Rotork Regulatory News (ROR)

28 Feb 2006 07:00

Rotork PLC28 February 2006 28 February 2006 Rotork p.l.c. Preliminary Announcement Strong results with double digit growth in operating profit Financial Highlights • Record order book with order intake up 24% at £188m • Sales revenue up 19% at £175m • Operating profit up 20% at £36.5m • Earnings per share up 16.7% at 28.6 pence per share • £10m additional interim dividends during 2006 Operational Review • Strong performances in US and China • Excellent growth in all three divisions • Good business levels in all markets • Continued high levels of growth achieved by Rotork Fluid System Chief Executive Bill Whiteley, commenting on the results said: "We saw further progress in many of our markets in 2005. The principal highlightwas the strength of our core electric actuator market especially in Asia and theUSA. This was supported by the continuing high levels of growth from RotorkFluid System. Conditions in most of our end user and geographic markets continue to be buoyantas reflected in the size of the order book at the start of 2006 and the strengthof the order input since then." For further information, please contact: Rotork p.l.c. Tel: 01225 733200Bill Whiteley, Chief ExecutiveBob Slater, Finance Director Financial Dynamics Tel: 020 7269 7224 Sally Lewis Chairman's statement Introduction Excellent progress has been made in the year with the Group's order inputincreasing by 24%. Group revenue advanced by 19% to £174.8m and double digitgrowth in operating profit was achieved by all three divisions. Overall profitincreased by 20% to £36.5m. Earnings per share increased by nearly 17%. Strongdemand, particularly from the hydrocarbon and power sectors, coupled with growthin all our geographical markets resulted in a 41% increase in the order book,which closed the year at an all time high. Business Review The Electric actuator business, which accounts for 71% of Group revenue, sawgood output levels from the main plant in Bath, building on the progress made inthe first half. The US had a very positive year with Rochester making recordprofits and successfully weathering the uncertain currency backdrop that waswith us through most of the year. Despite this uncertainty, currency overall hada modest positive impact on reported results. The IQT actuator released at theend of 2003 continues to be well received by customers worldwide. China is nowestablished as our biggest market for Electric products and this is recognisedthrough the development programme for both product and facilities that we havefor the business in the current year. Rotork Fluid System (RFS) continued to build on the growth of the last few yearsproducing a very creditable increase of 46% in order input and 36% in salesrevenue for the year. The main plants in Lucca and Rochester have improved theiruse of facilities and continued to develop product offerings during the year,all of which have delivered quality improvements to our customers and increasedthe range of services that we can offer. The PCI business in Melle, Germany,acquired in March, further increases the division's production capacity givingus the capability of handling very large projects when needed. This business hasnow been integrated into the Group and we are looking for the impact of thiswork to be reflected in improved performance during 2006. Rotork Gears continues to develop its products and business and extend itsinfluence across the global markets that we serve. The Milan based Omag businessacquired in January 2006, while small in a Group context, holds a respectedposition in the important Italian market. It has a strong engineering culturewith a largely complementary product range and will enhance the whole of ourGears business as we develop an integrated approach from the four productionfacilities in Leeds, Losser, Milan and Shanghai. Corporate Governance The Board is committed to continuously improving its corporate governanceframework and regularly reviews progress, both directly and through committees.We have further improved compliance with the Combined Code in a number of areasduring the year with, for example, all our directors now having one year noticeperiods or less. We have also recruited a third independent non-executivedirector and all of our Board committees are now combined code compliant. TheGroup has a well developed internal audit process and our internal auditprogramme now extends beyond fiscal matters to Health and Safety andEnvironmental issues Dividend The Board has a policy of distributing profits in the form of dividendsgenerally commensurate with increases in earnings. The level of cash held by theGroup at the end of the year, and anticipated continued cash generation in thecoming year, has however encouraged us to propose additional distributions toshareholders during 2006. The final dividend proposed by the Directors for 2005 is 9.90p per share payableon 26 May to shareholders on the register on 5 May 2006. In addition, the Boardis proposing to make further additional distributions to shareholders by way ofdividend, in the amount of £10 million over and above the sum of the finaldividend being recommended for 2005 and the proposed core interim dividend for2006. This additional distribution will take the form of two further interimdividends for 2006 paid in July and December, which with the final dividend for2005 and the core 2006 interim paid in September, means that we plan to makefour dividend payments to shareholders during 2006. The timing of these dividendpayments is intended to match the Group's cash generation profile. A tableshowing the timing and amount of the four dividends proposed to be paid during2006 is set out in the Operating and Financial Review. Recognising the present deficit in the main defined benefit pension scheme, theBoard has decided to make additional contributions to the scheme equivalent tothis additional dividend. It is anticipated that this will put the scheme on afirmer footing prior to the next actuarial valuation in March 2007. Jeremy Fry It was with sadness that we record the death of Jeremy Fry, the founder ofRotork, in 2005. A tribute to Jeremy will appear in the Annual Report andAccounts. Outlook Conditions in most of our end user and geographic markets continue to be buoyantas reflected in the size of the order book at the start of the year and thestrength of the order input since then. Based on this we are looking forward tofurther good progress in 2006. Roger LockwoodChairman27 February 2006 Operating and Financial Review Business Strategy The objective of Rotork p.l.c. is to increase shareholder value by developingits leadership position in worldwide valve actuator activities. All of theGroup's activities are focused on the specialist area of valve automation. Theorigins of the Company lie with the founder, Jeremy Fry, who developed anelectric valve actuator in 1952. Over the years Rotork continued to build on itsreputation as an innovator of new concepts in this field and has provided userswith increasing levels of functionality, performance and assurance. Recent strategy has focused on opportunities to leverage our leadership positionin heavy-duty electric actuation into other closely associated areas of valveautomation. Today Rotork's business is split into three actuation divisions;Rotork Electric, the original and largest activity supplying high