E2V.L Regulatory News (E2V)

5 Jun 2007 07:03

e2v technologies PLC05 June 2007 e2v technologies plc Final results for the year ended 31 March 2007 e2v technologies ('e2v' or 'the Group'), a specialist developer and manufacturerof high-technology electronic components and subsystems, announces its finalresults for the year ended 31 March 2007. HIGHLIGHTS • Acquisition of e2v semiconductors SAS (the Grenoble acquisition) completed July 2006 for £74m. • Group sales up 54.9% to £173.9m (2006: £112.3m) • Adjusted* pre tax profit up 60.4% to £21.7m (2006: £13.6m) • Reported profit before tax up 15.1% to £13.7m (2006: £11.9m) • Final dividend of 4.75p (2006: 4.25p), making a total for the year of 6.95p (2006: 6.25p) • Adjusted* EPS 25.82p (2006: 16.89p), basic EPS up 11.1% to 16.46p (2006: 14.81p) • Net cash from operating activities £10.6m (2006: £23.2m) • Net debt increased to £78.7m (2006: £17.8m) * Before amortisation of acquired intangibles, share based payment charges, acquisition and integration costs, voluntary severance costs, abnormal interest charges and their tax impact in the adjusted earnings per share calculation. Keith Attwood, Chief Executive Officer commented: "I am pleased to report positive progress in the year ended 31st March 2007.Whilst the results for year are dominated by the effects of the acquisition ofour Grenoble facility, the Group delivered healthy organic sales growth of 8%which, combined with our continued attention to cost management, gives usconfidence of continued progress in the current financial year." Enquiries: e2v technologies plcKeith Attwood, Chief Executive Today: 020 7554 1400Mike Hannant, Finance Director Thereafter: 01245 493493Website: www.e2v.com Gavin Anderson & CompanyKeith Brookbank/Fergus Wylie Tel: 020 7554 1400 NOTES FOR EDITORS: e2v technologies plc e2v technologies is a leading designer, developer and manufacturer of specialised components and subsystems, falling within two product groups: o Sensors and semiconductorso Electronic tubes These products enable some of the world's leading OEMs to deliver innovative systems for medical and science, aerospace and defence, and commercial and industrial applications. e2v's products are supplied into three core market areas: o Medical & Science: sensor and semiconductor technology includes imaging sensors for intra-oral and panoramic dental X-ray, mammography, life science applications and X-ray microscopy. Electronic tubes are the enabling technology behind radiotherapy cancer treatments, microwave medical therapy and high-energy physics. o Aerospace & Defence: sensor and semiconductor technology includes military surveillance, targeting and guidance, space-based imaging and astronomy, radar & electronic warfare and broadband data converters and microprocessors for aerospace applications. Electronic tubes provide the enabling technology behind radars, electronic countermeasures (ECM), electronic warfare and satellite communications. o Commercial & Industrial: sensor and semiconductor technology includes marine radars, industrial safety sensors, automotive radars and alarms, thermal imaging cameras used by fire fighters, CCD and CMOS high resolution line scan cameras for industrial inspection. Electronic tubes provide enabling technology behind TV broadcast, satellite communications, marine radar and food & industrial processing. The overall purpose of the business is to grow sustainable shareholder value whilst appropriately meeting the expectations of customers, people, partners, suppliers and the wider community. e2v's vision is to create value through bright ideas in technology and materials science. The Group's mission is to place customers at the heart of the business, providing enabling products of premium quality that extend technical barriers and enhance the competitive position of our partners. e2v has approximately 1,800 employees worldwide with three UK based manufacturing sites in Chelmsford, Lincoln and High Wycombe, one in Grenoble, France, and since May 2007 a site in Neuchatel in Switzerland. In addition e2v has sales offices in the UK, USA, Germany, France and Hong Kong as well as a network of distributors and representatives covering other key territories. Further information on e2v technologies plc is available from its website,www.e2v.com CHIEF EXECUTIVE'S REVIEW INTRODUCTION e2v's business strategy has four key aspects: •To focus our resources on high growth/high margin product opportunities in current and adjacent niche market sectors. •To extend our scope of supply, where appropriate, thereby maximising revenues from established market positions as well as developing new market positions. •To continue our internal focus on productivity improvements. •To acquire complementary businesses and technologies to accelerate growth. The Group is international in its operations, with three manufacturing sites inthe UK and, following the Grenoble and MICS acquisitions, two in mainlandEurope. The manufacturing operations are serviced by five sales and supportoffices and sell to over 60 countries worldwide. The acquisition of Grenoble has been a significant one for the Group and this isreflected within the full year figures. The acquisition has strengthened e2v'sposition as a major global provider of specialised electronic components and sub-systems to leading OEM's. The subsequent reorganisation of the business hasresulted in the extension to and redefinition of the sales and support operations into four