Released: 01/03/2010
- Part 3: For the preceeding part double click [ID:nRSA8072Hb]
(0.44)c
- c
Total operations
(1.77)c
(7.34)c
Diluted
Continuing operations
(1.33)c
(7.34)c
Discontinued operations
(0.44)c
- c
Total operations
(1.77)c
(7.34)c
Adjusted earnings per share
10
Basic
14.86 c
26.03 c
Diluted
14.81 c
25.96 c
Dividends per ordinary share
11
10.00 c
13.02 c
* See note 1
Consolidated statement of comprehensive income
Year ended 2 January 2010 $ million Restated* Year ended 3 January 2009 $ million
Profit/(loss) for the period 6.0 (46.5)
Other comprehensive loss
Foreign currency translation:
- Currency translation differences on foreign operations:
Subsidiaries 81.5 (211.7)
Associates 0.8 (3.2)
- (Loss)/gain on net investment hedges (3.1) 57.2
- Reclassification to profit or loss of currency translation loss on foreign operations sold - 6.7
79.2 (151.0)
Available-for-sale investments:
- Gain/(loss) arising in the period 0.4 (1.0)
- Reclassification to profit or loss of gain on investments sold - (1.2)
0.4 (2.2)
Post-employment benefits:
- Net actuarial loss (143.8) (98.8)
- Effect of the asset ceiling 18.6 12.3
(125.2) (86.5)
Other comprehensive loss before tax (45.6) (239.7)
Income tax benefit on components of other comprehensive loss 26.3 14.3
Other comprehensive loss after tax (19.3) (225.4)
Comprehensive loss for the period (13.3) (271.9)
Attributable to:
- Equity shareholders in Tomkins plc (36.8) (288.3)
- Minority shareholders in subsidiaries 23.5 16.4
(13.3) (271.9)
26.3
14.3
Other comprehensive loss after tax
(19.3)
(225.4)
Comprehensive loss for the period
(13.3)
(271.9)
Attributable to:
- Equity shareholders in Tomkins plc
(36.8)
(288.3)
- Minority shareholders in subsidiaries
23.5
16.4
(13.3)
(271.9)
* See note 1
Consolidated CASH FLOW statement
Note Year ended 2 January 2010 $ million Year ended 3 January 2009 $ million
Operating activities
Cash generated from operations 12 532.1 628.7
Income taxes paid (50.3) (116.3)
Income taxes received 31.2 31.8
Net cash inflow from operating activities 513.0 544.2
Investing activities
Purchase of property, plant and equipment (115.2) (183.2)
Purchase of computer software (7.8) (10.6)
Capitalisation of development costs (0.6) (0.6)
Disposal of property, plant and equipment 12.9 7.9
Purchase of available-for-sale investments - (0.1)
Sale of available-for-sale investments - 1.6
Investment in associates (2.7) (10.4)
Purchase of interests in subsidiaries, net of cash acquired (26.5) (65.0)
Sale of businesses and subsidiaries, net of cash disposed 0.7 124.6
Interest received 3.6 11.2
Dividends received from associates 0.3 0.6
Net cash outflow from investing activities (135.3) (124.0)
Financing activities
Issue of ordinary shares 0.1 0.2
Draw-down of bank and other loans 2.8 114.6
Repayment of bank and other loans (164.4) (15.6)
Receipts/(payments) on foreign currency derivatives 39.6 (178.6)
Capital element of finance lease rental payments (2.8) (2.8)
Interest element of finance lease rental payments (0.4) (0.5)
Decrease in collateralised cash 2.1 0.7
Purchase of own shares (1.4) (4.7)
Interest paid (37.5) (55.0)
Financing costs paid (6.3) -
Equity dividend paid (48.3) (246.2)
Investment by a minority shareholder in a subsidiary 4.7 0.4
Dividend paid to a minority shareholder in a subsidiary (8.7) (13.5)
Net cash outflow from financing activities (220.5) (401.0)
Increase in cash and cash equivalents 157.2 19.2
Net cash and cash equivalents at the beginning of the period 278.2 280.2
Foreign currency translation 4.8 (21.2)
Net cash and cash equivalents at the end of the period 440.2 278.2
Analysis of net cash and cash equivalents: Year ended 2 January 2010 $ million Year ended 3 January 2009 $ million
Cash and cash equivalents 445.0 291.9
Bank overdrafts (4.8) (13.7)
440.2 278.2
(8.7)
(13.5)
Net cash outflow from financing activities
(220.5)
(401.0)
Increase in cash and cash equivalents
157.2
19.2
Net cash and cash equivalents at the beginning of the period
278.2
280.2
Foreign currency translation
4.8
(21.2)
Net cash and cash equivalents at the end of the period
440.2
278.2
Analysis of net cash and cash equivalents:
Year
ended
2 January
2010
$ million
Year
ended
3 January
2009
$ million
Cash and cash equivalents
445.0
291.9
Bank overdrafts
(4.8)
(13.7)
440.2
278.2
As at 2 January 2010, the Group's net debt was $207.5 million (3 January 2009: $476.4 million).
