue our
security focus. With our leading market positions, strong balance sheet and
high-quality management, there are good opportunities for turnover and margin
growth in the year ahead, through both organic expansion and acquisitions.
We are responding robustly to the challenges which we continue to face in some
of our markets and we can therefore look forward to 2004 with greater
confidence."
For further enquiries please contact:
Securicor Nick Buckles, CEO +44(0)20 8770 7000
Trevor Dighton, CFO
Debbie McGrath
Citigate Dewe Rogerson Patrick Toyne Sewell +44(0)7973 672649
(for media enquiries) Sarah Gestetner
Notes to Editors
Securicor is an international security solutions group, operating in some 50
countries around the world. Securicor's vision is to become a global top three
provider of security solutions and expertise through the delivery of
world-class outsourcing in cash management, integrated security and justice
services. In total, Securicor employs over 100,000 people worldwide, working
with over 130,000 customers requiring both ongoing innovation and absolute
integrity. For more information on Securicor, visit www.securicor.com.
CHAIRMAN'S STATEMENT
Results
Our results for the year to 30 September 2003 are generally in line with last
year, despite the difficult market conditions in the UK and Continental Europe
to which I referred at the time of our half-year announcement in May.
Profit before interest, taxation, amortisation, exceptional items and
discontinued operations was �80.2 million, compared with �80.0 million (as
adjusted for a non-recurring profit of approximately �3 million related to
introduction of the Euro) for the previous year. The group's EBITA margin was
6.3% compared with 6.9% for the previous year.
Turnover for the continuing businesses grew 5.5% to �1,277.1 million. Organic
turnover growth for the year, excluding the US and discontinued operations, was
5.1%.
The group achieved pre-tax profits of �62.9 million. Normalised earnings per
share, being before goodwill, discontinued operations and exceptional items,
were 7.3p, compared with 7.1p for the previous year (or 6.8p adjusted for the
Euro).
The net effect pre-tax of exceptional items was a charge of �0.8 million. An
analysis of exceptional items appears later in my statement.
The table below sets out the turnover and operating profit for the continuing
businesses:
Year ended Year ended
30 September 30 September
2003 2002
�m �m
Group Turnover
United Kingdom 569.8 537.1
Europe, Middle East and Africa 449.0 392.2
Americas 177.5 210.0
Asia 80.8 70.9
1,277.1 1,210.2
Less security joint venture UK (7.2) (7.5)
Less security joint venture Asia - (4.8)
Total 1,269.9 1,197.9
Operating profit before exceptional items and
goodwill amortisation
United Kingdom 54.6 54.0
Europe, Middle East and Africa 18.8 24.3
Americas 0.6 0.6
Asia 6.2 4.1
Total as reported 80.2 83.0
Less Euro one-off in 2002 - (3.0)
Underlying total 80.2 80.0
Acquisitions and disposals
During the year we made a number of acquisitions and disposals which have
enabled us to deliver our key objective of becoming a focused security
business.
The acquisition for �12.5 million of the remaining 75% of Geldnet, the Dutch
cash services company, was completed in May and the disposals of Securicor
Information Systems and Securicor Cash Machine were completed in May and June
respectively. The disposal of the remaining 50% interest in the Distribution
joint venture to Deutsche Post was completed in July for �167 million, with �75
million of the sale proceeds being returned to shareholders by way of a special
dividend of 12p per share which was accompanied by a 17 for 20 consolidation of
the then existing Securicor shares.
Dividend
The directors recommend a final dividend of 1.62p per share, payable on 5 April
2004, and which, taken with the interim dividend of 0.78p per share paid on 30
September 2003, makes a total dividend of 2.40p per share for the year ended 30
September 2003. This represents an increase of 13.7% per share over the
previous year's dividend.
Trading
United Kingdom
EBITA increased to �54.6 million (2002: �54.0 million) on turnover of �569.8
million (2002: �537.1 million) representing organic growth of 6.9% and an EBITA
margin of 9.6% (2002: 10.1%).
