Exhibit 99
Strong third quarter results support confidence in year-end guidance
Positive outlook for 2004
Basingstoke, UK – 5 November 2003 – Shire Pharmaceuticals Group plc (LSE: SHP, NASDAQ: SHPGY, TSX: SHQ) announces results for the third quarter ended 30 September 2003.
Third Quarter 2003 Unaudited US GAAP Results Highlights
| | | Q3 2003 | | Q3 2002 | | % Growth |
| | | $M | | $M | | |
|
| | | | | | | |
| | Total revenues | 289.4 | | 249.7 | | +16% |
| | Operating income | 88.8 | | 81.0 | | +10% |
| | Income from continuing operations before | | | | | |
| | income taxes and equity in (losses) / earnings | | | | | |
| | of equity method investees | 89.8 | | 84.1 | | +7% |
| | Net income | 64.6 | | 63.6 | | +2% |
| | Diluted Earnings Per Share (EPS): | | | | | |
| | Per ordinary share | 12.8 | c | 12.4 | c | +3% |
| | Per American Depository Share (ADS) | 38.3 | c | 37.2 | c | +3% |
| (1) | The 2002 US GAAP results have been restated to reflect the disposal of our ‘Over-The-Counter’ (OTC) business, which has been accounted for as a discontinued operation. All 2002 figures down to income from continuing operations exclude the OTC business, while 2002 net income and EPS figures include the OTC results. |
| | |
| (2) | Average exchange rates for Q3 2003 and 2002 were $1.62: £1.00 and $1.56: £1.00 respectively. |
Matthew Emmens, Chief Executive, said:
“Shire’s robust performance continued in the third quarter and we remain on track to meet our year-end guidance. Our underlying business is very solid. Most notable is the fact that we recently achieved record prescription levels for ADDERALL XR.
“Our franchise was further strengthened with the receipt of an approvable letter from the US Food and Drug Administration (FDA) for the use of ADDERALL XR in adults with Attention Deficit and Hyperactivity Disorder (ADHD). With the most prescribed ADHD brand in the US and four other ADHD compounds in development, our intention is to remain the leading company in this rapidly growing market.
“Our recently announced strategic initiatives are moving forward. The first step, announced last quarter, was to redefine our focus. The resulting ‘search and development’ strategy implies honing our drug development capabilities and also enhancing our business development efforts. To accomplish this, we have exited early stage research and will spin out the vaccine business so that we can focus resources on later stage projects. Concurrently, we have been concentrating our business development efforts on a small number of highly attractive targets. Additionally, we are finalising our plan for organisational restructuring and US site consolidation. An update on this will be provided at the year-end.
“In summary, we expect to achieve our guidance of mid to high teens revenue growth, operating margins of around 30% and high single to low double digit earnings per share (EPS) growth (including the approximate 3 cents per share cost impact associated with the closure of early stage research). Given our positive momentum, we are confident of delivering sustained growth in 2004”
1
Third Quarter 2003 and Recent Events Highlights
- Q3 2003 revenues up 16% to $289.4 million, driven by ADDERALL XR’s excellent performance.
- Diluted earnings per ADS up 3% at 38.3c after charging costs of $12.1 million associated with early stage research and other intangible asset write-downs of $11.2 million.
- Total ADHD prescriptions up 23% quarter on quarter.
- ADDERALL XR sales up 55% on the same period last year, totalling $121.3 million; ADDERALL XR outperformed the market with prescription demand of 1.51 million up 34% compared with Q3 2002; the ADDERALL® franchise is the leading ADHD brand in the US with 25%1prescription share in Q3 2003.
- Shire receives approvable letter from the US Food and Drug Administration (FDA) for ADDERALL XR adult indication.
- Royalties up 14% to $49.7 million; 3TC™ royalties up 9% to $35.3 million and other royalties (mainly REMINYL™) up 51% to $8.2 million.
- FOSRENOL®responses submitted to the EU Reference Member State; US approvable letter responses to be delivered to the FDA before year-end.
- SPD476, a novel formulation of mesalamine for the treatment of Ulcerative Colitis, enters Phase III development.
Strategy update
Shire’s new strategy, which is to position itself as the leading company in meeting the needs of the specialist physician with a focus on fewer and later stage projects was announced at Q2 2003. Implementation of this new strategy is progressing well:
- Plans to spin off the vaccine business are advancing and in parallel the Company is examining a number of expressions of interest from potential purchasers.
- SPD754 (for HIV) and TROXATYL (for the treatment of acute myeloid leukaemia and pancreatic cancer), both of which are in Phase II, have attracted a number of potential partners and the Company expects to complete the out-licensing and partnering process by mid 2004.
- The early stage research centre in Laval, Quebec was closed in the quarter. An additional US manufacturing and distribution site has been closed in the past few months.
- M&A has been significantly enhanced with the establishment of a global focus team targeting acquisitions in the US including large scale transactions – a small number of highly attractive targets have been identified.
- The Company will provide an update on the organisational restructuring and US site consolidation at the year-end.
– Ends –
| For further information please contact: | | |
| | | |
| Cléa Rosenfeld – Investor Relations Global | +44 1256 894 160 |
| Jessica Mann – Media Europe | +1 859 669 8905 |
| Michele Roy – Media US & Canada | +1 450 978 7938 |
Notes to editors
Shire Pharmaceuticals Group plc
Shire Pharmaceuticals Group plc (Shire) is a global specialty pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system (CNS), gastrointestinal (GI), and renal diseases. Shire has operations in the world’s key pharmaceutical markets (US, Canada, UK, France, Italy, Spain and Germany) as well as a specialist drug delivery unit in the US.
For further information on Shire, please visit the Company’s website:www.shire.com
2
THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts, are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialise, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialisation, the impact of competitive products, including, but not limited to, the impact on Shire’s Attention Deficit Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval date of lanthanum carbonate (FOSRENOL®), METHYPATCH®, XAGRID® and the adult indication for ADDERALL XR® and other risks and uncertainties detailed from time to time in our filings, including the Annual Report filed on Form 10-K/A by Shire with the Securities and Exchange Commission.
The following are trade marks of Shire or companies within the Shire Group, which are the subject of trade mark registrations in certain territories.
ADDERALL XR® (mixed amphetamine salts)
ADDERALL® (mixed amphetamine salts)
AGRYLIN® (anagrelide hydrochloride)
CARBATROL® (carbamazepine)
FLUVIRAL®S/F (split-virion influenza vaccine)
FOSRENOL® (lanthanum carbonate)
METHYPATCH®(methylphenidate)
PROAMATINE® (midodrine hydrochloride)
TROXATYL® (troxacitabine)
XAGRID® (anagrelide hydrochloride)
The following are trade marks of third parties.
3TC (lamivudine) (trade mark of GlaxoSmithKline (GSK))
NEISVAC-C (trade mark of Baxter International Inc.)