key regions: Northern Europe, Southern Europe, the Americas and Asia Pacific. I am pleased to report that the organic sales growth in the business hascontinued the trend reported at the half year, with very strong demand forelectronic tubes products from the Medical and Science and Aerospace and Defencemarkets, whilst sensors and semiconductors saw growth from the Aerospace andDefence markets. RESULTS OVERVIEW Overall, sales grew by 54.9% to £173.9m (2006: £112.3m) in the year at reportedexchange rates, of which the Grenoble acquisition contributed £52.7m. Atconstant exchange rates the growth would have been 58.3%. Sales in the sensorsand semiconductors group grew by 107.9% in the year, of which 2.8% was organicand the remainder from the Grenoble acquisition. The electronic tube group saw asecond year of strong organic sales growth at 12.1%. Gross profit increased to £59.1m (2006: £37.8m), of which the Grenobleacquisition contributed £19.3m. Profit before tax increased by 15.1% from £11.9m to £13.7m. Adjusted* profitbefore tax increased 60.3% from £15.4m to £13.6m. Reported basic earnings per share amounted to 16.46 pence (2006: 14.81 pence)and adjusted* basic earnings per share were 25.82 pence (2006: 16.89 pence) pershare. The Group order book at 31 March 2007 was £137.2m (2006: £91.5m), of which theGrenoble acquisition contributed £43.8m. There is no directly comparable orderbook total at 31 March 2006 for the Grenoble facility due to different orderrecognition methodologies used by the previous parent company. With regards to currency exposure, the acquisition of the Grenoble facility hasresulted in transactional exposure to the US$ being increased, whilst £/•exposure has been eliminated. The electronic tube product group order book amounted to £58.2m (2006: £48.1m).This growth was primarily due to additional orders for defence electronicsubsystems. The sensors and semiconductors product group order book was £79.0m(2006: £43.5m) of which the Grenoble acquisition contributed £43.7m. Thereduction in the order book for the existing business is due to the unfolding ofmulti-year orders, in particular the GAIA programme and x-ray dental CCD's. Net borrowings at 31 March 2007 were £78.7m (2006: £17.8m). This is a directresult of the acquisition of the Grenoble facility in July 2006. Net cash flowfrom operating activities was £10.6m (2006: £23.2m). The shortfall compared tolast year is primarily due to the financing of trade debtors at our Grenoblefacility, which were not included in the working capital of the acquiredbusiness. BUSINESS OVERVIEW SENSORS AND SEMICONDUCTORS Sales of sensors and semiconductors at £104.3m were 107.9% higher than lastyear. The growth was dominated by the acquisition, but also incorporates organicgrowth of 2.8% (2006: 4.3%). The organic growth achieved in the Aerospace andDefence sectors more than offsets a decrease in sales in the Medical and Scienceand Commercial and Industrial sectors. Medical and Science Sales in the Medical and Science sector increased to £33.5m (2006: £20.7m) ofwhich the Grenoble facility contributed £15.7m. The Grenoble facility primarily supplies a range of sensors used in DigitalDental X-Ray applications and total sales into this product range amounted to£19.8m. 2007 was a year of consolidation in this market and a number of theGroup's customers were acquired by the Danaher Corporation. In addition therewas an element of de-stocking as customers supplying the US market re-scheduledorders to match the business levels achieved. Overall business levels declinedby 9.3%. Sales into the Life Science market increased by 7.2% to £9.8m (2006: £9.1m)where the group supplies sensors ultimately used in analysis and drug discoveryapplications. Sales for x-ray detectors amounted to £3.3m (2006: £2.3m). The introduction ofthe un-cooled detector range increased sales and helped offset a temporaryreduction in demand by a major customer in Japan. The remaining sales in this sector of £0.7m are Radio Frequency (RF) andMicrowave devices utilised in a range of medical equipment. Aerospace and Defence Sales in this sector increased to £41.3m (2006: £15.3m) of which the Grenoblefacility contributed £19.9m. e2v is the world's leading supplier of CCD technology into the Space andAstronomy market and has supplied devices that are now flying on major missionsfor the leading space agencies. Sales of this product range amounted to £17.3m(of which Grenoble sales amounted to £2.8m) providing total growth of 78%, ofwhich 50% was organic. The growth follows major programme wins, including theESA star mapping programme, GAIA which is on schedule and contributed sales of£4.7m in the year ended 31st March 2007. Grenoble supplies a range of broadband data converters and microprocessors aswell as test and assembly services to the world's major Aerospace and Defencecontractors. The devices are used in a wide range of applications includingradar, electronic warfare, engine control and flight recorders and amounted to£17.4m. Sales of RF and Microwave devices for a range of applications amounted to £6.8m(2006: £5.6m) an increase of 22%. The order book at the year end amounted to £39.8m, of which £33.7m isdeliverable within 12 months. There is no direct comparable for 2006 as, due todifferent order recognition methodologies used by the previous parent of ourGrenoble facility. Export licence constraints continue to effect the potentialdevelopment of this area of the business. Commercial and Industrial