Halma Regulatory News (HLMA)

28 Nov 2005 12:26

Halma PLC28 November 2005 HALMA p.l.c. ("Halma") NEW REPORTING SECTORS 28 November 2005 Halma, the leading safety, health and sensor technology group, today issues a reconciliation of theGroup's historic results under the three new reporting sectors for its business. This announcement isbeing made in advance of the Group's interim results for the six months to 1 October 2005 which will beannounced on 6 December 2005. New sectors defined by markets will support our growth strategy As announced in our Trading Update of 27 October 2005, we will now be reporting our financial performanceunder three new sectors. These new groupings, defined by markets rather than product type, will make theGroup simpler to understand by all stakeholders. Each new sector includes businesses with similar operating and market characteristics. This will help usfurther develop our market-driven strategies and enable more proactive collaboration across the Group. The fundamental Group philosophy of giving subsidiaries autonomy and freedom to operate independentlyremains firmly in place. However, we can do more to leverage the broader product and selling strengthsthat exist across those businesses operating in the same, or adjacent, markets. Financial analysis shows full year and interim results for each sector Appendix A gives a financial analysis restating Halma's last 3 years' full year and interim revenue andprofit before taxation under the new sector headings, on a UK GAAP basis. It also includes a bridgebetween the UK GAAP and IFRS revenue and profit before taxation numbers for 2004/05. All of theseschedules are unaudited but are based on the audited UK GAAP accounts for the relevant year. For the first time, this analysis discloses individual sector profits at the interim stage. In addition,Group Central Company costs/income are disclosed separately, rather than incorporated into one of thesectors. Central Companies provide services to the Group's operating businesses. Costs include those of centrallybased executives and limited central resources. Income is generated via a 'cost of capital' charge basedon the capital used in each business, reflecting their scale and complexity. In recent years centralincome has decreased mainly because the operating businesses have reduced their capital employed. New sectors align with operational management The new reporting sectors now align more closely with the operating responsibilities of our DivisionalChief Executives. Infrastructure Sensors - Fire - Elevator and Door Safety - Security Health and Analysis - Optics and Specialist - Water Industrial Safety - Gas - Process Safety - Resistors Common operating and market characteristics will encourage collaboration Appendix B gives an outline of the major growth drivers and operating characteristics common within eachnew sector. Grouping together businesses that have similar operational and market characteristics will help seniormanagement to identify and address major opportunities or threats at an earlier stage. Sharing knowledgeof common customers or solutions to similar technical problems will enhance our ability to increase thepace of change across the business. For further information, please contact: Halma p.l.c. +44 (0)1494 721111 Andrew Williams, Chief Executive Kevin Thompson, Finance Director Hogarth Partnership Limited +44 (0)20 7357 9477 Rachel Hirst/Andrew Jaques A copy of this announcement, together with other information about Halma, may be viewed on its website:www.halma.com. APPENDIX A Financial analysis and reconciliation by sector New reporting sectors under UK GAAP: £000 Financial years 2002/03 2003/04 2004/05Revenue Infrastructure Sensors 96,722 120,410 118,200 Health and Analysis 69,797 75,041 95,075 Industrial Safety 89,878 85,557 86,497 Inter-segmental sales (2,396) (1,397) (653) _______ _______ _______ Total continuing operations 254,001 279,611 299,119 Discontinued operations 13,292 13,029 - _______ _______ _______ Revenue 267,293 292,640 299,119 _______ _______ _______ Profit before TaxationInfrastructure Sensors 19,586 24,498 23,779Health and Analysis 10,870 12,910 15,105Industrial Safety 12,841 11,679 10,961Central companies 2,726 1,335 499 _______ _______ _______Total continuing operations 46,023 50,422 50,344Discontinued operations 77 (370) - _______ _______ _______ 46,100 50,052 50,344Interest 408 232 45 _______ _______ _______Profit before taxation, goodwillamortisation and exceptional items 46,508 50,284 50,389 Goodwill amortisation (3,235) (4,220) (5,491)Exceptional items - (9,149) - _______ _______ _______Profit before taxation 43,273 36,915 44,898 _______ _______ _______ £000 Interim periods 2002/03 2003/04 2004/05Revenue Infrastructure Sensors 39,348 60,173 58,466 Health and Analysis 33,223 35,686 44,185 Industrial Safety 44,892 44,765 41,887 Inter-segmental sales (785) (848) (409) _______ _______ _______ Total continuing operations 116,678 139,776 144,129 Discontinued operations 7,168 7,124 - _______ _______ _______ Revenue 123,846 146,900 144,129 _______ _______ _______ Profit before TaxationInfrastructure Sensors 7,783 12,305 11,776Health and Analysis 5,089 5,701 7,069Industrial Safety 6,451 5,914 5,343Central companies 1,124 643 315 _______ _______ _______Total continuing operations 20,447 24,563 24,503Discontinued operations 276 (129) - _______ _______ _______ 20,723 24,434 24,503Interest 496 15 115 _______ _______ _______Profit before taxation and goodwillamortisation 21,219 24,449 