PENTASA (mesalamine) (trade mark of Ferring)
REMINYL (galantamine hydrobromide) (trade mark of Johnson & Johnson)
ZEFFIX (lamivudine) (trade mark of GSK)
Data sources.
1 IMS Prescription Data – Product specific
2 GlaxoSmithKline (GSK)
3
OVERVIEW OF US GAAP FINANCIAL RESULTS
Introduction
The results for the third quarter ended 30 September 2002 have been restated to reflect the disposal of the OTC business, which is accounted for as a discontinued operation in accordance with generally accepted accounting principles in the US (US GAAP). In accordance with US GAAP, 2002 figures from revenues down to income from continuing operations exclude the results of the OTC business, while 2002 net income and earnings per share include the results of the OTC business.
Revenues from continuing operations for the third quarter ended 30 September 2003 increased by 16% to $289.4 million (Q3 2002: $249.7 million).
The Company recorded net income of $64.6million, an increase of 2% compared to the three months ended30 September 2002. Diluted earnings per ordinary share were 12.8cents, or 38.3cents per ADS, an increase of 3% over Q3 2002. This result was achieved after charging $12.1 million of closure costs in respect of Lead Optimisation and other intangible write-downs of $11.2 million.
Operations generated cash inflows from operating activities of $109.2million.
Cash, cash equivalents and marketable securities at 30 September 2003 amounted to $1,274.7million (31 December 2002: $1,213.8 million). After deduction of borrowings, this translates to a net cash position of $896.2million (31 December 2002: $805.7 million). The primary use of cash will be to enhance furtherthe Shire portfolio through product and project acquisitions.
Product sales
For the quarter ended 30 September 2003, product sales increased $32.8million to $238.3million (Q3 2002: $205.5 million) and represented 82% of total revenues. The Company estimates that Q3 2003 product sales were broadly in line with prescription-based demand for the quarter, however, reported sales of ADDERALL, AGRYLIN, PENTASA and PROAMATINE were lower, as predicted, as wholesalers reduced inventories. These movements were offset by the expected seasonal stocking of ADDERALL XR during the quarter.
Third Quarter 2003 Product Highlights| | | Sales | US Rx1 | Q3 20031 |
| Product | Sales | Growth | Growth | US Market Share |
| | $M | % | % | % |
|
| ADDERALL XR | 121.3 | +55% | + 34% | 22% |
| ADDERALL | 9.0 | - 51% | - 48% | 3% |
|
| Total ADDERALL | 130.3 | +35% | + 13% | 25% |
|
| AGRYLIN | 25.9 | - 10% | +5% | 27% |
| PENTASA | 19.8 | - 8% | - | 11% |
| PROAMATINE | 8.1 | - 44% | +11% | 27% |
| CARBATROL | 11.6 | +6% | +8% | 40% |
CNS Franchise
ADDERALL XR and ADDERALL for the treatment of attention deficit hyperactivity disorder (ADHD)
Total ADDERALL franchise sales in Q3 2003 were $130.3million, an increase of 35% over Q3 2002 ($96.1 million). Over the same period, total ADDERALL franchise prescriptions grew by approximately 13%1, despite the entry of generic versions of ADDERALL last year and new competition within the ADHD market.
Increased competitive activities have had a positive impact on US ADHD market growth, which grew by 23%1 for Q3 2003. Despite competition, ADHD physicians have continued to recognise the strengths of the ADDERALL brand, which maintained its leading position in the ADHD market with a 25%1 prescription share during Q3 2003 following a strong performance during the ‘back to school’ season.
Sales of ADDERALL XR in Q3 2003 were $121.3million, an increase of 55% over Q3 2002 ($78.0 million). ADDERALL XR prescriptions increased 34%1 between periods driven by significant US ADHD market growth and an increased share of that larger market. The difference between reported growth and prescription growth is largely due to the expected seasonal stocking of ADDERALL XR during the quarter. Wholesaler inventories at quarter-end were close to normal levels.
4
Sales of ADDERALL were $9.0million in Q3 2003, down 51% from Q3 2002 ($18.1 million). Overall prescriptions were down approximately 48%1 between periods, reflecting the switch to ADDERALL XR and generic competition
In August 2003 Shire was granted a new US patent, No 6,605,300, which covers ADDERALL XR. In September 2003, Shire filed a lawsuit against Barr Laboratories Inc for infringement of this '300 patent. The lawsuit results from an Abbreviated New Drug Application (ANDA) filed by Barr for a generic version of ADDERALL XR.
CARBATROL for the treatment of epilepsy
CARBATROL sales increased by $0.7million or 6%, compared to Q3 2002, versus an 8%1 increase in prescriptions.
Following the recommencement of promotional efforts, Shire has grown CARBATROL’s share of the extended release carbamazepine market from 36%1 in Q3 2002 to 40%1 in Q3 2003.
In August 2003 Shire received a Paragraph IV letter confirming that a generic company has filed an ANDA for CARBATROL 300 mg. This dose strength represents half of Shire’s current sales in epilepsy. Shire is currently evaluating this Paragraph IV notice and is still planning to file for a bipolar indication in 2004.
Other Franchises
AGRYLIN for the treatment of thrombocythaemia
AGRYLIN sales decreased by 10% in Q3 2003 however, US prescription growth increased by 5%1. The decrease in sales in Q3 2003 was expected as wholesalers reduced stocking from Q2 2003 levels. Shire anticipates further de-stocking in Q4 if wholesalers return to normalised inventory levels by year-end
AGRYLIN remains the only product specifically approved for essential thrombocythaemia in the US. Shire is seeking a paediatric extension for AGRYLIN which would extend its orphan drug exclusivity from March 2004 to September 2004, after which time it is expected to face generic competition. The expected launch of XAGRID in the EU (the trade name of AGRYLIN used in the EU) will continue to drive growth from markets outside the US.
PENTASA for the treatment of ulcerative colitis
PENTASA sales decreased by 8% compared to Q3 2002, despite no change1 in prescription demand for the same period. The decrease in sales in Q3 2003 was expected as wholesalers reduced stocking from Q2 2003 levels. Shire anticipates further de-stocking in Q4 if wholesalers return to normalised inventory levels by year-end.
Although its formal indication is for mild to moderately active ulcerative colitis, PENTASA is used mainly in Crohn’s Disease.
PROAMATINE for the treatment of hypotension
Prescription growth for PROAMATINE increased by 11%1compared to Q3 2002, while sales decreased by 44% during the quarter. The decrease in sales in Q3 2003 was expected as wholesalers reduced stocking from Q2 2003 levels. Shire anticipates additional de-stocking in Q4.
PROAMATINE’s Orphan Drug Status expired in September 2003. Since then several generic copies have entered the market.
Royalties
Royalty revenue increased 14% to $49.7million for Q3 2003 (Q3 2002: $43.5 million) as a result of strong sales and positive foreign exchange movements.