Sales in this sector increased to £29.5m (2006: £14.1m) of which the Grenoblefacility contributed £17.0m. One of Grenoble's major markets is industrial machine vision where it suppliessensors and line scan cameras amounted to £6.2m to major manufacturers acrossthe world. Sales amounted to £6.2m. Grenoble also supplies a range of Mixed Signal Application Specific IntegratedCircuits for a wide range of applications including Automotive, Utilities (MeterReading) and General Industrial Applications. Sales into this sub-sectoramounted to £9.5m. There are also applications that utilise the GrenobleBroadband Data Converters and Microprocessors including Oscilloscopes and DataAcquisition Cards that amounted to £1.6m. The UK activity's sales in this sector declined to £12.4m (2006: £14.1m) assales into Automotive declined £0.9m to £4.1m and Fire by £1.0m to £3.7m as aresult of a variety of trading issues. The remaining sales into Gas Sensing andMarine Radar markets were flat. ELECTRONIC TUBES The electronic tube product group is not affected by the acquisition and so allof the results derive from organic changes within the business. Sales in the electronic tube product group were £69.6m (2006: £62.1m)demonstrating growth of 12.1% at reported rates of exchange. The strong annual growth was largely driven by sales in the Medical and Sciencesector and the Aerospace and Defence sectors. Medical and Science Sales in the Medical and Scientific sector were £24.8m (2006: £18.8m)representing strong growth of 32.1% This was primarily driven by an increase in the scope of supply in theradiotherapy market, slightly flattered by the building of strategic sparesstock by some OEMs. Aerospace and Defence Sales in this sector were £22.2m (2006: £19.0m) reflecting growth of 16.8%. This was largely due to additional contracts to supply defence electronicsubsystems to the UK Ministry of Defence and others, naval-based radarcomponents, in particular the Seawolf upgrade programme and components for theEurofighter Typhoon programmes. Export licence constraints continue to effect the potential development of thisarea of the business. The order book at the year end amounted to £23.1m (2006: £14.7m) of which £13.5m(2006: £8.6m) is deliverable within 12 months. Commercial and Industrial Sales in this sector reduced to £22.6m (2006: £24.3m). This represents a fall of7.0%. Whilst the marine radar business demonstrated growth of 8.0%, there was also anexpected reduction in the sales of Inductive Output Tube systems for new digitaltransmitters in the US. Sales into general industrial applications were flat. INTERNATIONAL DEVELOPMENT We saw significant growth in UK sales of 19.3% (2006: 25.5%), driven both fromsales through the Grenoble acquisition and organically (10.9%). This organicgrowth was predominantly in the Aerospace and Defence market. Sales to the US at £51.3m (2006: £37.5m) were derived from 5.2% organic growthwith the remainder attributable to the acquisition. Sales to mainland Europe at £66.9m (2006: £32.9m) grew by 103.1%, (2006: 14.8%),of which the Grenoble acquisition contributed £31.8m, with 6.4% from organicgrowth. During the year, we opened a sales office in Hong Kong to support the increasedactivity in this region. Sales to the Asia Pacific region increased to £15m(2006: £9.2m), of which the Grenoble acquisition contributed £4.5m. Organicgrowth was 13.4%. Distributors remain important to the sales process for e2v's expanded productrange. We have established new contracts with specialist distributors workingwith the Grenoble facility. We have also reviewed the skills base across e2v'sexisting and new distributors to look for synergies and opportunities to crosssell all products from the enlarged group, and reassigned some product linesaccordingly. An integral part of this review has been a continued focus on improving customeraccess to our distributors and developing the skills within our distributorbase. In the last year three regional distribution conferences have been held inHong Kong, New York and San Francisco, with individual meetings throughoutEurope. Following the integration of the Grenoble facility, we have approximatelydoubled the number of global distributors supporting the Group. The e2v web site maintains a tailored 'extranet' to keep distributors updated oncurrent e2v Group affairs, including exhibition graphics, contact informationand product presentations. This is reinforced by regular two-way visits betweendistributors and e2v. CAPITAL INVESTMENT AND RESEARCH AND DEVELOPMENT Expenditure on capital equipment and software totalled £10.9m (2006: £7.8m), of which £1.9m covers expenditure in Grenoble. This total can broadly be categorised as £1.8m (2006: £2.5m), on infrastructure, clean rooms and building improvements, £6.4m (2006: £3.4m) on manufacturing plant expansion and replacement, £1.6m (2006: £1.5m) on IT, including the ongoing SAP system implementation and £1.1m (2006: £0.4m) on other items. The Group's Research and Development spend into product maintenance/support andnew products was £11.2m (2006: £5.4m) of which £4.0m was spent in Grenoble. Major programmes have included completion of the Argus(TM) 4 thermal imagingcamera and spend into the ongoing SLIMSENS (Short & Long range Integratedmultifunctional radar & communication Sensors) automotive project. A newCCD-based detector module is under development for the Sirius(R) silicon driftX-Ray detectors made in High Wycombe and, in Grenoble, back-illuminated