TIDMOXIG
RNS Number : 9243Q
Oxford Instruments PLC
13 November 2012
Release Date: 7am Tuesday 13(th) November 2012
Oxford Instruments plc
Announcement of Half Year Results for 2012/13
Oxford Instruments plc, a leading provider of high technology
tools and systems for industry and research, today announces its
Half Year Results for the six months to 30 September 2012.
Highlights:
-- Good progress in the first half, in line with meeting our 14 Cubed growth plan objectives
-- Revenue up 7.4% to GBP170.8 million (2011: GBP159.1 million)
-- Adjusted profit before tax* up 23.5% to GBP23.1 million (2011: GBP18.7 million)
-- Adjusted EPS* up 20.2% to 33.9 pence (2011: 28.2 pence)
-- Reported EPS up 25.1% to 20.9 pence (2011: 16.7 pence)
-- Continued increase in global demand for nanotechnology tools
-- Focused R&D programme continued to underpin organic growth
-- New product pipeline remains strong
-- Net cash of GBP37.1 million at period end (2011: GBP11.9 million)
-- Interim dividend increased by 10.1% to 3.05 pence (2011: 2.77 pence)
*Adjusted numbers are stated to give a better understanding of
the underlying business. Details of adjusting items can be found in
Note 2.
Jonathan Flint, Chief Executive of Oxford Instruments plc,
said:
"We have delivered a strong result in the first half in line
with our 14 Cubed objectives. We have a broad spread of geographies
and technologies, exposure to markets with long term structural
growth, a strong pipeline of new products and a focus on improving
efficiency. These factors should help us to remain resilient
against a backdrop of sustained global economic uncertainty. We are
continuing our pursuit of acquisitions that have the potential to
enhance shareholder value and add to our range of technical
capabilities.
The Board remains confident in the continued growth prospects of
Oxford Instruments and the Group's ability to deliver shareholder
value."
Enquiries:
Oxford Instruments plc Tel: 01865 393200
Jonathan Flint, Chief Executive
Kevin Boyd, Group Finance Director
MHP Communications Tel: 020 3128 8100
Rachel Hirst
Ian Payne
Number of pages: 22
For further copies of this Half Year Results Announcement,
please contact Lynn Shepherd at the Group's registered office at
Tubney Woods, Abingdon, Oxon OX13 5QX (email:
lynn.shepherd@oxinst.com)
Half Year Statement
Introduction
The Group continued to make good progress in the first half
driven by new product introductions and long term structural global
growth in demand for Nanotech tools. Revenue grew by 7.4% to
GBP170.8 million (2011: GBP159.1 million), with constant currency
organic growth of 5.8%. Adjusted profit before tax grew by 23.5% to
GBP23.1 million (2011: GBP18.7 million). Our adjusted operating
margin continued to increase, rising to 13.9% from 11.9% in the
prior year.
Overall, demand for our products remained strong, despite some
softness in the industrial sector as reported in our AGM statement
in September 2012. We maintained pricing in the period, supported
by the strength of our brand and the quality of our technology. Our
organic growth continues to be underpinned by our focused R&D
programme. In the half year, we increased our R&D cash spend by
7% to GBP12.1 million, reflecting the opportunities we see to
increase market share through the introduction of innovative new
products.
Developed markets showed robustness as customers used our
equipment to work at the frontiers of science and improve the
efficiency of high technology production facilities. Growth in
North America and Europe was 3% and 1% respectively. Sales growth
in Asia was strong at 23% supported by a number of initiatives
including a branch office in Korea and the opening of our Indian
subsidiary led by a new senior Country Manager.
October 2012 marked the half way point of our 14 Cubed growth
plan to deliver an average compound annual growth rate in sales of
14% and a net return on sales of 14% by 2014. Progress to date is
in line with meeting these objectives.
The Directors declare an interim dividend of 3.05 pence, 10%
higher than the previous year, payable on 8 April 2013 to
shareholders who are on the register on 8 March 2013.
Nanotechnology Tools Sector
2012 2011
GBPm GBPm
----------------- ---- ----
Revenue 80.9 70.4
Operating profit 10.4 7.3
----------------- ---- ----
In our Nanotechnology Tools sector, which represents 47% of
Group revenue, profits grew by 42% and operating profit margins
increased to 12.9% (2011: 10.4%). The sector comprises four
businesses: NanoAnalysis, Plasma Technology, NanoScience and
Omicron NanoTechnology. It produces high performance instruments
and systems for customers working in scientific research and with
advanced industrial processes. We have seen no evidence of a
reduction in research funding from governments worldwide.
Sales of our new material characterisation system comprising our
latest generation nanoanalysis detector hardware and multi-tasking
Aztec(R) software have been strong. A series of software upgrades
has firmly established this product as the world's leading material
characterisation system and sales have exceeded expectations. Three
new product introductions in the first half have further enhanced
the position of NanoAnalysis as technology leaders with the new
X-MAX(n) series of large area detectors setting a new benchmark in
the measurement and quantification of materials at the nanoscale.
The acquisition of Omniprobe in June 2011 has broadened our
NanoAnalysis product range by offering innovative nano-manipulation
tools for sample preparation on electron and ion beam microscopes.
The launch of a new nano-manipulation tool, Omniprobe400, has
supported Omniprobe's growing contribution to the Group.
Our Plasma Technology business produces equipment for
nanofabrication and has performed well. We have seen good growth in
markets such as next generation photovoltaics, power semiconductors
and MEMS (Micro Electrical Mechanical Systems), sales of which have
increased following the launch of our PlasmaPro100 system. As
previously reported, over-capacity in the HBLED market has led to a
softening in demand for our HBLED fabrication tools over the last
18 months. However we maintain a strong technological position in
this market and we are well placed to benefit when demand begins to
strengthen again.
Omicron NanoTechnology, which we acquired in June 2011, offers
customers working at the cutting-edge of physics research a broad
range of sophisticated, multi-technique systems. These include
Scanning Probe Microscopy (SPM), Electron Spectroscopy and Ultra
High Vacuum solutions. Some weakness in orders in the second half
of last year has now reversed and order intake in the period has
been strong, including the largest order Omicron has ever taken.
However, the long lead times associated with its complex products
mean that it will take another year to bring this business up to
expected levels of performance. In line with our integration plan
we have appointed a new Managing Director to drive this growth. He
replaces the founder who, as planned, has retired.
