Premier Farnell plc - Results for the Third Quarter and Nine Months
to 31st October 2004 for the Financial Year Ending on 30th January
2005 LEEDS, England, December 9 /PRNewswire-FirstCall/ -- Key
Financials GBPm
-------------------------------------------------------------------------
3rd Qtr 3rd Qtr 9 Months 9 Months 2004/5 2003/4 2004/5 2003/4 GBPm
GBPm GBPm GBPm (restated)*** (restated)***
-------------------------------------------------------------------------
Sales 196.7 193.5 591.7 584.1
-------------------------------------------------------------------------
Operating profit 18.9 18.2 56.6 51.0 Adjusted operating 19.6 18.9
58.7 55.4 profit*
-------------------------------------------------------------------------
Profit before taxation 15.5 14.6 46.5 40.1 Profit before taxation,
goodwill amortisation and gain/loss on business disposals 16.2 15.3
48.6 42.0
-------------------------------------------------------------------------
Earnings per share 2.7pence 2.3pence 7.7pence 6.2pence Adjusted
earnings per share** 2.9pence 2.5pence 8.3pence 7.2pence
-------------------------------------------------------------------------
Key Financials $m
-------------------------------------------------------------------------
$m $m $m $m (GBP1=$1.81) (GBP1=$1.65) (GBP1=$1.82) (GBP1=$1.62)
-------------------------------------------------------------------------
Sales 356.0 319.3 1,076.9 946.2
-------------------------------------------------------------------------
Operating profit 34.2 30.0 103.0 82.6 Adjusted operating 35.5 31.2
106.8 89.7 profit*
-------------------------------------------------------------------------
Profit before taxation 28.0 24.1 84.6 65.0 Profit before taxation,
goodwill amortisation and gain/loss on business disposals 29.3 25.3
88.4 68.0
-------------------------------------------------------------------------
Earnings per share $0.049 $0.038 $0.140 $0.100 Adjusted earnings
per $0.052 $0.041 $0.151 $0.117 share**
-------------------------------------------------------------------------
* before one-off rebranding costs in 2003/4 and goodwill
amortisation ** before one-off rebranding costs in 2003/4, goodwill
amortisation and gain/loss on business disposals *** restated to
reflect the adoption of UITF 38, Accounting for ESOP Trusts, which
had the impact of increasing operating profit and profit before
taxation for the third quarter and nine months of 2003/4 by
GBP0.1million and GBP0.2million, respectively. Highlights
---------- - Profit before taxation of GBP15.5million in third
quarter, up by GBP0.9million on 2003/4 despite an adverse currency
translation impact of GBP0.6million - Earnings per share of 2.7p in
third quarter, up 17.4% on the corresponding period last year -
Group sales per day(x) up 5.9% in the third quarter and 7.0% in the
nine months over the corresponding periods last year - Operating
margin of 9.6% in third quarter (2003/4: 9.4%) and adjusted
operating margin of 10.0% (2003/4: 9.8%), supported by further
improvement in gross margin - Marketing and Distribution Division's
eCommerce sales in the third quarter up 54% on the corresponding
period last year, accounting for 16% of divisional sales in the
third quarter (2003/4: 10%) John Hirst, Group Chief Executive
commented: "Almost all of our businesses have continued to make
good progress, growing sales year-on-year over the nine months and
in the third quarter. The group's results have, however, been
affected by slow sales at BuckHickman InOne which persisted into
the third quarter. BuckHickman InOne's like-for-like sales in
November were close to those of last year. "Growth rates in
electronics markets have eased recently after a normal seasonal
recovery following the summer. In the US, whilst our rate of growth
has moderated along with the market, we have continued to improve
gross margin. Our UK and mainland European electronic component
distribution business has once again built market share, with
excellent performances in some emerging markets. Across the
Marketing and Distribution Division, sales to corporate accounts
and via eCommerce channels continue to build. In addition, we are
successfully developing business with smaller customers through
more effective marketing campaigns. "Whilst the pace of recovery in
the third quarter has slowed and the short term outlook for our
markets is hard to gauge, our confidence remains high that the work
we have done in the past few years will allow us to deliver
improvements to our business and our market share." (x)SALES PER
DAY. Comparison of sales for specific periods is affected by three
variables: 1. Changes in exchange rates used to translate the
overseas sales in different currencies into sterling; 2.
Differences in the number of working days; 3. Disposal or
acquisition of businesses. In order to reflect the underlying
business performance, percentage changes in sales per day are shown
for continuing businesses at constant exchange rates throughout
this statement. The Company's announcements are published on the
Internet at http://www.premierfarnell.com/, together with business
information, the 2004 Annual Report and Accounts and links to all
other Group websites. Group year end results are expected to be
published in the week beginning 14th March, 2005. Two conference
calls with John Hirst and Andrew Fisher will take place on 9th
December: the first at 8am; the second at 4pm UK time (for US
investors and followers). To obtain dial-in details please call
Richard Mountain (UK or mainland Europe) at Financial Dynamics or
Andrew Saunders (US) at Taylor Rafferty on the above numbers.
Premier Farnell plc CHAIRMAN'S STATEMENT ON THIRD QUARTER AND NINE
MONTHS' RESULTS FOR THE PERIOD ENDED 31st October 2004 Premier
Farnell, the leading global marketer and distributor of electronic,
maintenance, repair and operations (MRO) and specialist products
and services, today announces its results for the third quarter and
nine months ended 31st October 2004. Financial Results
-----------------
-------------------------------------------------------------------------
Note: SALES PER DAY ------------------- Comparison of sales for
specific periods is affected by three variables: 1. Changes in
exchange rates used to translate the overseas sales in different
currencies into sterling; 2. Differences in the number of working
days; 3. Disposal or acquisition of businesses. In order to reflect
the underlying business performance, percentage changes in sales
per day are shown for continuing businesses at constant exchange
rates throughout this statement.
