Clyde Process Solutions plc - Final Results
Press Release 25 May 2010
Clyde Process Solutions plc
(“CPS”, together with its subsidiaries, the “Group”)
Preliminary Results
Clyde Process Solutions plc (AIM: CPSP), a global provider of pneumatic conveying and air filtration solutions for process industries, announces its preliminary results for the year ended 28 February 2010.
Financial highlights
§ Group revenue of £72.5 million (2009: £82.0 million)
§ Record operating profit before exceptionals of £6.7 million, up 6% (2009: £6.3 million)
§ Profit for the year after income tax of £3.1 million (2009: £2.6 million, excluding currency gain on loan)
§ Record EBITDA before exceptionals of £7.8 million, up 10% (2009: £7.1 million)
§ Fully diluted EPS at 7.70p (2009: 9.28p)
§ Net debt reduced to £16.3 million (2009: £18.9 million)
§ Final dividend proposed of 0.8 pence per share (2009: nil)
Operational highlights
§ Strong forward order book of £20.5 million at year end, which has risen to £21.8 million as at the end of April 2010
§ Continued focus on customer contact, credit control, costs and cash
§ Broadening market penetration in areas such as sugar and petrochemicals
§ Development of patentable technologies within air filtration and pneumatic conveying
§ Expanded geographical coverage to support sales and key customer accounts
Commenting on the results, Jim McColl, Chairman of Clyde Process Solutions plc said: “We have delivered an exceptionally strong set of results in what has been a challenging economic environment for many businesses. Our strategy of creating a well-diversified business across a wide range of customer markets, technologies and geographical territories has enabled us to generate outstanding operating profit growth and a set of results that are ahead of market expectations.
“Strong fiscal management, supported by an enhanced strategy of broadening our market penetration, developing patentable technologies, and expanding geographical coverage will enable the Group to build on these results and deliver long-term growth for our shareholders.
“I am disappointed at the continuing low value placed on our Group despite the continuing strong performance of our business. We are reviewing ways to maximise value for our shareholders as a priority. The resumption of the dividend reflects the Board’s confidence in its future and reflects the continuing growth in profits and cashflow despite unsettled market conditions.”
-Ends-
For further information please contact:
Clyde Process Solutions plc
Nominated Adviser
James Caithie
Cairn Financial Advisers LLP Tel: +44 (0) 20 7148 7900
Broker
Chris Hardie Tel: +44 (0) 20 7614 5900
Arden Partners
Media enquiries:
Abchurch
Sarah Hollins / Nick Probert Tel: +44 (0) 20 7398 7715
Chairman’s and Chief Executive’s Statement
Introduction
In one of the most challenging years the global economy has experienced, we are delighted to report that Clyde Process Solutions plc has delivered record operating profit for the financial year ended 28 February 2010.
This outstanding performance has been achieved by focusing on several initiatives which have been developed and driven by our global team. In January 2009 it was clear that trading conditions across many of our key customer markets were softening. Therefore, we responded rapidly by directing our strategic efforts on four key areas. These initiatives centred on increased customer contact, monitoring credit control procedures, controlling costs, and managing cash.
Complementing these specific initiatives has been our sustained focus on diversification across customer markets, technologies and geographical territories. We have enhanced our diversified strength during the period under review by; broadening our market penetration into areas such as sugar and petrochemicals; developing patentable technologies within air filtration and pneumatic conveying; and by expanding our geographical coverage to support sales and key customer account management.
The combination of the early, proactive action in response to the economic environment and our diversified strategy and customer base has contributed significantly to our operational performance and financial results, with record levels of operating profit being achieved. The Board recognises that although order intake and revenue levels have decreased from the previous year, strong fiscal management and execution of the Group’s strategy has enabled the business to generate strong profit.
Trading conditions are improving, which can be seen in the development of the Group’s order book since the beginning of 2010 when, in February, the order book stood at £20.5 million, and as at the end of April the order book has grown to £21.8 million. The Board believes the business is well positioned to benefit from the increasing demand for its technologies as customers drive their capital expenditure plans forward. This trend will allow us to take advantage of the operational leverage available to the Group as revenue levels rise, as well as continuing to control certain categories of cost.
