RNS Number:3525I
RMC Group PLC
06 March 2003
RMC Group p.l.c.
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
The information presented below relates to the year ended 31 December 2002 and
2001, unless otherwise stated.
2002 2001
#m #m
Total turnover 4,971.4 5,214.5
EBITA (excluding exceptional items) 262.8 329.6
Profit before tax
- excluding exceptional items 144.3 170.7
- including exceptional items 136.1 161.5
Earnings per share
- basic 26.5p 26.7p*
- basic excluding exceptional items
and goodwill amortisation 41.4p 43.7p*
Dividends per share
- proposed final 21.8p 21.8p
- full year 31.2p 31.2p
* Restated to reflect FRS 19 - Deferred Tax
"While the Group's results for 2002 reflect difficult trading conditions in
several key markets, results were encouraging in a number of countries. Good
underlying progress has been made in implementing the Group's strategy to
achieve the objectives and financial targets set after the business review
undertaken in 2002."
Stuart Walker, Group Chief Executive
KEY POINTS
* Profit before tax, excluding exceptionals, was #144.3m (2001:
#170.7m), in line with the December Trading Review.
* Particularly good performance was achieved in a number of markets,
notably in France, Spain, eastern Europe and Australia.
* Basic earnings per share were 26.5p (2001: 26.7p), reflecting a lower
tax rate in 2002.
* Disposals of non-core assets in 2002 contributed to a significant
reduction in net debt from #1,489.4m to #1,179.6m, which remains on track to
fall below #1 billion by the end of 2003.
* A final dividend of 21.8p (see below) is being recommended (2001: 21.8p).
* RMC is still awaiting the findings of the German Federal Cartel Office
investigation into alleged anti-competitive practices throughout the German
cement industry. However, #16m has been provided to cover fines for
anti-competitive activities and associated legal costs.
* Good underlying progress is being made in implementing the Group's
strategy to achieve the objectives and financial targets set following a
comprehensive business review in 2002.
Note: The final dividend will be paid on 30 May 2003 to shareholders on the
register on 11 April 2003.
OVERVIEW
Group results
As indicated in the Trading Review issued in December, the Group's results for
2002 reflect difficult trading conditions in a number of key markets.
Performance in some markets was also impacted by bad weather late in the year.
However, results were encouraging in a number of places, particularly in France,
Spain, and in eastern Europe where the Group is well positioned to take
advantage of the benefits of forthcoming EU membership. In Australia, there was
a strong performance from the Adelaide Brighton operations acquired as part of
the Rugby Group acquisition in 2000.
Total turnover from continuing operations fell by #34.7m to #4,844.3m. Falls in
Germany and the USA were largely offset by increased turnover in Great Britain,
the Rest of Europe and the Rest of the World.
EBITA from continuing operations (profit before tax, interest, amortisation of
goodwill and exceptional items) fell by #61.3m to #262.6m. This decline was
mainly attributable to Great Britain (#32.0m), where problems persisted at the
Rugby cement plant, resulting in a number of shutdowns to undertake
modifications and inconsistent performance, and the USA (#31.1m), where the
Eastern region was affected by a severe economic slowdown and unseasonably wet
weather in the autumn. Worldwide, the property division continued to make a
steady stream of sales from its large land bank, delivering profits of #16.5m
(2001: #19.0m).
Goodwill amortisation was #34.8m (2001: #34.7m).
Net exceptional charges totalled #8.2m (2001: #9.2m). These comprised net
profits of #27.3m arising on the disposal and closure of non-core businesses,
primarily the Group's two aerated concrete businesses, Durox and YTONG, and
charges of #35.5m, which include provisions for fines for anti-competitive
activities, principally arising from the German Federal Cartel Office
investigation into the cement industry in Germany, and redundancy costs arising
from the Group's business review.
Net interest fell by #40.5m to #83.7m, reflecting reduced borrowing levels and
lower average interest rates in 2002.
Profit before tax, excluding exceptional items, fell by #26.4m to #144.3m.
Profit before tax, including exceptional items, was #25.4m lower at #136.1m.
The reported tax rate was 27.8% (2001: 40.8%). The underlying tax rate, based on
profit before tax excluding goodwill amortisation and exceptional items, was
22.5% (2001: 31.4%), the fall reflecting the utilisation of past tax losses and
the release of prior year provisions following closure with tax authorities.