quality, stateof the art products for controlling pipeline and other valves; Rotork FluidSystem, which supplies heavy-duty pneumatic and hydraulic valve actuators foroperation in emergency shut down and other critical applications; Rotork Gears,involved in the supply of gearboxes, adaptors and ancillaries for the valveindustry. Key programmes relate to the development of products, marketinginitiatives, creating service revenue opportunities and driving cost reductionsrelating to these businesses. Year Under Review We saw a further strengthening of many of our markets in 2005 which had beenevident in the second half of the prior year. For once currencies were not asignificant factor with the average US dollar and euro exchange rates againstthe pound for the year as a whole giving us a small currency gain. Order intakewas up 23.7% with all three divisions participating in active markets. The orderbook at the end of the year was £63.7m which is 35.6% up on the start of theyear adjusted for the acquisition of PCI and 1.4% up on the order book at thehalf year. Revenue was up 19.0% and operating profits were up 20.0%. The principal highlight was the strength of our core electric actuator marketespecially in Asia and the USA where we enjoy good market positions due to ourstrong sales and support presence and the desire in these regions to purchasethe best available technology. This was supported by the continuing stronggrowth of Rotork Fluid System, whose business was enhanced last March by theacquisition of PC-Intertechnik in Germany. The key drivers for the Group's businesses relate to investment in oil and gas,water and waste water and power generation installations around the world withdemand being generated by new and expanded capacity, upgrades to existingfacilities and replacements. This is often linked to projects which are aimed atimproving the efficiency, safety and environmental performance of plants. Valveactuators are critical components and their long-term reliability andperformance is extremely important to users. They also act as a key interfacebetween plant control systems and related hardware. Rotork's reputation forquality, worldwide support and technical innovation is crucial to its leadershipposition in the field. The broad geographic spread of our operations andapplications means that we have a large number of repeat customers around theworld and no one customer accounts for more than 5% of our revenue in any year. Electric Actuators The principal markets for electric actuators are oil and gas, water and wastewater treatment and power generation. As a percentage of unit actuator orderinput oil & gas represented 37% (38%), water & waste water 24% (30%), powergeneration 31% (24%) and miscellaneous 9% (8%) with the prior year's figures inbrackets. The oil & gas markets received much general attention during the yeardue to the relatively high oil and gas prices affecting the costs to consumersof energy. Much of the focus for investment by the oil and gas companiesremained on upstream activities, such as exploration and production. Howeverthere was evidence that downstream activities were beginning to receive morefocus due to shortages in refining and storage capacity. The majority of theelectric actuators we sell into this sector go into downstream operations suchas refinery offsites, storage and distribution facilities. Liquefied Natural Gas(LNG) investment was also particularly active. Our main opportunities in thisbusiness area reside with our fluid power actuator activities, but we did seegood levels of demand for electric actuators especially on the export andreceiving terminals. The power market was particularly active for the year underreview. Sales of actuators into this market were heavily weighted towards Asia,in particular China and India. The water market also remains a key focus of ouractivities: we were successful in winning a number of important projects aroundthe world, however as a percentage of our total units ordered, it fell due tothis market lagging behind the exceptional growth in power and oil and gas. UK Operations The UK domestic market remained quiet for much of the year as the watercompanies moved from AMP 3 to AMP 4. Encouragingly we saw an increase in quoteactivity towards the end of the year. We also saw an increased level of businessfor power station work over the prior year. The Bath plant remains our main electric actuator assembly plant. It performedparticularly well during the year reaching record output levels. Improvements tothe supply chain, coupled with some strategic dual source arrangements, meantthat we did not see a re-occurrence of the supply difficulties experienced in2004. Despite severe increases in some raw materials and energy costs ourcomponent cost increases were kept well under control due to continuedprocurement initiatives. Further engineering and procurement cost initiativeswere worked on during the year which should help mitigate further material &energy cost increases in 2006. Our Bath and Leeds Service and Retrofit organisations developed their businesseswell during the year, in terms of both their capabilities and financialperformance. Europe Although the business environment was somewhat subdued in some of our Europeanmarkets, especially France, our sales subsidiaries performed well, in some casesboosted by projects won through their local valve makers for export to theMiddle and Far East. The Italian and Spanish operations increased profits over2004, while the Dutch, German and French companies performed well and ended theyear with strong order books and good prospects for the current year. Businessfrom Eastern Europe and Russia was at similar levels to the prior year. A newRotork company has been registered in Russia in place of the existing salesoffice as we believe that there will be growing opportunities for our productsin this important oil and gas economy. The Americas The U.S. subsidiary based in Rochester, N.Y., had a very successful year. Itbuilt on its strength in the water and waste water business with themunicipalities who continued to make investments in expanding and improvingtheir infrastructure. We also saw modest improvements in the prospects for oil &gas business, especially in Mexico. The company benefited from increased exportbusiness won by U.S. valve makers who were assisted by a relatively weak USdollar. Jordan Controls, our subsidiary manufacturing process control actuators based inMilwaukee, saw an improvement in its order intake and financial performance. Alargely new management team has been put into place to help further develop thiselement of our business. The Canadian subsidiary's performance saw an improvement over the prior year dueto a better performance in the West. The Venezuelan subsidiary continued toperform well in a difficult environment. The Far East and the Rest of the World Rotork benefits from a strong presence and reputation in Asia, and it is thisarea which has seen the most significant growth in the period. China and Indiarepresent the biggest market opportunities and we achieved exceptional growth atour operations in both countries. Much of this related to power plantconstruction, but it was encouraging to see a strong increase in business fromChinese tank farm and gas projects. Our Indian subsidiary has assembly plants inChennai and Bangalore and continues to achieve excellent