SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2001
Enodis plc
Washington House, 40-41 Conduit Street
London, W1S 2YQ, United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F: X Form 40-F: _____
-----
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes: ______ No: X
------
On November 2, 2001 and November 21, 2001, the Registrant distributed the
following three (3) press releases:
Enodis plc Board and Senior Management Changes
LONDON, Nov. 2 /PRNewswire/ -- Enodis plc (NYSE: ENO; London) announces the
following Board and Senior Management appointments:
* Andrew Allner, currently acting Chief Executive Officer, is appointed
Chief Executive Officer with immediate effect.
* Dave McCulloch, who has led the second half recovery of our Food Service
Equipment business in North America and has recently been appointed as
President Global Food Service Equipment Group, is appointed to the Board
of Enodis plc with immediate effect.
* Dave Odum, President Food Retail Equipment Group, who has driven the
restructuring of this business in a very challenging market, is appointed
to the Board of Enodis plc with immediate effect.
* The responsibilities of Chief Financial Officer will be shared between
Stuart Miller, the current Deputy CFO, who becomes CFO - Group, and Dave
Wrench, currently CFO Global Food Service, who becomes CFO -Operations.
Stuart Miller will have responsibility for the corporate finance
functions, Group wide financial processes and financial controls. Dave
Wrench will work closely with Dave McCulloch on the operational aspects
of the finance function.
* The Executive team has been further strengthened by the addition of Bob
Eimers, who recently joined Enodis as VP of Global Human Resources.
Reference is made to a separate announcement today concerning the trading
outlook and dividend.
Peter Brooks, Chairman, said:
"Andrew Allner, Dave McCulloch and Dave Odum have, together with the rest of the
Executive team, performed extremely well in very difficult circumstances since
March to achieve a major turnaround in results and positioning of the business
for the future. Accordingly we have concluded, having considered external
candidates also, that this is the best team to take Enodis forward. As CEO,
Andrew will continue to drive the implementation of Enodis' recovery plan and
pursue the Board's overriding objectives, which are to restore shareholder value
and reduce debt."
This press release contains "forward-looking statements," 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 and plans. 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. Factors that could cause the Company's results
to differ materially from its expectations include: the Company's susceptibility
to regional economic downturns, currency fluctuations, large customer order
slowdowns and other risks related to its U.S., U.K. and foreign operations; its
ability to realize cost savings from its cost reduction program; keen
competition in its fragmented and consolidating industry; and the other risk
factors and more complete descriptions of these factors found under "Risk
Factors" in the Company's Form 20-F filed with the SEC.
###
Enodis plc Further Comment on Trading; No Final Dividend Will Be Paid
LONDON, Nov. 2 /PRNewswire/ -- Since the Year End Trading Update on 25 September
2001 it has become increasingly apparent that the tragic events of September 11
are leading to a further deterioration in the markets for Food Service Equipment
and Food Retail Equipment in North America.
The extent and duration of this further downturn in the markets remain unclear.
It seems certain that, over the coming months, some end users of our products
will be deferring planned expenditure. By way of reference, at the time of the
Gulf War in 1991, the market for Food Service Equipment in the US, which had
already been impacted by economic slowdown, fell by some 15%.
In the circumstances, management is prudently taking the actions necessary to
mitigate the effect of a further downturn in Enodis' major markets. These
actions include discretionary expenditure cuts, additional savings from Group
purchasing initiatives and manufacturing and other operating efficiencies.
Actions to reduce debt include planned sales of non-core businesses and surplus
property, and tight control of working capital and capital expenditure.
At the same time management will be pursuing vigorously a range of initiatives
to build on the progress of the second half. Action is being taken to gain
market share through leveraging Enodis' broad product portfolio, the
introduction of an unprecedented number of new products with market leading
technologies and strengthening its partnerships with dealers, distributors and
service providers throughout the world. The alignment of sales representatives
in North America is demonstrating improved results and market opportunities in
Europe are now being developed.
The Board is confident that management is taking the appropriate actions. It is
considered, however, that in the current uncertain environment it is prudent to
minimize cash outflow and preserve the Group's financial flexibility.
Accordingly, the Board has decided that no final dividend payment will be paid
for the year ended 29 September 2001. An interim dividend of 2.0 pence per share
was paid on 6 July 2001.
The preliminary announcement of results for the year ended 29 September 2001
will be made on 21 November 2001. As stated in the Year End Trading Update this
will show that we have achieved a significantly better second half performance,
delivered the planned cost savings and improved our market positioning. Further
details of the actions being taken by management will be announced at that time.
The Board believes that the long-term fundamentals of the industry are
attractive and that Enodis has a powerful strategy that will enable the Group to
grow market share and extend its leadership position.
This press release contains "forward-looking statements," 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 and plans. 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. Factors that could cause the Company's results
to differ materially from its expectations include: the Company's susceptibility
to regional economic downturns, currency fluctuations, large customer order
slowdowns and other risks related to its U.S., U.K. and foreign operations; its
ability to realize cost savings from its cost reduction program; keen
competition in its fragmented and consolidating industry; and the other risk
factors and more complete descriptions of these factors found under "Risk
Factors" in the Company's Form 20-F filed with the SEC.
###
Enodis plc Preliminary results for the 52 weeks ended 29 September 2001.
Improved second half performance. Business refocussed for the future.
. Financial Highlights
. Food Equipment sales (pounds)887.2 million ((pounds)884.5 million) - down
7% on a like-for-like basis, reflecting deterioration in market conditions
in the USA.
. Food Equipment operating profit before exceptional items and goodwill
amortisation (pounds)90.7 million ((pounds)111.5 million) - second half
(pounds)54.0 million saw 47% improvement over first half (pounds)36.7
million.
