SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of July 2003
Filtronic PLC
(Translation of registrant's name into English)
The Waterfront, Salts Mill Road, Saltaire, Shipley, BD18 3TT, UK
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
FILTRONIC PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MAY 2003
Results in line with Market Expectations
GBP3.8m Pre-Tax Profit from GBP25.5m Loss; Gearing down 30% to 51%; Dividend
maintained
Consolidates Leading Market Position in Both Major Businesses
Filtronic plc ("Filtronic"), a leading global designer and manufacturer of
customised microwave electronic subsystems for the wireless telecommunications
and defence industries, announces its Preliminary Results for the year ended 31
May 2003. Worldwide sites are in the UK (North of England, Yorkshire, Midlands,
Scotland), USA, Finland, China and Australia.
Both major businesses, Wireless Infrastructure and Cellular Handset Products,
produced the majority of sales and all of the operating profits, in a year when
worldwide demand for the supply of wireless telecommunications products
continued to decline, with few signs of an imminent upturn.
In his Statement, Professor J. David Rhodes CBE FRS FREng Executive Chairman
said: "Notwithstanding these challenging market conditions, Filtronic
consolidated its position as the world's leading independent supplier of
transmit / receive modules for mobile base stations. Filtronic is one of the
world's leading manufacturers of mobile handset antennas and supplies over 25%
of the world demand."
Financial Highlights
- - Group sales of GBP241.3m (2002: GBP280.5m)
- - Operating profit before non-cash items of GBP11.0m (2002: GBP17.8m)
- - Pre-tax profit of GBP3.8m (2002: GBP25.5m loss)
- - Earnings per share of 1.46p (2002: 39.31p basic loss), 1.45p on a diluted
basis (2002: 39.31p diluted loss)
- - Wireless Infrastructure operating profit of GBP20.9m (2002: GBP31.8m)
- - Cellular Handset Products operating profit of GBP12.9m (2002: GBP11.6m)
- - Final dividend maintained at 1.8p (2002: 1.8p), payable 3 Nov 2003, for 2.7p
total (2002: 2.7p)
- - Cash generation of GBP19.5m
- - Net gearing down from 81% to 51%
Operational Highlights
- - Wireless Infrastructure: Outperformance against competitors
- - Pricing pressure in 2G and 2.5G systems
- - Low levels of demand for 3G WCDMA products
- - Well positioned for third generation deployment
- - Cellular Handset Products: Record sales, operating profit up, margins
maintained
- - Supplied 106 million handsets, up 23%; new Far Eastern customers
- - Electronic Warfare: Business profitable second half, increasing on monthly
basis 2003
- - Increasing production volumes for European Fighter Aircraft
- - Broadband Access: Business relocated to Newton Aycliffe, new products
- - Compound Semiconductors: New products, new business opportunities, losses
reduced
- - Transfer of closed California business to Newton Aycliffe
Development of Compound Semiconductor Technologies
- - New proprietary processes for switches, power transistors and MMICs
Outlook
In his Statement, Professor J. David Rhodes said: "The Board expects that the
group will continue to generate cash and reduce indebtedness during the
financial year ending 31 May 2004."
"Overall, our two main businesses are expected at least to maintain their market
position. In addition, the Electronic Warfare business is now growing and
profitable. The range of products and processes, particularly at Newton
Aycliffe, has been expanded to provide a platform for growth."
Enquiries:
Professor J. David Rhodes, Executive Chairman, Tel: 020 7786 9600 (Monday -
Filtronic plc Thursday)
John Samuel, Finance Director, Filtronic plc
Professor Christopher Snowden, Director, Tel: 01274 530 622
Filtronic plc
Peter Binns, Paul McManus, Emmie Peryer,
Binns & Co PR Ltd Tel: 020 7 786 9600
Mob: 07980 541 893
Executive Chairman's Statement
Financial results
Sales for the year ended 31 May 2003 were GBP241.3m (2002 GBP280.5m). Operating
profit before exceptional costs, goodwill amortisation, and share compensation
costs was GBP11.0m (2002 GBP17.8m).