Performance
The Group entered the period under review with a strong order book, which included the £9.3 million order secured in February 2009 from a leading US sugar producer. Margins have been preserved when converting our order book and through the action taken in relation to controlling costs and managing cash, the business has generated £5.7 million in cash from its operations (2009: £6.2 million).
Our result has incorporated the successful resolution of a long running contractual dispute with a Turkish producer of fertiliser products, which has contributed £0.5 million to the operating profit following release of a bad debt provision previously held against this debt. Currency movements between the US dollar and UK sterling continue to impact the Group.
In 2010, Group revenue decreased by £9.5 million to £72.5 million, a decrease of 12% on last year (2009: £82.0 million). Operating profit before exceptionals grew by 6% to £6.7 million (2009: £6.3 million), with profit for the year after income tax increasing by £0.5 million to £3.1 million (2009: £2.6 million, excluding currency gain on loan of £1.2 million after tax). Group Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) before exceptionals increased by 10% to £7.8 million (2009: £7.1 million).
The fully diluted earnings per share (EPS) decreased to 7.70p from the previous year comparative of 9.28p, equating to a 17% decline. The excellent operating profit does not benefit from the exceptional gain of £1.6 million from exchange, which led to significantly reduced finance costs last year.
Strategy
We have focused on enhancing and broadening our offering by customer market, technology and geographical territory during the financial year. We have refined our focus within the food industry, defining sugar as a sub industry of this market and directing business development efforts on this market, maximising the outstanding reference secured during the financial year from a leading US sugar producer. We have also identified petrochemicals as a high growth market and the Group will be putting in place a team to focus solely on this industry.
This focus on customer and market continues to deliver benefits with some excellent progress made with a number of key global customers and industries. To reflect the importance of some of these key customers to our future growth we have established global customer councils, which aim to drive and develop relationships with these customers in a coordinated and unified manner, which we believe will lead to increased order intake for the Group.
We continue to invest in a wide range of research and development projects and have established a global technology board to accelerate the creation of new solutions. This has been exemplified by our North American team, where, in a three-month period, they developed a new low headroom, energy efficient filtration system called the Spacesaver. The US patent for this new solution is pending with an international patent application in progress. We have already sold several of these new Spacesaver systems in North America. We have also secured some market leading orders, specifically, a limestone conveying system in China which transports this material over a mile, which is a world leading distance. We have also commissioned coal injection systems on the world’s largest blast furnace located in China and on the largest blast furnace in India.
We are aiming to expand our presence in India, where we are in advanced negotiations with a partner to form a joint venture in this territory. We believe that India can become a significant territory and contributor to growth in the near future for the Group. Furthermore, we have grown our sales footprint in China with the addition of industry representatives and have identified several partners to support our objective of further penetrating the Middle East.
The combination of close customer contact, coordinated global account management, market-driven innovation through an expanding footprint, which has been supported by strong fiscal management, has enabled the Group to deliver a strategy that has generated record levels of operating profit.
Board
We would like to thank our colleagues on the Board for their energy, commitment and continued support during the financial year.
Global Operations
The macro-economic environment clearly created challenging trading conditions for global industries. However, we have been able to reduce its impact by resolutely focusing our business development efforts on a range of customer markets, targeting key producers with our full array of conveying, injection, valve, filtration and aftermarket solutions.
Over a third of the Group’s order intake stemmed from the food industry, with metals, chemicals and minerals the other prime markets of activity. It is clear that one of the primary strengths of this Group has proven to be its diversification.
§ North America
Our North American operation contributed 75% of the Group’s revenue, generating £54.5 million (2009: £60.5 million). The execution and commissioning of the £13 million of contracts secured from a US sugar producer has given the Group an outstanding reference to further penetrate this particular market. In June 2009 we also opened a new pneumatic conveying test facility in Kansas City, which will be used to demonstrate to potential customers that we can efficiently and economically transport their materials prior to placing an order for our technology.
Our North American operation’s aftermarket and process controls division has also grown during the financial year and this is an area that we aim to develop moving forward. The sales pipeline in North America is strong and we believe that, as producers across our key customer markets gain confidence in investing in our technology, we will increasingly convert these opportunities.
§ Europe
Our European operations gained market share in the cement industry during the period under review, winning a number of fly ash conveying contracts with one of the world’s leading cement producers against strong competition. Over 55% of our European operation’s revenue came from the metals and minerals markets, with coal injection orders also being won for delivery on Indian blast furnaces through a UK-based engineering company.