. Group profit before tax, amortisation and exceptional items (pounds)63.8
million ((pounds)102.2 million).
. Goodwill impairment provision (pounds)100 million; other net exceptional
items (pounds)47.8 million.
. Net debt at 29 September 2001 (pounds)365.9 million ((pounds)434.2
million) reduced from (pounds)493.8 million at 31 March 2001.
. Adjusted diluted earnings per share 22.0p (35.0p).
. No final dividend - interim paid 2.0p.
. Strong management actions taken in the second half and cost savings delivered
on plan.
. Substantial progress made in developing and implementing our Global Food
Service Equipment strategy.
. Tough actions to turnaround Food Retail Equipment are yielding results in very
challenging markets.
. Following September 11, further measures are being taken to reduce costs and
target market share gain opportunities.
. Plans in place to reduce debt further.
Peter Brooks, Chairman, said:
"The management team's actions to refocus Enodis have resulted in a much better
second half performance. We are taking all prudent steps to address market
conditions which are likely to be even more challenging in the new financial
year.
We have a clear strategy to restore shareholder value and reduce debt, with the
determination to see that this strategy succeeds. We believe that the long term
fundamentals of the industry are attractive. With the recent management changes
and a full team working well together, the Board is confident that the Group
will be well positioned for the eventual recovery in our markets."
For further enquiries:
Andrew Allner Chief Executive Officer 020 7304 6006
Stuart Miller CFO - Group 020 7304 6006
Andrew Lorenz Financial Dynamics 020 7269 7113
PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 29 SEPTEMBER 2001
Overview
The year ended 29 September 2001 has been extremely challenging. The market
for food service equipment in North America, which represents over 50% of our
Food Equipment business, fell by some 10% in March and remained at about that
level relative to the prior year through the balance of the period. The market
for food retail equipment, display cases and systems in North America, just over
20% of our business, fell by some 15-20% in the first half; in the second half
it declined further to some 25-30% below last year by the year end. Markets in
Europe and Australia remained sluggish.
We have simplified the organisation and reduced costs by headcount reduction and
discretionary cost savings amounting to over (pounds)15 million in the second
half. We have refocussed our Global Food Service Equipment business to leverage
the scale, product range, technology and relationships of Enodis: this
refocussing targets both revenue improvement and cost reduction. In North
America, where our prime focus has been to date, this strategy is leading to
market share gains.
We are implementing a turnaround plan for our Food Retail Equipment business.
This is yielding results in a very challenging market and will leave us in a
strong position when markets recover.
We completed the sale of our Building and Consumer Products business, Magnet, in
June 2001. This has enabled us to reduce debt by some (pounds)100 million and
allows us to focus solely on food equipment.
Whilst we have made good progress in reducing net debt, (pounds)365.9 million at
the year end, this is still above a level we consider prudent. Plans are in
place to reduce debt further.
Subsequent to the year end we have taken further actions to reduce costs and
target market share gain opportunities addressing the likelihood of further
market declines following the tragic events of 11 September 2001. Our challenge
here is to turn adversity into opportunity for revenue and market share gains
and outperformance against the competition.
A full management team is now in place and working well together. The team
passionately believes in the strategy and strength of the Enodis business. The
refocussing we have carried out will lead to Enodis emerging stronger from this
downturn and well positioned for market recovery when it eventually comes.
The actions we have taken have placed considerable demands on our management and
employees, who have responded outstandingly. We are very grateful for their
continued support and loyalty.
Results
Profit before tax, goodwill amortisation and exceptional items was
(pounds)63.8 million ((pounds)102.2 million): foreign exchange movement
benefited this result by around (pounds)2 million. The second half profit of
(pounds)45.1 million was significantly ahead of the (pounds)18.7 million in the
first half. Second half property profits of (pounds)9.0 million were partly
offset by the dilution effect of the Magnet sale (approximately (pounds)4
million).
In Food Equipment, operating profit before goodwill amortisation and exceptional
items was (pounds)90.7 million ((pounds)111.5 million): operating profit for the
year benefited by around (pounds)4 million from foreign exchange movements
compared to the prior year and included (pounds)2.0 million from acquisitions.
The second half operating profit of (pounds)54.0 million was significantly ahead
of the (pounds)36.7 million in the first half, despite the further underlying
market decline, reflecting the benefits of cost reduction and seasonality.
Operating margins in the second half were 11.6% compared to 8.7% in the first
half.
Financing
Operating cash flow before exceptional items was (pounds)104.5 million
((pounds)137.2 million). After interest, dividends, exceptional items including
proceeds from the sale of Magnet, the effects of exchange rate movements and
cost of acquisition of Jackson, net debt at 29 September 2001 was (pounds)365.9
million ((pounds)434.2 million) down from (pounds)493.8 million at the half
year. This excludes a loan note of (pounds)20 million due from Nobia AB in
respect of the sale of Magnet.
The Group entered into new medium-term facilities to refinance the Scotsman
acquisition debt in March. Due to uncertainties arising from the possible sale
of Enodis and the review of strategic options, and latterly due to the more
uncertain and difficult outlook following the events of September 11, these new
facilities have not been syndicated. Syndication is planned to proceed on
revised terms appropriate in today's much more difficult banking market as soon
as practicable. Thus, whilst medium term facilities are in place, it is likely
that a significantly higher borrowing cost will be payable on outstanding
balances in the future.
The further reduction of debt remains a key priority for the Group. The Group's
businesses are highly cash generative with relatively low requirements for
capital expenditure. Very tight operating cash flow management will accordingly
play a central role in debt reduction. In addition, plans are in place to reduce
debt further, including the sale of non-core businesses and surplus property. We
have targeted profit from surplus property disposals of some (pounds)7 million
in the new financial year. We have also targeted proceeds of around (pounds)50
million from non-core disposals, though in the current climate this programme
will take time to deliver.