imagesensors for medium volume markets, an ASIC platform and a test centre fordetectors. In addition there was some longer term investment in the basetechnology that supports a range of Biosensor applications. Over the coming year our imaging and semiconductor business will focus onextending our reach into the industrial imaging markets in the Asia Pacificregion and exploiting synergies between our Chelmsford and Grenoble facilities.We also continue to support the e2v Centre for Electronic Imaging at BrunelUniversity which underpins new technology developments for longer termapplications. In 2006, notable new activities included work for x-ray detectorson the planned ESA Exo Mars mission and further medical imaging devicetechnology. Our electronic tube business is further developing opportunities to move intosub-systems. Underpinning development in RF power systems development is athree-year UK Department of Trade and Industry supported collaborative researchand development programme with Nottingham University for £1.4m. At 31 March 2007, 168 (2006: 82) patent families had been granted, of which 80are held by the Grenoble facility. Our patent management processes are based onthe principles of protection of our intellectual property, where appropriate, tomaintain and develop our market position. OPERATIONAL EFFICIENCIES The management team continue to focus on areas for operational improvement inthe business. A number of projects are in progress: • Investigations into low cost assembly facilities in Mexico are well progressed; • A review of UK business processes has been commissioned utilising the services of an external consultancy team; • A review of resources and facilities for high end imaging manufacturing is underway; • Good progress has been made in securing low cost sources for a range of machined components and these actions continue, particularly in Asia. Cost management remains a constant feature in the business. OUTLOOK Following the successful integration of our second acquisition since flotation,the pipeline of further targets for consideration remains buoyant as we continueto pursue a number of suitable targets. Our focus on driving growth from the expanded product portfolio and distributionnetwork, combined with our attention to internal efficiencies, gives usconfidence of continued progress in the current financial year in line with ourexisting expectations. K D Attwood4th June 2007 *Before amortisation of acquired intangibles, voluntary severance costs,share-based payment charges, acquisition and integration costs, abnormalinterest charges and their tax impact in the adjusted earnings per share calculation. GROUP INCOME STATEMENTfor the year ended 31 March 2007 Year ended Year ended 31 March 2007 31 March 2006 Notes £000 £000 Revenue 2 173,925 112,276Cost of sales (114,870) (74,521)--------------------------------------------------------------------------------Gross profit 59,055 37,755 Research and development costs (10,919) (4,928)Selling and distribution costs (11,334) (9,463)--------------------------------------------------------------------------------Amortisation of intangible assets arising (6,047) (369)on acquisitions Costs associated with acquisition (300) -Integration costs (755) -Voluntary severance payments - (819)Share based payment charges (654) (450)Other administrative costs (11,495) (7,961)-------------------------------------------------------------------------------- Administrative expenses (19,251) (9,599)--------------------------------------------------------------------------------Profit from continuing operations before 2 17,551 13,765tax and net finance costs Finance costs (4,217) (1,944)Finance revenue 382 95--------------------------------------------------------------------------------Profit before tax 13,716 11,916Income tax expense 3 (4,048) (3,768)--------------------------------------------------------------------------------Profit for the year attributable to equity 9,668 8,148holders of the parent -------------------------------------------------------------------------------- Earnings per share- basic 4 16.46p 14.81p- diluted 4 16.21p 14.74pAdjusted earnings per share- basic 4 25.82p 16.89p- diluted 4 25.42p 16.82p GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE-------------------------------------------------------------------------------- For the year ended 31 March 2007 Year ended Year ended 31 March 2007 31 March 2006 £000 £000 Gains/(losses) on cash flow hedges taken 349 (715) directly to equity Exchange differences on retranslation of (603) 322foreign operations Actuarial gain on post employment employee 353 -benefits Tax on items taken directly to or 3 867 220transferred from equity -------------------------------------------------------------------------------- Net expense recognised directly in equity 966 (173)Profit for the year 9,668 8,148--------------------------------------------------------------------------------Total recognised income and expense for the 7 10,634 7,975year -------------------------------------------------------------------------------- Effects of changes in accounting policyNet gain on cash flow hedges on first time - 308adoption of IAS 39 -------------------------------------------------------------------------------- GROUP BALANCE SHEETas at 31 March 2007 31 March 2007 31 March 2006 Notes £000 £000ASSETSNon-current assetsProperty, plant and equipment 35,192 21,320Intangible assets 84,275 22,372Deferred