The air filtration range of technology developed by CPS North America has been converted for use within the European market. A specific business development team has been established to push the air filtration technologies into this territory, with a number of orders already secured. The European operating profit benefited from the successful resolution of a long running contractual dispute with a Turkish producer of fertiliser products. This contributed £0.5 million to the operating profit following release of a bad debt provision previously held against this debt. Trading conditions are improving within Europe and we anticipate solid growth from this operation in the forthcoming financial year as we strengthen our filtration sales team and convert the many opportunities within the metals and minerals markets.
§ Asia
Our Asian operation, based from Beijing, China grew revenue by 26% to £5.3 million (2009: £4.2 million) during the financial year. Orders were secured predominately from the metals market, where CPS Asia continues to build market share. Aftermarket revenue also grew, winning orders from existing customers operating in the metals market.
CPS Asia also secured an order in the petrochemicals market, which was secured at competitive levels of contribution. We believe this reference will be a solid base from which to further penetrate this industry. The team has also won a number of filtration orders and added a number of industry representatives across China in an effort to increase its sales footprint. China remains a territory of immense potential for the Group and we are exploring various routes to increase exposure in this country. We also hope to complement our presence in Asia with a joint venture in India, the details of which we plan to announce in the near future.
§ South America
CPS South America incurred an operating loss of £0.6 million during the year as it experienced a significant decline in demand, primarily from the metals market. A number of orders were cancelled during the latter part of the last financial year which has impacted on revenue for this year. These developments led to the formation of a highly targeted business development strategy, which has seen the business focus on markets outside of metals. Orders have been secured at competitive levels of contribution and, like Europe and Asia, CPS South America has also won a number of air filtration orders. Diversification remains a key area of focus for CPS South America and we believe that by developing a broader range of business development initiatives that this subsidiary can return to profit in the new financial year.
§ South Africa
During its first full year of operation we are pleased to report that CPS South Africa generated a profit of £0.1 million from revenue of £1.0 million. We aim to invest in additional business development resource to support our strategy in South Africa. A strong sales pipeline of opportunities has been generated from a wide range of industries and we are confident that the team in South Africa can continue to secure orders and grow its bottom-line.
People
A number of our employees have made a personal contribution to the financial result of the Group this year. Many have subscribed to a salary sacrifice programme, which has enabled the Group to control costs, as well as ensure that headcount reductions were kept to a minimum.
These personal contributions have helped the Group deliver record operating profit and, on behalf of the Board, we wish to thank each and every member of the team that made this commitment. The Board believes this demonstrates the integrity and cohesive culture that has been developed in recent years by the Group. All our employees have played a part in preparing the Group for its next stage of growth and we look optimistically to achieve continued success.
Funding
While the Group entered the new financial year with a strong net cash position, during the period under review, the Board felt it appropriate to renegotiate the financial covenant calculations within the Group’s banking facility in order to provide long-term funding and suitable levels of headroom given the backdrop of the macro-economic environment. This updated facility has provided the business with prudent levels of headroom as it continues to develop and grow globally. This arrangement incurred a one-off charge of £0.4 million. In addition, the Group received an increase of 75 basis points across all interest rate margins, effective from 1 July 2009, resulting in a £0.1 million of additional interest costs.
At the end of February 2010 net debt stood at £16.3 million (2009: £18.9 million), including cash and cash equivalents of £5.6 million (2009: £6.5 million). Group borrowings, which are denominated in US dollars, have reduced through scheduled repayments of £1.8 million and exchange movements of £1.7 million in the period.
The Group has not significantly benefited from reduced interest rates as 75% of its interest obligations had been hedged at the time of drawdown of the original debt. However, as previously announced, we recently entered into new interest rate swaps for 75% of the Group’s outstanding loans that will contribute approximately £0.3 million to an expected reduction in interest costs of £0.4 million in the new financial year when compared to the period under review, assuming constant exchange rates. These new interest rate swaps will replace the present three year swaps which expire on 30 June 2010. These new interest rate swaps cover forward to the repayment dates of the loans in 2013, 2014 and 2015.
The Board is confident that the revised bank covenants are appropriate and the Group will continue to focus on managing cash, supported by a sustainable, long-term banking facility, which is in place to 2013.