margins from theseplants. The decision was taken to make actuators in China and to this end a newcompany has been registered and a plant leased in Shanghai to assemble bothgearboxes and electric actuators in order to become more deeply embedded in thismarket with its continuing growth opportunities. Elsewhere all three sales companies in South East Asia had excellentperformances. The Korean and Japanese subsidiaries also managed improved profitperformances despite relatively poor domestic investment levels. RotorkAustralia increased its profits and performed well while our South Africasubsidiary had a disappointing performance. The Middle East is a key businessarea for the Company, although orders for projects from this region arefrequently routed through European and American OEMs. Project activity wasdriven by high levels of investment in oil & gas, including LNG activities aswell as other infrastructure projects. The Malaysian manufacturing plant experienced strong order intake especially inthe first half of the year and had by the end of the third quarter managed toincrease its capacity to cope with the increased business. The AWT product,which is made in the plant, is an important addition to our product range, whichhas assisted our marketing effort in a number of important non oil and gasmarkets. Rotork Fluid System Rotork Fluid System design, assemble and market heavy-duty fluid power valveactuators which are operated either pneumatically or hydraulically. The mainmarkets served by our product are oil & gas related and unlike the electricactuators the bulk of these products are destined for upstream applications,transmission and LNG plants and terminals. These areas are benefiting fromincreased investment by most of the international oil & gas companies. Theprincipal assembly plant is based in Lucca, Italy, with product also assembledin Rochester N.Y. and, with the acquisition of PCI, Northern Germany. We continued to see exceptional growth levels from this business with orderinput up 45.8% (30.4%) output up 35.8% (18.4%) and net profits up 23.9% (21.1%).The figures, excluding the acquisition of PCI, are in brackets. I am pleased toreport that margins recovered considerably in the second half of the year due toproject timings and some relief from the •/$ exchange rate. It was also notablethat the division made good progress towards reaching its target of representing20% of Group revenue. The 71% increase in the order book year on year means thatit is well placed to meet that target in 2006. PC Intertechnik (PCI) was purchased in March for £6.5m. It has an excellentreputation for the design and manufacture of high pressure actuators. Thisacquisition has done much to enhance our product offerings and strengthen ourmarketing position in Germany, Eastern Europe and Russia and has alsosubstantially added to our manufacturing capability and capacity. The profitswere impacted by IFRS intangible amortisation and other initial ownership costs. The division continued to build its worldwide marketing reach and benefited fromits investment in leveraging Rotork's worldwide sales companies' coverage of themarket. Most of these now have specialist fluid power capabilities including theability to package product locally by designing and mounting bespoke controlpackages on actuators supplied from the assembly plants. The Rotork operationsin Canada, Spain, France and The Netherlands all recorded good increases inbusiness and profitability. The Italian plant again saw a significant increasein sales and profits while the US operation turned a first half loss into aprofit and met its targets for the year. The business benefited from its expanding product range. In particular productsthat have been introduced within the past two years, including the electrichydraulic and gas over oil range, sold well. During the year a range of sub-seaproducts was designed and successfully sold into a challenging area of businesswhich is set to expand over the next few years. Rotork Gears Rotork Gears experienced good levels of demand in most of its markets, the mainexception being the UK. Order intake for the year was up 6.4%, sales output up7.1% and operating profits up 19.8% with both the Leeds and Dutch plant inLosser performing well. The key strategies of this business are to expand its marketing reach and reducethe costs of its products as it operates in a price sensitive environment. Goodprogress is being made on both of these fronts. During the year the US operationcontinued to make inroads into the important North American market and inJanuary 2006 we acquired the business assets of Omag Snc for £1.1m. The newcompany will be named Rotork Gears S.r.l. Omag is a respected gears manufacturerand supplier to the Italian heavy duty industrial valve industry and is based inMilan. This acquisition provides the division with a manufacturing and salesbase in the globally significant Italian valve market in addition to its sitesin Leeds, the USA, the Netherlands and China. Small scale manufacture ofgearboxes commenced in Shanghai at the start of 2005. As already mentioned a newlarger plant is being set up in Shanghai of which half will be devoted togearbox manufacture. It is anticipated that gearbox assembly will commence inthe second quarter of this year in the new plant. The business also completed asuccessful cost engineering exercise on two of its smaller gearbox ranges priorto tooling up for Chinese assembly. It is planned that the exercise will moveonto the other main product ranges this year. Research and Development The last quarter saw the successful introduction of a new generation controllerfor our IQ and IQT actuators. In addition to extending our market leadingdiagnostics this new platform allows easier set up and configuration throughlanguage specific menus. A unique feature allows alternate languages to be addedpost manufacture enabling the product to be optimised to meet the needs of ourinternational customer base. An all new infra-red setting device has also been developed that facilitates therapid transfer of logged data between the actuator and the control ormaintenance room. The new device is suitable for use within all of the areaswhere actuators are installed and will in future be shipped as standard. Assuch, it will eliminate the need for third party tools and increase thecustomer's access to data stored within the actuator. Bringing all of this together is a new version of our PC based Insightdiagnostic software which for the first time allows the actuator's embeddedsoftware to be non-intrusively upgraded in the field. In addition to enhancingour manufacturing flexibility and allowing more rapid product introduction, thefeature also enables post installation upgrade, which is in keeping with ourstrategy of offering through life support and maintenance. During 2005 we have continued to develop and enhance our network offeringsincluding research into various technologies that could increase the speed andflexibility of field communications. Our proprietary Pakscan system has alsobeen the focus of significant development work. Following the success of introducing our IQ technology into the Skilmatic andRFS products our UK based development engineers have been working closely withthose at our US subsidiary Jordan Controls on a number of longer termdevelopments focused on the process control market. Quality