A reconciliation of the change in net cash and cash equivalents to the movement in net debt is presented in note 12.
Consolidated BALANCE SHEET
Note As at 2 January 2010 $ million As at 3 January 2009 $ million
Non-current assets
Goodwill 13 436.0 415.9
Other intangible assets 13 78.0 108.8
Property, plant and equipment 14 1,122.8 1,167.3
Investments in associates 20.6 20.3
Trade and other receivables 15 81.1 105.9
Deferred tax assets 82.9 64.8
Post-employment benefit surpluses 18 1.3 5.3
1,822.7 1,888.3
Current assets
Inventories 590.8 772.4
Trade and other receivables 15 753.0 769.7
Income tax recoverable 49.0 47.6
Available-for-sale investments 1.2 0.8
Cash and cash equivalents 445.0 291.9
1,839.0 1,882.4
Assets held for sale 11.9 -
Total assets 3,673.6 3,770.7
Current liabilities
Bank overdrafts (4.8) (13.7)
Bank and other loans (11.2) (29.5)
Obligations under finance leases (1.0) (1.5)
Trade and other payables 16 (677.6) (650.1)
Income tax liabilities (15.2) (17.9)
Provisions 17 (100.3) (48.8)
(810.1) (761.5)
Non-current liabilities
Bank and other loans (687.3) (762.9)
Obligations under finance leases (3.6) (5.4)
Trade and other payables 16 (27.1) (51.6)
Post-employment benefit obligations 18 (343.5) (333.6)
Deferred tax liabilities (25.3) (29.7)
Income tax liabilities (79.5) (63.5)
Provisions 17 (19.2) (23.2)
(1,185.5) (1,269.9)
Total liabilities (1,995.6) (2,031.4)
Net assets 1,678.0 1,739.3
Capital and reserves
Share capital 79.6 79.7
Share premium account 799.2 799.1
Other reserves 819.7 736.2
Accumulated deficit (161.9) (4.2)
Shareholders' equity 1,536.6 1,610.8
Minority interests 141.4 128.5
Total equity 1,678.0 1,739.3
Provisions
17
(19.2)
(23.2)
(1,185.5)
(1,269.9)
Total liabilities
(1,995.6)
(2,031.4)
Net assets
1,678.0
1,739.3
Capital and reserves
Share capital
79.6
79.7
Share premium account
799.2
799.1
Other reserves
819.7
736.2
Accumulated deficit
(161.9)
(4.2)
Shareholders' equity
1,536.6
1,610.8
Minority interests
141.4
128.5
Total equity
1,678.0
1,739.3
consolidated statement of changes in equity
Shareholders' equity
Share capital $ million Share premium account $ million Other reserves $ million Restated* (Accumulated deficit)/ retained profit $ million Total $ million Minority interests $ million Total equity $ million
As at 30 December 2007 65.5 679.4 1,013.4 379.5 2,137.8 117.0 2,254.8
Year ended 3 January 2009
(Loss)/profit for the period - - - (64.6) (64.6) 18.1 (46.5)
Other comprehensive loss - - (150.9) (72.8) (223.7) (1.7) (225.4)
Total comprehensive (loss)/income - - (150.9) (137.4) (288.3) 16.4 (271.9)
Other changes in equity:
- Change of functional currency 22.6 112.4 (135.0) - - - -
- Issue of ordinary shares - 0.2 - - 0.2 - 0.2
- Redenomination of ordinary share capital (8.4) 7.1 1.3 - - - -
- Dividends paid on ordinary shares - - - (246.2) (246.2) - (246.2)
- Purchase of own shares - - (4.7) - (4.7) - (4.7)
- Transfer of own shares - - 12.1 (12.1) - - -
- Cost of share-based incentives - - - 12.0 12.0 - 12.0