Earnings per share, excluding exceptional items and goodwill amortisation, were
41.4p compared with 43.7p in 2001. Including these items, basic earnings per
share were 26.5p (2001: 26.7p).
In line with our stated intention, net debt at the year end was #309.8m lower at
#1,179.6m and gearing fell by 18.3% to 60.4%. The sale of businesses generated
a cash inflow of #252.0m.
Note: The 2001 results have been restated to provide fully for deferred
tax, in line with Financial Reporting Standard 19 - Deferred Tax. There is no
effect on the comparative profit on ordinary activities before tax, but the
effect on full year basic earnings per share is a reduction of 5.4p.
Dividend
The Board, in reviewing the dividend, recognises its importance to shareholders.
It also attaches importance, amongst other judgements, to the level of cash
cover and the good progress that has been achieved in the early implementation
of the Group's business review. Taking account of these factors, the Board has
recommended an unchanged final dividend of 21.8p per share (2001: 21.8p) which,
together with the interim dividend paid per share of 9.4p (2001: 9.4p), makes a
total dividend for the year of 31.2p (2001: 31.2p).
Group developments
In September 2002, the Group announced the outcome of its business review. The
key elements of this were:
* Greater concentration on core products (concrete, aggregates and
cement) and core operations that have, or offer the prospect of achieving,
significant scale and market position in the next five years. Smaller,
under-performing businesses and non-core operations will be sold.
* Demanding performance targets set for under-performing businesses, especially
cement operations which have been set targets of increasing EBITA by
#50m and delivering a 10% return by 2005.
* Group's net debt to be reduced below #1 billion by 31 December 2003.
* German business to be retained and performance improved through further cost
cutting, increased market share and simplification of the ownership
structure.
* Priority for new investment will be in aggregates and concrete in
continental Europe, Great Britain and the USA.
* EBITA return on net operating assets of 12% to be generated in the
medium term.
With respect to rationalisation of the Group's operations, significant progress
has been made, with net debt reduced to #1,179.6m at the end of 2002. This has
been achieved despite a more difficult climate for asset disposal, as economic
conditions have worsened.
In 2002, the Group sold its two European aerated concrete businesses, Durox and
YTONG, and received the proceeds from the sale of its concrete products business
in France. In January 2003, the Group announced that it had completed the sale
of its concrete products operations in the Netherlands and had entered into an
agreement for the sale of its ready mixed concrete and aggregates operations in
Belgium, the former having been completed at the end of 2002.
Thus far in 2003, the Group has sold Rugby IPD, its US distribution business,
and its operations in Jordan, generating sale proceeds of #13m.
With regard to improving the performance of the cement business, the Group's
cement trading division substantially increased internal sales between Group
companies. This enabled increased utilisation of the Group's cement plants in a
number of countries, with overall plant utilisation rising.
As part of the strategy of focusing on smaller 'bolt-on' acquisitions that
complement the core businesses, a number of such acquisitions were made during
2002 at a total cost of #36m. These included the Premier Resources business,
acquired by Adelaide Brighton in March (New South Wales and Victoria, Australia
- ready mixed concrete, aggregates and cement grinding), F Gibbons & Sons
Limited in October (Great Britain - aggregates), Rio Grande Materials in
November (New Mexico, USA - ready mixed concrete) and Neil Mansell Concrete Pty
Ltd, acquired by Adelaide Brighton in December (Queensland, Australia - ready
mixed concrete).
With the progress made in the first six months since announcing the outcome of
the business review, the Group is confident that it will be able to achieve the
12% target return on net operating assets in the medium term, subject to
improved economic conditions.
TRADING REVIEW BY REGION (CONTINUING OPERATIONS)
Great Britain
2002 2001
#m #m
Total turnover 1,154.8 1,088.0
EBITA (excluding exceptional items) 78.0 110.0
Turnover rose by #66.8m to #1,154.8m, largely as a result of the Aggregates
Levy. EBITA fell by #32.0m to #78.0m. Within this, the property division
profits were #3.5m lower at #10.9m. The profitability of all divisions was
affected by a #7m increase in central costs, primarily relating to the set-up
costs of a Shared Service Centre, and the introduction of new integrated IT
systems.
The aggregates division benefited from the full year contribution of the Russell
aggregates business and the strong market for asphalt. The readymix division
delivered lower volumes, but this was mainly offset by improved margins. Taken
together, profitability of the aggregates and readymix divisions rose by #4m.
