Enodis plc Releases First Quarter Results.Business Editors LONDON--(BUSINESS WIRE)--Feb. 10, 2003 Enodis Enodis plc is a British company headquartered in Central London which manufactures foodmaking equipment. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. plc (NYSE NYSE See: New York Stock Exchange :ENO):
First Quarter Results for the 13 Weeks Ended 28 December 2002
Group Financial Highlights
(pounds)m (except EPS)
Q103 Q102
------ ------
Operating profits (*)
FSE - North America 9.4 9.8
FSE - Europe and Asia 1.6 2.7
FSE - Global 11.0 12.5
FRE (0.8) 1.7
Adjusted Group profit/(loss) before tax(*) 2.5 5.1
Group profit/(loss) before tax (0.2) (3.7)
Adjusted, diluted EPS(*) 0.5p 1.4p
Net debt 182.0 376.1
(*) before exceptional items and goodwill amortisation
Key Points
- Results in line with expectations
- Food Service Equipment - North America: like-for-like
operating profit(**) up 8% with evidence of further market
share gains
- Global Food Service Equipment operating profit down 12%,
reflecting disposals and foreign exchange effects
- Significant progress in Food Retail Equipment - reduced losses
versus Q402
- Q102 operating profits include (pounds)2.1m profit
contribution from businesses subsequently sold
- Net debt at (pounds)182.0m less than half prior year figure
(**) like-for-like adjusted for disposals and foreign exchange
Andrew Allner, Chief Executive Officer said: "The Q1 results are in line with our expectations. However, given the recent signs of increasing nervousness among our customer base about the political situation and economic outlook, and the impact of adverse foreign exchange movements, we are becoming a little more cautious about the likely full year outturn. We continue to take the appropriate measures to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact of this difficult trading
environment, and are confident that the consistent implementation of our
strategy will leave Enodis strongly positioned when growth is
resumed."For further enquiries: Andrew Allner Chief Executive Officer 020 7304 6006 Dave Wrench Chief Financial Officer 020 7304 6006 Andrew Lorenz Financial Dynamics 020 7269 7291 Conference calls will be held for shareholders/analysts at 9:30am and bondholders at 11:00am today. For details, please contact Sorrel Beynon at Financial Dynamics on 020 7269 7291 or Kaylie Thomson at Enodis on 020 7304 6024. Chief Executive Officer's Review Overview As anticipated markets have continued to be weak. Our Q1 results are, however, in line with the Board's expectations. Improved like-for-like performance at Food Service Equipment - North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. (8% up on Q102) has offset continuing weaker European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. performance. Whilst Kysor Warren Warren. 1 City (1990 pop. 144,864), Macomb co., SE Mich., a suburb of Detroit; est. 1837, inc. as a city 1957. It is an important metalworking center where steel is processed. continues to make operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , these have been significantly reduced since Q402 as its new management team's focus on quality and productivity has improved operations and hence results. We have generated (pounds)10.2m of positive pre-exceptional operating cashflow after capital expenditure. There was a (pounds)0.5m free cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. during the quarter, after (pounds)5.7m of semi-annual interest payments on our 10?% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes. Net debt at (pounds)182.0m is less than half the Q102 balance and has reduced slightly since our Financial Year end of 28 September September: see month. 2002 primarily due to the weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. of the dollar.Results Q103 profit before tax, exceptional items and goodwill amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. was (pounds)2.5m (Q102:(pounds)5.1m). The decrease from prior year was primarily caused by:
(pounds)m
- Loss of Q102 operating profits from businesses
sold during FY02 (2.1)
- Reduced Food Retail Equipment results (2.5)
- Decreased interest charge 1.4
Like-for-like Q103 Global Food Service Equipment operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. (*) was flat compared to Q102, masking mask·ing n. 1. The concealment or the screening of one sensory process or sensation by another. 2. An opaque covering used to camouflage the metal parts of a prosthesis. an 8% increase in Food Service Equipment - North America like-for-like profits. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: declined to 5.2% (Q102: 6.3%) principally as a result of lower margins in Food Service Equipment - Europe/Asia and losses in Food Retail Equipment. Food Service Equipment - North America margins declined slightly to 9.4%. (*) In this discussion, operating profit is before exceptional items and goodwill amortisation. Exceptional Items
Q103 exceptional items comprise the following: (pounds)m
Favourable settlement of disposal warranty claims 2.5
Increased legal fee accruals in respect of (1.7)
Consolidated Industries litigation ----------
Net credit 0.8
==========
More details are contained in Note 4 to the attached unaudited
financial statements.
