TIDMCCC
RNS Number : 5826O
Computacenter PLC
10 March 2009
Computacenter plc
Preliminary results announcement
Computacenter plc, the European IT infrastructure services provider, today
announces preliminary results for the twelve months ended 31 December 2008.
FINANCIAL HIGHLIGHTS
Financial performance
* Group revenues increased 7.6% to GBP2.56 billion (2007: GBP2.38 billion)
* Adjusted* profit before tax increased 1.0% to GBP43.1 million (2007: GBP42.7
million)
* Adjusted* diluted earnings per share increased 13.5% to 21.0p (2007: 18.5p)
* Final dividend of 5.5p per share, total dividend 8.2p (2007: 8.0p)
* Net cash before customer-specific financing ('CSF') of GBP4.6 million (2007: net
debt of GBP16.2 million)
Statutory Performance
* Profit before tax decreased 6.0% to GBP39.5 million (2007 : GBP42.1 million)
* Diluted EPS increased 33.0% to 24.2p (2007: 18.2p)
* Net debt after CSF of GBP84.6 million (2007: net debt of GBP79.8 million)
OPERATING HIGHLIGHTS
* Group annual services contract base grew over 10% to GBP498 million, based on
constant currency
* Major UK change programme launched in Q4 2008 to accelerate transition to higher
margin services and solutions business and improve capital return
* UK contract base grows 7.5% to GBP217 million, with new wins and extensions
expected to add a further GBP23 million by end Q1 2009
* Substantial improvement in German profitability driven by improved services
margin and an increased focus on networking and datacentre solutions
* Continued steady improvement in French performance and improved services mix
Mike Norris, Chief Executive of Computacenter plc, commented:
"Computacenter delivered a strong performance for 2008 and laid the foundations
for an encouraging future. As we state every year in our Preliminary
announcement, it is impossible to draw any meaningful conclusion about the
current year until we have completed the first quarter.
"The current economic conditions are undoubtedly affecting the markets in which
we operate. However we can, and do, help businesses reduce costs and become more
competitive, which makes our managed services offerings more compelling, as our
recent contract base growth illustrates. We expect this growth to continue at a
similar pace throughout the year, though our product revenues are under
pressure.
"We enter 2009 with a strong balance sheet, which means we are well placed to
capture further opportunities and market share."
* Adjusted for exceptional items and amortisation of acquired intangibles.
For further information, please contact:
Computacenter plc.
Mike Norris, Chief Executive
01707 631 601
Tessa Freeman, Investor Relations
01707 631 514
www.computacenter.com
Tulchan Communications
020 7353 4200
Stephen Malthouse
www.tulchangroup.com
High resolution images are available for the media to view and download free of
charge from www.vismedia.co.uk
OPERATING REVIEW
Group Summary
Computacenter delivered a strong performance for 2008 and laid the foundations
for an encouraging future. The Group delivered a 1.0% increase in adjusted*
profit before tax to GBP43.1 million (2007: GBP42.7 million), largely due to
improved profit performance in Germany, aided by exchange rates, Group adjusted*
operating profit increased 1.1% to GBP42.1 million. As a result of higher
profitability, a reduced number of shares in issue and a lower tax rate,
adjusted* diluted earnings per share (adjusted* EPS) grew 13.5% to 21.0p (2007:
18.5p).
On a statutory basis, taking into account amortisation of acquired intangibles
and exceptional impairments of intangible assets, Group profit before tax
declined 6.0% to GBP39.5 million (2007: GBP42.1 million). Exceptional impairment
charges consist of Group ERP charges that can be directly attributed to France,
and the non-cash impairment of the acquired Digica trademark, following the
cessation of its use. With the benefit of an exceptional income tax credit,
Group profit after tax increased by 29.2% to GBP37.3 million (2007: GBP28.9
million) and diluted earnings per share grew 33.0% to 24.2p (2007: 18.2p).
Group revenues grew a further 7.6% in 2008 to GBP2,560.1 million (2007:
GBP2,379.1 million), aided by the effects of a stronger Euro and continuing
services revenue growth. By year-end our Group annual services contract base
stood at GBP498 million, representing a growth in excess of 10% over 31 December
2007, based on constant currency.
Our balance sheet remains strong. At year-end, net cash prior to
customer-specific financing (CSF) was GBP4.6 million (2007: net debt GBP16.2
million). Including CSF, net debt was GBP84.6 million (2007: GBP79.8 million).
The Board is pleased to recommend a final dividend of 5.5p per share, bringing
the total dividend for the year to 8.2p (2007: 8.0p). The increased dividend is
consistent with our stated policy of maintaining the level of dividend cover
within the target range of 2 - 2.5x. Subject to shareholder approval, the
dividend will be paid on 11 June 2009 to shareholders on the register as at 15
May 2009.
The main contributors to profit growth were again our European operations
particularly our German business, with a lack lustre performance in the UK.
Following an in-depth review of our business, the fourth quarter of 2008 saw the
launch of a UK change programme designed to ensure an improved capital return
and further sharpen our focus as a services and solutions company. These changes
will deliver an estimated GBP15 million annualised reduction in UK Sales General
and Administration costs, with a positive impact in 2009. Similar, albeit much
smaller, change programmes are being implemented in other countries. The major
components of the change programme are as follows:
1) Exit from businesses that use working capital inefficiently
In November 2008 we ended the sale of PCs, laptops and printers through CCD, our
trade distribution arm. Volume distribution of these products is highly
price-competitive and gives us insufficient return. CCD will instead sharpen its
focus on the higher-margin server, storage and networking business. We expect
this to result in a reduction in 2009 revenues in the order of GBP70 million
without any reduction in profit, while freeing approximately GBP15 million of
working capital.
In addition, following a disappointing return on investment from product sales
to our smaller customer base, we took the decision to refocus our UK sales
efforts more sharply on our higher margin services and solutions business, where
we see the greatest growth opportunity.
2) Restructure to reduce costs and encourage higher-margin sales growth
At the beginning of 2009 we implemented a new UK structure, aimed at increasing
our customer focus and growing our more profitable services and solutions
business. The restructure reduces organisational duplication and complexity,
with fewer management layers and wider accountability.
3) Leverage scale via Group-wide IT capital investment
In 2008 we embarked on a GBP25 million capital investment in IT systems that
will, over the next three years, enable us to standardise financial reporting
and management tools across the Group. Adopting a common, Group Enterprise
Resource Planning (ERP) system will enable more effective financial planning and
skills and resource management, helping us reduce our costs and leverage our
scale for competitive advantage. Approximately GBP8 million of this capital
investment was paid by the end of 2008.
UK
UK revenues grew by 2.5% to GBP1.39 billion (2007: GBP1.36 billion) for the year
as a whole, largely as a result of strong sales growth in datacentre services,
consulting/integration activities and in sales to the medium-sized business
sector. Adjusted operating profit declined 15.6% to GBP27.9 million (2007:
GBP33.1 million). This was mainly due to the poor start to the year, continued
significant investment in our services capability and the resourcing of our
sales operation targeting product sales to organisations of fewer than 500
seats. Operating profit was also impacted by GBP1.8 million costs of internal
effort related to the ERP upgrade programme that has been charged to the UK,
principally from the German business.
As previously reported, the merging of our Managed Services and Digica
operations, together with a number of smaller cost-cutting initiatives, also
resulted in a restructuring cost to the UK business, adversely affecting
operating profit in the first half of the year by some GBP1.0 million.
Services revenues overall grew by 4.3% over 2007, as the economic downturn drove
customers to seek to improve the cost-effectiveness of their infrastructures.
This helped grow the UK contract base a further 7.5% to GBP217 million. However
this does not include a number of significant long-term services contracts,
secured in the second half of the year, which did not make any contribution to
revenue in 2008 but are expected to have a positive impact on our 2009
performance. These successes include new five-year managed services contracts
with Nationwide, for the end-to-end management of its desktop and related IT
infrastructure services and with Hays, for the provision of all datacentre and
desktop services in the UK. We anticipate that these and other contracts will
result in a UK contract base of approximately GBP240 million by the end of Q1
2009.
Other important wins during 2008 include a major five-year contract with
Unipart, worth more than GBP18 million, through which we will provide end-user,
datacentre and network managed services. Marks & Spencer (M&S) also expanded its
IT managed services agreement, with Computacenter, which now has end-to-end
accountability for the delivery of IT services to M&S's six office sites,
servicing approximately 4,000 end-users.
The completed merger of Digica into our core operations made an important
contribution to our win and renewal success, our improved datacentre capability
enhancing our historical strengths in the desktop and networking areas.
Our ability to assist organisations to reduce operational expenditure and
compete in a difficult market helped us win new business in the construction
sector. Our new three-year contract with Rok Plc is for the outsourcing of the
company's entire IT infrastructure, covering its 'Wintel' and UNIX server
estate, storage management and the delivery of a hosted datacentre service. The
scope of our datacentre hosted services contract with Crest Nicholson was also
extended to cover desktop services for 650 users and management of 100 sites
across the UK, leveraging Computacenter's capabilities in both South Africa and
the UK.
Our consulting and integration activities again recorded revenue growth in 2008,
with an increasing number of project wins utilising our full capability.
The trend for integration or transformation projects to include hardware and
software sales also continued, reflecting our customers' increased dependence on
highly resilient and flexible datacentre, storage and network infrastructures.
Profit margins on this infrastructure remain materially higher than our
transactional business due to the additional value that customers place on
end-to-end solutions.
Overall UK product sales grew by 2.0%. However, outside of trade distribution,
sales grew a more satisfactory 5.4%, driven by strong sales of storage,
virtualisation and audio-visual technology in particular. This was offset by a
14.2% reduction in revenues from CCD, our trade distribution arm. The rise in
product revenues was also in part attributable to the weakness of sterling,
which led to some small price rises in certain product areas.
Our remarketing and recycling arm, RDC, continued to perform well, recording
nearly 17.5% revenue growth overall. RDC is seen increasingly as a safe pair of
hands for customers concerned over environmental disposal, recycling and data
security for their end-of-life equipment.
Germany
Computacenter Germany again made good progress in 2008. After achieving 8.2%
full year sales growth in 2007, revenue growth levelled off in 2008 as the
German economy was hit by the severe economic downturn. However, while revenues
increased just 1.0% in local currency and 17.2% in sterling to GBP830.7 million
(2007: GBP708.6 million), adjusted* operating profit grew 47.2% to GBP15.3
million (2007: GBP10.4 million), driven mainly by further improvements in
service margins and the recovery of costs of GBP1.4 million recharged to the UK
in relation to the ERP upgrade programme.