Third Quarter 2003 Royalty Highlights| Product | Royalties
to Shire
$M | Royalty
growth
% | Worldwide in-market sales by
licensee in Q3 20032
$M |
| 3TC | 35.3 | +9%* | 272 |
| ZEFFIX | 6.2 | +12%** | 52 |
| Other | 8.2 | +51% | n/a |
*The impact of foreign exchange movements has contributed 3% to the reported growth
**The impact of foreign exchange movements has contributed 5% to the reported growth5
For the products 3TC and ZEFFIX, treatments for HIV infection and chronic hepatitis B respectively, Shire receives royalties from GlaxoSmithKline (GSK) on worldwide sales, with the exception of Canada, where a commercialisation partnership with GSK exists.
The nucleoside analogue market for HIV has continued to exhibit solid growth in recent months. This growth is supported by increases in the number of individuals living with HIV, as well as reduced mortality due to more effective treatment regimens.
Royalty revenue is also received in respect of REMINYL from Johnson & Johnson, and in respect of a number of hormone replacement therapy products from various licensees.
REMINYL, for the treatment of mild to moderately severe dementia of the Alzheimer’s type is growing well in the Alzheimer’s market. Progress continues with other indications and formulations.
Cost of product sales
For the third quarter ended 30 September 2003, cost of product sales amounted to 15.9% of product sales (Q3 2002: 15.5%).
Research and development (R&D)
R&D expenditure increased to $53.3million in Q3 2003 from $42.0 million in Q3 2002. Expressed as a percentage of total revenues, R&D expenditure for the quarter was 18% (Q3 2002: 17%). Included within the expenditure for Q3 2003 is $6.6 million in respect of costs resulting from the closure of early stage research.
Selling, general and administrative (SG&A)
SG&A expenses decreased from $82.4million in Q3 2002 to $82.3million in Q3 2003. As a percentage of product sales, these expenses were 35% (2002: 40%).
The decrease, as a percentage of product sales, was the result of heavy investment in the ADDERALL XR brand in 2002 during its initial US ‘back to school’ season.
Depreciation and amortisation
The depreciation and amortisation charge for Q3 2003 was $27.1million, an increase of $14.5million compared to Q3 2002. Included within the Q3 2003 charge are $11.2 million of intangible asset write-downs (Q3 2002 $3.0 million) and $5.5 million of tangible fixed asset write-downs.
Interest income and expense
For the three months ended 30 September 2003, the Company received interest income of $3.7million (Q3 2002: $5.1 million). Interest expense decreased from $2.3 million in Q3 2002 to $2.0million in Q3 2003, primarily due to the partial buy back of the convertible notes in Q2 2003 at a discount to their par value.
Other (expense)/income, net
For the three months ended 30 September 2003, other expense totalled $0.7million (Q3 2002: other income of $0.2 million). The quarter on quarter change is due to foreign exchange movements.
Taxation
For Q3 2003 income taxes increased $2.1 million to $25.1million, from $23.0 million for Q3 2002. The effective tax rate was 28% for Q3 2003 (2002: 27%). Net deferred tax assets totalled $58.4million at 30 September 2003. Realisation is dependent upon generating sufficient taxable income to utilise such assets. Although realisation of these assets is not assured, management believe it is more likely than not that the deferred tax assets will be realised.
Equity in (losses)/earnings of equity method investees
The Company received $0.9million, representing a 50% share of earnings from the antiviral commercialisation partnership with GSK in Canada (Q3 2002: $0.7million). A loss of $0.9million was incurred representing a 50% share of the losses in Qualia Computing Inc (Q3 2002: $nil).
6
Closure costs
Included within operating expenses is a charge of $12.1 million in relation to the closure of early stage research. This includes severance payments to employees and the write-off of tangible fixed assets.
Discontinued operations
The Company completed the divestment of its OTC portfolio on 27 December 2002. These products were originally acquired in 1999 as a result of the Company’s merger with Roberts Pharmaceutical Corporation. In accordance with US GAAP the 2002 results have been restated to present the results of these products as a discontinued operation.
The OTC business contributed net income of $1.8 million for the three months ended 30 September 2002, which is included in the reported net income number for 2002.
R&D OVERVIEW
As part of its strategic review Shire will re-focus its portfolio onto lower risk, later stage opportunities and to build its franchise in CNS, GI and in renal. The re-focus and prioritisation will enable Shire to alter the risk-balance profile of the portfolio to improve the likely return on this investment.
R&D activities from July to October 2003
CENTRAL NERVOUS SYSTEM (CNS)
ADDERALL XR for the treatment of attention deficit hyperactivity disorder (ADHD)
Shire received an ‘approvable’ letter from the US Food and Drug Administration (FDA) for ADDERALL XR® once daily treatment for adult Attention Deficit Hyperactivity Disorder (ADHD) on 17 October 2003. Shire is working with the FDA to answer the questions raised in the approvable letter.
GASTROINTESTINAL
SPD476 for the treatment of ulcerative colitis
This project is progressing well and has now entered Phase III development.
RENAL
FOSRENOL for the treatment of hyperphosphataemia
Shire’s clinical package now includes data from four years of use of FOSRENOL in patients. Questions from the European Reference Member State have now been answered and data was submitted in October. Following the receipt of the US approvable letter Shire is analysing current data to provide answers to the questions raised in the letter from the US FDA; these will be submitted by year-end.