Profitability of the waste division fell by #2m, partially due to one-off costs
associated with work on developing new products, and increasing the geographic
reach of the business.
The cement division's profitability fell by #23m. This reflected continuing
difficulties at the Rugby plant, which resulted in higher transportation and
maintenance costs, and higher insurance costs. Operating performance of the
Rugby plant was inconsistent throughout the year, especially in the first half.
This led to a number of shutdowns to undertake modifications. Some improvement
was seen during the second half, enabling the workforce to be reduced by over
100.
For 2003 overall, the market is expected to be at a similar level to 2002, with
demand picking up in the latter part of the year. Key to this will be the level
of expenditure arising from investment in public services and infrastructure
projects. Subject to more consistent operational performance, results from the
cement division should improve as costs associated with the inconsistent output
of the Rugby plant do not recur.
Germany
2002 2001
#m #m
Total turnover 766.0 816.3
EBITA (excluding exceptional items) (0.3) 15.4
The German businesses continued to suffer from the weak condition of the economy
and a further decline in construction investment, as well as from very wet
weather in the autumn. In addition, the cement market experienced a sharp
reduction in prices from early in the year. However, increased sourcing of
cement from our own plants to the concrete division raised in-house consumption
from around 20% to nearly 40%, and led to higher cement plant utilisation and
increased market share.
Excluding YTONG, turnover of #766.0m was #50.3m lower and EBITA fell by #15.7m
to roughly break even.
The fall in EBITA arose primarily from the fall in the average selling price for
cement, partially offset by an increase in cement volumes. This increase in
cement volumes reflected higher internal sales and market share gains. The
performance of the concrete division improved, reflecting lower raw material
prices. The profit from aggregates fell slightly.
During the year, the Federal Cartel Office (FCO) undertook an investigation into
alleged anti-competitive practices in the German cement industry, simultaneously
raiding some 30 offices. RMC still awaits the findings of the investigation,
but believes that, in reaching its decision, the FCO will take account of
actions taken by the Group in recent years. Since 1999, RMC has taken
significant steps to strengthen its competition compliance procedures worldwide.
In 2001, it appointed new management to its German operations and withdrew
from all trade associations in the country. A sum of #16m has been provided to
cover fines for anti-competitive activities and associated legal costs.
The outlook for Germany remains challenging. Construction demand is expected to
decline by a further 10% in 2003. However, our continuing cost reduction and
rationalisation programmes should protect us from the full impact of any
decline. Furthermore, at some stage, there should be some rationalisation of
cement production capacity and we expect cement prices to stabilise at more
realistic levels in the medium term, if not in 2003.
Rest of Europe
2002 2001
#m #m
Total turnover 1,255.0 1,230.2
EBITA (excluding exceptional items) 91.9 87.3
Performance in the Rest of Europe was pleasing. Excluding the discontinued
activities of YTONG and the Netherlands, turnover rose by #24.8m to #1,255.0m
and EBITA was #4.6m higher at #91.9m.
France reported record profits reflecting continued high demand in the early
part of the year and the benefits of cost control. In Spain, profits benefited
from continuing strong demand across the construction industry, also to reach a
record level. In Ireland, where economic conditions have deteriorated, results
were below last year. Trading remained difficult in Austria.
Performance in our eastern European operations was also good, with profits
significantly ahead of 2001. In Croatia, plant utilisation was high and the
domestic and export markets were strong, while Poland benefited from greater
cement plant utilisation as a result of additional exports to other Group
companies. Hungary continued to perform well in a strong market. In the Czech
Republic, increased profits reflected high economic growth and the gains from a
number of large contracts. These results were achieved despite extensive
flooding in the autumn.
In western Europe in 2003, there is some evidence that demand is softening from
past high levels in France and that the economy in the Republic of Ireland is
continuing to weaken. However, demand in Spain is anticipated to remain strong.
Our operations in eastern Europe are expected to continue to prosper, especially
in those countries that will be joining the EU in 2004.
USA
2002 2001
#m #m
Total turnover 1,255.4 1,362.6
EBITA (excluding exceptional items) 57.2 88.3
Turnover and profits were down throughout the USA, most notably in the Carolinas
and Georgia. Turnover fell by #107.2m to #1,255.4m. EBITA fell by #31.1m to
#57.2m. This partly reflected higher healthcare and insurance costs, which
increased by #5m.