-------------------------------------------------------------------------
- Group Sales Group sales in the first nine months of the year were
GBP591.7million (2003/4: GBP584.1million). Sales per day increased
7.0%, compared with the same period last year. Group third quarter
sales per day were up 5.9%, compared with the same period last
year. At constant exchange rates, the first nine months sales
increase over the prior year would have been GBP31.0million more,
reflecting the continued weakness of the US dollar against
sterling. - Margins and Operating Profit Third Quarter results: the
gross margin for the Group improved to 40.7% compared with 40.3% in
the first half. Operating profit in the third quarter was
GBP18.9million (2003/4:GBP18.2million), producing an operating
margin of 9.6% (2003/4: 9.4%). Adjusted operating profit before
goodwill amortisation in the third quarter was GBP19.6million
(2003/4: GBP18.9million), producing an adjusted operating margin of
10.0% (2003/4: 9.8%). Nine Months' results: operating profit was
GBP56.6million (2003/4: GBP51.0million), with an operating margin
of 9.6% (2003/4: 8.7%). Adjusted operating profit, before
GBP2.1million of goodwill amortisation was GBP58.7million (2003/4:
GBP55.4million before the GBP2.4million one-off costs of rebranding
and GBP2.0million of goodwill amortisation), producing an adjusted
operating margin of 9.9% (2003/4: 9.5%). At constant exchange
rates, the first nine months operating profit increase of
GBP5.6million over the prior year would have been GBP3.6million
more, reflecting the continued weakness of the US dollar against
sterling. - Interest Net interest payable in the first nine months
was GBP10.1million (2003/4: GBP11.0million) and was covered 5.8
times by operating profit before goodwill amortisation. - Profit
Before Taxation Profit before taxation in the first nine months of
the year was GBP46.5million (2003/4: GBP40.1million). Profit before
taxation, goodwill amortisation and gain/loss on business disposals
was GBP48.6million (2003/4: GBP42.0million after charging the
GBP2.4million one-off costs of rebranding in the first quarter). At
constant exchange rates, the increase in profit before tax for the
first nine months of GBP6.4million over the prior year would have
been GBP2.5million more. - Earnings per Share Earnings per share in
the first nine months were 7.7pence (2003/4: 6.2pence). Adjusted
earnings per share, before rebranding costs, amortisation of
goodwill and gain/loss on business disposals were 8.3pence (2003/4:
7.2pence). - Balance Sheet, Cash Flow and Working Capital Net debt
amounted to GBP222.3million at 31st October 2004, up from
GBP201.9million at the end of January 2004. Working capital
increased by GBP27.4million during the first nine months due to the
sales growth in the period, together with investment in inventory
to extend product ranges. There was also a normal seasonal increase
in receivables in the third quarter which is expected to reverse in
the fourth quarter. Operating cash flow in the nine months was 73%
of operating profit before goodwill amortisation. - International
Financial Reporting Standards (IFRS) The Group is required to
report under IFRS for its financial periods commencing after 30th
January 2005. It plans to present the effects of the transition to
these standards on its financial statements shortly after the
announcement of its Preliminary Results for the year ending 30th
January 2005. Operations ---------- Marketing and Distribution
Division (MDD) - Overview The Marketing and Distribution Division
comprises Newark InOne, Farnell InOne, BuckHickman InOne, MCM, an
InOne Company, and CPC. --------------------------------- 3rd Qtr
3rd Qtr 9 Months 9 Months 2004/5 2003/4 2004/5 2003/4 GBPm GBPm
GBPm GBPm ---------------------------------------------------------
Sales 171.9 169.5 518.9 510.9
--------------------------------------------------------- Operating
profit 17.4 16.4 53.2 46.3 Adjusted operating 18.0 17.1 55.2 50.7
profit* ---------------------------------------------------------
Return on sales % 10.1% 9.7% 10.3% 9.1% Adjusted return on 10.5%
10.1% 10.6% 9.9% sales %*
--------------------------------------------------------- *before
one-off rebranding costs in 2003/4 and goodwill amortisation
Divisional sales per day increased 6.9% in the nine months, and
5.4% in the third quarter, compared with the respective periods
last year. Operating profit in the nine months was GBP55.2million,
before goodwill amortisation of GBP2.0million (2003/4:
GBP50.7million, before goodwill amortisation of GBP2.0million and
one-off rebranding costs of GBP2.4million taken in the first
quarter). Return on sales increased to 10.3% from 9.1% and the
adjusted return on sales increased to 10.6% from 9.9% reflecting
robust gross margin and the benefits of operational gearing. Across
the division, eCommerce sales continued to grow; they comprised 16%
of divisional sales in the third quarter, up from 10% in the same
period last year. A further 18 eProcurement partnerships commenced
during the quarter, increasing the total number of such
arrangements in place across the division to 346, up from 266 at
the same time last year. - The Americas
---------------------------------- 3rd Qtr 3rd Qtr 9 Months 9
Months 2004/5 2003/4 2004/5 2003/4 GBPm GBPm GBPm GBPm
------------------------------------------------------------- Sales
74.9 74.2 222.6 221.1
-------------------------------------------------------------
Operating profit 7.3 6.9 21.4 19.6 Adjusted operating profit* 7.3
6.9 21.4 20.8
-------------------------------------------------------------