Exceptional Items
At the interim stage we reported exceptional items of (pounds)46.3 million:
this included (pounds)14.5 million in respect of the cost reduction programme,
(pounds)13.7 million relating to the reassessment of accounting estimates,
(pounds)12.3 million for the settlement of the Bomar litigation and the
write-off of capitalised finance costs of (pounds)5.8 million.
In the second half there are further exceptional costs of (pounds)18.6 million
relating to the cost reduction programme and (pounds)8.5 million for the review
of strategic options: this review was a detailed and rigorous exercise which
confirmed the strength of our product portfolio in North America and that our
strategy was appropriate.
In addition, a provision for impairment of goodwill of (pounds)100 million
relating to the Scotsman acquisition has been made, reflecting the outlook for
these acquired companies in current economic circumstances.
These exceptional items were partially offset by net gains on disposals,
principally Building and Consumer Products division, of (pounds)23.5 million.
The net cash inflow from this disposal was (pounds)98.6 million.
Cash spend on the exceptional items amounted to (pounds)27.8 million in the
year, of which (pounds)15.5 million related to restructuring, (pounds)5.2
million to the review of strategic options and (pounds)7.1 million to Bomar.
Further spend of circa (pounds)17.5 million in respect of these exceptional
items is expected in the next financial year of which (pounds)5 million relates
to Bomar, (pounds)3 million to the review of options and the balance to
restructuring.
Dividend
An interim dividend of 2.0p per share was paid to shareholders on 6 July 2001.
As announced on 2 November 2001, the Board has decided that in the current
uncertain environment it is prudent to minimise cash outflow and preserve the
Group's financial flexibility. Accordingly, no final dividend will be paid.
Food Service Equipment - North America
Our Food Service Equipment Group in North America offers a full range of
core heavy equipment products in the industry, comprising cooking, warming,
refrigeration, ventilation, dishwashing and food preparation equipment as well
as ice machines. Customers include quick service and full service restaurants,
hotels and institutional customers. Competitive advantage is achieved through
leveraging the Group's scale, product range and leading brands, technology and
relationships with end users, channel partners and suppliers. This business
represents over 50% of our Food Equipment sales.
The market for food service equipment in North America declined by some 10% in
March and remained at about that level below the prior year to the financial
year end. The market decline reflected the slowdown in the US economy with
leading restaurant chains curtailing new store openings and refurbishment
programmes and many independent restaurant and hotel operators delaying new
openings and non-essential replacement of equipment. The slowdown has been
particularly marked in the QSR chains, which represent some 30% of our North
American food service equipment business.
Whilst short term market conditions are unfavourable there is no evidence that
long term food service growth trends will not resume when the economic
background improves. Lifestyle changes continue to drive growth in out-of-home
food and beverage consumption. Thus in the long term we see these markets as
attractive.
We have taken tough actions to cut costs including 271 headcount reduction, 7%
of the workforce, and discretionary cost savings. These savings amounted to over
(pounds)11 million in the second half and are forecast to be some (pounds)19
million in the new financial year.
The organisation has been refocussed during the period to enable us to leverage
effectively our scale, product range, technology and relationships. Particular
actions taken include the alignment of 17 out of 21 of our independent sales
representatives in North America so that in each aligned territory Enodis now
has a single representative covering the full range of Enodis products. We
believe these representatives constitute the strongest sales force in the
industry. We have partnered with dealers, distributors and other channel
partners and have introduced new incentive schemes, programmes and
communications. We have established a new key account management structure,
which more effectively services global, national and regional customers. These
actions clearly target revenue improvement as well as cost reduction.
Technology is a key driver and important source of competitive advantage for
Enodis. In order to support and service our customers we have maintained our
investment in new technology despite pressure to reduce costs. This investment
is co-ordinated through our technology centre in Tampa, Florida, which is unique
in the industry. Our technology focus led to an unprecedented number of new
products being on display at the North American Food Equipment Manufacturers
show in Orlando in early September.
Encouragingly, industry data and other evidence available confirms Enodis is
gaining market share. Our `like for like' decline in sales of 8% is less than
estimates of decline in the market. Our ice businesses, where industry
statistics are available, have grown market share and our sales to the five
major buying groups are up 6% in a market down 10%, with our products gaining
new listings. Similarly, publicly available competitor information confirms
Enodis is performing relatively strongly with lower sales declines and higher
margins.
Operating profit was (pounds)62.6 million ((pounds)66.3 million). Importantly,
operating profit for the second half was (pounds)39.6 million compared to
(pounds)23.0 million in the first half with margins of 15.0% compared to 9.8%,
reflecting the benefits of the cost reduction actions and some seasonal volume
improvement.
Since 11 September we have taken further actions to reduce costs and target
market share gain opportunities in the face of further weakening economic
circumstances. Immediate action included discretionary spend savings, cut backs
in capital expenditure and the introduction of new programmes for buying groups
and dealers and increased customer communication.
Additional plans are being developed to accelerate market share gains, including
new product development, improving our international sales capability and
further partnering opportunities with major dealers and buying groups, thus
enhancing top line performance. Cost reduction actions include leveraging group
purchasing, group IT and manufacturing best practices. We are targeting
strategic headcount reductions and continuing our focus on ongoing manufacturing
rationalisation. Cost reduction actions are targeted to save some (pounds)7
million in the new financial year at a cost of some (pounds)2 million.
Major strategic priorities include the consolidation of parts and service,
increasing focus on core heavy equipment products and brands, selling non-core
businesses and continuing to leverage the Enodis organisation.