Our NanoScience business is the world's leading supplier of
cryogenic systems for nano-characterisation and measurement at low
temperatures and high magnetic fields. Our Triton(R) dilution
refrigerator continues to be a market leading product for this
business. Six systems were recently installed in the newly opened
Centre for Quantum Devices at the Niels Bohr Institute in
Copenhagen. The growth of the consultancy business has continued
with a range of contracts including one with fusion technology
specialists Tokamak Solutions.
Industrial Products Sector
2012 2011
GBPm GBPm
----------------- ---- ----
Revenue 61.5 64.7
Operating profit 7.6 6.6
----------------- ---- ----
In our Industrial Products sector, which represents 36% of Group
revenue, profits grew by 15%. The businesses which make up this
sector are unchanged but have been regrouped into Industrial
Analysis and Industrial Components. This sector supplies analytical
systems for quality control, environmental and compliance testing
and components for industry and research. The Industrial Analysis
business comprises X-ray Fluorescence, Optical Emission
Spectroscopy and Magnetic Resonance. Industrial Components
comprises Superconducting Wire, Austin Scientific and X-Ray
Technology.
Emerging markets, particularly India, continue to offer an
important growth opportunity for Industrial Products, although in
general visibility is lower than last year. Prior year comparators
include revenues from a product line we disposed of last year and a
large one-off order in Austin Scientific. Excluding these items,
revenues increased. Operating profit margins further improved to
12.4% (2011: 10.2%).
In Industrial Analysis, new portable and hand-held analysers
launched this half have generated considerable interest from both
new and existing customers, offering an innovative user interface
and improved ergonomics in response to customer feedback. Our bench
top products have benefited from strong demand. We have continued
to build a strong position in the rock core analysis market where
our magnetic resonance analyser is a market leader. Magnetic
resonance is gaining recognition as a crucial technique in helping
to understand recently discovered natural resources such as oil in
shale.
In Industrial Components, the increasing demand for next
generation, higher magnetic field MRI scanners continues to drive
growth in our Superconducting Wire business where we have invested
in new facilities which will improve efficiency in the core MRI
business. Deliveries to the international ITER energy programme
remain on track with completion scheduled for the end of the
financial year. In our X-Ray Technology business, important new
product innovations include the use of a novel X-ray source in a
radiography system to advance the treatment of breast cancer and on
the NASA Mars Rover. At Austin Scientific, sales to a large
semiconductor manufacturer have reduced, as anticipated, following
a large contract win last year. Austin Scientific's move to new
premises has been completed successfully.
Service Sector
2012 2011
GBPm GBPm
----------------- ---- ----
Revenue 29.3 24.9
Operating profit 5.8 5.0
----------------- ---- ----
Our Service business represents 17% of Group revenue and profits
grew by 16%. It comprises activities in the United States and Japan
servicing MRI machines, together with the aftermarket revenues
associated with our Nanotechnology Tools and Industrial Products
sectors. Operating profit margins remained strong at 19.8% (2011:
20.1%).
The aftermarket revenues associated with our two manufacturing
sectors are split into three main revenue streams: service
contracts (where customers purchase unlimited support for a fixed
period); billable service (where customers are billed for time and
materials); and the sale of spare parts and consumables. To support
these activities, we are also investing in e-commerce, new training
packages, hardware and software upgrades and increased
personnel.
In November 2011 we acquired Platinum Medical Imaging, an
established US company providing high quality parts and services
for MRI (Magnetic Resonance Imaging) and CT (Computed Tomography)
medical imaging instruments. There is a growing opportunity in the
US market following healthcare reforms which have encouraged the
transfer of medical imaging facilities to more cost effective third
party service providers. The combination of Platinum with Oxford
Instruments' MRI Service business in North America significantly
strengthens the Group's Service Sector by providing a broader range
of services internationally. For example, we have recently received
regulatory approval to provide refurbished CT and MR equipment to
companies in South Korea.
Financial Review
Orders in the period were GBP169.8 million (2011: GBP174.8
million) and the order book for future deliveries was GBP142.8
million at the end of the period.
Revenues in the half year grew by 7.4% (GBP11.7 million) to
GBP170.8 million. The increase in revenues between the two periods
due to acquisitions and disposals was GBP3.7 million. Adverse
foreign currency exchange rate movements reduced sales by GBP1.2
million giving organic volume growth of 5.8%.
The implementation of the Business Improvement Plan, one of the
three elements of our 14 Cubed medium term plan has helped grow
gross margins across the Group from 42.7% to 44.6%. Constant
currency operating expenses, excluding acquisitions, were held at
the same level as the prior year.
Adjusted operating profit increased by GBP4.9 million to GBP23.8
million, giving an adjusted operating profit margin of 13.9% (2011:
11.9%). Net bank interest reduced by GBP0.2 million to a charge of
GBP0.3 million, and net interest on the pension fund changed from a
credit of GBP0.3 million to a charge of GBP0.4 million due to the
increased deficit at the end of March 2012 and the reduced rate of
return from gilt related assets. As a result adjusted profit before
tax rose GBP4.4 million to GBP23.1 million.
The ability to utilise brought forward tax losses in the UK has
kept the adjusted tax rate low at 18% (2011: 20%) which leads to
adjusted earnings per share (EPS) of 33.9 pence, an increase of 5.7
pence. Reported EPS rose by 4.2 pence to 20.9 pence. The difference
is due to the items detailed in note 2, primarily acquisition
costs, amortisation of acquired intangible assets and the
utilisation of the large deferred tax asset that was excluded from
adjusted earnings in the prior year.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) increased by 19.5% to GBP28.2 million. As expected working
capital expanded in the period but remains controlled at 7% of the
previous twelve months sales. Capital expenditure increased to
GBP4.2 million from GBP2.1 million primarily due to increased
investment in our superconducting wire facility.
At the period end net cash was GBP37.1 million (31 March 2012:
GBP35.1 million, 2011: GBP11.9 million). Cash inflow in the period
was GBP2.0 million (2011: GBP1.2 million outflow). The Group has a
committed GBP50 million revolving credit facility with a club of
banks, extendable to GBP70 million by mutual consent, which expires
in December 2014.
As calculated under IAS19, the defined benefit pension deficit
has increased by GBP5.7 million to GBP40.9 million since 31 March
2012. Since 31 March 2012 assets have risen by 2.3% to GBP184.4
million while liabilities have increased by 4.6% to GBP225.3
million due mainly to the reduction in corporate bond yields used
to discount liabilities.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out above. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in
the above Financial Review section.