Return on sales % 9.7% 9.3% 9.6% 8.9% Adjusted return on 9.7% 9.3%
9.6% 9.4% sales %*
-------------------------------------------------------------
*before one-off rebranding costs in 2003/4 Sales per day in the
first nine months were up 12.3% compared with the same period last
year. In the third quarter, sales per day were 9.8% ahead of the
prior year, held back by the slowing of market growth rates in the
latter part of the third quarter. The weaker US dollar resulted in
a negative currency impact of GBP23.1million on sales in the first
nine months compared with the prior year. Operating profit for the
nine months was GBP21.4million (2003/4: GBP20.8million before
one-off rebranding costs of GBP1.2million). This increase was
achieved despite GBP2.3million adverse translation effect due to
the weaker US dollar and GBP0.8million of increased depreciation on
the customer relationship management (CRM) software implemented
during the first quarter of last year. Gross margin in the Americas
in the third quarter was ahead of that achieved in the same period
in the prior year. This helped the region deliver a return on sales
of 9.7% in the third quarter, up from the 9.5% achieved in the
first half. Sales via eCommerce channels continue to grow and
comprised 17% of total sales in North America in the quarter. Sales
via eProcurement agreements and over the web were both strong, up
39% and 52% respectively in the third quarter compared with the
same period last year. The division's new web search engine was
launched at Newark InOne in September and both visitor and order
numbers have subsequently increased. The launch of Newark InOne's
latest catalogue in September, containing some 28,000 new products,
was also well received. In the first nine months, sales per day in
Mexico and Brazil continued to grow rapidly. Shortly after the end
of the quarter, Newark InOne, received five marketing awards from
the National Electronic Distributors Association (NEDA), based on
the creativity and effectiveness of its marketing and advertising.
This reflects an increased interest by suppliers in the business'
marketing capability. - Europe and Asia Pacific
---------------------------------- 3rd Qtr 3rd Qtr 9 Months 9
Months 2004/5 2003/4 2004/5 2003/4 GBPm GBPm GBPm GBPm
---------------------------------------------------------- Sales
97.0 95.3 296.3 289.8
----------------------------------------------------------
Operating profit 10.1 9.5 31.8 26.7 Adjusted operating 10.7 10.2
33.8 29.9 profit *
---------------------------------------------------------- Return
on sales % 10.4% 10.0% 10.7% 9.2% Adjusted return on 11.0% 10.7%
11.4% 10.3% sales %*
---------------------------------------------------------- *before
one-off rebranding costs in 2003/4 and goodwill amortisation Sales
per day in the nine months were up 2.9% over the same period last
year and increased 2.1% compared with the third quarter last year.
The effect on sales of the weaker euro during the nine months was
GBP2.6million. Adjusted operating profit in the nine months was
GBP33.8million before goodwill amortisation of GBP2.0million
(2003/4: GBP29.9million, before goodwill amortisation of
GBP2.0million, and one-off rebranding costs of GBP1.2million). In
the UK, sales per day for the third quarter declined 1.9% against
those achieved in the prior year, held back by a 6.9% fall in sales
at BuckHickman InOne. BuckHickman InOne's sales have not recovered
as quickly as planned following the restoration of customer service
levels in the second quarter. During the third quarter, BuckHickman
InOne, working in partnership with Farnell InOne, extended the
Group's successful eProcurement relationship with The United
Kingdom Atomic Energy Authority by securing a third agreement for
the supply of tooling products, in addition to those already in
place for personal and protective equipment and electrical and
electronic equipment. Together, these three agreements, each of
three years' duration, are expected to generate combined annual
sales of some GBP3million across Premier Farnell's UK businesses.
The UK electronic component distribution businesses, Farnell InOne
and CPC, achieved growth in sales per day of 1.8% in the third
quarter and 3.6% for the nine months over the comparable periods in
the prior year. Whilst CPC encountered softer market conditions
amongst its small business customer base, Farnell InOne's sales per
day in the quarter grew 4.7% over the prior year, underpinned by
increasing sales to corporate accounts. In addition, targeted
telemarketing campaigns using its CRM system helped the business
stimulate growth in sales amongst low spending and dormant
accounts. In mainland Europe, sales per day for the nine months
increased 11.1%, while third quarter sales increased 9.7% year on
year. This reflected good sales growth in all regions during the
third quarter, with the exception of France where growth slowed
from the high levels achieved earlier in the year. In the quarter,
Farnell InOne signed an agreement with Robert Bosch GmbH for the
supply of electronics and electromechanical components to all of
its European sites. The agreement has an estimated sales value,
over three years, of euro 7.5million. This is the largest corporate
account that the business has won in mainland Europe to date. The
division's new web search engine has now been deployed in all major
territories in Europe except France. Sales via websites in Germany,
where the search engine was first introduced in July, increased
significantly and there has been a positive reaction from customers
elsewhere. Sales via eProcurement agreements and over the web were