Cashflow and Financing Pre-exceptional operating cash inflow, after capital expenditure, was (pounds)10.2m reflecting little movement in net working capital during the quarter. After interest and tax, there was a (pounds)0.5m free cash inflow. (pounds)5.7m of semi-annual interest was paid in respect of our 10?% senior subordinated notes. Net debt reduced by (pounds)4.1m compared to the level at 28 September 2002, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. due to the weakening of the US$ from $1.55:(pounds)1 to $1.60:(pounds)1 at period end. Interest in Q103 was (pounds)1.4m lower than Q102 due to the impact of lower principal balances offset by higher interest rates on our senior notes. Earnings Per Share Adjusted diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of are 0.5p (Q102:1.4p having adjusted for the bonus element of last year's Rights Issue). REVIEW OF OPERATIONS Global Food Service Equipment Global Food Service Equipment comprises our operations in North America, approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 76% of Food Service Equipment sales, and our operations in Europe/Asia. At the time of our preliminary announcement in November November: see month. we stated that we did not anticipate any improvement in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. food service equipment markets for the year as a whole. We believe the market in Q103 is up some 5% compared to Q102 during which period demand was of course adversely impacted by the events of September 11, 2001. The markets in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). were, as expected, mixed and continued to be
down versus prior year as Europe lagged North America.Results Like-for-like Q1 sales for our North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. , including exports, were up 10% on the prior year, partially reflecting the impact of September 11, 2001 which reduced the comparative figures. In absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute , sales at (pounds)100.1m were down (pounds)7.2m on the prior year, predominantly due to the effect of disposals and foreign exchange movements. The 4% decline in reported operating profits in Food Service Equipment - North America reflected the impact of disposals and foreign exchange. Corresponding like-for-like operating profits were up 8% as most of our continuing businesses performed strongly. However, at our North American refrigeration refrigeration, process for drawing heat from substances to lower their temperature, often for purposes of preservation. Refrigeration in its modern, portable form also depends on insulating materials that are thin yet effective. business pricing issues and a move to lower margin products reduced profits. Weak European markets led to overall flat like-for-like sales Like-for-Like Sales The portion of current sales achieved through activities that are comparable to the activities of the previous year. Notes: Using like-for-like sales is a method of valuation that attempts to exclude any effects of expansion, acquisition, or other . However, like-for-like profits fell by 35%, principally due to the continued effects of low volume and factory relocations in two of our UK businesses, although in both cases significant improvement has been seen since Q402. Food Retail Equipment Returning Kysor Warren, and therefore Food Retail Equipment, to profitability remains a key priority, although it will take some time. Significant action has been taken by the new management team to improve customer satisfaction, product quality and productivity. Early signs are encouraging, with trial orders being received from several customers that had previously decided to source product elsewhere - a positive lead indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. for the future. The underlying run rate of losses at Kysor Warren was significantly lower than in Q402. Results Like-for-like sales were down 25% on the prior year, due to lower sales at our operations in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and unseasonally higher sales in Kysor Panel Systems in Q102, along with some price erosion erosion (ĭrō`zhən), general term for the processes by which the surface of the earth is constantly being worn away. The principal agents are gravity, running water, near-shore waves, ice (mostly glaciers), and wind. . Like-for-like operating profits were down as a consequence of lower sales however this was offset by aggressive cost control. Property We have now signed contracts in respect of the next phase of development of our Felsted property, which we continue to expect to contribute to full year property profits of around (pounds)4m (FY02 (pounds)8m). Current Trading and Outlook Our Q1 results were as we anticipated at the start of FY 03, in what is seasonally our weakest quarter. Given recent signs of increasing nervousness among our customer base about the political situation and economic outlook, we are becoming a little more cautious about the likely full year outturn. Were the present (pounds)/US$ rate of $1.65:(pounds)1 to be maintained, compared with last year's average rate of $1.47:(pounds)1, our US operating results would be reduced by some (pounds)5m with an offsetting benefit to the interest charge of approximately (pounds)1m. Management continues to focus on customer satisfaction, cost control and cash management to mitigate the impact of this difficult trading environment. We expect our Food Service Equipment - North America business to build on the market share progress achieved over the last year. In Food Retail Equipment we anticipate further progress at Kysor Warren as our management actions take effect. A J Allner Chief Executive Officer 10 February 2003 Management Discussion and Analysis (MD&A) Under the terms of our 10?% senior subordinated notes we are required to prepare an MD&A and file it with the Securities and Exchange Commission (SEC) in the US on Form 6-K. This is a US style explanation of our Q103 results and contains more detail of certain matters for example liquidity and capital resources, historical cashflows and legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. including more detail on the status of the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Industries cases. You will be able to obtain a copy of the filing on the SEC website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ," within the meaning of the U.S. federal securities laws, that represent the Company's expectations or beliefs regarding future events, based on currently available information, including statements concerning its anticipated performance. These statements by their nature involve substantial risks and uncertainties, many of which are beyond the Company's control. The Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, including the Company's substantial debt obligations and restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. ; susceptibility susceptibility the state of being susceptible. Refers usually to infectious disease but may be to physical factors such as wetting or to psychological factors such as harassment. to regional economic downturns; the effects of fluctuations in foreign currencies; and other risk factors. A more complete description of these factors, can be found under "Risk Factors" in the Company's Form 20-F, filed with the SEC in December December: see month. 2002
