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 August, 2002
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
-----
1
On August 8, 2002 Enodis plc distributed the following press release
announcing its third quarter results for the 13 weeks ended June 29, 2002:
Enodis plc: THIRD QUARTER RESULTS FOR THE 13 WEEKS ENDED 29 JUNE 2002
Refinancing complete, net debt reduced to (Pounds)225.7m
. Group Financial Highlights
. Food Equipment sales (Pounds)197.3m, flat on a like-for-like
basis.
. Group profit before tax* (Pounds)9.1m (Q3
2001: (Pounds)14.4m).
. Adjusted, diluted earnings per share 2.1p (3.6p).
. Global Food Service Equipment (FSE)
. Operating profit* in North America 6% ahead on a
like-for-like basis at (Pounds)17.6m ((Pounds)17.9m).
. European market, particularly UK, difficult.
. Global FSE operating profit* (Pounds)20.3m ((Pounds)22.5m)
down 4% on a like-for-like basis.
. Food Retail Equipment
. Operating loss* of (Pounds)1.2m (profit (Pounds)1.9m)
. Good performance at Kysor Panel Systems offset by losses at
Kysor Warren - new president appointed and vigorous action
continuing.
. Exceptional items
. Net cash inflow (Pounds)64.7m.
. Net proceeds from disposals in quarter of (Pounds)76.6m,
loss on disposal (Pounds)40.0m (including (Pounds)54.7m of
goodwill).
. (Pounds)48.9m impairment of Kysor Warren goodwill.
. (Pounds)5.0m of restructuring and asset write down charges
taken in Q3.
. Period end net debt down to (Pounds)225.7m following rights issue,
disposals and improved free cash flow.
* before goodwill amortisation and exceptional items.
Peter Brooks, Chairman, said:
"Our Food Service Equipment business in North America continues to perform
robustly in difficult markets. The results have been impacted by losses at Kysor
Warren where vigorous action continues to be taken. We have made good progress
in reducing net debt, which has fallen significantly to (Pounds)225.7 million
from (Pounds)380.5 million at the half year and (Pounds)493.8 million in March
2001."
For further enquiries:
Andrew Allner Chief Executive Officer 020 7304 6006
Dave Wrench Chief Financial Officer 020 7304 6006
Richard Mountain 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.
2
Chairman's and Chief Executive Officer's Review
Overview
Food Service Equipment results are in line with our expectations. As anticipated
markets have continued to be weak.
Against this background our Food Service Equipment business in North America has
performed robustly in a weak market, growing both sales and operating profits by
6% on a like-for-like basis compared to the same period last year.
The market for food service equipment in Europe/ROW has weakened with a very
competitive UK market taking the brunt of the downturn. Our Food Service
Equipment business in Europe/ROW, which is smaller and less integrated than our
business in North America, recorded sales down 6% and operating profits down 41%
on a like-for-like basis.
In Food Retail Equipment, the market continues to be difficult, but our Kysor
Panel Systems business has increased like-for-like sales by 2%. We have
continued to lose market share at Kysor Warren due to problems with product
quality and lack of customer focus. As anticipated at the time of the interim
results, Kysor Warren will continue to make operating losses throughout the 2002
financial year. Whilst we are determined we will successfully turn round this
business, this will take time and we have prudently written off all the
remaining Kysor Warren goodwill of (Pounds)48.9 million.
We have had strong operating cash flow in the quarter of (Pounds)10.4m and net
exceptional cash inflow from disposals, exceptional items and the rights issue
of (Pounds)135.0m.
Net debt at 29 June 2002 stood at (Pounds)225.7m down from (Pounds)380.5m at the
half year.
Results
Profit before tax, goodwill amortisation and exceptional items in Q3 2002 was in
line with our expectations at (Pounds)9.1m (Q3 2001: (Pounds)14.4m including
(Pounds)1.5m from the Building and Consumer Products business sold in June
2001). Foreign exchange movements have adversely affected the results by
approximately (Pounds)0.4m with the balance being due to the effect of disposals
and stronger Food Service North America performance being offset by Europe/ROW
and Retail.
For the three quarters ended 29 June 2002, cumulative profit before tax,
goodwill amortisation and exceptional items was (Pounds)20.4m ((Pounds)33.1m
including (Pounds)9.1m in respect of the Building and Consumer Products business
sold in June 2001).
In Food Equipment, Q3 operating profit before goodwill amortisation and
exceptional items ("operating profit") was (Pounds)19.1m ((Poundss)24.4m), with
a weaker dollar contributing (Pounds)0.4m to the reduction in results and the
effect of disposals a further (Pounds)1.5m. Operating margins in the period were
9.7% (10.7%) reflecting lower margins in Europe/ROW and Food Retail Equipment.
For the three quarters ended 29 June 2002, cumulative Food Equipment operating
profit before goodwill amortisation and exceptional items was (Pounds)49.5
million ((Pounds)61.1 million).
3
Q3 Group operating profit was (Pounds)17.1m ((Pounds)23.0m including
(Pounds)1.5m from the Building and Consumer Products business). For the three
quarters ended 29 June 2002, cumulative Group operating profit was (Pounds)43.3m
((Pounds)62.8m including (Pounds)9.1m in respect of the Building and Consumer
Products business).
Exceptional items
Exceptional items in Q3 comprise the following:
Profit/(loss) Net cash
inflow/
(outflow)
(Pounds)m (Pounds)m
1. Restructuring and asset write downs (5.0) (7.2)
2. Refinancing fees - (1.9)
3. Disposals of businesses (43.3) 49.4
4. Nobia receipt 3.3 24.4
5. Impairment of Kysor Warren goodwill (48.9) -
---------------------------------
Total (93.9) 64.7
Notes:
1. Net operating exceptional items, excluding goodwill impairment, in Q3 of
(Pounds)5.0m comprise further restructuring costs and asset write downs,
mostly at Kysor Warren. The exceptional cash flow includes related cash
costs along with payments against previous restructuring programmes.
2. Fees paid in respect of the refinancing.
3. The loss on disposals of non-core businesses during the Quarter included
goodwill previously written off to reserves of (Pounds)54.7m. In the 52
weeks ended 29 September 2001, the operating profit for businesses
disposed of in the current quarter was (Pounds)8.9m and in the current
year, to the date of disposal, was (Pounds)3.8m.