- Dividends paid to minority shareholders - - - - - (13.5) (13.5)
- Shares issued by a subsidiary to minority shareholders - - - - - 0.4 0.4
- Minority interest on acquisition of a subsidiary - - - - - 8.2 8.2
14.2 119.7 (126.3) (246.3) (238.7) (4.9) (243.6)
As at 3 January 2009 79.7 799.1 736.2 (4.2) 1,610.8 128.5 1,739.3
Year ended 2 January 2010
Profit/(loss) for the period - - - (15.6) (15.6) 21.6 6.0
Other comprehensive (loss)/income - - 76.7 (97.9) (21.2) 1.9 (19.3)
Total comprehensive (loss)/income - - 76.7 (113.5) (36.8) 23.5 (13.3)
Other changes in equity:
- Cancellation of deferred shares (0.1) - 0.1 - - - -
- Issue of ordinary shares - 0.1 - - 0.1 - 0.1
- Dividends paid on ordinary shares - - - (48.3) (48.3) - (48.3)
- Purchase of own shares - - (1.4) - (1.4) - (1.4)
- Transfer of own shares - - 8.1 (8.1) - - -
- Cost of share-based incentives (including a tax benefit of $0.9 million) - - - 12.2 12.2 - 12.2
- Dividends paid to minority shareholders - - - - - (8.7) (8.7)
- Purchase of a minority shareholding - - - - - (6.6) (6.6)
- Shares issued by a subsidiary to minority shareholders - - - - - 4.7 4.7
(0.1) 0.1 6.8 (44.2) (37.4) (10.6) (48.0)
As at 2 January 2010 79.6 799.2 819.7 (161.9) 1,536.6 141.4 1,678.0
0.1
-
-
-
-
- Issue of ordinary shares
-
0.1
-
-
0.1
-
0.1
- Dividends paid on ordinary shares
-
-
-
(48.3)
(48.3)
-
(48.3)
- Purchase of own shares
-
-
(1.4)
-
(1.4)
-
(1.4)
- Transfer of own shares
-
-
8.1
(8.1)
-
-
-
- Cost of share-based incentives (including a tax benefit of $0.9 million)
-
-
-
12.2
12.2
-
12.2
- Dividends paid to minority shareholders
-
-
-
-
-
(8.7)
(8.7)
- Purchase of a minority shareholding
-
-
-
-
-
(6.6)
(6.6)
- Shares issued by a subsidiary to minority shareholders
-
-
-
-
-
4.7
4.7
(0.1)
0.1
6.8
(44.2)
(37.4)
(10.6)
(48.0)
As at 2 January 2010
79.6
799.2
819.7
(161.9)
1,536.6
141.4
1,678.0
* See note 1
1 Basis of Preparation
The financial information on pages 21 to 38 is derived from the Group's consolidated financial statements for the year
ended 2 January 2010 that have been prepared on a going concern basis in accordance with International Financial Reporting
Standards ('IFRS') adopted for use in the European Union and, except with regard to certain financial instruments, under
the historical cost convention.
From the Group's perspective, there are no applicable differences between IFRS adopted for use in the European Union and
IFRS as issued by the International Accounting Standards Board.
At the beginning of the current period, the Group adopted the following accounting pronouncements that are relevant to its
operations, none of which had any significant impact on its results or financial position:
*
IAS 1 Revised (2007) 'Presentation of Financial Statements'.
*
IAS 23 Revised (2007) 'Borrowing Costs'.
*
Amendment to IFRS 2 'Share-based Payment - Vesting Conditions and Cancellations'.
*
Amendments to IFRS 7 'Financial Instruments: Disclosures - Improving Disclosures about Financial Instruments'.
