- (1.7) (6.6) Profit attributable to ordinary shareholders Earnings per share 5 Basic 2.3p 2.5p 10.6p Diluted 2.3p 2.5p 10.

Transcription

1 Consolidated Profit and Loss Account For the 13 weeks ended 1st May 2005 Notes Revenue Cost of sales (117.5) (119.9) (462.2) Gross profit Total operating expenses (61.4) (61.6) (242.0) Operating profit Finance income (interest receivable) Finance costs - interest payable (3.3) (3.5) (13.8) - preference dividend (1.7) premium on redemption of preference shares (0.3) - - Total finance costs (5.3) (3.5) (13.8) Profit before taxation Taxation 4 (3.8) (4.8) (14.0) Profit after taxation Preference dividend - (1.7) (6.6) Profit attributable to ordinary shareholders Earnings per share 5 Basic 2.3p 2.5p 10.6p Diluted 2.3p 2.5p 10.6p Consolidated Statement of Recognised Income and Expense For the 13 weeks ended 1st May 2005 Profit after taxation Foreign exchange translation differences 0.2 (1.8) 2.2 Actuarial losses on defined benefit pension schemes - - (15.0) Deferred tax on actuarial losses on defined benefit pension schemes Net gains and losses not recognised in the profit and loss account 0.2 (1.8) (7.6) Total recognised income and expense for the period

2 Consolidated Balance Sheet As at 1st May st May 2nd May 30th January Notes ASSETS Non-current assets Property, plant and equipment Intangible assets Retirement benefit asset Deferred tax assets Total non-current assets Current assets Inventories Trade and other receivables Cash and cash equivalents Total current assets LIABILITIES Current liabilities Financial liabilities 6 (0.5) (5.2) (0.8) Trade and other payables (89.7) (106.5) (89.3) Current tax payable (42.3) (42.6) (40.6) Short-term provisions (0.1) (0.1) (0.1) Total current liabilities (132.6) (154.4) (130.8) Net current assets Non-current liabilities Financial liabilities 6 (331.3) (236.8) (227.8) Deferred tax liabilities (21.7) (26.1) (22.4) Retirement and other post-employment benefits (27.8) (22.5) (28.1) Other provisions (0.9) (1.4) (0.9) Total non-current liabilities (381.7) (286.8) (279.2) NET ASSETS EQUITY Share capital Equity element of preference shares Share premium Capital redemption reserve Cumulative translation reserve 2.4 (1.8) 2.2 Retained earnings (60.5) TOTAL EQUITY Consolidated Reconciliation of Movements in Equity For the 13 weeks ended 1st May 2005 Notes Total equity at beginning of period, as previously reported Implementation of accounting for financial instruments in accordance with IAS 32 and IAS 39: - reclassification of preference shares as debt 1 (106.3) associated deferred tax (4.7) - - Total equity at beginning of period, as adjusted (8.5) Profit after taxation Net income/(expense) recognised directly in equity 0.2 (1.8) (7.6) Ordinary dividends declared - - (32.6) Preference dividends - (1.7) (6.6) Ordinary shares issued Share-based payments Total equity at end of period

3 Summarised Consolidated Statement of Cash Flows For the 13 weeks ended 1st May 2005 Notes Cash flows from operating activities Operating profit Depreciation and amortisation Changes in working capital (9.9) (12.3) (19.9) Other non-cash movements 0.3 (0.3) 0.2 Cash generated from operations Net interest paid (0.1) (0.1) (13.4) Dividends paid on preference shares - - (6.6) Taxation paid (2.3) (2.2) (12.1) Net cash from operating activities Cash flows from investing activities Purchase of business - (2.6) (2.6) Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment (1.4) (2.5) (6.5) Purchase of intangible assets (computer software) (0.8) (1.4) (6.8) Net cash used in investing activities (2.2) (6.4) (14.9) Cash flows from financing activities Issue of ordinary shares New bank loans Repayment of bank loans - - (17.7) Dividends paid to shareholders - - (32.6) Net cash used in financing activities (27.2) Net increase/(decrease) in cash and bank overdrafts (1.7) Reconciliation of net debt Net debt at beginning of period, as previously reported (200.7) (201.9) (201.9) Implementation of accounting for financial instruments in accordance with IAS 39: - reclassification of preference shares as debt 1 (106.3) - - Net debt at beginning of period, as restated (307.0) (201.9) (201.9) Net increase/(decrease) in cash and bank overdrafts (1.7) Increase in debt - - (5.3) Premium on redemption of preference shares (0.3) - - Exchange movement 1.8 (9.5) 8.2 Net debt at end of period 6 (297.0) (208.6) (200.7) 11