4. As a result of the recent public offering of Nobia AB, which purchased our
Building and Consumer Products business in June 2001, we received
repayment of our vendor loan note of (Pounds)20.0m, together with an early
repayment penalty. Furthermore, we sold the shares arising from the
exercise of Nobia AB warrants, raising proceeds of (Pounds)4.0m and net
profits of (Pounds)3.3m.
5. As a result of our review of the performance of Kysor Warren, and as first
discussed at the time of our Q1 announcement in February, we have
reassessed the value of the Kysor Warren goodwill. Our conclusion is that
in the current difficult market conditions, along with our decline in
market share and operating losses, there is an impairment in the carrying
value of goodwill. Therefore, we are writing off (Pounds)48.9m as an
exceptional non-cash charge being all the remaining Kysor Warren goodwill.
This is an accounting rather than cash item and we are taking every step
to recover this value as we focus on turnround.
Cash flow and financing
Operating cash flow in the quarter was (Pounds)10.4m (Q3 2001: (Pounds)10.1m) on
lower year on year Q3 operating profit. After interest and tax, free cash flow
was (Pounds)5.4m ((Pounds)0.2m).
4
During the quarter, we received a net exceptional cash inflow of (Pounds)64.7m
and the net proceeds of our 3 for 5 Rights Issue of (Pounds)70.3m.
After taking into account foreign exchange gains of (Pounds)14.4m, net debt in
the period reduced from (Pounds)380.5m at 30 March 2002 to (Pounds)225.7m.
The final phase of the syndication of the Group's Senior Debt is now complete.
Debt reduction will remain a priority for the Group. Operating companies remain
firmly focused on cash conversion days and we expect further debt reduction as a
result of operating cash flow.
Property
Work is progressing on Felsted Phase III in accordance with our plans and,
subject to completion of infrastructure improvements on time, should generate
operating profits of some (Pounds)7m in the last quarter of the current
financial year.
Global Food Service Equipment
Global Food Service Equipment comprises both our operations in North America,
approximately 75% of Food Service Equipment sales, and our operations in
Europe/ROW. Our strategy is to achieve market share growth through excellence in
product, distribution and service.
The Group offers a full range of core heavy kitchen equipment to the industry
and competitive advantage is achieved through leveraging the Group's scale,
product range and leading brands, technology and relationships with distributors
and service partners, end-users and suppliers.
We have continued to make good progress against our strategic objectives with
particular success in building on relationships with key global accounts and
improved performance with major dealers and buying groups. Our Scotsman Ice
plant achieved recognition as one of the USA's best plants across all industries
and we are at early stages of manufacturing formerly USA sourced products in
Europe, China and Thailand. Our ice businesses, where industry data is
available, continue to grow share.
In Europe/ROW we have had significant success in gaining orders for our
Merrychef accelerated cooking products. Elsewhere, increased factory capacity
and new product start up costs have depressed margins. The UK remains a key area
of focus.
Sales of our North American operations, including exports, at (Pounds)124.8m
were in line with our expectations, down 4% on the same period last year.
However, on a like-for-like basis, i.e. adjusting for the effects of disposals
and foreign currency, sales grew in the period by 6%. Operating profit was
broadly flat at (Pounds)17.6m but was up 6% on a like-for-like basis.
Sales in Europe/ROW declined by 22% to (Pounds)36.6m which is 6% down on a
like-for-like basis principally due to lower UK sales in a fiercely competitive
market. Operating profits were down 41% (both on an actual and on a
like-for-like basis) at (Pounds)2.7m with the UK again being the main
contributor. Volume effects and cost increases were offset in part by cost
savings.
5
Overall, operating profit in Global Food Service Equipment was down 10% to
(Pounds)20.3m with margins flat at 12.6%. Like-for-like sales are up 3% and
profits are down 4%, with the performance in Europe/ROW more than offsetting
improvements in North America.
Food Retail Equipment
Our Food Retail Equipment business comprises Kysor Warren and Kysor Panel
Systems and the results of Austral and Belshaw up to the dates of disposal.
Sales, at (Pounds)35.9m, were down 11% on a like-for-like basis. We made
operating losses of (Pounds)1.2m (Q3 2001 profit: (Pounds)1.9m).
Kysor Panel Systems has continued its good performance, with underlying sales
and profits up 2% and 31% respectively.
Kysor Warren was loss making with like-for-like sales declining by 22%. We
expect Kysor Warren to continue making losses in Q4 with the final result
dependent on volumes in the balance of year and timing of corrective actions.
Our objective for Kysor Warren is to turn the business round and re-establish it
as a successful, profitable, leading player in the display cabinet and systems
industry. As discussed at the interims, following the appointment of a task
force, we are focusing on improving the management team, addressing operational
issues and re-establishing customer focus whilst maintaining emphasis on cash.
On 22 July we successfully concluded our search for a new president for Kysor
Warren, who brings significant turnround experience. He will work closely with
the experienced president of the Kysor Group and also the FSE retail account
manager to leverage Enodis's relationship with retail customers. Kysor Warren
has a reputation for product reliability and the immediate priority is to
address short term issues of fit and finish. In addition, cost reduction actions
are well advanced.
As a result of our review of the performance of Kysor Warren, and as first
discussed at the time of our Q1 announcement in February, we have reassessed the
value of the Kysor Warren goodwill. Our conclusion is that in the current
difficult market conditions, along with our decline in market share and
operating losses, it is prudent to recognise an impairment in the carrying value
of goodwill. Therefore, we are writing off (Pounds)48.9m as an exceptional
non-cash charge which includes all goodwill associated with Kysor Warren.
We remain determined that we will successfully turn round this business and all
actions are being taken to achieve this, though it will take time.
Outlook
We had always expected markets to remain weak through the current financial year
but to pick up early next year. However, despite some positive signs earlier
this year, indications are that this period of weakness is now likely to extend
further than we had originally expected.
6
Despite this we remain confident that we will grow sales and market share by
focusing on key accounts, and by leveraging our technology, product range and
relationships with our distribution and service partners. We will also continue
to reduce costs and have a strong focus on cash.
The market in North America for Food Retail Equipment is showing some signs of
slowing further. Our results in this area, however, will largely depend on our
ability to turn round Kysor Warren; we expect it to take time for the benefits
of our actions to show through.
Overall trading in July continued in line with expectations with robust
performance in Food Service Equipment, North America, weak performance in Food
Service Europe/ROW and losses at Kysor Warren.
We expect trading conditions in Q4 to remain broadly in line with those seen in
Q3 except for the effect of adverse exchange rate movements, which assuming
current rates continue, are estimated to reduce Q4 operating profits by some
(Pounds)1 million.