The diverse nature of the Group combined with its current
financial strength provides a solid foundation for a sustainable
business. The Directors have reviewed the Group's forecasts and
considered a number of potential scenarios relating to changes in
trading performance. The Directors believe that the Group will be
able to operate within its existing debt facility which expires in
December 2014. This review also considered hedging arrangements in
place. As a consequence, the Directors believe that the Group is
well placed to manage its business risks successfully.
This Half Year Report has been prepared on a going concern
basis, based on the Directors' opinion, after making reasonable
enquiries, that the Group has adequate resources to continue in
operational existence for the foreseeable future.
Principal Risks
The principle risks in the business are considered the Principal
Risks and Uncertainties section of this Half Year Report.
People
A high technology business relies on the skills and expertise of
its people. We therefore recognise the importance of ensuring a
sustainable business going forward through an inclusive strategy of
managing, developing and recruiting people who support our company
values and contribute to our growth. Our wholehearted thanks go to
all our people for their commitment, energy and hard work.
Outlook
We have delivered a strong result in the first half in line with
our 14 Cubed objectives. We have a broad spread of geographies and
technologies, exposure to markets with long term structural growth,
a strong pipeline of new products and a focus on improving
efficiency. These factors should help us to remain resilient
against a backdrop of sustained global economic uncertainty. We are
continuing our pursuit of acquisitions that have the potential to
enhance shareholder value and add to our range of technical
capabilities.
The Board remains confident in the continued growth prospects of
Oxford Instruments and the Group's ability to deliver shareholder
value.
Jonathan Flint
Chief Executive
13 November 2012
Condensed Consolidated Statement of Income - unaudited
Half Year to 30 Sept Half Year to 30 Sept
2012 2011
As restated and re-presented**
Adjusted* Adjusting Total Adjusted* Adjusting Total
items* items*
Notes GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Revenue 3 170.8 - 170.8 159.1 - 159.1
Cost of sales (94.6) (0.2) (94.8) (91.1) (1.0) (92.1)
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Gross profit 76.2 (0.2) 76.0 68.0 (1.0) 67.0
Research and development 4 (12.1) - (12.1) (12.6) - (12.6)
Selling and marketing (25.1) - (25.1) (22.3) - (22.3)
Administration
and shared services (16.3) (6.0) (22.3) (14.4) (5.0) (19.4)
Other operating
income - - - - - -
Foreign exchange
gain/(loss) 1.1 - 1.1 0.2 - 0.2
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Operating profit 23.8 (6.2) 17.6 18.9 (6.0) 12.9
Expected return
on pension scheme
assets 4.8 - 4.8 5.4 - 5.4
Other financial
income 0.2 - 0.2 - 0.4 0.4
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Financial income 5.0 - 5.0 5.4 0.4 5.8
Interest charge
on pension scheme
liabilities (5.2) - (5.2) (5.1) (5.1)
Other financial
expenditure (0.5) - (0.5) (0.5) - (0.5)
Financial expenditure (5.7) - (5.7) (5.6) - (5.6)
Profit before income
tax 3 23.1 (6.2) 16.9 18.7 (5.6) 13.1
Income tax expense 6 (4.1) (1.1) (5.2) (3.8) (0.4) (4.2)
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Profit for the
period attributable
to equity shareholders
of the parent 19.0 (7.3) 11.7 14.9 (6.0) 8.9
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
pence pence pence Pence
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
Earnings per share
Basic earnings
per share 7 33.9 20.9 28.2 16.7
Diluted earnings
per share 7 33.4 20.6 27.4 16.2
Dividends per share
Dividends paid 8 2.77 2.52
Dividends proposed 8 3.05 2.77
-------------------------- ------ ---------- ---------- ------- ------------ ------------ --------
* Adjusting numbers are stated to give a better understanding of
the underlying business performance. Details of adjusting items can
be found in Note 2 of this Half Year Report.
** See Note 1 of this Half Year Report for details of
restatement and re-presentation of comparative information.
Condensed Consolidated Statement of Income - unaudited
Year to 31 March 2012
Adjusted* Adjusting Total
items*
Notes GBPm GBPm GBPm
------------------------------ ------ ---------- ---------- --------
Revenue 3 337.3 - 337.3
Cost of sales (188.3) (1.7) (190.0)
---------------------------------- ------ ---------- ---------- --------
Gross profit 149.0 (1.7) 147.3
Research and development 4 (25.8) - (25.8)
Selling and marketing (48.7) - (48.7)
Administration and
shared services (32.1) (12.7) (44.8)
Other operating income - 7.0 7.0
Foreign exchange
gain/(loss) (0.3) - (0.3)
---------------------------------- ------ ---------- ---------- --------
Operating profit 42.1 (7.4) 34.7
Expected return on
pension scheme assets 10.9 - 10.9
Other financial income 0.2 1.5 1.7
---------------------------------- ------ ---------- ---------- --------
Financial income 11.1 1.5 12.6
Interest charge on (10.2) - (10.2)
pension scheme liabilities
Other financial expenditure (1.0) - (1.0)
--------
Financial expenditure (11.2) - (11.2)
Profit before income
tax 3 42.0 (5.9) 36.1
Income tax expense 6 (8.8) (2.5) (11.3)
---------------------------------- ------ ---------- ---------- --------
Profit for the period
attributable to equity
shareholders of the
parent 33.2 (8.4) 24.8
---------------------------------- ------ ---------- ---------- --------
pence pence
------------------------------ ------ ---------- ---------- --------
Earnings per share
Basic earnings per
share 7 61.6 46.0
Diluted earnings
per share 7 60.3 45.0
Dividends per share
Dividends paid 8 9.0
Dividends proposed 8 10.0
---------------------------------- ------ ---------- ---------- --------
* Adjusting numbers are stated to give a better understanding of
the underlying business performance. Details of adjusting items can
be found in Note 2 of this Half Year Report.
Condensed Consolidated Statement of Comprehensive Income -
unaudited
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm as re-presented* GBPm
GBPm
-------------------------------------------- ---------- ----------------- ---------
Profit for the period 11.7 8.9 24.8
Other comprehensive (expense)/income
Foreign exchange translation differences (2.6) 0.5 (2.6)
Actuarial loss in respect of post
retirement benefits (7.7) (20.4) (28.6)
Net loss on effective portion of
changes in fair value of cash flow
hedges, net of amounts recycled - (1.2) (0.4)
Tax on items recognised directly
in other comprehensive income 1.6 5.5 7.2
-------------------------------------------- ---------- ----------------- ---------
Total other comprehensive (expense)/income (8.7) (15.6) (24.4)
Total comprehensive income/(expense)
for the period attributable to equity
shareholders of the parent 3.0 (6.7) 0.4
-------------------------------------------- ---------- ----------------- ---------
* See note 1 for details of re-presentation of comparative
information.