Food Service Equipment - Europe and Rest of World
Our Food Service Equipment business in Europe and Rest of World comprises
manufacturing businesses in ice machines, ovens, ventilation, beverage and other
food preparation and general food service equipment, together with the
distribution of products manufactured in North America. This business represents
approximately 20% of our Food Equipment Group.
The market in food service equipment in Europe has been mixed with the market
overall estimated to be flat, compared to the prior year. Our businesses in
Germany and the UK beverage businesses have been most impacted by economic
slowdown.
Actions have been taken to reduce costs including headcount reduction and
discretionary cost savings. Headcount savings of some 108 employees have been
achieved, which together with discretionary cost savings, have benefited second
half performance by some (pounds)1 million with an annualised benefit of some
(pounds)4 million.
Operating profit for the year was (pounds)17.7 million compared to (pounds)22.6
million in the prior year. The second half performance was (pounds)8.5 million,
a deterioration compared to (pounds)9.2 million in the first half.
These results are disappointing and reflect losses at one of our UK beverage
businesses, which has now been sold, weakening performance in our German
businesses, increased overhead costs and margin pressure. The results include
non-recurring property profits of (pounds)1.5 million.
Subsequent to the year end we have combined our North American and Europe & ROW
Food Service Equipment businesses into a single Global Food Service Equipment
Group under the leadership of Dave McCulloch. This has been done in order to
improve top line performance, reduce costs, further streamline the organisation
and provide our global customers with better service. Further actions to
strengthen management have been taken.
Our strategy in Europe is to refocus the European portfolio on core heavy food
equipment, leverage the strength of our North American brands for global
customers, sell non-core activities, pool technology resources and revitalise
our owned and third party distributors.
Food Retail Equipment
Our Food Retail Equipment businesses, which represent just over 20% of
total Food Equipment, comprises four companies:- Kysor Warren and Austral, which
manufacture display cases and refrigeration systems, Kysor Panel Systems, which
manufactures walk-ins and systems, and Belshaw which manufactures doughnut
equipment. Austral, Kysor Panel Systems and Belshaw have leading market
positions. Kysor Warren, which accounts for approximately one third of this
group, has a number four market position and has suffered from under-investment
and a concentrated customer base in a very challenging market environment.
The North American market for display cases and systems declined during the year
and is currently estimated to be down some 25-30% compared to the prior year.
This decline has been driven by economic slowdown and consolidation within the
US retail sector. The market for walk-ins and systems is also down and Belshaw
has been impacted by a trend towards larger equipment. Austral is showing some
recovery from a low base.
The whole industry has been affected by this very severe turndown with all major
competitors in the display case and systems business closing plants and laying
off employees. We estimate that some 20% of display case capacity has been
eliminated.
We have developed and are implementing a turnaround plan for this business. This
has included the appointment of new management, led by Dave Odum, two plant
closures and a headcount reduction of almost 500 employees, product refreshment,
the consolidation of facilities in Australia and aggressive actions to broaden
the customer base. The actions taken reduced costs by some (pounds)2.5 million
in the second half and over (pounds)7 million on an annualised basis. We believe
Kysor Warren is now positioned as the low cost producer in what remains a very
competitive market.
Operating profit for the period was (pounds)10.4 million ((pounds)22.6 million).
Operating profit for the second half is (pounds)5.9 million up from (pounds)4.5
million in the first half despite a further decline in the market.
Success has been achieved in broadening the customer base with important new
customers won at Kysor Warren, Kysor Panel Systems and Austral. The market,
however, is very competitive, and margins have suffered accordingly.
Additionally, actions are being taken to further reduce the cost base including
headcount reduction and other manufacturing and rationalisation savings. These
cost savings are targeted to be (pounds)2 million in the new financial year at a
cost of (pounds)2 million. Strategic priorities include completing the
turnaround plan, broadening the customer base and positioning the business for
recovery when markets eventually improve.
Management
As announced on 2 November 2001 a full Executive team is in place and is
working well together. The organisation has been streamlined and unnecessary
senior management layers eliminated.
The management team has led with tough actions and a clear `back to basics'
focus in the organisation to maximise profit, cash and profitable market share
growth.
Outlook
The Group's strategy is to consolidate and extend its position as the
world's leading supplier of heavy core commercial food service equipment through
product, distribution and service excellence. We have a fully developed,
coherent Global Food Service Equipment strategy which we are confident will lead
to market share gains. In addition, the Group plans to complete the Food Retail
Equipment turnaround and position this business for market recovery.
The further reduction of debt remains a key priority. The Group's
businesses are highly cash generative and we have plans in place to dispose of
surplus property and non-core businesses.
Trading in October and November to date has been at levels close to our original
plans. Nevertheless the trading climate is likely to become more difficult
following the events of September 11 and the extent of any further market
decline remains unclear. All prudent actions are being taken to address the
situation, reducing costs further and taking advantage of market share gain
opportunities. We have based our planning on the experience at the time of the
Gulf War in 1991, when as previously announced, the market for food service
equipment in the USA fell by some 15%.
We are targeting further cost savings of some (pounds)10 million for the
new financial year relating to strategic headcount reductions, discretionary
cost savings, leveraging Group purchasing and ongoing manufacturing
rationalisation. We estimate exceptional items of some (pounds)6 million in the
new financial year relating to these actions.
We are also taking actions to improve top line performance and believe that our
scale, broad product range, technology, and industry relationships ideally
position us to achieve this.
We believe we have a powerful strategy and that, as we continue to implement it,
Enodis will emerge stronger, with improved market share and well positioned for
market recovery when it comes.
