Bank Irel13.375 Regulatory News (BOI)

1 Mar 2006 07:02

Biotrace International PLC01 March 2006 FOR IMMEDIATE RELEASE 1st March 2006 BIOTRACE INTERNATIONAL PLC ANNOUNCES PRELIMINARY RESULTS for the year ended 31 December 2005 Biotrace International Plc ('Biotrace', the "Company" or the "Group"), a leadingmanufacturer of industrial microbiology products, today announces itspreliminary results for the year ended 31 December 2005. Highlights Financial • Revenue up 10% to £29.3 million (2004: £26.6 million) and a Compound Annual Growth Rate (CAGR) since 2000 of 31% • Profit before tax, restructuring costs and intangible asset amortisation up 19% to £3.5 million (2004: £2.9 million) • Operating profit up 10% to £2.8 million (2004: £2.6 million) after incurring losses of £0.3 million in Ruskinn • Earnings per share before restructuring costs and intangible asset amortisation up 17% to 5.95p (2004: 5.07p) • Operating cash flow up 12% at £3.9 million (2004: £3.5 million) • Total dividend for the year increased by 11% to 1.55p (2004: 1.40p) Operational • Acquisition of MicroSafe in September 2005 enhancing presence in pharmaceutical market • Appointment of Group Operations Director and re-structuring of European operations • Purchase of remaining shares in Biotrace SA • Post year-end, sale of Ruskinn Life Sciences business • Collaboration with Pall Corporation for pharmaceutical market Commenting on the results, Terry Clements, Non-Executive Chairman of Biotrace,said: "Good progress was made in 2005 as the Group continued to consolidate itsposition in the industrial microbiology market with strategic acquisitions.Underlying profitability increased as a result of acquisitions, furtherintegration initiatives and improved operational efficiency. "We have made a positive start to 2006 with top line growth generated from thecontribution of MicroSafe acquired in September 2005 and through organic growth.The recent disposal of the Ruskinn Life Science business will provide greaterfocus on the highly profitable industrial business and drive furtherimprovements in financial performance in the coming year. The collaboration withPall Corporation, announced in January, is a great endorsement of ourproprietary technologies and will help expand our business in the pharmaceuticalmarket. "Biotrace continues to be a profitable, highly cash generative business withstrong growth potential and the Board remains optimistic regarding the Group'sprospects." For further information:Biotrace International Tel: +44 (0) 1656 641 400Ian Johnson, Chief Executive OfficerPeter Morgan, Finance Director Buchanan Communications Tel: +44 (0) 207 466 5000Tim Anderson / Mary Jane Johnson / James Strong BIOTRACE INTERNATIONAL PLC ANNOUNCES PRELIMINARY RESULTS for the year ended 31 December 2005 OVERVIEW: Group revenue £29.3 million (2004: £26.6 million) Industrial £27.2 million (2004: £24.9 million)Life Science £1.1 million (2004: £1.0 million)Defence £1.0 million (2004: £0.7 million) The Group continued to prioritise investment in its core Industrial businessduring 2005. A sustained commitment to R&D across all brands led to the launchof new and improved products for environmental monitoring and quality controlsolutions for the food, pharmaceutical and water industries. Further investmentwas made in expanding direct customer access with the purchase of the remaining47% of the shares in the French sales subsidiary, Biotrace SA. In September2005, the Italian microbiology group, MicroSafe, was acquired to expand theGroup's direct sales organisation in Europe and to build a significant presencein the pharmaceutical market. The Group's Life Science business, Ruskinn Life Sciences, which manufacturesinnovative products for medical microbiology and life science research, was soldon 9 February 2006. The Defence business unit develops and manufactures biological weapon detectionequipment and consumables, leveraging the Group's rapid detection technology.These systems are supplied to the UK MoD and several other governments anddefence organisations either directly or through larger defence partners. Theacquisition of MicroSafe expanded sales within Europe during the year andreduces the Group's dependency on UK MoD sales going forward. Overall, sales increased 10% to £29.3 million (2004: £26.6 million) withoperating profits also increasing 10% over the prior year to £2.8 million (2004:£2.6 million). Pre tax profit before restructuring costs and intangible assetamortisation increased 19% on the prior year to £3.5 million (2004: £2.9million), whilst profit before tax increased to £2.6 million (2004: £2.5million). Earnings per share increased marginally in 2005 to 4.39p (2004:4.38p), with