Condensed Consolidated Statement of Changes in Equity -
unaudited
Foreign
Share exchange
Share premium Other translation Retained
capital account reserves reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------- -------- -------- --------- ------------ --------- ------
Balance at 1 April 2012 2.8 60.2 0.1 0.6 63.4 127.1
Total comprehensive income/(expense)
attributable to equity
shareholders of the parent
-Profit for the period - - - - 11.7 11.7
-Other comprehensive income - - - (2.6) (6.1) (8.7)
----------------------------------------- -------- -------- --------- ------------ --------- ------
- - - (2.6) 5.6 3.0
Transactions recorded
directly in equity:
- Credit in respect of
employee service costs
settled by award of share
options - - - - 0.6 0.6
- Tax credit in respect
of share options - - - - 1.3 1.3
- Proceeds from shares
issued - 0.1 - - - 0.1
- Dividends paid and accrued - - - - (5.6) (5.6)
----------------------------------------- -------- -------- --------- ------------ --------- ------
Total contributions by
and distributions to equity
shareholders - 0.1 - - (3.7) (3.6)
----------------------------------------- -------- -------- --------- ------------ --------- ------
Balance at 30 September
2012 2.8 60.3 0.1 (2.0) 65.3 126.5
----------------------------------------- -------- -------- --------- ------------ --------- ------
Foreign Retained
Share exchange Earnings Total
Share Premium Other translation as as
capital Account reserves reserve restated* restated*
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- -------- -------- --------- ------------ ----------- ----------
Balance at 1 April 2011 2.5 22.5 0.4 3.2 64.9 93.5
Total comprehensive income/(expense)
attributable to equity
shareholders of the parent
-Profit for the period
(as re-presented*) - - - - 8.9 8.9
-Other comprehensive income - - (0.8) 0.5 (15.3) (15.6)
-------------------------------------- -------- -------- --------- ------------ ----------- ----------
- - (0.8) 0.5 (6.4) (6.7)
Transactions recorded
directly in equity:
- Credit in respect of
employee service costs
settled by award of share
options - - - - 0.3 0.3
- Proceeds from shares
issued 0.3 37.3 - - - 37.6
- Dividends paid and accrued
(as restated*) - - - - (4.8) (4.8)
-------------------------------------- -------- -------- --------- ------------ ----------- ----------
Total contributions by
and distributions to equity
shareholders 0.3 37.3 - - (4.5) 33.1
-------------------------------------- -------- -------- --------- ------------ ----------- ----------
Balance at 30 September
2011 2.8 59.8 (0.4) 3.7 54.0 119.9
-------------------------------------- -------- -------- --------- ------------ ----------- ----------
* See note 1 for details of restatement of comparative
information.
Foreign
Share exchange
Share Premium Other translation Retained
capital Account reserves reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- -------- -------- --------- ------------ --------- -------
Balance at 1 April 2011 2.5 22.5 0.4 3.2 64.9 93.5
Total comprehensive income/(expense)
attributable to equity
shareholders of the parent
-Profit for the period - - - - 24.8 24.8
-Other comprehensive income - - (0.3) (2.6) (21.5) (24.4)
-------------------------------------- -------- -------- --------- ------------ --------- -------
- - (0.3) (2.6) 3.3 0.4
Transactions recorded
directly in equity:
- Credit in respect of
employee service costs
settled by award of share
options - - - - 1.0 1.0
- Tax charge in respect
of share options - - - - (1.0) (1.0)
- Proceeds from shares
issued 0.3 37.7 - - - 38.0
- Dividends paid - - - - (4.8) (4.8)
-------------------------------------- -------- -------- --------- ------------ --------- -------
Total contributions by
and distributions to equity
shareholders 0.3 37.7 - - (4.8) 33.2
-------------------------------------- -------- -------- --------- ------------ --------- -------
Balance at 31 March 2012 2.8 60.2 0.1 0.6 63.4 127.1
-------------------------------------- -------- -------- --------- ------------ --------- -------
Condensed Consolidated Statement of Financial Position -
unaudited
As at As at As at
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm GBPm GBPm
as restated
and re-presented*
Assets
Non-current assets
Property, plant and equipment 29.9 28.0 28.2
Intangible assets 70.8 75.5 78.1
Deferred tax assets 21.0 21.0 19.3
121.7 124.5 125.6
Current assets
Inventories 60.9 64.5 59.3
Trade and other receivables 64.2 67.0 61.0
Current income tax recoverable 1.0 1.4 1.3
Derivative financial instruments 2.2 2.1 2.4
Cash and cash equivalents 37.9 19.5 35.1
166.2 154.5 159.1
Total assets 287.9 279.0 284.7
--------------------------------------- -------- ------------------- ---------
Equity
Capital and reserves attributable
to the Company's equity shareholders
Share capital 2.8 2.8 2.8
Share premium 60.3 59.8 60.2
Other reserves 0.1 (0.4) 0.1
Translation reserve (2.0) 3.7 0.6
Retained earnings 65.3 54.0 63.4
126.5 119.9 127.1
Liabilities
Non-current liabilities
Bank loans 0.7 7.0 -
Other payables 3.8 0.7 2.8
Retirement benefit obligations 40.9 29.7 35.2
Deferred tax liabilities 7.2 9.5 7.0
--------------------------------------- -------- ------------------- ---------
52.6 46.9 45.0
Current liabilities
Bank loans 0.1 0.1 -
Bank overdrafts - 0.5 -
Trade and other payables 91.4 94.9 96.4
Current income tax payables 3.5 3.4 6.0
Accrued dividend 4.0 3.5 -
Derivative financial instruments 0.4 2.6 1.2
Provisions 9.4 7.2 9.0
--------------------------------------- -------- ------------------- ---------
108.8 112.2 112.6
Total liabilities 161.4 159.1 157.6
Total liabilities and equity 287.9 279.0 284.7
--------------------------------------- -------- ------------------- ---------
*See note 1 for details of restatement and re-presentation of
comparative information.