Dividend
The Board intends to propose at the Annual General Meeting, to be held on 1 July 2010, a final dividend of 0.8 pence per share to be paid on the 1 September 2010. The Board has balanced shareholders’ dividend expectations with the need to maintain prudence in the current economic climate and believes the yield proposed is attractive to all shareholders. The record date for the final dividend will be 6 August 2010. We will continue to adopt a progressive dividend policy, subject to the availability of distributable reserves, and the retention of funds required to finance future growth.
Outlook
Our strategy of creating a well-diversified business across customer markets, technologies and geographical territories has enabled us to not only generate outstanding operating profit growth but has also provided us with the ability to combat what has been a challenging global trading environment.
We are beginning to see many of our current and prospective customers release capital expenditure as they aim to sustain their own growth strategies. We have focused our business on building senior-level relationships and close contact with these customers, as well as listening to their evolving needs to build new, patentable technologies through an expanded global footprint. We believe this strong combination enables the Group to be well-positioned to maximise on these opportunities, which will drive medium and long term growth.
These views are being supported by a range of macro-economic intelligence which shows key customer markets such as food, chemicals, metals, minerals and petrochemicals growing globally over the next four years. We believe the investment and focus we have placed in developing new technologies that aim to generate economic and environmental benefit with rapid returns will support the ambitions of our customers and shareholders. We also aim to drive forward our presence in high growth geographies such as China, India, Australasia and South America and are exploring a range of options which include both organic and acquisition-assisted initiatives.
The exponential growth of China and other developing economies, and consequent increased demand for raw materials and commodities, is expected to continue for at least the next 15 years. As the average wealth of many people increases, we continue to expect these economies to provide around 10% of global growth and our strategies will ensure we are well placed to share in this growth.
We are disappointed at the continuing low value placed on our Group despite the continuing strong performance of our business. We are reviewing ways to maximise value for our shareholders as a priority. The resumption of the dividend reflects the Board’s confidence in its future and reflects the continuing growth in profits and cashflow despite unsettled market conditions. The Board strongly believes that the enhanced, diversified strategy, supported by strong fiscal management, will enable the Group to build on these results and deliver long-term growth for its shareholders.
Jim McColl Alex Stewart
Chairman Chief Executive
25 May 2010
Consolidated Income Statement
for the year ended 28 February 2010
| Note | Year ended 28 February 2010 | Year ended 28 February 2009 | |
| £’000 | £’000 | ||
| Revenue | 2 | 72,501 | 81,956 |
| Cost of sales | (53,252) | (61,494) | |
| Gross profit | 19,249 | 20,462 | |
| Distribution costs | (5,889) | (6,780) | |
| Administrative costs | (6,684) | (8,069) | |
| Other income | 51 | 166 | |
| Operating profit | 6,727 | 5,779 | |
| Analysed as: | |||
| Operating profit before exceptional items | 6,727 | 6,251 | |
| Exceptional items | - | (472) | |
| Finance income | 674 | 1,814 | |
| Finance expense | (2,763) | (2,043) | |
| Net finance costs | 3 | (2,089) | (229) |
| Share of loss of joint venture | (4) | (15) | |
| Profit before income tax | 4,634 | 5,535 | |
| Income tax expense | (1,542) | (1,779) | |
| Profit for the year | 3,092 | 3,756 | |
| (Loss)/profit attributable to minority interests | (15) | 7 | |
| Profit attributable to owners | 3,107 | 3,749 |
Earnings per share for profit attributable to the equity holders of the Company during the year
| Basic earnings per share | 4 | 7.70p | 9.91p |
| Diluted earnings per share | 4 | 7.70p | 9.28p |
Consolidated Statement of Comprehensive Income
for the year ended 28 February 2010
Consolidated Balance Sheet
at 28 February 2010| Note | Year ended 28 February 2010 | Year ended 28 February 2009 | |