Unaudited group profit and loss account
13 weeks to 28 December 2002 (First Quarter)
13 weeks to 28 December 2002
Except-
Before ional Total
exceptional items
items (note 4)
Notes (pounds)m (pounds)m (pounds)m
(Unaudited)(Unaudited)(Unaudited)
Turnover
Food Equipment 156.8 - 156.8
Property - - -
----------------------------------------------------------------------
Total turnover 2 156.8 - 156.8
----------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 10.2 - 10.2
Property - - -
Corporate costs (2.1) (1.7) (3.8)
----------------------------------------------------------------------
Continuing operations 8.1 (1.7) 6.4
Goodwill amortisation (3.5) - (3.5)
----------------------------------------------------------------------
Operating profit/(loss) 3 4.6 (1.7) 2.9
Profit /(loss) on disposal of
business 4 - 2.5 2.5
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities before interest
and taxation 4.6 0.8 5.4
----------------------------------------------------------------------
Net interest payable and
similar charges (5.6) - (5.6)
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities before taxation (1.0) 0.8 (0.2)
----------------------------------------------------------------------
Tax on profit/(loss) on
ordinary activities 5 (0.4) 0.6 0.2
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities after taxation (1.4) 1.4 0.0
----------------------------------------------------------------------
Minority interests - - -
----------------------------------------------------------------------
Profit/(loss) for the period (1.4) 1.4 0.0
----------------------------------------------------------------------
Equity dividends - - -
----------------------------------------------------------------------
Retained result (1.4) 1.4 0.0
----------------------------------------------------------------------
Earnings/(loss) per share
(pence) 6
Basic earnings/(loss) per
share -
----------------------------------------------------------------------
Adjusted basic earnings/(loss)
per share 0.5
----------------------------------------------------------------------
Diluted earnings/(loss) per
share -
----------------------------------------------------------------------
Adjusted diluted
earnings/(loss) per share 0.5
----------------------------------------------------------------------
Statement of total recognised
gains and (losses) (pounds)m
Gain/(loss) for the period -
Goodwill written back on
disposals, previously written off -
Currency translation
differences on foreign
currency net investments (3.2)
----------------------------------------------------------------------
Total recognised gains and
(losses) for the period (3.2)
----------------------------------------------------------------------
Prior period adjustment -
----------------------------------------------------------------------
Total recognised gains and
(losses) since last annual
report (3.2)
----------------------------------------------------------------------
13 weeks to 29 December 2001
Except-
Before ional Total
exceptional items
items (note 4)
Notes (pounds)m (pounds)m
(Unaudited)(Unaudited)(Unaudited)
Turnover
Food Equipment 192.8 - 192.8
Property - - -
----------------------------------------------------------------------
Total turnover 2 192.8 - 192.8
----------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 14.2 (2.4) 11.8
Property - - -
Corporate costs (2.1) - (2.1)
----------------------------------------------------------------------
Continuing operations 12.1 (2.4) 9.7
Goodwill amortisation (5.0) - (5.0)
----------------------------------------------------------------------
Operating profit/(loss) 3 7.1 (2.4) 4.7
Profit /(loss) on disposal of
business 4 - 2.7 2.7
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities before interest
and taxation 7.1 0.3 7.4
----------------------------------------------------------------------
Net interest payable and
similar charges (7.0) (4.1) (11.1)
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities before taxation 0.1 (3.8) (3.7)
----------------------------------------------------------------------
Tax on profit/(loss) on
ordinary activities 5 (0.6) - (0.6)
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities after taxation (0.5) (3.8) (4.3)
----------------------------------------------------------------------
Minority interests (0.1) - (0.1)
----------------------------------------------------------------------
Profit/(loss) for the period (0.6) (3.8) (4.4)
----------------------------------------------------------------------
Equity dividends - - -
----------------------------------------------------------------------
Retained result (0.6) (3.8) (4.4)
----------------------------------------------------------------------
Earnings/(loss) per share (Restated)
(pence) 6
Basic earnings/(loss) per share (1.5)
----------------------------------------------------------------------
Adjusted basic earnings/(loss) per share 1.4
----------------------------------------------------------------------
Diluted earnings/(loss) per share (1.5)
----------------------------------------------------------------------
Adjusted diluted earnings/(loss) per share 1.4
----------------------------------------------------------------------
Statement of total recognised
gains and (losses) (pounds)m
Gain/(loss) for the period (4.4)
Goodwill written back on
disposals, previously written off 10.4
Currency translation
differences on foreign
currency net investments (1.1)
----------------------------------------------------------------------
Total recognised gains and
(losses) for the period 4.9
----------------------------------------------------------------------
Prior period adjustment 26.9
----------------------------------------------------------------------
Total recognised gains and
(losses) since last annual report 31.8
----------------------------------------------------------------------
Audited group profit and loss account
52 weeks to 28 September 2002
52 weeks to 28 September 2002
Except-
Before ional Total
exceptional items
items (note 4)
Notes (pounds)m (pounds)m (pounds)m
Turnover
Food Equipment 777.1 - 777.1
Property 16.1 - 16.1
----------------------------------------------------------------------
Total turnover 2 793.2 - 793.2
----------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 67.2 (8.9) 58.3
Property 8.0 - 8.0