Condensed Consolidated Statement of Cash Flows- unaudited
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm GBPm GBPm
as re-presented*
--------------------------------------------- ---------- ------------------ ---------
Profit for the period 11.7 8.9 24.8
Adjustments for:
Income tax expense 5.2 4.2 11.3
Net financial expense/(income) 0.7 (0.2) (1.4)
Other operating income - - (7.0)
Reversal of acquisition related fair
value adjustments 0.2 1.0 1.7
Acquisition related costs 0.6 0.7 1.5
Amortisation of acquired intangibles 5.4 4.3 11.2
Depreciation of property, plant and
equipment 2.3 2.3 4.8
Amortisation and impairment of capitalised
development costs 2.1 2.4 5.2
--------------------------------------------- ---------- ------------------ ---------
Earnings before interest, tax, depreciation
and amortisation 28.2 23.6 52.1
Loss on disposal of plant, property
and equipment - - 0.5
Cost of equity settled employee share
schemes 0.6 0.3 1.0
Acquisition related costs paid - (0.5) (1.0)
Cash payments to the pension scheme
more than the charge to operating
profit (2.4) (2.1) (4.5)
--------------------------------------------- ---------- ------------------ ---------
Operating cash flows before movements
in working capital 26.4 21.3 48.1
Increase in inventories (2.2) (4.8) (0.2)
Increase in receivables (4.7) (7.9) (1.7)
(Decrease)/increase in payables and
provisions (4.6) (2.8) 5.7
Increase/(decrease) in customer deposits 0.4 4.9 (1.4)
Cash generated by operations 15.3 10.7 50.5
Interest paid (0.5) (1.2) (1.1)
Income taxes paid (5.8) (3.4) (7.8)
--------------------------------------------- ---------- ------------------ ---------
Net cash from operating activities 9.0 6.1 41.6
--------------------------------------------- ---------- ------------------ ---------
Cash flows from investing activities
Proceeds from sale of property, plant
and equipment - - 0.1
Proceeds from sale of product line
and subsidiary 1.0 - 7.3
Interest received 0.2 - -
Acquisition of subsidiaries, net
of cash acquired (0.2) (40.7) (51.6)
Acquisition of property, plant and
equipment (4.2) (2.1) (5.6)
Capitalised development expenditure (1.8) (0.9) (2.4)
--------------------------------------------- ---------- ------------------ ---------
Net cash used in investing activities (5.0) (43.7) (52.2)
--------------------------------------------- ---------- ------------------ ---------
Cash flows from financing activities
Proceeds from issue of share capital 0.1 37.6 38.0
Repayment of borrowings - (6.0) (13.1)
Increase in borrowings 0.8 2.5 2.5
Dividends paid (1.6) (1.3) (4.8)
--------------------------------------------- ---------- ------------------ ---------
Net cash (used in)/from financing
activities (0.7) 32.8 22.6
--------------------------------------------- ---------- ------------------ ---------
Net increase/(decrease) in cash and
cash equivalents 3.3 (4.8) 12.0
Cash and cash equivalents at beginning
of the period 35.1 23.7 23.7
Effect of exchange rate fluctuations
on cash held (0.5) 0.1 (0.6)
--------------------------------------------- ---------- ------------------ ---------
Cash and cash equivalents at end
of the period 37.9 19.0 35.1
--------------------------------------------- ---------- ------------------ ---------
Reconciliation of changes in cash and cash equivalents to movement
in net cash
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm GBPm GBPm
----------------------------------------- ---------- ---------- ---------
Increase/(decrease) in cash and cash
equivalents 3.3 (4.8) 12.0
Effect of foreign exchange rate changes
on cash and cash equivalents (0.5) 0.1 (0.6)
----------------------------------------- ---------- ---------- ---------
2.8 (4.7) 11.4
Cash outflow from decrease in debt - 6.0 13.1
Cash inflow from increase in debt (0.8) (2.5) (2.5)
Movement in net cash in the period 2.0 (1.2) 22.0
Net cash at start of the period 35.1 13.1 13.1
----------------------------------------- ---------- ---------- ---------
Net cash at the end of the period 37.1 11.9 35.1
----------------------------------------- ---------- ---------- ---------
*See note 1 for details of re-presentation of comparative
information.
Notes on the Half Year Financial Statements - unaudited
1 BASIS OF PREparATION OF ACCOUNTS
Oxford Instruments plc (the Company) is a company incorporated
in England and Wales. The condensed consolidated half year
financial statements consolidate the results of the Company and its
subsidiaries (together referred to as the Group). They have been
prepared and approved by the Directors in accordance with
International Financial Reporting Standard (IFRS) IAS 34 Interim
Financial Reporting as adopted by the EU. They do not include all
of the information required for full annual financial statements,
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 March 2012.
As required by the Disclosure and Transparency Rules of the
Financial Services Authority, the half year financial information
has been prepared applying the accounting policies and presentation
that were applied in the preparation of the Group's consolidated
financial statements for the year ended 31 March 2012, except as
noted below. Additional information has been included in the
Condensed Consolidated Statement of Income in the form of an
adjusting items column which in the opinion of the Directors
enables the performance of the business to be more clearly
seen.
The financial information contained herein is unaudited and does
not constitute statutory accounts as defined by Section 435 of the
Companies Act 2006. The comparative figures for the financial year
ended 31 March 2012 are not the company's statutory accounts for
that financial year. Those accounts have been reported on by the
company's auditors and delivered to the registrar of companies. The
report of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report, and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The condensed consolidated half year financial statements have
been prepared on a going concern basis, based on the Directors'
opinion, after making reasonable enquiries, that the Group has
adequate resources to continue in operational existence for the
foreseeable future.
In its Financial Statements to 31 March 2012 the Group
reclassified certain engineering costs incurred in relation to
one-off special customer orders. Such costs are now treated as
research and development costs, rather than costs of sales. This is
considered to be a treatment consistent with the Group's Industry
peers. The effect on the Consolidated Income Statement for the half
year to 30 September 2011 was to reduce costs of sales by GBP1.5m
and increase research and development costs by the same amount, see
note 4.
As required by IFRS3 the accounts as at 30 September 2011 have
been re-presented in respect of the finalisation of the acquisition
accounting which was provisional at the time the 30 September 2011
accounts were published. Furthermore the Group has noted that the
final dividend for the year to 31 March 2011 should have been
recorded as a liability at 30 September 2011 since it was approved
by shareholders on 13 September 2011. Accordingly, the accounts at
that date have been restated to include an amount of GBP3.5 million
as a current liability. Equity at that date has been reduced by the
same amount. There was no impact on the consolidated statement of
financial position at 31 March 2011 or 2012.