24,618 Goodwill amortisation (1,138) (2,116) (2,667) _______ _______ _______Profit before taxation 20,081 22,333 21,951 _______ _______ _______ Reconciliation of old to new sectors under UK GAAP/IFRS: 52 weeks ended 2 April 2005 £000Revenue UK GAAP IFRS Old New New Sectors Gas Other Sectors Sectors Fire and Gas 75,539Elevator & Door 62,529Safety _______ Infrastructure 138,068 (24,421) 4,553 118,200 Sensors 118,200 Water 32,466Optics & Specialist 65,442 _______ Health and 97,908 5,128 (7,961) 95,075 Analysis 95,075 Process Safety 36,214Resistors 27,699 _______ 63,913 19,257 3,327 86,497 Industrial Safety 86,497Inter-segmental Inter-segmentalsales (770) 36 81 (653) sales (653) _______ _______ _______ _______ _______Revenue 299,119 - - 299,119 Revenue 299,119 _______ _______ _______ _______ _______ £000Profit before taxation UK GAAP IFRS Old New IFRS Sectors Gas Other Sectors Adjustments Profit Fire and Gas 16,713Elevator & DoorSafety 11,510 _______ Infrastructure 28,223 (4,688) 244 23,779 Sensors (40) 23,739 Water 2,616Optics & Specialist* 11,583 _______ Health and 14,199 1,962 (1,056) 15,105 Analysis (121) 14,984 Process Safety 6,503Resistors 1,419 _______ 7,922 2,726 313 10,961 Industrial Safety 205 11,166 Central companies - - 499 499 Central companies 576 1,075 _______ _______ _______ _______ _______ _______ 50,344 - - 50,344 620 50,964 _______ _______ _______ _______ _______ _______ Interest 45 - - 45 Interest (1,097) (1,052) Goodwill Goodwillamortisation (5,491) - - (5,491) amortisation 5,491 - Acquired Acquiredintangibles intangiblesamortisation - - - - amortisation (361) (361) _______ _______ _______ _______ _______ _______Profit before Profit beforetaxation 44,898 - - 44,898 taxation 4,653 49,551 _______ _______ _______ _______ _______ _______ * including holding companies 26 weeks ended 2 October 2004 £000Revenue UK GAAP IFRS Old New New Sectors Gas Other Sectors Sectors Fire and Gas 37,258Elevator & DoorSafety 30,728 _______ Infrastructure (11,924) 2,404 58,466 Sensors 58,466 67,986 Water 14,785Optics & Specialist 30,915 _______ Health and 45,700 2,519 (4,034) 44,185 Analysis 44,185 Process Safety 17,501Resistors 13,384 _______ 30,885 9,370 1,632 41,887 Industrial Safety 41,887Inter-segmental Inter-segmentalsales (442) 35 (2) (409) sales (409) _______ _______ _______ _______ _______Revenue 144,129 - - 144,129 Revenue 144,129 _______ _______ _______ _______ _______ £000Profit before UK GAAP IFRStaxation Old New IFRS Sectors Gas Other Sectors Adjustments Profit Fire and Gas 8,077Elevator & DoorSafety 5,729 _______ Infrastructure 13,806 (2,236) 206 11,776 Sensors (52) 11,724 Water 1,328Optics & Specialist* 5,642 _______ Health and 6,970 894 (795) 7,069 Analysis (61) 7,008 Process Safety 2,864Resistors 863 _______ 3,727 1,342 274 5,343 Industrial Safety 209 5,552 Central companies - - 315 315 Central companies 304 619 _______ _______ _______ _______ _______ _______ 24,503 - - 24,503 400 24,903 _______ _______ _______ _______ _______ _______ Interest 115 - - 115 Interest (548) (433) Goodwill Goodwillamortisation (2,667) - - (2,667) amortisation 2,667 - Acquired Acquiredintangibles intangiblesamortisation - - - - amortisation (175) (175) _______ _______- _______ _______ _______ _______Profit before Profit beforetaxation 21,951 - - 21,951 taxation 2,344 24,295 _______ _______ _______ _______ _______ _______ * including holding companies Notes: 1 The above figures are unaudited but the full financial year UK GAAP results are based on the Group's statutory accounts for the relevant period, which received an unqualified audit report. 2 IFRS adjustments complement the summary reconciliations given in the document 'Adoption of International Financial Reporting Standards', released by Halma on 2 September 2005, which includes the significant Group IFRS accounting policies and further explanation of the adjustments. APPENDIX B Growth drivers and market characteristics by sector Infrastructure Sensors: Market growth drivers Operating characteristics • Construction (new build and refurbishment) • Large markets with big, global players • Safety regulations and legislation • Higher volume/lower cost products • Risk of accidents and financial cost • Significant sales channel management • Growing population • Critical component supply (not installing or • Increasing urbanisation commissioning systems) • Competitors can be OEM customers too • Product performance is safety critical Industrial Safety: Market growth drivers Operating characteristics • Safety regulations and legislation • Sell direct, or via local/regional distributors • Risk of accidents and financial cost • Generally fragmented competition • Refurbishment and new build of industrial • Larger proportion of sales to heavy industries facilities • Level of industrial growth • Strong presence in oil/petrochemical market • Innovative applications for existing technology as important as new product development • Product performance is safety critical Health and Analysis: Market growth drivers Operating characteristics • Demographics (population growth, ageing • Technology-driven businesses population,etc) • Wide range of potential applications and end markets • Increasing personal and public health standards • Supply critical components into larger customer and expectations installation or system • Regulation and legislation • Larger OEM opportunities • New technology • Product performance is safety critical This information is provided by RNS The company news service from the London Stock Exchange