Corporate costs (7.9) (0.5) (8.4)
----------------------------------------------------------------------
67.3 (9.4) 57.9
Goodwill amortisation/impairment (19.0) (48.9) (67.9)
----------------------------------------------------------------------
Operating profit/(loss) 3 48.3 (58.3) (10.0)
Profit/(loss) on disposal of
business 4 - (38.1) (38.1)
----------------------------------------------------------------------
48.3 (96.4) (48.1)
Net interest payable and similar
charges (29.3) (8.4) (37.7)
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities before taxation 19.0 (104.8) (85.8)
Tax on profit/(loss) on ordinary
activities 5 (1.2) 0.2 (1.0)
----------------------------------------------------------------------
Profit/(loss) on ordinary
activities after taxation 17.8 (104.6) (86.8)
Minority interests (0.2) - (0.2)
----------------------------------------------------------------------
Profit/(loss) for the period 17.6 (104.6) (87.0)
Equity dividends - - -
----------------------------------------------------------------------
Retained result 17.6 (104.6) (87.0)
----------------------------------------------------------------------
Earnings/(loss) per share
(pence) 6
Basic earnings/(loss) per share (24.8)
----------------------------------------------------------------------
Adjusted basic earnings/(loss) per share 10.4
----------------------------------------------------------------------
Diluted earnings/(loss) per share (24.8)
----------------------------------------------------------------------
Adjusted diluted earnings/(loss) per share 10.4
----------------------------------------------------------------------
Statement of total recognised
gains and (losses) (pounds)m
Gain/(loss) for the period (87.0)
Goodwill written back on
disposals, previously written off 65.1
Currency translation differences
on foreign currency net investments (5.7)
----------------------------------------------------------------------
Total recognised gains and
(losses) for the period (27.6)
----------------------------------------------------------------------
Prior period adjustment 26.9
----------------------------------------------------------------------
Total recognised gains and
(losses) since last annual report (0.7)
----------------------------------------------------------------------
Unaudited group balance sheet
28 29 28
December December September
2002 2001 2002
(pounds)m (pounds)m (pounds)m
(Unaudited)(Unaudited)
----------------------------------------------------------------------
Fixed assets
Intangible assets: goodwill 225.7 310.9 235.4
Tangible assets 83.6 108.7 88.0
Investments 5.9 6.9 5.9
----------------------------------------------------------------------
315.2 426.5 329.3
----------------------------------------------------------------------
Current assets
Stocks 76.5 105.4 77.7
Debtors 106.1 184.6 127.4
Deferred tax asset 25.1 27.0 25.3
Cash at bank and in hand 59.2 26.9 72.7
----------------------------------------------------------------------
266.9 343.9 303.1
Creditors falling due within one year
Borrowings (31.4) (388.5) (33.4)
Other creditors (155.1) (189.3) (183.8)
----------------------------------------------------------------------
Net current assets/(liabilities) 80.4 (233.9) 85.9
----------------------------------------------------------------------
Total assets less current liabilities 395.6 192.6 415.2
----------------------------------------------------------------------
Financed by:
Creditors falling due after more than
one year
Borrowings 199.2 14.5 214.1
Provisions for liabilities and charges 42.9 58.2 44.3
----------------------------------------------------------------------
242.1 72.7 258.4
----------------------------------------------------------------------
Capital and reserves
Called up equity share capital 200.2 125.1 200.2
Share premium account 234.2 239.0 234.2
Profit and loss account (280.9) (245.1) (277.6)
----------------------------------------------------------------------
Equity shareholders' funds 153.5 119.0 156.8
----------------------------------------------------------------------
Equity minority interests - 0.9 -
----------------------------------------------------------------------
395.6 192.6 415.2
Unaudited group cash flow statement
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
Notes (pounds)m (pounds)m (pounds)m
(Unaudited)(Unaudited)
----------------------------------------------------------------------
Net cash flow from operations
before exceptional items 11.0 2.3 100.0
Net cash flow effect of
exceptional items (0.9) (11.2) (27.4)
----------------------------------------------------------------------
Net cash inflow/(outflow) from
operating activities a 10.1 (8.9) 72.6
----------------------------------------------------------------------
Return on investments and
servicing of finance
Interest paid (8.2) (5.7) (23.3)
Financing fees paid - - (18.9)
----------------------------------------------------------------------
(8.2) (5.7) (42.2)
----------------------------------------------------------------------
Taxation
Overseas and UK tax paid (1.5) (1.6) (3.3)
----------------------------------------------------------------------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (1.2) (2.8) (9.9)
Receipts from sale of tangible fixed assets 0.4 0.1 0.9
----------------------------------------------------------------------
(0.8) (2.7) (9.0)
----------------------------------------------------------------------
Acquisitions and disposals
Disposal of subsidiary undertakings - 16.6 88.6
----------------------------------------------------------------------
- 16.6 88.6
----------------------------------------------------------------------
Equity dividends paid - - -
----------------------------------------------------------------------
Cash inflow/(outflow) before financing (0.4) (2.3) 106.7
----------------------------------------------------------------------
Financing
Issue of shares - - 70.3
Net drawings/(repayment) of borrowings (12.7) (10.1) (242.5)
Issue of 10 3/8% senior
subordinated notes - - 100.0
Capital element of finance lease payments (0.2) (0.1) (0.5)
----------------------------------------------------------------------
(12.9) (10.2) (72.7)
----------------------------------------------------------------------
Increase/(decrease) in cash in the period (13.3) (12.5) 34.0
----------------------------------------------------------------------
Unaudited group cash flow statement
(a) Reconciliation of operating profit/(loss) to net cash
inflow/(outflow) from operating activities
13 weeks to 28 December 2002
Before Effect of Total
exceptional exceptional
items items
(Unaudited) (Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Operating profit/(loss) 4.6 (1.7) 2.9
Depreciation 3.3 - 3.3
Amortisation of goodwill 3.5 - 3.5
Provisions (net) (0.2) (0.4) (0.6)
(Increase)/decrease in stocks 0.3 0.1 0.4
(Increase)/decrease in debtors 20.2 - 20.2