The principal exchange rates used to translate the Group's
overseas results were as follows:
Half year Half year
Period end rates to to Year to
30 Sept 30 Sept 31 March
2012 2011 2012
US Dollar 1.61 1.56 1.60
Euro 1.26 1.16 1.20
Yen 126 120 131
-------------------------------- ---------- ---------- ---------
Average translation rates US Dollar Euro Yen
-------------------------------- ---------- ---------- ---------
Half year to 30 September 2012
Quarter 1 1.58 1.23 127
Quarter 2 1.59 1.26 125
-------------------------------- ---------- ---------- ---------
Year to 31 March 2012
Quarter 1 1.63 1.13 132
Quarter 2 1.60 1.14 125
Quarter 3 1.57 1.17 121
Quarter 4 1.58 1.19 125
-------------------------------- ---------- ---------- ---------
2 NON-GAAP MEASURES
The Directors present the following non-GAAP measure as they
believe it gives a better indication of the underlying performance
of the business.
RECONCILIATION BETWEEN PROFIT BEFORE INCOME TAX AND ADJUSTED
PROFIT
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm GBPm GBPm
as re-presented*
-------------------------------------- ---------- ------------------ ---------
Profit before income tax 16.9 13.1 36.1
Reversal of acquisition related fair
value adjustments to inventory 0.2 1.0 1.7
Gain on disposal of product line - - (7.0)
Acquisition related costs 0.6 0.7 1.5
Amortisation of acquired intangibles 5.4 4.3 11.2
Mark to market gain in respect of
derivative financial instruments - (0.4) (1.5)
-------------------------------------- ---------- ------------------ ---------
Adjusted profit before income tax 23.1 18.7 42.0
Share of taxation (4.1) (3.8) (8.8)
-------------------------------------- ---------- ------------------ ---------
Adjusted profit 19.0 14.9 33.2
-------------------------------------- ---------- ------------------ ---------
*See note 1 for details of re-presentation of comparative
information
Adjusted profit before tax excludes the reversal of acquisition
related fair value adjustments to inventory to provide an adjusted
profit measure that will include results from acquired businesses
on a consistent basis over time to assist comparison of
performance. Acquisition related costs comprise professional fees
incurred in relation to mergers and acquisitions activity and any
consideration which, under IFRS3 (revised), falls to be treated as
a post acquisition employment expense.
On 20 October 2011 the Group disposed of a product line for a
consideration of GBP8.1m. GBP1.0m of the consideration was deferred
and was received during the current period. The product line was
part of the Industrial Products segment. The profit on disposal was
GBP7.0m.
On 21 March 2012 the Group transferred its ownership of
Technologies and Devices Inc (TDI) to Ostendo, a privately owned
company based in California. The Group has received 650,000 shares
of Ostendo common stock plus $0.7m in cash of which $0.2m was
received in October 2012. The Group considers the fair value of the
shares to be nil. The profit on disposal was nil.
Under IAS 39, all derivative financial instruments are
recognised initially at fair value. Subsequent to initial
recognition, they are also measured at fair value. In respect of
instruments used to hedge foreign exchange risk and interest rate
risk the Group does not take advantage of the hedge accounting
rules provided for in IAS 39 since that standard requires certain
stringent criteria to be met in order to hedge account, which, in
the particular circumstances of the Group, are considered by the
Board not to bring any significant economic benefit. Accordingly,
the Group accounts for these derivative financial instruments at
fair value through profit or loss. To the extent that instruments
are hedges of future transactions, adjusted profit for the year is
stated before changes in the valuation of these instruments so that
the underlying performance of the Group can more clearly be
seen.
In calculating the share of tax attributable to adjusted profit
before tax in the year ended 31 March 2011 a one-off recognition of
deferred tax assets relating to the Group's UK businesses of
GBP11.3m was excluded. At that time the Group announced its
intention to exclude the reversal of this deferred tax from the
calculation of the share of tax attributable to adjusted profit
before tax in the years in which it reverses. In the year ended 31
March 2012 deferred tax of GBP4.6m was reversed. In the current
period deferred tax of GBP3.2m has reversed and consequently been
excluded from the tax attributable to adjusted profit before
tax.
3 SEGMENT Information
The Group has seven operating segments. These operating segments
have been combined into three aggregated operating segments to the
extent that they have similar economic characteristics, with
relevance to products and services, type and class of customer,
methods of sale and distribution and the regulatory environment in
which they operate. Each of these three aggregated operating
segments is a reportable segment.
The Group's internal management structure and financial
reporting systems differentiate the three aggregated operating
segments on the basis of the economic characteristics discussed
below.
- The Nanotechnology Tools segment contains a group of
businesses supplying similar products, characterised by a high
degree of customisation and high unit prices. These are the Group's
highest technology products serving research customers in both the
public and private sectors.
- The Industrial Products segment contains a group of businesses
supplying high technology products and components manufactured in
medium volume for industrial customers.
- The Service segment contains the Group's service business as
well as service revenues from other parts of the Group.
Reportable segment results include items directly attributable
to a segment as well as those which can be allocated on a
reasonable basis. Inter-segment pricing is determined on an arm's
length basis. The operating results of each are regularly reviewed
by the Chief Operating Decision Maker, which is deemed to be the
Board of Directors. Discrete financial information is available for
each segment and used by the Board of Directors for decisions on
resource allocation and to assess performance. No asset information
is presented below as this information is not allocated to
operating segments in reporting to the Group's Board of
Directors.