Securicor Cash Services experienced challenging market conditions and
significant cost pressures in the year, including a pay award of 5% increasing
to 6% in 2003/4, and rising attack losses. The business responded with various
cost-reduction programmes for branch and head office overheads and will be
seeking above-inflation price increases at contract renewal negotiations. Sales
revenue from cash transportation was marginally ahead of last year, whilst
growth in ATM sales slowed from the 20% rate experienced in recent years to 6%.
A four-year outsourcing agreement, secured in association with the sale of the
1,200 ATM Securicor Cash Machine estate, has now established Securicor as a
leading provider of complete end-to-end ATM back-office solutions.
Following the successful start-up of major cash processing contracts with
Alliance & Leicester, Clydesdale and Lloyds TSB, Securicor Cash Centres has
been integrated within Cash Services to facilitate the provision of a total
cash solution to customers. The integration will also lead to operational
improvements and reduced administrative costs.
Price and volume pressures in the manned guarding sector resulted in a slight
reduction in sales revenue at Securicor Security with price pressure being
particularly acute in localised markets such as the City of London. However,
good cost discipline throughout the company enabled gross margins to be
maintained at the previous year's level. New work awarded included the
three-year covert security services contract at Marks & Spencer which has now
been largely rolled out across the country and which, together with similar
work undertaken for Boots and Safeway, has established the company as a leading
provider of covert security services to the retail sector. Securicor Aviation
enjoyed a good year, with a double digit sales uplift, the retention of the
major accounts with British Airways, United Airlines and Highlands and Islands
Airport and the winning of new contracts with Virgin Atlantic and Cardiff
Airport.
Securicor Justice Services had an excellent year, enjoying significantly
improved sales and profits. There was a strong performance from the electronic
monitoring business, whilst the court and escorting services side of the
business achieved its best service delivery performance, despite a record
number of prisoner movements. HMP & YOI Parc at Bridgend, with a population of
more than 1,000, is now one of the country's largest and most complex prisons
and was named in a June 2003 National Audit Office report as being one of the
best performing prisons in England and Wales. A 25-year PFI contract was signed
earlier in the year under which a Securicor-led consortium will design,
construct, manage and finance an 80-bed secure training centre in Milton
Keynes. This facility, due to open in June 2004, will house young people aged
12-17. In July, a pilot contract commenced with British Transport Police,
enabling the company to enter the police support services market.
Securicor International Valuables Transport delivered another strong
performance despite the uncertain global trading environment and increased
insurance costs. EBITA was up almost 10%, with the Johannesburg office
generating a strong first full-year contribution and the new Frankfurt office
trading profitably following its opening in May. Further office openings are
expected soon.
Europe, Middle East and Africa
EBITA decreased to �18.8 million (2002: �21.3 million* ) on turnover of �449.0
million (2002: �392.2million) representing 1.8%* organic growth and an EBITA
margin of 4.2% (2002: 6.2%). (* = adjusted for one-off Euro effect)
Against a background of difficult trading conditions in Continental Europe,
underlying profits decreased by 12%. The region was affected by over-capacity
in the cash services market following the introduction of the Euro in 2002,
increased insurance charges, and a relatively fixed overhead base within the
Cash Services sector, particularly in Germany and Ireland. However, good
progress was made in the second half of the period in realigning the cost base
and in passing on some of the insurance increases to the market.
The integrated security business in Germany remained fairly sluggish overall,
but with encouraging signs that a newly-acquired consulting and electronic
installation capability, using sub-contractors, will produce growth in Europe's
most challenging market. Our German Cash Services business made a loss in the
year but should return to profitability in the first half of 2004 following
senior management changes and a price increase programme.
The integrated security business in the Netherlands performed strongly in a
tightening market, supported by growth in outsourcing with local government,
including a contract with the City of Rotterdam for the provision of security
guards on its fleet of trams. Geldnet, the Dutch cash services business in
which Securicor had for many years held a 25% stake and the full acquisition of
which was completed in May, produced an excellent performance, with significant
productivity and operational improvements.
After the previous year's strong result, the performance in Ireland was
disappointing, a reflection of increased competition and slowing economic
growth. There were good results from the Channel Islands and Isle of Man.