P M Brooks A J Allner
Chairman Chief Executive Officer
8 August 2002 8 August 2002
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, including the Company's substantial debt
obligations and restrictive covenants; 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 realise costs
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
F-4 registration statement, as amended, recently filed with the SEC.
7
Unaudited group profit and loss account
39 weeks to 29 June 2002 (Three Quarters)
39 weeks to 29 June 2002 39 weeks to 30 June 2001
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items (note 4) items (note 4)
Notes (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Turnover
Food Equipment 587.3 - 587.3 647.7 647.7
Property - - - 0.9 - 0.9
---------------------------------------------------------------------------------------------------------------------------------
Continuing operations 587.3 - 587.3 648.6 - 648.6
Discontinued operations - - - 177.3 - 177.3
---------------------------------------------------------------------------------------------------------------------------------
Total turnover 2 587.3 - 587.3 825.9 - 825.9
---------------------------------------------------------------------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 49.5 (8.4) 41.1 61.1 (31.9) 29.2
Property - - - - - -
Corporate costs (6.2) (0.3) (6.5) (7.4) (15.8) (23.2)
---------------------------------------------------------------------------------------------------------------------------------
Continuing operations 43.3 (8.7) 34.6 53.7 (47.7) 6.0
Discontinued operations - - - 9.1 - 9.1
---------------------------------------------------------------------------------------------------------------------------------
43.3 (8.7) 34.6 62.8 (47.7) 15.1
Goodwill amortisation and impairment (15.2) (48.9) (64.1) (17.2) - (17.2)
---------------------------------------------------------------------------------------------------------------------------------
Operating profit/(loss)
Continuing operations 28.1 (57.6) (29.5) 36.5 (47.7) (11.2)
Discontinued operations - - - 9.1 - 9.1
---------------------------------------------------------------------------------------------------------------------------------
3 28.1 (57.6) (29.5) 45.6 (47.7) (2.1)
Profit /(loss) on disposal of business 4 - (37.3) (37.3) - 29.1 29.1
---------------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before 28.1 (94.9) (66.8) 45.6 (18.6) 27.0
interest and taxation
Net interest payable and similar charges (22.9) (8.4) (31.3) (29.7) (5.8) (35.5)
---------------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before 5.2 (103.3) (98.1) 15.9 (24.4) (8.5)
taxation
Tax on profit/(loss) on ordinary activities 5 (2.5) - (2.5) (7.1) - (7.1)
---------------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities after 2.7 (103.3) (100.6) 8.8 (24.4) (15.6)
taxation
Minority interests (0.2) - (0.2) (0.1) - (0.1)
---------------------------------------------------------------------------------------------------------------------------------
Profit/(loss) for the period 2.5 (103.3) (100.8) 8.7 (24.4) (15.7)
Equity dividends 6 - - - (5.0) - (5.0)
---------------------------------------------------------------------------------------------------------------------------------
Retained result 2.5 (103.3) (100.8) 3.7 (24.4) (20.7)
---------------------------------------------------------------------------------------------------------------------------------
Earnings/(loss) per share (pence) 7
Basic loss per share (30.1)p (5.1)p
Adjusted basic earnings per share 5.3p 8.4p
Diluted loss per share (30.1)p (5.1)p
Adjusted diluted earnings per share 5.3p 8.4p
Statement of total recognised gains and losses (Pounds)m (Pounds)m
Loss for the period (100.8) (15.7)
Goodwill / (Negative goodwill) written back on
disposals, previously written off 65.1 (4.4)
Currency translation differences on foreign
currency net investments (2.6) 3.3
---------------------------------------------------------------------------------------------------------------------------------
Total recognised gains and losses for the period (38.3) (16.8)
Prior period adjustment (note 10) 26.9 -
---------------------------------------------------------------------------------------------------------------------------------
Total recognised gains and losses since
last annual report (11.4) (16.8)
---------------------------------------------------------------------------------------------------------------------------------
8
Unaudited group profit and loss account
13 weeks to 29 June 2002 (Third quarter)
13 weeks to 29 June 2002 13 weeks to 30 June 2001
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items (note 4) items (note 4)
Notes (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited) (Unaudited) (Unaudited (Unaudited) (Unaudited)
Turnover
Food Equipment 197.3 - 197.3 228.0 - 228.0
Property - - - - - -
-------------------------------------------------------------------------------------------------------------------------
Continuing operations 197.3 - 197.3 228.0 - 228.0
Discontinued operations - - - 44.4 - 44.4
-------------------------------------------------------------------------------------------------------------------------
Total turnover 2 197.3 - 197.3 272.4 - 272.4
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 19.1 (4.7) 14.4 24.4 (7.1) 17.3
Property - - - - - -
Corporate costs (2.0) (0.3) (2.3) (2.9) (0.1) (3.0)
-------------------------------------------------------------------------------------------------------------------------
Continuing operations 17.1 (5.0) 12.1 21.5 (7.2) 14.3
Discontinued operations - - - 1.5 - 1.5
-------------------------------------------------------------------------------------------------------------------------
17.1 (5.0) 12.1 23.0 (7.2) 15.8
Goodwill amortisation and impairment (5.1) (48.9) (54.0) (5.5) - (5.5)
-------------------------------------------------------------------------------------------------------------------------
Operating profit/(loss)
Continuing operations 12.0 (53.9) (41.9) 16.0 (7.2) 8.8
Discontinued operations - - - 1.5 - 1.5
-------------------------------------------------------------------------------------------------------------------------
3 12.0 (53.9) (41.9) 17.5 (7.2) 10.3
Profit/(loss) on disposal of business - (40.0) (40.0) - 29.1 29.1
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before 12.0 (93.9) (81.9) 17.5 21.9 39.4
interest and taxation
Net interest payable and similar charges (8.0) - (8.0) (8.6) - (8.6)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before 4.0 (93.9) (89.9) 8.9 21.9 30.8
taxation
Tax on profit/(loss) on ordinary activities (1.1) - (1.1) (3.2) - (3.2)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities after 2.9 (93.9) (91.0) 5.7 21.9 27.6
taxation
Minority interests - - - (0.1) - (0.1)
-------------------------------------------------------------------------------------------------------------------------
Profit/(loss) for the period 2.9 (93.9) (91.0) 5.6 21.9 27.5
Equity dividends - - - - - -
-------------------------------------------------------------------------------------------------------------------------
Retained result 2.9 (93.9) (91.0) 5.6 21.9 27.5