Services revenues grew by 4.3% in local currency. This continuing growth came
largely from our networking and datacentre solutions business, which is
benefiting from our strategic focus on higher-margin services and our ongoing
investment in IT solutions and outsourcing. Sales performance was particularly
strong in networking, where double-digit growth rates have helped double
networking volumes since 2005. We also saw strong sales growth from our energy
efficiency related consulting services and from our security solutions.
The improved services profitability is the result of management initiatives
launched in 2007 that yielded, in 2008, a three percentage point margin
improvement over the previous year, most of which came from our networking and
datacentre business. We are confident that this services margin improvement can
be sustained and built upon.
Growing market recognition of our capabilities helped grow our annual contract
base for managed services a further 11.7% in 2008. While this growth is somewhat
less than in previous years, this was attributable largely to our strategic
focus on improving the profitability of a number of large outsourced datacentre
contracts, which had a significant positive impact on our overall performance
but required substantial management attention.
Important managed services wins include a 58-month international desktop
services and service desk contract with BMW Group, covering 70,000 users in
Germany, Austria and the UK, and a 10-year contract with NRW.Bank, the
development bank of North Rhine-Westphalia, for the management of its office and
datacentre infrastructure.
An increasingly competitive market, especially in the Intel server area,
adversely affected the product business, where sales declined 0.8% in local
currency. This was largely driven by a fall in 'Wintel' server sales in two of
our largest customers. However, sales of large enterprise servers and storage
products remained strong.
Initiatives aimed at increasing networking product sales, launched in 2007,
yielded strong growth in 2008, notably in the areas of security and unified
communications. As a result of US dollar to Euro exchange rate fluctuations,
networking product margins decreased slightly, driving down product margin
percentage levels overall. Customer demand for next generation client/server
architecture also helped grow sales of software 10.6%
Our overall business mix is largely unchanged, with services accounting for 36%
of total revenue. More than 60% of our business is now from the sale of
networking and datacentre solutions, demonstrating that our effort to focus our
business mix on the less-commoditised end of the market is yielding results.
We are pleased to welcome Oliver Tuszik, who has held a number of management
positions within the company, to the German Board as CEO of Computacenter
Germany. We offer him our best wishes in his new role.
France
We continued to see a steady improvement in the performance of our French
business in terms of operating performance, financial structure and commercial
wins.
After a difficult first quarter, operating performance gradually improved over
the course of the year, resulting in an adjusted operating loss reduction of
44.9% to GBP1.0 million (2007: loss of GBP1.8 million).
A product market that remains highly challenging contributed to an overall
revenue decline of 7.1% in local currency. However, due to beneficial currency
movements, reported revenue increased to GBP308.2 million (2007: GBP285.7
million). The decline in product revenues hides a strong increase in services
revenues of 12.2% (2007: 8.0%) in local currency helped by the consolidation of
our short term professional services contract base into managed services
business, where revenues grew 24.5%.
This strong services growth, which was well ahead of the market, demonstrates
further progress in our efforts to increase the services mix of the business.
Services account now for 15.4% of total revenue (2007: 12.8%).
As with 2007, we saw margin improvement across both products and services. In
products, this was due to our more commercially selective approach to the
provisioning of hardware and an increased focus on regional business, together
with more effective sales incentives. Services margins also improved thanks to
volume increase, better management of resources, and tight management of costs.
Computacenter France also delivered an improved financial situation, thanks
to improved debt collection, a better control of inventories and a tighter
management of cash. Despite average interest rates increasing in 2008, finance
costs reduced by 12.3% over 2007 in local currency.
We saw some pleasing contract successes in 2008. The second half saw us renew
and extend our major services contracts with EDF and Air Liquide, and renew our
software licensing contract with the French public purchasing agency, UGAP. We
won a new global solutions three-year contract with Eiffage, including
e-procurement, supply chain services, installations, moves and changes,
maintenance and product recycling. We also won a significant deal with Société
Générale covering supply chain solutions, a roll-out project with Conseil
Régional d'Ile de France (Paris region), and a four-year managed services
contract with Chambre de Commerce et d'Industrie des Bouches du Rhône.
2009 looks very challenging for our French business, with performance contingent
to some extent on our success in securing the renewal of our contract with the
French Army, our largest French customer, which expires at the end of Q1 2009.
Amongst early successes in 2009, we won the right to bid with Ministère de
l'Economie et des Finances for all ultraportable and portable desktops, laptops
and screens, and a significant roll-out for 5,000 users for a customer in the
retail sector.
We are aware that much remains to be done to deliver a long term, acceptable
level of profit. To that end, changes to the French management team, and
additional sales investment, were made in early 2009 to help accelerate the
trend in performance improvement. Our strategic focus is on improving sales
efficiency, developing our services offerings, increasing the use of
standardised tools and best practice, increasing quality as a market
differentiator, and tighter management of overall resources, efficiency and
costs.
Henri Viard, formerly our French operation's Finance Director, has recently been
appointed CEO of Computacenter France. We offer him our best wishes in his new
role.
Benelux
Our Belgium and Netherlands business showed an operational
profit of GBP137,000 (2007: GBP125,000), with a profit in Belgium offset by a
small loss in Luxembourg. Revenues increased by 8.9% to GBP30.0 million (2007:
GBP27.6 million), which equates to a reduction of 6.2% in local currency, with
services growth of 16.6% offset by a 14.9% reduction in product
sales.
Key Benelux wins include a five-year renewal of the SWIFT desktop
managed services outsourcing contract, European procurement contracts at UCB and
Artenius PetPackaging, an Exchange migration and encryption project at Millicom,
and a Cisco Unified Communications project at McDonalds Belgium.
Outlook
As we state every year in our Preliminary announcement, it is impossible to draw
any meaningful conclusion about the current year until we have completed the
first quarter.
The current economic conditions are undoubtedly affecting the markets in which
we operate. Our customers' desire to reduce their operating costs makes our
managed services offerings more compelling, as our recent contract base growth
illustrates. We expect this growth to continue at a similar pace throughout the
year, though our product revenues are under pressure. We enter 2009 with a
strong balance sheet, which means we are well placed to capture further
opportunities and market share.
Our appreciation and thanks go to the employees of Computacenter for their
outstanding commitment, energy and hard work.
* Adjusted profit before tax, income tax expense and EPS are stated prior to
amortisation of acquired intangibles and exceptional impairment charges.
Adjusted operating profit is also stated after charging finance costs on CSF.
Finance Director's review
Turnover and profitability
Following on from the growth in 2007, Group revenues increased by 7.6% to
GBP2.60 billion. Whilst the increase was substantially attributable to currency
movements, Group revenues at constant currency increased by 0.6%. Growth in the
UK business was offset by a 14.2% reduction in trade distribution sales. Growth
in services was achieved in all countries, with lower margin product revenues
reducing in Germany and France. The growth in service revenues across the Group
has contributed to a position where over 45% of the gross profit of the Group is
now earned from services, which improves the forward visibility of gross margin
generation and earnings resilience.
Adjusted profit before tax improved by 1.0% from GBP41.7 million to GBP42.1
million. After taking account of exceptional impairments and amortisation of
acquired intangibles, statutory profit before tax reduced by 6.0% from GBP42.1
million to GBP39.5 million.
Adjusted operating profit
Statutory operating profit reduced from GBP43.1 million to GBP42.6 million.
However, management measure the Group's operating performance using adjusted
operating profit, which is stated prior to amortisation of acquired intangibles
and exceptional items, and after charging finance costs on customer-specific
financing (CSF) for which the Group receives regular rental income. Gross profit
is also adjusted to take account of CSF finance costs.
Table 1, below, shows the reconciliation between statutory and adjusted gross
profit and operating profit by geographical segment for 2008 and 2007.
TABLE 1 - reconciliation of adjusted gross profit and operating profit to
statutory measures
+----------------------------+----------+----------+---------+----------+----------+
| | UK | Germany | France | Benelux | |
| | | | | | Total |
+----------------------------+----------+----------+---------+----------+----------+
| 2008 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
| | | | | | GBP'000 |
+----------------------------+----------+----------+---------+----------+----------+
| Adjusted Gross Profit | 194,933 | 113,703 | 38,821 | 3,373 | 350,830 |
+----------------------------+----------+----------+---------+----------+----------+
| Add back interest on CSF | 3,292 | 737 | - | - | 4,029 |
+----------------------------+----------+----------+---------+----------+----------+
| Gross profit | 198,225 | 114,440 | 38,821 | 3,373 | 354,859 |
+----------------------------+----------+----------+---------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+---------+----------+----------+
| Adjusted Operating Profit | 27,938 | 15,268 | (967) | (95) | 42,144 |
+----------------------------+----------+----------+---------+----------+----------+
| Add back interest on CSF | 3,292 | 737 | - | - | 4,029 |
+----------------------------+----------+----------+---------+----------+----------+
| Intangibles amortisation | (481) | (44) | - | - | (525) |
+----------------------------+----------+----------+---------+----------+----------+
| Exceptional items | (1,922) | - | (1,124) | - | (3,046) |
+----------------------------+----------+----------+---------+----------+----------+
| Operating Profit | 28,827 | 15,961 | (2,091) | (95) | 42,602 |
+----------------------------+----------+----------+---------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+---------+----------+----------+
| 2007 | | | | | |
+----------------------------+----------+----------+---------+----------+----------+
| Adjusted Gross Profit | 195,846 | 93,516 | 31,501 | 2,920 | 323,783 |
+----------------------------+----------+----------+---------+----------+----------+
| Add back interest on CSF | 1,339 | 686 | - | - | 2,025 |
+----------------------------+----------+----------+---------+----------+----------+
| Gross profit | 197,185 | 94,202 | 31,501 | 2,920 | 325,808 |
+----------------------------+----------+----------+---------+----------+----------+
| | | | | | |
+----------------------------+----------+----------+---------+----------+----------+
| Adjusted Operating Profit | 33,099 | 10,388 | (1,754) | (44) | 41,689 |
+----------------------------+----------+----------+---------+----------+----------+
| Add back interest on CSF | 1,339 | 686 | - | - | 2,025 |
+----------------------------+----------+----------+---------+----------+----------+
| Intangibles amortisation | (481) | (132) | - | - | (613) |
+----------------------------+----------+----------+---------+----------+----------+
| Operating Profit | 33,957 | 10,942 | (1,754) | (44) | 43,101 |
+----------------------------+----------+----------+---------+----------+----------+
UK
The UK business again delivered revenue growth in 2008, despite a 14.2%
reduction in trade distribution sales. Excluding this reduction, UK product
sales increased by 5.4%, which taken together with an improvement in services
revenues of 4.3% resulted in overall growth of 5.1% in end user sales. The
services revenue performance does not include the impact of a number of long
term contract wins during the second half of 2008 which commence billing in
2009.