earnings before restructuring costs and intangible assetamortisation increasing 17% from 5.07p in 2004 to 5.95p in the period. OPERATIONAL REVIEW: Group revenue £29.3 million (2004: £26.6 million) Europe £13.7 million (2004: £12.6 million)Americas £13.1 million (2004: £12.5 million)Asia Pacific £ 2.5 million (2004: £1.5 million) European sales grew 9% in 2005, with the contribution from MicroSafe in the lastquarter offsetting a 7% decline in underlying sales. European operations wererestructured during the second half of the year to optimise the salesorganisation and improve manufacturing efficiency. Sales in the Americascontinued to grow steadily, improving by 5% on 2004 to £13.1 million, whilstAsia-Pacific sales grew 67% to £2.5 million, largely as a result of a fullyear's contribution from Tecra sales in the region. Sales of the Group's own brands in 2005 increased to 83% of turnover (2004:82%), as a result of the contributions by Tecra and MicroSafe. Direct sales,from the Group's sales subsidiaries, accounted for 86% of turnover (2004: 87%),with the balance derived from the Group's network of international distributors.Recurring revenues from reagents, consumables and service business increasedfrom 89% in 2004 to 90% in 2005. Industrial Revenue £27.2 million (2004: £24.9 million) The industrial business, which accounted for 93% of Group revenues in theperiod, is focussed on delivering innovative solutions that reduce testing timeor provides automation or convenience for customers to achieve high standards ofproduct quality and safety, optimise process performance and safeguard humanhealth. It serves small and multi-national companies within the food, dairy,beverage, pharmaceutical, personal care products, water quality and industrialprocessing sectors, wherever they operate worldwide. Biotrace hygienemonitoring, Tecra pathogen detection and IBP sampling and prepared mediaproducts account for the majority of sales in the industrial business,predominantly in the food sector. Overall, Industrial sales grew 9% to £27.2 million in 2005 (2004: £24.9 million)with the three month contribution from MicroSafe and a full year's effect ofTecra driving the growth and offsetting a small decline in European industrialsales. The food and beverage sector has historically generated the highest proportionof revenues and in 2005 accounted for 78% of industrial turnover (2004: 81%).Over the past two years the Group has been steadily building revenues innon-food sectors to broaden the business base and reduce the risks associatedwith a high concentration of earnings from a single sector. The Company intendsto build a significant presence in and derive a higher proportion of revenuesfrom the pharmaceutical, personal care and cosmetics sector. The acquisition ofMicroSafe in the last quarter of the year increases the Group's presence in thissector substantially. Ascotec air samplers and Biotrace PPM prepared mediaproducts together provide a powerful solution for environmental monitoring inpharmaceutical manufacturing. It is anticipated that revenues from this sectorin 2006 will account for approximately a quarter of Group turnover. Defence Revenue £1.0 million (2004: £0.7 million) As anticipated, underlying UK defence sales remained flat in 2005 at £0.7million, however, the acquisition of MicroSafe contributed approximately £0.3million of sales generated from the Italian military and homeland securitymarket, which gave rise to an overall increase in defence sales of 43% comparedwith 2004. The current visibility would suggest a continuing low level of UKbusiness in the absence of any further conflicts, however, opportunities forsales growth are being developed within Europe from an expanded product offeringand geographic coverage. Life Science Revenue £1.1 million (2004: £1.0 million) Life Science's sales increased 10% in the period with Ruskinn contributing £0.9million and MicroSafe adding £0.2 million from the date of acquisition. Asannounced in February this year, the Ruskinn business was sold to the lifescience management team for £1.05 million in cash plus 10% equity in the ongoingnew business, resulting in the termination of the Group's direct activity inthis market. Product Development Expenditure on R&D during the year was similar to 2004 at £1.2 million. Anumber of new and improved products were launched during the year. Theseincluded new allergen tests from Tecra to meet the increasing concern frommanufacturers to detect the presence of minute traces of contaminatingallergenic substances. The Company continued to improve the performance of theAir-trace(TM) air sampler to meet major pharmaceutical manufacturers'requirements. Corporate