Luxembourg produced a satisfactory result and opened a high security centre for
handling new cash outsourcing business, much of which was secured in the final
quarter of the year. Hungary had a year of consolidation and investment, with
the cash services network being expanded nationally.
Our operations in the Middle East had an excellent year, benefiting from the
increase in demand for security solutions following the Iraq war. A number of
large new contracts were won in Kuwait.
The overall performance in Africa was satisfactory. There were a number of
senior management changes in the year, including the appointment of a new
regional managing director. The company is now concentrating on those markets
which it believes are key to development within the continent and, consistent
with this strategy, withdrew from Angola and Equatorial Guinea towards the end
of the year.
Americas
EBITA was �0.6 million (2002: �0.6 million) on turnover of �177.5 million
(2002: �210.0 million) with 8.3% organic growth (excluding USA) and an EBITA
margin of 0.3% (2002: 0.3%).
In the USA, the exit from the aviation services sector was completed earlier in
the year, the passenger screening work at US airports having already been
federalised in 2002. The remaining security and transportation businesses,
branded Cognisa, gained some major national account contracts and are well
placed to return to modest profitability in the current year, following
completion of an overhead reduction programme.
Our position in relation to the US terrorist attacks of 11 September 2001 is
set out at Note 10 in the section after my statement.
The two justice services businesses, Securicor EMS and Securicor New Century,
increased their profit contribution, with the latter company increasing from
three to six the number of youth custody and treatment facilities it provides
in Florida, where it has almost 900 young people in care.
Canada continued to make good progress following the price increase strategy of
the previous year and improvements in overhead and operational efficiencies.
The two largest customers, Toronto Dominion Bank and Royal Bank of Canada,
re-tendered their work during the year, with Securicor retaining all the
former's business and remaining as primary provider to the latter, albeit with
a reduced allocation of work. Against a background of consolidation amongst the
Canadian financial institutions, the company is exploring cash centre
outsourcing opportunities and seeking to increase its share of commercial
sector work.
In the Central America and Caribbean region there were strong performances from
our businesses in Barbados, Trinidad and the Dominican Republic, but weaker
results in Costa Rica, Jamaica and Guyana. Renewed focus has been given to
operational efficiency and improved security procedures across the region.
Asia
EBITA increased to �6.2 million (2002: �4.1 million) on turnover of �80.8
million (2002: �70.9 million) representing 6.8% organic growth and an EBITA
margin of 7.7% (2002: 5.8%).
Asia's performance improved over the previous year despite a difficult
deflationary environment and the impact of SARS earlier in the year. Gross
profit levels were maintained through a focus on productivity and cost of
service delivery.
In Hong Kong, the existing cash centre is being renovated and upgraded, with
the work due to be completed shortly. The new facilities, equipped with
extensive automation and IT systems, will enable the company to provide
outsourcing solutions in addition to expanding existing services. New long-term
guarding contracts were gained with DHL, FedEx and PCCW Cyberport, a cash
services contract with MTRC and an ATM managed services contract with Standard
Chartered Bank.
There was good profit growth from our associate business in Malaysia, where
integration with Safeguards Corporation progressed well following the merger
last December. Cash outsourcing work is being rolled out countrywide for major
banking customers. Significant inroads into the ATM managed services market in
China have been achieved following the acquisition of Donar, the largest
independent ATM maintenance service provider in China, which operates in 24
cities and has customer relationships with all the major banks. Thailand
performed well in spite of intense competition, with an alarm monitoring
acquisition enabling the company to increase its presence in the electronic
security solutions market. Taiwan grew its ATM business and developed a
second-tier guarding business which is well placed to capture further market
share. In Macau, the merger with Great Wall has provided the company with a
wider product mix and greater potential for growth. Good progress has also been
achieved in Indonesia, against a background of economic and political turmoil.
Exceptional items
There were several exceptional items in the year. The sale of the remaining 50%
of Distribution gave rise to a profit of �65.7 million. There was a loss of �
30.5 million on the sale of Securicor Information Systems and a �28.6 million
charge for intangible asset impairment to reflect the final exit from the US
aviation sector. There was also a �7.4 million write-off in respect of other
disposals, primarily related to various Communications businesses.