up 102% and 60% respectively in the third quarter compared with the
same period last year. Third quarter sales per day in Asia rose
25.6% above the prior year, resulting in a 31.3% increase in the
nine months over the same period last year. This sales growth was
accompanied by higher service levels in the region. In Australia,
Farnell InOne continued to grow market share as sales per day
performed strongly, up 7.5% in the third quarter, and up 5.8% over
nine months. Shortly after the period end, Premier Farnell won the
European Electronics Industry's 'Investor in People' award at the
Electronica trade fair in Munich. It also won awards from three of
its suppliers: Vishay; EPCOS; and Harwin. Industrial Products
Division --------------------------------- 3rd Qtr 3rd Qtr 9 Months
9 Months 2004/5 2003/4 2004/5 2003/4 GBPm GBPm GBPm GBPm
------------------------------------------------------------ Sales:
Continuing businesses 24.8 24.0 72.8 72.5 Businesses disposed - - -
0.7 Total 24.8 24.0 72.8 73.2
------------------------------------------------------------
Operating profit 3.7 3.6 10.2 10.4 Adjusted operating 3.8 3.6 10.3
10.4 profit*
------------------------------------------------------------ Return
on sales % 14.9% 15.0% 14.0% 14.2% Adjusted return on 15.3% 15.0%
14.1% 14.2% sales%*
------------------------------------------------------------
*before goodwill amortisation The Industrial Products Division's
sales in the nine months were GBP72.8million (2003/4:
GBP73.2million). The weaker US dollar resulted in a negative
currency translation impact of GBP5.3million on sales and
GBP0.9million on operating profit in the nine months, compared with
last year. Sales per day increased 8.0% in the nine months over the
same period last year and 9.0% in the third quarter. - Akron Brass
Sales per day have continued to progress, increasing 14.8% in the
first nine months and 12.9% in the third quarter over the same
period last year. This reflects further strong growth in the sales
of new products added through the acquisition of GFE Manufacturing
and steady growth in sales of Akron Brass's core products. - TPC
Wire & Cable Sales per day were up 22.2% in the third quarter
compared with the prior year, lifting sales per day for the nine
months up by 9.5% over the same period last year. TPC recorded its
strongest month ever in September, helped by sales to Japanese
automotive manufacturers in the US and to the Federal Government. -
Kent Sales per day were up 4.7% in the third quarter, and 2.7% in
nine months year-on-year in a market that remains tough. Closure of
ADR programme and de-listing from NYSE The Board has decided to
de-list voluntarily from the New York Stock Exchange (NYSE) and
terminate the American Depositary Receipt (ADR) programme for
Premier Farnell plc's Ordinary Shares and Preference Shares. The
Company's US Investor base has declined steadily since the
acquisition of Premier Industrial Corporation in 1996. Currently,
less than 3% of the Company's Ordinary Shares, and 15% of its
Preference shares, are held in the form of ADRs. Trading in the
ordinary ADRs on the NYSE represents less than 1% of the average
daily trading volume in the Company's Ordinary Shares. The Board is
also seeking ways in which to de-register from the Securities and
Exchange Commission (SEC) and avoid the increasing burden and
expense of complying with its reporting obligations under the US
Securities Exchange Act of 1934. Outlook Growth rates in several of
the markets in which the Group operates slowed in the latter part
of the quarter, and whilst still moving ahead, the short-term
outlook for the Group's markets is hard to gauge. Nonetheless, the
Group's performance for the full year will be ahead of last year
and we remain confident about the prospects for our business. The
Group continues to focus on achieving further market share gains,
building upon the very significant operational improvements made to
the business over the past few years. Sir Malcolm Bates Chairman
9th December 2004 Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the United States Private Securities
Litigation Reform Act of 1995: The U.S. Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for
forward-looking statements. This press release contains certain
forward-looking statements relating to the business of the Group
and certain of its plans and objectives, including, but not limited
to, future capital expenditures, future ordinary expenditures and
future actions to be taken by the Group in connection with such
capital and ordinary expenditures, the introduction of new
information technology and e-commerce platforms, the expected
benefits and future actions to be taken by the Group in respect of
certain sales and marketing initiatives, operating efficiencies,
economies of scale, the planned delisting from the NYSE and
termination of the ADR program and the Group's plans to seek ways
to deregister under the US securities laws. By their nature
forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future. Actual expenditures made and actions taken may
differ materially from the Group's expectations contained in the
forward-looking statements as a result of various factors, many of
which are beyond the control of the Group. These factors include,
but are not limited to, the implementation of cost-saving
initiatives to offset current market conditions, the ability to
recruit and retain management personnel, integration of new
information systems, continued use and acceptance of e-commerce
programs and systems and the impact on other distribution systems,
