ECM.L Regulatory News (ECM)

12 Jul 2005 09:00

Electrocomponents PLC12 July 2005 Embargoed to 9:00am, Tuesday 12 July 2005 ELECTROCOMPONENTS PLC: THE IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") Restatement of 2005 Financial Information On 25 May 2005, Electrocomponents plc announced its results for the year ended31 March 2005 using UK Generally Accepted Accounting Principles. Thisannouncement restates those results under International Financial ReportingStandards (IFRS). The Group will prepare financial statements for the year ended 31 March 2006,and for the half year to 30 September 2005, in accordance with IFRS. The resultsfor the comparative year (ending 31 March 2005) will therefore be restated. Thisreport shows the impact of this restatement and explains the primarydifferences. The Group will issue a trading update at its Annual General Meeting on 15 July2005. SUMMARY RESULTS 2005 IFRS 2005 UK GAAP 2005 UK GAAP (unaudited) After amortisation of Before amortisation of goodwill goodwill Revenue £773.9m £773.9m Operating profit £100.8m £95.9m £105.3mProfit before tax £99.9m £95.0m £104.4mIncome tax expense (£32.3m) (£30.3m) (£30.3m)Profit for the year attributable to £67.6m £64.7m £74.1mequity shareholdersEarnings per share 15.5p 14.9p 17.0pFree cash flow £61.1m £61.1mNet debt £55.4m £55.4mNet assets £355.7m £330.7m As highlighted in the 2004 and 2005 Annual Reports, the most significant areasof change for the Group include accounting for defined benefit pension schemes,share options, dividends and goodwill. These affect the profit and loss accountand balance sheet but they have no impact on business performance or cash flow. The main profit and loss account focus of observers has, in the past, been theprofit before tax and goodwill, which was £104.4m in the year ended 31 March2005. Under IFRS, this is £99.9m, a decline of 4.3%, with the movements beingthe charge for share based payments (£2.4m) and the additional charge for thedefined benefit pension schemes (£2.1m). Calculated on the same basis, earningsper share falls from 17.0p to 15.5p, a decline of 8.8%. This includes theadditional deferred tax charge resulting from the IFRS treatment of goodwill. On the balance sheet, the net assets increase from £330.7m under UK GAAP to£355.7m under IFRS. The main differences are the movement of the provision forthe final dividend for the year ended 31 March 2005 into the following year(+£54.8m) and the provision for the defined benefit pension scheme deficits netof deferred tax (-£32.4m). Other smaller adjustments increasing net assets by£2.6m are detailed in this announcement. The Company has considerabledistributable reserves under both UK GAAP and IFRS. Cash flow is unchanged from that previously reported under UK GAAP. Enquiries:Jeff Hewitt, Deputy Chairman / Finance Director Electrocomponents plc 01865 204000Jeremy Wilson, Group Controller Electrocomponents plc 01865 204000Diana Soltmann Flagship Consulting Ltd 0207 886 8440 This statement is published on the corporate website atwww.electrocomponents.com INTRODUCTION The European Union has approved the application of International FinancialReporting Standards (IFRS) for listed companies for periods beginning on orafter 1 January 2005. For Electrocomponents, the financial statements for theyear ended 31 March 2006 will be the first to be prepared in accordance withIFRS. In those financial statements, the results for the comparative year(ending 31 March 2005) will be restated. This report shows the impact of thisrestatement and explains the primary differences. The financial information presented in this statement has been prepared byapplying all IFRS that have been published to date that are applicable to theGroup, including International Accounting Standards (IAS) and interpretationsissued by the International Accounting Standards Board (IASB) and itscommittees. These are subject to amendment by the