Pensions
The full triennial actuarial assessment of the group's main UK final salary
pension scheme (which since 1996 has been progressively closed to most new
entrants) was carried out as at 5 April 2003 and updated to 30 September 2003.
The assessment revealed the scheme's funding levels in respect of past service
under the different regulatory measures to be as follows:
Minimum Funding Requirement
The funding level was approximately 110%.
SSAP24
There was a shortfall of �21 million (�15 million after tax) at 30 September
2003. The improved performance of the equity markets since then has resulted in
this shortfall being completely eradicated.
FRS17
This valuation indicated a shortfall of �135 million (�94 million after tax).
The value of the fund assets has increased since 30 September 2003 by
approximately �25 million.
There was a degree of recovery in equity values in the year to 30 September
2003, but the funding valuations must also take account of increasing longevity
expectations. We continue to believe that, over the long term, improved
investment returns should eliminate the deficit in the scheme in respect of
past service liabilities. However, in recognition of the current position, an
additional net cash contribution of �3.5 million is being made to the scheme in
the year commencing 1 October 2003. This will not affect the profit and loss
account.
Financing
�75 million was returned to shareholders by way of a special dividend in July,
representing just under 50% of the net proceeds of our Distribution joint
venture. The remainder of the proceeds were used to reduce net debt to �114.5
million (2002: �198.5 million), representing gearing of 42%. The group had
borrowing facilities at 30 September 2003 totalling �364 million, of which �321
million was committed for periods of up to 27 months.
Outlook
At the half year, we indicated that difficult market conditions would impact
some of our businesses in the second half. Despite these difficulties, our
businesses have performed well overall, maintaining the focus on service
delivery and customer retention whilst driving out costs. We continue our
security focus. With our leading market positions, strong balance sheet and
high-quality management, there are good opportunities for turnover and margin
growth in the year ahead, through both organic expansion and acquisitions.
We are responding robustly to the challenges which we continue to face in some
of our markets and we can therefore look forward to 2004 with greater
confidence.
Lord Sharman
Chairman 4 December 2003
Securicor plc
Preliminary results announcement for the year ended 30 September 2003
Consolidated profit and loss account
Year ended 30 September 2003 Year ended 30 September 2002
(restated)
Before Exceptional Total Before Exceptional Total
exceptional items and exceptional items and
items and goodwill items and goodwill
goodwill amortisation goodwill amortisation
amortisation (note 4) amortisation (note 4)
Note �m �m �m �m �m �m
Turnover
Total turnover 1,644.8 - 1,644.8 1,759.9 - 1,759.9
Less share of (321.0) - (321.0) (359.8) - (359.8)
joint ventures
Group turnover 2 1,323.8 - 1,323.8 1,400.1 - 1,400.1
Continuing 1,269.9 - 1,269.9 1,197.9 - 1,197.9
operations
Discontinued 3 53.9 - 53.9 202.2 - 202.2
operations
Group turnover 2 1,323.8 - 1,323.8 1,400.1 - 1,400.1
Operating profit
(loss)
Continuing 73.7 (12.5) 61.2 76.7 (11.3) 65.4
operations
Discontinued 3 (7.0) - (7.0) (4.6) (76.0) (80.6)
operations
Group operating 66.7 (12.5) 54.2 72.1 (87.3) (15.2)
profit (loss)
Share of joint
ventures and
associates
Continuing 6.5 - 6.5 6.3 - 6.3
operations
Discontinued 3 7.0 (0.1) 6.9 7.1 (0.1) 7.0
operations
Total operating 2 80.2 (12.6) 67.6 85.5 (87.4) (1.9)
profit (loss)
Non operating 4 - (0.8) (0.8) - (5.0) (5.0)
exceptional
items
Profit (loss) on 80.2 (13.4) 66.8 85.5 (92.4) (6.9)
ordinary
activities
before interest
and taxation
Net interest 5 (17.3) - (17.3) (17.7) - (17.7)
Profit (loss) on 62.9 (13.4) 49.5 67.8 (92.4) (24.6)