Development Tecra, acquired in June 2004 has been integrated into the Group and now formsthe base for Asia Pacific sales. MicroSafe acquired in September 2005, iscurrently being integrated into the revised European structure and is playing aglobal role in developing business in the pharmaceutical market. As mentionedpreviously, the sale of Ruskinn will allow management to focus on growing thecore industrial business utilising the cash generated from the deal. Whilst management is focussing on achieving operational excellence within theexisting Group, further opportunities that will strengthen the Company'sposition in the industrial market will be evaluated, provided they meet strictcriteria for adding value to shareholders. OUTLOOK: Biotrace is developing and executing well-defined plans to gain worldwideleadership in the large and growing industrial microbiology market. A greatdeal has been achieved over the last twelve months and in particular during theearly part of this year, to strengthen the Company's position and to improvefinancial performance. The addition of MicroSafe and its collaboration withPall Corporation to develop business in the pharmaceutical sector is progressingwell and a substantial order has been placed by Pall recently to commence theirsales campaign. The recent disposal of the loss making Ruskinn unit willimprove profitability and allow management to concentrate on growing theprofitable industrial business. It is anticipated that Biotrace will continue to grow above the overall marketgrowth rate currently at approx. 5-6%. This will be achieved through acombination of organic growth - generated from the sale of rapid tests which aregrowing faster; expansion of sales into the high growth potential pharmaceuticalsector; and through acquisitions, as the market continues to consolidate. TheDefence business will, as in the past, continue to perform better in some yearsthan others but provides high quality and profitable business when contracts arewon. A stronger and more dependable business base has been achieved over thecourse of last year by significantly reducing the Company's dependency onunpredictable or unsustainable revenues, providing greater visibility ofearnings from the high level of revenues generated from direct sales, own brandsand repeat consumables. Biotrace is a profitable and strongly cash generative business, now with morefocus, it is well positioned to take advantage of the opportunities forprofitable growth that will add value for shareholders. A positive start hasbeen made in 2006 with current trading in line with expectations. The Boardremains confident of the prospects for the Group and that further improvementsin financial performance will be delivered this year. FINANCIAL REVIEW: Revenue: Sales for the year were £29.3 million (2004: £26.6 million), a growth of 10%over 2004 and a compound annual growth rate since 2000 of 31%. The improvement in sales resulted from the full year effect of the acquisitionof Tecra in June 2004, combined with just over three months' contribution fromBiotrace MicroSafe, acquired in September 2005. Sales for the 2nd half were up11% on the corresponding period in 2004 and up 16% on the 1st half of 2005.During the year, the US dollar appreciated by 11% relative to sterling followingdeclines of 17% and 11% in 2004 and 2003 respectively. The average rate used totranslate the results of our US operations declined by 1% from 1.83 to 1.82,benefiting the Group by £0.1 million in turnover on a like for like basis. Gross Margins: Overall gross margins for the year were 50% (2004: 51%) falling due to theinclusion of lower margin turnover related to Biotrace MicroSafe and product mixchanges. Expenses: Selling and administrative costs, including intangible amortisation, were £10.3million (2004: £9.7 million) before restructuring charges. These costsincreased as anticipated over 2004 with the inclusion of a full year of costs ofTecra, together with the selling and administration costs of Biotrace MicroSafefrom September onwards. Intangible asset amortisation during the periodamounted to £0.5 million (2004: £0.2 million). Excluding the additional costsand amortisation noted above, underlying overheads were reduced by £0.8 millionfrom 2004 levels. Result for the Year: Operating profit before amortisation and restructuring costs was up 25% at £3.7million in 2005 (2004: £2.9 million). The results have been reported under IFRS's as adopted by the European Union. Asthe Group has made significant investments in acquiring the business of BiotraceMicroSafe Srl in 2005 this has given rise to additional intangible assets in theperiod. The majority of these relate to distribution