Half year to 30 September 2012
Nanotechnology Industrial
Tools Products Service Total
GBPm GBPm GBPm GBPm
------------------------- -------------- ---------- ------- -----
External revenue 80.7 60.9 29.2 170.8
Inter-segment revenue 0.2 0.6 0.1
------------------------- -------------- ---------- -------
Total segment revenue 80.9 61.5 29.3
Segment operating profit 10.4 7.6 5.8 23.8
------------------------- -------------- ---------- ------- -----
Half year to 30 September 2011
Nanotechnology Industrial
Tools Products Service Total
GBPm GBPm GBPm GBPm
------------------------- -------------- ---------- ------- -----
External revenue 70.0 64.2 24.9 159.1
Inter-segment revenue 0.4 0.5 -
------------------------- -------------- ---------- -------
Total segment revenue 70.4 64.7 24.9
Segment operating profit 7.3 6.6 5.0 18.9
------------------------- -------------- ---------- ------- -----
3 SEGMENT Information (continued)
Year to 31 March 2012
Nanotechnology Industrial
Tools Products Service Total
GBPm GBPm GBPm GBPm
------------------------- -------------- ---------- ------- -----
External revenue 153.3 128.0 56.0 337.3
Inter-segment revenue 0.6 1.1 0.3
------------------------- -------------- ---------- -------
Total segment revenue 153.9 129.1 56.3
Segment operating profit 17.3 13.8 11.0 42.1
------------------------- -------------- ---------- ------- -----
Reconciliation of reportable segment profit
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
GBPm GBPm GBPm
as re-presented*
------------------------------------------- ---------- ------------------ ----------
Operating profit for reportable segments 23.8 18.9 42.1
Other operating income - - 7.0
Reversal of acquisition related fair
value adjustments to inventory (0.2) (1.0) (1.7)
Acquisition related costs (0.6) (0.7) (1.5)
Amortisation of acquired intangibles (5.4) (4.3) (11.2)
Financial income 5.0 5.8 12.6
Financial expenditure (5.7) (5.6) (11.2)
------------------------------------------ ---------- ------------------ ----------
Profit before income tax 16.9 13.1 36.1
------------------------------------------ ---------- ------------------ ----------
* See note 1 for details of re-presentation of comparative
information.
4 RESEARCH AND DEVELOPMENT
Total research and development spend by the Group is as
follows:
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
as restated* as restated*
GBPm GBPm GBPm
---------------------------------------- ---------- -------------- --------------
Research and development expense
charged to the consolidated statement
of income 12.1 12.6 25.8
Less: depreciation of R&D related
fixed assets (0.1) (0.1) (0.2)
Add: amounts capitalised as fixed
assets 0.4 0.3 0.9
Less: amortisation and impairment
of R&D costs previously capitalised
as intangibles (2.1) (2.4) (5.2)
Add: amounts capitalised as intangible
assets 1.8 0.9 2.4
Total cash spent on research and
development during the period 12.1 11.3 23.7
---------------------------------------- ---------- -------------- --------------
* See Note 1 for details of the change in presentation in
respect of Research and Development expenditure. In addition the
Group has discovered that certain depreciation and capital
expenditures were double counted in the calculation of cash spent
in the prior year on research and development. This has been
corrected in the above table resulting in an increase in the
reported cash spent on research and development by GBP0.3 million
in the half year to 30 September 2011 and GBP1.0 million in the
year to 31 March 2012.
5 ACQUISITIONS
Platinum Medical Imaging LLC
On 3 November 2011 the Group acquired 100% of the share capital
of Platinum Medical Imaging LLC for an initial cash consideration
of GBP11.0m.
Further contingent consideration is payable each year until the
third anniversary of the acquisition dependent on post acquisition
earnings. The amount of this consideration could be between zero
and GBP19.4m. The fair value of the amount likely to be paid is
GBP2.6m and is based on management forecasts of future
profitability.
Platinum Medical Imaging LLC is an established US company
providing high quality parts and services for MRI (Magnetic
Resonance Imaging) and CT (Computed Tomography) medical imaging
instruments. It operates from sites in Florida and California from
which the business sells parts, carries out service and maintenance
and performs system rebuilds.
The book and fair value of the assets and liabilities acquired
is given in the table below. The business has been acquired for the
purpose of integrating into the Service segment.
Book value Adjustments Fair Value
GBPm GBPm GBPm
---------------------------------- ----------- ------------ -----------
Intangible fixed assets - 12.5 12.5
Tangible fixed assets 0.5 (0.2) 0.3
Inventories 0.9 0.8 1.7
Trade and other receivables 0.6 (0.3) 0.3
Trade and other payables (0.4) (0.4) (0.8)
Customer deposits (0.4) (0.3) (0.7)
Deferred tax - (0.2) (0.2)
Overdraft (0.1) - (0.1)
---------------------------------- ----------- ------------ -----------
Net assets acquired 13.0
Goodwill 1.1 11.9 0.6
---------------------------------- ----------- ------------ -----------
Total consideration 13.6
Overdraft acquired 0.1
Contingent consideration (2.6)
---------------------------------- ----------- ------------ -----------
Net cash outflow relating to the
acquisition 11.1
---------------------------------- ----------- ------------ -----------
The goodwill arising is tax deductible in full and is considered
to represent the value of the acquired work force and expected
synergies arising from the integration with the Group's existing
service business.
The book value of receivables given in the table above
represents the gross contractual amounts receivable. The fair value
adjustment to receivables represents the best estimate at the
acquisition date of the cash flows not expected to be
collected.
6 TAXATION
The total effective tax rate on profits for the half year is 31%
(2011: 32%). The weighted average tax rate in respect of adjusted
profit before tax (see note 2) for the half year is 18% (2011:
20%).
The Group estimates that its full year weighted average tax rate
in respect of adjusted profit before tax will be 18% (2011:
20%).
7 earnings per share
a) Basic
The calculation of basic earnings per share is based on the
profit or loss for the period after taxation and a weighted average
number of ordinary shares outstanding during the period, excluding
shares held by the Employee Share Ownership Trust, as follows:
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
Shares Shares Shares
million million million
------------------------------------------ ---------- ---------- ---------
Weighted average number of shares
outstanding 56.2 53.0 54.2
Less: weighted average number of
shares held by Employee Share Ownership
Trust (0.2) (0.4) (0.2)
------------------------------------------ ---------- ---------- ---------
Weighted average number of shares
used in calculation of earnings
per share 56.0 52.6 54.0
------------------------------------------ ---------- ---------- ---------
b) Diluted
The following table shows the effect of share options on the
calculation of both adjusted and unadjusted diluted basic earnings
per share.