income tax asset 3,964 2,006-------------------------------------------------------------------------------- 123,431 45,698Current assetsInventories 40,384 20,839Trade and other receivables 45,344 25,561Other financial assets 267 11Income tax recoverable 1,705 -Cash 8,496 8,087-------------------------------------------------------------------------------- 96,196 54,498--------------------------------------------------------------------------------TOTAL ASSETS 219,627 100,196-------------------------------------------------------------------------------- LIABILITIESCurrent liabilitiesTrade and other payables (46,620) (22,138)Other financial liabilities (2,398) (6,607)Income tax payable (1,231) (1,505)Provisions (4,557) (2,691)-------------------------------------------------------------------------------- (54,806) (32,941)--------------------------------------------------------------------------------Net current assets 41,390 21,557--------------------------------------------------------------------------------Non-current liabilitiesOther financial liabilities (84,801) (19,905)Provisions (766) (1,070)Retirement benefit obligations (2,691) -Deferred income tax liabilities (12,335) (2,543)-------------------------------------------------------------------------------- (100,593) (23,518)--------------------------------------------------------------------------------NET ASSETS 64,228 43,737-------------------------------------------------------------------------------- SHAREHOLDERS' EQUITYOrdinary share capital 7 3,073 2,796Share premium 7 39,902 27,309Capital redemption reserve 7 274 274Investment in own shares held by employee 7 (9) (9)benefit trust Hedge reserve 7 111 (134)Foreign currency translation reserve 7 (50) 221Retained earnings 7 20,927 13,280--------------------------------------------------------------------------------TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO 64,228 43,737EQUITY HOLDERS OF THE PARENT COMPANY. -------------------------------------------------------------------------------- GROUP CASHFLOW STATEMENTfor the year ending 31 March 2007 Year ended Year ended 31 March 2007 31 March 2006 Notes £000 £000 Cash flows from operating activities Profit from continuing operations before 17,551 13,765tax and net finance costsAdjustments to reconcile to net cashinflows from operating activitiesDepreciation of property, plant and 7,311 4,863equipmentAmortisation of intangible assets 8,724 2,371Share based payment charges 654 450Increase in inventories (4,349) (1,125)(Increase)/decrease in trade and other (18,327) 1,957receivables Increase in trade and other payables 7,941 4,204Increase/(decrease) in provisions 34 (16)--------------------------------------------------------------------------------Cash generated from operations 19,539 26,469Income taxes paid (8,930) (3,266)--------------------------------------------------------------------------------Net cash flows from operating activities 10,609 23,203--------------------------------------------------------------------------------Cash flows from investing activitiesProceeds from sale of property, plant and 21 55equipment Interest received 382 95Purchase of property, plant and equipment (9,169) (6,525)Purchase of software (1,493) (1,278)Expenditure on patents, trade marks and (24) -technology Expenditure on product development (1,905) (1,308)Acquisition of subsidiary, net of cashacquired 6 (64,553) (4,974)--------------------------------------------------------------------------------Net cash flows used in investing (76,741) (13,935)activities --------------------------------------------------------------------------------Cash flows from financing activitiesInterest paid (3,653) (1,852)Proceeds from issue of shares, net of 12,870 8expensesDividends paid to equity shareholders of (3,667) (3,246)the parentPayment of finance lease liabilities (28) (42)Proceeds from borrowings 92,595 5,100Transaction costs of new bank loans raised (1,735) -Repayment of borrowings (29,709) (5,250)--------------------------------------------------------------------------------Net cash flows generated from financing 66,673 (5,282)activities --------------------------------------------------------------------------------Net increase in cash and cash equivalents 541 3,986Net foreign exchange difference (132) 32Cash and cash equivalents at 1April 8,087 4,069--------------------------------------------------------------------------------Cash and cash equivalents at 31March 8,496 8,087-------------------------------------------------------------------------------- NOTES TO THE FINAL RESULTS 1. Basis of preparation e2v technologies plc prepares its financial statements on the basis ofInternational Financial Reporting Standards (IFRS) as adopted for use by theEuropean Union (EU). The financial information presented herein has beenprepared in accordance with the accounting policies used in preparing thefinancial statements for the year ended 31 March 2007, which do not differ fromthose used for the financial statements for the year ended 31 March 2006. The financial information contained in this document does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Thefinancial information for the year ended 31 March 2007 has been extracted fromthe financial statements of e2v technologies plc which will be delivered to theRegistrar of Companies in due course. The auditors have issued an unqualifiedopinion on the Group's financial statements for the year ended 31 March 2006,which have been filed with the Registrar of Companies. The preliminary announcement covers the period 1 April 2006 to 31 March 2007 andwas approved by the Board on 4 June 2007. The report and accounts will be sent to shareholders in due course. Furthercopies will be available from the Company's registered office. 