| £’000 | £’000 | ||
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 58,022 | 61,667 | |
| Property, plant and equipment | 10,559 | 10,856 | |
| Deferred income tax assets | 4,757 | 4,215 | |
| 73,338 | 76,738 | ||
| Current assets | |||
| Inventories | 5,272 | 5,486 | |
| Trade and other receivables | 14,765 | 21,080 | |
| Current tax receivable | 103 | 21 | |
| Derivative financial instruments | 20 | 42 | |
| Cash and cash equivalents | 7 | 5,552 | 6,486 |
| 25,712 | 33,115 | ||
| LIABILITIES | |||
| Current liabilities | |||
| Bank borrowings and finance leases | 8 | (2,330) | (2,019) |
| Trade and other payables | (19,118) | (27,000) | |
| Current income tax liabilities | (29) | (718) | |
| Provisions for liabilities and charges | (864) | (933) | |
| Derivative financial instruments | (427) | (1,068) | |
| (22,768) | (31,738) | ||
| Net current assets | 2,944 | 1,377 | |
| Non-current liabilities | |||
| Deferred income tax liabilities | (9,980) | (10,362) | |
| Bank borrowings and finance leases | 8 | (19,536) | (23,353) |
| Investment in joint venture | (39) | (35) | |
| Retirement benefit obligations | (9,540) | (6,588) | |
| Derivative financial instruments | (11) | (222) | |
| Other non-current liabilities | (93) | (78) | |
| (39,199) | (40,638) | ||
| Net Assets | 37,083 | 37,477 | |
| EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT | |||
| Ordinary shares | 10,094 | 10,094 | |
| Share premium | 24,529 | 24,529 | |
| Other reserves | (3,747) | (2,586) | |
| Retained earnings | 6,202 | 5,409 | |
| Total equity attributable to owners of the parent | 37,078 | 37,446 | |
| Minority interests | 5 | 31 | |
| Total equity | 37,083 | 37,477 |
| Ordinary shares | Share premium | Earn-out shares | Other reserves | Retained earnings | Minority Interest | Total equity | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Balance at 1 March 2009 | 10,094 | 24,529 | - | (2,586) | 5,409 | 31 | 37,477 | |
| Profit/(loss) for the year | - | - | - | - | 3,107 | (15) | 3,092 | |
| Exchange differences on retranslation | - | - | - | (1,647) | - | 4 | (1,643) | |
| Actuarial loss on retirement benefit obligations | - | - | - | - | (3,213) | - | (3,213) | |
| Deferred tax movement on actuarial loss | - | - | - | - | 899 | - | 899 | |
| Movement in interest rate hedging reserve | - | - | - | 466 | - | - | 466 | |
| Movement in exchange rate hedging reserve | - | - | - | 187 | - | - | 187 | |
| Deferred tax movement on hedging reserves | - | - | - | (227) | - | - | (227) | |
| Total comprehensive (loss)/ income for the year | - | - | - | (1,221) | 793 | (11) | (439) | |
| Value of employee services under share options | - | - | - | 60 | - | - | 60 | |
| Dividends to minority interests | - | - | - | - | - | (15) | (15) | |
| Balance at 28 February 2010 | 10,094 | 24,529 | - | (3,747) | 6,202 | 5 | 37,083 | |
| Balance at 1 March 2008 | 8,044 | 18,377 | 8,202 | (9,865) | 5,782 | 21 | 30,561 |
| Profit for the year | - | - | - | - | 3,749 | 7 | 3,756 |
| Exchange differences on retranslation | - | - | - | 7,508 | - | 3 | 7,511 |
| Actuarial loss on retirement benefit obligations | - | - | - | - | (4,835) | - | (4,835) |
| Deferred tax movement on actuarial loss | - | - | - | - | 1,354 | - | 1,354 |
| Movement in interest rate hedging reserve | - | - | - | 183 | - | - | 183 |
| Movement in exchange rate hedging reserve | - | - | - | (476) | - | - | (476) |
| Deferred tax movement on hedging reserves | - | - | - | 64 | - | - | 64 |
| Total comprehensive income for the year | - | - | - | 7,279 | 268 | 10 | 7,557 |
| Dividends paid to shareholders | - | - | - | - | (641) | - | (641) |
| Issue of earn-out shares | 2,050 | 6,152 | (8,202) | - | - | - | - |
| Balance at 28 February 2009 | 10,094 | 24,529 | - | (2,586) | 5,409 | 31 | 37,477 |
Consolidated Statement of Cash Flows
for the year ended 28 February 2010| Note | Year ended 28 February 2010 | Year ended 28 February 2009 | |
| £’000 | £’000 | ||
| Cash flows from operating activities | |||
| Cash generated from operations | 6 | 5,738 | 6,188 |
| Tax paid | (1,903) | (1,301) | |
| Net cash flow from operating activities | 3,835 | 4,887 | |
| Cash flows from investing activities | |||
| Interest received | 547 | 141 | |
| Proceeds from sale of property, plant and equipment | 1 | 43 | |
| Purchases of intangible fixed assets | (107) | (3) | |
| Purchases of property, plant and equipment | (1,075) | (1,102) | |