After charging exceptional costs of GBP1.8m, goodwill amortisation of GBP2.3m,
share compensation costs of GBP0.2m, and net interest and financing currency
costs of GBP2.9m, the profit before tax was GBP3.8m (2002 GBP25.5m loss). After
tax, this was GBP1.1m (2002 GBP29.0m loss), resulting in basic earnings per
share of 1.46p (2002 39.31p basic loss), which is 1.45p on a diluted basis (2002
39.31p loss).
Net interest and financing currency costs have fallen to GBP2.9m from GBP12.5m
in 2002. This is partly due to lower levels of net interest payable which
reduced to GBP8.0m from GBP12.6m in 2002 as a result of buying in $37.2m of 10%
Senior Notes during the year. Additionally, a net financing currency exchange
gain of GBP4.2m (2002 GBP0.1m) has arisen on the 10% Senior Notes and an
exceptional net gain of GBP0.9m (2002 GBPnil) was realised on buying in the
Senior Notes at a discount to par value.
Cash
At 31 May 2003, Filtronic had a cash balance of GBP6.5m, having generated
GBP19.5m of cash during the financial year. Filtronic's debt was $103.6m
(GBP63.2m) of 10% Senior Notes, after using GBP22.1m of cash to buy in $37.2m of
10% Senior Notes. Additionally, the company continues to have bank borrowing
facilities totalling GBP31.0m, none of which was being utilised at the year end.
Net gearing was 51%, compared to 81% at 31 May 2002.
Dividend
The Board is proposing to maintain the final dividend of 1.8p (2002 1.8p)
payable on 3 November 2003 to shareholders on the register at 15 August 2003.
Operations
The segmental analysis of the business is as follows:
Operating profit before
closure costs, goodwill
amortisation and impairment,
tangible fixed asset
impairment and share
compensation
Sales
Year ended 31 May 2003 2002 2003 2002
GBPm GBPm GBPm GBPm
Wireless infrastructure 151.7 188.6 20.9 31.8
Cellular handset 51.2 48.8 12.9 11.6
products
Electronic warfare 25.7 27.0 (0.5) (1.4)
Broadband access 10.8 12.5 (2.8) (3.0)
Inter segment (1.6) (3.9) - -
Central costs - - (4.9) (5.0)
------- ------- ------- -------
Excluding Compound 237.8 273.0 25.6 34.0
semiconductors
Compound semiconductors 3.5 7.5 (14.6) (16.2)
------- ------- ------- -------
241.3 280.5 11.0 17.8
------- ------- ------- -------
Wireless Infrastructure
Market conditions have been characterised by strong pricing pressure in 2G and
2.5G systems and low levels of demand for 3G WCDMA products. As a result, both
sales and operating margins in this business segment declined. Although the
larger operations in the UK and the USA continued to achieve our target
operating margins, low levels of 3G WCDMA demand adversely impacted performance
in our Finnish and Australian operations. Overall, Filtronic continued to
outperform its competitors and remains the number one independent supplier of
its type in the world. Continued focus on customer support, cost reductions and
operating efficiency will remain at the forefront of this business segment's
strategy.
Cellular Handset Products
The Cellular Handset Products business had another outstanding year. During the
financial year, Filtronic supplied approximately 106 million handset antennas,
an increase of 23% over the previous financial year. Over one third of these
units were manufactured in Suzhou, China. Several Far Eastern handset
manufacturers have been added as customers during the year, although to date
they have not accounted for material levels of sales.
Electronic Warfare
The Electronic Warfare business segment finished the financial year strongly
after a disappointing first half. The business was profitable, and increasingly
so, in each of the last four months of the financial year, reflecting the
increasing volumes of production in the European Fighter Aircraft programme,
alongside strong demand for certain products in the USA.
Broadband Access
The Broadband Access business continued to suffer from low levels of demand for
its current point to point transceiver products resulting in continuing losses.
New high performance, lower cost, monolithic microwave integrated circuits
("MMICs") from Newton Aycliffe have been designed and are expected to be
introduced during the second half of the next financial year, which should
assist in improving financial performance in this business segment.