Even prior to ISO 9001: 2000, Rotork was completely committed to the keyprinciples of customer focus and continual improvement. Recent LRQA audits ofthe main manufacturing site in Bath have yielded no formal findings and haveincluded very positive summaries, commenting on the evident commitment toimprovement. The rigour applied to the review, testing and validation of newproducts prior to release in the market place, has also been noted favourably.One significant innovation was the 'gated' Design Review process where all newproducts and significant changes to established ones, are assessed at everycritical development stage. Prototypes are scrutinised for potential build orfield reliability problems, as well as compliance with agreed specifications. Asimple and highly effective 'traffic light' system is employed to note thestatus of each design, manufacturing or system aspect. Any 'red lights' at aDesign Review drive further consideration of the aspect in question beforeproceeding to the next 'gate' in the project. This has had a major, positiveimpact, preventing projects progressing with inherent problems, which proveintractable in the final stages. The most recent new product introductions are atestament to these controls. New and significantly revised products have beenimplemented with minimal initial build issues and excellent field reliabilityperformance from day one. One very powerful tool in identifying improvement opportunities is regularreview of Key Performance Indicators (KPI). Studying actual against targetperformance in principal customer facing objectives, highlights areas requiringparticular focus. Similarly, a comprehensive Vendor Rating (VR) mechanism,measuring suppliers against quality, delivery, service and cost parameters, hasproved extremely effective in driving improvement in suppliers' performance.Both the KPI and VR systems are run on the same 'traffic light' system as DesignReviews - any red is a trigger for immediate corrective relief. Pensions It has been clear over the last couple of years that deficits in defined benefitpension schemes have been adversely affected by a number of factors. The presentassessment of life expectancy is leading to an increase in liabilities ofschemes generally as these go through their actuarial valuation process. Thesteady reduction in bond yields over the recent past also increases schemeliabilities through less aggressive discounting of future costs as well as theprojection of lower future income levels for schemes. The effect of these issueson Rotork is felt through the main UK defined benefit scheme. We have takenaction to mitigate costs within the scheme and have taken no new entrants intothe scheme since 2002. In addition, members have accepted increases in theirlevel of contributions recognising the additional costs being borne by theemployer companies. Although we have not prepared a complete update to theactuarial valuation since the last full valuation in 2004, it is the opinion ofthe scheme's actuary that there is a risk that the deficit has risen since thattime and that a significant shortfall will be seen at the next valuation inMarch 2007. This would bring the actuarial deficit closer to the numbersreported in these accounts under IAS 19. In view of this the Board has decidedto make a further cash contribution of £10m over and above the employers'regular contributions to address this in some large part. The first tranche ofthis, £2m, was paid to the trustees in December 2005, and the balance will bespread through 2006 and early 2007. It is believed that by taking this actionnow the strength of the fund at the March 2007 actuarial valuation will be muchsounder than would have been the case. This will not affect the Company'sresults as the underlying cost to the business is taken into account in the IAS19 calculations. Tax Rotork is an international business with 60% of the Group's profits being earnedoutside the UK. A number of these jurisdictions have rates of corporate taxhigher than that in the UK. The effective rate of tax on profit was 33% in theyear (2004: 33%). We anticipate the rate of tax applicable to 2006 to be broadlysimilar to that in 2005. Performance Indicators The Group measures its performance internally through a range of indicatorslargely income and cash focussed. We have for some time published a number ofthese in graphical form, augmented more recently by information on totalshareholder return. International Financial Reporting Standards On June 21 2005 the Group released audited restated accounts for 2004 underIFRS. These accounts have been used as the comparative numbers in this reportand as a consequence there is no reference to UK GAAP (generally acceptedaccounting principles) within the Group financial statements. Dividends The Group's strong cash generation in the year has resulted in a closing cashbalance of £27.2m. In view of there being no immediate requirement for thiswithin the Group the Board is recommending that additional dividends be paidduring 2006 which will distribute £10m of this back to shareholders. At the timethat the last additional dividend was paid from 2004 profits, we said that in ayear where we made such a distribution, we would recommend that the ongoing, or"core" dividends be increased by an amount lower than earnings growth. The Board are therefore recommending payments of the following dividends in thecurrent year: • Final proposed dividend for 2005 of 9.90p - to be paid on 26 May 2006 to shareholders on the register on 5 May 2006 • Additional interim dividend for 2006 of 5.80p - to be paid on 27 July 2006 to shareholders on the register on 16 June 2006 • Regular interim dividend for 2006 to be announced with interim results - to be paid on 28 September 2006 to shareholders on the register on 8 September 2006 • Additional interim dividend for 2006 of 5.80p - to be paid on 21 December 2006 to shareholders on the register on 1 December 2006. The final proposed dividend for 2005 represents a 2% increase over the final for2004. The two dividends payable in July and December between them represent thedistribution of £10m additional dividend for 2006. Treasury The Group's treasury function in Bath manages financial risks to the Group.These primarily relate to foreign currency exposure as a result of theinternational nature of the Group's business, and managing cash. The main currency exposure results from trading transactions between ourproduction plants, trading companies and customers around the world. Overallaround 30% of our income streams are denominated in US dollars (actual or nearequivalent), 20% in euros and 15% in sterling. The rest is a mix of otherconvertible currencies across the operating companies. The main instrument forcovering this transaction exposure is the simple forward cover derivativecontract, and this is used for known exposures only where we can accuratelypredict income. No speculative or non trading hedging takes place within theGroup. The weighted average rates for translation of our two main trading currenciesinto sterling over the last few years have been: US dollar Euro • 2002 1.52 1.58 • 2003 1.66 1.44 • 2004 1.83 1.46 • 2005 1.80 1.46 Overall then the movement in average rates between 2004 and 2005 has meant thatthe effect of currency on our trading profits has been relatively small, under£500k, although there are balance sheet differences