Increase/(decrease) in creditors (20.7) 1.1 (19.6)
----------------------------------------------------------------------
Net cash inflow/(outflow) from
operating activities 11.0 (0.9) 10.1
----------------------------------------------------------------------
13 weeks to 29 December 2001
Before Effect of Total
exceptional exceptional
items items
(Unaudited) (Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Operating profit/(loss) 7.1 (2.4) 4.7
Depreciation 4.5 - 4.5
Amortisation of goodwill 5.0 - 5.0
Provisions (net) (0.3) (1.2) (1.5)
(Increase)/decrease in stocks (1.2) - (1.2)
(Increase)/decrease in debtors 16.9 - 16.9
Increase/(decrease) in creditors (29.7) (7.6) (37.3)
----------------------------------------------------------------------
Net cash inflow/(outflow) from
operating activities 2.3 (11.2) (8.9)
----------------------------------------------------------------------
52 weeks to 28 September 2002
Before Effect of Total
exceptional exceptional
items items
(pounds)m (pounds)m (pounds)m
Operating profit/(loss) 48.3 (58.3) (10.0)
Depreciation 15.7 - 15.7
Amortisation/impairment of goodwill 19.0 48.9 67.9
Provisions (net) (2.2) (5.6) (7.8)
(Increase)/decrease in stocks 5.5 5.9 11.4
(Increase)/decrease in debtors 19.7 - 19.7
Increase/(decrease) in creditors (6.0) (18.3) (24.3)
----------------------------------------------------------------------
Net cash inflow/(outflow) from
operating activities 100.0 (27.4) 72.6
----------------------------------------------------------------------
(b) Reconciliation of net cash flow to movement in net debt
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Net debt at the start of period (186.1) (365.9) (365.9)
Increase/(decrease) in net cash in the
period (13.3) (12.5) 34.0
Borrowings repaid - 10.1 400.4
Issue of 10?% senior subordinated notes - - (100.0)
Net (increase)/decrease in other loans 12.7 - (157.9)
Net (increase)/decrease in finance leases 0.2 0.1 (1.0)
Translation differences 4.5 (7.9) 4.3
----------------------------------------------------------------------
Net debt at the end of the period (182.0) (376.1) (186.1)
Unaudited group cash flow statement
(c) Reconciliation of net debt to balance sheet
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Cash 59.2 26.9 72.7
Short term borrowing (31.4) (388.5) (33.4)
Long term borrowing (199.2) (14.5) (214.1)
----------------------------------------------------------------------
(171.4) (376.1) (174.8)
Deferred financing costs (10.6) - (11.3)
----------------------------------------------------------------------
(182.0) (376.1) (186.1)
Notes to the unaudited financial statements 1. Basis of Preparation The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. financial statements ("quarterly financial statements") have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United Kingdom ("U.K. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). The quarterly financial statements are unaudited but include all adjustments (consisting of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. adjustments) which the Group's management considers necessary for a fair presentation of the financial position of the Group as of such dates and the operating results and cash flows for those periods. Certain information and footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." disclosures normally included in statutory financial statements prepared in accordance with U.K. GAAP have been condensed or omitted. The results of operations for the 13 weeks ended 28 December 2002 may not necessarily be indicative indicative: see mood. of the operating results that may be achieved for the entire financial year. The quarterly financial statements have been prepared on the basis of the accounting policies set out in the Group's financial statements for the year ended 28 September 2002. U.K. GAAP differs in certain significant respects from accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("U.S. GAAP"). The application of the latter would have affected the determination of profit/(loss) to the extent summarised in Note 8 to the quarterly financial statements. These quarterly financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the financial statements and the notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in the Company's latest annual report. The accounts in this statement do not comprise To embrace, cover, or include; to confine within; to consist of. In the law governing patents—grants of an exclusive right or privilege to make, use, or sell an invention or product for a term of years—the term comprise full accounts within the meaning of section 240 of the Companies Act 1985. The figures for the 52 weeks to 28 September 2002 are based upon the 2002 Annual Report but do not comprise statutory accounts for that period. The audited financial statements have been delivered to the Registrar of Companies The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. . The Auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together made an unqualified report on those accounts and their report did not contain any statement under section 237 (2) or (3) of the Companies Act 1985. The figures for the 13 week period to 28 December 2002 and 29 December 2001 have been extracted from underlying accounting records and have not been audited. Freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or and shipping revenues have previously either been booked against the original freight costs or reflected as part of turnover. As of 29 September 2002, we have chosen to adopt a consistent treatment of these revenues as part of turnover. All comparative disclosures have been reclassified in this respect. The impact on turnover is:
Period As
previously Re-
reported classified
(pounds)m (pounds)m
13 weeks ended 29 December 2001 189.9 192.8
52 weeks ended 28 September 2002 783.2 793.2
The reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. did not have any impact on gross profit or operating profit for any period. 2. Turnover
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Food Service Equipment - North America 100.1 107.3 474.1
Food Service Equipment - Europe and Asia 32.0 37.0 145.0
Food Retail Equipment 24.7 48.5 158.0
----------------------------------------------------------------------
Food Equipment 156.8 192.8 777.1
Property - - 16.1
----------------------------------------------------------------------
156.8 192.8 793.2
3. Operating profit/(loss)
13 weeks to 28 December 2002
Before Except-
exceptional ional Total
items items
(Unaudited)(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Food Service Equipment - North America 9.4 - 9.4
Food Service Equipment - Europe and Asia 1.6 - 1.6
Food Retail Equipment (0.8) - (0.8)
----------------------------------------------------------------------
10.2 - 10.2
Food Equipment goodwill amortisation (3.5) - (3.5)
----------------------------------------------------------------------