IASB and subsequentendorsement by the European Commission and are therefore subject to possiblechange. This could result in the need to change the basis of accounting orpresentation of certain financial information from that presented in thisannouncement. It is possible, therefore, that further changes will be requiredbefore final comparative information for the year ending 31 March 2006 ispublished. The financial information presented now is unaudited. BASIS OF ACCOUNTING First time adoption of IFRS (IFRS 1) This Standard has been issued to assist the first time adoption of IFRS. TheStandard allows alternative treatments for certain areas of the financialstatements during the initial transition period: Business combinations The Group has made the elective exemption that allows goodwill in respect ofacquisitions made prior to 1 April 2004 to remain as stated under UK GAAP. Employee benefits IFRS requires that a balance sheet asset or liability must be shown in respectof defined benefit pension schemes. Actuarial gains and losses arise when theactual returns on scheme assets differ from those initially expected by theactuary. The Group will adopt the exemption in IFRS 1 allowing all actuarialgains and losses arising before 1 April 2004 to be shown in the opening balancesheet at 1 April 2004. In the future, actuarial gains and losses will beincluded in the Statement of Recognised Income and Expense. Cumulative translation differences In the Group financial statements the results of overseas subsidiaries aretranslated into Sterling at the average exchange rate. The balance sheet istranslated at the closing rate. This leads to exchange gains and losses beinggenerated on consolidation. IFRS requires translation differences on therevaluation of the assets and liabilities of overseas subsidiaries to be takendirectly to reserves. On the disposal of an overseas entity, exchangedifferences previously taken to reserves will be transferred to the incomestatement as part of the profit/loss on disposal of that entity. The elective exemption in IFRS 1 means that any translation differences prior tothe date of transition (1 April 2004) do not need to be analysed retrospectivelyand so the deemed cumulative translation differences at this date can be set to£nil. Thus, any cumulative translation differences arising prior to the date oftransition are excluded from any future profit/loss on disposal of any entities.The Group will adopt this exemption. Share-based payment (IFRS 2) The Group has chosen to adopt the exemption whereby IFRS 2, Share-Based Payment,is applied only to awards made after 7 November 2002. Financial instruments (IAS 32 and 39) The Group has chosen to adopt the exemption delaying the implementation of IAS32, Financial Instruments: Disclosure and Presentation, and IAS 39, FinancialInstruments: Recognition and Measurement. These will be first applied in theyear ending 31 March 2006. Presentation of financial information The primary statements within the financial information contained in thisdocument have been presented in accordance with IAS 1, Presentation of FinancialStatements. Segmentation Under IAS 14, Segment Reporting, the Group's existing geographical segmentsreported under UK GAAP will remain the primary reported segments. EXPLANATION OF IFRS ADJUSTMENTS The following paragraphs explain the key adjustments made to the financialresults for the year ended 31 March 2005, in order to reflect IFRS. Share based payments (IFRS 2) IFRS 2 requires that the fair value of share options be charged to the incomestatement over the vesting period of the options. For Electrocomponents, theseare mainly the Savings Related Share Option Scheme (SAYE) and the Long TermIncentive Option Scheme (LTIOS). The fair value is assessed at the date of grant of the options and then chargedto the income statement over the vesting period. Fair values per share have beencalculated for