| Net cash flow from investing activities | (634) | (921) | |
| Cash flows from financing activities | |||
| Repayment of borrowings | (1,848) | (1,129) | |
| Loan to joint venture | - | (21) | |
| Repayment of capital element of finance leases | (23) | (31) | |
| Dividends paid to minority interests | (15) | - | |
| Dividends paid to owners | - | (641) | |
| Other financing cash flows - net | (1,727) | (2,023) | |
| Net cash flow from financing activities | (3,613) | (3,845) | |
| (Decrease)/increase in cash and cash equivalents | (412) | 121 | |
| Effect of exchange rates on cash and cash equivalents | (522) | 1,778 | |
| Cash and cash equivalents at the beginning of the year | 6,486 | 4,587 | |
| Cash and cash equivalents at the end of the year | 7 | 5,552 | 6,486 |
1. Notes to the preliminary resultsGeneral InformationClyde Process Solutions plc (the Company) is a public limited company incorporated and domiciled in England. The Company has a primary listing on the AIM stock exchange. The address of its registered office and principal place of business is Carolina Court, Lakeside, Doncaster, DN4 5RA. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified for financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in the financial statements. The financial information for the years ended 28 February 2010 and 28 February 2009 set out above does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended 28 February 2009 have been delivered to the Registrar of Companies, and the accounts for the year ended 28 February 2010 will be delivered to the Registrar of Companies following the Annual General Meeting. The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include any 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 section 498(3) of the Companies Act 2006. The Annual Report and Accounts for the year ended 28 February 2010 will be posted to shareholders in advance of the Annual General Meeting. The results for 2010 were approved by the Board of directors on 24 May 2010 and are audited. The consolidated financial statements are presented in Sterling and all values are rounded to the nearest £’000 except where otherwise indicated. 2. Segmental information Geographical segmentation The principal segment information made available to the CPS Board of Directors for the year ended 28 February 2010 is as follows:
| Europe | North America | South America | Asia | Africa | Unallocated | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Total segment revenue | 11,779 | 54,563 | 485 | 5,653 | 965 | - | 73,445 |
| Inter-segment revenue | (509) | (46) | - | (389) | - | - | (944) |
| External segment revenue | 11,270 | 54,517 | 485 | 5,264 | 965 | - | 72,501 |
| Operating profit before exceptionals | 1,446 | 6,252 | (557) | 164 | 86 | (664) | 6,727 |
| Share of loss of joint venture | - | - | - | (4) | - | - | (4) |
| EBIT before exceptionals | 1,446 | 6,252 | (557) | 160 | 86 | (664) | 6,723 |
| Europe | North America | South America | Asia | Africa | Unallocated | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Depreciation and amortisation | 184 | 840 | 48 | 19 | - | - | 1,091 |
| Exceptional items | - | - | - | - | - | - | - |
| Materials Handling | Filtration | Total | |
| £’000 | £’000 | £’000 | |
| Total revenue | 57,557 | 15,888 | 73,445 |
| Inter-group revenue | (901) | (43) | (944) |
| External revenue | 56,656 | 15,845 | 72,501 |
| Year ended 28 February 2010 | Year ended 28 February 2009 | ||
| £’000 | £’000 | ||
| Interest on bank overdrafts | 92 | 63 | |
| Interest on borrowings | 1,564 | 1,514 | |
| Finance lease interest | 8 | 12 | |
| Other interest costs | 27 | 7 | |
| Net foreign exchange loss on financing activities | 19 | - | |
| Working capital facility non-utilisation fees | 74 | 73 | |
| Net finance cost on retirement benefit obligation | 535 | 194 | |
| Interest rate swap hedge ineffectiveness charge | - | 114 | |
| Working capital arrangement fee and other similar charges | 444 | 66 | |
| Total finance expense | 2,763 | 2,043 | |
| Net foreign exchange gain on financing activities * | - | (1,673) | |
| Interest receivable | (108) | (141) | |
| Interest on bad debts recovered ** | (440) | - | |
| Interest rate swap hedge ineffectiveness | (126) | - | |
| Total finance income | (674) | (1,814) | |
| Net finance costs | 2,089 | 229 |
* During the prior year there was a £1.613m gain on a $10m inter-group loan. Hedging instruments were put in place to prevent any further exchange gain or loss arising.