Compound Semiconductors
Throughout the year, focus has been maintained on developing and qualifying the
compound semiconductor processes at our state of the art facility at Newton
Aycliffe. As I stated in my Interim Statement in January 2003, our agreement for
foundry sales with M/A-COM, Inc., has not proved fruitful. As a result, we have
developed a new proprietary switch process and sample product has been supplied
to several major potential customers for mobile handset and wireless LAN market
applications. In addition, an innovative process for the manufacture of very
high power transistors has been developed for the base station power amplifier
market. These transistors are essential to meet the high efficiency requirements
of our power amplifier development. The MMIC process has been used to supply
initial quantities of product to BAE SYSTEMS Avionics Ltd and other customers,
including internal requirements in the Broadband Access business. These products
address both the defence and wireless communications markets.
Filtronic Solid State, California
Last year, the Board announced the closure of the fabrication facility for
compound semiconductors at Filtronic Solid State, Santa Clara, California. The
exceptional closure costs amounted to GBP1.8m, GBP0.9m lower than the estimate
made in the half year results to 30 November 2002. The compound semiconductor
team at Filtronic Solid State is now operating as a 'fabless' compound
semiconductor business using the manufacturing capability at Newton Aycliffe.
Outlook
The Board expects that the group will continue to generate cash and reduce
indebtedness during the financial year ending 31 May 2004.
Worldwide demand for mobile infrastructure products continued to decline during
the past year with few signs of an imminent upturn. Independent forecasts
indicate a further decline in the range of 10% to 20% in this market in 2003.
Notwithstanding these challenging market conditions, Filtronic has continued to
consolidate its position as the world's leading independent supplier of transmit
/receive modules for mobile base stations. Despite pricing pressures and
difficult markets, the Board remains confident in the medium and long term
opportunities offered by the wireless communications markets, including 3G, for
both the company's existing and new products including high performance power
amplifiers.
Filtronic is one of the world's leading manufacturers of mobile handset antennas
and supplies over 25% of the world demand. The world market for mobile handsets
is independently forecast to show an approximate 10% year on year unit growth in
2003. The Board expects Filtronic to maintain its market position in this
business segment in the financial year ending 31 May 2004.
The Electronic Warfare business is characterised by long development cycles and
requires demanding technical performance. Filtronic has now entered the
production phase for several qualified products on a number of major programmes,
which should provide sustainable, profitable growth over a number of years.
Considerable pressure exists to develop and produce more sophisticated and cost
effective solutions in the mobile telecommunications industry. For the last
three years our major research and development effort has been aimed
specifically at 3G base station equipment. At the heart of the new products are
the compound semiconductor transistors manufactured at Newton Aycliffe, which
are embedded in proprietary circuits to provide high power (360 Watts peak) very
efficiently. Following the successful demonstration of this technology to
several Original Equipment Manufacturers ("OEMs"), customer specific 3G power
amplifier requirements are now being addressed using internally developed
advanced digital linearisation techniques. These customer specific sample units
will be delivered to at least four major OEMs over the next few months. Other
market demands have led us to develop a larger range of compound semiconductor
products at Newton Aycliffe with an increased urgency to introduce multifunction
MMICs for both the commercial and defence sectors. Our developments at Newton
Aycliffe position Filtronic to take advantage of a wide range of compound
semiconductor related market opportunities as they arise.
Overall, our two main businesses are expected at least to maintain their market
position. In addition, the Electronic Warfare business is now growing and
profitable. The range of products and processes, particularly at Newton
Aycliffe, has been expanded to provide a platform for growth.