P M Brooks
21 November 2001
Copies of this announcement are available upon request to:
The Company Secretary
Enodis plc
Washington House
40-41 Conduit Street
London W1S 2YQ
This press release contains "forward-looking statements," 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 and plans. 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. Factors that could cause the Company's results
to differ materially from its expectations include: the Company's susceptibility
to regional economic downturns, currency fluctuations, large customer order
slowdowns and other risks related to its U.S., U.K. and foreign operations; its
ability to realize cost savings from its cost reduction program; keen
competition in its fragmented and consolidating industry; and the other risk
factors and more complete descriptions of these factors found under "Risk
Factors" in the Company's Form 20-F filed with the SEC.
52 weeks to 52 weeks to
Group profit and loss account 29 September 30 September
2001 2000
Exceptional
Pre-exceptional items
Notes (See Note 2) Total
(pounds)m (pounds)m (pounds)m (pounds)m
Turnover 1
Food Equipment 887.2 - 887.2 884.5
Property 16.6 - 16.6 19.9
-------------------------------------------------------------------------------------------------------------------------
Continuing operations 903.8 - 903.8 904.4
Discontinued operations 177.3 - 177.3 275.7
-------------------------------------------------------------------------------------------------------------------------
1,081.1 - 1,081.1 1,180.1
-------------------------------------------------------------------------------------------------------------------------
Profit from operations
Continuing operations
Food equipment 90.7 (43.4) 47.3 111.5
Property 9.0 - 9.0 8.4
Corporate costs (8.9) (24.1) (33.0) (7.3)
-------------------------------------------------------------------------------------------------------------------------
90.8 (67.5) 23.3 112.6
Discontinued operations 9.1 - 9.1 27.1
-------------------------------------------------------------------------------------------------------------------------
99.9 (67.5) 32.4 139.7
Goodwill amortisation / impairment (23.0) (100.0) (123.0) (21.4)
-------------------------------------------------------------------------------------------------------------------------
Operating profit / (loss) 1
Continuing operations 67.8 (167.5) (99.7) 91.2
Discontinued operations 9.1 - 9.1 27.1
-------------------------------------------------------------------------------------------------------------------------
76.9 (167.5) (90.6) 118.3
Profit on disposal of businesses 2 - 23.5 23.5 -
Profit on disposal of property fixed assets - - - 3.0
-------------------------------------------------------------------------------------------------------------------------
76.9 (144.0) (67.1) 121.3
Net interest payable and similar charges (36.1) (5.8) (41.9) (37.5)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before taxation 40.8 (149.8) (109.0) 83.8
Tax on (profit)/loss on ordinary activities 3 (8.6) 2.0 (6.6) (14.2)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities after taxation 32.2 (147.8) (115.6) 69.6
Equity minority interest (0.3) - (0.3) (0.3)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) for the period 31.9 (147.8) (115.9) 69.3
Equity dividends 4 (4.8) - (4.8) (33.9)
-------------------------------------------------------------------------------------------------------------------------
Retained profit/(loss) 27.1 (147.8) (120.7) 35.4
-------------------------------------------------------------------------------------------------------------------------
52 weeks to 52 weeks to
29 September 30 September
Earnings/(loss) per share 2001 2000
Pence per Pence per
share share
Basic earnings/(loss) per share 5 (46.5) 29.6
Adjusted basic earnings per share 22.1 37.4
Diluted earnings/(loss) per share (46.5) 27.7
Adjusted diluted earnings per share 22.0 35.0
Statement of total recognized gains and losses
52 weeks to 52 weeks to
29 September 30 September
2001 2000
(pounds)m (pounds)m
(Loss)/profit for the period (115.9) 69.3
Negative goodwill written back on disposals,
previously written off (4.4) -
Currency translation differences on foreign currency net investments (1.7) 1.3
-------------------------------------------------------------------------------------------------------------------------
Total recognised gains and losses for the period (122.0) 70.6
-------------------------------------------------------------------------------------------------------------------------
Group balance sheet
29 September 30 September
2001 2000
Notes (pounds)m (pounds)m
----------------------------------------------------------------------------------------------------------------
Fixed assets
Intangible assets: goodwill 310.2 412.7
Tangible assets 111.4 171.8
Investments 6.2 7.2
----------------------------------------------------------------------------------------------------------------
427.8 591.7
----------------------------------------------------------------------------------------------------------------
Current assets
Stocks 105.6 153.1
Debtors 200.7 221.1
Cash at bank and in hand 39.4 28.5
----------------------------------------------------------------------------------------------------------------
345.7 402.7
----------------------------------------------------------------------------------------------------------------
Creditors falling due within one year
Borrowings (2.4) (90.4)
Other creditors (225.1) (276.9)
----------------------------------------------------------------------------------------------------------------
(227.5) (367.3)
----------------------------------------------------------------------------------------------------------------
Net current assets 118.2 35.4
----------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 1 546.0 627.1
----------------------------------------------------------------------------------------------------------------
Financed by
Creditors falling due after more than one year 398.9 366.6
Provisions for liabilities and charges 59.1 45.6
----------------------------------------------------------------------------------------------------------------
458.0 412.2
----------------------------------------------------------------------------------------------------------------
Capital and reserves
Called up share capital 125.1 125.0
Share premium account 239.0 238.9
Revaluation reserve - -
Profit and loss account (276.9) (150.1)
----------------------------------------------------------------------------------------------------------------
Equity shareholders' funds 87.2 213.8
----------------------------------------------------------------------------------------------------------------
Equity minority interests 0.8 1.1
----------------------------------------------------------------------------------------------------------------
546.0 627.1
----------------------------------------------------------------------------------------------------------------