the ability to expand into new markets and territories, the
implementation of new sales and marketing initiatives, changes in
demand for electronic, electrical, electromagnetic and industrial
products, rapid changes in distribution of products and customer
expectations, the ability to introduce and customers' acceptance of
new services, products and product lines, product availability, the
impact of competitive pricing, fluctuations in foreign currencies,
changes in interest rates and overall market conditions,
particularly the impact of changes in world-wide and national
economies, and the implementation of the Group's plans to delist
and terminate its ADR program and to seek ways to deregister under
the US securities laws and the realization of the expected benefits
of such plans. Consolidated Profit and Loss Account For the third
quarter and nine months ended 31st October 2004 2003/4 2003/4
2004/5 Third 2004/5 Nine 2003/4 Third quarter Nine months Full year
quarter unaudited months unaudited audited unaudited (restated)
unaudited (restated) (restated) Notes GBPm GBPm GBPm GBPm GBPm
-------------------- -------------------- ---------- Turnover 1
196.7 193.5 591.7 584.1 764.6 --------------------
-------------------- ---------- Operating profit
---------------------------------------------------- - before
rebranding costs and amortisation of goodwill 19.6 18.9 58.7 55.4
74.0 - rebranding costs - - - (2.4) (2.4) - amortisation of
goodwill (0.7) (0.7) (2.1) (2.0) (2.6)
---------------------------------------------------- Total
operating profit 1 18.9 18.2 56.6 51.0 69.0 Profit on disposal of
business - - - 0.1 0.1 Net interest payable (3.4) (3.6) (10.1)
(11.0) (14.3) -------------------- -------------------- ----------
Profit before taxation 15.5 14.6 46.5 40.1 54.8 Taxation 3 (4.0)
(4.4) (13.5) (12.5) (15.6) --------------------
-------------------- ---------- Profit after taxation 11.5 10.2
33.0 27.6 39.2 Preference dividends (non-equity) (1.6) (1.7) (4.9)
(5.0) (6.6) -------------------- -------------------- ----------
Profit attributable to ordinary shareholders 9.9 8.5 28.1 22.6 32.6
Ordinary dividends (equity) - - (14.5) (14.5) (32.6)
-------------------- -------------------- ---------- Retained
profit 9.9 8.5 13.6 8.1 - -------------------- --------------------
---------- -------------------- -------------------- ----------
Earnings per share 4 Basic 2.7 2.3 7.7 6.2 9.0 pence pence pence
pence pence Diluted 2.7 2.3 7.7 6.2 9.0 pence pence pence pence
pence Earnings per share before rebranding costs, amortisation of
goodwill and disposals 4 Basic 2.9 2.5 8.3 7.2 10.2 pence pence
pence pence pence Diluted 2.9 2.5 8.3 7.2 10.1 pence pence pence
pence pence Statement of Total Recognised Gains and Losses For the
nine months ended 31st October 2004 2003/4 2004/5 Nine 2003/4 Nine
months Full year months unaudited audited unaudited (restated)
(restated) GBPm GBPm GBPm -------------------- ---------- Profit
after taxation for the period 33.0 27.6 39.2 Currency translation
adjustments (net of associated tax credit/charge) 1.3 7.6 9.8
-------------------- ---------- Total recognised gains for the
period 34.3 35.2 49.0 -------------------- ----------
-------------------- ---------- Consolidated Profit and Loss
Account For the third quarter and nine months ended 31st October
2004 2003/4 2003/4 2004/5 Third 2004/5 Nine 2003/4 Third quarter
Nine months Full year quarter unaudited months unaudited audited
unaudited (restated) unaudited (restated) (restated) Notes $m $m $m
$m $m -------------------- -------------------- ---------- Turnover
1 356.0 319.3 1,076.9 946.2 1,269.2 --------------------
-------------------- ---------- --------------------
-------------------- ---------- Operating profit
---------------------------------------------------- - before
rebranding costs and amortisation of goodwill 35.5 31.2 106.8 89.7
122.8 - rebranding costs - - - (3.9) (4.0) - amortisation of
goodwill (1.3) (1.2) (3.8) (3.2) (4.3)
---------------------------------------------------- Total
operating profit 1 34.2 30.0 103.0 82.6 114.5 Profit on disposal of
business - - - 0.2 0.2 Net interest payable (6.2) (5.9) (18.4)
(17.8) (23.7) -------------------- -------------------- ----------
Profit before taxation 28.0 24.1 84.6 65.0 91.0 Taxation 3 (7.2)
(7.3) (24.6) (20.3) (25.9) --------------------
-------------------- ---------- Profit after taxation 20.8 16.8
60.0 44.7 65.1 Preference dividends (non-equity) (2.9) (2.8) (8.9)
(8.1) (11.0) -------------------- -------------------- ----------
Profit attributable to ordinary shareholders 17.9 14.0 51.1 36.6
54.1 Ordinary dividends (equity) - - (26.4) (23.5) (54.1)
-------------------- -------------------- ---------- Retained
profit 17.9 14.0 24.7 13.1 - --------------------
-------------------- ---------- --------------------
-------------------- ---------- Earnings per share 4 Basic $0.049
$0.038 $0.140 $0.100 $0.149 Diluted $0.049 $0.038 $0.140 $0.100
$0.149 Earnings per share before rebranding costs, amortisation of
goodwill and disposals 4 Basic $0.052 $0.041 $0.151 $0.117 $0.169
Diluted $0.052 $0.041 $0.151 $0.117 $0.168 The translation of
sterling into US dollars has been presented for convenience
purposes only using the following average exchange rates: 1.81 1.65
1.82 1.62 1.66 Consolidated Balance Sheet As at 31st October 2004
31st 2nd 1st October November February 2004 2003 2004 unaudited
unaudited audited Notes GBPm GBPm GBPm --------------------
--------- Fixed Assets Intangible assets 45.5 46.5 45.9 Tangible
assets 101.7 109.8 107.2 -------------------- --------- 147.2 156.3
153.1 -------------------- --------- Current Assets Stocks 168.5
