Rotork Regulatory News (ROR)

21 Jun 2005 07:00

Rotork PLC21 June 2005 PART 1 Embargoed until 7.00am, 21 June 2005 Rotork p.l.c. 2004 accounts restated and audited as compliant with International FinancialReporting Standards Rotork, the specialist engineer, today notifies its 2004 accounts restated andaudited as compliant with International Financial Reporting Standards ("IFRS"). The adoption of IFRS will first apply to the Group's financial results for thesix months ending 30 June, 2005. Previously Rotork reported under UK generallyaccepted accounting principles (UK GAAP). The new accounting standards change the basis on which many of the figures inthe accounts are calculated, and this statement should be read in conjunctionwith the full audited restatement also announced today. The adoption of IFRSresults in changes to the Company's income statement for the 12 months ended 31December 2004, announced on 3 March, 2005. These restated accounts for 2004 will also be used as the comparative figureswhen the results for 2005 are released. The major impacts of IFRS accounting standards on income are shown below. • Cost of share schemes - This relates to all employee share schemes operated by the Group. Previously only the performance related share scheme "LTIP" resulted in a charge to income, the share option scheme being satisfied by the issue of new shares with no income statement charge. The new standard requires that all share schemes result in a charge against profits and prescribes a method for calculating the LTIP charge. This creates an overall reduction in the charge to profit of £12k in 2004. • Treatment of intangibles - IFRS requires a new approach to the allocation of purchase price on an acquisition to reduce the amount of the carrying value of goodwill by allocating purchase price to amortisable intangibles. As a result, an additional charge of £70k against profit appears in relation to the 2004 acquisition of Deanquip. • Goodwill amortisation - The 2004 goodwill amortisation of £1,293k is reversed as goodwill on earlier acquisitions are fixed at the 1 January 2004 value and subject to annual impairment tests. • Capitalised development costs - This relates to the requirement to attribute value to the development of products under a prescribed formula. An additional charge against profit of £220k appears in the 2004 accounts. The Balance Sheet has an additional net asset of £772k relating to historic development costs now capitalised. • Treatment of exchange gains. This standard requires exchange gains, mainly on the conversion of foreign currency cash balances, to be shown after the definition of operating income, rather than within it. 2004 had an exchange gain relating to foreign cash held, credited within administration costs. This now comes out of operating income into financial income. The result is that operating income drops by £440k, but Profit before Tax is unchanged. • Basic EPS as reported was 23.2p, under the restated accounts it is 24.5p. • Balance sheet reclassification - IFRS requires a number of assets and liabilities to be presented differently. The most significant change is the presentation of all deferred tax assets as non-current assets rather than as current assets or a reduction in the defined benefit pension liability. Furthermore, employee related accruals, previously shown in current liabilities, are now disclosed within employee benefits which is within non-current liabilities and there is some reanalysis between the lines within equity. Attached to this statement are the 2004 income statement reconciliation andbalance sheet reconciliation at 31 December 2004 to the IFRS accounts nowreleased. A second statement notified today provides the full restated accounts for 2004. Additionally, Rotork announces that today a meeting will be held with analystsat the Lucca plant in Italy, the main factory operated by the Rotork FluidSystem division which is one of the main growth areas for the Group. No newtrading information will be provided by the Company at this event. Tradingremains in line with the Trading Update made at the Annual General Meeting on 22April 2005. The Company's announcement of its interim 2005 results will be made on 3 August2005. For further information on this please contact: For further information, please contact: Rotork p.l.c. Tel: 01225 733200Bill Whiteley, Chief ExecutiveBob Slater, Finance Director Financial Dynamics Tel: 020 7269 7224Sally Lewis IFRS restated 2004 audited accounts Income statement UK Share Amortisation Capitalised Disclosure Reverse IFRS GAAP based of acquired development of exchange goodwill payments intangibles costs gains write down Revenue 146,883 146,883 Cost of sales (79,030) (17) (50) (79,097) Gross profit 67,853 (17) (50) 0 0 0 67,786 Overheads (37,996) 29 (20) (220) (440) 1,293 (37,354) Profits from operations 29,857 12 (70) (220) (440) 1,293 30,432 Net financing income 634 440 1,074 Profit before tax 30,491 12 (70) (220) 0 1,293 31,506 Tax expense (10,591) (4) 21 66 (10,508) Net profit for the year 19,900 8 (49) (154) 0 1,293 20,998 IFRS restated 2004 audited accounts Balance sheet UK Share Intangibles Capitalised Reverse Reverse Presentation IFRS GAAP based acquired development goodwill declared adjustment payments write down dividend PP&E 13,877 13,877 Intangible assets 18,174 (70) 772 1,293 20,169 Deferred tax assets 173 21 6,794 6,988 Other receivables 489 489 Total non-current assets 32,540 173 (49) 772 1,293 0 6,794 41,523 Inventories 21,015 21,015 Trade receivables 34,060 34,060 Current tax 2,176 2,176receivable Other receivables 3,442 (917) 2,525 Cash and cash equivalents 25,298 25,298 Total current 85,991 0 0 0 0 0 (917) 85,074assets Total assets 118,531 173 (49) 772 1,293 0 5,877 126,597 Issued capital 4,300 4,300 Preference shares 47 47 Share premium 4,993 4,993 Reserves 4,042 (3,617) 425 Retained earnings 44,753 716 (49) 541 1,293 8,342 2,893 58,489 Total equity 58,135 716 (49) 541 1,293 8,342 (724) 68,254 Loans and 268 268borrowings Employee benefits 13,885 (543) 10,227 23,569 Deferred tax 275 231 649 1,155liabilities Provisions 1,159 (638) 521 Total non-current liabilities 15,587 (543) 0 231 0 0 10,238 25,513 Bank overdraft 473 473 Loans and 253 253borrowings Trade payables 15,609 15,609 Current tax 5,779 5,779 Other payables 21,653 (8,342) (3,637) 9,674 Provisions 1,042 1,042 Total current 44,809 0 0 0 0 (8,342) (3,637) 32,830liabilities Total liabilities 60,396 (543) 0 231 0 (8,342) 6,601 58,343 Total equity and liabilities 118,531 173 (49) 772 1,293 0 5,877 126,597 This information is provided by RNS The company news service from the London Stock Exchange MORE TO FOLLOW