and business connectionsand a 10 year amortisation period has been adopted. As reported above chargesfor amortisation of intangible assets were £0.5 million (2004: £0.2 million). Restructuring costs of £0.3 million (2004: £0.2 million) were incurred inrelation to the restructuring of the business on a geographical basis after theacquisition of Tecra. This included transfer of customer service operations fromRuncorn to Bridgend, merging UK operations into one operating company andclosure of Tecra's French subsidiary. In addition costs were incurred inclosing the Ruskinn facility near Leeds and moving manufacturing to Bridgend.Taking these restructuring costs and intangible asset amortisation into accountgave an operating profit of £2.8 million up 10% on 2004 (£2.6 million). Net financing costs rose to £0.3 million (2004: £0.1 million) through acombination of the full year interest charges for the loan taken out to financethe acquisition of Tecra in 2004 and the new euro denominated loan for thefinancing of the acquisition of the 62% stake in Biotrace MicroSafe Srl in 2005.Interest rates on the US dollar have risen significantly in the periodincreasing the interest charges despite the reduction in capital outstandingthrough a short term repayment schedule over five years. After finance costs,profit before tax was up 2% at £2.6 million, whilst profit before restructuringcharges was up 9% to £2.9 million. Disposal of Ruskinn: The Group announced on the 9 February 2006 the disposal of the Ruskinn business.During 2005 this operation lost £0.3 million at the operating level and itsdisposal will lead to an improvement in operating profits in the current year. Taxation: The tax charge for the year of £0.9 million (2004: £0.9 million), represents anequivalent consolidated tax charge of 35%. As expected the US tax lossesavailable to the Group have now been fully utilised and the Group does now payfederal taxes on profits in the US. The charge represents a high percentagerelative to profit before tax due to higher tax rates outside the UK and theinability to utilise losses arising from our operations in Denmark. Earnings per share: Earnings per share for 2005 were 4.39p (2004: 4.38p). To inform shareholders ofthe underlying position of the Group's results earnings per share have also beencalculated before restructuring costs and secondly before restructuring costsand intangible asset amortisation: Pence per share 2005 2004 growthEarnings 4.39 4.38 -Earnings before restructuring 5.00 4.67 7%costsEarnings before restructuring costs 5.95 5.07 17%and intangible asset amortisation Dividend: The Board is recommending a final dividend of 1.15p per share, which combinedwith the interim dividend of 0.40p paid in October, gives a total dividend of1.55p per share for the year amounting to £0.6 million. This represents anincrease of 11% over 2004. Cash flow: Cash flow from operating activities remains strong, increasing by 12% over 2004to £3.9 million (2004: £3.5 million) and has grown at a compound annual growthrate of 24% since 2000. The net cash inflow from operating activities was offsetby the investment of £3.2 million in acquiring Biotrace MicroSafe and acquiringthe remaining shares in Biotrace SA not already owned by the Company. £0.7million (2004: £0.7 million) was invested in capital expenditure. Income taxpayments of £1.2 million (2004: £0.9 million) were made and £0.6 million ofdividends paid to shareholders. Balance Sheet: Equity shareholders' funds have increased by 12% to £19.3 million arising fromthe retained profits for the period of £1.1 million, combined with a foreigncurrency exchange gain of £0.5 million and the issue of £0.3 million worth ofnew shares. 387,478 ordinary shares were issued in the year, to satisfy part of theconsideration paid to the vendors of the Biotrace MicroSafe businesses acquiredin Italy. Capital investment totalled £0.7 million for the year (2004: £0.7 million).Intangible assets increased to £18.0 million arising from the acquisition of theBiotrace MicroSafe business in Italy and the purchase of the minorityshareholding of Biotrace SA in France. Inventories increased in the period by £1.5 million to £5.4 million, arisingfrom the acquisition of the Biotrace MicroSafe businesses combined withincreased stockholding in the regions following the creation of the geographicalhubs at the start of the year. Receivables increased due principally to theaddition of Biotrace MicroSafe balances during the year. Cash and indebtedness: During the year the Group took on an additional loan denominated in euros of£2.8 million to assist with the purchase of the Biotrace MicroSafe businesses inItaly, thus providing a hedge