154.1 151.0 Debtors - due within one year 141.1 137.5 128.5 - due
after more than one year 82.9 83.8 79.6 Cash at bank and in hand
35.9 33.9 31.7 -------------------- --------- 428.4 409.3 390.8
-------------------- --------- Creditors - due within one year
Loans and overdrafts (5.4) (5.6) (2.9) Other (147.9) (143.7)
(156.1) -------------------- --------- (153.3) (149.3) (159.0)
-------------------- --------- Net current assets 275.1 260.0 231.8
-------------------- --------- Total assets less current
liabilities 422.3 416.3 384.9 Creditors - due after more than one
year Loans (252.8) (256.3) (230.7) Provisions for liabilities and
charges 5 (42.0) (42.0) (42.1) -------------------- --------- Net
assets 127.5 118.0 112.1 -------------------- ---------
-------------------- --------- Equity shareholders' funds 5.7 (4.9)
(9.7) Non-equity shareholders' funds 121.8 122.9 121.8
-------------------- --------- Total shareholders' funds 127.5
118.0 112.1 -------------------- --------- --------------------
--------- Movement in Shareholders' Funds For the nine months ended
31st October 2004 2003/4 2004/5 Nine 2003/4 Nine months Full year
months unaudited audited unaudited (restated) (restated) GBPm GBPm
GBPm --------------------- ----------- Profit after taxation 33.0
27.6 39.2 Dividends - preference (4.9) (5.0) (6.6) - ordinary
(14.5) (14.5) (32.6) --------------------- ----------- 13.6 8.1 -
New share capital subscribed 0.1 0.9 0.9 Purchase of own preference
shares - (2.3) (2.3) Credit in respect of employee share schemes
0.4 - - Goodwill reinstated on disposal of business - 0.4 0.4
Currency translation adjustment (net of associated tax
credit/charge) 1.3 7.6 9.8 --------------------- ----------- Net
change in shareholders' funds 15.4 14.7 8.8 Opening shareholders'
funds (2003/4: previously GBP103.5m, restated for prior year
adjustment of GBP0.2m to GBP103.3m) 112.1 103.3 103.3
--------------------- ----------- Closing shareholders' funds 127.5
118.0 112.1 --------------------- ----------- ---------------------
----------- Consolidated Balance Sheet As at 31st October 2004 31st
2nd 1st October November February 2004 2003 2004 unaudited
unaudited audited $m $m $m -------------------- --------- Fixed
Assets Intangible assets 83.3 79.1 83.5 Tangible assets 186.1 186.6
195.1 -------------------- --------- 269.4 265.7 278.6
-------------------- --------- Current Assets Stocks 308.4 262.0
274.8 Debtors - due within one year 258.2 233.7 233.9 - due after
more than one year 151.7 142.5 144.9 Cash at bank and in hand 65.7
57.6 57.7 -------------------- --------- 784.0 695.8 711.3
-------------------- --------- Creditors - due within one year
Loans and overdrafts (9.9) (9.5) (5.3) Other (270.7) (244.3)
(284.1) -------------------- --------- (280.6) (253.8) (289.4)
-------------------- --------- Net current assets 503.4 442.0 421.9
-------------------- --------- Total assets less current
liabilities 772.8 707.7 700.5 Creditors - due after more than one
year Loans (462.6) (435.7) (419.9) Provisions for liabilities and
charges (76.9) (71.4) (76.6) -------------------- --------- Net
assets 233.3 200.6 204.0 -------------------- ---------
-------------------- --------- Equity shareholders' funds 10.4
(8.3) (17.7) Non-equity shareholders' funds 222.9 208.9 221.7
-------------------- --------- Total shareholders' funds 233.3
200.6 204.0 -------------------- --------- --------------------
--------- The translation of sterling into US dollars has been
presented for convenience purposes only using the following
period-end exchange rates: 1.83 1.70 1.82 Summarised Consolidated
Statement of Cash Flows For the third quarter and nine months ended
31st October 2004 2003/4 2003/4 2004/5 Third 2004/5 Nine 2003/4
Third quarter Nine months Full year quarter unaudited months
unaudited audited unaudited (restated) unaudited (restated)
(restated) Notes GBPm GBPm GBPm GBPm GBPm --------------------
-------------------- ---------- Operating profit 18.9 18.2 56.6
51.0 69.0 Depreciation and non-cash items 4.0 4.4 13.5 12.0 15.9
Working capital (5.7) (9.7) (27.4) (24.4) (14.9)
-------------------- -------------------- ---------- Net cash
inflow from operating activities 17.2 12.9 42.7 38.6 70.0 Net
interest payable (0.1) (0.3) (6.8) (7.3) (14.0) Preference
dividends - - (3.3) (3.3) (6.6) Taxation paid (3.1) (3.2) (9.9)
(10.0) (14.5) Purchase of tangible fixed assets (2.9) (5.7) (9.9)
(15.0) (20.4) Sale of tangible fixed assets - - 0.2 1.4 2.6
Purchase of business (net of costs) 2 - - (2.6) - - Disposal of
business (net of costs) - - - 0.8 0.5 Ordinary dividends paid
(14.5) (14.5) (32.6) (32.6) (32.6) --------------------
-------------------- ---------- Cash outflow before use of liquid
resources and financing (3.4) (10.8) (22.2) (27.4) (15.0) Issue of
ordinary shares - 0.9 0.1 0.9 0.9 Purchase of own preference shares
- - - (2.3) (2.3) New bank loans 6.0 13.5 23.0 206.6 206.6
Repayment of bank loans - (4.7) - (175.6) (188.7)
-------------------- -------------------- ----------
Increase/(decrease) in cash 2.6 (1.1) 0.9 2.2 1.5
-------------------- -------------------- ----------
-------------------- -------------------- ---------- Reconciliation
of net debt Net debt at beginning of period (201.9) (209.2) (209.2)
Increase in cash 0.9 2.2 1.5 Increase in debt (23.0) (31.0) (17.9)
Exchange movement 1.7 10.0 23.7 -------------------- ---------- Net
debt at end of period 6 (222.3) (228.0) (201.9)
-------------------- ---------- -------------------- ----------
Summarised Consolidated Statement of Cash Flows For the third
quarter and nine months ended 31st October 2004 2003/4 2003/4