Professor J D Rhodes CBE FRS FREng
Executive Chairman
28 July 2003
Consolidated Profit and Loss Account
for the year ended 31 May 2003
Excluding
Compound Compound
semi- semi-
conductors conductors
2003 2003 2003
note GBP000 GBP000 GBP000
Sales 1, 2 237,816 3,452 241,268
----------- ----------- -----------
Operating profit/(loss)
before closure costs,
goodwill amortisation and
impairment, tangible fixed
asset impairment and share
compensation 1, 2 25,658 (14,637) 11,021
Exceptional closure costs 3 - (1,812) (1,812)
Goodwill amortisation (2,348) - (2,348)
Exceptional goodwill 4 - - -
impairment
Exceptional tangible fixed 5 - - -
asset impairment
Share compensation 6 (146) - (146)
----------- ----------- -----------
Operating profit/(loss) 1, 2 23,164 (16,449) 6,715
----------- ----------- -----------
Net interest payable 7 (7,995)
Net financing currency 8 4,236
exchange gain
Exceptional net gain on 9 881
repayment of debt
-----------
(2,878)
-----------
Profit on ordinary 3,837
activities before
taxation
Taxation on profit on 10 (2,753)
ordinary activities
-----------
Profit on ordinary 1,084
activities after taxation
Dividends (2,006)
-----------
Deficit for the year (922)
-----------
Adjusted earnings per
share
Basic 11 0.37p
Diluted 11 0.37p
Earnings per share
Basic 11 1.46p
Diluted 11 1.45p
Dividend per share 2.70p
Consolidated Profit and Loss Account
for the year ended 31 May 2002
Excluding
Compound Compound
semi- semi-
conductors conductors
2002 2002 2002
note GBP000 GBP000 GBP000
Sales 1, 2 273,066 7,481 280,547
----------- ----------- -----------
Operating profit/(loss)
before closure costs,
goodwill amortisation and
impairment, tangible fixed
asset impairment and share
compensation 1, 2 34,029 (16,196) 17,833
Exceptional closure costs 3 - - -
Goodwill amortisation (3,880) (1,472) (5,352)
Exceptional goodwill 4 (5,658) (10,378) (16,036)
impairment
Exceptional tangible fixed 5 - (7,938) (7,938)
asset impairment
Share compensation 6 (1,570) - (1,570)
----------- ----------- -----------
Operating profit/(loss) 1, 2 22,921 (35,984) (13,063)
----------- ----------- -----------
Net interest payable 7 (12,638)
Net financing currency 8 165
exchange gain
Exceptional net gain on 9 -
repayment of debt
-----------
(12,473)
-----------
Loss on ordinary activities (25,536)
before taxation
Taxation on profit on 10 (3,508)
ordinary activities
-----------
Loss on ordinary activities (29,044)
after taxation
Dividends (1,999)
-----------
Deficit for the year (31,043)
-----------
Adjusted earnings per
share
Basic 11 2.28p
Diluted 11 2.25p
Loss per share
Basic 11 (39.31)p
Diluted 11 (39.31)p
Dividend per share 2.70p
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 May 2003
2003 2002
GBP000 GBP000
Profit/(loss) on ordinary activities after 1,084 (29,044)
taxation
Currency exchange movement arising on (590) 1,422
consolidation
Currency exchange movement on loan 5,329 2,496
----------- -----------
Total recognised gains and losses for the year 5,823 (25,126)
----------- -----------
Consolidated Balance Sheet
at 31 May 2003
2003 2002
GBP000 GBP000
Fixed assets
Intangible assets 35,769 34,720
Tangible assets 96,272 108,589
----------- -----------
132,041 143,309
----------- -----------
Current assets
Stocks 34,344 43,735
Debtors 50,908 55,435
Cash 6,522 9,083
----------- -----------
91,774 108,253
Creditors: amounts falling due within one year 38,821 39,774
----------- -----------
Net current assets 52,953 68,479
----------- -----------
Total assets less current liabilities 184,994 211,788
Creditors: amounts falling due after one year 61,942 93,769
Provision for deferred tax 750 408
Deferred income 13,143 12,415
----------- -----------
Net assets 109,159 105,196
----------- -----------
Capital and reserves
Called up share capital 7,430 7,409
Share premium account 135,851 134,151
Shares to be issued 4,321 6,682
Revaluation reserve 106 106
Other reserve 828 -
Profit and loss account (39,377) (43,152)
----------- -----------
Equity shareholders' funds 109,159 105,196
----------- -----------
Consolidated Cash Flow Statement
for the year ended 31 May 2003
2003 2002
note GBP000 GBP000
Net cash flow from operating activities A 38,528 64,218
----------- -----------
Returns on investment and servicing of
finance
Interest received 231 358
Interest paid (7,638) (11,629)
----------- -----------
Net cash flow from returns on investment (7,407) (11,271)