Overall, difficult trading conditions were experienced throughout the year.
Non-residential construction fell significantly due to the weakening economy,
particularly the commercial and office sectors. Housing demand continued to be
strong in most areas, mitigating the general slowdown in construction activity.
The decline in demand for heavy building products put downward pressure on
selling prices.
Profits in the eastern USA fell by #21.0m to #17.9m.
The Carolinas and Georgia were the most severely affected by the economic
decline and resulting pricing pressures. This was compounded by extremely wet
weather in the last quarter, which caused major disruption to construction work.
These factors also affected the prestressed concrete business which operates
predominantly in these states and is heavily dependent upon office and
commercial development.
Profits held up well in Florida. The housing market remained strong in the
southwest, but there was a decline in commercial activity in the Tampa to
Orlando corridor.
The western USA held up better than the east, but profits fell #10.1m to #39.3m.
In the southwest area, which includes Arizona, Nevada, southern New Mexico and
El Paso, Texas, profits declined due to competitive conditions in Phoenix and a
lower level of spending on the state highway programme in west Texas.
In the important northern California market, profits held up well, being only
slightly lower than in 2001. A decline in commercial activity in the San
Francisco Bay area was offset by an increase in housing activity in the Central
Valley.
Looking forward, market conditions in the USA differ from region to region.
Overall, while the residential construction market was strong in 2002, there is
a risk that it could weaken. There would also appear to be no immediate
prospect that the commercial and industrial sectors will improve. With respect
to specific regions, there is evidence that conditions in our key Californian
market are improving. The Carolinas and Georgia are expected to be the most
difficult markets.
Rest of the World
2002 2001
#m #m
Total turnover 413.1 381.9
EBITA (excluding exceptional items) 35.8 22.9
Performance in the Rest of the World was dominated by favourable market
conditions in Australia and the contribution from Adelaide Brighton.
Turnover rose by #31.2m to #413.1m. EBITA increased by #12.9m to #35.8m.
In Australia, Adelaide Brighton's turnover rose by over 25%. This mainly
reflected strong demand and higher prices for cement and lime, and the
nine-month contribution from Premier Resources, acquired in March 2002. The
business also benefited from operational improvements and cost reductions. For
2003, we expect this strong performance to continue.
The Group continued to develop its business in the Gulf States, where improved
market conditions led to an increase in turnover of more than 15%, and Israel
performed well in difficult market conditions.
OUTLOOK
As we look ahead, a number of our key markets face considerable economic
uncertainty. Trading in 2002 was weaker in the second half than in the first,
and we expect broadly similar conditions in the first half of 2003 as in the
second half of 2002. This economic fragility might well be compounded as a
result of events in Iraq, either through the impact of high oil prices or lower
consumer confidence. However, reduced net debt, lower interest rates, refocusing
on our core businesses and the performance improvement measures now being
implemented should assist us to counter the downward pressures we face in key
markets during the course of 2003. Any improvement in trading conditions is
likely to come in the second half of the year.
RMC Group p.l.c.