Adjusted gross profit reduced from 14.4% to 14%. This drop was driven by a
reduction in product margins due to reduced profitability in trade distribution,
a business which was partially exited in late 2008, along with growth in lower
margin product sales to smaller customer base.
Adjusted operating expenses increased by 2.6%, reflecting the growth in 2008 of
investment in sales to our smaller customer base, and redundancy costs cGBP1.0m
higher than in previous years. However, due to a disappointing return on
investment, our UK sales efforts will in future be re-focused towards our higher
margin solutions and services business. This action forms part of the UK change
programme, for which no significant costs were incurred in 2008.
Also included in the expense base in 2008 was GBP1.8m of internal effort related
to the ERP upgrade programme that has been charged to the UK, principally from
the German business.
Germany
Overall revenue in constant currency increased by 1.0%, with services revenues
growing by 4.3%, offset by a contraction in product revenues of 0.8%. Product
revenues reductions were principally in supply of lower margin product. When
translated into sterling, German revenues increased in 2008 by 17.2% to GBP830.7
million.
The key element of profitability improvement in Germany was the improvement in
margins, principally within services. Much of this improvement was due to a
number of management initiatives launched during 2007, which led to a three
percentage point increase in services margins, which in turn led to an increase
in the gross profit percentage for Germany as a whole from 13.2% to 13.7% of
sales.
Net operating expenses continue to be well controlled increasing by 2.0% in
local currency. The outcome was an improvement in adjusted operating profit from
GBP10.4 million to GBP15.3 million in 2008. This result benefits from the
operating costs that have been recharged to the UK related to the ERP upgrade
programme.
France
The French business continued to reduce its loss in 2008, with a combination of
a more selective approach in a challenging product market and additional
services revenue growth. In local currency, product revenues reduced by 9.9%,
whereas services revenue grew by 12.2%. When translated into sterling this led
to an growth in revenues of 7.9% in 2008 to GBP308.2 million.
Gross profit return increased from 11.0% of sales to 12.6% of revenues due to
the change in services mix, and improved margins in products together with
higher margins in services largely as a result of improved utilisation.
Other operating expenses increased by 3.0% in local currency, remaining under
control despite the increased commission costs resulting from the improved
margin performance. This translates into a 19.6% increase when reported in
Sterling.
As a result of these improvements the operating loss, prior to an exceptional
impairment, reduced to GBP1.0 million (2007 : GBP1.8 million).
Benelux
Revenues in the Benelux region reduced in local currency in 2008, with a 16.6%
increase in services revenues offset by a 14.9% fall in product revenues. Whilst
this change in mix resulted in an improved gross profit return, the operating
loss of the business increased to GBP96,000 (2007: GBP44,000). The increased
loss was generated in Luxembourg, with the business in Belgium generating a
small operating profit.
Exceptional impairment charge
An exceptional impairment of GBP1.1 million has been recognised in relation to
additions to intangible assets due to the Group ERP programme that can be
specifically allocated to the French cash-generating unit.
After the year-end a decision was reached to cease using the Digica brand
following the integration of the Digica operations into those of Computacenter
(UK) Limited. An exceptional non-cash impairment charge of GBP1.9 million for
the trademark generated at the time of the Digica acquisition has been
recognised accordingly.
Finance income and costs
Net finance costs on a statutory basis increased from GBP1.0 million in 2007 to
GBP3.0 million in 2008. This increase is attributable to an increase in finance
costs on customer specific financing from GBP2.0 million to GBP4.0 million. On
an adjusted basis, prior to the interest on customer specific finance ('CSF'),
net finance income was static at GBP1.0 million.
Taxation
The effective tax rate for the Group reduced to 5.5% in 2008 from 31.3% in 2007.
2008 includes two exceptional items that are not expected to be repeated.
Firstly, the UK tax charge was lower by GBP3.6 million in relation to settlement
of certain prior year items. Secondly, there was a reassessment of the
recoverable amount of the deferred tax asset recognised in relation to tax
losses of Computacenter Germany, following the material improvement in
profitability over the course of 2007 and 2008. This reassessment, in excess of
the losses utilised in the year, resulted in a beneficial reduction of GBP4.7
million to the tax charge.
Excluding the exceptional items, the adjusted effective tax rate was 24.9% (2007
: 31.3%). The improvement in 2008 is attributable to the reduction of unrelieved
operating losses in France, and losses utilised on earnings in Germany.
Deferred tax assets of GBP13.5 million (2007: GBP6.9 million) have been
recognised in respect of losses carried forward. In addition, at 31 December
2008, there were unused tax losses across the Group of GBP212.0 million (2007 :
GBP169.6 million) for which no deferred tax asset has been recognised. Of these
losses, GBP138.8 million (2007 : GBP116.5 million) arise in Germany, albeit a
significant proportion have been generated in statutory entities that no longer
have significant levels of trade. The remaining unrecognised tax losses relate
to other loss-making overseas subsidiaries.
Earnings per share and dividend
Whilst statutory diluted earnings per share has grown by 33.0% to 24.2p (2007 :
18.2p), adjusted* diluted earnings per share provides a more appropriate
reflection of performance, increasing by 13.5% from 18.5p in 2007 to 21.0p in
2008 as shown in Table 2, below :-
TABLE 2 - reconciliation of adjusted profit before tax, income tax expense and
earnings per share to statutory measures
+----------------------------------------------+---------+---------+
| | 2008 | 2007 |
+----------------------------------------------+---------+---------+
| Reconcilation of profit before tax (GBP'000) | | |
+----------------------------------------------+---------+---------+
| Profit before tax | 39,536 | 42,059 |
+----------------------------------------------+---------+---------+
| Amortisation of acquired intangibles | 525 | 613 |
+----------------------------------------------+---------+---------+
| Exceptional costs | 3,046 | |
| | | - |
+----------------------------------------------+---------+---------+
| Adjusted profit before tax | 43,107 | 42,672 |
+----------------------------------------------+---------+---------+
| | | |
+----------------------------------------------+---------+---------+
| Reconcilation of income tax expense | | |
| (GBP'000) | | |
+----------------------------------------------+---------+---------+
| Income tax expense | 2,194 | 13,161 |
+----------------------------------------------+---------+---------+
| Tax on amortisation of acquired intangibles | 150 | 184 |
+----------------------------------------------+---------+---------+
| Exceptional items | | |
+----------------------------------------------+---------+---------+
| Exceptional adjustments in relation to | 3,611 | - |
| prior periods | | |
+----------------------------------------------+---------+---------+
| Exceptional revaluation of the deferred | 4,766 | |
| tax asset in Germany | | - |
+----------------------------------------------+---------+---------+
| Adjusted income tax expense | 10,721 | 13,345 |
+----------------------------------------------+---------+---------+
| | | |
+----------------------------------------------+---------+---------+
| Statutory | | |
+----------------------------------------------+---------+---------+
| Effective tax rate | 5.5% | 31.3% |
+----------------------------------------------+---------+---------+
| Profit attributable to shareholders | 37,337 | 28,888 |
| (GBP'000) | | |
+----------------------------------------------+---------+---------+
| Basic earnings per share (p) | 24.7 | 18.5 |
+----------------------------------------------+---------+---------+
| Diluted earnings per share (p) | 24.2 | 18.2 |
+----------------------------------------------+---------+---------+
| | | |
+----------------------------------------------+---------+---------+
| Adjusted * | | |
+----------------------------------------------+---------+---------+
| Effective tax rate | 24.9% | 31.3% |
+----------------------------------------------+---------+---------+
| Profit attributable to shareholders | 32,386 | 29,327 |
| (GBP'000) | | |
+----------------------------------------------+---------+---------+
| Basic earnings per share (p) | 21.4 | 18.8 |
+----------------------------------------------+---------+---------+
| Diluted earnings per share (p) | 21.0 | 18.5 |
+----------------------------------------------+---------+---------+
Earnings per share increases exceeds the profit growth due to the repurchases of
capital through 2007 and 2008, reduced corporation tax rate in the UK and
improvement in overseas earnings that are not subject to tax.
The Board is recommending the total dividend for the year to be 8.2p per share
(2008 : 8.0p). The final dividend of 5.5p will be payable on 11 June 2009 to
registered shareholders as at 15 May 2009.
Cash flow
The Group manages its trading net funds position taking into account factor
financing, but excluding CSF. There is an adjusted cash flow statement provided
in note 28 that restates the statutory cash flow to take account of this
definition.
Net funds excluding CSF increased by GBP20.8 million from debt of GBP16.2
million to a positive position of GBP4.6 million. The increase was generated
despite outflows in the year of GBP9.7m on repurchasing shares and approximately
GBP8 million invested in intangible assets related to the ERP programme.
The main determinants for the cash inflow were earnings in the year, a low tax
payment in the UK, substantially untaxed earnings in Germany and France, and
tight management of working capital across the Group, resulting in a GBP15.3
million inflow.
During the year, we entered into a number of new CSF contracts principally in
relation to new datacentre offerings in the UK and Germany. Taking CSF into
account, total net debt at the end of the year was GBP84.6 million, compared to
GBP79.8 million at the start of the year.
Customer specific financing
In certain circumstances, the Group enters into customer contracts that are
financed by leases or loans, which are secured only on the assets that they
finance. Whilst the outstanding balance of CSF is included within the net funds
for statutory reporting purposes, the Group excludes CSF when managing the net
funds of the business, as this CSF is matched by contracted future receipts from
customers.
Whilst CSF is repaid through the future customer receipts, Computacenter retains
the credit risk on these customers. However, in excess of 90% of the GBP89.2
million CSF balance at 31 December 2008 is due from customers with strong credit
ratings (D&B - 5A1), and the future expected rental income that is estimated to
be received in future periods is approximately GBP95 million.
The CSF financing facilities, which are committed, are thus outside of the
normal working capital requirements of the Group's product resale and service
activities. It is anticipated that the level of CSF in 2009 will be broadly
similar to 2008.
Capital Management
Details of the Group's capital management policies are included within note 24
of the financial statements.
Financial instruments
The Group's financial instruments comprise borrowings, cash and liquid
resources, and various items that arise directly from its operations. The Group
occasionally enters into hedging transactions, principally forward exchange
contracts or currency swaps. The purpose of these transactions is to manage
currency risks arising from the Group's operations and its sources of finance.