against the euro denominated assets acquired. Cashbalances at the year end amounted to £0.5 million and the net debt position ofthe Group amounted to £6.3 million, representing gearing of 32%. As announcedsince the year end, the Group has sold its Ruskinn business for £1.1m cash, £0.6million payable on completion and the remaining proceeds payable in the secondhalf of the year. CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2005 Note 2005 2005 2004 2004 £'000 £'000 £'000 £'000 Revenue 1 29,336 26,639Cost of Sales (14,655) (13,108) Gross Profit 14,681 13,531 Selling, marketing & administrative costs before (10,327) (9,664)restructuringRestructuring costs 2 (337) (157)Total selling, marketing & administrative costs (10,664) (9,821)Research & development costs (1,215) (1,155) (11,879) (10,976) Operating profit 2,802 2,555 Financial income - interest receivable 38 83Financial expenses - interest payable (298) (164)Net financing costs (260) (81)Share of profit and loss in joint venture and 64 76associate Profit before restructuring costs 2,943 2,707Restructuring costs (337) (157)Profit before income tax 2,606 2,550 UK tax (240) (375)Overseas tax (663) (490)Income tax expense 4 (903) (865) Profit for the year 1,703 1,685 Attributable to :Equity holders of the company 1,711 1,694Minority interests (8) (9) 1,703 1,685 Dividend paid and proposed 5 606 543 Earnings per ordinary share 6- basic 4.39p 4.38p- diluted 4.37p 4.35pDividend per share 5 1.55p 1.40p Note: All results are reported under International Financial ReportingStandards (IFRS). 2004 results, as permitted by IFRS1, are not restated inrespect of IAS 32/39, financial instruments. The basis of preparation of thefinancial information is set out in note 8. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2005 DECEMBER 2005 Attributable to equity holders of the parent company Share Other Retained Total Minority Total Capital Reserves Earnings Interest Equity (see below) £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 January 2005 3,887 10,622 2,766 17,275 483 17,758 Opening balance IAS 39 adjustment - 20 - 20 - 20Revised balance at 1 January 2005 3,887 10,642 2,766 17,295 483 17,778Fair value losses on hedging - (43) - (43) - (43)Currency translation & hedging - 565 - 565 (5) 560Net income recognized directly in - 522 - 522 (5) 517equityProfit for the year - - 1,711 1,711 (8) 1,703Dividends paid - - (619) (619) - (619)Minority interest purchased - - - - (265) (265)Equity settled transactions - - 74 74 - 74Shares issued 38 300 - 338 - 338Balance at 31 December 2005 3,925 11,464 3,932 19,321 205 19,526 OTHER RESERVES - DECEMBER 2005 Share Revaluation Merger Translation Hedging Total Premium Reserve Reserve Reserve Reserve Other Reserves £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 January 2005 9,921 29 390 282 - 10,622 Opening balance IAS 39 adjustment - - - - 20 20Revised balance at 1 January 2005 9,921 29 390 282 20 10,642 Fair value losses - - - - (43) (43)Currency translation & hedging - - - 565 - 565Net income recognised directly in - - - 565 (43) 522equityShares issued 300 - - - - 300Balance at 31 December 2005 10,221 29 390 847 (23) 11,464 Note: All results are reported under International Financial Reporting Standards(IFRS). 2004 results, as permitted by IFRS1, are not restated in respect of IAS32/39, financial instruments. The basis of preparation of the financialinformation is set out in note 8. CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2005 Attributable to equity holders of the parent company DECEMBER 2004 Share Other Retained Total Minority Total Capital Reserves Earnings Interest Equity (see below) £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 January 2004 3,829 10,126 1,574 15,529 492 16,021Currency translation & hedging - 282 - 282 - 282Net income recognized directly in - 282 - 282 - 282equityProfit for the year - - 1,694 1,694 (9) 1,685Dividends paid - - (543) (543) - (543)Equity settled transactions - - 41 41 - 41Shares issued 58 214 - 272 - 272Balance at 31 December 2004 3,887 10,622 2,766 17,275 483 17,758 OTHER RESERVES - DECEMBER 2004 Share Revaluation Merger Translation Hedging Total Premium Reserve Reserve Reserve Reserve Other Reserves £'000 £'000 £'000 £'000 £'000 £'000Balance at 1 January 2004 9,707 29 390 - - 10,126Currency translation & hedging - - - 282 - 282Net income recognised directly in - - - 282 - 282equityShares issued 214 - - - - 214Balance at 31 December 2004 9,921 29 390 282 - 10,622 Note: All results are reported under International Financial Reporting Standards(IFRS). 