and servicing of finance
----------- -----------
Tax paid (4,128) (2,345)
----------- -----------
Capital expenditure
Purchase of tangible fixed assets (8,198) (11,369)
Sale of tangible fixed assets 1,378 1,312
Government grants received 1,319 1,034
----------- -----------
Net cash flow from capital expenditure (5,501) (9,023)
----------- -----------
Equity dividends paid (2,002) (1,992)
----------- -----------
----------- -----------
Net cash flow before financing 19,490 39,587
----------- -----------
Financing
Issue of shares - 264
Loans repaid (22,107) (21,982)
----------- -----------
Net cash flow from financing (22,107) (21,718)
----------- -----------
(Decrease)/increase in cash B (2,617) 17,869
----------- -----------
Notes to the Consolidated Cash Flow Statement
for the year ended 31 May 2003
A Reconciliation of operating profit/(loss) to net cash flow from
operating activities
2003 2002
GBP000 GBP000
Operating profit/(loss) 6,715 (13,063)
Goodwill amortisation 2,348 5,352
Exceptional goodwill impairment - 16,036
Share compensation 146 1,570
Depreciation 19,322 20,433
Exceptional tangible fixed asset - 7,938
impairment
(Profit)/loss on disposal of tangible (518) 191
fixed assets
Licence fee income received - 10,000
Licence fee released (66) -
Government grants released (525) (134)
Movement in stocks 8,734 7,445
Movement in debtors 3,876 12,115
Movement in creditors (1,504) (3,665)
----------- -----------
Net cash flow from operating 38,528 64,218
activities
----------- -----------
B Reconciliation of net cash flow to movement in net debt
2003 2002
GBP000 GBP000
(Decrease)/increase in cash (2,617) 17,869
Cash flow from debt 22,107 21,982
----------- -----------
Change in net debt from cash flows 19,490 39,851
Non-cash movement 293 (1,367)
Currency exchange movement 9,483 2,754
----------- -----------
Movement in net debt 29,266 41,238
Opening net debt (84,686) (125,924)
----------- -----------
Closing net debt (55,420) (84,686)
----------- -----------
C Analysis of movement in net debt
At Currency At
1 June Cash Non-cash exchange 31 May
2002 flow movement movement 2003
GBP000 GBP000 GBP000 GBP000 GBP000
Cash 9,083 (2,617) - 56 6,522
Loans due (93,769) 22,107 293 9,427 (61,942)
after one
year
----------- ----------- ----------- ----------- -----------
Net debt (84,686) 19,490 293 9,483 (55,420)
----------- ----------- ----------- ----------- -----------
Consolidated Reconciliation of Shareholders' Funds
for the year ended 31 May 2003
2003 2002
GBP000 GBP000
Profit/(loss) on ordinary activities after 1,084 (29,044)
taxation
Dividends (2,006) (1,999)
----------- -----------
Deficit for the year (922) (31,043)
Contribution to QUEST - (461)
Currency exchange movement arising on (590) 1,422
consolidation
Currency exchange movement on loan 5,329 2,496
Issue of shares 2,507 3,229
Shares to be issued - shares issued (2,507) (2,504)
Shares to be issued - share compensation 146 1,570
----------- -----------
Movement in shareholders' funds 3,963 (25,291)
Opening shareholders' funds 105,196 130,487
----------- -----------
Closing shareholders' funds 109,159 105,196
----------- -----------
Notes to the Financial Statements
for the year ended 31 May 2003
1 Geographical origin segment analysis
2003 2002
GBP000 GBP000
Sales
United Kingdom 102,807 108,951
Finland 64,954 68,936
United States of America 56,967 98,871
Australia 5,490 14,962
China 21,791 12,857
Inter segment (10,741) (24,030)
----------- -----------
241,268 280,547
----------- -----------
Operating profit/(loss) before closure costs, goodwill
amortisation and impairment, tangible fixed assets
impairment and share compensation
United Kingdom 167 2,862
Finland 8,087 12,316
United States of America 2,895 2,482
Australia (2,004) 793
China 6,811 4,332
Central costs (4,935) (4,952)
----------- -----------
11,021 17,833
----------- -----------
Operating profit/(loss)
United Kingdom 167 2,862
Finland 5,960 10,424
United States of America 716 (26,522)
Australia (2,004) 793
China 6,811 4,332
Central costs (4,935) (4,952)
----------- -----------
6,715 (13,063)
----------- -----------
The operating profit/(loss) in the United States of America is after charging
GBP1,812,000 (2002 GBPnil) of exceptional closure costs, GBPnil (2002
GBP16,036,000) of exceptional goodwill impairment and GBPnil (2002 GBP7,938,000)
of exceptional tangible fixed asset impairment.