The Group's policy remains that no trading in financial instruments shall be
undertaken.
The main risks arising from the Group's financial instruments are interest rate,
liquidity and foreign currency risks. The overall financial instruments strategy
is to manage these risks in order to minimise their impact on the financial
results of the Group. The policies for managing each of these risks are set out
below. Further disclosures in line with the requirements of IFRS 7 are included
in note 23 of the accounts.
Interest rate risk
The Group finances its operations through a mixture of retained profits, bank
borrowings, invoice factoring in France and the UK and finance leases and loans
for certain customer contracts. The Group's bank borrowings, other facilities
and deposits are at floating rates. No interest rate derivative contracts have
been entered into. When long-term borrowings are utilised, the Group's policy is
to maintain these borrowings at fixed rates to limit the Group's exposure to
interest rate fluctuations.
Liquidity risk
The Group's policy is to ensure that it has sufficient funding and committed
bank facilities in place to meet any foreseeable peak in borrowing requirements.
The Group's net funds position improved substantially during 2008, and at the
year-end was GBP4.6 million excluding customer-specific financing and net debt
of GBP84.6 million on a statutory basis.
At 31 December 2008, the Group had available GBP163.4 million (2007:GBP 148.1
million) of uncommitted overdraft and factoring facilities. However, GBP81.2
million of these facilities will expire during March 2009 and will not be
renewed as they are no longer required given the GBP60.0 million committed
facility established in May 2008, of which GBP45.0 million is not utilised at
the balance sheet date. Customer-specific financing facilities are committed.
The Group manages its counterparty risk by placing cash on deposit across a
panel of reputable banking institutions, with no more than GBP30 million
deposited with a single counterparty at any one time.
Foreign currency risk
The Group operates primarily in the UK, Germany, France, and the 'Benelux'
countries, using local borrowings to fund its operations outside of the UK,
where principal receipts and payments are denominated in Euros. In each country
a small proportion of the sales are made to customers outside those countries.
For those countries within the Euro zone, the level of non-Euro denominated
sales is very small and, if material, the Group's policy is to eliminate
currency exposure through forward currency contracts. For the UK, the vast
majority of sales and purchases are denominated in Sterling and any material
trading exposures are eliminated through forward currency contracts.
Credit risk
The Group principally manages credit risk through management of customer credit
limits. The credit limits are set for each customer based on the
creditworthiness of the customer and the anticipated levels of business
activity. These limits are initially determined when the customer account is
first set up and are continually monitored thereafter. In France, credit risk is
mitigated through a credit insurance policy which applies to non-Government
customers and provides insurance for approximately 50% of the relevant credit
risk exposure.
As a result of the more difficult credit environment in the past 12 months, we
have been extremely vigilant, however a loss of GBP0.85m was incurred due to the
bankruptcy of a major financial services client.
There are no significant concentrations of credit risk within the Group. The
maximum credit risk exposure relating to financial assets is represented by
carrying value as at the balance sheet date.
Going concern
After making due enquiries the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly they continue to adopt the going concern basis
in preparing the consolidated financial statements.
Tony Conophy, Finance Director
9 March 2009
Risks
The Group undertakes a formal annual process of identifying, analysing and
managing the risks to the business. Throughout the year, new risks or changed
circumstances are captured and then reflected in the Risk Log. All identified
risks are quantified, prioritised and appropriate mitigations are developed.
Risks are also considered in the development and execution of the programme of
work carried out by the Group's Internal Audit Department. Highlighted below are
some of the principal risks to the implementation of the Group's strategy or
achievement of desired performance levels. These risks are categorised into
strategic risks, operational risks and hazards. Financial risk exposures are
described in the Finance Director's Review.
Strategic risks arise principally from external events over which the Group has
limited influence and in response to which, our focus tends to be on measures to
limit or control losses.
Operational risks arise from failures in internal processes, people and systems
where proactive intervention can reduce the likelihood or severity of such
risks.
Hazards constitute perils such as fire, flood and viral attack of pandemic
proportions. Hazards are managed through prevention, mitigation, continuity
planning and risk transfer through the purchase of insurance.
+----------------------------------+----------------------------------+-------------------------------+
| | Risks | Mitigation |
+----------------------------------+----------------------------------+-------------------------------+
| Strategic Risks | The economic slowdown could | Re-focus resource on the |
| | expose the Group to materially | more buoyant business |
| | reduced discretionary spend on | sectors and promote business |
| | IT, particularly within the | offerings that reduce cost |
| | Financial Services sector and | for customers. The Group has |
| | further expose the Group to an | also implemented a cost |
| | increased potential of customer | reduction programme to save |
| | insolvency. Should a customer | GBP15 million per annum. |
| | specific financing arrangement | Close and frequent |
| | also be in place if an | monitoring of customer |
| | insolvency occurs, the potential | credit ratings and financial |
| | severity of the risk may be | stability indicators. |
| | materially increased. | Ensuring that a level of |
| | | contractual protection is |
| | | assured through the |
| | | negotiation of retention of |
| | | title clauses. |
| | | Maintaining the level of |
| | | customer specific finance |
| | | exposure to within the |
| | | defined risk tolerance with |
| | | relatively low risk |
| | | customers. |
| | | |
+ +----------------------------------+-------------------------------+
| | The economic slowdown has | Requests for extended terms to |
| | resulted in an increase in | be considered at Board level |
| | payment term extension requests | and only to be granted with |
| | from customers and increased | restrictions. Internal |
| | invoice queries, resulting in | processes enhanced to minimise |
| | payment delays which may impact | invoice queries. |
| | liquidity. | |
+ +----------------------------------+----------------------------------+
| | The credit crisis has materially | In addition to existing |
| | reduced the availability and the | facilities across the Group, a |
| | cost of arranging finance. | committed facility was secured |
| | | in 2008. The Group's available |
| | | cash and working capital |
| | | requirements are constantly |
| | | reviewed together with the |
| | | suitability of the facility |
| | | levels. |
| | | |
+ +----------------------------------+----------------------------------+
| | A small number of key vendors | Maintaining a vendor |
| | with considerable scale and | independent product portfolio |
| | market strength supply products | and delivering incremental |
| | which generate a significant | value to customers across the |
| | proportion of the Group's | range of services. |
| | revenues. | |
| | | |
+ +----------------------------------+----------------------------------+
| | The Group's profits continue to | Focus on internal cost control |
| | be exposed to erosion of IT | and directing the selling |
| | equipment unit prices. | activity to higher margin |
| | | earning contracts. |
| | | |
+----------------------------------+----------------------------------+----------------------------------+
| Operational Risks | Profit erosion resulting from a | Multi level bid review and |
| | failure to understand or | an escalation process for |
| | effectively implement the full | non-standard proposals with |
| | commercial consequences and | detailed contract |
| | terms of new and complex | negotiation by experienced |
| | end-to-end service contracts, | staff. Focus on service |
| | which arise through the | implementation processes |
| | competitive and dynamic nature | during contract take-on. |
| | of the industry. | |
| | | |
+ +----------------------------------+-------------------------------+
| | Failure of the business in | Aggressive implementation of |
| | France to return to | the strategy to build services |
| | profitability. | offerings and to grow the |
| | | business' presence within this |
| | | environment, whilst remaining |
| | | focussed on internal cost |
| | | control. |
| | | |
+ +----------------------------------+----------------------------------+
| | The ERP upgrade SAP project | Senior Executive and Board |
| | suffers delays due to unforeseen | level progress monitoring |
| | scope changes, resulting in | reviews, against pre-determined |
| | material costs outside of the | performance indicators, are |
| | budget, or the SAP application | scheduled at high frequency. |
| | fails to deliver the anticipated | Senior management resource has |
| | business benefits, due to | been dedicated to the project |
| | initial design omissions. | design phase and competent |
| | | staff have been assigned to |
| | | maintain focus on current |
| | | business activities. |
| | | |
+ +----------------------------------+----------------------------------+
| | The Group cost reduction plan | Cost reduction monitoring |
| | does not achieve the targeted | against plan is frequently |
| | level of cost removal. | undertaken, with prompt |
| | | responses to variances |
| | | implemented. |
| | | |
+----------------------------------+----------------------------------+----------------------------------+
| Hazards | The loss of an entire | Enhanced loss control |
| | significant facility of the | measures and physical |
| | Group, or the failure of | protection implemented over |
| | business critical IT systems or | previous years, combined |
| | telephony. | with ongoing contingency |
| | | planning and testing. |
+----------------------------------+----------------------------------+-------------------------------+
Directors' Responsibility Statement
* The financial statements, prepared in accordance with International Financial
Reporting Standards as adopted by the EU, give a true and fair view of the
assets, liabilities, financial position and profit for the Company and
undertakings included in the consolidation taken as a whole; and
* Pursuant to the Disclosure and Transparency Rules, pages 1 to 22 of the
Company's annual report and accounts includes a fair review of the development
and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
The contents of this announcement, including the responsibility statement above
has been extracted from the annual report and accounts for the year ended 31
December 2008, which will be published on Computacenter.com and dispatched to
shareholders in early April. Accordingly the responsibility statement makes
reference to the financial statements of the Group and to the relevant
narratives appearing in that annual report and accounts rather than the contents
of this announcement.