2004/5 Third 2004/5 Nine 2003/4 Third quarter Nine months Full year
quarter unaudited months unaudited audited unaudited (restated)
unaudited (restated) (restated) $m $m $m $m $m --------------------
-------------------- ---------- Operating profit 34.2 30.0 103.0
82.6 114.5 Depreciation and non-cash items 7.2 7.3 24.6 19.4 26.4
Working capital (10.3) (16.0) (49.9) (39.5) (24.7)
-------------------- -------------------- ---------- Net cash
inflow from operating activities 31.1 21.3 77.7 62.5 116.2 Net
interest payable (0.2) (0.5) (12.5) (11.8) (23.2) Preference
dividends - - (6.0) (5.3) (11.0) Taxation paid (5.6) (5.3) (18.0)
(16.3) (24.1) Purchase of tangible fixed assets (5.2) (9.4) (18.0)
(24.3) (33.9) Sale of tangible fixed assets - - 0.4 2.3 4.3
Purchase of business (net of costs) - - (4.7) - - Disposal of
business (net of costs) - - - 1.3 0.8 Ordinary dividends paid
(26.3) (23.9) (59.3) (52.8) (54.1) --------------------
-------------------- ---------- Cash outflow before use of liquid
resources and financing (6.2) (17.8) (40.4) (44.4) (25.0) Issue of
ordinary shares - 1.5 0.2 1.5 1.5 Purchase of own preference shares
- - - (3.7) (3.8) New bank loans 10.9 22.3 41.9 334.7 343.0
Repayment of bank loans - (7.8) - (284.5) (313.2)
-------------------- -------------------- ----------
Increase/(decrease) in cash 4.7 (1.8) 1.7 3.6 2.5
-------------------- -------------------- ----------
-------------------- -------------------- ---------- The
translation of sterling into US dollars has been presented for
convenience purposes only using the following average exchange
rates: 1.81 1.65 1.82 1.62 1.66 Notes 1 Segment information 2003/4
2003/4 2003/4 2004/5 Third 2004/5 Nine Full Third quarter Nine
months year quarter unaudited months unaudited audited unaudited
(restated) unaudited (restated) (restated) GBPm GBPm GBPm GBPm GBPm
-------------------- -------------------- ---------- Turnover
Marketing and Distribution Division Americas 74.9 74.2 222.6 221.1
286.1 Europe and Asia Pacific 97.0 95.3 296.3 289.8 382.1
-------------------- -------------------- ---------- 171.9 169.5
518.9 510.9 668.2 Industrial Products Division 24.8 24.0 72.8 73.2
96.4 -------------------- -------------------- ---------- 196.7
193.5 591.7 584.1 764.6 -------------------- --------------------
---------- -------------------- -------------------- ----------
Operating profit Marketing and Distribution Division Americas
---------------------------------------------------- - before
rebranding costs 7.3 6.9 21.4 20.8 27.0 - rebranding costs - - -
(1.2) (1.2) ----------------------------------------------------
7.3 6.9 21.4 19.6 25.8 Europe and Asia Pacific
---------------------------------------------------- - before
rebranding costs and amortisation of goodwill 10.7 10.2 33.8 29.9
40.6 - rebranding costs - - - (1.2) (1.2) - amortisation of
goodwill (0.6) (0.7) (2.0) (2.0) (2.6)
---------------------------------------------------- 10.1 9.5 31.8
26.7 36.8 ----------------------------------------------------
Total Marketing and Distribution Division 17.4 16.4 53.2 46.3 62.6
Industrial Products Division* 3.7 3.6 10.2 10.4 13.7 Head Office
costs (2.2) (1.8) (6.8) (5.7) (7.3) --------------------
-------------------- ---------- 18.9 18.2 56.6 51.0 69.0
-------------------- -------------------- ----------
-------------------- -------------------- ---------- $m $m $m $m $m
-------------------- -------------------- ---------- Turnover
Marketing and Distribution Division Americas 135.6 122.5 405.1
358.2 474.9 Europe and Asia Pacific 175.5 157.2 539.3 469.4 634.3
-------------------- -------------------- ---------- 311.1 279.7
944.4 827.6 1,109.2 Industrial Products Division 44.9 39.6 132.5
118.6 160.0 -------------------- -------------------- ----------
356.0 319.3 1,076.9 946.2 1,269.2 --------------------
-------------------- ---------- --------------------
-------------------- ---------- Operating profit Marketing and
Distribution Division Americas
---------------------------------------------------- - before
rebranding costs 13.2 11.4 38.9 33.7 44.8 - rebranding costs - - -
(1.9) (2.0) ----------------------------------------------------
13.2 11.4 38.9 31.8 42.8 Europe and Asia Pacific
---------------------------------------------------- - before
rebranding costs and amortisation of goodwill 19.4 16.8 61.5 48.4
67.4 - rebranding costs - - - (2.0) (2.0) - amortisation of
goodwill (1.1) (1.2) (3.6) (3.2) (4.3)
---------------------------------------------------- 18.3 15.6 57.9
43.2 61.1 ----------------------------------------------------
Total Marketing and Distribution Division 31.5 27.0 96.8 75.0 103.9
Industrial Products Division* 6.7 5.9 18.6 16.9 22.7 Head Office
costs (4.0) (2.9) (12.4) (9.3) (12.1) --------------------
-------------------- ---------- 34.2 30.0 103.0 82.6 114.5
-------------------- -------------------- ----------
-------------------- -------------------- ---------- * Stated net
of goodwill amortisation in the third quarter and nine months of
GBP0.1 million (2003/4: nil). 2 Acquisition On 6th February 2004,
the Group acquired the business and assets of GFE Manufacturing, a
US company involved in the manufacture of lighting rigs for the
fire-fighting industry, for a cash consideration, including costs,
of GBP2.6 million. The fair value of net assets acquired was GBP1.0
million, with the resulting goodwill of GBP1.6 million being
amortised over a period of 20 years. GFE Manufacturing contributed
GBP2.4 million of sales and GBP0.6 million of operating profit to
the Industrial Products Division in the first nine months. 3
Taxation The taxation charge includes provision at an effective