** Interest awarded on the resolution of a large aged debt. 4. Earnings per ordinary shareThe basic earning per share is calculated by dividing the earnings attributable to ordinary shareholders for the financial period by the weighted average number of shares in issue. In calculating the diluted earning per share, warrants, earn-out shares outstanding and share options have been taken into account.| Year ended 28 February 2010 | Year ended 28 February 2009 | ||
| Profit attributable to equity shareholders (£’000) | 3,107 | 3,749 | |
| Weighted average number of shares (number) | 40,376,710 | 37,815,006 | |
| Effect of outstanding share warrants | - | 5,260 | |
| Effect of earn-out shares up to date of issue | - | 2,561,704 | |
| Adjusted weighted average number of shares (number) | 40,376,710 | 40,381,970 | |
| Basic earnings per share (p) | 7.70 | 9.91 | |
| Diluted earnings per share (p) | 7.70 | 9.28 |
| Year ended 28 February 2010 | Year ended 28 February 2009 | ||
| £’000 | £’000 | ||
| Operating profit | 6,727 | 5,779 | |
| Amortisation | 211 | 192 | |
| Depreciation | 880 | 705 | |
| Loss on disposal of property, plant & equipment | 2 | 21 | |
| Movement on hedging instruments | 22 | (270) | |
| Value of employee services under share options | 60 | - | |
| Retirement benefit obligation | (796) | (648) | |
| (Increase)/decrease in inventories | (73) | (251) | |
| Decrease/(increase) in trade & other receivables | 5,867 | (1,108) | |
| (Decrease)/increase in trade & other payables | (7,138) | 1,649 | |
| (Decrease)/increase in provisions for liabilities and charges | (24) | 119 | |
| Cash generated from operations | 5,738 | 6,188 |
| 28 February 2010 | 28 February 2009 | ||
| £’000 | £’000 | ||
| Pound Sterling | (269) | (1,059) | |
| US Dollar | 4,826 | 6,906 | |
| Chinese Renminbi | 158 | 464 | |
| Brazilian Real | 93 | 154 | |
| South African Rand | 706 | 27 | |
| Euro | 38 | (14) | |
| Canadian Dollar | - | 8 | |
| 5,552 | 6,486 |
8. Bank borrowings and finance leases
| 28 February 2010 | 28 February 2009 | ||
| £’000 | £’000 | ||
| Current | |||
| Bank borrowings | 2,320 | 1,995 | |
| Current obligations under finance leases | 10 | 24 | |
| 2,330 | 2,019 | ||
| Non-current | |||
| Bank borrowings | 19,503 | 23,310 | |
| Non-current obligations under finance leases | 33 | 43 | |
| 19,536 | 23,353 | ||
| Total borrowings | 21,866 | 25,372 | |
| Less: Cash and cash equivalents | (5,552) | (6,486) | |
| Net debt | 16,314 | 18,886 |
| 28 February 2010 | 28 February 2009 | ||
| £’000 | £’000 | ||
| Within one year, or on demand | 2,330 | 2,019 | |
| Between 1 and 2 years | 2,535 | 2,488 | |
| Between 2 and 5 years | 10,432 | 6,834 | |
| Greater than 5 years | 6,569 | 14,031 | |
| 21,866 | 25,372 |
9. Earnings before interest, tax, depreciation & amortisation
The earnings before interest, tax, depreciation & amortisation (“EBITDA”) as referred to in the Chairman’s and Chief Executive’s Statement is calculated as follows:| Note | Year ended 28 February 2010 | Year ended 28 February 2009 | |
| £’000 | £’000 | ||
| Operating profit | 6,727 | 5,779 | |
| Less share of joint venture losses | (4) | (15) | |
| Plus depreciation | 880 | 705 | |
| Plus amortisation | 211 | 192 | |
| EBITDA | 7,814 | 6,661 | |
| Add back exceptional costs | - | 472 | |
| EBITDA before exceptionals | 7,814 | 7,133 |