On behalf of the Board
MJ Norris FA Conophy
Chief Executive Finance Director
9 March 2009
Consolidated income statement
For the year ended 31 December 2008
+--------------------------------------------+--------+-------------+-+-------------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+-------------+-+-------------+
| | Note | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Revenue | 3 | 2,560,135 | | 2,379,141 |
+--------------------------------------------+--------+-------------+-+-------------+
| Cost of sales | | (2,205,276) | | (2,053,333) |
+--------------------------------------------+--------+-------------+-+-------------+
| Gross profit | | 354,859 | | 325,808 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Distribution costs | | (20,268) | | (18,344) |
+--------------------------------------------+--------+-------------+-+-------------+
| Administrative expenses | | (288,418) | | (263,750) |
+--------------------------------------------+--------+-------------+-+-------------+
| Operating profit: | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Before amortisation of acquired | | 46,173 | | 43,714 |
| intangibles and exceptional items | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Amortisation of acquired intangibles | | (525) | | (613) |
+--------------------------------------------+--------+-------------+-+-------------+
| Exceptional items | 4 | (3,046) | | - |
+--------------------------------------------+--------+-------------+-+-------------+
| Operating profit | | 42,602 | | 43,101 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Finance revenue | | 3,095 | | 3,910 |
+--------------------------------------------+--------+-------------+-+-------------+
| Finance costs | | (6,161) | | (4,952) |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Profit before tax: | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Before amortisation of acquired | | 43,107 | | 42,672 |
| intangibles and exceptional items | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Amortisation of acquired intangibles | | (525) | | (613) |
+--------------------------------------------+--------+-------------+-+-------------+
| Exceptional items | | (3,046) | | - |
+--------------------------------------------+--------+-------------+-+-------------+
| Profit before tax | | 39,536 | | 42,059 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Income tax expense: | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Before exceptional items | | (10,571) | | (13,161) |
+--------------------------------------------+--------+-------------+-+-------------+
| Exceptional tax items | 4 | 8,377 | | - |
+--------------------------------------------+--------+-------------+-+-------------+
| Income tax expense | 5 | (2,194) | | (13,161) |
+--------------------------------------------+--------+-------------+-+-------------+
| Profit for the year | | 37,342 | | 28,898 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Attributable to: | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Equity holders of the parent | 6 | 37,337 | | 28,888 |
+--------------------------------------------+--------+-------------+-+-------------+
| Minority interests | | 5 | | 10 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | 37,342 | | 28,898 |
+--------------------------------------------+--------+-------------+-+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| Earnings per share | 6 | | | |
+--------------------------------------------+--------+-------------+-+-------------+
| - basic | | 24.7p | | 18.5p |
+--------------------------------------------+--------+-------------+-+-------------+
| - diluted | | 24.2p | | 18.2p |
+--------------------------------------------+--------+-------------+-+-------------+
Consolidated balance sheet
As at 31 December 2008
+--------------------------------------------+--------+-----------+--+-----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+-----------+--+-----------+
| | Notes | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+-----------+--+-----------+
| Non-current assets | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Property, plant and equipment | | 123,315 | | 116,444 |
+--------------------------------------------+--------+-----------+--+-----------+
| Intangible assets | | 51,551 | | 45,185 |
+--------------------------------------------+--------+-----------+--+-----------+
| Deferred income tax asset | | 16,672 | | 8,190 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | 191,538 | | 169,819 |
+--------------------------------------------+--------+-----------+--+-----------+
| Current assets | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Inventories | | 105,831 | | 110,535 |
+--------------------------------------------+--------+-----------+--+-----------+
| Trade and other receivables | | 529,501 | | 454,155 |
+--------------------------------------------+--------+-----------+--+-----------+
| Prepayments | | 53,766 | | 27,936 |
+--------------------------------------------+--------+-----------+--+-----------+
| Accrued income | | 43,942 | | 33,445 |
+--------------------------------------------+--------+-----------+--+-----------+
| Cash and short-term deposits | 8 | 53,372 | | 29,211 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | 786,412 | | 655,282 |
+--------------------------------------------+--------+-----------+--+-----------+
| Total assets | | 977,950 | | 825,101 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Current liabilities | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Trade and other payables | | 378,721 | | 336,971 |
+--------------------------------------------+--------+-----------+--+-----------+
| Deferred income | | 115,274 | | 74,686 |
+--------------------------------------------+--------+-----------+--+-----------+
| Financial liabilities | | 96,154 | | 74,363 |
+--------------------------------------------+--------+-----------+--+-----------+
| Forward currency contracts | | 644 | | 369 |
+--------------------------------------------+--------+-----------+--+-----------+
| Income tax payable | | 10,275 | | 7,899 |
+--------------------------------------------+--------+-----------+--+-----------+
| Provisions | | 2,100 | | 2,180 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | 603,168 | | 496,468 |
+--------------------------------------------+--------+-----------+--+-----------+
| Non-current liabilities | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Financial liabilities | | 41,809 | | 34,652 |
+--------------------------------------------+--------+-----------+--+-----------+
| Provisions | | 9,565 | | 12,225 |
+--------------------------------------------+--------+-----------+--+-----------+
| Other non-current liabilities | | 615 | | 1,685 |
+--------------------------------------------+--------+-----------+--+-----------+
| Deferred income tax liabilities | | 1,582 | | 1,875 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | 53,571 | | 50,437 |
+--------------------------------------------+--------+-----------+--+-----------+
| Total liabilities | | 656,739 | | 546,905 |
+--------------------------------------------+--------+-----------+--+-----------+
| Net assets | | 321,211 | | 278,196 |
+--------------------------------------------+--------+-----------+--+-----------+
| | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Capital and reserves | | | | |
+--------------------------------------------+--------+-----------+--+-----------+
| Issued capital | | 9,181 | | 9,504 |
+--------------------------------------------+--------+-----------+--+-----------+
| Share premium | | 2,890 | | 2,890 |
+--------------------------------------------+--------+-----------+--+-----------+
| Capital redemption reserve | | 74,950 | | 74,627 |
+--------------------------------------------+--------+-----------+--+-----------+
| Own shares held | | (11,169) | | (11,380) |
+--------------------------------------------+--------+-----------+--+-----------+
| Foreign currency translation reserve | | 26,368 | | 1,507 |
+--------------------------------------------+--------+-----------+--+-----------+
| Retained earnings | | 218,970 | | 201,035 |
+--------------------------------------------+--------+-----------+--+-----------+
| Shareholders' equity | | 321,190 | | 278,183 |
+--------------------------------------------+--------+-----------+--+-----------+
| Minority interest | | 21 | | 13 |
+--------------------------------------------+--------+-----------+--+-----------+
| Total equity | | 321,211 | | 278,196 |
+--------------------------------------------+--------+-----------+--+-----------+
Approved by the Board on 9 March 2009
MJ Norris FA Conophy
Chief Executive Finance Director
Consolidated statement of changes in equity
For the year ended 31 December 2008
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| | Attributable to equity holders of the parent | | | |
+------------------+--------------------------------------------------------------------+----------+----------+----------+
| | Issued | | Capital | Own | Foreign | Retained | | Minority | Total |
| | capital | Share | redemption | shares | currency | earnings | Total | interest | equity |
| | | premium | reserve | held | translation | | | | |
| | | | | | reserve | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| At 1 January | 9,571 | 2,247 | 74,542 | (2,503) | (2,455) | 183,700 | 265,102 | 27 | 265,129 |
| 2007 | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Exchange | - | - | - | - | 3,962 | - | 3,962 | - | 3,962 |
| differences on | | | | | | | | | |
| retranslation of | | | | | | | | | |
| foreign | | | | | | | | | |
| operations | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Net income | - | - | - | - | 3,962 | - | 3,962 | - | 3,962 |
| recognised | | | | | | | | | |
| directly in | | | | | | | | | |
| equity | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Profit for the | - | - | - | | - | 28,888 | 28,888 | 10 | 28,898 |
| year | | | | - | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Total recognised | - | - | - | - | 3,962 | 28,888 | 32,850 | 10 | 32,860 |
| income and | | | | | | | | | |
| expenses for the | | | | | | | | | |
| year | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Cost of | - | - | - | - | - | 2,659 | 2,659 | - | 2,659 |
| share-based | | | | | | | | | |
| payment | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Exercise of | 18 | 643 | - | 49 | - | - | 710 | - | 710 |
| options | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Purchase of own | - | - | - | (11,332) | - | - | (11,332) | - | (11,332) |
| shares | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Cancellation of | (85) | - | 85 | 2,406 | - | (2,406) | - | - | - |
| own shares | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Equity dividends | - | - | - | - | - | (11,806) | (11,806) | - | (11,806) |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Acquisition of | - | - | - | - | - | - | - | (24) | (24) |
| minority | | | | | | | | | |
| interests | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| | (67) | 643 | 85 | (8,877) | 3,962 | 17,335 | 13,081 | (14) | 13,067 |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| At 31 December | 9,504 | 2,890 | 74,627 | (11,380) | 1,507 | 201,035 | 278,183 | 13 | 278,196 |
| 2007 | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| At 1 January | 9,504 | 2,890 | 74,627 | (11,380) | 1,507 | 201,035 | 278,183 | 13 | 278,196 |
| 2008 | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Exchange | - | - | - | - | 24,861 | - | 24,861 | 3 | 24,864 |
| differences on | | | | | | | | | |
| retranslation of | | | | | | | | | |
| foreign | | | | | | | | | |
| operations | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Net income | - | - | - | - | 24,861 | - | 24,861 | 3 | 24,864 |
| recognised | | | | | | | | | |
| directly in | | | | | | | | | |
| equity | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Profit for the | - | - | - | | - | 37,337 | 37,337 | 5 | 37,342 |
| year | | | | - | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Total recognised | - | - | - | - | 24,861 | 37,337 | 62,198 | 8 | 62,206 |
| income and | | | | | | | | | |
| expenses for the | | | | | | | | | |
| year | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Cost of | - | - | - | - | - | 2,525 | 2,525 | - | 2,525 |
| share-based | | | | | | | | | |
| payment | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Exercise of | - | - | - | 298 | - | (298) | - | - | - |
| options | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Purchase of own | - | - | - | (9,695) | - | - | (9,695) | - | (9,695) |
| shares | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Cancellation of | (323) | - | 323 | 9,608 | - | (9,608) | - | - | - |
| own shares | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| Equity dividends | - | - | - | - | - | (12,021) | (12,021) | - | (12,021) |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| | (323) | - | 323 | 211 | 24,861 | 17,935 | 43,007 | 8 | 43,015 |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
| At 31 December | 9,181 | 2,890 | 74,950 | (11,169) | 26,368 | 218,970 | 321,190 | 21 | 321,211 |
| 2008 | | | | | | | | | |
+------------------+---------+---------+------------+----------+-------------+----------+----------+----------+----------+
Consolidated cash flow statement
For the year ended 31 December 2008
+--------------------------------------------+--------+----------+--+-----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+----------+--+-----------+
| | Notes | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+----------+--+-----------+
| Operating activities | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Profit before taxation | | 39,536 | | 42,059 |
+--------------------------------------------+--------+----------+--+-----------+
| Net finance costs | | 3,066 | | 1,041 |
+--------------------------------------------+--------+----------+--+-----------+
| Depreciation | | 36,719 | | 27,130 |
+--------------------------------------------+--------+----------+--+-----------+
| Amortisation | | 4,764 | | 3,547 |
+--------------------------------------------+--------+----------+--+-----------+
| Share-based payment | | 2,525 | | 2,659 |
+--------------------------------------------+--------+----------+--+-----------+
| Loss on disposal of property, plant and | | 526 | | 190 |
| equipment | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Impairment of intangible assets | | 3,046 | | 86 |
+--------------------------------------------+--------+----------+--+-----------+
| Loss on disposal of intangible assets | | 48 | | |
| | | | | - |
+--------------------------------------------+--------+----------+--+-----------+
| Decrease/(increase) in inventories | | 19,793 | | (8,724) |
+--------------------------------------------+--------+----------+--+-----------+
| Increase in trade and other receivables | | (34,844) | | (1,470) |
+--------------------------------------------+--------+----------+--+-----------+
| Increase/(decrease) in trade and other | | 16,190 | | (19,976) |
| payables | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Other adjustments | | (760) | | (218) |
+--------------------------------------------+--------+----------+--+-----------+
| Cash generated from operations | | 90,609 | | 46,324 |
+--------------------------------------------+--------+----------+--+-----------+