Notes to the Financial Statements
for the year ended 31 May 2003
2 Business segment analysis
2003 2002
GBP000 GBP000
Sales
Wireless infrastructure 151,715 188,589
Cellular handset products 51,242 48,845
Electronic warfare 25,721 26,977
Broadband access 10,796 12,544
Inter segment (1,658) (3,889)
----------- -----------
Excluding compound semiconductors 237,816 273,066
Compound semiconductors 3,452 7,481
----------- -----------
241,268 280,547
----------- -----------
Operating profit/(loss) before closure costs, goodwill
amortisation and impairment, tangible fixed assets
impairment and share compensation
Wireless infrastructure 20,962 31,777
Cellular handset products 12,961 11,570
Electronic warfare (492) (1,336)
Broadband access (2,838) (3,030)
Central costs (4,935) (4,952)
----------- -----------
Excluding compound semiconductors 25,658 34,029
Compound semiconductors (14,637) (16,196)
----------- -----------
11,021 17,833
----------- -----------
Operating profit/(loss)
Wireless infrastructure 20,962 31,777
Cellular handset products 10,834 9,678
Electronic warfare (713) (1,583)
Broadband access (2,984) (11,999)
Central costs (4,935) (4,952)
----------- -----------
Excluding compound semiconductors 23,164 22,921
Compound semiconductors (16,449) (35,984)
----------- -----------
6,715 (13,063)
----------- -----------
The operating loss of compound semiconductors is stated after charging
GBP1,812,000 (2002 GBPnil) of exceptional closure costs, GBPnil (2002
GBP10,378,000) of exceptional goodwill impairment and GBPnil (2002 GBP7,938,000)
of exceptional tangible fixed asset impairment. The operating loss of broadband
access is stated after charging GBPnil (2002 GBP5,658,000) of exceptional
goodwill impairment.
Notes to the Financial Statements
for the year ended 31 May 2003
3 Exceptional closure costs
2003 2002
GBP000 GBP000
Exceptional closure costs 1,812 -
----------- -----------
The exceptional closure costs relate to the closure of the compound
semiconductor fabrication facility at Filtronic Solid State, Santa Clara,
California.
4 Exceptional goodwill impairment
2003 2002
GBP000 GBP000
Exceptional goodwill impairment - 16,036
----------- -----------
There has been no impairment to goodwill in the year ended 31
May 2003. In the year ended 31 May 2002, GBP10,378,000 of the
exceptional goodwill impairment arose in respect of the compound
semiconductor operation at Filtronic Solid State and GBP5,658,000
in respect of Filtronic Sigtek, Inc., which forms part of the
broadband access business segment.
5 Exceptional tangible fixed assets impairment
2003 2002
GBP000 GBP000
Exceptional tangible fixed asset impairment - 7,938
----------- -----------
There has been no impairment to tangible fixed assets in the year ended 31
May 2003. In the year ended 31 May 2002, the whole of the exceptional
tangible fixed asset impairment arose in respect of the compound
semiconductor operation at Filtronic Solid State.