2004 results, as permitted by IFRS1, are not restated in respect of IAS32/39, financial instruments. The basis of preparation of the financialinformation is set out in note 8. CONSOLIDATED BALANCE SHEETAt 31 December 2005 2005 2004 £'000 £'000 ASSETS Intangible assets 17,971 14,050Property, plant and equipment 2,561 2,737Investments in joint venture and associate 380 154Deferred tax asset 171 460Other receivables 100 100Total non current assets 21,183 17,501 Inventories 5,380 3,905Trade and other receivables 7,627 5,047Cash and cash equivalents 466 758Total current assets 13,473 9,710Total assets 34,656 27,211 EQUITYIssued share capital 3,925 3,887Share premium 10,221 9,921Other reserves 1,243 701Retained earnings 3,932 2,766Total equity attributable to shareholders of the parent 19,321 17,275Minority interest share in net assets 205 483Total equity 19,526 17,758 LIABILITIESInterest bearing loans and borrowings 4,289 2,917Deferred tax liabilities 356 579Other payables - deferred consideration 1,200 -Provisions 120 212Total non current liabilities 5,965 3,708Trade and other payables 4,890 3,711Interest bearing loans and borrowings 2,534 1,143Current tax liabilities 247 183Derivative financial instruments 23 -Provisions 1,471 708Total current liabilities 9,165 5,745 Total liabilities 15,130 9,453 Total equity and liabilities 34,656 27,211 Note: All results are reported under International Financial Reporting Standards(IFRS). 2004 results, as permitted by IFRS1, are not restated in respect of IAS32/39, financial instruments. The basis of preparation of the financialinformation is set out in note 8. CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2005 2005 2004 £'000 £'000 Profit for the year 1,703 1,685Adjustment for:Depreciation 1,047 889Amortisation 531 221Amortisation of share options issued to employees 74 41Foreign exchange losses (93) (138)Financial income (38) (83) Financial expenses 298 164 Share in associate results (64) (19) Gain on sale of property, plant and equipment 16 77Income tax expense 903 865Operating profit before changes in working capitaland provisions 4,377 3,702(Increase)/decrease in accounts receivable (308) 325Increase in inventories (885) (249)Increase/(decrease) in accounts payable 741 (259)Cash generated from operations 3,925 3,519Interest paid (298) (152)Income tax paid (1,175) (866)Net cash from operating activities 2,452 2,501Acquisition of subsidiaries, net of cash acquired (3,147) (5,468)Acquisition of minority interest share in (474) -subsidiaryPayments to acquire property, plant and equipment (708) (726)Receipts from sales of property, plant and 53 57equipmentPayments to acquire intangible assets (156) (4)Interest received 38 83Net cash used in investing activities (4,394) (6,058)Proceeds from issue of ordinary shares - 272Proceeds from borrowings 2,793 1,151Repayments of borrowings (1,341) (789)Payment of finance lease liabilities (18) (18)Dividend paid to equity shareholders (625) (539)Net cash used in financing activities 809 77Net cash outflow (1,133) (3,480) 2005 2004 £'000 £'000 Net cash outflow (1,133) (3,480)Cash and cash equivalents at start of year 758 4,221Effect of exchange rate fluctuation on cash held - 17Cash and cash equivalents at end of year (375) 758 2005 2004 £'000 £'000Cash and cash equivalent consists of:Cash and cash equivalents 466 758Overdrafts (841) - (375) 758 Notes 1. SUMMARY SEGMENTAL INFORMATION Segmental information is presented in respect of the Group's geographicalsegments which are the primary basis of segmental reporting. The results below are allocated based on the region from which the businessesare located; this reflects the group's management and internal reportingstructure. Inter segment pricing is determined on an arms length basis. Segment resultsinclude items directly attributable to a segment as well as those that can beallocated on a reasonable basis. For the purposes of this analysis the following definitions are used:Europe - includes all of Europe, Middle East and Africa and RussiaAmericas - includes all of North and South America and the CaribbeanAPAC (Asia Pacific region) - includes Australasia, New Zealand, China, India,Far East, Asia (apart from Russia). Corporate - includes the activities of the directors of the Company and certaincentral finance and marketing costs not attributable to the individual regions. Europe Americas APAC Corporate Group £'000 £'000 £'000 £'000 £'00012 months to 31 December 2005Revenue - external 13,682 13,167 2,487 - 29,336 - intra group 5,998 3,433 2,413 - 11,844Total segment revenue 19,680 16,600 4,900 - 41,180 Operating profit 2,006 1,701 343 (1,248) 2,802 Share of profit in associates & joint 64venturesNet financing costs (260)Profit before income tax 2,606Income tax (903)Profit for period 1,703 Included in the above:Depreciation 