Group cash flow statement
52 weeks to 52 weeks to
29 September 2001 30 September
(pounds)m 2000
Notes (pounds)m
------------------------------------------------------------------------------------------------------------------
Net cash inflow from operating activities before exceptional
items a 120.8 160.5
Net cash outflow from operating exceptional items (27.8) -
------------------------------------------------------------------------------------------------------------------
Net cash flow from operating activities 93.0 160.5
------------------------------------------------------------------------------------------------------------------
Return on investments and servicing of finance
Interest paid (40.9) (37.5)
------------------------------------------------------------------------------------------------------------------
Taxation
Overseas and UK tax paid (6.0) (10.2)
------------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (23.7) (32.1)
Receipts from sale of tangible fixed assets 7.4 8.2
Payments to acquire fixed asset investments - 0.6
------------------------------------------------------------------------------------------------------------------
(16.3) (23.3)
------------------------------------------------------------------------------------------------------------------
Acquisitions and disposals
Purchase of subsidiary undertakings and minority interests (25.8) (47.8)
Sale of subsidiary undertakings 98.6 -
Investment in joint venture - (0.4)
------------------------------------------------------------------------------------------------------------------
72.8 (48.2)
------------------------------------------------------------------------------------------------------------------
Equity dividends paid (28.2) (28.6)
----------------------------------------------------------------------------------------------
Cash inflow before use of liquid resources and financing 74.4 12.7
----------------------------------------------------------------------------------------------
Management of liquid resources*
Cash transferred from term deposits d - 1.0
----------------------------------------------------------------------------------------------
Financing
Issue of shares 0.2 0.6
Redemption of CULS - (1.1)
Additional net borrowings 398.3 0.6
Repayment of term loan (385.7) (32.4)
Net decrease in other loans (72.8) 19.2
Capital element of finance lease repayments (0.6) (0.7)
----------------------------------------------------------------------------------------------
(60.6) (13.8)
----------------------------------------------------------------------------------------------
Increase/(decrease) in cash in the period 13.8 (0.1)
----------------------------------------------------------------------------------------------
*Enodis Group includes as liquid resources term deposits with a maturity less
than 90 days.
Notes to Group cash flow statement
----------------------------------------------------------------------------------------------------------------------------
52 weeks to 29 September 2001 52
weeks to 30
September
a) Reconciliation of operating profit Before
to net cash inflow from operating activities exceptional Exceptional
items items Total 2000
(pounds)m (pounds)m (pounds)m (pounds)m
----------------------------------------------------------------------------------------------------------- ----------------
Operating profit 76.9 (167.5) (90.6) 118.3
Depreciation 22.7 - 22.7 23.8
Amortisation of goodwill 23.0 100.0 123.0 21.4
Gain on sale of fixed assets (1.7) - (1.7) (0.3)
Provisions (net) (6.0) 16.5 10.5 (4.6)
Decrease/(increase) in stock 12.1 0.5 12.6 (0.5)
Decrease in debtors 10.7 - 10.7 6.0
(Decrease)/increase in creditors (16.9) 22.7 5.8 (3.6)
----------------------------------------------------------------------------------------------------------------------------
Net cash inflow from operating activities 120.8 (27.8) 93.0 160.5
----------------------------------------------------------------------------------------------------------------------------
52 weeks to 52 weeks to
29 September 30 September
2001 2000
b) Reconciliation of net cash flow to movement in net debt (pounds)m (pounds)m
----------------------------------------------------------------------------------------------------------------------------
Increase/(decrease) in net cash in the period 13.8 (0.1)
Loans and finance leases acquired with subsidiary undertakings (0.7) (0.8)
Cash outflow from capital element of finance lease payments 0.6 0.7
Repayment of other loans 5.4 (19.2)
Borrowings repaid 54.8 31.8
Conversion of convertible unsecured loan stock ("CULS") to
ordinary shares - 93.3
Cash redemption of CULS - 1.1
Translation difference (5.6) (42.3)
----------------------------------------------------------------------------------------------------------------------------
Movement in net debt 68.3 64.5
Net debt at start of period (434.2) (498.7)
----------------------------------------------------------------------------------------------------------------------------
Net debt at end of period (365.9) (434.2)
----------------------------------------------------------------------------------------------------------------------------
2001 2000
c) Reconciliation of net debt to balance sheet (pounds)m (pounds)m
----------------------------------------------------------------------------------------------------------------------------
Cash at bank and in hand 39.4 28.5
Current borrowing (2.4) (90.4)
Exclude current proportion of deferred financing costs (1.1) (1.2)
----------------------------------------------------------------------------------------------------------------------------
Current net debt 35.9 (63.1)
Long-term lease obligations (1.2) (0.5)
Long-term debt (400.6) (370.6)
----------------------------------------------------------------------------------------------------------------------------
Net debt at end of period (365.9) (434.2)
----------------------------------------------------------------------------------------------------------------------------
Acquired Translation
2000 Cash flow with adjustments 2001
(pounds)m (pounds)m subsidiaries (pounds)m (pounds)m
d) Analysis of movement in net debt (pounds)m
---------------------------------------------------------------------------------------------------------------------------
Cash 28.5 13.8 - (2.9) 39.4
Borrowings due within one year (92.1) 86.8 - 1.8 (3.5)
Revolving multi-currency facilities
Old (64.5) 67.4 - (2.9) -
New - (398.3) - 10.8 (387.5)
Term Loan (287.3) 298.9 - (11.6) -
Other long-term debt (18.8) 6.0 (0.7) (0.8) (14.3)
---------------------------------------------------------------------------------------------------------------------------
Net (debt)/funds (Note 6) (434.2) 74.6 (0.7) (5.6) (365.9)
---------------------------------------------------------------------------------------------------------------------------
Notes to the accounts
1. Analyses of turnover, operating profit/(loss) and total assets less current