Food Equipment 6.7 - 6.7
Property - - -
Corporate costs (2.1) (1.7) (3.8)
----------------------------------------------------------------------
4.6 (1.7) 2.9
13 weeks to 29 December 2001
Before Except-
exceptional ional Total
items items
(Unaudited)(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Food Service Equipment - North America 9.8 - 9.8
Food Service Equipment - Europe and Asia 2.7 (1.3) 1.4
Food Retail Equipment 1.7 (1.1) 0.6
----------------------------------------------------------------------
14.2 (2.4) 11.8
Food Equipment goodwill amortisation (5.0) - (5.0)
----------------------------------------------------------------------
Food Equipment 9.2 (2.4) 6.8
Property - - -
Corporate costs (2.1) - (2.1)
----------------------------------------------------------------------
7.1 (2.4) 4.7
52 weeks to 28 September 2002
Before Except-
exceptional ional Total
items items
(pounds)m (pounds)m (pounds)m
Food Service Equipment - North America 60.8 0.2 61.0
Food Service Equipment - Europe and Asia 9.7 (2.5) 7.2
Food Retail Equipment (3.3) (6.6) (9.9)
----------------------------------------------------------------------
67.2 (8.9) 58.3
Food Equipment goodwill
amortisation/impairment (19.0) (48.9) (67.9)
----------------------------------------------------------------------
Food Equipment 48.2 (57.8) (9.6)
Property 8.0 - 8.0
Corporate costs (7.9) (0.5) (8.4)
----------------------------------------------------------------------
48.3 (58.3) (10.0)
4. Exceptional items
(a) Operating exceptional items 13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Legal fee accruals 1.7 - -
Restructuring costs and inventory
write downs - 2.4 9.4
----------------------------------------------------------------------
1.7 2.4 9.4
Goodwill impairment - - 48.9
----------------------------------------------------------------------
Operating exceptional items 1.7 2.4 58.3
The Group has reassessed its accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for legal costs for defending the claims in the Consolidated Industries litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. following an adverse summary judgement Noun 1. summary judgement - a judgment rendered by the court prior to a verdict because no material issue of fact exists and one party or the other is entitled to a judgment as a matter of law on some of the claims totalling $8.6m. The Group is advised that the adverse decision is incorrect Incorrect means to not be correct and may also refer to:
Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs in the 13 weeks to 29 December 2001 and the 52 weeks to 28 September 2002 principally represent costs associated with the closure of excess operating capacity in our Food Retail Equipment Group. This includes the write down of inventory at Kysor Warren reflecting the decline in the business and employee termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. costs that resulted from a headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. reduction of 30. There was also further rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization of administration functions and simplification sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. of management structures in the European businesses within the Global Food Service Equipment Group. Following downturns in the US economy, in particular in the retail markets, it was necessary to reassess reassess Verb to reconsider the value or importance of reassessment n Verb 1. reassess - revise or renew one's assessment reevaluate the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of goodwill in respect of the Scotsman acquisition during 2001 and 2002. In accordance with the methodology presented in FRS FRS abbr. Fellow of the Royal Society FRS, n “flexed rotated side-bent,” an osteopathic abbreviation used to describe vertebral position in cases of spinal dysfunction. 11 "Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of Fixed Assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → and Goodwill", which requires consideration of the net present value of estimated future cash flows, the fair value was reassessed and compared to the carrying value of net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. , including the carrying value of the goodwill. In 2001, an impairment of (pounds)100m was booked. In 2002, due to the poor performance of Kysor Warren, the Warren, The Haredale’s house, “mouldering to ruin.” [Br. Lit.: Barnaby Rudge] See : Decadence carrying value of goodwill was written down by a further (pounds)48.9m.
(b) Disposal of businesses 13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Profit/(loss) on disposals 2.5 2.7 (38.1)
In February February: see month. 2003, the Group paid (pounds)1.25m to release it from the majority of the warranties warranties, n.pl the details of a contract; considered less important than the conditions. Whereas the penalty for breach of conditions is the termination of the contract, the penalty for breach of warranties is payment of damages to the innocent party. and indemnities that were given at the time of the disposal of one of its subsidiaries. As a result, associated accruals of (pounds)2.5m have been credited to the profit and loss account in the 13 weeks ended 28 December 2002. On 13 December 2001, the Group disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of Sammic SA and its subsidiary undertakings for net consideration of (pounds)18.7m realising a profit on disposal of (pounds)2.7m after writing off (pounds)10.4m of goodwill previously not charged against reserves. During the 52 weeks to 28 September 2002, in addition to Sammic SA, the Group disposed of Belshaw Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) Inc, Austral aus·tral adj. Of, relating to, or coming from the south. [Latin austr  lis, from auster, austr-, south. Refrigeration Pty Ltd PTY LTD Propriety Limited (company structure in Australia) ,
Aladdin AladdinHero of a well-known story in The Thousand and One Nights. The son of a poor widow, Aladdin is a lazy, careless boy who meets an African magician claiming to be his uncle. Temp-Rite and Prolon LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . The Group realised a loss on these disposals of (pounds)44.1m after writing off goodwill of (pounds)54.7m previously charged against reserves. In December 2001, (pounds)2.1m was paid to Nobia Nobia is a Swedish corporation owning many European kitchen firms. External links
The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of the note and (pounds)4.0m for the sale of the shares arising from the exercise of the warrants. After writing off deferred finance fees arising from the early repayment of debt and other associated costs, the net profit on disposal was (pounds)3.3m. The net cash consideration, after expenses, of all the above disposals has been used to repay debt.