-------------------------------------------------------------------------------------------------------------------------
Earnings/(loss) per share (pence) 7
Basic loss per share (23.4)p 8.9p
Adjusted basic earnings per share 2.1p 3.6p
Diluted loss per share (23.4)p 8.9p
Adjusted diluted earnings per share 2.1p 3.6p
Statement of total recognised gains and losses (Pounds)m (Pounds)m
Gain/(Loss) for the period (91.0) 27.5
Goodwill / (Negative goodwill) written back on disposals, previously 54.7 (4.4)
written off
Currency translation differences on foreign currency net investments (4.2) 1.8
--------------------------------------------------------------------------------------------------------------------------
Total recognised gains and losses for the period (40.5) 24.9
--------------------------------------------------------------------------------------------------------------------------
9
Audited group profit and loss account
52 weeks to 29 September 2001
52 weeks to 29 September 2001
Before Exceptional Total
exceptional items
items (note 4)
Notes (Pounds)m (Pounds)m (Pounds)m
(Restated) (Restated) (Restated)
Turnover
Food Equipment 887.2 - 887.2
Property 16.6 - 16.6
------------------------------------------------------------------------------------------------------------------------
Continuing operations 903.8 - 903.8
Discontinued operations 177.3 - 177.3
------------------------------------------------------------------------------------------------------------------------
Total turnover 2 1,081.1 - 1,081.1
------------------------------------------------------------------------------------------------------------------------
Profit/(loss) from operations
Food Equipment 90.7 (43.4) 47.3
Property 9.0 - 9.0
Corporate costs (8.9) (24.1) (33.0)
------------------------------------------------------------------------------------------------------------------------
Continuing operations 90.8 (67.5) 23.3
Discontinued operations 9.1 - 9.1
------------------------------------------------------------------------------------------------------------------------
99.9 (67.5) 32.4
Goodwill amortisation/impairment (23.0) (100.0) (123.0)
------------------------------------------------------------------------------------------------------------------------
Operating profit/(loss)
Continuing operations 67.8 (167.5) (99.7)
Discontinued operations 9.1 - 9.1
------------------------------------------------------------------------------------------------------------------------
3 76.9 (167.5) (90.6)
Profit on disposal of business 4 - 23.5 23.5
------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before interest and taxation 76.9 (144.0) (67.1)
Net interest payable and similar charges (36.1) (5.8) (41.9)
------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities before taxation 40.8 (149.8) (109.0)
Tax on profit/(loss) on ordinary activities 5 (13.4) 2.0 (11.4)
------------------------------------------------------------------------------------------------------------------------
Profit/(loss) on ordinary activities after taxation 27.4 (147.8) (120.4)
Minority interests (0.3) - (0.3)
------------------------------------------------------------------------------------------------------------------------
Profit/(loss) for the period 27.1 (147.8) (120.7)
Equity dividends 6 (4.8) - (4.8)
------------------------------------------------------------------------------------------------------------------------
Retained result 22.3 (147.8) (125.5)
------------------------------------------------------------------------------------------------------------------------
Earnings/(loss) per share (pence) 7
Basic loss per share (39.3)p
Adjusted basic earnings per share 16.3 p
Diluted loss per share (39.3)p
Adjusted diluted earnings per share 16.3 p
Statement of total recognised gains and losses (Pounds)m
Loss for the period (120.7)
Negative goodwill written back on disposals, previously written off (4.4)
Currency translation differences on foreign currency net investments (1.7)
------------------------------------------------------------------------------------------------------------------------
Total recognised gains and losses for the period (126.8)
------------------------------------------------------------------------------------------------------------------------
10
Unaudited group balance sheet
29 June 30 June 29 September
2002 2001 2001
Notes (Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited) (Restated)
------------------------------------------------------------------------------------------------------------------------
Fixed assets
Intangible assets: Goodwill 241.9 431.5 310.2
Tangible assets 89.8 119.0 111.4
Investments 5.9 11.8 6.2
------------------------------------------------------------------------------------------------------------------------
337.6 562.3 427.8
------------------------------------------------------------------------------------------------------------------------
Current assets
Stocks 8 89.1 115.1 105.6
Debtors 139.5 214.5 200.7
Deferred tax asset 5 26.7 29.3 26.9
Cash at bank and in hand 9 48.7 31.4 39.4
------------------------------------------------------------------------------------------------------------------------
304.0 390.3 372.6
Creditors falling due within one year
Borrowings 9 (12.1) (5.6) (2.4)
Other creditors (183.7) (214.3) (225.1)
------------------------------------------------------------------------------------------------------------------------
(195.8) (219.9) (227.5)
------------------------------------------------------------------------------------------------------------------------
Net current assets 108.2 170.4 145.1
------------------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 445.8 732.7 572.9
------------------------------------------------------------------------------------------------------------------------
Financed by:
Creditors falling due after more than one year
Borrowings 9 250.1 449.1 398.9
Provisions for liabilities and charges 49.6 59.2 59.1
------------------------------------------------------------------------------------------------------------------------
299.7 508.3 458.0
------------------------------------------------------------------------------------------------------------------------
Capital and reserves
Called up equity share capital 200.2 126.6 125.1
Share premium account 234.2 239.4 239.0
Profit and loss account (288.3) (142.3) (250.0)
------------------------------------------------------------------------------------------------------------------------
Equity shareholders' funds 10 146.1 223.7 114.1
------------------------------------------------------------------------------------------------------------------------
Equity minority interests - 0.7 0.8
------------------------------------------------------------------------------------------------------------------------
445.8 732.7 572.9
------------------------------------------------------------------------------------------------------------------------
11
Unaudited group cash flow statement
39 weeks to 39 weeks to 52 weeks to
29 June 30 June 29 September
2002 2001 2001
Notes (Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited)
--------------------------------------------------------------------------------------------------------------