| Income taxes paid | | (6,052) | | (13,853) |
+--------------------------------------------+--------+----------+--+-----------+
| Net cash flow from operating activities | | 84,557 | | 32,471 |
+--------------------------------------------+--------+----------+--+-----------+
| | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Investing activities | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Interest received | | 3,884 | | 3,885 |
+--------------------------------------------+--------+----------+--+-----------+
| Acquisition of subsidiaries, net of cash | | - | | (32,600) |
| acquired | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Sale of property, plant and equipment | | 30 | | 336 |
+--------------------------------------------+--------+----------+--+-----------+
| Purchases of property, plant and equipment | | (10,065) | | (8,620) |
+--------------------------------------------+--------+----------+--+-----------+
| Purchases of intangible assets | | (14,278) | | (5,619) |
+--------------------------------------------+--------+----------+--+-----------+
| Acquisition of minority interests | | - | | (30) |
+--------------------------------------------+--------+----------+--+-----------+
| Net cash flow from investing activities | | (20,429) | | (42,648) |
+--------------------------------------------+--------+----------+--+-----------+
| | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Financing activities | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Interest paid | | (7,254) | | (5,333) |
+--------------------------------------------+--------+----------+--+-----------+
| Dividends paid to equity shareholders of | | (12,021) | | (11,806) |
| the parent | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Proceeds from share issues | | - | | 661 |
+--------------------------------------------+--------+----------+--+-----------+
| Purchase of own shares | | (9,695) | | (11,332) |
+--------------------------------------------+--------+----------+--+-----------+
| Repayment of capital element of finance | | (25,713) | | (12,195) |
| leases | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Repayment of loans | | (28,633) | | (11,103) |
+--------------------------------------------+--------+----------+--+-----------+
| New borrowings | | 46,610 | | 19,832 |
+--------------------------------------------+--------+----------+--+-----------+
| Increase/(decrease) in factor financing | | 12,763 | | (8,743) |
+--------------------------------------------+--------+----------+--+-----------+
| Net cash flow from financing activities | | (23,943) | | (40,019) |
+--------------------------------------------+--------+----------+--+-----------+
| | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Increase/(decrease) in cash and cash | | 40,185 | | (50,195) |
| equivalents | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Effect of exchange rates on cash and cash | | (562) | | (1,521) |
| equivalents | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Cash and cash equivalents at the beginning | 8 | 7,266 | | 58,982 |
| of the year | | | | |
+--------------------------------------------+--------+----------+--+-----------+
| Cash and cash equivalents at the year end | 8 | 46,889 | | 7,266 |
+--------------------------------------------+--------+----------+--+-----------+
Analysis of changes in net debt
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| | At 1 | | Cash | | Non-cash | | Exchange | | At 31 |
| | January | | flows in | | flow | | differences | | December |
| | 2008 | | year | | | | | | 2008 |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Cash and cash equivalents | 7,266 | | 40,185 | | - | | (562) | | 46,889 |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Factor financing | (23,453) | | (12,763) | | - | | (6,064) | | (42,280) |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Net (debt)/funds excluding | (16,187) | | 27,422 | | - | | (6,626) | | 4,609 |
| customer-specific financing | | | | | | | | | |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Finance leases | (47,642) | | 25,713 | | (27,657) | | (5,605) | | (55,191) |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Other loans | (15,975) | | (17,977) | | - | | (57) | | (34,009) |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
| Net debt | (79,804) | | 35,158 | | (27,657) | | (12,288) | | (84,591) |
+-------------------------------+----------+--+-----------+--+----------+--+-------------+--+-------------+
Notes to the consolidated financial statements
For the year ended 31 December 2008
1 Authorisation of financial statements and statement of compliance with IFRS
The consolidated financial statements of Computacenter plc for the year ended 31
December 2008 were authorised for issue in accordance with a resolution of the
Directors on 9 March 2009. The balance sheet was signed on behalf of the Board
by MJ Norris and FA Conophy. Computacenter plc is a limited company incorporated
and domiciled in England whose shares are publicly traded.
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
31 December 2008 and applied in accordance with the Companies Act 1985.
2 Summary of significant accounting policies
Basis of preparation
The consolidated financial statements are presented in sterling and all values
are rounded to the nearest thousand (GBP'000) except when otherwise indicated.
Basis of consolidation
The consolidated financial statements comprise the financial statements of
Computacenter plc and its subsidiaries as at 31 December each year. The
financial statements of subsidiaries are prepared for the same reporting year as
the parent company, using existing GAAP in each country of operation.
Adjustments are made on consolidation translating any differences that may exist
between the respective local GAAPs and IFRS.
All intra-group balances, transactions, income and expenses and profit and
losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are consolidated from the date on which the Group obtains control
and cease to be consolidated from the date on which the Group no longer retains
control.
Minority interests represent the portion of profit or loss and net assets in
subsidiaries that is not held by the Group and is presented separately within
equity in the consolidated balance sheet, separately from parent shareholders'
equity.
Changes in accounting policy and disclosures
The accounting policies adopted are consistent with those of the previous
financial year.
3 Segmental analysis
The Group's primary reporting format is geographical segments and its secondary
format is business segments. The Group's geographical segments are determined by
the location of the Group's assets and operations. The Group's business in each
geography is managed separately and held in separate statutory entities.
Each geographical business contains the following three business segments: -
* the Product segment supplies computer hardware and software to large and medium
corporate and government customers and to other distributors. It includes the
resale of third party services for which the group retains no risks or rewards
post sale; and
* the Professional Services segment provides technical and project management
skills to enable customers in the corporate and government sectors to implement
and integrate new technologies into their infrastructures; and
* the Support and Managed Services segment provides an outsourcing service for
specific areas of infrastructure management to customers in the corporate and
government sectors.
The sale of goods is reported in the Product segment. The rendering of services
is reported in the Professional Services and Support and Managed Services
segments.
Transfer prices between geographical segments are set on an arm's length basis
in a manner similar to transactions with third parties. The impact of
inter-segment sales on operating profit by segment is not significant.
Geographical segments
The following tables present revenue, expenditure and certain asset information
regarding the Group's geographical segments for the years ended 31 December 2008
and 2007.
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | UK | Germany | France | Benelux | Total |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Year ended 31 December 2008 | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Revenue | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Sales to external customers | | 1,391,177 | 830,740 | 308,210 | 30,008 | 2,560,135 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Inter-segment sales | | 9,063 | 10,268 | 2,517 | 2,203 | 24,051 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Segment revenue | | 1,400,240 | 841,008 | 310,727 | 32,211 | 2,584,186 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Result | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Gross profit | | 198,226 | 114,439 | 38,821 | 3,373 | 354,859 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Distribution costs | | (11,924) | (4,360) | (3,748) | (236) | (20,268) |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Administrative expenses | | (155,072) | (94,074) | (36,040) | (3,232) | (288,418) |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Operating result before | | 31,230 | 16,005 | (967) | (95) | 46,173 |
| amortisation of acquired | | | | | | |
| intangibles and exceptional | | | | | | |
| items | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Amortisation of acquired | | (481) | (44) | - | - | (525) |
| intangibles | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Exceptional items | | (1,922) | - | (1,124) | - | (3,046) |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Segment operating result | | 28,827 | 15,961 | (2,091) | (95) | 42,602 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Net finance income/(expense) | | 180 | (1,532) | (1,643) | (71) | (3,066) |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Profit before tax | | 29,007 | 14,429 | (3,734) | (166) | 39,536 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Income tax expense | | | | | | (2,194) |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Profit for the year | | | | | | 37,342 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Assets and liabilities | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Total segment assets | | 641,233 | 244,587 | 71,094 | 4,364 | 961,278 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Unallocated assets | | | | | | 16,672 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Total assets | | | | | | 977,950 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Total segment liabilities | | 323,078 | 205,837 | 110,306 | 5,661 | 644,882 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Unallocated liabilities | | | | | | 11,857 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Total liabilities | | | | | | 656,739 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Other segment information | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Capital expenditure: | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Property, plant and equipment | | 28,725 | 7,663 | 1,105 | 229 | 37,722 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Intangible fixed assets | | 11,903 | 1,067 | 1,308 | - | 14,278 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Depreciation | | 27,715 | 7,804 | 1,078 | 122 | 36,719 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Amortisation | | 2,816 | 827 | 1,121 | - | 4,764 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| | | | | | | |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
| Share-based payments | | 2,009 | 334 | 182 | - | 2,525 |
+--------------------------------+--------+-----------+----------+----------+---------+-----------+
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | UK | Germany | France | Benelux | Total |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Year ended 31 December 2007 | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Revenue | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Sales to external customers | | 1,357,305 | 708,581 | 285,698 | 27,557 | 2,379,141 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Inter-segment sales | | 13,094 | 19,529 | 1,373 | 4,014 | 38,010 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Segment revenue | | 1,370,399 | 728,110 | 287,071 | 31,571 | 2,417,151 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Result | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Gross profit | | 197,185 | 94,202 | 31,501 | 2,920 | 325,808 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Distribution costs | | (10,572) | (3,700) | (3,855) | (217) | (18,344) |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Administrative expenses | | (152,175) | (79,428) | (29,400) | (2,747) | (263,750) |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Operating result before | | 34,438 | 11,074 | (1,754) | (44) | 43,714 |
| amortisation of acquired | | | | | | |
| intangibles | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Amortisation of acquired | | (481) | (132) | - | - | (613) |
| intangibles | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Segment operating result | | 33,957 | 10,942 | (1,754) | (44) | 43,101 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Net finance income/expense | | 2,536 | (1,842) | (1,613) | (123) | (1,042) |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Profit before tax | | 36,493 | 9,100 | (3,367) | (167) | 42,059 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Income tax expense | | | | | | (13,161) |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Profit for the year | | | | | | 28,898 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Assets and liabilities | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Total segment assets | | 574,985 | 181,827 | 56,379 | 3,720 | 816,911 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Unallocated assets | | | | | | 8,190 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Total assets | | | | | | 825,101 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Total segment liabilities | | 282,647 | 152,531 | 96,377 | 5,575 | 537,130 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Unallocated liabilities | | | | | | 9,775 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | 546,905 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Other segment information | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Capital expenditure: | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Property, plant and equipment | | 42,914 | 12,759 | 648 | 67 | 56,388 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Intangible fixed assets | | 3,195 | 2,239 | 185 | - | 5,619 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Depreciation | | 22,319 | 4,705 | - | 106 | 27,130 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Amortisation | | 2,985 | 451 | 111 | - | 3,547 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| | | | | | | |
+--------------------------------+-------+------------+----------+----------+---------+------------+
| Share-based payments | | 2,197 | 326 | 136 | - | 2,659 |
+--------------------------------+-------+------------+----------+----------+---------+------------+
Business segments
The following tables present revenue information regarding the Group's business
segments for the years ended 31 December 2008 and 2007.