due to the spot rates at thetwo year ends having moved, materially in the case of the dollar. As a guide aone cent movement in the US dollar can have an £150k effect on profit if takenover a full year, and a one cent movement in the euro an equivalent effect of£150k. In recent years we have developed overseas component sources and thistrend continued in the year. The production units outside the UK sourceprimarily in their own currencies, with the exception of the main facility inthe US which sources mainly from the UK. This approach to international sourcingprovides a further hedge to the effect of currency movements on our businesses. Conversion of profit into cash is traditionally strong in Rotork due largely tothe business model, which does not require a large capital base to support it.It is believed that this model allows management of the divisional businesses tofocus on customer facing issues and profitability to a greater degree than oncapital and production. Receivables collection has been good again in the yearand Group debtor days over the last three years have seen the benefit ofinitiatives internally focussing on this. Inventory has increased over the lasttwo years due in part to the increasing complexity of our product range, theimpact of the Rotork Fluid System business which has very large projects as afeature of its business, and the high work in progress at the end of Decemberresulting from the very strong order book at the end of the year. Internal Audit The Group has an effective and well-developed internal audit function that hasbeen moulded over many years. Audit work is performed by senior finance stafffrom a number of our business units based on a common training process and auditwork programme developed with assistance from our Group auditors, KPMG. Thismethodology provides feedback through regular reviews, and allows members of theteam to experience the control environment in different business areas whileenabling us to develop a common message throughout the Group. The auditprogramme has inbuilt key performance indicators which are reported on, togetherwith summaries of work performed and issues raised, to each Audit Committeemeeting throughout the year. Environment 2005 saw a major milestone in the development of the Environment ManagementSystem (EMS) at the main Bath site when it achieved independent verification ofcompliance with ISO 14001. The benefits of the management system itself areequally remarkable. With the new environmental legislation being introduced on aregular basis, having proper mechanisms in place to address the new requirementshas proved invaluable. There have also been some significant cost benefits,mainly from reducing waste to landfill by 46% during 2005. As one of the site'smost significant environmental impacts, waste stream management has proved afocal point of the EMS. The reduction in waste to landfill was achieved both byminimising waste generation and by increased recycling, especially of wood andcardboard. While exempt from the specific provisions of the WEEE and RoHS directives,Rotork is making every effort to reduce the environmental impact of itsproducts. Wherever possible, new product components are marked with theappropriate standard EU recycling marks or labels. Information has also beenincluded in product handbooks regarding the materials the units contain and anyspecific advice re disposal. Rotork remains committed to meeting the requirements for inclusion in theFTSE4Good index and to the 10 principles of the Global Compact. Rotork is veryconscious of the need for improved awareness of environmental issues and theneed to minimise the Group's environmental impact. During 2005 a project waslaunched to improve the Group's reporting of environmental performance data.This project is now well advanced and the number of subsidiaries reporting theirenvironmental data has increased significantly from 7 to 30. Over the next twoyears, this project will further extend reporting on Rotork's global operationalimpacts and, where possible, take action to reduce them. Details of Rotork'sglobal environmental performance are published in the Rotork EnvironmentalReport on the Rotork Web Site at www.rotork.com Jeremy Fry It was with great sadness that we learnt of the death of our founder, JeremyFry, in July. Jeremy founded Rotork Engineering Company in 1957 and beganoperations with about a dozen employees from his home in Bath, Widcombe Manor.Jeremy recognised the potential of developing a 'valve actuator' in an era whenalmost all valves were manually operated. Everyone associated with Rotork is indebted to his vision, enterprise and energyin founding Rotork and setting it on its path in becoming one of the mostsuccessful UK engineering companies. Anyone who worked with Jeremy was instantlyaware of his restless search for the right answer to any problem, hiswillingness to discard conventional wisdom and ability to think from firstprinciples. When I joined Rotork from a large industrial group over 30 years ago I wasimmediately attracted to the culture of the Company which reflected Jeremy'sunique contribution to the world of business, engineering and, in our case,valve actuators. Although Rotork has seen many changes since his retirement in1984 I believe that many of his principles still form the Company's core values.The most important of these were his innovative approach to product design, hisinternational outlook to business and markets, his encouragement of young talentand his keen interest in the welfare of everyone working for the Company. Employees I would again like to thank all of our employees for the dedication andenthusiasm which they display in furthering Rotork's business. It isparticularly encouraging when their commitment to serving our customers isrewarded by the level of financial success experienced in 2005. Bill WhiteleyChief Executive27 February 2006 Consolidated Income Statementfor the year ended 31 December 2005 Notes 2005 2004 £000 £000 Revenue 2 174,839 146,883 Cost of sales (95,358) (79,097) ______ ______ Gross profit 79,481 67,786 Other income 79 136Distribution costs (1,959) (1,816)Administrative expenses (41,002) (35,638)Other expenses (69) (36) ______ ______ Operating profit 2 36,530 30,432 Financial income 4,479 4,854Financial expenses (4,352) (3,780) ______ ______ Profit before tax 36,657 31,506 Tax expense 3 (12,043) (10,508) ______ ______ Profit for the year 24,614 20,998 ===== ===== Pence Pence Basic earnings per share 4 28.6 24.5Diluted earnings per share 4 28.4 24.3 Consolidated Balance Sheetat 31 December 2005 Notes 2005 2004 £000 £000 Assets Property, plant and equipment 17,214 13,877Intangible assets 22,038 20,169Deferred tax assets 9,115 6,988Other receivables 633 489 ______ ______ Total non-current assets 49,000 41,523 Inventories 26,697 21,015Trade receivables 36,492 34,060Current tax 2,225 2,176Other receivables 2,560 2,525Cash and cash equivalents 27,878 25,298 ______ ______ Total current assets 95,852 85,074 ______ ______Total assets 144,852 126,597 ===== ===== Equity Issued equity capital 4,310 4,300Preference shares - 47Share premium 5,609 4,993Reserves 2,405 425Retained earnings 68,241 58,489 ______ ______ Total equity 5 80,565 68,254 ====== ======Liabilities Interest-bearing loans and borrowings 236 268Employee benefits 6 25,078 23,569Deferred tax liabilities 1,164 1,155Provisions 654 521 ______ ______ Total non-current liabilities 27,132 25,513 Bank overdraft 698 473Interest bearing loans and borrowings 1,016 253Trade payables 14,937 15,609Current tax 5,620 5,779Other payables 13,129 9,674Provisions 1,755 1,042 ______ ______ Total current liabilities 37,155 32,830 Total liabilities 64,287 58,343 ______ ______Total equity and liabilities 144,852 126,597 ====== ====== Total equity as shown above for 2004 contains £47,000 non-equity on an FRS 4basis. These financial statements were approved by the Board of Directors on 27February 2006 and were signed on its behalf by WH Whiteley and RE Slater,Directors. Consolidated Statement of Cash Flowsfor the year ended 31 December 2005 2005 2005 2004 2004 £000 £000 £000 £000 Cash flows from operating activities Profit for the year 24,614 20,998Adjustments for:Amortisation of intangibles 179 70Amortisation of development costs 293 322Depreciation 2,671 2,577Equity settled share based payment expense 312 208Loss / (profit) on sale of fixed assets 22 (72)Financial income (4,479) (4,854)Financial expenses 4,352 3,780Income tax expense 12,043 10,508 ______ ______ 40,007 33,537Increase in inventories (3,359) (2,600)Increase in trade and other receivables (685) (6,228)Increase in trade and other payables 1,325 4,130Difference between pension charge and cash (3,243) (5,633)contributionIncrease / (decrease) in provisions 709 (130)Increase in other employee benefits 1,509 748 ______ ______ 36,263 23,824Income taxes paid (11,296) (10,441) ______ ______ Cash flows from operating activities 24,967 13,383 Investing activities Purchase of tangible fixed assets (1,396) (3,099)Development costs capitalised (291) (102)Sale of tangible fixed assets 94 295Acquisition of subsidiary net of cash acquired (7,227) (912)Interest received 776 973 ______ ______ Cash flows from investing activities (8,044) (2,845) Financing activities Issue of ordinary share capital 626 458Purchase of ordinary share capital (2,236) (691)Purchase of own preference shares - (5)Interest paid (232) (136)Repayment of amounts borrowed 677 188Repayment of finance lease liabilities (100) (58)Dividends paid on ordinary shares (13,437) (17,751)Dividends paid on preference shares - (4) ______ ______ Cash flows from financing activities (14,702) (17,999) ______ ______ Net increase / (decrease) in cash and cash 2,221 (7,461)equivalentsCash and cash equivalents at 1 January 24,825 32,134Effect of exchange rate fluctuations on cash 134 152held ______ ______Cash and cash equivalents at 31 December 27,180 24,825 ====== ====== Consolidated Statement of Recognised Income and ExpenseFor the year ended 31 December 2005 2005 2004 £000 £000 Foreign exchange translation differences 2,190 (1,212)Actuarial loss in pension scheme (3,452) (5,792)Movement on deferred tax relating to actuarial loss 2,552 237Effective portion of changes in fair value of cash flow hedges (487) - ______ ______ Net gain / (loss) recognised directly in equity 803 (6,767) Net profit for the year 24,614 20,998 ______ ______ Total recognised income and expense 25,417 14,231 =====Reclassification of preference shares (47)Effective cash flow hedges at 1 January 2005 277 _____ 25,647 ===== Notes to the Financial Statementsfor the year ended 31 December 2005 Except where indicated, values in these notes are in £'000 Rotork plc is a Company domiciled in England. The consolidated financialstatements of the Company for the year ended 31 December 2005 comprise theCompany and its subsidiaries (together referred to as the Group). The accountingpolicies contained below in note 1 and all the notes all relate to the Groupstatements. 1. Accounting policies Basis of preparation The Group is preparing its consolidated financial statements in accordance withInternational Financial Reporting Standards and its interpretation issued by theInternational Accounting Standards Board that have been adopted by the EU ("Adopted IFRS") for the first time and consequently has applied IFRS 1. Anexplanation of how the transition to Adopted IFRSs has affected the reportedfinancial position, financial performance and cash flows of the Group isprovided in the restatement of the 2004 audited accounts issued on 21 June 2005. In addition to exempting companies from the requirement to restate comparativesfor IAS 32 and IAS 39 (which the Group has taken), IFRS 1 grants certainexemptions from the full requirements of IFRSs on transition. The followingexemptions have been taken by the Group in the preparation of its consolidatedfinancial statements for the year ended 31 December 2005: • Business combinations - Business combinations that took place prior to 1 January 2004 have not been restated. • Fair value or revaluation as deemed cost - At the date of transition, fair value has been used as deemed cost for properties previously measured at fair value. • Employee benefits - All cumulative actuarial gains and losses on defined benefit plans have been recognised in equity at 1 January 2004. • Cumulative translation differences - Cumulative translation differences for all foreign operations have been set to zero at 1 January 2004. In preparing the 2004 and 2005 financial information within its consolidatedfinancial statements under Adopted IFRS, the directors have elected to adopt theendorsed December 2004 amendment to IAS 19 -Employee Benefits and the April 2005endorsed amendment to IAS 39 - Cash Flow Hedge Accounting of Intra-groupForecast Transactions before they were endorsed by the EU. Basis of accounting The consolidated financial statements have been prepared under the historicalcost convention with the exception of derivative financial instruments whichhave been accounted for in accordance with IAS 32 and IAS 39 from 1 January2005. The accounting policies set out in the restatement of the 2004 auditedaccounts issued on 21 June 2005 have been consistently applied in preparing anopening IFRS balance sheet at 1 January 2004 for the purposes of transition toIFRS and for preparing the 2004 and 2005 financial information within itsconsolidated financial statements for the year ended 31 December 2005 with theexception of IAS 32 and IAS 39 which were applied from 1 January 2005. Theaccounting policies have been applied consistently in respect of Group entities. The preparation of consolidated financial statements in conformity with AdoptedIFRSs requires the directors to make judgements, estimates and assumptions thataffect the application of policies and reported amounts of assets andliabilities, income and expenses. The estimates and associated assumptions arebased on historical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis ofmaking the judgements about carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results may differ from theseestimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. The key areas where estimates have been used and the assumptionapplied are in the impairment testing of goodwill and in assessing the definedbenefit pension scheme liabilities. Status of this preliminary announcement The financial information contained in this preliminary announcement does notconstitute the Company's statutory accounts for the years ended 31 December 2005or 2004. Statutory accounts for 2004, which were prepared under UK GAAP, havebeen delivered to the registrar of companies, and those for 2005, prepared underInternational Financial Reporting Standards as adopted by the EU, will bedelivered in due course. The auditors have reported on these accounts, theirreports were unqualified and did not contain statements under section 237 (2) or(3) of the Companies Act 1985. Full financial statements for the year ended 31December 2005, will shortly be posted to shareholders, and after adoption at theAnnual General Meeting on 21 April 2006 will be delivered to the registrar. 