Net cash flow from operations before exceptional items 48.6 59.0 120.8
Net cash flow effect of exceptional items (23.3) (24.9) (27.8)
--------------------------------------------------------------------------------------------------------------
Net cash inflow from operating activities a 25.3 34.1 93.0
--------------------------------------------------------------------------------------------------------------
Return on investments and servicing of finance
Interest paid (20.1) (28.1) (36.8)
Financing fees paid (16.6) (4.1) (4.1)
--------------------------------------------------------------------------------------------------------------
(36.7) (32.2) (40.9)
--------------------------------------------------------------------------------------------------------------
Taxation
Overseas and UK tax paid (1.7) (5.5) (6.0)
--------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (8.2) (18.5) (23.7)
Receipts from sale of tangible fixed assets 0.8 3.8 7.4
--------------------------------------------------------------------------------------------------------------
(7.4) (14.7) (16.3)
--------------------------------------------------------------------------------------------------------------
Acquisitions and disposals
Purchase of subsidiary undertakings and minority interests - (25.8) (25.8)
Disposal of subsidiary undertakings 4 90.2 98.6 98.6
--------------------------------------------------------------------------------------------------------------
90.2 72.8 72.8
--------------------------------------------------------------------------------------------------------------
Equity dividends paid - (23.3) (28.2)
--------------------------------------------------------------------------------------------------------------
Cash inflow before financing 69.7 31.2 74.4
--------------------------------------------------------------------------------------------------------------
Financing
Issue of shares 70.3 0.1 0.2
Additional net borrowings 169.3 429.9 398.3
Issue of 10 3/8% senior subordinated notes 100.0 -
Term loan repayment (400.4) (385.7) (385.7)
Repayment of other loans - (72.8) (72.8)
Capital element of finance lease payments - (0.6) (0.6)
--------------------------------------------------------------------------------------------------------------
(60.8) (29.1) (60.6)
--------------------------------------------------------------------------------------------------------------
Increase in cash in the period 8.9 2.1 13.8
--------------------------------------------------------------------------------------------------------------
12
Unaudited group cash flow statement
(a) Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from
operating activities
39 weeks to 29 June 2002 39 weeks to 30 June 2001
Before Effect of Total Before Effect of Total
exceptional exceptional exceptional exceptional
items items items items
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
Operating profit/(loss) 28.1 (57.6) (29.5) 45.6 (47.7) (2.1)
Depreciation 12.6 - 12.6 18.7 - 18.7
Amortisation of goodwill 15.2 48.9 64.1 17.2 - 17.2
(Gain)/Loss on the sale of fixed assets 0.1 - 0.1 (1.7) - (1.7)
Provisions (net) (0.4) (1.0) (1.4) (12.0) 16.5 4.5
(Increase)/decrease in stocks (3.6) 5.5 1.9 3.6 (0.5) 3.1
Decrease in debtors 16.9 - 16.9 10.3 - 10.3
(Decrease)/increase in creditors (20.3) (19.1) (39.4) (22.7) 6.8 (15.9)
----------------------------------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating activities 48.6 (23.3) 25.3 59.0 (24.9) 34.1
----------------------------------------------------------------------------------------------------------------------------------
52 weeks to 29 September 2001
Before Effect of Total
exceptional exceptional
items items
(Pounds)m (Pounds)m (Pounds)m
Operating profit/(loss) 76.9 (167.5) (90.6)
Depreciation 22.7 - 22.7
Amortisation of goodwill 23.0 100.0 123.0
Gain on sale of fixed assets (1.7) - (1.7)
Provisions (net) (6.0) 16.5 10.5
Decrease in stocks 12.1 0.5 12.6
Decrease in debtors 10.7 - 10.7
(Decrease)/increase in creditors (16.9) 22.7 5.8
-------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating activities 120.8 (27.8) 93.0
-------------------------------------------------------------------------------------------
(b) Reconciliation of net cash flow to movement in net debt
29 June 30 June 29 September
2002 2001 2001
(Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m
Net debt at the start of period (365.9) (434.2) (434.2)
Increase in net cash in the period 8.9 2.1 13.8
Issue of 10 3/8% senior subordinated notes (100.0) - -
Net decrease in other loans 231.1 29.2 60.1
Translation differences 0.2 (25.5) (5.6)
---------------------------------------
Net debt at the end of the period (225.7) (428.4) (365.9)
---------------------------------------
13
Notes to the unaudited financial statements
1 Basis of Preparation
The accompanying condensed financial statements ("quarterly financial
statements") have been prepared in accordance with accounting principles
generally accepted in the United Kingdom ("U.K. GAAP"). The quarterly financial
statements are unaudited but include all adjustments (consisting of normal
recurring 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 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 39 weeks ended 29 June 2002 may not necessarily be
indicative of the operating results that may be achieved for the entire
financial year.
The quarterly financial information has been prepared on the basis of the
accounting policies set out in the Group's financial statements for the year
ended 29 September 2001, with the exception that the results reflect the
adoption of FRS 19 "Deferred Tax" and the 29 September 2001 comparative figures
have been restated accordingly.
U.K. GAAP differs in certain significant respects from accounting principles
generally accepted in the United States of America ("U.S. GAAP"). The
application of the latter would have affected the determination of profit/(loss)
to the extent summarised in Note 13 to the quarterly financial statements.
These quarterly financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
annual report.
2 Turnover 39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
29 June 30 June 29 June 30 June 29 September
2002 2001 2002 2001 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
Food Service Equipment - North America 353.1 365.1 124.8 130.3 498.7
Food Service Equipment - Europe and 109.4 134.6 36.6 47.2 185.4
Asia
Food Retail Equipment 124.8 148.0 35.9 50.5 203.1
-----------------------------------------------------------------------------------------------------------------------
Food Equipment 587.3 647.7 197.3 228.0 887.2
Property -- 0.9 -- -- 16.6
-----------------------------------------------------------------------------------------------------------------------
Continuing operations 587.3 648.6 197.3 228.0 903.8
Discontinued operations -- 177.3 -- 44.4 177.3
-----------------------------------------------------------------------------------------------------------------------
587.3 825.9 197.3 272.4 1,081.1
-----------------------------------------------------------------------------------------------------------------------
Turnover from discontinued operations represents the Building and Consumer
Products business sold in June 2001.