options granted since 7 November 2002. These have then beencharged to the income statement over their respective vesting periods. Thecharge for these share-based payments was £2.4m in the 2005 IFRS accounts. Thischarge included the Long Term Incentive Option Scheme options issued in July2003 and July 2004. The charge for the year ended 31 March 2006 will alsoinclude the impact of the options issued in July 2005. The fair values are calculated using an appropriate option pricing model. Theincome statement charge is then adjusted to reflect expected and actual levelsof vesting based on non-market performance criteria. The Group's SAYE scheme hasbeen valued using a Black-Scholes model and the income statement charge has beenadjusted for forfeitures caused by employees failing to maintain either theiremployment or the required savings. The Group's LTIOS scheme includesperformance criteria based on the Group's total shareholder return performancerelative to a group of 13 comparable companies. The fair value of the LTIOSschemes has been calculated using a Monte Carlo model and the income statementcharge has been adjusted for options forfeited by employees leaving the Group. The International Financial Reporting Interpretations Committee (IFRIC) isconsidering the application of IFRS 2 and its findings could lead to a change inreporting under this standard. Employee benefits (IAS 19) The Standard splits employee benefits into long term and short term. Long term The primary long term employee benefits are pensions, which were accounted forunder SSAP 24 with accompanying disclosures prepared using FRS 17. Under SSAP24, the cost of providing benefits was charged against the operating profit overthe period during which the Group expected to benefit from the employees'services. The application of SSAP 24 resulted in a prepayment of £4.1m as at 31March 2005, and this asset is reversed as a result of the adoption of IAS 19. The IAS 19 approach is similar to FRS 17. In summary, IAS 19 requires that theGroup's pension deficits be recorded as balance sheet liabilities. The Group haselected to adopt the amendment to IAS 19, which allows the impact of changes inthe value of the deficits to be recorded in the Statement of Recognised Incomeand Expenses rather than the income statement. Annual charges to the incomestatement will comprise a service cost and a finance cost. The following is atable summarising the main impacts of IAS 19, FRS 17 and SSAP 24 with regard tothe pension schemes. Defined benefit schemes Profit and loss account Year ended 31 March 2005 IAS 19 FRS 17 SSAP 24 £m £m £mUK 9.8 9.8 8.1 Germany and Ireland 0.8 0.8 0.4Pre-tax cost 10.6 10.6 8.5 Under SSAP 24, there was a cost of £8.5m in the income statement for the yearended 31 March 2005. Under IAS 19, this cost would have been £10.6m. Defined benefit schemes Balance sheet 31 March 2005 IAS 19 FRS 17 £m £mUK -41.3 -41.3 Germany -5.3 -5.3 Ireland -0.4 -0.4Deficit in the scheme -47.0 -47.0 Deferred tax asset 14.6 14.6Net pension liability -32.4 -32.4 The deficit on the balance sheet under IAS 19 reduced net assets by £32.4m, netof £14.6m of deferred tax. There was a corresponding reduction in equity. Finally, creditors of £2.9m, under UK GAAP, relating to long term employeebenefits are now disclosed as part of retirement benefit obligations. Short term The requirement of IAS 19 is that when an employee has rendered service to anenterprise, the enterprise should recognise the undiscounted amount of the shortterm benefits expected to be paid in exchange for that service as either aliability or an expense. If an employee is allowed to be away from work (either on holiday or sick) for acertain number of days per year, but does not take that time off, then theemployee has given a greater number of days work to the enterprise than he orshe has been paid for. The enterprise must then accrue for that extra work done.Consequently