Group profit and loss account for the year ended 31 December 2002
2002 2001
(restated)
Excluding Excluding
exceptional Exceptional exceptional Exceptional
items items Total items items Total
Notes #m #m #m #m #m #m
Turnover
Total turnover including Group
share of joint ventures and
associated undertakings 1 4,971.4 4,971.4 5,214.5 5,214.5
Less: Share of turnover of joint
ventures and associated undertakings 469.1 469.1 500.8 500.8
Turnover of subsidiary undertakings 4,502.3 4,502.3 4,713.7 4,713.7
Continuing operations 4,348.1 4,348.1 4,380.5 4,380.5
Acquisitions 28.0 28.0 - -
Discontinued operations 126.2 126.2 333.2 333.2
Turnover of subsidiary undertakings 4,502.3 4,502.3 4,713.7 4,713.7
Operating profit
Continuing operations 2 211.2 (31.4) 179.8 280.6 - 280.6
Acquisitions 1.4 - 1.4 - - -
Discontinued operations 0.2 - 0.2 5.7 - 5.7
Operating profit 212.8 (31.4) 181.4 286.3 - 286.3
Share of operating profit of joint
ventures and associated
undertakings 2 15.2 (4.1) 11.1 8.6 - 8.6
Total trading profit 1 228.0 (35.5) 192.5 294.9 - 294.9
Non-operating exceptional items 2
- profit on disposal of
discontinued operations 39.5 39.5 - -
- loss on disposal/termination of
continuing operations (13.9) (13.9) (14.4) (14.4)
- profit on disposal of fixed
assets 1.7 1.7 5.2 5.2
Profit before net interest payable 228.0 (8.2) 219.8 294.9 (9.2) 285.7
Interest payable (net) 83.7 - 83.7 124.2 - 124.2
Profit on ordinary activities
before taxation 144.3 (8.2) 136.1 170.7 (9.2) 161.5
Taxation 3 37.9 65.9
Profit on ordinary activities
after taxation 98.2 95.6
Minority interests 27.9 25.0
Profit for the year attributable
to shareholders 70.3 70.6
Dividends 82.6 82.5
Retained loss for the year (12.3) (11.9)
Earnings per share of 25p 5
Basic 26.5p 26.7p
Basic excluding exceptional items 28.4p 30.7p
Basic excluding exceptional items
and goodwill amortisation 41.4p 43.7p
Diluted 26.5p 26.5p
Diluted excluding exceptional items 28.4p 30.6p
Diluted excluding exceptional
items and goodwill amortisation 41.3p 43.6p
Dividend per share 4 31.2p 31.2p
Prior year comparative figures for taxation, minority interest and earnings per
share have been restated on the adoption of
FRS 19 - Deferred Tax
Summarised Group balance sheet at 31 December 2002
2002 2001
(restated)
#m #m #m #m
Fixed assets
Intangible assets - Goodwill 562.7 585.5
Tangible assets 2,755.6 2,939.2
Joint ventures 77.5 79.7
Associated undertakings 70.9 84.3
Other investments 4.8 20.1
153.2 184.1
Current assets 3,471.5 3,708.8
Stocks 291.7 309.1
Debtors
Due within one year 850.6 910.2
Due after one year 60.6 63.3
911.2 973.5
Investments 11.8 11.1
Cash at bank and in hand 117.2 152.6
1,331.9 1,446.3
Creditors: amounts falling due
within one year
Loans and overdrafts 245.4 361.2
Dividend 57.7 57.7
Creditors 914.9 950.7
1,218.0 1,369.6
Net current assets 113.9 76.7
Total assets less current liabilities 3,585.4 3,785.5
Creditors: amounts falling due
after more than one year
Bank and other loans 1,063.2 1,291.9
Deferred creditors 32.9 34.7
1,096.1 1,326.6
Provisions for liabilities and
charges 534.8 567.2
1,630.9 1,893.8
Net assets 1,954.5 1,891.7
Capital and reserves
Called up equity share capital 66.3 66.2
Share premium account 650.6 649.5
Profit and loss account 1,002.1 950.8
Shareholders' equity funds 1,719.0 1,666.5
Minority interests 235.5 225.2
Total capital and reserves 1,954.5 1,891.7
Prior year comparative figures for provisions for liabilities and charges,
profit and loss account and minority interests have been restated on the
adoption of FRS 19 - Deferred Tax.