ordinary
activities
before taxation
Taxation 6 (18.3) 14.4 (3.9) (21.0) 4.2 (16.8)
Profit (loss) on 44.6 1.0 45.6 46.8 (88.2) (41.4)
ordinary
activities after
taxation
Attributable to (1.1) - (1.1) (1.4) - (1.4)
minorities
Profit (loss) 43.5 1.0 44.5 45.4 (88.2) (42.8)
for the year
Ordinary 9 (12.8) - (12.8) (13.2) - (13.2)
Dividends
Special Dividend 9 - (75.0) (75.0) - - -
Retained 30.7 (74.0) (43.3) 32.2 (88.2) (56.0)
earnings
(deficit)
Per share data
Basic earnings 7 7.4p (6.8)p
(loss)
Diluted earnings 7 7.4p (6.8)p
(loss)
Normalised 7 7.3p 7.1p
earnings
Average number 605.1m 625.0m
of shares
Ordinary 9 2.40p 2.11p
Dividends
Consolidated balance sheet
30 30
September September
2003 2002
(restated)
�m
�m
Intangible fixed assets
Goodwill 219.2 221.2
Development expenditure - 26.4
Tangible fixed assets 177.1 166.2
Investments 2.4 -
Joint ventures 6.8 55.8
Associates 8.6 3.5
Total fixed assets 414.1 473.1
Stocks 6.3 13.5
Debtors 218.6 232.5
Creditors (250.8) (239.9)
Net current (liabilities) assets excluding cash and (25.9) 6.1
borrowings
Bank and deposit balances 73.5 67.2
Bank overdrafts (6.8) (4.0)
Short term loans and finance leases (66.1) (29.5)
Long term loans and finance leases (115.1) (232.2)
Net borrowings (114.5) (198.5)
Provisions (4.0) (8.4)
Net assets 269.7 272.3
Capital and reserves
Called up share capital 31.3 31.3
Reserves 232.0 235.6
Equity shareholders' funds (note 8) 263.3 266.9
Equity minority interests 6.4 5.4
Capital employed 269.7 272.3
Consolidated statement of total recognised gains and losses
Year ended Year ended
30 30
September September
2003 2002
�m �m
Profit (loss) on ordinary activities after taxation 44.5 (42.8)
and minority interests
Translation differences on foreign currency net (5.1) (9.4)
investments
Total recognised gains (losses) since last annual 39.4 (52.2)
report
Consolidated cash flow
Year ended Year ended
30 30
September September
2003 2002
�m �m
Cash flow from operating activities
Operating profit (loss) after exceptional items 54.2 (15.2)
Depreciation 35.2 31.2
(Profit) loss on sale of fixed assets (0.3) 0.1
Amortisation of goodwill 12.5 11.3
Exceptional impairment of intangible fixed assets - 38.5
Exceptional impairment of goodwill - 33.0
(Increase) decrease in working capital and provisions (4.7) 28.5
Net cash flow from operating activities 96.9 127.4
Dividends from associates and joint ventures 1.3 2.2
Net cash flow from returns on investments and (13.8) (13.5)
servicing of finance
Taxation (5.9) (13.1)
Net cash flow from capital expenditure (39.7) (56.9)
Net cash flow from acquisitions and disposals 156.0 (47.7)
Ordinary dividends paid (12.9) (10.7)
Special dividend paid (75.0) -
Cash flow before use of liquid resources and financing 106.9 (12.3)
Financing:
Issue of new share capital - 3.6
(Decrease) increase in loans (101.1) 42.6
Capital element of finance lease rental payments (1.3) (0.7)
Cash flow from financing (102.4) 45.5
Increase in cash in period 4.5 33.2
Reconciliation of net cash flow to movement in net
debt
Increase in cash in period 4.5 33.2
Cash flow from decrease (increase) in debt and lease 102.4 (41.9)
financing
Borrowings acquired on acquisition of subsidiaries (1.8) (6.8)
New finance leases (5.2) (6.3)
Movement in net debt in period 99.9 (21.8)
Exchange movements (15.9) 6.4
Net debt at start of period (198.5) (183.1)
Net debt at end of period (114.5) (198.5)
Notes to the preliminary announcement
1. Basis of preparation and prior year adjustment
The financial information set out in this announcement does not constitute the
company's statutory accounts. The financial information for the year ended 30
September 2002 is derived from the statutory accounts for that year which have
been delivered to the Registrar of Companies. The auditors have reported on
those accounts and their report was unqualified and did not contain a statement
under s237 Companies Act 1985. The audit opinion on the accounts for the year
ended 30 September 2003 has not yet been signed.