7
US GAAP Results
Unaudited Condensed Consolidated Balance Sheets
| | | | | | (Audited) | |
| | | 30 September | | 31 December | |
| | | 2003 | | 2002 | |
| | $’000 | $’000 | |
| | |
| |
| |
| ASSETS | | | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | 1,061,523 | | 897,718 | |
| Marketable securities | | 213,186 | | 316,126 | |
| Accounts receivable, net | | 181,526 | | 138,397 | |
| Inventories | | 56,201 | | 49,216 | |
| Deferred tax asset | | 44,955 | | 34,849 | |
| Prepaid expenses and other current assets | | 42,173 | | 30,790 | |
| | |
| |
| |
| Total current assets | | 1,599,564 | | 1,467,096 | |
| | | | | | |
| Investments | | 76,589 | | 71,962 | |
| Property, plant and equipment, net | | 167,611 | | 135,234 | |
| Goodwill, net | | 210,485 | | 203,767 | |
| Other intangible assets, net | | 308,372 | | 301,084 | |
| Deferred tax asset | | 13,422 | | 6,216 | |
| Other non-current assets | | 20,691 | | 23,264 | |
| | |
| |
| |
| Total assets | | 2,396,734 | | 2,208,623 | |
| | |
| |
| |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| Current liabilities: | | | | | | | |
| Current instalments of long-term debt | | 1,008 | | | 888 | |
| Accounts payable and accrued expenses | | 198,355 | | 184,107 | |
| Other current liabilities | | 23,458 | | 15,492 | |
| | |
| |
| |
| Total current liabilities from continuing operations | | 222,821 | | 200,487 | |
| Current liabilities from discontinued operations | | | - | | 12,784 | |
| | |
| |
| |
| Total current liabilities | | 222,821 | | 213,271 | |
| | | | | | | | |
| Long-term debt, excluding current instalments | | 377,545 | | 407,302 | |
| Other long-term liabilities | | 13,134 | | 14,884 | |
| | |
| |
| |
| Total liabilities | | 613,500 | | 635,457 | |
| | |
| |
| |
| Shareholders’ equity: | | | | | | | |
| Common stock of 5p par value; 800,000,000 shares | | | | | | | |
| authorised; and 477,335,061 (December 31, 2002: | | | | | | | |
| 484,344,412) shares issued and outstanding | | 39,473 | | 40,051 | |
| Exchangeable shares; 5,840,110 (December 31, 2002: | | | | | | | |
| 5,874,112) shares issued and outstanding | | 270,698 | | 272,523 | |
| Additional paid-in capital | | 979,868 | | 1,027,499 | |
| Accumulated other comprehensive income/(loss) | | 25,501 | | (41,431 | ) |
| Retained earnings | | 467,694 | | 274,524 | |
| | |
| |
| |
| Total shareholders’ equity | | 1,783,234 | | 1,573,166 | |
| | |
| |
| |
| Total liabilities and shareholders’ equity | | 2,396,734 | | 2,208,623 | |
| | |
| |
| |
8
US GAAP Results
Unaudited Condensed Consolidated Statements of Operations
| | 3 months to | | 3 months to | | 9 months to | | 9 months to | |
| | 30 | | 30 | | 30 | | 30 | |
| | September | | September | | September | | September | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
| | $’000 | | $’000 | | $’000 | | $’000 | |
| |
| |
| |
| |
| |
| Total revenues | 289,442 | | 249,720 | | 892,947 | | 734,786 | |
| Cost of revenues | (37,986 | ) | (31,768 | ) | (115,624 | ) | (86,509 | ) |
| |
| |
| |
| |
| |
| Gross profit | 251,456 | | 217,952 | | 777,323 | | 648,277 | |
| Operating expenses | (162,644 | ) | (136,962 | ) | (505,102 | ) | (421,885 | ) |
| |
| |
| |
| |
| |
| Operating income | 88,812 | | 80,990 | | 272,221 | | 226,392 | |
| | | | | | | | | |
| Interest income | 3,688 | | 5,142 | | 13,099 | | 14,693 | |
| Interest expense | (1,995 | ) | (2,280 | ) | (7,332 | ) | (6,053 | ) |
| Other (expense)/income, net | (702 | ) | 200 | | (7,997 | ) | 431 | |
| |
| |
| |
| |
| |
| Total other income/(expense), net | 991 | | 3,062 | | (2,230 | ) | 9,071 | |
| |
| |
| |
| |
| |
| Income from continuing operations before income taxes and equity in (losses)/earnings of equity method investees | 89,803 | | 84,052 | | 269,991 | | 235,463 | |
| | | | | | | | | |
| Income taxes | (25,139 | ) | (22,954 | ) | (75,122 | ) | (64,034 | ) |
| | | | | | | | | |
| Equity in (losses)/earnings of equity method investees | (45 | ) | 704 | | (1,699 | ) | 3,303 | |
| |
| |
| |
| |
| |
| Income from continuing operations | 64,619 | | 61,802 | | 193,170 | | 174,732 | |
| | | | | | | | | |
| Income from discontinued operations (net of income tax expense of $nil, $1,047,000, $nil and $2,915,000 respectively) | - | | 1,783 | | - | | 4,962 | |
| |
| |
| |
| |
| |
| Net income | 64,619 | | 63,585 | | 193,170 | | 179,694 | |
| |
| |
| |
| |
| |
| | | | | | | | | |
| Earnings per share: | | | | | | | | |
| Basic | | | | | | | | |
| Continuing operations | 13.1c | | 12.3c | | 38.7c | | 34.9c | |
| Discontinued operations | - | | 0.4c | | - | | 1.0c | |
| |
| |
| |
| |
| |
| Net income | 13.1c | | 12.7c | | 38.7c | | 35.9c | |
| |
| |
| |
| |
| |
| Diluted | | | | | | | | |
| Continuing operations | 12.8c | | 12.0c | | 37.9c | | 34.1c | |
| Discontinued operations | - | | 0.4c | | - | | 1.0c | |
| |
| |
| |
| |
| |
| Net income | 12.8c | | 12.4c | | 37.9c | | 35.1c | |
| |
| |
| |
| |
| |
| Weighted average number of shares: | | | | | | | | |
| Basic | 494,827,334 | | 501,026,581 | | 499,414,490 | | 500,394,452 | |
| Diluted | 515,826,822 | | 524,130,078 | | 520,530,702 | | 524,058,558 | |
The results for the 3 and 9 months ended 30 September 2002 have been restated to reflect the disposal of our OTC business that has been accounted for as a discontinued operation.