14
Notes to the unaudited financial statements (continued)
3 Operating profit/(loss)
39 weeks to 29 June 2002 39 weeks to 30 June 2001
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items items
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
Food Service Equipment - North America 42.2 - 42.2 40.9 (18.3) 22.6
Food Service Equipment - Europe and 7.0 (2.5) 4.5 13.8 (2.5) 11.3
Asia
Food Retail Equipment 0.3 (5.9) (5.6) 6.4 (11.1) (4.7)
-----------------------------------------------------------------------------------------------------------------------
49.5 (8.4) 41.1 61.1 (31.9) 29.2
Food Equipment goodwill (15.2) (48.9) (64.1) (17.2) - (17.2)
amortisation/impairment
-----------------------------------------------------------------------------------------------------------------------
Food Equipment 34.3 (57.3) (23.0) 43.9 (31.9) 12.0
Property - - - - - -
Corporate costs (6.2) (0.3) (6.5) (7.4) (15.8) (23.2)
-----------------------------------------------------------------------------------------------------------------------
Continuing operations 28.1 (57.6) (29.5) 36.5 (47.7) (11.2)
Discontinued operations - - - 9.1 - 9.1
-----------------------------------------------------------------------------------------------------------------------
28.1 (57.6) (29.5) 45.6 (47.7) (2.1)
-----------------------------------------------------------------------------------------------------------------------
13 weeks to 29 June 2002 13 weeks to 29 June 2001
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items items
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
Food Service Equipment - North America 17.6 - 17.6 17.9 (1.4) 16.5
Food Service Equipment - Europe and 2.7 (0.8) 1.9 4.6 (1.6) 3.0
Asia
Food Retail Equipment (1.2) (3.9) (5.1) 1.9 (4.1) (2.2)
-----------------------------------------------------------------------------------------------------------------------
19.1 (4.7) 14.4 24.4 (7.1) 17.3
Food Equipment goodwill (5.1) (48.9) (54.0) (5.5) - (5.5)
amortisation/impairment
-----------------------------------------------------------------------------------------------------------------------
Food Equipment 14.0 (53.6) (39.6) 18.9 (7.1) 11.8
Property - - - - - -
Corporate costs (2.0) (0.3) (2.3) (2.9) (0.1) (3.0)
-----------------------------------------------------------------------------------------------------------------------
Continuing operations 12.0 (53.9) (41.9) 16.0 (7.2) 8.8
Discontinued operations - - - 1.5 - 1.5
-----------------------------------------------------------------------------------------------------------------------
12.0 (53.9) (41.9) 17.5 (7.2) 10.3
-----------------------------------------------------------------------------------------------------------------------
15
Notes to the unaudited financial statements (continued)
3 Operating profit/(loss) (continued) 52 weeks to 29 September 2001
Before Exceptional Total
exceptional items
items
(Pounds)m (Pounds)m (Pounds)m
Food Service Equipment - North America 62.6 (25.6) 37.0
Food Service Equipment - Europe and Rest of the World 17.7 (5.2) 12.5
Food Retail Equipment 10.4 (12.6) (2.2)
---------------------------------------------------------------------------------------------------
90.7 (43.4) 47.3
Food Equipment goodwill amortisation/impairment (23.0) (100.0) (123.0)
---------------------------------------------------------------------------------------------------
Food Equipment 67.7 (143.4) (75.7)
Property 9.0 - 9.0
Corporate costs (8.9) (24.1) (33.0)
---------------------------------------------------------------------------------------------------
Continuing operations 67.8 (167.5) (99.7)
Discontinued operations 9.1 - 9.1
---------------------------------------------------------------------------------------------------
76.9 (167.5) (90.6)
---------------------------------------------------------------------------------------------------
Operating profit from discontinued operations represents the Building and
Consumer Products Business sold in June 2001.
4 Exceptional items 39 weeks to 39 weeks to 52 weeks to
(a) Operating exceptional items 29 June 30 June 29 September
2002 2001 2001
(Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m
Restructuring costs and inventory write downs 8.7 21.8 33.1
Revisions to working capital provisions and - 13.7 13.7
other exceptional warranty costs
Litigation costs - 12.2 12.2
Costs associated with the Board's review of - - 8.5
strategic options
--------------------------------------
8.7 47.7 67.5
Goodwill impairment 48.9 - 100.0
--------------------------------------
Operating exceptional items 57.6 47.7 167.5
--------------------------------------
Restructuring costs in the 39 weeks to 29 June 2002 principally represent costs
associated with the closure of excess operating capacity in our Food Retail
Equipment group and the further rationalisation of administration functions and
simplification of management structures in the European businesses within the
Global Food Service equipment group. This includes the write down of inventory
at Kysor Warren reflecting the decline in the business.
As indicated at the time of our interim announcement, the Group has been
reassessing the carrying value of goodwill in respect of the Scotsman
acquisition. In accordance with the methodology presented in FRS11 "Impairment
of Fixed Assets and Goodwill", which requires consideration of the net present
value of estimated future cash flows, the carrying value of the goodwill has
been written down by (Pounds)48.9 million.
16
Notes to the unaudited financial statements (continued)
4 Exceptional items (continued) 39 weeks to 29 June 2002
(unaudited)
(b) Disposal of businesses Profit and Net
loss account Cashflow
Disposal of Sammic (i) 2.7 18.5
Disposal of Belshaw (ii) (16.4) 15.5
Disposal of Austral (iii) (6.7) 7.3
Disposal of ATR (iv) (19.4) 25.6
Disposal of Prolon LLC (v) (0.8) 1.0
Disposal of Magnet (vi) 3.3 22.3
--------------------------------------------------------------------------------
(37.3) 90.2
--------------------------------------------------------------------------------
In June 2001, the Group disposed of its Building and Consumer Products business
(`Magnet') generating a profit on disposal of (Pounds)29.1 million and a cash
inflow of (Pounds)98.6 million. The Group also received a Vendor Loan Note for
(Pounds)20 million and warrants over Nobia AB shares which were not valued (see
note (vi) below).
(i) On 13 December 2001, the Group disposed of Sammic SA and its subsidiary
undertakings for consideration of (Pounds)20.0m realising a profit on disposal
of (Pounds)2.7m after writing off goodwill of (Pounds)10.4m previously charged
against reserves.
(ii) On 24 April 2002 the Group sold Belshaw Bros, Inc (`Belshaw') for a cash
consideration of (Pounds)16.7 million ($24.2 million) payable in full upon
completion. The Group realised a loss on disposal of (Pounds)16.4 million after
writing off goodwill of (Pounds)25.0 million previously charged against
reserves.
(iii) On 21 May 2002 the Group sold Austral Refrigeration Pty Limited
(`Austral') for a net cash consideration of (Pounds)7.5 million payable in full
on completion. The Group realised a loss on disposal of (Pounds)6.7 million.
(iv) On 23 May 2002 the Group sold the Aladdin Temp-Rite (ATR) companies for a
net cash consideration of (Pounds)27.0 million ($39.2 million) payable in full
on completion. The Group realised a loss on disposal of (Pounds)19.4 million
after writing off goodwill of (Pounds)29.7million previously charged against
reserves.
(v) On 14 June 2002, the Group sold the assets of Prolon LLC (`Prolon') for
cash consideration of (Pounds)1.0 million ($1.5million) payable in full on
completion. The Group realised a loss on disposal of (Pounds)0.8 million.