liabilities
52 weeks to 52 weeks to
29 September 30 September
2001 2000
(pounds)m (pounds)m
-------------------------------------------------------------------------------------------------------------------
a) Turnover
Food Service Equipment - North America 476.6 487.0
Food Service Equipment - North American acquisitions 22.1 -
Food Service Equipment - Europe and Rest of World 185.4 178.1
Food Retail Equipment 203.1 219.4
-------------------------------------------------------------------------------------------------------------------
Food Equipment 887.2 884.5
Property 16.6 19.9
-------------------------------------------------------------------------------------------------------------------
Continuing operations 903.8 904.4
Discontinued operations 177.3 275.7
-------------------------------------------------------------------------------------------------------------------
Total 1,081.1 1,180.1
-------------------------------------------------------------------------------------------------------------------
b) Operating profit/(loss) 52 weeks to
30 September
52 weeks to 29 September 2001 2000
Exceptional
items
Pre-exceptional (see Note 2) Total Total
(pounds)m (pounds)m (pounds)m (pounds)m
Food Service Equipment - North America 60.6 (25.6) 35.0 66.3
Food Service Equipment - North American acquisitions 2.0 - 2.0 -
Food Service Equipment - Europe & Rest of World 17.7 (5.2) 12.5 22.6
Food Retail Equipment 10.4 (12.6) (2.2) 22.6
-------------------------------------------------------------------------------------------------------------------
90.7 (43.4) 47.3 111.5
Food Equipment goodwill amortisation and impairment (23.0) (100.0) (123.0) (21.4)
-------------------------------------------------------------------------------------------------------------------
Food Equipment 67.7 (143.4) (75.7) 90.1
Property 9.0 - 9.0 8.4
Corporate Costs (8.9) (24.1) (33.0) (7.3)
-------------------------------------------------------------------------------------------------------------------
Continuing operations 67.8 (167.5) (99.7) 91.2
Discontinued operations 9.1 9.1 27.1
-------------------------------------------------------------------------------------------------------------------
Total 76.9 (167.5) (90.6) 118.3
-------------------------------------------------------------------------------------------------------------------
2001 2000
(pounds)m (pounds)m
-------------------------------------------------------------------------------------------------------------------
c) Total assets less current liabilities
Food Service Equipment - North America 80.4 93.3
Food Service Equipment - North American acquisitions 4.3 -
Food Service Equipment - Europe and Rest of World 50.5 50.9
Food Retail Equipment 45.9 60.7
Food Equipment goodwill 310.2 412.7
-------------------------------------------------------------------------------------------------------------------
Food Equipment 491.3 617.6
Property 10.9 9.1
Investments 4.8 4.8
Discontinued operations - 81.4
-------------------------------------------------------------------------------------------------------------------
507.0 712.9
Corporate 2.0 (22.7)
Net cash/(debt) 37.0 (63.1)
-------------------------------------------------------------------------------------------------------------------
Total 546.0 627.1
-------------------------------------------------------------------------------------------------------------------
2 Exceptional Items
52 weeks to
Food 29 September
a) Operating exceptional items Equipment Corporate 2001
(pounds)m (pounds)m (pounds)m
------------------------------------------------------------------------------------------------------------------------
Restructuring costs 29.7 3.4 33.1
Revisions to working capital provisions and other exceptional
warranty costs 13.7 - 13.7
Litigation costs - 12.2 12.2
Costs associated with the Board's review of strategic options - 8.5 8.5
------------------------------------------------------------------------------------------------------------------------
43.4 24.1 67.5
Goodwill impairment 100.0 - 100.0
------------------------------------------------------------------------------------------------------------------------
Operating exceptional items 143.4 24.1 167.5
------------------------------------------------------------------------------------------------------------------------
Restructuring costs of (pounds)33.1m comprise the costs associated with a number
of rationalisation projects including headcount savings and manufacturing
efficiency improvements announced before 29 September 2001.
Following the publication of FRS18 "Accounting Policies", the Group has
reassessed its accounting estimates for warranty provisions and provided an
additional (pounds)8.0m. Further exceptional warranty costs of (pounds)4.5m have
arisen in the period and previously capitalised development costs of
(pounds)1.2m have been written off.
The Group settled the long-standing Bomar cases for payment of $17.5m
((pounds)12.2m) in settlement of all claims. A payment of $10.0m was made in the
period with a further $7.5m in October 2001.
The Board undertook a review of the Group's strategic options during the year
with the objective of maximising shareholder value. Costs of (pounds)8.5m,
predominantly professional fees, were incurred.
Following recent downturns in the US economy, in particular in the Retail
markets, it was necessary to reassess the carrying value of goodwill in respect
of the Scotsman acquisition. In accordance with the methodology prescribed in
FRS11 "Impairment of Fixed Assets and Goodwill", which requires consideration of
the net present value of estimated future cashflows, the carrying value of
goodwill has been written down by (pounds)100.0m.
Building and
Consumer Scotsman
Products Response Total
b) Disposal of businesses (pounds)m (pounds)m (pounds)m
--------------------------------------------------------------------------------------------------------------------
Proceeds - cash 114.0 - 114.0
- loan note 20.0 - 20.0
--------------------------------------------------------------------------------------------------------------------
134.0 - 134.0
Less:
Book value of net assets (85.7) (3.1) (88.8)
Payment into pension fund (10.0) - (10.0)
Costs (13.6) (0.2) (13.8)
Goodwill 4.4 (2.3) 2.1
--------------------------------------------------------------------------------------------------------------------
Profit/(loss) on disposal 29.1 (5.6) 23.5
--------------------------------------------------------------------------------------------------------------------
On 14 June 2001, the Group completed the sale, announced on 23 April 2001, of
its Building and Consumer Products Division to Nobia AB for a total
consideration of (pounds)134.0m (subject to asset adjustments). Prior to
completion the Group paid a contribution of (pounds)10.0m to Magnet in respect
of pension scheme funding. (pounds)4.4m of negative goodwill previously written
off to reserves was credited to the profit and loss account on disposal.