*
'Improvements to IFRSs 2008', except where adoption of an improvement is not permitted without also adopting early IAS 27
Revised (2008) 'Consolidated and Separate Financial Statements'.
*
IFRIC 16 'Hedges of a Net Investment in a Foreign Operation'.
Retrospective application of the amendment to IFRS 2 had the effect of increasing administrative expenses by $0.5 million
to $513.3 million in 2008 and there was a corresponding increase in the credit to equity in relation to share-based
incentives (there were no tax effects). In 2008, the loss per share from continuing operations was increased by 0.05 cents
to 7.34 cents. Prior year balance sheets were not affected by this change of accounting policy.
The financial information does not constitute full accounts within the meaning of section 434 of the Companies Act 2006 or
contain sufficient information to comply with IFRS disclosure requirements.
The Company's auditors, Deloitte LLP, have given an unqualified report on the Group's consolidated financial statements for
the year ended 2 January 2010, which does not contain any statement under section 498 of the Companies Act 2006. Subject to
approval by shareholders, the financial statements will be filed with the Registrar of Companies following the Company's
Annual General Meeting on 1 June 2010.
2 Segment information - Continuing operations
a) Background
The Group's operating segments are identified by grouping together businesses that manufacture similar products, as this is
the basis on which information is provided to the Board for the purposes of allocating resources within the Group and
assessing the performance of the Group's businesses.
During 2009, the Group substantially completed its long-term programme of disposing of or exiting its non-core businesses
and changes were made to the Group's internal reporting structure to assist the Board in focusing on the performance of the
Group's ongoing businesses. Distinction is now drawn between those of the Group's continuing operations that are ongoing
and those that have been exited but do not meet the conditions to be classified as discontinued operations. The following
changes were made that are relevant to this financial information:
*
the Stant and Standard-Thomson businesses that were sold in 2008 were removed from the Fluid Systems segment and are now
presented as a separate segment named Caps & Thermostats;
*
the remainder of the Fluid Systems segment was renamed Sensors & Valves;
*
the Air Systems Components segment was renamed Air Distribution;
*
the Philips Doors and Windows business that is to be closed during 2009 was removed from the Other Building Products
segment and is now presented as a separate segment named Doors & Windows; and
*
the remainder of the Other Building Products segment was renamed Bathware.
Also during 2009, the Group's Water Pumps business was transferred from Other Industrial & Automotive to Power
Transmission.
Comparative information for 2008 has been re-presented to reflect these changes.
B) MEASURE OF SEGMENT PROFIT OR LOSS
The Board uses adjusted operating profit to measure the profitability of each segment. Adjusted operating profit is
therefore the measure of segment profit or loss presented in the Group's segment disclosures.
Adjusted operating profit represents operating profit before specific items that are considered to hinder comparison of the
trading performance of the Group's businesses either year on year or with other businesses.
During the periods under review, the items excluded from operating profit in arriving at adjusted operating profit were as
follows:
*
the amortisation of intangible assets arising on acquisitions;
*
impairments, comprising impairments of goodwill and intangible assets arising on acquisitions and material impairments of
other assets;
*
restructuring costs;
*
the net gain or loss on disposals and on the exit of businesses; and
*
in 2009, the gain recognised on amendments to certain post-employment benefit plans in North America.
2 Segment information - Continuing operations (continued)
a) Sales and adjusted operating profit - continuing operations
Segment information about the Group's continuing operations is presented below.