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| | | | | Product | Professional | Support | Total |
| | | | | | services | and | |
| | | | | | | managed | |
| | | | | | | services | |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| Year ended 31 December | | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| 2008 | | | | | | | |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| Revenue | | | | | | | |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| Sales to external | | | | 1,875,857 | 181,219 | 503,059 | 2,560,135 |
| customers | | | | | | | |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| Inter-segment sales | | | | 5,093 | 2,350 | 16,608 | 24,051 |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
| Segment revenue | | | | 1,880,950 | 183,569 | 519,667 | 2,584,186 |
+----------------------------+-------+-------+---+-----------+--------------+-----------+-----------+
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| | | | | Product | Professional | Support | Total |
| | | | | | services | and | |
| | | | | | | managed | |
| | | | | | | services | |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| Year ended 31 December | | | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| 2007 | | | | | | | |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| Revenue | | | | | | | |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| Sales to external | | | | 1,774,164 | 158,488 | 446,489 | 2,379,141 |
| customers | | | | | | | |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| Inter-segment sales | | | | 7,563 | 9,559 | 20,888 | 38,010 |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
| Segment revenue | | | | 1,781,727 | 168,047 | 467,377 | 2,417,151 |
+--------------------------+-------+-------+------+------------+--------------+-----------+------------+
Business segments provide the Group with common business performance reporting
across geographical segments that are structured and organised differently. Due
to invoice bundling and shared service and business support structures, revenue
and gross profit involves allocation judgements. Each geographical segment
principally consists of a single entity with shared assets, liabilities and
capital expenditure. Investment decisions are made either at the level of or
within a geographical segment, but are not made at a business segment level. It
is, therefore, not possible to split out assets, liabilities and capital
expenditure information by business segments
4 Exceptional items
+--------------------------------------------+--------+----------+--+----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+----------+--+----------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+----------+--+----------+
| Operating profit | | | | |
+--------------------------------------------+--------+----------+--+----------+
| Impairment of intangible assets - software | | (1,124) | | - |
+--------------------------------------------+--------+----------+--+----------+
| | | (1,922) | | |
| - trademarks | | | | - |
+--------------------------------------------+--------+----------+--+----------+
| | | (3,046) | | - |
+--------------------------------------------+--------+----------+--+----------+
| | | | | |
+--------------------------------------------+--------+----------+--+----------+
| Income tax | | | | |
+--------------------------------------------+--------+----------+--+----------+
| Adjustment following agreement of certain items for | 3,611 | | - |
| earlier years | | | |
+-----------------------------------------------------+----------+--+----------+
| Changes in recoverable amounts of deferred | | 4,766 | | - |
| tax assets | | | | |
+--------------------------------------------+--------+----------+--+----------+
| | | 8,377 | | |
| | | | | - |
+--------------------------------------------+--------+----------+--+----------+
The forecasted cash-flows for Computacenter France do not support the value of
the non-current assets in the business. An exceptional impairment has been
recognised in 2008 in relation to additions to intangible assets relating to the
Group ERP programme that can be specifically allocated to the French
cash-generating unit.
After the year-end a decision was reached to cease using the Digica brand
following the integration of the Digica operations into those of Computacenter
(UK) Limited. An exceptional impairment of the trademark, generated at the time
of acquisition, has been recognised accordingly.
The tax charge for the year contains two items which, due to their size, are
disclosed separately, as follows:
- during the year agreement was reached on certain significant items for
earlier years;
- the deferred tax asset in respect of losses in Germany was re-assessed in
line with management's
view of the entities future performance. Where
the reassessment exceeds the losses utilised in the
year, the change
in the recoverable amount of the deferred tax asset is shown as an exceptional
item.
5 Income tax
a) Tax on profit on ordinary activities
+--------------------------------------------+--------+------------------+--+--------------------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+------------------+--+--------------------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Tax charged in the income statement | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Current income tax | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| UK corporation tax | | 11,881 | | 13,420 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Foreign tax | | 673 | | 113 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Adjustments in respect of prior periods | | (4,028) | | (385) |
+--------------------------------------------+--------+------------------+--+--------------------+
| Total current income tax | | 8,526 | | 13,148 |
+--------------------------------------------+--------+------------------+--+--------------------+
| | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Deferred tax | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Origination and reversal of temporary | | (2,379) | | (1,372) |
| differences | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Losses utilised | | 4,841 | | 3,417 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Effect of changes in tax rate on deferred | | - | | (49) |
| tax | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Effect of changes in tax rate on German | | - | | 635 |
| deferred tax asset | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Changes in recoverable amounts of deferred | | (4,145) | | (2,747) |
| tax assets | | | | |
+--------------------------------------------+--------+------------------+--+--------------------+
| Exceptional changes in recoverable amounts | | (4,766) | | |
| of deferred tax assets | | | | - |
+--------------------------------------------+--------+------------------+--+--------------------+
| Adjustments in respect of prior periods | | 117 | | 129 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Total deferred tax | | (6,332) | | 13 |
+--------------------------------------------+--------+------------------+--+--------------------+
| Tax charge in the income statement | | 2,194 | | 13,161 |
+--------------------------------------------+--------+------------------+--+--------------------+
b) Reconciliation of the total tax charge
+--------------------------------------------+--------+------------------+--+-----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+------------------+--+-----------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+------------------+--+-----------+
| Accounting profit before income tax | | 39,536 | | 42,059 |
+--------------------------------------------+--------+------------------+--+-----------+
| | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| At the UK standard rate of corporation tax | | 11,268 | | 12,618 |
| of 28.5% (2007: 30%) | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Expenses not deductible for tax purposes | | 806 | | 643 |
+--------------------------------------------+--------+------------------+--+-----------+
| Exceptional expenses not deductible for | | 548 | | |
| tax purposes | | | | - |
+--------------------------------------------+--------+------------------+--+-----------+
| Relief on share option gains | | - | | (78) |
+--------------------------------------------+--------+------------------+--+-----------+
| Non-deductible element of share-based | | 719 | | 506 |
| payment charge | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Exceptional adjustments in respect of | | (3,611) | | |
| current income tax of previous periods | | | | - |
+--------------------------------------------+--------+------------------+--+-----------+
| Adjustments in respect of current income | | (300) | | (256) |
| tax of previous periods | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Higher tax on overseas earnings | | 664 | | 859 |
+--------------------------------------------+--------+------------------+--+-----------+
| Effect of changes in tax rate on deferred | | - | | (49) |
| tax | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Other differences | | (104) | | (149) |
+--------------------------------------------+--------+------------------+--+-----------+
| Effect of change in rate of overseas | | - | | 635 |
| deferred tax asset | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Changes in recoverable amounts of deferred | | (4,145) | | (2,747) |
| tax assets | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| Exceptional changes in recoverable amounts | | (4,766) | | |
| of deferred tax assets | | | | - |
+--------------------------------------------+--------+------------------+--+-----------+
| Losses of overseas undertakings not | | 1,115 | | 1,179 |
| available for relief | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
| At effective income tax rate of 5.5% | | 2,194 | | 13,161 |
| (2007: 31.3%) | | | | |
+--------------------------------------------+--------+------------------+--+-----------+
As a consequence of the UK corporation tax rate change from 30% to 28% on 6th
April 2008, corporation tax is calculated at 28.5% of the estimated assessable
profit for the year.
c) Tax losses
Deferred tax assets of GBP13.5 million (2007: GBP6.9 million) have been
recognised in respect of losses carried forward. Where deferred tax assets have
been reassessed in excess of the losses utilised in the year, the change in the
recoverable amount of the deferred tax asset is shown as an exceptional item in
the income tax expense for the year, due to the material nature and expected
infrequency of this reassessment.
In addition, at 31 December 2008, there were unused tax losses across the Group
of GBP212.0 million (2007 : GBP169.6 million) for which no deferred tax asset
has been recognised. Of these losses, GBP138.8 million (2007 : GBP116.5 million)
arise in Germany, albeit a significant proportion have been generated in
statutory entities that no longer have significant levels of trade. The
remaining unrecognised tax losses relate to other loss-making overseas
subsidiaries.
6 Earnings per ordinary share
Earnings per share (EPS) amounts are calculated by dividing profit attributable
to ordinary equity holders by the weighted average number of ordinary shares
outstanding during the year (excluding own shares held).
Diluted earnings per share amounts are calculated by dividing profit
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year (excluding own shares held) adjusted
for the effect of dilutive options.
Adjusted basic and adjusted diluted EPS are presented to provide more comparable
and representative information. Accordingly the adjusted basic and adjusted
diluted EPS figures exclude amortisation of acquired intangibles and exceptional
items.