Summarised Group cash flow statement for the year ended 31 December 2002
2002 2001
#m #m #m #m
Operating profit 181.4 286.3
Depreciation 210.4 214.0
Amortisation of goodwill 33.6 33.5
Profit on sale of fixed assets (18.7) (22.4)
Working capital movements (14.7) 11.8
Cash flow from operating activities 392.0 523.2
Dividends from joint ventures and associates 8.2 4.2
Returns on investments and servicing of finance (103.2) (130.4)
Taxation (36.2) (41.0)
Capital expenditure and financial investment:
Purchase of fixed assets (185.0) (189.7)
Sale of fixed assets 69.5 73.0
Acquisitions (30.8) (82.2)
Disposals 239.8 93.5 5.0 (193.9)
Dividends paid to RMC shareholders (82.6) (82.3)
Net cash inflow before financing 271.7 79.8
Management of liquid resources 15.1 (15.6)
Financing - Equity 8.2 3.6
- Debt (net) (289.8) (281.6) (75.1) (71.5)
Movement in cash in the year 5.2 (7.3)
Movement in net debt
Movement in cash in the year 5.2 (7.3)
Movement in liquid resources (15.1) 15.6
Financing - decrease in debt 289.8 75.1
Change in debt in the year 279.9 83.4
Foreign currency translation adjustments 17.1 27.5
New Group undertakings/undertakings sold 12.8 (1.5)
Movement in net debt in the year 309.8 109.4
Net debt at 1 January (1,489.4) (1,598.8)
Net debt at 31 December (1,179.6) (1,489.4)
Statement of total recognised gains and losses
2002 2001
(restated)
#m #m
Profit for the year attributable to shareholders 70.3 70.6
Other gains and losses:
Foreign currency translation adjustments 12.3 19.4
Total recognised gains and losses for the year 82.6 90.0
Prior year adjustment (as explained in Note 3) (188.3)
Total recognised gains and losses since the last Annual Report (105.7)
Movements in shareholders' equity funds
2002 2001
(restated)
#m #m
Profit for the year attributable to shareholders 70.3 70.6
Dividends (82.6) (82.5)
(12.3) (11.9)
Foreign currency translation adjustments 12.3 19.4
New share capital 1.2 4.7
Goodwill written back on disposal 51.3 0.8
52.5 13.0
Shareholders' equity funds at 1 January 1,854.8 1,828.9
Prior year adjustment - (as explained in Note 3) (188.3) (175.4)
Shareholders' equity funds at 1 January (as restated) 1,666.5 1,653.5
Shareholders' equity funds at 31 December 1,719.0 1,666.5
Notes
1. Segmental reporting of total turnover, EBITA before exceptional items,
total trading profit and net operating assets (including joint ventures and
associates)
2002
EBITA before* Total Net
Total exceptional trading operating
turnover items profit assets
#m #m #m #m
a) Geographical Analysis
Continuing operations:
Great Britain 1,154.8 78.0 56.0 985.1
Germany 766.0 (0.3) (21.0) 594.0
Rest of Europe 1,255.0 91.9 79.2 1,058.1
United States of America 1,255.4 57.2 51.8 523.2
Rest of the World 413.1 35.8 26.4 483.3
4,844.3 262.6 192.4 3,643.7
Discontinued operations:
Great Britain 1.0 0.1 0.1 -
Germany 30.3 (4.6) (4.6) -
Rest of Europe 95.8 4.7 4.6 -
127.1 0.2 0.1 -
Total:
Great Britain 1,155.8 78.1 56.1 985.1
Germany 796.3 (4.9) (25.6) 594.0
Rest of Europe 1,350.8 96.6 83.8 1,058.1
United States of America 1,255.4 57.2 51.8 523.2
Rest of the World 413.1 35.8 26.4 483.3
4,971.4 262.8 192.5 3,643.7
Continuing operations include
contributions from acquisitions in:
Great Britain 2.7 0.4 0.3 13.6
Germany 4.0 0.2 0.2 4.2
Rest of Europe 1.6 0.1 0.1 0.2
United States of America 1.0 0.2 0.2 4.8
Rest of the World 20.3 0.8 0.7 27.9
29.6 1.7 1.5 50.7
* Total trading profit excluding goodwill amortisation of #34.8 million and
operating exceptional items of #35.5 million.
2001
EBITA before* Total Net
Total exceptional trading operating
turnover items profit assets
#m #m #m #m
Continuing operations:
Great Britain 1,088.0 110.0 97.3 983.8
Germany 816.3 15.4 12.4 573.3
Rest of Europe 1,230.2 87.3 78.8 1,041.5
United States of America 1,362.6 88.3 86.9 623.1
Rest of the World 381.9 22.9 14.0 494.9
4,879.0 323.9 289.4 3,716.6
Discontinued operations:
Great Britain 34.1 2.9 2.9 18.3
Germany 88.5 (10.0) (10.0) 64.2
Rest of Europe 212.9 12.8 12.6 116.7
335.5 5.7 5.5 199.2
Total:
Great Britain 1,122.1 112.9 100.2 1,002.1
Germany 904.8 5.4 2.4 637.5
Rest of Europe 1,443.1 100.1 91.4 1,158.2
United States of America 1,362.6 88.3 86.9 623.1
Rest of the World 381.9 22.9 14.0 494.9
5,214.5 329.6 294.9 3,915.8
* Total trading profit excluding goodwill amortisation of #34.7 million. There
were no operating exceptional items in 2001.