The preliminary accounts have been prepared in accordance with the same
accounting policies as the statutory accounts for the year ended 30 September
2002. The company's investment in Bridgend Custodial Services which has
previously been accounted for as an associate has in these accounts been
reclassified as a joint venture. The carrying value of �7.0m at 30 September
2002 has been restated accordingly, and the total turnover for 2002 restated,
increasing by �7.5m.
Transactions denominated in foreign currencies are translated at the average
rates applicable to the accounting period. Assets and liabilities of foreign
subsidiaries, associate undertakings and joint ventures, denominated in foreign
currencies, are translated into sterling at rates of exchange ruling at balance
sheet dates. Differences arising thereon are taken directly to reserves,
together with exchange adjustments on borrowings used to fund investments.
Other exchange differences are taken to the profit and loss account.
The group has continued to account for pensions and other post employment
benefits in accordance with SSAP24, whilst complying with the transitional
disclosure requirements of FRS17.
2. Business sector and geographical analysis
Year ended Year ended
30 30
September September
2003 2002
(restated)
�m
�m
Group turnover
United Kingdom 569.8 537.1
Europe, Middle East and Africa 449.0 392.2
Americas 177.5 210.0
Asia 80.8 70.9
1,277.1 1,210.2
Less security joint venture UK (7.2) (7.5)
Less security joint venture Asia - (4.8)
Continuing Operations (including acquisitions) 1,269.9 1,197.9
Discontinued operations 53.9 202.2
Total 1,323.8 1,400.1
Operating profit before exceptional items and goodwill
amortisation
United Kingdom 54.6 54.0
Europe, Middle East and Africa 18.8 24.3
Americas 0.6 0.6
Asia 6.2 4.1
Continuing Operations (including acquisitions) 80.2 83.0
Discontinued operations (7.0) (4.6)
Discontinued joint venture operations 7.0 7.1
Total 80.2 85.5
3. Discontinued operations
Discontinued group operations for 2003 represent the aviation security
activities of Argenbright Security (exited February 2003), the operations of
Securicor Wireless Technology (sold December 2002), the operations of Securicor
Information Systems (sold May 2003), the operations of Securicor Cash Machine
(sold June 2003), operations in Angola, Equatorial Guinea and Qatar (exited
during the year) and the group's share of the operations of the Securicor
Distribution joint venture (sold July 2003). For 2002, discontinued group
operations also include SafeDoor (closed May 2002).
Notes to the preliminary announcement (continued)
4. Exceptional items
Year ended Year ended
30 30
September September
2003 2002
�m �m
Within group operating profit (loss)
Impairment of goodwill arising on acquisition of - (33.0)
Argenbright Security
Restructuring costs of Argenbright Security - (4.1)
Impairment of intangible fixed asset at Securicor - (36.3)
Information Systems
Impairment of intangible fixed asset and associated - (2.6)
costs at Securicor Wireless Technology
- (76.0)
Non operating items
Profit (loss) on sale or closure of operations
Securicor Distribution 65.7 -
Securicor Information Systems (30.5) -
SafeDoor - (5.7)
Other (7.4) 1.4
Impairment of goodwill arising on acquisition of (28.6) -
Argenbright Security associated with exit from
Aviation Security activities
Loss on sale of fixed assets - (0.7)
(0.8) (5.0)
The reported profit (loss) on the sale of Securicor Distribution and Securicor
Information Systems takes account of, respectively, �31.8m and �13.0m of
goodwill arising on acquisition and previously written off to reserves.