(c) Net interest payable and similar charges
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
Deferred financing fees written off - 4.1 4.2
----------------------------------------------------------------------
Refinancing fees - - 4.2
----------------------------------------------------------------------
- 4.1 8.4
Deferred finance fees written off of (pounds)4.2m in the 52 weeks to 28 September 2002 related to amounts previously capitalised in respect of the multi-currency revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility that was replaced by the refinancing Refinancing An extension and/or increase in amount of existing debt. announced on 20 February 2002. Refinancing fees represent amounts paid to banks in relation to the termination of our previous multi-currency revolving credit facility and costs associated with the bridging facility under the Group's new arrangements. 5. Taxation
(a) Analysis of charge in period 13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited)
(pounds)m (pounds)m (pounds)m
The tax charge for the current period
comprised:
UK taxation at 30% (2001:30%) - - -
Foreign taxation - current year 0.4 0.7 5.8
- prior year - - (3.8)
----------------------------------------------------------------------
0.4 0.7 2.0
Tax relief on exceptional items -
deferred taxation (0.6) - (0.2)
----------------------------------------------------------------------
(0.2) 0.7 1.8
Deferred taxation - (0.1) (0.8)
----------------------------------------------------------------------
(0.2) 0.6 1.0
(b) The Group tax rate benefits from the effect of tax losses brought
forward. A current tax charge arises principally because of profits
arising in overseas countries where there are no available losses.
6. Earnings/(loss) per share
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited) (Unaudited/Restated)
(pounds)m (pounds)m (pounds)m
Basic and diluted loss
attributable to shareholders 0.0 (4.4) (87.0)
---------------------------------------------------------------------
Basic and diluted weighted
average number of shares 399.2 307.5 351.0
---------------------------------------------------------------------
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(Unaudited)(Unaudited/
Restated)
pence pence Pence
Basic loss per share 0.0 (1.5) (24.8)
Effect per share of exceptional items (0.4) 1.2 15.9
Effect per share of goodwill
amortisation and impairment 0.9 1.7 19.3
----------------------------------------------------------------------
Adjusted basic earnings per share 0.5 1.4 10.4
----------------------------------------------------------------------
Diluted loss per share 0.0 (1.5) (24.8)
Effect per share of exceptional items (0.4) 1.2 15.9
Effect per share of goodwill
amortisation and impairment 0.9 1.7 19.3
----------------------------------------------------------------------
Adjusted diluted earnings per share 0.5 1.4 10.4
----------------------------------------------------------------------
Adjusted earnings per share before exceptional items (note 4) and goodwill amortisation are disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). to reflect the underlying performance of the Group. The period ended 29 December 2001 has been restated for the bonus element of the rights issue completed on 9 April 2002. The theoretical ex-rights Ex-Rights A condition of a share price after a rights issue on the stock has either expired, been transferred to another investor or been exercised. The rights originally assigned to the stockholder are, for whatever reason, no longer valid or no longer applicable to the stock. price was 82.2p. 7. Foreign currency translation The results of subsidiary companies reporting in currencies other than Pounds Sterling have been translated at the average rate prevailing for each month for the 13 weeks to 28 December 2002, the average exchange rate for sales and profit being (pounds)1=$1.57. Results to 29 December 2001 were translated at the rate of (pounds)1=$1.45 and full year results to 28 September 2002 at (pounds)1=$1.47. The closing rate for the US Dollar at 28 December 2002 was (pounds)1=$1.60, at 29 December 2001 was (pounds)1=$1.45 and at 28 September 2002 was (pounds)1=$1.55. 8. Supplementary information for US Investors Reconciliation to generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The quarterly financial statements have been prepared in accordance with UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles , which differs in certain significant respects from US GAAP. The following is a summary of the adjustments to operating profit/(loss) and net profit/(loss) for the period required when reconciling such amounts recorded in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge to the corresponding amounts in accordance with US GAAP, considering the differences between UK GAAP and US GAAP.
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(pounds)m (pounds)m (pounds)m
(Unaudited)(Unaudited)
Profit/(loss) in accordance with UK GAAP 0.0 (4.4) (87.0)
Items increasing/(decreasing) UK GAAP
operating profit/(loss)(*):
- Goodwill amortisation 3.5 (3.8) (13.5)
- Pension costs (0.5) 0.3 (2.5)
- Sale/leaseback transactions - - 0.1
- Share option plans - - 1.1
- Restructuring charges - (0.4) (0.4)
- Derivative instruments - (1.8) (4.0)
- Other - (0.5) (0.7)
- Capitalised interest 0.1 - -
- Loss contingency - - 2.4
Items increasing/(decreasing) UK GAAP other
non-operating profit/(loss):
- Deferred taxation (0.4) (1.3) (16.5)
----------------------------------------------------------------------
- Gain on sale of businesses - 2.4 18.0
----------------------------------------------------------------------
Net profit/(loss) in accordance with
US GAAP 2.7 (9.5) (103.0)
----------------------------------------------------------------------
Net profit/(loss) in accordance with US GAAP
is represented by:
Net profit/(loss) from continuing
operations 0.2 (9.5) (103.0)
Net profit /(loss) from discontinuing
operations - - -
Gain on sale of discontinued
operations 2.5 - -
----------------------------------------------------------------------
Net profit/(loss) in accordance with
US GAAP 2.7 (9.5) (103.0)
----------------------------------------------------------------------
(*) All adjustments exclude the effect of taxes, with all tax
related adjustments included within the deferred taxation line item.