9
US GAAP Results
Unaudited Condensed Consolidated Statements of Cash Flows
| | 3 months to | | 3 months to | | 9 months to | | 9 months to | |
| | 30 | | 30 | | 30 | | 30 | |
| | September | | September | | September | | September | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
| | $’000
| | $’000
| | $’000
| | $’000
| |
| CASH FLOWS FROM OPERATING | | | | | | | | |
| ACTIVITIES: | | | | | | | | |
| Net income from continuing operations | 64,619 | | 61,802 | | 193,170 | | 174,732 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortisation | 10,390 | | 9,548 | | 31,851 | | 27,360 | |
| Stock option compensation | - | | (16 | ) | (24 | ) | (166 | ) |
| Tax benefit of stock option compensation, | | | | | | | | |
| charged directly to equity | - | | (2 | ) | - | | 687 | |
| Decrease/(increase) in deferred tax asset | 483 | | 9,634 | | (17,312 | ) | 4,939 | |
| Non cash exchange gains and losses | 1,855 | | 1,263 | | 7,792 | | 2,935 | |
| Equity in losses/(earnings) of equity method investees | 45 | | (704 | ) | 1,699 | | (3,303 | ) |
| Write-down of long term investments | - | | 3,000 | | 8,472 | | 5,500 | |
| Write-down of intangible assets | 11,150 | | 3,000 | | 14,437 | | 7,500 | |
| Write-down of tangible assets | 5,521 | | - | | 5,521 | | - | |
| (Gain)/loss on sale of fixed assets | (104 | ) | 37 | | (104 | ) | 153 | |
| Changes in operating assets and liabilities, net of acquisitions: | | | | | | | | |
| Decrease/(increase) in accounts receivable | 13,382 | | (28,372 | ) | (43,129 | ) | 25,032 | |
| Increase in inventory | (1,796 | ) | (5,709 | ) | (6,985 | ) | (15,118 | ) |
| Increase in prepayments and other current assets | (6,818 | ) | (13,874 | ) | (11,383 | ) | (9,546 | ) |
| Decrease in other assets | 1,939 | | 2,069 | | 2,573 | | 2,638 | |
| Increase/(decrease) in accounts and | | | | | | | | |
| notes payable and other liabilities | 6,249 | | 6,136 | | 7,680 | | (46,281 | ) |
| Decrease in unearned income | - | | - | | - | | (17,409 | ) |
| Dividend received from equity method investees | 2,289 | | - | | 2,289 | | - | |
| |
| |
| |
| |
| |
| Net cash provided by operating activities | 109,204 | | 47,812 | | 196,547 | | 159,653 | |
| |
| |
| |
| |
| |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Decrease (increase) in short-term deposits | 4,491 | | (42,907 | ) | 102,940 | | 455,114 | |
| Purchase of long-term investments | - | | (3,131 | ) | (1,475 | ) | (4,148 | ) |
| Purchase of subsidiary undertakings | - | | (17,000 | ) | - | | (17,000 | ) |
| Purchase of intangible assets | (10,608 | ) | (187 | ) | (36,108 | ) | (18,697 | ) |
| Proceeds from sale of fixed assets | 852 | | - | | 852 | | - | |
| Purchase of property, plant and equipment | (10,475 | ) | (3,965 | ) | (38,076 | ) | (11,613 | ) |
| |
| |
| |
| |
| |
| Net cash (used in)/provided by investing activities | (15,740 | ) | (67,190 | ) | 28,133 | | 403,656 | |
| |
| |
| |
| |
| |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| Repurchase/payments on long-term debt, | | | | | | | | |
| capital leases and notes | (63 | ) | (145 | ) | (29,942 | ) | (2,728 | ) |
| Proceeds from exercise of options | 127 | | 903 | | 2,381 | | 4,455 | |
| Payment for the redemption of stock | - | | - | | (52,392 | ) | - | |
| |
| |
| |
| |
| |
| Net cash provided by/(used in) financing activities | 64 | | 758 | | (79,953 | ) | 1,727 | |
| |
| |
| |
| |
| |
10
US GAAP Results
Unaudited Condensed Consolidated Statements of Cash Flows (continued)
| | | 3 months to | | 3 months to | | | 9 months to | | 9 months to | |
| | | 30 | | 30 | | | 30 | | 30 | |
| | | September | | September | | | September | | September | |
| | | 2003 | | 2002 | | | 2003 | | 2002 | |
| | $’000 | | $’000 | | | $’000 | | $’000 | |
| Effect of foreign exchange rate changes on | | | | | | | | | | |
| cash and cash equivalents | | 515 | | (3,797 | ) | | 19,078 | | 5,692 | |
| | |
| |
| | |
| |
| |
| Net increase/(decrease) in cash and cash | | | | | | | | | | |
| equivalents | | 94,043 | | (22,417 | ) | | 163,805 | | 570,728 | |
| Cash flows provided by discontinued | | | | | | | | | | |
| operations | | - | | 2,509 | | | - | | 5,847 | |
| | |
| |
| | |
| |
| |
| Net increase/(decrease) in cash and cash | | | | | | | | | | |
| equivalents | | 94,043 | | (19,908 | ) | | 163,805 | | 576,575 | |
| Cash and cash equivalents at beginning of | | | | | | | | | | |
| period | | 967,480 | | 714,523 | | | 897,718 | | 118,040 | |
| | |
| |
| | |
| |
| |
| Cash and cash equivalents at end of period | | 1,061,523 | | 694,615 | | | 1,061,523 | | 694,615 | |
| | |
| |
| | |
| |
| |
11
Selected Notes to the Unaudited US GAAP Financial Statements
(1) Analysis of revenues, operating income and reportable segments
The Company has disclosed segment information for the individual operating areas of the business, based on the way in which the business is managed and controlled. The Company evaluates performance based on operating income or loss before interest and income taxes.
For 2003 our reporting has been expanded as set out below to provide more information on the Corporate and International segments. The 2002 reportable segments have been restated on this basis.
| 3 months to 30 September | US | | International | | Biologics | | Corporate | | R&D | | Total | |
| 2003 | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | |
| |
| |
| |
| |
| |
| |
| |
| Product sales | 190,530 | | 39,096 | | 8,720 | | - | | - | | 238,346 | |
| Licensing and development | 1,355 | | - | | - | | - | | - | | 1,355 | |
| Royalties | - | | 2,282 | | - | | 47,453 | | - | | 49,735 | |
| Other | 6 | | - | | - | | - | | - | | 6 | |
| |
| |
| |
| |
| |
| |
| |
| Total revenues | 191,891 | | 41,378 | | 8,720 | | 47,453 | | - | | 289,442 | |
| |
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | | | |
| Cost of product sales | 18,401 | | 12,504 | | 7,081 | | - | | - | | 37,986 | |
| Research and development | - | | - | | - | | - | | 53,309 | | 53,309 | |
| Selling, general and administrative | 49,440 | | 18,559 | | 2,194 | | 12,081 | | - | | 82,274 | |
| | | | | | | | | | | | | |
| Depreciation and amortisation | 9,083 | | *16,102 | | 1,142 | | 734 | | - | | 27,061 | |
| |
| |
| |
| |
| |
| |
| |
| Total operating expenses | 76,924 | | 47,165 | | 10,417 | | 12,815 | | 53,309 | | 200,630 | |
| |
| |
| |
| |
| |
| |
| |
| Operating income/(loss) | 114,967 | | (5,787 | ) | (1,697 | ) | 34,638 | | (53,309 | ) | 88,812 | |
| |
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| 3 months to 30 September | US | | International | | Biologics | | Corporate | | R&D | | Total | |
| 2002 | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | |
| |
| |
| |
| |
| |
| |
| |
| Product sales | 166,995 | | 34,920 | | 3,589 | | - | | - | | 205,504 | |
| Licensing and development | 726 | | - | | - | | - | | - | | 726 | |
| Royalties | - | | 2,132 | | - | | 41,353 | | - | | 43,485 | |
| Other revenues | - | | 5 | | - | | - | | - | | 5 | |
| |
| |
| |
| |
| |
| |
| |
| Total revenues | 167,721 | | 37,057 | | 3,589 | | 41,353 | | - | | 249,720 | |
| |
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | | | |
| Cost of product sales | 11,556 | | 17,152 | | 3,060 | | - | | - | | 31,768 | |
| Research and development | - | | - | | - | | - | | 42,026 | | 42,026 | |
| Selling, general and administrative | 45,254 | | 19,462 | | 2,054 | | 15,618 | | - | | 82,388 | |
| Depreciation and amortisation | 7,548 | | 2,951 | | 915 | | 1,134 | | - | | 12,548 | |
| |
| |
| |
| |
| |
| |
| |
| Total operating expenses | 64,358 | | 39,565 | | 6,029 | | 16,752 | | 42,026 | | 168,730 | |
| |
| |
| |
| |
| |
| |
| |
| Operating income/(loss) | 103,363 | | (2,508 | ) | (2,440 | ) | 24,601 | | (42,026 | ) | 80,990 | |
| |
| |
| |
| |
| |
| |
| |
*Included within depreciation and amortisation costs in the International segment for the 3 months to 30 September 2003 are $5.5 million of tangible asset write-downs in respect of the closure of Lead Optimisation and intangible asset write-downs of $7.8 million.