rate for the first nine months, excluding goodwill amortisation and
profit on disposal of business, of 27.7% (2003/4: 30.0%) being the
estimated effective rate of taxation for the year ending 30th
January 2005. 4 Earnings per share Basic earnings per share are
based on the profit attributable to ordinary shareholders and the
weighted average number of ordinary shares in issue during the
period, excluding those shares held by the Premier Farnell
Executive Trust. For diluted earnings per share, the weighted
average number of ordinary shares in issue is adjusted to assume
issue of all dilutive potential ordinary shares, being those share
options granted to employees where the exercise price is less than
the average market price of the Company's ordinary shares during
the period. Reconciliations of earnings and the weighted average
number of shares used in the calculations are set out below. 2003/4
2003/4 2004/5 Nine Full Nine months year months unaudited audited
unaudited (restated) (restated) GBPm GBPm GBPm
------------------------ ----------- Profit attributable to
ordinary shareholders 28.1 22.6 32.6 Rebranding costs - 2.4 2.4
Profit on disposal of business - (0.1) (0.1) Tax attributable to
rebranding - (0.7) (0.7) Amortisation of goodwill 2.1 2.0 2.6
------------------------ ----------- Profit attributable to
ordinary shareholders before rebranding costs, amortisation of
goodwill and disposals 30.2 26.2 36.8 ------------------------
----------- ------------------------ ----------- Number Number
Number ------------------------ ----------- Weighted average number
of shares 362,658,409 362,227,670 362,329,619 Dilutive effect of
share options 1,139,438 837,271 1,025,010 Diluted weighted average
number of shares 363,797,847 363,064,941 363,354,629 Earnings per
share before rebranding costs, amortisation of goodwill and profit
on disposal of business have been disclosed in order to facilitate
comparison. 5 Provisions for liabilities and charges Provisions for
liabilities and charges comprise deferred taxation of GBP35.7
million (2nd November 2003: GBP35.4 million, 1st February 2004:
GBP35.9 million), provision for overseas post-retirement
obligations of GBP5.0 million (2nd November 2003: GBP5.1 million,
1st February 2004: GBP4.7 million) and provision for dilapidation
costs on leased properties of GBP1.3 million (2nd November 2003:
GBP1.5 million, 1st February 2004: GBP1.5 million). 6 Net debt 31st
2nd 1st October November February 2004 2003 2004 unaudited
unaudited audited GBPm GBPm GBPm -------------------- -------- Cash
at bank and in hand 35.9 33.9 31.7 Unsecured loans and overdrafts
(258.2) (261.9) (233.6) -------------------- -------- (222.3)
(228.0) (201.9) -------------------- -------- --------------------
-------- Unsecured loans and overdrafts comprise: Bank overdrafts
5.3 5.5 2.8 Bank loans 43.0 30.6 20.0 7.2% US dollar Guaranteed
Senior Notes payable 2006 84.7 91.2 85.2 5.3% US dollar Guaranteed
Senior Notes payable 2010 36.1 38.8 36.3 5.9% US dollar Guaranteed
Senior Notes payable 2013 86.9 93.5 87.4 Other loans 2.2 2.3 1.9
-------------------- -------- 258.2 261.9 233.6
-------------------- -------- -------------------- --------
Unsecured loans and overdrafts are repayable as follows: Within one
year 5.4 5.6 2.9 Between one and two years 127.8 0.1 0.1 Between
two and five years 0.3 122.1 105.5 After five years 124.7 134.1
125.1 -------------------- -------- 258.2 261.9 233.6
-------------------- -------- -------------------- -------- 7 Basis
of preparation The unaudited consolidated financial information for
the 39 weeks ended 31st October 2004 has been prepared applying the
accounting policies disclosed in the Group's 2004 Annual Report and
Accounts with the exception of the accounting policy for
investments in own shares. UITF 38, Accounting for ESOP Trusts, has
been adopted with effect from 2nd February 2004. UITF 38 requires
that investments in own shares made in order to meet anticipated
obligations under performance share plans should be accounted for
as a deduction from shareholders' funds. Prior to 2nd February
2004, the Group's accounting policy was to classify such
investments as fixed assets and to amortise the cost over the
performance period of the plan to which they relate. The adoption
of UITF 38 has been accounted for by way of a prior period
adjustment, increasing operating profit for the 2003/4 first nine
months by GBP0.2 million and for the 2003/4 full year by GBP0.2
million, reflecting the reversal of the amortisation charge on the
investment in own shares. The Group's 2004 Annual Report and
Accounts have been delivered to the Registrar of Companies and
contain an unqualified audit report. The principal average exchange
rates used to translate the Group's overseas profits were as
follows: 2004/5 2003/4 2004/5 2003/4 2003/4 Third Third Nine Nine
Full quarter quarter months months year ----------------
------------------------ US dollar 1.81 1.65 1.82 1.62 1.66 Euro
1.46 1.44 1.48 1.44 1.44 Australian dollar 2.49 2.42 2.50 2.49 2.46
8 Dividend The preference share dividend for the six months ending
26th January 2005 will be paid on 26th January 2005 to preference
shareholders on the register at close of business on 31st December
2004. DATASOURCE: Premier Farnell Plc CONTACT: For further
information, contact: John Hirst, Group CEO, Andrew Fisher, Group
Finance Director, James Garthwaite, Group Director, Communications,
Premier Farnell plc, +44-(0)20-7851-4100; Richard Mountain / Andrew
Lorenz, Financial Dynamics (UK), +44-(0)20-7269-7291; Andrew
Saunders, Taylor Rafferty (NA), +1-212-889-4350
Copyright