6 Share compensation
2003 2002
GBP000 GBP000
Share compensation 146 1,570
----------- -----------
As a result of the acquisition of Filtronic Sigtek, Inc., on 22 August
2000, a maximum cumulative charge of GBP4,285,000, comprising the issue to
certain employees of Filtronic Sigtek, Inc. of a maximum of 364,067
ordinary shares of 10p each in Filtronic plc, could arise over the four
year period following the acquisition. This share compensation is
contingent on Filtronic Sigtek, Inc., maintaining the number and quality of
its engineers over that period. The cumulative charge at 31 May 2003 was
GBP4,009,000 (2002 GBP3,863,000).
Notes to the Financial Statements
for the year ended 31 May 2003
7 Net interest payable
2003 2002
GBP000 GBP000
Interest receivable
Interest on bank deposits 231 358
----------- -----------
Interest payable
Interest on bank borrowings 51 460
Interest on other loans 7,587 11,169
Debt issue costs - amortisation 588 824
Debt issue costs - loss on repayment of - 543
debt
----------- -----------
8,226 12,996
----------- -----------
----------- -----------
Net interest payable 7,995 12,638
----------- -----------
8 Net financing currency exchange gain
2003 2002
GBP000 GBP000
Currency exchange gain/(loss) on cash 138 (224)
balances
Currency exchange gain on loan 4,098 389
----------- -----------
4,236 165
----------- -----------
9 Exceptional net gain on repayment of debt
2003 2002
GBP000 GBP000
Profit on repayment of debt 1,443 -
Debt issue costs - loss on repayment of (562) -
debt
----------- -----------
881 -
----------- -----------
Notes to the Financial Statements
for the year ended 31 May 2003
10 Taxation on profit/(loss) on ordinary activities
2003 2002
GBP000 GBP000
Current tax
United Kingdom 37 162
Overseas 2,425 2,938
----------- -----------
2,462 3,100
----------- -----------
Deferred tax
Overseas origination and reversal of timing
differences 291 408
----------- -----------
----------- -----------
2,753 3,508
----------- -----------
The United Kingdom current tax charge arises from taxes paid overseas on
income paid to the United Kingdom which cannot be fully relieved against
United Kingdom taxes. The overseas tax charge for the year arises
primarily from the group's operations in Finland and to a lesser extent in
China, where taxable profits cannot be relieved by losses available in
other jurisdictions. Additionally, the overseas tax charge includes
certain state taxes in the United States of America.
Notes to the Financial Statements
for the year ended 31 May 2003
11 Earnings/(loss) per share
2003 2002
GBP000 GBP000
Adjusted basic earnings per share 0.37p 2.28p
Effect of adjusted items net of taxation 1.09p (41.59)p
----------- -----------
Basic earnings/(loss) per share 1.46p (39.31)p
----------- -----------
Adjusted diluted earnings per share 0.37p 2.25p
Effect of adjusted items net of taxation 1.08p (41.56)p
----------- -----------
Diluted earnings/(loss) per share 1.45p (39.31)p
----------- -----------
GBP000 GBP000
Adjusted profit 273 1,687
Exceptional closure costs (1,812) -
Goodwill amortisation (2,348) (5,352)
Exceptional goodwill impairment - (16,036)
Exceptional tangible fixed asset - (7,938)
impairment
Share compensation (146) (1,570)
Net financing currency exchange gain 4,236 165
Exceptional net gain on repayment of debt 881 -
----------- -----------
Profit/(loss) on ordinary activities after 1,084 (29,044)
taxation
----------- -----------
Weighted average number of shares in issue 74,245,267 73,881,832
Dilution effect of share options - 243,482
Dilution effect of contingently issuable 459,850 708,543
shares
----------- -----------
Diluted weighted average number of shares 74,705,117 74,833,857
----------- -----------
The adjusted earnings/(loss) per share figures have been provided in order that
the effects of the adjusted items on reported earnings per share can be fully
appreciated.
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 May 2003 or 31 May 2002. Statutory
accounts for 2002 have been delivered to the registrar of companies, and those
for 2003 will be delivered following the company's annual general meeting. The
auditors have reported on the 2002 accounts; their reports were unqualified and
did not contain statements under section 237(2) or (3) of the Companies Act
1985.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Filtronic PLC
(Registrant)
By: David Staddon
Group Finance Controller
Date 28 JULY 2003