2. Segment information The Group's primary reporting format is business segments and its secondaryformat is geographical segments. The operating businesses are organised andmanaged separately according to the nature of the products and servicesprovided, with each segment representing a strategic business unit that offersdifferent products and serves different markets. The sensors and semiconductors segment products include charged coupled imagingdevices (CCDs), CMOS sensors and cameras, solid-state microwave components,thermal imaging cameras, Mixed-signal application specific integrated circuits(AICS), Broadband data converters, gas sensors and x-ray detectors. The electronic tubes segment products include magnetrons, thyratrons, klystrons,inductive output tubes (IOTs), modulators, travelling wave tubes (TWTs) andsatcom amplifiers. The Group's geographical segments are determined by the location of the Group'sassets and operations. Business segments The following tables present revenue and profit information and certain assetand liability and other information regarding the Group's business segments forthe years ended 31 March 2007 and 2006. Year ended 31 March 2007 Sensors and Electronic Total semiconductors tubes operations £000 £000 £000 RevenueMedical and Science 33,466 24,788 58,254Aerospace and Defence 41,309 22,235 63,544Commercial and Industrial 29,511 22,616 52,127--------------------------------------------------------------------------------Total segment revenue 104,286 69,639 173,925--------------------------------------------------------------------------------ResultSegment result before 13,763 12,214 25,977amortisation Amortisation of (6,037) - (6,037)intangibles arisingon acquisition --------------------------------------------------------------------------------Segment result 7,726 12,214 19,940--------------------------------------------------------------------------------Exchange differences 1,195Acquisition and (1,055)integration costs Share based payment charges (654)Other unallocated (1,875)expenses --------------------------------------------------------------------------------Total unallocated (2,389)expenses --------------------------------------------------------------------------------Profit from continuing operations before tax 17,551and net finance costs Net finance costs (3,835)--------------------------------------------------------------------------------Profit before 13,716income tax Income tax (4,048)expense --------------------------------------------------------------------------------Profit for the year 9,668-------------------------------------------------------------------------------- Sensors and Electronic Central Total semiconductors tubes unallocated operations items £000 £000 £000 £000 Assets and liabilitiesIntangible assets 68,394 1,146 14,735 84,275Property plant 22,066 6,432 6,694 35,192and equipment Other assets 27,487 12,884 59,789 100,160--------------------------------------------------------------------------------Total assets 117,947 20,462 81,218 219,627Total (8,051) (2,781) (144,567) (155,399)liabilities --------------------------------------------------------------------------------Net assets 109,896 17,681 (63,349) 64,228-------------------------------------------------------------------------------- Other segmentinformationCapital expenditure:Property, plant and 4,659 2,275 2,503 9,437equipment Software 56 - 1,437 1,493Expenditure on 1,070 835 - 1,905product development Other intangibles - - 24 24 Depreciation 4,127 1,838 1,346 7,311Amortisation 6,922 605 1,197 8,724Warranty provision 2,338 1,976 - 4,314 Year ended 31 March Sensors and Electronic Total2006 semiconductors tubes operations £000 £000 £000 RevenueMedical and Science 20,707 18,768 39,475Aerospace and Defence 15,316 19,042 34,358Commercial andIndustrial 14,135 24,308 38,443--------------------------------------------------------------------------------Total segment revenue 50,158 62,118 112,276-------------------------------------------------------------------------------- ResultSegment result 10,061 7,322 17,383before amortisation Amortisation of intangibles (359) - (359)arising on acquisition --------------------------------------------------------------------------------Segment result 9,702 7,322 17,024--------------------------------------------------------------------------------Difference on exchange (631)Voluntary severance (819)payments Share based payment (450)charges Other unallocated (1,359)expenses Total unallocated (3,259)expenses --------------------------------------------------------------------------------Profit from 13,765continuing operationsbefore tax andnet finance costs Net finance (1,849)costs --------------------------------------------------------------------------------Profit before 11,916income tax Income tax expense (3,768)--------------------------------------------------------------------------------Profit for the year 8,148-------------------------------------------------------------------------------- Sensors and Electronic Central Total semiconductors tubes unallocated operations items £000 £000 £000 £000 Assets and liabilitiesIntangible assets 7,041 