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
Shares Shares Shares
million million million
--------------------------------------- ---------- ---------- ---------
Number of ordinary shares per basic
earnings per share calculations 56.0 52.6 54.0
Effect of shares under option 1.0 1.6 1.1
--------------------------------------- ---------- ---------- ---------
Number of ordinary shares per diluted
earnings per share calculations 57.0 54.2 55.1
--------------------------------------- ---------- ---------- ---------
8 dividends per share
The following dividends per share were paid by the Group:
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
pence pence pence
---------------------------------- ---------- ---------- ---------
Previous period interim dividend 2.772 2.52 2.52
Previous period final dividend - - 6.48
---------------------------------- ---------- ---------- ---------
2.772 2.52 9.00
---------------------------------- ---------- ---------- ---------
The following dividends per share were proposed by the Group in
respect of each accounting period presented:
Half year Half year Year to
to to
30 Sept 30 Sept 31 March
2012 2011 2012
pence pence pence
------------------ --------------- ---------- ---------
Interim dividend 3.05 2.77 2.772
Final dividend - - 7.228
------------------ --------------- ---------- ---------
3.05 2.77 10.000
------------------ --------------- ---------- ---------
The final dividend for the year to 31 March 2012 was approved by
shareholders at the Annual General Meeting held on 11 September
2012. Accordingly is it no longer at the discretion of the company
and has been included as a liability as at 30 September 2012. It
was paid on 25 October 2012.
The interim dividend for the year to 31 March 2013 of 3.05 pence
was approved by the Board on 13 November 2012, 10% higher than the
previous year and has not been included as a liability as at 30
September 2012. The interim dividend will be paid on 8 April 2013
to shareholders on the register at the close of business on 8 March
2013.
Principal Risks and Uncertainties
The Group has in place a risk management structure and internal
controls which are designed to identify, manage and mitigate
risk.
In common with all businesses, Oxford Instruments faces a number
of risks and uncertainties which could have a material impact on
the Group's long term performance.
On pages 22 and 23 of its 2012 Annual Report and Accounts (a
copy of which is available at www.oxford-instruments.com), the
Company set out what the Directors regarded as being the principal
risks and uncertainties facing the Group's long term performance
and these are reproduced in the table below. Many of these risks
are inherent to Oxford Instruments as a global business and they
remain valid as regards their potential impact during the remainder
of the second half of the year.
Specific Risk Context Risk Possible Impact
------------------------ ----------------------------- -------------------------- --------------------------
Technical Risk The Group provides Failure of the -- Lower profitability
high advanced and financial returns.
technology equipment technologies applied -- Negative impact
and by the on the
systems to its Group to produce Group's reputation.
customers. commercial
products, capable
of being
manufactured and
sold profitably.
------------------------ ----------------------------- -------------------------- --------------------------
Economic Environment The recent global Demand for the -- Lower profitability
recession Group's and financial returns.
and prevailing products may be
economic lower
downturn have resulted than anticipated.
in cuts to both
government and
private sector
spending.
------------------------ ----------------------------- -------------------------- --------------------------
Acquisitions Part of the growth Appropriate acquisition -- Lower profitability
of targets may not and financial returns.
Oxford Instruments' be available in -- Management focus
plans is the necessary timescale. taken
to come from acquisitions Alternatively, away from the core
which provide the once acquired, business in order
Group with targets may fail to
complementary technologies. to provide manage integration
the planned value. issues.
------------------------ ----------------------------- -------------------------- --------------------------
Foreign exchange A significant proportion The Group's profit -- Lower profitability
volatility of the Group's levels are and financial returns.
profit is made exposed to fluctuations
in foreign currencies. in
exchange rates.
------------------------ ----------------------------- -------------------------- --------------------------
Outsourcing The Group's strategic Failures in the -- Disruption to
plan supply chain customers.
includes the outsourcing impacting sales. -- Negative impact
of on the
a significantly Group's reputation.
higher proportion
of the costs of
its products to
benefit from economies
of scale and natural
currency hedges.
------------------------ ----------------------------- -------------------------- --------------------------
Raw material volatility The Group relies If these price -- Lower profitability.
on the rises can not be -- Occasional disruption
purchase of a significant passed on to customers to production.
amount of copper as copper prices
for the rise, profitability
production of its falls.
superconducting
wire.
------------------------ ----------------------------- -------------------------- --------------------------
Pensions The Group's calculated Movements in the -- Additional cash
pension deficit actuarial required
is sensitive assumptions may by the Group to
to changes in the have an fund
actuarial appreciable effect the deficit.
assumptions. on the -- Reduction in
reported pension net assets.
deficit.
------------------------ ----------------------------- -------------------------- --------------------------
People A number of the One critical or -- Performance
Group's a number of key does not meet
employees are business employees in an expectations.
critical. The Group's associated work -- Disruption to
growth plan requires area leave the customers.
people and structure Group. -- Lower profitability
capable of managing and financial returns.
the increasing
size and complexity
of the business.
------------------------ ----------------------------- -------------------------- --------------------------
The impact of the economic and end market environments in which
the Group's businesses operate are considered in the Half Year
Statement of this Half Year Report, together with an indication if
management is aware of any likely change in this situation.
Responsibility Statement of the Directors in respect of the Half
Year Financial Statements
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
Jonathan Flint Chief Executive Kevin Boyd Group Finance Director
13 November 2012
Independent Review Report by KPMG Audit Plc to Oxford
Instruments plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2012 which comprises the Condensed
Consolidated Statement of Income, the Condensed Consolidated
Statement of Comprehensive Income, Condensed Consolidated Statement
of Financial Position, Condensed Consolidated Statement of Changes
in Equity, Condensed Consolidated Statement of Cash Flows and the
related explanatory notes. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Services Authority ("the UK FSA"). Our review
has been undertaken so that we might state to the company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the EU.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2012 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
S Haydn-Jones
for and on behalf of KPMG Audit Plc
Chartered Accountants
One Snowhill, Snow Hill Queensway
Birmingham, B4 6GH
13 November 2012
Notes to Editors
Oxford Instruments designs, supplies and supports
high-technology tools and systems with a focus on research and
industrial applications. It provides solutions needed to advance
fundamental physics research and its transfer into commercial
nanotechnology applications. Innovation has been the driving force
behind Oxford Instruments' growth and success for over 50 years,
and its strategy is to effect the successful commercialisation of
these ideas by bringing them to market in a timely and
customer-focused fashion.
The first technology business to be spun out from Oxford
University over fifty years ago, Oxford Instruments is now a global
company with over 1900 staff worldwide and is listed on the FTSE250
index of the London Stock Exchange (OXIG). Its objective is to be
the leading provider of new generation tools and systems for the
research and industrial sectors.
This involves the combination of core technologies in areas such
as low temperature, high magnetic field and ultra high vacuum
environments, Nuclear Magnetic Resonance, X-ray, electron and
optical based metrology, and advanced growth, deposition and
etching.
Oxford Instruments aims to pursue responsible development and
deeper understanding of our world through science and technology.
Its products, expertise, and ideas address global issues such as
energy, environment, security and health.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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