Sales Adjusted operating profit/(loss)
Year ended 2 January 2010 $ million Year ended 3 January 2009 $ million Year ended 2 January 2010 $ million Restated* Year ended 3 January 2009 $ million
Ongoing segments
Industrial & Automotive:
- Power Transmission 1,763.4 2,125.2 212.4 228.1
- Fluid Power 588.7 832.3 (11.8) 46.2
- Sensors & Valves 313.6 421.0 0.1 29.6
- Other Industrial & Automotive 463.4 602.1 25.4 45.5
3,129.1 3,980.6 226.1 349.4
Building Products:
- Air Distribution 874.2 1,112.3 77.8 104.2
- Bathware 140.3 208.2 (8.7) (11.8)
1,014.5 1,320.5 69.1 92.4
Corporate - - (32.3) (37.0)
Total ongoing 4,143.6 5,301.1 262.9 404.8
Segments exited or to be exited
Industrial & Automotive:
- Caps & Thermostats - 80.2 - 10.3
Building Products:
- Doors & Windows 36.5 134.6 (13.1) (12.2)
Total exited or to be exited 36.5 214.8 (13.1) (1.9)
Total continuing operations 4,180.1 5,515.9 249.8 402.9
By origin
US 2,172.9 2,947.6 105.3 181.4
UK 297.0 399.6 4.7 (5.0)
Rest of Europe 603.5 787.2 29.4 55.9
Rest of the world 1,106.7 1,381.5 110.4 170.6
4,180.1 5,515.9 249.8 402.9
By destination
US 2,358.9 3,178.7
UK 87.3 129.0
Rest of Europe 665.8 864.9
Rest of the world 1,068.1 1,343.3
4,180.1 5,515.9
Rest of Europe
603.5
787.2
29.4
55.9
Rest of the world
1,106.7
1,381.5
110.4
170.6
4,180.1
5,515.9
249.8
402.9
By destination
US
2,358.9
3,178.7
UK
87.3
129.0
Rest of Europe
665.8
864.9
Rest of the world
1,068.1
1,343.3
4,180.1
5,515.9
* See note 1
Inter-segment sales were not significant.
2 Segment information - Continuing operations (continued)
Reconciliation of adjusted operating profit to profit/(loss) before tax: Year ended 2 January 2010 $ million Restated* Year ended 3 January 2009 $ million
Adjusted operating profit 249.8 402.9
Amortisation of intangible assets arising on acquisitions (11.2) (10.6)
Impairments (see note 3) (73.0) (342.4)
Restructuring costs (see note 4) (144.1) (26.0)
Net gain on disposals and on the exit of businesses (see note 4) 0.2 43.0
Gain on amendment of post-employment benefits (see note 5) 63.0 -
Operating profit 84.7 66.9
Net finance costs (46.3) (75.0)
Profit/(loss) before tax 38.4 (8.1)
0.2
43.0
Gain on amendment of post-employment benefits (see note 5)
63.0
-
Operating profit
84.7
66.9
Net finance costs
(46.3)
(75.0)
Profit/(loss) before tax
38.4
(8.1)
* See note 1
3 Impairments
In 2009, the Group recognised impairments amounting to $73.0 million, comprising $18.9 million on goodwill and intangible
assets arising on acquisitions, $38.6 million on assets that have become impaired as a consequence of the Group's
restructuring initiatives and $15.5 million on receivables held in relation to the disposal of businesses in previous
years.
In 2008, impairments amounted to $342.4 million, of which $228.6 million related to goodwill and $113.8 million to
property, plant and equipment, which largely resulted from the significant deterioration during 2008 of the North American
automotive OE and US residential construction markets.