Goodwill amortisation (including share of joint ventures and associates) was �
12.6m in the year to 30 September 2003 and �11.4m in the year to 30 September
2002.
5. Net interest
Year ended Year ended
30 30
September September
2003 2002
�m �m
Group 13.2 13.0
Share of joint ventures and associates - continuing 3.4 3.3
Share of joint venture - discontinued 0.7 1.4
Net interest 17.3 17.7
6. Taxation
Year ended Year ended
30 30
September September
2003 2002
�m �m
Corporation tax 22.3 17.6
Deferred tax (6.9) 1.9
Associates and joint ventures
Corporation tax 2.9 1.3
Deferred tax - 0.2
Exceptional items and goodwill
Corporation tax (12.6) (2.5)
Deferred tax (1.8) (1.7)
Total taxation charge 3.9 16.8
Notes to the preliminary announcement (continued)
7. Earnings per share
Year ended Year ended
30 30
September September
2003 2002
�m �m
Basic
Profit (loss) after taxation 45.6 (41.4)
Minority interests (1.1) (1.4)
Profit (loss) attributable to shareholders 44.5 (42.8)
Weighted average number of shares outstanding 605.1m 625.0m
Basic earnings (loss) per share 7.4p (6.8)p
Diluted
Diluted earnings (loss) per share 7.4p (6.8)p
Normalised earnings (before exceptional items,
goodwill amortisation and discontinued operations)
Profit (loss) attributable to shareholders 44.5 (42.8)
Exceptional items, goodwill amortisation and (0.4) 87.4
discontinued operations (net of tax and including
discontinued joint venture interest charges)
Adjusted attributable profit 44.1 44.6
Weighted average number of shares outstanding 605.1m 625.0m
Normalised earnings per share 7.3p 7.1p
8. Reconciliation of movement in equity shareholders' funds
Year ended Year ended
30 30
September September
2003 2002
�m �m
Profit (loss) on ordinary activities after taxation 44.5 (42.8)
and minority interests
Dividends (87.8) (13.2)
Retained deficit (43.3) (56.0)
Translation differences on foreign currency net (5.1) (9.4)
investments
Proceeds of share capital issued - 3.6
Write-back of goodwill on disposals previously written 44.8 -
off
(3.6) (61.8)
Equity shareholders' funds at start of period 266.9 328.7
Equity shareholders' funds at end of period 263.3 266.9
9. Dividends
Year ended Year ended
30 30
September September
2003 2002
�m �m
Ordinary dividend
Interim 0.78p (2002 : 0.72p) 4.2 4.5
Final 1.62p (2002 : 1.39p) 8.6 8.7
Total 2.40p (2002 : 2.11p) 12.8 13.2
Special dividend 12.0p 75.0 -
The final dividend will be paid on 5 April 2004 to shareholders on the register
on 5 March 2004.
The special dividend was paid following the completion of the sale of Securicor
Distribution.
Notes to the preliminary announcement (continued)
10. Contingent liability
The company's wholly-owned US subsidiary, Argenbright Security, Inc
('Argenbright'), was responsible for passenger checkpoint security screening
for two of the flights involved in the terrorist atrocities of 11 September
2001, being the United Airlines flight from Newark to San Francisco and the
American Airlines flight from Washington to Los Angeles. The hijacked planes
performing these flights crashed respectively in rural Pennsylvania and into
the Pentagon, Washington.
The directors believe that, in respect of those two flights, Argenbright
carried out its security screening services properly and in accordance with its
contractual and regulatory duties and that it should have no liability for the
losses that occurred subsequently. However, the events of 11 September were so
extraordinary that it is impossible at this stage to state with certainty that
no findings against Argenbright will be made.
Argenbright, which is a stand-alone limited liability corporation, is being
sued and a number of lawsuits have been served upon it. Securicor plc itself
has been named in some of the lawsuits.
At 11 September 2001, Argenbright and the company had in place joint aviation
liability insurance which included cover for acts of terrorism. The directors
believe that, subject to claims under the policy by Argenbright, the company
has insurance cover of US$1billion for each of the two flights referred to
above.
END