(vi) In June 2002, Nobia AB's shares were listed on the Stockholm Stock
Exchange and the Group received (Pounds)24.4 million being (Pounds)20.0 million
for the vendor loan note, (Pounds)0.4 million compensation for early repayment
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. In December 2001 (Pounds)2.1m was paid to Nobia AB in
respect of the value of net assets transferred following the sale.
The net cash consideration, after expenses, of all the above disposals has been
used to repay debt.
(c) Net interest payable and similar 39 weeks to 39 weeks to 52 weeks to
29 June 30 June 29 September
2002 2001 2001
(Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m
Deferred financing fees written off 4.2 5.8 5.8
Refinancing fees 4.2 - -
--------------------------------------------------------------------------------
8.4 5.8 5.8
--------------------------------------------------------------------------------
17
Notes to the unaudited financial statements (continued)
4 Exceptional items (continued)
Deferred finance fees written off relate to amounts previously capitalised in
respect of the multi-currency revolving credit facility that was replaced by the
refinancing announced on 20 February 2002. Refinancing fees represent amounts
payable 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 (see note 9).
5 Taxation
(a) Analysis of charge in period 39 weeks to 39 weeks to 52 weeks to
29 June 30 June 29 September
2002 2001 2001
(Unaudited) (Unaudited) (Restated)
(Pounds)m (Pounds)m (Pounds)m
The tax charge for the current period comprised:
UK taxation at 30% - - -
Foreign taxation 3.1 5.6 8.6
------------------------------------------------------------------------------------------------
3.1 5.6 8.6
Tax relief on exceptional items - - (2.0)
------------------------------------------------------------------------------------------------
3.1 5.6 6.6
Deferred taxation (0.6) 1.5 4.8
------------------------------------------------------------------------------------------------
2.5 7.1 11.4
------------------------------------------------------------------------------------------------
(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.
(c) The adoption of FRS 19 "Deferred Tax" has required changes in the method of
accounting for deferred tax assets and liabilities. As a result of these
changes, the comparative periods have been restated as follows, principally in
respect of tax losses and warranty reserves.
29 September
2001
(Pounds)m
(Restated)
Deferred tax provision as previously reported -
Adjustment to recognise deferred tax in respect of 26.9
timing differences
-----------------------------------------------------------------------------------------
Deferred tax asset as restated 26.9
-----------------------------------------------------------------------------------------
(d) Analysis of deferred tax asset 29 June 30 June 29 September
2002 2001 2001
(Pounds)m (Pounds)m (Pounds)m
(Unaudited)(Unaudited) (Restated)
US revenue losses 13.9 13.7 12.7
Warranties 8.1 8.2 8.2
Pension and SERP related reserves 4.2 3.6 4.0
Accrued compensation related items 3.2 1.6 3.2
Other short term timing differences 5.8 11.1 6.8
-----------------------------------------------------------------------------------------------
35.2 38.2 34.9
Accelerated capital allowances (8.5) (8.9) (8.0)
-----------------------------------------------------------------------------------------------
26.7 29.3 26.9
-----------------------------------------------------------------------------------------------
A deferred tax asset has only been recognised in respect of those losses which
are expected to be utilised in the immediate future.
18
Notes to the unaudited financial statements (continued)
6 Equity dividends
39 weeks to 39 weeks to 52 weeks to
29 June 30 June 29 September
2002 2001 2001
(Unaudited) (Unaudited)
(Pounds)m (Pounds)m (Pounds)m
Interim and final dividend - 5.0 4.8
--------------------------------------------------------------------------------------------------
pence pence pence
Interim and final dividend (net per ordinary - 2.0 2.0
share)
--------------------------------------------------------------------------------------------------
7 Earnings /(loss) per share
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
29 June 30 June 29 June 30 June 29 September
2002 2001 2002 2001 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Restated)
(Pounds)m (Pounds)m (Pounds)m (Pounds)m (Pounds)m
Basic and diluted loss attributable to (100.8) (15.7) (91.0) 27.5 (120.7)
shareholders
-----------------------------------------------------------------------------------------------------------------
m m m m m
Basic weighted average number of shares 334.9 307.3 389.2 307.4 307.3
Executive share options - 0.3 - - 0.2
Share save options - 0.3 - - 0.2
---------------------------------------------------------------------------------------------------------------
Diluted weighted average number of shares 334.9 307.9 389.2 307.4 307.7
---------------------------------------------------------------------------------------------------------------
39 weeks to 39 weeks to 13 weeks to 13 weeks to 52 weeks to
29 June 30 June 29 June 30 June September 29
2002 2001 2002 2001 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Restated)
pence pence pence pence pence
Basic loss per share (30.1) (5.1) (23.4) 8.9 (39.3)
Effect per share of exceptional items 16.2 7.9 11.6 (7.1) 15.5
Effect per share of goodwill amortisation and impairment 19.2 5.6 13.9 1.8 40.1
-----------------------------------------------------------------------------------------------------------------------------
Adjusted basic earnings per share 5.3 8.4 2.1 3.6 16.3
-----------------------------------------------------------------------------------------------------------------------------
Diluted loss per share (30.1) (5.1) (23.4) 8.9 (39.3)
Effect per share of exceptional items 16.2 7.9 11.6 (7.1) 15.5
Effect per share of goodwill amortisation and impairment 19.2 5.6 13.9 1.8 40.1
-----------------------------------------------------------------------------------------------------------------------------
Adjusted diluted earnings per share 5.3 8.4 2.1 3.6 16.3
-----------------------------------------------------------------------------------------------------------------------------
On 20 February 2002, the Company announced a rights issue which was subsequently
approved by the shareholders at the Extraordinary General Meeting held on 18
March 2002. On 9 April 2002, 150,174,595 new ordinary shares were issued at 50p
per share on the basis of three new ordinary shares for every five existing
ordinary shares.
The actual cum rights price on 18 March 2002, the last day of quotation cum
rights, was 101.5p per share and the theoretical ex-rights price for an ordinary
share was 82.2p per share.
In accordance with FRS 14 "Earnings per share", the earnings per share for all
reported periods have been restated to reflect the effect of the bonus element
of the rights issue.