2. Analysis of revenue, profit and net assets The primary format used for segmental reporting is by business segment as thisreflects the internal management structure and reporting of the Group. Segmentresults, assets and liabilities include items directly attributable to a segmentas well as those that can be allocated on a reasonable basis. Unallocatedexpenses comprise corporate expenses and unallocated assets and liabilitiescomprise cash, borrowings tax assets and liabilities respectively. Inter grouptrading is determined on an arm's length basis. Business segments The Group comprises the following business segments: Electrics - the design, manufacture and sale of electric valve actuators Gears - the design, manufacture and sale of gearboxes, adaption and ancillariesfor the valve industry Fluid system - the design, manufacture and sale of heavy duty pneumatic andhydraulic valve actuators Geographic segments Rotork has a worldwide presence in all three business segments through itssubsidiary selling offices and through an agency network. A full list oflocations can be found at www.rotork.com. Analysis by operation: Electrics Gears Fluid system Eliminations Consolidated 2005 2005 2005 2005 2005 Revenue from external customers 128,535 13,983 32,321 - 174,839Inter-segment revenue - 5,080 - (5,080) - ______ ______ ______ ______ ______Total revenue 128,535 19,063 32,321 (5,080) 174,839 ====== ====== ====== ====== ====== Segment result 30,912 3,825 3,669 - 38,406 ====== ====== ====== ======Unallocated expenses (1,876) ______Operating profit 36,530Net financing income 127Income tax expense (12,043) ______Net profit for the year 24,614 ===== Electrics Gears Fluid system Eliminations Consolidated 2004 2004 2004 2004 2004 Revenue from external customers 109,345 13,736 23,802 - 146,883Inter-segment revenue - 4,070 - (4,070) - ______ ______ ______ ______ ______Total revenue 109,345 17,806 23,802 (4,070) 146,883 ====== ====== ====== ====== ====== Segment result 25,719 3,192 2,962 - 31,873 ====== ====== ====== ======Unallocated expenses (1,441) ______Operating profit 30,432Net financing income 1,074Income tax expense (10,508) ______Net profit for the year 20,998 ====== Electrics Gears Fluid system Unallocated Consolidated 2005 2005 2005 2005 2005Segment assets 63,973 12,964 28,691 39,224 144,852 ===== Segment liabilities 44,666 2,743 8,145 8,733 64,287 ===== Depreciation 2,228 219 696 - 3,143Non-cash items 527 12 213 32 784Capital expenditure 1,024 128 480 - 1,632 Electrics Gears Fluid system Unallocated Consolidated 2004 2004 2004 2004 2004 Segment assets 57,862 12,072 22,200 34,463 126,597 ===== Segment liabilities 40,357 2,434 7,624 7,928 58,343 ===== Depreciation 2,203 284 482 - 2,969Non-cash items 39 9 57 332 437Capital expenditure 2,628 177 643 - 3,448 Analysis by Geographical segment Europe Americas Rest of the Unallocated Consolidated World 2005 2005 2005 2005 2005 Revenue from external customers by 73,967 50,544 50,328 - 174,839location of customer Segment assets by location of assets 67,102 23,578 14,948 39,224 144,852 Capital expenditure by location of 1,288 168 176 - 1,632assets Analysis by Geographical segment Europe Americas Rest of the Unallocated Consolidated World 2004 2004 2004 2004 2004 Revenue from external customers by 66,036 41,704 39,143 - 146,883location of customer Segment assets by location of assets 58,491 20,146 13,497 34,463 126,597 Capital expenditure by location of 2,380 201 867 - 3,448assets All of the activities of the Group in the year arise from continuing operations.The 2004 segment results and assets and liability allocations have been restatedto reflect a more appropriate allocation of share scheme costs and liabilities. 3. Income tax expense recognised in the income statement 2005 2005 2004 2004Current tax:UK Corporation tax on profits for the year 8,976 6,258Double tax relief (5,441) (1,995)Adjustment in respect of prior years 70 156 ______ ______ 3,605 4,419 Overseas tax on profits for the year 7,470 5,879Adjustment in respect of prior years 22 21 ______ ______ 7,492 5,900 ______ ______Total current tax 11,097 10,319 Deferred tax:Origination and reversal of other temporary 1,089 129differencesAdjustment to estimated recoverable amounts of (143) 60deferred tax assets arising in previous periods ______ ______ Total deferred tax 946 189 _____ _____Tax charge on profit on ordinary activities 12,043 10,508 ===== ===== Effective tax rate (based on profit before tax) 32.9% 33.4% Profit before tax 36,657 31,506 Profit on ordinary activities multiplied by standard 10,997 9,452rate of corporation tax in the UK of 30% Effects of:Non deductible expenses 577 150Unrelieved losses (38) 25Higher tax rates on overseas earnings 558 644Adjustments to tax charge in respect of prior (51) 237periods ______ ______Current tax charge for period 12,043 10,508 ====== ====== Deferred tax of £342,000 (2004: £175,000) in respect of share based payments hasbeen recognised directly in equity in the period. The Group continues to expect its effective rate of corporation tax to beslightly higher than the standard UK rate due to higher rates of tax in the US,Canada, France, Germany, Italy and India. No deferred tax is recognised on the unremitted earnings of overseassubsidiaries. As the unremitted earnings are continually reinvested by theGroup, no tax is expected to be payable on them in the foreseeable future. There is an unrecognised deferred tax liability for temporary differencesassociated with investments in subsidiaries. Rotork plc controls the dividendpolicies of its subsidiaries and subsequently the timing of the reversal of thetemporary differences. It is not practical to quantify the unrecognised deferredtax liability as acknowledged within paragraph 40 of IAS 12. 4. Earnings per share Basic earnings per share Earnings per share is calculated for both the current and previous years usingthe profit attributable to the ordinary shareholders for the year. The earningsper share calculation is based on 86.1 million shares (2004: 85.8 millionshares) being the weighted average number of ordinary shares in issue for theyear. 