12
Selected Notes to the Unaudited US GAAP Financial Statements (continued)
(1) Analysis of revenues, operating income and reportable segments (continued)
| 9 months to 30 September | US | | International | | Biologics | | Corporate | | R&D | | Total |
| 2003 | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | | $’000 |
| |
| |
| |
| |
| |
| |
|
| Product sales | 620,100 | | 110,843 | | 10,206 | | - | | - | | 741,149 |
| Licensing and development | 2,451 | | - | | - | | - | | - | | 2,451 |
| Royalties | 14 | | 7,206 | | - | | 142,114 | | - | | 149,334 |
| Other revenues | 13 | | - | | - | | - | | - | | 13 |
| |
| |
| |
| |
| |
| |
|
| Total revenues | 622,578 | | 118,049 | | 10,206 | | 142,114 | | - | | 892,947 |
| |
| |
| |
| |
| |
| |
|
| | | | | | | | | | | | |
| Cost of product sales | 71,660 | | 35,600 | | 8,364 | | - | | - | | 115,624 |
| Research and development | - | | - | | - | | - | | 158,004 | | 158,004 |
| Selling, general and administrative | 185,066 | | 56,800 | | 6,810 | | 46,613 | | - | | 295,289 |
| Depreciation and amortisation | 25,136 | | *20,846 | | 3,412 | | 2,415 | | - | | 51,809 |
| |
| |
| |
| |
| |
| |
|
| Total operating expenses | 281,862 | | 113,246 | | 18,586 | | 49,028 | | 158,004 | | 620,726 |
| |
| |
| |
| |
| |
| |
|
| Operating income/(loss) | 340,716 | | 4,803 | | (8,380 | ) | 93,086 | | (158,004 | ) | 272,221 |
| |
| |
| |
| |
| |
| |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| 9 months to 30 September | US | | International | | Biologics | | Corporate | | R&D | | Total |
| 2002 | $’000 | | $’000 | | $’000 | | $’000 | | $’000 | | $’000 |
| |
| |
| |
| |
| |
| |
|
| Product sales | 508,203 | | 96,483 | | 4,186 | | - | | - | | 608,872 |
| Licensing and development | 1,929 | | 402 | | - | | - | | - | | 2,331 |
| Royalties | 221 | | 5,172 | | - | | 118,180 | | - | | 123,573 |
| Other revenues | - | | 10 | | - | | - | | - | | 10 |
| |
| |
| |
| |
| |
| |
|
| Total revenues | 510,353 | | 102,067 | | 4,186 | | 118,180 | | - | | 734,786 |
| |
| |
| |
| |
| |
| |
|
| | | | | | | | | | | | |
| Cost of product sales | 41,531 | | 41,159 | | 3,819 | | - | | - | | 86,509 |
| Research and development | - | | - | | - | | - | | 138,557 | | 138,557 |
| Selling, general and administrative | 154,837 | | 51,580 | | 6,023 | | 36,028 | | - | | 248,468 |
| Depreciation and amortisation | 21,027 | | 7,649 | | 3,100 | | 3,084 | | - | | 34,860 |
| |
| |
| |
| |
| |
| |
|
| Total operating expenses | 217,395 | | 100,388 | | 12,942 | | 39,112 | | 138,557 | | 508,394 |
| |
| |
| |
| |
| |
| |
|
| Operating income/(loss) | 292,958 | | 1,679 | | (8,756 | ) | 79,068 | | (138,557 | ) | 226,392 |
| |
| |
| |
| |
| |
| |
|
*Included within depreciation and amortisation costs in the International segment for the 9 months to 30 September 2003 are $5.5 million of tangible asset write-downs in respect of the closure of Lead Optimisation and intangible asset write-downs of $7.8 million.
**Included within the selling, general and administrative costs in the Corporate segment for the 9 months to 30 September 2003 is $7.2 million in respect of the former Chief Executive’s departure.
13
Selected Notes to the Unaudited US GAAP Financial Statements (continued)
(2) Earnings per share
Basic earnings per share is based upon the net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period.
Diluted earnings per share is based upon net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period and adjusted for the effect of all dilutive potential common shares that were outstanding during the period.
| | 3 months to | | 3 months to | | 9 months to | | 9 months to |
| | 30 | | 30 | | 30 | | 30 |
| | September | | September | | September | | September |
| | 2003 | | 2002 | | 2003 | | 2002 |
| | $’000 | | $’000 | | $’000 | | $’000 |
| |
| |
| |
| |
|
| Numerator for basic earnings per share | 64,619 | | 63,585 | | 193,170 | | 179,694 |
| Interest charged on convertible debt, net of tax | 1,200 | | 1,380 | | 3,923 | | 4,188 |
| |
| |
| |
| |
|
| Numerator for diluted earnings per share | 65,819 | | 64,965 | | 197,093 | | 183,882 |
| |
| |
| |
| |
|
| | | | | | | | |
| | Number of | | Number of | | Number of | | Number of |
| | shares | | shares | | shares | | shares |
| |
| |
| |
| |
|
| Weighted-average number of shares: | | | | | | | |
| Basic | 494,827,334 | | 501,026,581 | | 499,414,490 | | 500,394,452 |
| Effect of dilutive shares: | | | | | | | |
| Stock options | 2,628,923 | | 1,993,136 | | 2,043,820 | | 2,553,745 |
| Warrants | - | | 1,263,184 | | - | | 1,263,184 |
| Convertible debt | 18,370,565 | | 19,847,177 | | 19,072,392 | | 19,847,177 |
| |
| |
| |
| |
|
| Diluted | 515,826,822 | | 524,130,078 | | 520,530,702 | | 524,058,558 |
| |
| |
| |
| |
|
| | | | | | | | |
| Basic earnings per share | 13.1c | | 12.7c | | 38.7c | | 35.9c |
| |
| |
| |
| |
|
| Diluted earnings per share | 12.8c | | 12.4c | | 37.9c | | 35.1c |
| |
| |
| |
| |
|
Warrants to purchase approximately 1.4 million common shares for the three and nine months ended 30 September 2003 were anti-dilutive and were therefore excluded from the computation of diluted earnings per share.
Stock options to purchase approximately 17.5 million and 17.7 million common shares for the three months and nine months ended September 30, 2003 respectively, were anti-dilutive and were therefore excluded from the computation of diluted earnings per share.