On 14 September 2001, the Group disposed of Scotsman Response Limited for
consideration of up to (pounds)45,000.
2 Exceptional Items, continued
52 weeks to
29 September
2001
c) Net interest payable and similar charges (pounds)m
--------------------------------------------------------------------------------
Deferred finance fees written off 5.8
--------------------------------------------------------------------------------
On 12 March 2001, the Group entered into a new revolving multi-currency facility
to refinance the Scotsman acquisition debt. The capitalised, unamortised costs
of the previous financing arrangements relating primarily to arrangement and
other fees totalling (pounds)5.8m have been written off.
3 Tax on profit/(loss) on ordinary activities
52 weeks to 52 weeks to
29 September 30 September
2001 2000
(pounds)m (pounds)m
--------------------------------------------------------------------------------
The tax charge for the period comprised:
UK taxation at 30% (2000: 30%)
- current year - 0.7
Foreign taxation:
- current year 8.6 13.5
--------------------------------------------------------------------------------
8.6 14.2
Tax relief on exceptional items (2.0) -
--------------------------------------------------------------------------------
6.6 14.2
--------------------------------------------------------------------------------
4 Equity dividends
52 weeks to 52 weeks to
29 September 30 September
2001 2000
(pounds)m (pounds)m
---------------------------------------------------------------------------------------------
Interim paid, 2.0p net per ordinary share (2000: 4.4p net) 4.8 10.8
Final, nil payable (2000: 9.35p net per ordinary share) - 23.1
---------------------------------------------------------------------------------------------
4.8 33.9
---------------------------------------------------------------------------------------------
5 Earnings per share
52 weeks to 52 weeks to
29 September 30 September
2001 2000
(pounds)m (pounds)m
-------------------------------------------------------------------------------------------------------------------
Basic earnings (profit on ordinary activities after taxation and minority
interests) (115.9) 69.3
Convertible Unsecured Loan Stock finance costs - 0.1
-------------------------------------------------------------------------------------------------------------------
(115.9) 69.4
-------------------------------------------------------------------------------------------------------------------
52 weeks to 52 weeks to
29 September 30 September
2001 2000
million million
-------------------------------------------------------------------------------------------------------------------
Basic weighted average number of shares 248.9 234.0
Dilution effect of:
- employee share options 0.1 1.5
- share save options 0.2 0.9
- CULS - 14.3
-------------------------------------------------------------------------------------------------------------------
Diluted weighted average number of shares 249.2 250.7
-------------------------------------------------------------------------------------------------------------------
52 weeks to 52 weeks to
29 September 30 September
2001 2000
pence pence
-------------------------------------------------------------------------------------------------------------------
Basic earnings per share (46.5) 29.6
Basic earnings per share on exceptional items 19.2 (1.3)
Basic earnings per share on goodwill amortisation and impairment 49.4 9.1
-------------------------------------------------------------------------------------------------------------------
Adjusted basic earnings per share 22.1 37.4
-------------------------------------------------------------------------------------------------------------------
Diluted earnings per share (46.5) 27.7
Diluted earnings per share on exceptional items 19.2 (1.2)
Diluted earnings per share on goodwill amortisation and impairment 49.3 8.5
-------------------------------------------------------------------------------------------------------------------
Adjusted diluted earnings per share 22.0 35.0
-------------------------------------------------------------------------------------------------------------------
Adjusted earnings per share before exceptional items (note 2) and goodwill
amortisation (note 1d) are disclosed to reflect the underlying performance of
the Group.
6 Analysis of net debt
2001 2000
(pounds)m (pounds)m
Debt - due within one year (3.5) (91.6)
- due after more than one year (401.8) (371.1)
--------------------------------------------------------------------------------
(405.3) (462.7)
Less - cash 39.4 28.5
--------------------------------------------------------------------------------
(365.9) (434.2)
--------------------------------------------------------------------------------
Included in debt due after more than one year is (pounds)387.5m drawn under a
Revolving Multi-Currency Facility ("the Facility"), repayable in March 2006. The
Facility is underwritten by two banks pending syndication. The underwriting
banks retain the right to alter the structure of the facility to achieve a
successful syndication. The underwriting banks have confirmed that they will not
exercise their right in such a way as to cause repayment within one year.
On 20/th/ November 2001 the Company and its principal subsidiaries entered into
an agreement to grant the underwriting banks a fixed and floating charge over
the Group's assets.
7 Basis of preparation
The financial information set out above does not constitute the Company's
statutory accounts for the 52 weeks ended 29 September 2001 or 30 September
2000. The financial information for the 52 weeks ended 30 September 2000 is
derived from the statutory accounts for that period which have been delivered to
the Registrar of Companies. The auditors reported on those accounts; their
report was unqualified and did not contain a statement under section 237(2) or
(3) of the Companies Act 1985. The statutory accounts for the 52 weeks ended 29
September 2001 will be finalised on the basis of the financial information
presented by the directors in the preliminary announcement and will be delivered
to the Registrar of Companies following the Company's Annual General Meeting.
The financial information set out above has been prepared on the basis of the
accounting policies set out in the Group's annual financial statements for the
period ended 30 September 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ENODIS PLC
November 21, 2001 By: /s/ Andrew J. Allner
---------------------------------
Name: Andrew J. Allner
Title: Chief Executive Officer