2005 2004Net profit attributable to ordinary shareholdersProfit for the year 24,614 20,998Dividends on non-redeemable cumulative preference shares - (4) ______ ______Net profit attributable to ordinary shareholders 24,614 20,994 ====== ====== Weighted average number of ordinary shares Issued ordinary shares at 1 January 85,867 85,832Effect of own shares held 62 (127)Effect of shares issued under options 130 96 ______ ______Weighted average number of ordinary shares for the year ended 31 December 86,059 85,801 ====== ====== Diluted earnings per share Diluted earnings per share is based on the profit for the year attributable tothe ordinary shareholders and 86.7 million shares (2004: 86.4 million shares).The number of shares is equal to the weighted average number of ordinary sharesin issue adjusted to assume conversion of all dilutive potential ordinaryshares. The Company has two categories of dilutive potential ordinary shares:those share options granted to employees where the exercise price is less thanthe average market price of the Company's ordinary shares during the year andcontingently issuable shares awarded under the Long-term incentive plan. 2005 2004Net profit attributable to ordinary shareholders (diluted)Net profit attributable to ordinary shareholders 24,614 20,994 ====== ====== Weighted average number of ordinary shares (diluted) Weighted average number of ordinary shares for the year ended 31 December 86,059 85,801Effect of share options on issue 108 86Effect of LTIP shares on issue 545 482 ______ ______Weighted average number of ordinary shares (diluted) for the year ended 31 86,712 86,369December ====== ====== 5. Capital and reserves Issued Preference Share Translation Capital Hedging Retained Total equity shares premium reserve redemption reserve earnings capital reserve Balance at 1 4,292 50 4,543 - 1,634 - 60,567 71,086January 2004Profit for the - - - - - - 20,998 20,998financial yearOther items in the - - - (1,212) - - (5,555) (6,767)statement ofrecognised incomeand expenseEquity settled - - - - - - 228 228transactions net oftaxShare options 8 - 450 - - - - 458exercised byemployeesOwn ordinary shares - - - - - - (691) (691)acquiredOwn ordinary shares - - - - - - 702 702awarded under shareschemesOwn preference - (3) - - 3 - (5) (5)shares acquiredDividends to - - - - - - (17,755) (17,755)shareholders _____ _____ _____ _____ _____ _____ _____ _____Balance at 31 4,300 47 4,993 (1,212) 1,637 - 58,489 68,254December 2004 Adoption of IAS 32 - (47) - - - 277 - 230& IAS 39 _____ _____ _____ _____ _____ _____ _____ _____Restated opening 4,300 - 4,993 (1,212) 1,637 277 58,489 68,484balanceProfit for the - - - - - - 24,614 24,614financial yearOther items in the - - - 2,190 - (487) (900) 803statement ofrecognised incomeand expenseEquity settled - - - - - - 562 562transactions net oftaxShare options 10 - 616 - - - - 626exercised byemployeesOwn ordinary shares - - - - - - (2,236) (2,236)acquiredOwn ordinary shares - - - - - - 1,149 1,149awarded under shareschemesDividends to - - - - - - (13,437) (13,437)shareholders _____ _____ _____ _____ _____ _____ _____ _____Balance at 31 4,310 - 5,609 978 1,637 (210) 68,241 80,565December 2005 ===== ===== ===== ===== ===== ===== ===== ===== Share capital and share premium Number of shares (000) 5p Ordinary 5p Ordinary 5p Ordinary 5p Ordinary £1 shares shares shares shares Non-redeemable 9.5% Preference Authorised Issued and Authorised Issued and shares full paid full paid 2005 2005 2004 2004 2004 On issue at 1 January 5,449 4,300 5,449 4,292 50Purchased for cash and cancelled - - - - (3)Issued under employee share schemes - 10 - 8 - _____ _____ _____ _____ _____On issue at 31 December - fully paid 5,449 4,310 5,449 4,300 47 ===== ===== ===== ===== ===== Number of shares 108,990 86,192 108,990 85,944 ===== ===== ===== ===== Dividends The following dividends were paid in the year: 2005 2004 9.7p (2004: 9.5p) per qualifying ordinary share 8,342 8,1435.9p (2004:5.35p) per qualifying ordinary share 5,095 4,5942004 additional interim dividend 5.85p per qualifying ordinary share - 5,014 _____ _____ 13,437 17,751 ===== ===== After the balance sheet date the following dividends were proposed by thedirectors. The dividends have not been provided for and there are no corporationtax consequences. 2005 2004Final proposed dividend 9.9p per qualifying ordinary share 8,521 =====9.7p per qualifying ordinary share 8,303 ===== Additional interim dividends proposed for 2006 5.8p per qualifying ordinary share 5,0005.8p per qualifying ordinary share 5,000 _____ 10,000 ===== 6. Employee benefits 2005 2004Recognised liability for defined benefit obligations: Present value of unfunded obligations 89,501 74,486 Fair value of plan assets (69,125) (54,650) ______ ______ 20,376 19,836 Defined contribution scheme liabilities 543 502Employee bonus and incentive plan 2,113 1,663Long-term incentive plan 1,542 1,075Employee indemnity provision 357 356Liability for long-service leave 147 137 ______ ______ 25,078 23,569 ===== ===== Defined benefit pension liabilities The Group makes a contribution to three defined benefit plans to providebenefits for employees upon retirement. Movements in the present value of defined benefit obligations 2005 2004 Liabilities at 1 January 74,486 64,203Current service costs 1,378 1,502Member contributions 506 440Interest cost 4,048 3,556Benefits paid (1,339) (1,731)Actuarial loss 9,930 6,783Currency losses / (gains) 492 (267) _____ _____Liabilities at 31 December 89,501 74,486 ===== ===== Movements in fair value of plan assets 2005 2004 Assets at 1 January 54,650 44,700Expected return on scheme assets 3,770 3,477Employer contributions 4,568 7,040Member contributions 506 440Benefits paid (1,339) (1,731)Actuarial gains 6,693 884Currency gains / (losses) 277 (160) _____ _____Assets at 31 December 69,125 54,650 ===== ===== Expense recognised in the income statement 2005 2004 Current service costs 1,378 1,502Interest on obligation 4,048 3,556Expected return on plan assets (3,770) (3,477) _____ _____ 1,656 1,581 ===== ===== The expense is recognised in the following line items in the income statement 2005 2004 Cost of sales 351 382Administrative expenses 1,027 1,120Net financing income 278 79 _____ _____ 1,656 1,581 ===== ===== Actuarial gain on plan assets 6,693 884Actuarial loss from liabilities (9,930) (6,783)Currency (losses) / gains (215) 107 _____ _____Net actuarial loss recognised in Consolidated Statement of Recognised Income and (3,452) (5,792)Expense ===== ===== Cumulative actuarial loss recognised in Consolidated Statement of Recognised (3,452)Income and Expense ===== 2005 2004 2003 2002 2001 Defined benefit obligation (89,501) (74,486) (64,203) (54,400) (50,300)Scheme assets 69,125 54,650 44,700 37,800 44,400 _____ _____ _____ _____ _____Deficit (20,376) (19,836) (19,503) (16,600) (5,900) Experience adjustments on (9,930) (6,783) (6,750) (1,100)liabilitiesExperience adjustments on assets 6,693 884 3,700 (10,300)Experience adjustments on currency (215) 107 50 100 Liability for defined benefit obligations The principal actuarial assumptions at the balance sheet date (expressed asweighted averages) UK scheme US scheme Average (% per annum) (% per annum) (% per annum) 2005 2004 2003 2005 2004 2003 2005 2004 2003Discount rate 4.70 5.30 5.45 5.40 5.66 6.10 4.74 5.32 5.48Rate of increase in 4.0 3.9 3.8 4.5 4.5 4.5 4.03 3.93 3.84salariesRate of increase in 3.0 2.9 2.8 0.0 0.0 0.0 2.85 2.78 2.66pensions (post May2000)Rate of increase in 4.5 4.5 4.5 0.0 0.0 0.0 4.27 4.31 4.28pensions (pre May2000)Rate of price 3.0 2.9 2.8 3.5 3.5 3.5 3.03 2.93 2.84inflation The expected rates of return were: Expected rate of return % 2005 2004 2003Equities 7.40 7.90 8.20Bonds 4.40 4.90 5.10Other 4.40 4.90 4.90US deposit administration contract 6.00 6.00 6.00 The mortality assumption used is PA92 c2004 with an adjustment to the discountrate of -0.1% per annum to allow for future improvements in mortality. Defined contribution pension liabilities The Group makes a contribution to a number of defined contribution plans aroundthe world to provide benefits for employees upon retirement. Total expenserelating to these plans in the year was £519,000 (2004: £533,000). This information is provided by RNS The company news service from the London Stock Exchange