Discontinued operations comprise the aerated concrete businesses of Durox and
YTONG and the Group's operations in the Netherlands.
1. Segmental reporting of total turnover, EBITA before exceptional items,
total trading profit and net operating assets (including joint ventures and
associates) continued
2002
EBITA before* Total Net
Total exceptional trading operating
turnover items profit assets
#m #m #m #m
b) Analysis by Business
Continuing operations:
Ready mixed concrete
and aggregates 3,217.5 152.2 135.4 1,651.0
Cement, lime and
concrete products 1,194.3 82.2 35.0 1,888.7
Waste control and others 404.1 11.7 5.5 67.8
Property 28.4 16.5 16.5 36.2
4,844.3 262.6 192.4 3,643.7
Discontinued operations:
Cement, lime and
concrete products 127.1 0.2 0.1 -
127.1 0.2 0.1 -
Total:
Ready mixed concrete
and aggregates 3,217.5 152.2 135.4 1,651.0
Cement, lime and
concrete products 1,321.4 82.4 35.1 1,888.7
Waste control and others 404.1 11.7 5.5 67.8
Property 28.4 16.5 16.5 36.2
4,971.4 262.8 192.5 3,643.7
Continuing operations include
contributions from acquisitions of:
Ready mixed concrete
and aggregates 26.8 1.1 0.9 44.8
Cement, lime and
concrete products 1.6 0.5 0.6 4.0
Waste control and others 1.2 0.1 - 1.9
Property - - - -
29.6 1.7 1.5 50.7
* Total trading profit excluding goodwill amortisation of #34.8 million and
operating exceptional items of #35.5 million.
2001
EBITA before* Total Net
Total exceptional trading operating
turnover items profit assets
#m #m #m #m
b) Analysis by Business
Continuing operations:
Ready mixed concrete
and aggregates 3,244.1 165.7 160.7 1,691.5
Cement, lime and
concrete products 1,177.0 124.9 95.9 1,899.9
Waste control and others 419.9 14.3 13.8 76.3
Property 38.0 19.0 19.0 48.9
4,879.0 323.9 289.4 3,716.6
Discontinued operations:
Cement, lime and
concrete products 335.5 5.7 5.5 199.2
335.5 5.7 5.5 199.2
Total:
Ready mixed concrete
and aggregates 3,244.1 165.7 160.7 1,691.5
Cement, lime and
concrete products 1,512.5 130.6 101.4 2,099.1
Waste control and others 419.9 14.3 13.8 76.3
Property 38.0 19.0 19.0 48.9
5,214.5 329.6 294.9 3,915.8
* Total trading profit excluding goodwill amortisation of #34.7 million.
There were no operating exceptional items in 2001.
2. Exceptional items
In 2002, non-operating exceptional items comprised a profit of #39.5
million on the sale of the Group's aerated concrete businesses, Durox and YTONG,
and its concrete products business in the Netherlands, after charging goodwill
previously written off to reserves of #51.3 million (shown as profit on disposal
of discontinued operations), a loss of #13.9 million on the withdrawal from
certain non-core operations in the USA and Germany (shown as loss on disposal/
termination of continuing operations) and a net profit of #1.7 million on the
disposal of fixed assets and investments in the USA and Germany.
Operating exceptional items of #31.4 million comprised anticipated fines
for anti-competitive activities and associated legal costs totalling #15.9
million, principally arising from the German Federal Cartel Office's
investigation into the cement industry, redundancy costs arising from the
Group's business review of #9.5 million, abortive disposal costs of #3.4 million
and a write-down of the shares held by the Trustee of the Long-Term Incentive
Plan to market value at 31 December 2002 amounting to #2.6 million. In
addition, there was a goodwill impairment in the Group's associate, Huttig
Building Products Inc in the USA of #4.1 million.
In 2001 non-operating exceptional items comprised a loss of #14.4 million
on the disposal of the Group's interest in Tilbury Aggregates in Great Britain
and the concrete products business in France, (shown as loss on disposal of
continuing operations), and a gain of #5.2 million on the sale of office
buildings in Germany (shown as profit on disposal of fixed assets). The loss on
disposal of continuing operations includes #0.8 million of goodwill written back
on the concrete products business in France. There were no operating
exceptional items in 2001.