the Group has now included an accrual for accumulating holiday payand sick pay where relevant. The accrual at 1 April 2005 is £3.7m and the incomestatement charge for the year ending 31 March 2005 is £nil. It is noted that IAS 19 (revised), and hence the accounting treatment detailedin this section, is still subject to endorsement by the European Union and couldstill change. IFRIC is considering the application of IAS 19 and its findingscould also lead to a change in reporting under this standard. Business combinations and goodwill (IFRS 3) A business combination occurs when one entity gains control of another. Theacquired assets and liabilities should be stated at fair value in the books ofthe acquirer (if appropriate) or in the Group accounts. The excess of thepurchase price over the cost is classified as goodwill on the face of thebalance sheet in the Group accounts. Goodwill should not be amortised but shouldbe reviewed, at least annually, for impairment and carried in the balance sheetat cost less any accumulated impairment losses. For goodwill already inexistence at the transition date to IFRS the goodwill amortisation alreadyrecognised will not be adjusted. The impact on the income statement for the yearending 31 March 2005 is that goodwill amortisation of £9.4m that was previouslycharged is now removed. Events after the balance sheet date (IAS 10) Under IAS 10, dividends declared after the balance sheet date should not beaccrued. This is a change from the current treatment under UK GAAP. This meansthat each dividend will be charged in the period in which it is approved ratherthan in the period to which it relates. Income taxes (IAS 12) Under UK GAAP deferred tax was provided on the basis of timing differencesbetween accounting profit and taxable profit. IAS 12 requires that deferredtaxation is based on temporary differences between the carrying value of anasset or liability and its tax base. The impact of IFRS on the total tax charge to the Group's Income Statement forthe year ended 31 March 2005 is an increase of £2.0m to £32.3m. This increasesthe effective tax rate from 31.9% of profit before tax (PBT) (29% of profitbefore tax and goodwill) to 32.3% of PBT for the year. Tax charge PBT&G % of PBT&G £m £m %Total tax charge under UK GAAP 30.3 104.4 29.0% Tax charge PBT % of PBT £m £m %Total tax charge under UK GAAP 30.3 95.0 31.9% Increase in deferred tax charge on goodwill 3.4 Increase in deferred tax credit on employee benefits -0.6 Increase in deferred tax credit on share based payments -0.8Total tax charge under IFRS 32.3 99.9 32.3% The deferred tax liability on goodwill increases as the Group continues toreceive a US tax deduction for amortisation but no longer amortises the goodwillthrough the income statement. Therefore the temporary difference between theaccounts value of goodwill and the tax value of goodwill increases by £3.4m. Theincreased asset on employee benefits relates largely to the IFRS 2 share schemecharge to the income statement, where the share scheme costs are not taxdeductible until incurred. The impact of IFRS on deferred tax in the balance sheet is as follows: 2005 £m Net deferred tax liability at 31/03/05 - UK GAAP -14.3 IFRS adjustments: Deferred tax on pension deficit 14.6 Deferred tax on other employee benefits 0.3 Increase in deferred tax charge on goodwill -3.4 Deferred tax on share based payments 1.3Net deferred tax liability at 31/03/05 - IFRS -1.5 Represented by: Deferred tax asset at 31/03/05 17.6 Deferred tax liability at 31/03/05 -19.1 Intangible assets (IAS 38) Under IFRS, computer software is treated as an intangible asset "when thesoftware is not an integral part of the related hardware". This meansapplication software costs that have been capitalised as tangible fixed assetsmust now be reclassified as intangible assets. The value of the reclassification of assets from tangible to intangible assetswas £53.0m at 31 