Year ended 2 January 2010 Year ended 3 January 2009
Goodwill $ million Other intangible assets $ million Property, plant and equipment $ million Long-term receivables $ million Total $ million Goodwill Property, plant and equipment Total
$ million $ million $ million
Ongoing segments
Industrial & Automotive:
- Power Transmission - 9.3 13.9 - 23.2 194.6 90.0 284.6
- Fluid Power - 3.0 9.5 - 12.5 - 11.7 11.7
- Sensors & Valves - - - - - - 1.1 1.1
- Other Industrial & Automotive - - 0.7 - 0.7 - - -
- 12.3 24.1 - 36.4 194.6 102.8 297.4
Building Products:
- Air Distribution 8.7 9.7 0.2 - 18.6 34.0 - 34.0
- Bathware - - 2.5 - 2.5 - - -
8.7 9.7 2.7 - 21.1 34.0 - 34.0
Corporate - - - 15.5 15.5 - - -
Total ongoing 8.7 22.0 26.8 15.5 73.0 228.6 102.8 331.4
Segments exited or to be exited
Building Products:
- Doors & Windows - - - - - - 11.0 11.0
Total exited or to be exited 8.7 22.0 26.8 15.5 73.0 - 11.0 11.0
Total continuing operations 8.7 22.0 26.8 15.5 73.0 228.6 113.8 342.4
Building Products:
- Doors & Windows
-
-
-
-
-
-
11.0
11.0
Total exited or to be exited
8.7
22.0
26.8
15.5
73.0
-
11.0
11.0
Total continuing operations
8.7
22.0
26.8
15.5
73.0
228.6
113.8
342.4
4 Restructuring Initiatives
A) Restructuring costs
Restructuring costs recognised during 2009 principally arose in relation to the restructuring of the Group's manufacturing
operations under projects 'Eagle' and 'Cheetah'. In particular:
*
in Industrial & Automotive, the cessation of Power Transmission's manufacturing operations in Aachen, Germany, and the
closures of its powder metal facility at Mississauga, Ontario, scheduled for 2010, its pulley and tensioner facility at
London, Ontario, and FormFlo in the UK; the cessation of Fluid Power's hose manufacturing activities in Erembodegem,
Belgium and the substantial closure of its assembly facility at St Neots, UK; and, in Other Industrial & Automotive, the
closure of Ideal's manufacturing facility at St. Augustine, Florida and the rationalisation of Dexter's manufacturing
facilities; and
*
in Building Products, the closure of the Philips Doors and Windows business.
In 2008, restructuring costs principally related to the closure of Power Transmission's facility at Moncks Corner, South
Carolina, further rationalisation of the Lasco Bathware business in the US and the closure of Hart & Cooley's production
facility at Tucson, Arizona, and further costs associated with outsourcing of IT services that began in 2007.
B) Disposals and exit of businesses
In 2009, the Group recognised a net gain of $0.2 million in relation to the disposal of businesses in prior years.
In 2008, the Group recognised a gain of $43.2 million on the disposal of Stant and Standard-Thomson.
Year ended 2 January 2010 Year ended 3 January 2009
Restructuring costs Disposals Total Restructuring costs Disposals Total
$ million and exit of businesses $ million $ million and exit of businesses $ million
$ million $ million
Ongoing segments
Industrial & Automotive:
- Power Transmission (75.6) - (75.6) (13.8) - (13.8)
- Fluid Power (26.0) - (26.0) (1.9) - (1.9)
- Sensors & Valves (3.2) - (3.2) (0.2) - (0.2)
- Other Industrial & Automotive (12.2) 0.3 (11.9) (3.2) - (3.2)
(117.0) 0.3 (116.7) (19.1) - (19.1)
Building Products:
- Air Distribution (5.1) - (5.1) (3.6) - (3.6)
- Bathware (1.6) - (1.6) (2.2) (0.2) (2.4)
(6.7) - (6.7) (5.8) (0.2) (6.0)
Corporate (0.5) (0.1) (0.6) (0.3) - (0.3)
Total ongoing (124.2) 0.2 (124.0) (25.2) (0.2) (25.4)
Segments exited or to be exited
Industrial & Automotive:
- Caps & Thermostats - - - - 43.2 43.2
Building Products:
- Doors & Windows (19.9) - (19.9) (0.8) - (0.8)
Total exited or to be exited (19.9) - (19.9) (0.8) 43.2 42.4
Total continuing operations (144.1) 0.2 (143.9) (26.0) 43.0 17.0
43.2
Building Products:
- Doors & Windows
(19.9)
-
(19.9)
(0.8)
-
(0.8)
Total exited or to be exited
(19.9)
-
(19.9)
(0.8)
43.2
42.4
Total continuing operations
(144.1)
0.2
(143.9)
(26.0)
43.0
17.0
5 Gain on amendment of post-employment benefits
With effect from 30 September 2009, the Group closed its principal defined benefit pension plans in the US and Canada to
future service accrual and the deferred pension benefits accrued under those plans were frozen based on the pensionable
salaries of participating employees at that date. In addition, the Group closed the Gates post-retirement healthcare plan
in the US to employees who had not retired by 31 December 2009 and reduced the benefits payable to existing beneficiaries.
As a result of these amendments, the Group recognised a gain of $63.0 million in 2009, of which $35.3 million related to
pensions and $27.7 million to
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