1,007 14,324 22,372Property plant 9,415 5,723 6,182 21,320and equipment Other assets 7,915 14,805 33,784 56,504--------------------------------------------------------------------------------Assets 24,371 21,535 54,290 100,196Liabilities (2,623) (2,252) (51,584) (56,459)--------------------------------------------------------------------------------Net assets 21,748 19,283 2,706 43,737-------------------------------------------------------------------------------- Other segmentinformationCapital expenditure:Property,plant and 3,474 1,275 1,776 6,525equipment Software - - 1,278 1,278Expenditure on 816 492 - 1,308product development Depreciation 2,051 1,431 1,381 4,863Amortisation 508 729 1,134 2,371Warranty provision 716 1,975 - 2,691 Geographical segments The following table presents revenue, capital expenditure and certain assetinformation regarding the Group's geographical segments for the years ended 31March 2007 and 2006. Year Year ended ended 31 March 31 March 2007 2006 £000 £000Group turnoverRevenue by destinationUnited Kingdom 37,547 31,472North America 51,314 37,492Europe 66,871 32,924Asia Pacific 14,998 9,235Rest of the world 3,195 1,153-------------------------------------------------------------------------------- 173,925 112,276--------------------------------------------------------------------------------Segment assetsUnited Kingdom 91,760 85,291North America 12,204 10,511Europe 115,584 4,394Asia Pacific 79 --------------------------------------------------------------------------------- 219,627 100,196--------------------------------------------------------------------------------Capital expenditure including product developmentUnited Kingdom 10,711 9,058North America 61 48Europe 2,087 5-------------------------------------------------------------------------------- 12,859 9,111-------------------------------------------------------------------------------- 3. Income tax Major components of income tax expense for the years ended 31 March 2007 and2006 are: Year Year ended ended 31 March 31 March 2007 2006 £000 £000Consolidated income statementCurrent income taxCurrent income tax charge - UK corporation tax 2,252 2,861Current income tax charge - foreign tax 3,587 1,006-------------------------------------------------------------------------------Current income tax charge 5,839 3,867-------------------------------------------------------------------------------Adjustments in respect of current income tax of previous 107 320years --------------------------------------------------------------------------------Total current income tax 5,946 4,187-------------------------------------------------------------------------------Deferred income taxRelating to origination and reversal of temporary (1,799) (495)differences Adjustments in respect of deferred income tax of (99) 76previous years --------------------------------------------------------------------------------Income tax expense reported in the group income 4,048 3,768statement -------------------------------------------------------------------------------- Tax relating to items charged or credited to equityDeferred income tax--------------------------------------------------------------------------------Net gain on adoption of IAS 32 and IAS 39 - 132------------------------------------------------------------------------------- Net gain/(loss) on revaluation of cash flow hedges 105 (214)Credit in respect of share based payments (639) (48)Net deferred income tax on retranslation of foreign (333) 42operations --------------------------------------------------------------------------------Tax credit in the statement of recognised income and (867) (220)expense -------------------------------------------------------------------------------- A reconciliation of income tax expense applicable to accounting profit beforeincome tax at the statutory income tax rate to income tax expense at the Group'seffective income tax rate for the years ended 31 March 2007 and 2006 is asfollows: Year Year ended ended 31 March 31 March 2007 2006 £000 £000 Accounting profit before income tax 13,716 11,916 At UK statutory income tax rate of 30% (2006: 30%) 4,115 3,575Adjustments in respect of current income tax of previous 107 320years Adjustments in respect of deferred income tax of (99) 76previous years Expenditure not allowable for income tax 519 88Tax relief on research and development (944) (280)Tax relief on share options exercised - (54)Impact of higher taxes on overseas earnings 350 43--------------------------------------------------------------------------------Total tax expense reported in the income statement 4,048 3,768-------------------------------------------------------------------------------- 4. Earnings per share Basic earnings per share amounts are calculated by dividing net profit for theyear attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profitattributable to ordinary shareholders by the weighted average number of ordinaryshares outstanding during the year adjusted for the effects of dilutive options. The following reflects the income and share data used in the basic and dilutedearnings per share computations: Year Year ended ended 31 March 31 March 2007 2006 £000 £000--------------------------------------------------------------------------------Profit attributable to ordinary shareholders 9,668 8,148-------------------------------------------------------------------------------- Adjusted earnings per share is arrived at using the following