14
Selected Notes to the Unaudited US GAAP Financial Statements (continued)
(3) Analysis of revenues
| | 3 months to | | 3 months to | | 3 months to | | 3 months to | |
| | 30 September | | 30 September | | 30 September | | 30 September | |
| | 2003 | | 2002 | | 2003 | | 2003 | |
| | $’000 | | $’000 | | % change | | % of total | |
| |
| |
| |
| |
| |
| Net product sales: | | | | | | | | |
| ADDERALL XR | 121,255 | | 78,000 | | +55 | % | 42 | % |
| ADDERALL | 8,961 | | 18,128 | | -51 | % | 3 | % |
| AGRYLIN | 25,907 | | 28,725 | | -10 | % | 9 | % |
| PENTASA | 19,838 | | 21,619 | | -8 | % | 7 | % |
| PROAMATINE | 8,102 | | 14,398 | | -44 | % | 3 | % |
| CARBATROL | 11,619 | | 10,944 | | +6 | % | 4 | % |
| Calciums | 7,009 | | 6,126 | | +14 | % | 2 | % |
| Others | 35,655 | | 27,564 | | +29 | % | 12 | % |
| |
| |
| |
| |
| |
| | 238,346 | | 205,504 | | +16 | % | 82 | % |
| |
| |
| |
| |
| |
| Royalty income: | | | | | | | | |
| 3TC | 35,300 | | 32,501 | | +9 | % | 12 | % |
| ZEFFIX | 6,217 | | 5,547 | | +12 | % | 2 | % |
| Others | 8,218 | | 5,437 | | +51 | % | 3 | % |
| |
| |
| |
| |
| |
| | 49,735 | | 43,485 | | +14 | % | 17 | % |
| |
| |
| |
| |
| |
| Licensing | 1,355 | | 726 | | +87 | % | 1 | % |
| Other | 6 | | 5 | | +20 | % | - | |
| |
| |
| |
| |
| |
| Total revenues | 289,442 | | 249,720 | | +16 | % | 100 | % |
| |
| |
| |
| |
| |
| | | | | | | | | |
| | 9 months to | | 9 months to | | 9 months to | | 9 months to | |
| | 30 September | | 30 September | | 30 September | | 30 September | |
| | 2003 | | 2002 | | 2003 | | 2003 | |
| | $’000 | | $’000 | | % change | | % of total | |
| |
| |
| |
| |
| |
| Net product sales: | | | | | | | | |
| ADDERALL XR | 338,847 | | 215,696 | | +57 | % | 38 | % |
| ADDERALL | 47,051 | | 92,619 | | -49 | % | 5 | % |
| AGRYLIN | 102,132 | | 81,596 | | +25 | % | 12 | % |
| PENTASA | 74,311 | | 60,645 | | +23 | % | 8 | % |
| PROAMATINE | 40,238 | | 34,839 | | +15 | % | 5 | % |
| CARBATROL | 34,955 | | 35,090 | | - | | 4 | % |
| Calciums | 19,476 | | 16,528 | | +18 | % | 2 | % |
| Others | 84,139 | | 71,859 | | +17 | % | 9 | % |
| |
| |
| |
| |
| |
| | 741,149 | | 608,872 | | +22 | % | 83 | % |
| |
| |
| |
| |
| |
| Royalty income: | | | | | | | | |
| 3TC | 106,979 | | 93,857 | | +14 | % | 12 | % |
| ZEFFIX | 18,337 | | 15,350 | | +19 | % | 2 | % |
| Others | 24,018 | | 14,366 | | +67 | % | 3 | % |
| |
| |
| |
| |
| |
| | 149,334 | | 123,573 | | +21 | % | 17 | % |
| |
| |
| |
| |
| |
| Licensing | 2,451 | | 2,331 | | +5 | % | - | |
| Other | 13 | | 10 | | +30 | % | - | |
| |
| |
| |
| |
| |
| Total revenues | 892,947 | | 734,786 | | +22 | % | 100 | % |
| |
| |
| |
| |
| |
15
UK GAAP Results
Unaudited and Unreviewed Consolidated Profit and Loss Account
| | | | | | | | | | (Audited) | |
| | 3 months to | | 3 months to | | 9 months to | | 9 months to | | Year to | |
| | 30 | | 30 | | 30 | | 30 | | 31 | |
| | September | | September | | September | | September | | December | |
| | 2003 | | 2002 | | 2003 | | 2002 | | 2002 | |
| | £’000 | | £’000 | | £’000 | | £’000 | | £’000 | |
| |
| |
| |
| |
| |
| |
| Turnover: group and share ofjoint venture | 181,046 | | 161,837 | | 559,684 | | 502,907 | | 697,314 | |
| Less: share of joint venture’sturnover | (790 | ) | - | | (2,326 | ) | - | | (762 | ) |
| |
| |
| |
| |
| |
| |
| Group turnover on continuing operations | 180,256 | | 161,837 | | 557,358 | | 502,907 | | 696,552 | |
| Discontinued operations | - | | 4,196 | | - | | 12,716 | | 15,975 | |
| |
| |
| |
| |
| |
| |
| Group turnover | 180,256 | | 166,033 | | 557,358 | | 515,623 | | 712,527 | |
| Cost of sales | (24,213 | ) | (22,087 | ) | (73,709 | ) | (63,502 | ) | (95,042 | ) |
| |
| |
| |
| |
| |
| |
| Gross profit | 156,043 | | 143,946 | | 483,649 | | 452,121 | | 617,485 | |
| Net operating expenses | (123,663 | ) | (124,524 | ) | (397,677 | ) | (395,608 | ) | (1,150,630 | ) |
| |
| |
| |
| |
| |
| |
| Operating profit/(loss): | 32,380 | | 19,422 | | 85,972 | | 56,513 | | (533,145 | ) |
| | | | | | | | | | | |
| Continuing operations - Group | 32,380 | | 17,604 | | 85,972 | | 51,189 | | (541,603 | ) |
| Discontinued operations | - | | 1,818 | | - | | 5,324 | | 8,458 | |
| |
| |
| |
| |
| |
| |
| | 32,380 | | 19,422 | | 85,972 | | 56,513 | | (533,145 | ) |
| | | | | | | | | | | |
| Share of joint venture’s operating loss | (580 | ) | - | | (2,571 | ) | - | | (559 | ) |
| Finance charges, net | 380 | | (75 | ) | 3,557 | | 720 | | 6,931 | |
| |
| |
| |
| |
| |
| |
| Profit/(loss) on ordinary activities | | | | | | | | | | |
| before taxation | 32,180 | | 19,347 | | 86,958 | | 57,233 | | (526,773 | ) |
| Tax on profit/(loss) on ordinary activities | (15,514 | ) | (15,412 | ) | (46,329 | ) | (44,784 | ) | (61,626 | ) |
| |
| |
| |
| |
| |
| |
| Retained profit/(loss) for the | | | | | | | | | | |
| period transferred to/(from) reserves | 16,666 | | 3,935 | | 40,629 | | 12,449 | | (588,399 | ) |
| |
| |
| |
| |
| |
| |
| Earnings/(loss) per share | | | | | | | | | | |
| Basic | 3.4 | p | 0.8 | p | 8.1 | p | 2.5 | p | (117.5 | p) |
| Diluted | 3.4 | p | 0.8 | p | 8.1 | p | 2.5 | p | (117.5 | p) |
| | | | | | | | | | | |
| Unaudited and Unreviewed Consolidated Statement of Total Recognised Gains and Losses | |
| | | | | | | | | | | |
| | | | | | | | | | (Audited) | |
| | 3 months to | | 3 months to | | 9 months to | | 9 months to | | Year to | |
| | 30 | | 30 | | 30 | | 30 | | 31 | |
| | September | | September | | September | | September | | December | |
| | 2003 | | 2002 | | 2003 | | 2002 | | 2002 | |