March 2005. The major element of these reclassified assetsrelates to the Enterprise Business System project. There is no income statementimpact as the software will continue to be written off over its remaining usefullife. Cash and cash equivalents (IAS 7) Under IAS 7 (Cash flow statements), for an investment to qualify as a cashequivalent, it must be readily convertible to a known amount of cash. Therefore,an investment normally only qualifies as cash when it has a maturity of 3 monthsor less from the date of acquisition. The Group has reclassified deposits with a maturity of less than 3 months from 'current asset investments' to 'cash and cash equivalents'. The overall impact isto reclassify £53.6m from investments to cash at 31 March 2005. Leases (IAS 17) IAS 17 does not normally permit the disclosure of land as a finance lease.Therefore, land and buildings, currently held on the balance sheet under financeleases, are required to be split to determine how much relates to land and howmuch to buildings so that the land element can be reclassified to operatingleases. The Group has two such leases and therefore, £1.8m has been reclassifiedfrom finance leases to operating leases. Other changes There are a number of other minor changes. These have no material effect oneither reported profits or net assets. DISTRIBUTABLE RESERVES The Company has considerable distributable reserves under both UK GAAP and IFRS. CONSOLIDATED INCOME STATEMENTFor the year ended 31 March 2005 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m Revenue 773.9 773.9Cost of sales -361.8 -361.8Gross profit 412.1 0.0 0.0 0.0 412.1Distribution and marketing expenses -298.8 -2.4 -2.1 -303.3Operating expenses -17.4 9.4 -8.0Operating profit 95.9 -2.4 -2.1 9.4 100.8Financial income 3.6 3.6Financial expenses -4.5 -4.5Net financing costs -0.9 0.0 0.0 0.0 -0.9Profit before tax 95.0 -2.4 -2.1 9.4 99.9 Income tax expense -30.3 0.8 0.6 -3.4 -32.3Profit for the year attributable to shareholders 64.7 -1.6 -1.5 6.0 67.6 Earnings per share Basic 14.9p -0.4p -0.4p 1.4p 15.5p Diluted 14.9p 15.5p CONSOLIDATED INCOME STATEMENTFor the half year ended 30 September 2004 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m Revenue 379.5 379.5Operating profit 46.8 -1.0 -0.9 4.8 49.7Net financing costs -0.1 -0.1Profit before tax 46.7 -1.0 -0.9 4.8 49.6Income tax expense -14.9 0.8 0.3 -1.7 -15.5Profit for the period attributable to shareholders 31.8 -0.2 -0.6 3.1 34.1 Earnings per share 7.3p 7.8p Basic CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 31 March 2005 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m Foreign exchange translation differences 1.6 -0.1 1.5Actuarial gain on defined benefit pension schemes 0.5 0.5Tax on items taken directly to equity -0.2 -0.2Net income recognised directly in equity 1.6 0.0 0.3 -0.1 1.8Profit for the year 64.7 -1.6 -1.5 6.0 67.6Total recognised income and expense for the year 66.3 -1.6 -1.2 5.9 69.4 CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the half year ended 30 September 2004 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m Foreign exchange translation differences 5.7 0.1 5.8Actuarial gain on defined benefit pension schemes 0.0Tax on items taken directly to equity 0.0Net income recognised directly in equity 5.7 0.0 0.0 0.1 5.8Profit for the period 31.8 -0.2 -0.6 3.1 34.1Total recognised income and expense for the period 37.5 -0.2 -0.6 3.2 39.9 CONSOLIDATED BALANCE SHEETAs at 31 March 2005 IFRS adjustments Share based Employee payments benefits Goodwill Dividend Other IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m £m £mNon-current assetsIntangible assets 129.6 9.4 52.9 191.9Property, plant and equipment 165.8 -54.9 110.9Investments 0.2 0.2Trade and other receivables -4.1 6.9 2.8falling due after more than oneyearDeferred tax asset 17.6 17.6 295.6 0.0 -4.1 9.4 0.0 22.5 323.4Current assetsInventories 142.3 142.3Trade and other receivables 