+-----------------------------------------------+--------+----------+--+----------+
| | | 2008 | | 2007 |
+-----------------------------------------------+--------+----------+--+----------+
| | | GBP'000 | | GBP'000 |
+-----------------------------------------------+--------+----------+--+----------+
| Profit attributable to equity holders of the | | 37,337 | | 28,888 |
| parent | | | | |
+-----------------------------------------------+--------+----------+--+----------+
| Amortisation of acquired intangibles | | 525 | | 613 |
+-----------------------------------------------+--------+----------+--+----------+
| Tax on amortisation of acquired intangibles | | (150) | | (184) |
+-----------------------------------------------+--------+----------+--+----------+
| Exceptional items within operating profit | | 3,046 | | - |
+-----------------------------------------------+--------+----------+--+----------+
| Exceptional items within the total tax charge | | | | |
| for the year: | | | | |
+-----------------------------------------------+--------+----------+--+----------+
| - adjustment following agreement of certain items for | (3,611) | | - |
| earlier years | | | |
+--------------------------------------------------------+----------+--+----------+
| - changes in recoverable amounts of deferred | | (4,766) | | - |
| tax assets | | | | |
+-----------------------------------------------+--------+----------+--+----------+
| Profit before amortisation of acquired | | 32,381 | | 29,317 |
| intangibles and exceptional items | | | | |
+-----------------------------------------------+--------+----------+--+----------+
+-----------------------------------------------+--------+----------+--+-----------+
| | | 2008 | | 2007 |
+-----------------------------------------------+--------+----------+--+-----------+
| | | 000's | | 000's |
+-----------------------------------------------+--------+----------+--+-----------+
| Basic weighted average number of shares | | 151,279 | | 156,117 |
| (excluding own shares held) | | | | |
+-----------------------------------------------+--------+----------+--+-----------+
| Effect of dilution: | | | | |
+-----------------------------------------------+--------+----------+--+-----------+
| Share options | | 3,077 | | 2,202 |
+-----------------------------------------------+--------+----------+--+-----------+
| Diluted weighted average number of shares | | 154,356 | | 158,319 |
+-----------------------------------------------+--------+----------+--+-----------+
+-----------------------------------------------+--------+----------+--+-----------+
| | | 2008 | | 2007 |
+-----------------------------------------------+--------+----------+--+-----------+
| | | pence | | pence |
+-----------------------------------------------+--------+----------+--+-----------+
| Basic earnings per share | | 24.7 | | 18.5 |
+-----------------------------------------------+--------+----------+--+-----------+
| Diluted earnings per share | | 24.2 | | 18.2 |
+-----------------------------------------------+--------+----------+--+-----------+
| Adjusted basic earnings per share | | 21.4 | | 18.8 |
+-----------------------------------------------+--------+----------+--+-----------+
| Adjusted diluted earnings per share | | 21.0 | | 18.5 |
+-----------------------------------------------+--------+----------+--+-----------+
7 Dividends paid and proposed
+-----------------------------------------------+--------+----------+--+-----------+
| | | 2008 | | 2007 |
+-----------------------------------------------+--------+----------+--+-----------+
| | | GBP'000 | | GBP'000 |
+-----------------------------------------------+--------+----------+--+-----------+
| Declared and paid during the year: | | | | |
+-----------------------------------------------+--------+----------+--+-----------+
| Equity dividends on ordinary shares: | | | | |
+-----------------------------------------------+--------+----------+--+-----------+
| Final dividend for 2007: 5.5p (2006: 5.0p) | | 8,063 | | 7,872 |
+-----------------------------------------------+--------+----------+--+-----------+
| Interim for 2008: 2.7p (2007: 2.5p) | | 3,958 | | 3,934 |
+-----------------------------------------------+--------+----------+--+-----------+
| | | 12,021 | | 11,806 |
+-----------------------------------------------+--------+----------+--+-----------+
+------------------------------------------------+-------+----------+--+-----------+
| Proposed for approval at AGM (not recognised | | | | |
| as a liability as at 31 December) | | | | |
+------------------------------------------------+-------+----------+--+-----------+
| Equity dividends on ordinary shares: | | | | |
+------------------------------------------------+-------+----------+--+-----------+
| Final dividend for 2008: 5.5p (2007: 5.5p) | | 8,120 | | 7,997 |
+------------------------------------------------+-------+----------+--+-----------+
8 Cash and short-term deposits
+-----------------------------------------------+--------+----------+--+----------+
| | | 2008 | | 2007 |
+-----------------------------------------------+--------+----------+--+----------+
| | | GBP'000 | | GBP'000 |
| | | | | |
+-----------------------------------------------+--------+----------+--+----------+
| Cash at bank and in hand | | 13,372 | | 19,211 |
+-----------------------------------------------+--------+----------+--+----------+
| Short-term deposits | | 40,000 | | 10,000 |
+-----------------------------------------------+--------+----------+--+----------+
| | | 53,372 | | 29,211 |
+-----------------------------------------------+--------+----------+--+----------+
Cash at bank and in hand earns interest at floating rates based on daily bank
deposit rates. Short-term deposits are made for varying periods of between one
day and three months depending on the immediate cash requirements of the Group,
and earn interest at the respective short-term deposit rates. The fair value of
cash and cash equivalents is GBP53,372,000 (2007: GBP29,211,000).
At 31 December 2008, the Group had available GBP163.4 million (2007:GBP 148.1
million) of uncommitted overdraft and factoring facilities. However, GBP81.2
million of these facilities will expire during March 2009 and will not be
renewed as they are no longer required given the GBP60.0 million committed
facility established in May 2008, of which GBP45.0 million is not utilised at
the balance sheet date. Customer-specific financing facilities are committed.
For the purposes of the consolidated cash flow statement, cash and cash
equivalents comprise the following at 31 December:
+--------------------------------------------+--------+--------------+-+---------------------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+--------------+-+---------------------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+--------------+-+---------------------+
| Cash at bank and in hand | | 13,372 | | 19,211 |
+--------------------------------------------+--------+--------------+-+---------------------+
| Short-term deposits | | 40,000 | | 10,000 |
+--------------------------------------------+--------+--------------+-+---------------------+
| Bank overdrafts | | (6,483) | | (21,945) |
+--------------------------------------------+--------+--------------+-+---------------------+
| | | 46,889 | | 7,266 |
+--------------------------------------------+--------+--------------+-+---------------------+
9 Adjusted operating profit
Reconciliation of adjusted operating profit
Management measure the Group's operating performance using adjusted operating
profit which is stated prior to amortisation of acquired intangibles,
exceptional items and after charging finance costs on customer-specific
financing ("CSF") for which the Group receives regular rental income.
+--------------------------------------------+--------+----------+-+-----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+----------+-+-----------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+----------+-+-----------+
| Operating profit | | 42,602 | | 43,101 |
+--------------------------------------------+--------+----------+-+-----------+
| Add back | | | | |
+--------------------------------------------+--------+----------+-+-----------+
| Amortisation of acquired intangibles | | 525 | | 613 |
+--------------------------------------------+--------+----------+-+-----------+
| Exceptional items | | 3,046 | | - |
+--------------------------------------------+--------+----------+-+-----------+
| After charging | | | | |
+--------------------------------------------+--------+----------+-+-----------+
| Finance costs on CSF | | (4,029) | | (2,025) |
+--------------------------------------------+--------+----------+-+-----------+
| | | 42,144 | | 41,689 |
+--------------------------------------------+--------+----------+-+-----------+
Adjusted operating profit/(loss) by geographic market
+--------------------------------------------+--------+----------+--+-----------+
| | | 2008 | | 2007 |
+--------------------------------------------+--------+----------+--+-----------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+----------+--+-----------+
| UK | | 27,938 | | 33,099 |
+--------------------------------------------+--------+----------+--+-----------+
| Germany | | 15,268 | | 10,388 |
+--------------------------------------------+--------+----------+--+-----------+
| France | | (967) | | (1,754) |
+--------------------------------------------+--------+----------+--+-----------+
| Benelux | | (95) | | (44) |
+--------------------------------------------+--------+----------+--+-----------+
| Total | | 42,144 | | 41,689 |
+--------------------------------------------+--------+----------+--+-----------+
10 Adjusted management cash flow statement
The adjusted management cash flow has been provided to explain how management
view the cash performance of the business. There are two primary differences to
this presentation compared to the statutory cash flow statement, as follows:
1) Factor financing is not included within the statutory definition of cash
and cash equivalents, but operationally is
managed within the total net funds/borrowings of the businesses; and
2) Items relating to customer specific financing are adjusted for as
follows:
a. Interest paid on customer-specific financing is reclassified from
interest paid to adjusted operating profit; and
b. Where customer-specific assets are financed by finance leases and
the liabilities are matched by future
amounts receivable under
customer operating lease rentals, the depreciation of leased assets and the
repayment of the capital element of finance leases are offset within
net working capital; and
c. Where assets are financed by loans and the liabilities are matched
by amounts receivable under customer
operating lease rentals,
the movement on loans within financing activities and is also offset within
working
capital.
+----------------------------------------------------------+----------+-------------+--+--------------+
| | | 2008 | | 2007 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| | | GBP'000 | | GBP'000 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Adjusted profit before taxation | | 43,107 | | 42,672 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Net finance income | | (963) | | (983) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Depreciation and amortisation | | 18,055 | | 16,603 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Share-based payment | | 2,525 | | 2,659 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Working capital movements | | 16,306 | | (20,089) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Other adjustments | | (186) | | (2,675) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Income taxes paid | | (6,052) | | (13,853) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Adjusted cashflow from operating activities | | 72,792 | | 24,334 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Net interest received | | 659 | | 577 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Capital expenditure and investments | | (24,313) | | (13,933) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Acquisitions and disposals | | - | | (32,600) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Equity dividends paid | | (12,021) | | (11,806) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Cash in/(out)flow before financing | | 37,117 | | (33,428) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Financing activities | | | | |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Proceeds from issue of shares | | - | | 661 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Purchase of own shares | | (9,695) | | (11,332) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Decrease in net debt excluding CSF in the period | | 27,422 | | (44,099) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| | | | | |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Increase/(decrease) in net debt excluding CSF | | 27,422 | | (44,099) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Effect of exchange rates on cash and cash equivalents | | (6,626) | | (1,521) |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Net debt excluding CSF at beginning of period | | (16,187) | | 29,433 |
+----------------------------------------------------------+----------+-------------+--+--------------+
| Net debt excluding CSF at end of period | | 4,609 | | (16,187) |
+----------------------------------------------------------+----------+-------------+--+--------------+
11 Publication of non-statutory accounts
The financial information in the preliminary statement of results does not
constitute statutory accounts within the meaning of Section 240 of the Companies
Act 1985 (the "Act"). The financial information for the year ended 31 December
2008 has been extracted from the statutory accounts on which an unqualified
audit opinion has been issued. Statutory accounts for the year ended 31 December
2008 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The financial statements, and this preliminary statement, of the Group for the
year ended 31 December 2008 were authorised for issue by the Board of Directors
on 9 March 2008 and the balance sheet was signed on behalf of the Board by MJ
Norris and FA Conophy.
The statutory accounts have been delivered to the Registrar of Companies in
respect of the year ended 31 December 2007 and the Auditors of the Company made
a report thereon under Section 235 of the Act. That report was an unqualified
report and did not contain a statement under Section 237(2) or (3) of the Act.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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