587 262 198 - 1,047Amortisation 145 - 386 - 531 Balances at 31 December 2005Segment assets 14,540 12,119 7,331 115 34,105Investment in associates & joint venture 380 380Unallocated assets 171Total assets 34,656Segment liabilities (5,655) (884) (710) (1,313) (8,562)Unallocated liabilities (6,568)Total liabilities (15,130)Capital expenditure - property, plant and equipment 416 69 279 - 764 - intangible 257 - 42 - 299 Europe Americas APAC Corporate Group £'000 £'000 £'000 £'000 £'00012 months to 31 December 2004Revenue - external 12,592 12,544 1,503 - 26,639 - intra group 5,017 77 1,011 - 6,105Total segment revenue 17,609 12,621 2,514 - 32,744 Operating profit 1,985 1,502 386 (1,318) 2,555 Share of profit in associates & joint 76venturesNet financing costs (81)Profit before income tax 2,550Income tax (865)Profit for period 1,685 Included in the above:Depreciation 526 292 71 - 889Amortisation 74 - 147 - 221 Balances at 31 December 2004Segment assets 8,159 10,930 7,379 129 26,597Investment in associates & joint venture 154 - - - 154Unallocated assets 460Total assets 27,211Segment liabilities (2,157) (891) (641) (942) (4,631)Unallocated liabilities (4,822)Total liabilities (9,453) Capital expenditure - property, plant and equipment 543 128 55 - 726 - intangible - - 274 - 274 2. RESTRUCTURING COSTS Restructuring costs comprise the following:- 2005 2004 £'000 £'000 Relocation of Lucigen Ltd - 31Restructure to regional basis following acquisition of Tecra 264 94Change to direct distribution in N America - 32Restructuring of Ruskinn division 73 - 337 157 Provision for restructuring costs at the year end 31 - 3. ACQUISITIONS During the year the Group made the following investments: On 14 September 2005 the Company acquired an Italian subsidiary company BiotraceMicroSafe srl which in turn acquired the trade and assets of a group ofcompanies comprising MicroSafe srl, MicroSafe Servizi srl, Ascotec srl, GruppoCarli srl and Themis srl for £2.9 million. This acquisition was achieved throughan initial acquisition of 62% of Biotrace MicroSafe srl. Biotrace has theoption in 2008 to purchase and the vendor has the option to sell the remainingshares for an additional sum of up to €2.3 million (£1.6 million) based upon theachievement of certain profit targets by 31 December 2007. An amount of £1.0mhas been accrued in respect of this remaining consideration based on currentbest estimates of the likely profitability of the company in this period.Biotrace MicroSafe srl has been treated as a wholly owned subsidiary and isfully consolidated into these group accounts. The provisional fair value of100% of the assets acquired with the company were: Book value Adjustments Fair value £'000 £'000 £'000 Fixed assets - property, plant and equipment 105 - 105 - patents 65 - 65- other intangible - 2,926 2,926- investment in associate 211 - 211 Inventory 378 - 378 Accounts receivable 2,040 - 2,040 Accounts payable (2,217) - (2,217) 582 2,926 3,508 Goodwill 203 3,711 Note: The adjustment shown above represents the valuation of the company'sdistribution network at the date of acquisition. The goodwill arising onacquisition relates to the amount paid in respect of key members of the existingworkforce. Satisfied by the following consideration: £'000 Cash 1,601 Deferred cash payments 508 Accrued consideration for remaining shares 1,003Shares issued at market price 339Acquisition costs 398Net cash acquired (138) 3,711 Biotrace MicroSafe's contribution to the operating profits since acquisition isset out below: 15 September 31 December 2005 £'000 Turnover 1,983Cost of sales (1,155) Gross profit 828Selling and administrative expenses (684)Operating profit 144 4. Taxation 2005 2004 £'000 £'000Current taxation- UK 240 288- Overseas 597 207Deferred taxation- UK - 87- Overseas 66 283Total charge 903 865 5. DIVIDEND The dividends declared in the relevant periods are as follows: Dividend description Amount per Payment date Total Based on share dividend register £'000 datedFinal dividend 2003 1.15p 14/05/04 440 23/04/04Interim dividend 2004 0.25p 08/10/04 97 10/09/04Final dividend 2004 1.15p 16/05/05 446 15/04/05Interim dividend 2005 0.40p 11/10/05 155 16/09/05Final dividend 2005 - proposed 1.15p 15/05/06 451 18/04/06 6. EARNINGS PER SHARE Earnings per share is based on the profit after taxation attributable to equityholders of the parent of £1.7 million (2004: £1.7 million) and the weightedaverage number of shares in issue during the year of 38,978,738 (2004:38,633,574). Diluted earnings per share is based on the profit after taxation of£1.7 million (2004: £1.7 million) and 39,124,737 (2004: 38,899,921) ordinaryshares. The Group has calculated an undiluted earnings per share