152.4 -7.3 145.1Investments 53.6 -53.6 0.0Income tax receivables 2.2 2.2Cash and cash equivalents 11.2 53.6 64.8 359.5 0.0 0.0 0.0 0.0 -5.1 354.4Current liabilitiesTrade and other payables -207.0 -3.7 54.8 46.4 -109.5Loans and borrowings -27.7 -27.7Tax liabilities -18.7 -18.7Net current assets 152.5 0.0 -3.7 0.0 54.8 -5.1 198.5Total assets less current 448.1 0.0 -7.8 9.4 54.8 17.4 521.9liabilitiesNon-current liabilitiesTrade and other payables -103.1 2.9 92.6 -7.6falling due after more than oneyearRetirement benefit obligations -47.0 -47.0Loans and borrowings -92.5 -92.5Deferred tax liability -14.3 1.3 14.9 -3.4 -17.6 -19.1Net assets 330.7 1.3 -37.0 6.0 54.8 -0.1 355.7 EquityCalled-up share capital 43.5 43.5Share premium account 38.4 38.4Retained earnings 248.8 1.3 -37.0 6.0 54.8 -0.1 273.8Equity attributable to the 330.7 1.3 -37.0 6.0 54.8 -0.1 355.7shareholders of the parent CONSOLIDATED BALANCE SHEETAs at 30 September 2004 IFRS adjustments Share based Employee payments benefits Goodwill Dividend Other IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m £m £mNon-current assetsIntangible assets 140.1 4.8 44.2 189.1Property, plant and equipment 165.6 -46.1 119.5Investments 0.1 0.1Trade and other receivables -2.8 5.5 2.7falling due after more than oneyearDeferred tax asset 25.2 25.2 305.8 0.0 -2.8 4.8 0.0 28.8 336.6Current assetsInventories 139.6 139.6Trade and other receivables 144.1 -4.1 140.0Investments 25.0 -25.0 0.0Income tax receivables 0.5 0.5Cash and cash equivalents 24.9 25.0 49.9 333.6 0.0 0.0 0.0 0.0 -3.6 330.0Current liabilitiesTrade and other payables -171.7 -3.7 25.2 46.0 -104.2Loans and borrowings -28.2 -28.2Tax liabilities -17.8 -17.8Net current assets 161.9 0.0 -3.7 0.0 25.2 -3.6 179.8Total assets less current 467.7 0.0 -6.5 4.8 25.2 25.2 516.4liabilitiesNon-current liabilitiesTrade and other payables -97.5 2.8 82.9 -11.8falling due after more than oneyearRetirement benefit obligations -47.5 -47.5Loans and borrowings -82.9 -82.9Deferred tax liability -13.5 1.3 15.0 -1.7 -25.3 -24.2Net assets 356.7 1.3 -36.2 3.1 25.2 -0.1 350.0 EquityCalled-up share capital 43.5 43.5Share premium account 38.4 38.4Retained earnings 274.8 1.3 -36.2 3.1 25.2 -0.1 268.1Equity attributable to the 356.7 1.3 -36.2 3.1 25.2 -0.1 350.0shareholders of the parent CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 March 2005 IFRS adjustments Share based Employee payments benefits Goodwill Other IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited)(unaudited) £m £m £m £m £m £mCash flows from operating activitiesOperating profit 95.9 -2.4 -2.1 9.4 100.8Amortisation of goodwill 9.4 -9.4 0.0Depreciation and other amortisation 22.3 -0.1 22.2Employee share options 2.4 2.4Increase in inventories -13.6 -13.6Decrease in trade and other receivables 6.2 3.0 0.1 9.3Decrease in trade and other payables -2.8 -0.9 -3.7Cash generated from operations 117.4 0.0 0.0 0.0 0.0 117.4Net interest payable -1.3 -1.3Income tax expense -31.2 -31.2Operating cash flow 84.9 0.0 0.0 0.0 0.0 84.9 Cash flows from investing activitiesCapital expenditure and financial -24.6 -24.6investmentProceeds from sale of tangible fixed assets 0.8 0.8Receipt of capital grant 0.0Dividends received 0.0Net cash used in investing activities -23.8 0.0 0.0 0.0 0.0 -23.8 Free cash flow 61.1 0.0 0.0 0.0 0.0 61.1 Cash flows from financing activitiesProceeds from the issue of share capital 0.0 0.0New bank loans 35.0 35.0Repayment of bank loans -20.8 -20.8Equity dividends paid -80.0 -80.0Net cash used in financing activities -65.8 0.0 0.0 0.0 0.0 -65.8 Net decrease in cash and cash equivalents -4.7 0.0 0.0 0.0 0.0 -4.7Cash and cash equivalents at the beginning 72.6 72.6of the yearEffect of exchange rates in cash -5.3 -5.3Cash and cash equivalents at the end of the 62.6 0.0 0.0 0.0 0.0 62.6year CONSOLIDATED CASH FLOW STATEMENTFor the half year ended 30 September 2004 IFRS adjustments Share based Employee payments benefits