3. Taxation
2002 2001
(restated)
#m #m
Taxation charge on the profit for the year
United Kingdom 3.3 8.8
Overseas 32.0 51.6
35.3 60.4
Taxation of joint ventures and associates 5.1 4.1
Taxation on exceptional items
- Non-operating exceptional items 5.1 1.4
- Operating exceptional items (7.6) -
37.9 65.9
United Kingdom corporation tax has been calculated at the rate of 30 per
cent (2001: 30 per cent).
FRS 19 - Deferred Tax has been adopted with effect from 1 January 2002.
The effect of restating the prior year comparatives is as follows:
2001
#m
Profit and loss account
Increase in taxation charge (15.4)
Decrease in minority interest charge 1.3
Decrease in basic earnings per share (5.4p)
Balance sheet
Decrease in shareholders' equity funds (188.3)
Decrease in minority interests (9.8)
Decrease in total capital and reserves (198.1)
Applying the principles of SSAP15 "Accounting for deferred tax" to the
results for 2002 would not materially alter the tax charge or earnings per
share.
4. Dividends per share
2002 2001
Interim paid on 29 November 2002 9.4p 9.4p
Final proposed payable on 30 May 2003 21.8p 21.8p
31.2p 31.2p
5. Earnings per share
The earnings per share are based on the profit for the year attributable
to shareholders and on the weighted average number of shares in issue during the
year. The number of shares for this purpose was 265,082,150 (2001:
264,132,437). The number of shares in issue at 31 December 2002 was 265,145,148
(2001: 264,970,389). For the calculation of diluted earnings per share the
number of shares for this purpose was 265,686,708 (2001: 265,150,206).
The earnings per share have been calculated on earnings as follows:
2002 2001
(restated)
Earnings Earnings
Earnings per share Earnings per share
#m pence #m pence
Earnings 70.3 26.5 70.6 26.7
Exceptional items 8.2 3.1 9.2 3.5
Taxation arising on exceptional items (2.5) (1.0) 1.4 0.5
Minority interest share of exceptional items (0.6) (0.2) - -
Earnings excluding exceptional items 75.4 28.4 81.2 30.7
Goodwill amortisation 34.8 13.0 34.7 13.0
Minority interest share of goodwill
amortisation (0.4) - (0.3) -
Earnings excluding exceptional items and
goodwill amortisation 109.8 41.4 115.6 43.7
6. Foreign currencies
Assets and liabilities in foreign currencies have been translated into
sterling at rates of exchange ruling at the end of the financial year. Results
and balance sheet movements in foreign currencies have been translated into
sterling using average rates of exchange.
Rates of exchange used for the translation of major currencies are as
follows:-
2002 2001
Average Year end Average Year end
Euro (Euro) 1.60 1.53 1.61 1.63
USA ($) 1.50 1.61 1.45 1.46
Australia ($) 2.77 2.86 2.80 2.84
7. Financial information in the preliminary announcement
(a) Accounting policies
The information presented for the year to 31 December 2002 has been
prepared using accounting policies set out in the 2001 accounts, except as
restated on the adoption of FRS 19 - Deferred tax, which requires full provision
rather than partial provision to be made for deferred taxation. The effect of
this is disclosed in note 3.
(b) The financial information set out in the preliminary announcement does not
constitute the Company's statutory accounts for the year ended 31 December 2002
or 2001. Except for the restatement on the adoption of FRS 19 - Deferred tax,
the financial information for the year ended 31 December 2001 is derived from
the statutory accounts for that year, which have been delivered to the Registrar
of Companies. The report of the auditors on those accounts was unqualified.
The statutory accounts for the year ended 31 December 2002 will be finalised on
the basis of the financial information presented in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
ENQUIRIES
Enquiries relating to RMC's results, business and General enquiries about shareholder matters
financial position should be made to:- should be made to:-
Investor Relations Department Computershare Investor Services plc
RMC Group p.l.c. P O Box 82
RMC House, Coldharbour Lane The Pavillions
Thorpe, Egham, Bridgewater Road
Surrey, TW20 8TD Bristol, BS99 7NH
Tel: 01932 583219 Tel: 0870 702 0001
FINANCIAL CALENDAR
Ex-dividend date for 2002 final dividend 9 April 2003
Record date for 2002 final dividend 11 April 2003
Annual General Meeting 2 May 2003
Payment of 2002 final dividend 30 May 2003
Announcement of 2003 Interim Results 5 September 2003 (provisional)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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