19
Notes to the unaudited financial statements (continued)
8 Stocks 29 June 30 June 29 September
2002 2001 2001
(Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited)
Raw materials and consumables 34.2 45.1 42.2
Work in progress 11.5 14.3 15.7
Finished goods 31.8 44.4 36.4
-------------------------------------------------------------------------------------------
77.5 103.8 94.3
Property 11.6 11.3 11.3
-------------------------------------------------------------------------------------------
89.1 115.1 105.6
-------------------------------------------------------------------------------------------
9 Borrowings
(a) On 20 February 2002 the Group announced new financing arrangements to
replace the prior multi-currency revolving credit agreement. These included a
new committed senior credit facility consisting of a five year amortising $300
million term loan, a six year $70 million term loan, a five year $85 million
revolving multi-currency facility and a 10 year (Pounds)150 million bridge
facility.
On 26 March 2002 the Company received the proceeds of a (Pounds)100 million
senior subordinated note issue, priced at 10 3/8%, maturing in April 2012. The
net proceeds were applied in part repayment of the bridge facility. On 9 April
2002, the Company completed a gross (Pounds)75.1 million three for five
underwritten rights issue. The net proceeds were applied in part to repay in
full the balance of the bridge facility and in part against the senior credit
facility.
At 29 June 2002, the $300m term loan has been reduced to $169.9m by applying
against the facility $23.0m from the rights issue proceeds, $70.6m from the net
proceeds of the sale of non-core businesses since the refinancing exercise in
February (more fully described in Note 4) and $36.5m from the repayment of the
Nobia loan note and associated warrants.
The Group enters into interest rate swaps and forward rate agreements (FRAs) to
change a portion of its floating rate debt into fixed rate debt and so reduce
the impact of changes in interest rates on the Group's interest charge. At 29
June 2002, the Company had interest rate swaps and FRAs outstanding with an
aggregate value of $283.0 million of which $43.0 million have not yet commenced.
The Group has also entered into cross-currency swaps to change the underlying
currency profile of the debt. Two contracts have been entered into to exchange
an aggregate of (Pounds)60.0 million for US dollars and Euros, such that the
currency profile of the debt more closely matches the currency profile of the
assets.
(b) Reconciliation of net debt to Balance Sheet
29 June 30 June 29 September
2002 2001 2001
(Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited)
(Pounds)m (Pounds)m
Cash at bank 48.7 31.4 39.4
Current borrowing (12.1) (5.6) (2.4)
Exclude current portion of deferred financing (3.3) (1.0) (1.1)
costs
--------------------------------------------------------------------------------------------------------
Net cash 33.3 24.8 35.9
Long term lease obligations (0.1) (0.7) (1.2)
10 3/8% senior subordinated notes (100.0) - -
Other long term debt (150.0) (448.4) (397.7)
Exclude long term portion of deferred finance (8.9) (4.1) (2.9)
--------------------------------------------------------------------------------------------------------
Net debt at end of period (225.7) (428.4) (365.9)
--------------------------------------------------------------------------------------------------------
20
Notes to the unaudited financial statements (continued)
10 Equity shareholders' funds
a) Following the implementation of FRS 19 "Deferred tax" (note 5), equity
shareholders' funds at 29 September 2001 have been restated as follows.
29 September
2001
(Pounds)m
(Restated)
Equity shareholders' funds as previously 87.2
reported
Cumulative effect on profit and loss account reserve of 26.9
implementing FRS 19 "Deferred tax"
-------------------------------------------------------------------------
Equity shareholders' funds as restated 114.1
-------------------------------------------------------------------------
b) Reconciliation of equity shareholders' funds Share Share Profit
capital premium & loss Total
(Pounds)m (Pounds)m (Pounds)m (Pounds)m
At 29 September 2001 (restated) 125.1 239.0 (250.0) 114.1
Loss for the period - - (100.8) (100.8)
Share issue 75.1 (4.8) - 70.3
Goodwill written back on disposals previously - - 65.1 65.1
written off
Currency realignment - - (2.6) (2.6)
------------------------------------------------------------------------------------------------
At 29 June 2002 200.2 234.2 (288.3) 146.1
------------------------------------------------------------------------------------------------
The costs associated with the rights issue (see note 7) have been charged to the
share premium account. The shares were issued and the proceeds of (pound)75.1
million were received on 9 April 2002.
11 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 39 weeks to 29 June 2002, the weighted average exchange rate for sales and
profit being (Pounds)1=$1.45. Results to 30 June 2001 were translated at the
rate of (Pounds)1=$1.45 and full year results to 29 September 2001 at
(Pounds)1=$1.44. Results for the 13 week period to 29 June 2002 were translated
at the rate of (Pounds)1 =$1.47 and for the 13 weeks to 30 June 2001 at
(Pounds)1=$1.42. The closing rate for the US Dollar at 29 June 2002 was
(Pounds)1=$1.52, at 30 June 2001 was (Pounds)1=$1.41 and at 29 September 2001
was (Pounds)1=$1.47.
12 Results for 2001 and 2002
The accounts in this statement do not comprise full accounts within the meaning
of section 240 of the Companies Act 1985. The figures for the 52 weeks to 29
September 2001 are based upon the 2001 Annual Report but do not comprise
statutory accounts for that period. The audited financial statements have been
delivered to the Registrar of Companies. The Auditors 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 52 weeks to 29
September 2001 have been restated to reflect the introduction of FRS 19
"Deferred tax". The figures for the 13 and 39 week periods to 29 June 2002 and
30 June 2001 have been extracted from underlying accounting records and have not
been audited.
21
Notes to the unaudited financial statements (continued)
13 US GAAP reconciliation
39 weeks to 39 weeks to 52 weeks to
29 June 30 June 29 September
2002 2001 2001
(Pounds)m (Pounds)m (Pounds)m
(Unaudited) (Unaudited) (Restated)
Net profit/(loss)
Net loss under UK GAAP (100.8) (20.7) (120.7)
Items increasing/(decreasing) UK GAAP operating profit
- Goodwill amortisation (11.1) (12.6) (16.6)
- Goodwill impairment - - 9.8
- Pension costs 0.9 4.4 5.9
- Sale/leaseback transactions - (0.6) (1.3)
- Restructuring charges (0.4) - 0.4
- Other (4.2) (0.6) (0.1)
Items increasing/(decreasing) UK GAAP non-operating profit
- Deferred taxation (6.3) 7.0 8.1
- Gain on sale of businesses 18.0 0.8 0.8
-------------------------------------------------------------------------------------------------------------
Net income in accordance with US GAAP (103.9) (22.3) (113.7)
-------------------------------------------------------------------------------------------------------------
22
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
August 9, 2002 By: /s/ W. David Wrench
-------------------------------------
Name: W. David Wrench
Title: Chief Financial Officer