Goodwill Other IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m £mCash flows from operating activitiesOperating profit 46.8 -1.0 -0.9 4.8 49.7Amortisation of goodwill 4.8 -4.8 0.0Depreciation and other amortisation 10.9 10.9Employee share options 1.0 1.0Increase in inventories -9.8 -9.8Decrease in trade and other receivables 5.9 5.9Decrease in trade and other payables -2.2 0.9 -1.3Cash generated from operations 56.4 0.0 0.0 0.0 0.0 56.4Net interest payable -0.1 -0.1Income tax expense -15.8 -15.8Operating cash flow 40.5 0.0 0.0 0.0 0.0 40.5 Cash flows from investing activitiesCapital expenditure and financial -12.2 -12.2investmentProceeds from sale of tangible fixed assets 0.0Receipt of capital grant 0.0Dividends received 0.0Net cash used in investing activities -12.2 0.0 0.0 0.0 0.0 -12.2 Free cash flow 28.3 0.0 0.0 0.0 0.0 28.3 Cash flows from financing activitiesProceeds from the issue of share capital 0.0 0.0New bank loans 2.7 2.7Repayment of bank loans 0.0 0.0Equity dividends paid -54.8 -54.8Net cash used in financing activities -52.1 0.0 0.0 0.0 0.0 -52.1 Net decrease in cash and cash equivalents -23.8 0.0 0.0 0.0 0.0 -23.8Cash and cash equivalents at the beginning 72.6 72.6of the periodEffect of exchange rates in cash 0.4 0.4Cash and cash equivalents at the end of the 49.2 0.0 0.0 0.0 0.0 49.2period SEGMENTAL PROFIT BEFORE TAXFor the year ended 31 March 2005 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited)(unaudited) £m £m £m £m £m United Kingdom 107.5 -1.3 -0.5 105.7Rest of Europe 56.0 -0.2 -0.3 55.5North America 15.8 -0.1 15.7Japan 1.5 1.5Rest of World 4.0 4.0Contribution 184.8 -1.6 -0.8 0.0 182.4Groupwide process costs -79.5 -0.8 -1.3 -81.6Amortisation of goodwill - Allied (North America) -9.2 9.2 0.0Amortisation of goodwill - RS Norway (Rest of Europe) -0.2 0.2 0.0Net interest payable -0.9 -0.9Profit before tax 95.0 -2.4 -2.1 9.4 99.9 SEGMENTAL PROFIT BEFORE TAXFor the half year ended 30 September 2004 IFRS adjustments Share based Employee payments benefits Goodwill IFRS UK GAAP (unaudited) (unaudited) (unaudited) (unaudited) £m £m £m £m £m United Kingdom 54.8 -0.5 -0.6 53.7Rest of Europe 25.0 -0.1 -0.3 24.6North America 7.5 7.5Japan 0.6 0.6Rest of World 1.8 1.8Contribution 89.7 -0.6 -0.9 0.0 88.2Groupwide process costs -38.1 -0.4 -38.5Amortisation of goodwill - Allied (North America) -4.7 4.7 0.0Amortisation of goodwill - RS Norway (Rest of Europe) -0.1 0.1 0.0Net interest payable -0.1 -0.1Profit before tax 46.7 -1.0 -0.9 4.8 49.6 Safe Harbour: This announcement contains certain statements, statistics andprojections that are or may be forward-looking. The accuracy and completeness ofall such statements, including, without limitation, statements regarding thefuture financial position, strategy, projected costs, plans and objectives forthe management of future operations of Electrocomponents plc and itssubsidiaries is not warranted or guaranteed. These statements typically containwords such as "intends", "expects", "anticipates", "estimates" and words ofsimilar import. By their nature, forward-looking statements involve risk anduncertainty because they relate to events and depend on circumstances that willoccur in the future. Although Electrocomponents plc believes that theexpectations reflected in such statements are reasonable, no assurance can begiven that such expectations will prove to be correct. There are a number offactors, which may be beyond the control of Electrocomponents plc, which couldcause actual results and developments to differ materially from those expressedor implied by such forward-looking statements. Other than as required byapplicable law or the applicable rules of any exchange on which our securitiesmay be listed, Electrocomponents plc has no intention or obligation to updateforward-looking statements contained herein. This information is provided by RNS The company news service from the London Stock Exchange