4 Notes 1 Adoption of International Financial Reporting Standards (IFRS) Premier Farnell adopted IFRS with effect from 31st January Consequently, these financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. IFRS 1, First Time Adoption of IFRS, requires that most IFRS are applied retrospectively, subject to certain exemptions that can be taken. Hence, the comparative information included in these financial statements has been restated in accordance with IFRS. A reconciliation from UK GAAP to IFRS of the profit and loss account for the quarter ended 2nd May 2004, and of the balance sheet as at 2nd May 2004, is included on pages 15 and 16, respectively. A more detailed explanation of the changes made to the UK GAAP accounting policies disclosed in the Group's 2005 Annual Report and Accounts are given in the IFRS announcement made by the Company on 4th May From 31st January 2005, Premier Farnell implemented the following additional change in accounting policy as a result of adopting IAS 32 and IAS 39, accounting for financial instruments. This change is applied prospectively from 31st January 2005, and therefore does not affect the comparative information. Prior to 31st January 2005, convertible, redeemable preference shares were included within shareholders' funds and the preference dividend shown as a deduction from profit after tax. From 31st January 2005, IFRS requires such preference shares to be split into debt and equity components with the preference dividend being reclassified as a finance cost. The fair value of the debt element is established on issue of the shares, based on the discounted cash flows of the instrument to the date of maturity, and is then increased each year on a straight line basis through the profit and loss account in order to arrive at the redemption amount payable on maturity of the shares. The equity component is 19.9 million and will only change as and when shares are redeemed. At 1st May 2005, the debt element of the preference shares was million (31st January 2005: million). The amortisation charge relating to the implied redemption premium during the quarter ended 1st May 2005 was 0.3 million. The transition from UK GAAP to IFRS does not change the reported cash flows of the Group. An IFRS cash flow statement is similar to UK GAAP but presents various cash flows in different categories and in a different order from UK GAAP. All of the IFRS adjustments noted on pages 15 and 16 net out within cash generated from operations except for the intangible assets reclassification where the cash used to purchase computer software has been reclassified from purchase of plant and equipment to purchase of intangible assets. IAS 14, Segment Reporting, does not change the Group's reportable segments from those reported under UK GAAP. The Group's business segments under UK GAAP will be the primary reporting segments under IAS 14. A copy of the Group's 2005 Annual Report and Accounts and the IFRS announcement are available on the Company's website at 2 Segment information Revenue Marketing and Distribution Division Americas Europe and Asia Pacific Total Marketing and Distribution Division Industrial Products Division Operating profit Marketing and Distribution Division Americas Europe and Asia Pacific Total Marketing and Distribution Division Industrial Products Division Head Office costs (2.4) (2.5) (9.7)

5 3 Profit before taxation Profit before taxation is stated after charging/(crediting): Share-based payments Defined benefit pension schemes (net) (0.3) (0.7) (2.7) 4 Taxation The taxation charge includes provision at an effective rate for the period on profit before tax and preference dividend of 27.0% (2004/5: 31.2%), being the estimated effective rate of taxation for the year ending 29th January 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, i.e. 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. Earnings and the weighted average number of shares used in the calculations are set out below. Profit attributable to ordinary shareholders Number Number Number Weighted average number of shares 362,703, ,644, ,664,115 Dilutive effect of share options 259,748 1,452,853 1,042,844 Diluted weighted average number of shares 362,962, ,097, ,706,959 13

6 6 Net debt 1st May 2nd May 30th January Cash and cash equivalents Unsecured loans and overdrafts (224.8) (242.0) (228.6) Net debt before preference shares (190.0) (208.6) (200.7) Preference shares (note 1) (107.0) - - Net debt (297.0) (208.6) (200.7) Unsecured loans and overdrafts comprise: Bank overdrafts Bank loans % US dollar Guaranteed Senior Notes payable % US dollar Guaranteed Senior Notes payable % US dollar Guaranteed Senior Notes payable Other loans Unsecured loans and overdrafts are repayable as follows: Within one year Between one and two years Between two and five years After five years Exchange rates The principal average exchange rates used to translate the Group's overseas profits were as follows: US dollar Euro