Description of differences A discussion of the material variations in the accounting principles, practices and methods used in preparing the audited consolidated financial statements in accordance with UK GAAP from the principles, practices and methods generally accepted in the US is provided in the consolidated financial statements as of 28 September 2002. There are no new material variations between UK GAAP and US GAAP accounting principles, practices and methods used in preparing the unaudited consolidated interim financial statements other than those discussed below. Adoption of new accounting standards In June 2001, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). ("FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ") issued Statement of Financial Accounting Standard ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 142, "Goodwill and other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ". SFAS 142 is effective for fiscal years beginning after 15 December 2001 for all goodwill and other intangible assets recognised in an entity's statement of financial position at that date, regardless of when those assets were initially recognized. SFAS 142 requires, among other things, the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of goodwill amortisation and an annual test for impairment. In addition, the standard includes provisions for the reclassification of certain existing recognised intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. as goodwill, reassessment Reassessment The process of re-determining the value of property or land for tax purposes. Notes: Property is usually reassessed on an annual basis. You may request a "reassessment" if you disagree with your assessment. of the useful lives of existing recognised intangibles, reclassification of certain intangibles out of previously reported goodwill and the identification of reporting units for purposes of assessing potential future impairments of goodwill. SFAS 142 also requires the Group to complete a transitional goodwill impairment test six months from the date of adoption. With respect to goodwill amortisation, the Group adopted SFAS No. 142 effective 29 September 2002. The application of the non-amortisation provisions of SFAS No. 142 for goodwill for the 13 weeks ended 28 December 2002 resulted in a reduction of amortisation expense by (pounds)3.5m under US GAAP. The Group estimates that there will be a reduction of amortisation expense by (pounds)14.8m for the fiscal year ending 27 September 2003. A reconciliation of previously reported net profit/(loss) to the amounts adjusted for the exclusion exclusion /ex·clu·sion/ (eks-kloo´zhun) 1. a shutting out or elimination. 2. surgical isolation of a part, as of a segment of intestine, without removal from the body. of the amortisation of goodwill under US GAAP is as follows:
13 weeks 13 weeks 52 weeks
to to to
28 29 28
December December September
2002 2001 2002
(pounds)m (pounds)m (pounds)m
Reported net profit/(loss) in accordance
with US GAAP 2.7 (9.5) (103.0)
Add: Goodwill amortisation - 8.8 32.5
----------------------------------------------------------------------
Adjusted net profit/(loss) 2.7 (0.7) (70.5)
At 28 December 2002 the Group had goodwill of (pounds)385.6m. Pursuant to the transitional provisions of SFAS No. 142, the Group will complete the first step of its transitional goodwill impairment test during the second quarter of fiscal 2003. If impairment is indicated the second step of its transitional goodwill impairment test to measure the impairment loss requirements will be completed prior to fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. . The Group will record such impairment, if necessary, as a cumulative effect of accounting change effective 29 September 2002. The cumulative effect of accounting change recorded could be material to the consolidated results of operations or financial position under US GAAP.
OTHER FINANCIAL INFORMATION: Reconciliation of like-for-like
information
13 weeks Effect
to of
28 Foreign Proforma
December Exchange
2002 Q1 2003
a) Turnover (pounds)m (pounds)m (pounds)m
Food Service Equipment
- North America
100.1 7.8 107.9
Food Service Equipment
- Europe and Asia
32.0 (0.4) 31.6
--------------------------------------------------------------
Food Service Equipment 132.1 7.4 139.5
Food Retail Equipment 24.7 1.8 26.5
--------------------------------------------------------------
Food Equipment 156.8 9.2 166.0
--------------------------------------------------------------
b) Operating profit
Food Service Equipment
- North America 9.4 0.8 10.2
Food Service Equipment
- Europe and Asia 1.6 (0.1) 1.5
--------------------------------------------------------------
Food Service Equipment 11.0 0.7 11.7
Food Retail Equipment (0.8) (0.1) (0.9)
--------------------------------------------------------------
Food Equipment 10.2 0.6 10.8
--------------------------------------------------------------
13 weeks
to Effect Like-
29 of Proforma for-
December Disposals like
2001 Q1 2002
a) Turnover (pounds)m (pounds)m (pounds)m %
Food Service Equipment
- North America
107.3 (9.5) 97.8 10%
Food Service Equipment
- Europe and Asia
37.0 (4.6) 32.4 (2)%
----------------------------------------------------------------------
Food Service Equipment
144.3 (14.1) 130.2 7%
Food Retail Equipment
48.5 (13.2) 35.3 (25)%
----------------------------------------------------------------------
Food Equipment 192.8 (27.3) 165.5 0%
----------------------------------------------------------------------
b) Operating profit
Food Service Equipment
- North America
9.8 (0.4) 9.4 8%
Food Service Equipment
- Europe and Asia
2.7 (0.4) 2.3 (35)%
----------------------------------------------------------------------
Food Service Equipment
12.5 (0.8) 11.7 0%
Food Retail Equipment
1.7 (1.3) 0.4 (325)%
----------------------------------------------------------------------
Food Equipment 14.2 (2.1) 12.1 (11)%
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