| | £’000 | | £’000 | | £’000 | | £’000 | | £’000 | |
| |
| |
| |
| |
| |
| |
| Profit/(loss) for the period | 16,666 | | 3,935 | | 40,629 | | 12,449 | | (588,399 | ) |
| Translation of the financial | | | | | | | | | | |
| statements of overseas subsidiaries | (4,365 | ) | (27,989 | ) | 4,469 | | (43,746 | ) | (62,739 | ) |
| |
| |
| |
| |
| |
| |
| Total recognised gains and losses | | | | | | | | | | |
| relating to the period | 12,301 | | (24,054 | ) | 45,098 | | (31,297 | ) | (651,138 | ) |
| |
| |
| |
| |
| |
| |
16
UK GAAP Results
Unaudited and Unreviewed Consolidated Balance Sheet
| | | | (Audited) | |
| | 30 | | 31 | |
| | September | | December | |
| | 2003 | | 2002 | |
| | £’000 | | £’000 | |
| |
| |
| |
| Fixed assets | | | | |
| Intangible assets – intellectual property | 185,701 | | 183,404 | |
| Intangible assets – goodwill | 1,820,048 | | 1,900,896 | |
| Tangible assets | 100,885 | | 84,001 | |
| Fixed asset investments | 37,387 | | 37,345 | |
| Investment in joint ventures | | | | |
| Share of gross assets | 3,623 | | 5,082 | |
| Share of gross liabilities | (938 | ) | (342 | ) |
| |
| |
| |
| | 2,146,706 | | 2,210,386 | |
| |
| |
| |
| Current assets | | | | |
| Stocks | 33,828 | | 30,571 | |
| Debtors | | | | |
| - due within one year excluding deferred tax | 135,557 | | 106,125 | |
| - due within one year – deferred tax | 27,058 | | 21,646 | |
| - due after more than one year excluding deferred tax | 8,432 | | 9,535 | |
| - due after more than one year – deferred tax | 8,079 | | 3,861 | |
| Current asset investments | 128,216 | | 196,364 | |
| Cash at bank and in hand | 640,104 | | 558,432 | |
| |
| |
| |
| | 981,274 | | 926,534 | |
| Creditors: amounts falling due within one year | | | | |
| Convertible debt | - | | - | |
| Other creditors | (134,984 | ) | (131,885 | ) |
| |
| |
| |
| | (134,984 | ) | (131,885 | ) |
| |
| |
| |
| Net current assets | 846,290 | | 794,649 | |
| |
| |
| |
| Total assets less current liabilities | 2,992,996 | | 3,005,035 | |
| Creditors: amounts falling due after more than one year | | | | |
| Convertible debt | (218,214 | ) | (243,547 | ) |
| Other creditors | (12,311 | ) | (13,782 | ) |
| |
| |
| |
| | (230,525 | ) | (257,329 | ) |
| |
| |
| |
| Net assets | 2,762,471 | | 2,747,706 | |
| |
| |
| |
| Capital and reserves | | | | |
| Called-up share capital | 23,869 | | 24,217 | |
| Share premium | 3,217,080 | | 3,214,512 | |
| Exchangeable shares | 190,442 | | 191,552 | |
| Capital reserve | 2,755 | | 2,755 | |
| Capital redemption reserve | 380 | | - | |
| Other reserves | 24,247 | | 24,247 | |
| Profit and loss account | (696,302 | ) | (709,577 | ) |
| |
| |
| |
| Equity shareholders’ funds | 2,762,471 | | 2,747,706 | |
| |
| |
| |
17
Selected Notes to the Unaudited and Unreviewed UK GAAP Financial Statements
(1) Earnings per share
Earnings per share has been calculated by dividing the profit on ordinary activities after taxation for each period by the weighted-average number of shares in issue during those periods.
The weighted-average number of shares used in calculating fully diluted earnings per share has been adjusted for the effects of all dilutive potential ordinary shares.
The $370 million convertible loan note is excluded from the calculation of weighted average number of shares for fully diluted earnings per share in 2003 and 2002 as it was not dilutive. The zero coupon convertible loan note included in 2002 has no impact on the numerator for fully diluted earnings per share.
The warrants to purchase approximately 1.4 million common shares for the 3 and 9 months ended 30 September 2003 were anti-dilutive and were therefore excluded from the computation of diluted earnings per share.
| | | | | | | | | | (Audited) | |
| | 3 months to | | 3 months to | | 9 months to | | 9 months to | | Year to | |
| | 30 | | 30 | | 30 | | 30 | | 31 | |
| | September | | September | | September | | September | | December | |
| | 2003 | | 2002 | | 2003 | | 2002 | | 2002 | |
| | £’000 | | £’000 | | £’000 | | £’000 | | £’000 | |
| |
| |
| |
| |
| |
| |
| Profit for the period (for basic and diluted EPS) | 16,666 | | 3,935 | | 40,629 | | 12,449 | | (588,399 | ) |
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | Number of | | Number of | | Number of | | Number of | | Number of | |
| | shares | | shares | | shares | | shares | | shares | |
| |
| |
| |
| |
| |
| |
| Weighted-average number of shares: | | | | | | | | | | |
| Basic | 494,827,334 | | 501,026,581 | | 499,414,490 | | 500,394,452 | | 500,687,594 | |
| Conversion of convertible debt | - | | - | | - | | - | | - | |
| Exercise of share options | 2,628,923 | | 1,993,136 | | 2,043,820 | | 2,553,745 | | - | |
| Exercise of warrants | - | | 1,263,184 | | - | | 1,263,184 | | - | |
| |
| |
| |
| |
| |
| |
| Fully diluted | 497,456,257 | | 504,282,901 | | 501,458,310 | | 504,211,381 | | 500,687,594 | |
| |
| |
| |
| |
| |
| |
(2) Basis of preparation
The Group has applied consistent accounting policies throughout both periods.
The results for the 3 and 9 months ended 30 September 2003 have not been audited or reviewed and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The figures for the 12 months ended 31 December 2002 do not constitute the Group’s statutory accounts, which have been filed with the Registrar of Companies. The auditors have reported on these accounts and that report was unqualified and did not contain a statement under Section 237 (2) of the Companies Act 1985.
18