7 Consolidated Profit and Loss Account Reconciliation for the Quarter ended 2nd May 2004 Unaudited UK GAAP IFRS ADJUSTMENTS IFRS (IFRS format) Share-based Goodwill payments Pensions m m Revenue Cost of sales (119.9) (119.9) Gross profit Total operating expenses (61.4) 0.7 (0.5) (0.4) (61.6) Operating profit (0.5) (0.4) 18.8 Net finance cost (3.4) (3.4) Profit before taxation (0.5) (0.4) 15.4 Taxation (4.9) (4.8) Profit after taxation (0.5) (0.3) 10.6 Preference dividends (1.7) (1.7) Profit attributable to ordinary shareholders (0.5) (0.3) 8.9 Earnings per share Basic 2.5p 0.2p (0.1)p (0.1)p 2.5p Diluted 2.5p 0.2p (0.1)p (0.1)p 2.5p A brief explanation of the significant changes in accounting policies to reflect IFRS is given below. Full details are included in the Company's IFRS announcement made on 4th May 2005, a copy of which is available on the Company's website. Goodwill UK GAAP requires goodwill on acquisitions to be amortised over its estimated useful life. Under IFRS, goodwill is considered to have an indefinite life and so is not amortised. Instead, goodwill is subject to an annual test for impairment and is carried at cost less accumulated impairment losses. Share-based payments Under UK GAAP, the expense in respect of share options, long-term incentive plans and save as you earn schemes was based on the intrinsic value of the award, being the difference between the exercise price and the market price of the instrument at the date of the award. Save as you earn schemes were specifically exempt from such a charge. Under IFRS 2, an expense is recognised for all share-based payments, including save as you earn schemes, over the vesting period. The expense is based on the fair value of the benefit awarded using option pricing models appropriate for the type of scheme concerned. Pensions Under UK GAAP, Premier Farnell accounted for pensions in accordance with SSAP 24 which adopted a profit and loss account driven approach to valuing pensions. SSAP 24 did not require any pension scheme surpluses or deficits to be included on the balance sheet except when fair valuing pension schemes on acquisitions. IAS 19 is fundamentally different to SSAP 24 and adopts a balance sheet driven approach with market based measures. All pension scheme surpluses and deficits are required to be recognised on the balance sheet. The asset/liability recognised in the balance sheet represents the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. Changes in actuarial assumptions are recognised in the Statement of Recognised Income and Expense. Segmental Operating Profit Reconciliation for the Quarter ended 2nd May 2004 Unaudited IFRS UK GAAP adjustments IFRS Marketing and Distribution Division Americas 7.3 (0.5) 6.8 Europe and Asia Pacific before amortisation of goodwill amortisation of goodwill (0.7) Total Marketing and Distribution Division Industrial Products Division before amortisation of goodwill 3.0 (0.2) 2.8 amortisation of goodwill (0.2) 2.8 Head Office costs (2.3) (0.2) (2.5) 19.0 (0.2)

8 Consolidated Balance Sheet Reconciliation as at 2nd May 2004 Unaudited UK GAAP IFRS ADJUSTMENTS IFRS (IFRS format) Share-based Ordinary Goodwill payments Pensions Taxation Reclassifications dividend m m ASSETS Non-current assets Property, plant and equipment (32.6) Intangible assets Retirement benefit asset (27.8) Deferred tax assets (1.2) Total non-current assets (22.8) - (1.2) Current assets Inventories Trade and other receivables Cash and cash equivalents Total current assets LIABILITIES Current liabilities Financial liabilities (5.2) (5.2) Trade and other payables (125.7) (106.5) Current tax payable (42.6) (42.6) Short-term provisions (0.1) - (0.1) Total current liabilities (173.5) (0.1) 18.1 (154.4) Net current assets (0.1) Non-current liabilities Financial liabilities (236.8) (236.8) Deferred tax liabilities (36.8) (1.4) (26.1) Retirement and other post-employment benefits (4.9) - - (17.6) (22.5) Other provisions (1.5) (1.4) Total non-current liabilities (280.0) (7.0) (1.4) (286.8) NET ASSETS (28.9) (1.4) EQUITY Share capital Share premium Capital redemption reserve Cumulative translation reserve - (0.1) - (0.3) - (1.4) - (1.8) Retained earnings (28.6) (1.4) TOTAL EQUITY (28.9) (1.4) A brief explanation of the significant changes in accounting policies to reflect IFRS is given on the prior page and below. Full details are included in the Company's IFRS announcement made on 4th May 2005, a copy of which is available on the Company's website. Taxation Under UK GAAP, deferred taxation is recognised on the basis of timing differences, being the difference between accounting profit and taxable profit. IFRS requires deferred taxation to be based on temporary differences, being the difference between the carrying value of an asset or liability and its tax base. Reclassifications Under UK GAAP, capitalised computer software is included within tangible fixed assets as plant and equipment. Under IFRS, capitalised computer software is recorded as an intangible asset. There is no profit and loss account impact as a result of this reclassification since, under both UK GAAP and IFRS, computer software is written down over its estimated useful life. Ordinary dividend UK GAAP requires ordinary dividends to be accounted for in the period to which they relate. Under IFRS, proposed ordinary dividends do not meet the definition of a liability until they are approved at the AGM or Board Meeting. 16