2. ADJUSTED PERFORMANCE MEASURES
Spectris uses adjusted figures as key performance measures in addition to those reported under IFRS. Adjusted figures are stated before amortisation of acquisition-related intangible assets, goodwill charges, profits or losses on termination or disposal of businesses or major fixed assets, unrealised changes in the fair value of financial instruments, related tax effects and other tax items which do not form part of the underlying tax rate (see Note 6).
The adjusted performance measures are derived from the reported figures under IFRS as follows:
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Adjusted operating profit | |||
| Operating profit as reported under IFRS | 32.0 | 27.3 | 64.9 |
| Amortisation of acquisition-related intangible assets | 0.7 | 0.5 | 1.2 |
| Goodwill impairment charge | - | - | 7.4 |
| Adjusted operating profit | 32.7 | 27.8 | 73.5 |
| Process technology |
In-line instrumentation |
Electronic controls |
2006 Half year Total £m |
|
|---|---|---|---|---|
| Adjusted operating profit by segment - June 2006 | ||||
| Segment result under IFRS | 16.1 | 8.6 | 7.3 | 32.0 |
| Amortisation of acquisition-related intangible assets | 0.7 | - | - | 0.7 |
| Adjusted operating profit | 16.8 | 8.6 | 7.3 | 32.7 |
| Process technology |
In-line instrumentation |
Electronic controls |
2005 Half year Total £m |
|
|---|---|---|---|---|
| Adjusted operating profit by segment - June 2005 | ||||
| Segment result under IFRS | 10.5 | 8.0 | 8.8 | 27.3 |
| Amortisation of acquisition-related intangible assets | 0.5 | - | - | 0.5 |
| Adjusted operating profit | 11.0 | 8.0 | 8.8 | 27.8 |
| Process technology |
In-line instrumentation |
Electronic controls |
2005 Full year Total £m |
|
|---|---|---|---|---|
| Adjusted operating profit by segment - December 2005 | ||||
| Segment result under IFRS | 31.2 | 15.5 | 18.2 | 64.9 |
| Amortisation of acquisition-related intangible assets | 1.2 | - | - | 1.2 |
| Goodwill impairment charge | - | 7.4 | - | 7.4 |
| Adjusted operating profit | 32.4 | 22.9 | 18.2 | 73.5 |
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Adjusted profit before tax | |||
| Profit before tax as reported under IFRS | 36.9 | 16.5 | 50.8 |
| Amortisation of acquisition-related intangible assets | 0.7 | 0.5 | 1.2 |
| Goodwill impairment charge | - | - | 7.4 |
| Profit on disposal of business | (9.5) | - | - |
| Unrealised (gain)/loss on change in fair value of cross-currency interest rate swaps | (0.6) | 2.7 | 1.1 |
| Unrealised loss on change in fair value of average rate options | - | 1.8 | 1.7 |
| Other financial income | - | (0.4) | (1.7) |
| Adjusted profit before tax | 27.5 | 21.1 | 60.5 |
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Operating cash flow | |||
| Net cash from operating activities under IFRS | 29.4 | 21.5 | 74.8 |
| Corporation tax paid | 12.3 | 6.6 | 15.8 |
| Purchase of property, plant & equipment | (4.9) | (5.9) | (12.3) |
| Proceeds from sale of property, plant & equipment | 0.1 | - | 0.1 |
| Operating cash flow for management purposes | 36.9 | 22.2 | 78.4 |
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Adjusted earnings per share | |||
| Profit after tax as reported under IFRS | 25.7 | 7.2 | 35.2 |
| Adjusted for: | |||
| Amortisation of acquisition-related intangible assets | 0.7 | 0.5 | 1.2 |
| Goodwill impairment charge | - | - | 7.4 |
| Profit on disposal of business | (9.5) | - | - |
| Unrealised change in fair value of cross-currency interest rate swaps | (0.6) | 2.7 | 1.1 |
| Unrealised change in fair value of average rate options | - | 1.8 | 1.7 |
| Other financial income | - | (0.4) | (1.7) |
| Tax effect of the above | 3.2 | 0.1 | (1.5) |
| Other tax items not forming part of the underlying tax rate | - | 3.5 | 0.8 |
| Adjusted earnings | 19.5 | 15.4 | 44.2 |
| Weighted average number of shares outstanding (millions) | 124.0 | 121.3 | 122.1 |
| Adjusted earnings per share (pence) | 15.7p | 12.7p | 36.2p |
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Analysis of net debt for management purposes | |||
| Short-term borrowings | 58.5 | 10.5 | 59.4 |
| Medium and long-term borrowings | 114.7 | 172.6 | 121.6 |
| Derivative financial instruments - currency portion of cross-currency interest rate swaps | 23.4 | 17.8 | 16.0 |
| Total borrowings | 196.6 | 200.9 | 197.0 |
| Cash balances | (101.4) | (42.3) | (77.1) |
| Net debt | 95.2 | 158.6 | 119.9 |
Additional adjusted performance measures presented following disposal of Arcom business
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Analysis of turnover by geographical destination - excluding Arcom business | |||
| UK | 16.6 | 18.8 | 37.7 |
| Continental Europe | 118.4 | 115.3 | 238.0 |
| North America | 84.1 | 75.1 | 160.7 |
| Japan | 26.5 | 25.0 | 54.0 |
| China | 24.9 | 19.6 | 45.6 |
| Rest of Asia Pacific | 36.1 | 31.8 | 69.0 |
| Rest of the world | 16.8 | 14.1 | 34.8 |
| Total excluding Arcom business | 323.4 | 299.7 | 639.8 |
| Arcom | 3.9 | 7.5 | 16.1 |
| Group total | 327.3 | 307.2 | 655.9 |
| 2006 Half year £m |
2005 Half year £m |
2005 Full year £m |
|
|---|---|---|---|
| Adjusted group operating profit - excluding Arcom business | |||
| Operating profit as reported under IFRS - excluding Arcom business | 31.7 | 26.9 | 63.2 |
| Amortisation of acquisition-related intangible assets | 0.7 | 0.5 | 1.2 |
| Goodwill impairment charge | - | - | 7.4 |
| Adjusted operating profit - excluding Arcom business | 32.4 | 27.4 | 71.8 |
Excluding the Arcom business, external customer revenue for the Electronic controls segment was £65.3m in the period to 30 June 2006 (30 June 2005: £62.7m; 31 December 2005: £127.4m).
Excluding the Arcom business, adjusted operating profit for the Electronic controls segment was £7.0m in the period to 30 June 2006 (30 June 2005: £8.4m; 31 December 2005: £16.5m).