before restructuringcosts in order to inform shareholders of the underlying position of the Group'sresults. The earnings before restructuring costs is calculated as follows: 2005 2004 £'000 £'000Earnings before restructuring costsProfit for the year 1,711 1,694Add: restructuring costs 337 157Less: tax on restructuring costs (101) (47) 1,947 1,804 In addition earnings per share before restructuring costs and amortisation has been calculated as follows: 2005 2004 £'000 £'000Earnings before restructuring costs and amortisationProfit for the year before restructuring costs 1,947 1,804Add: amortisation of intangibles 531 221Less: tax on amortisation (159) (66) 2,319 1,959 2005 2004Weighted average number of ordinary sharesIssued ordinary shares at the end of the period 39,252,627 38,865,149Issued ordinary shares at the start of the period 38,865,149 38,290,149Weighted average number of shares in period 38,978,738 38,633,574Diluted number of shares in period 39,124,737 38,899,921 Earnings per ordinary share Pence Pence per share Per shareBasic 4.39 4.38Diluted 4.37 4.35before restructuring costs - basic 5.00 4.67 - diluted 4.98 4.64before restructuring costs and amortisation - basic 5.95 5.07 - diluted 5.93 5.04 7. Financial Instruments The carrying amount of financial instruments is shown below. The fair value ofthese instruments approximates to the carrying value because of the shortmaturity of the deposits and borrowings and because the interest rates are basedon floating money market rates in the USA and UK. To estimate the fair values of forward exchange contracts, they are marked tomarket either using listed market prices or by discounting the contractualforward price and deducting the current spot rate. Financial Instruments 2005 2004 £'000 £'000 Cash and cash equivalents 466 758Overdrafts (841) -Loans - due within 1 year (1,676) (1,143)Loans - due after more than 1 year (4,289) (2,917)Finance leases (17) (24)Loan with joint venture 100 100 (6,257) (3,226) 8. BASIS OF PREPARATION The preliminary announcement for the full year ended 31 December 2005 has beenprepared in accordance with International Financial Reporting Standards asadopted by the European Union (EU) ("Adopted IFRSs") at 31 December 2005. Details of the accounting policies applied are set out in the interim report forthe 6 months ended 30 June 2005. These accounting policies have been appliedconsistently in preparing this announcement. 2004 results, as permitted by IFRS 1, are not restated in respect of IAS 32/39 'Financial Instruments'. The opening balances at 1 January 2005 have beenadjusted to reflect a gain on the fair value of forward contracts of £20,000.This gain was credited to the hedging reserve. Reconciliations showing the effect of moving from UK GAAP to IFRS on the balancesheets as at 31 December 2003 and 2004, and on the results for the year ended 31December 2004, were included in note 11 to the group's interim report for thesix months ended 30 June 2005. This interim report is available atwww.biotrace.co.uk. The directors have revised those reconciliationssubsequently, adjusting the goodwill and deferred tax liabilities arising on anacquisition completed in 2004 by £458,000 following clarification of thetaxation treatment of certain acquired intangible assets. In addition, aprovision of £96,000 was recognised as of acquisition date relating to theobligation to return premises to their original condition at the end of a leasealong with goodwill of £67,000 and a deferred tax asset of £29,000. The effect of the revision is to increase the tax charge and decrease the profitafter tax for the year ended 31 December 2004 by £22,000, to increase goodwillas at 31 December 2004 by £558,000, to increase deferred tax liabilities as at31 December 2004 by £479,000 and to increase provisions by £101,000. Revisedversions of the reconciliations will be published in the financial statementsfor the year ended 31 December 2005. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 December 2005 or 2004. Statutoryaccounts for 2004, which were prepared under UK GAAP, have been delivered to theregistrar of companies. The auditors have reported on the 2004 accounts; theirreport was unqualified and did not contain a statement under section 237(2) or(3) of the Companies Act 1985. The statutory accounts for 2005, which are beingprepared under International Financial Reporting Standards as adopted by the EU,will be finalised on the basis of the financial information presented by thedirectors in this preliminary announcement and will be delivered to theregistrar of companies in due course. This information is provided by RNS The company news service from the London Stock Exchange