earnings: Year Year ended ended 31 March 31 March 2007 2006 £000 £000 Profit for the year 9,668 8,148Abnormal write off of debt issue costs 276 -Amortisation of acquired intangible assets 6,047 369Share based payment charges 654 450Acquisition costs 300 -Integration costs 755 -Voluntary severance costs - 819Tax impact of the above (2,535) (491)-------------------------------------------------------------------------------- 15,165 9,295-------------------------------------------------------------------------------- The adjusted earnings per share is considered to more appropriately reflect theunderlying performance of the business since the costs highlighted above areexpected to be either non-recurring or not comparable between periods. Year Year ended endedWeighted average number of ordinary shares 31 March 31 March 2007 2006 No. 000 No. 000 For basic earnings per share 58,730 55,018Effect of dilution:Share options 918 250--------------------------------------------------------------------------------For diluted earnings per share 59,648 55,268-------------------------------------------------------------------------------- 5. Dividends paid and proposed Year Year ended ended 31 March 31 March 2007 2006 £000 £000Declared and paid during the year: Equity dividends on ordinary shares:Adjustment for prior year dividend payments (6) -Final dividend for 2006: 4.25p (2005: 3.90p) 2,340 2,145First dividend for 2007: 2.20p (2006: 2.00p) 1,333 1,101-------------------------------------------------------------------------------- 3,667 3,246--------------------------------------------------------------------------------Proposed for approval at AGM (not recognised as a liabilityas at 31 March) Equity dividends on ordinary shares:Final dividend for 2007: 4.75p (2006: 4.25p) 2,878 2,340 The number of shares owned by the employee benefit trust is 884,239 (2006:884,239). The employee benefit trust has waived its right to receive dividends. The final dividend is payable on 14 September 2007 to shareholders registered atthe close of business on 24 August 2007 and is based on the number of shares inissue, excluding those held by the Employee Benefit Trust, at the date thefinancial statements are approved and authorised for issue. The final dividendmay differ due to increases or decreases in the number of shares in issuebetween the date of approval of the financial statements and the record date forthe final dividend. 6. Business combination in the year Acquisition of e2v Semiconductors SAS On 31 July 2006, e2v technologies plc acquired 100% of the voting shares of e2vsemiconductors SAS (formerly Atmel Grenoble SAS) an unlisted company based inFrance specialising in the design and manufacture of specialised electroniccomponents and sub-systems. The fair value of the identifiable assets and liabilities of e2v semiconductorsSAS as at the date of acquisition was: Fair value Book value recognised on acquisition £000 £000Intangible assets 32,055 -Property, plant and 11,829 8,510equipment Cash and cash equivalents 9,455 9,455Other debtors 3,995 3,236Inventories 15,398 14,975Deferred tax asset 1,666 --------------------------------------------------------------------------------- 74,398 36,176--------------------------------------------------------------------------------Trade payables (11,276) (11,276)Taxation (943) (943)Other creditors (6,869) (6,869)Termination benefit (3,019) (2,678)obligations on retirement Provisions (1,557) (1,557)Deferred income tax (12,264) -liability -------------------------------------------------------------------------------- (35,928) (23,323)--------------------------------------------------------------------------------Fair value of net assets 38,470 12,853--------------------------------------------------------------------------------Goodwill arising on 35,538acquisition --------------------------------------------------------------------------------Total consideration 74,008-------------------------------------------------------------------------------- Consideration: £000 Cash paid 72,429Costs associated with the acquisition 1,579--------------------------------------------------------------------------------Total consideration 74,008-------------------------------------------------------------------------------- The cash outflow on acquisition is as follows: £000 Net cash acquired with the subsidiary 9,455Cash paid (74,008)--------------------------------------------------------------------------------Net cash outflow (64,553)-------------------------------------------------------------------------------- From the date of acquisition, e2v semiconductors SAS has contributed £4,616,000to the profit before tax and net finance costs of the Group. It is notpracticable to establish the revenue and profit attributable to the Group hadthe combination taken place at the beginning of the year due to the tradingrelationship the company had with its previous parent undertaking. 7. Reconciliation of movements in equity Issued Share Other Hedge Foreign Retained Total Capital premium reserves reserve currency earnings equity translation reserve £000 £000 £000 £000 £000 £000 £000At 1 April 2005(restated) 2,796 27,301 264 367 (101) 7,923 38,550------------------------------------------------------------------------------------------------------------------------Total recognised - - - (501) 322 8,154 7,975income/(expense) for theyear Share based payment charge - - - - - 450 450Issue of shares - 8 - - - - 8Issue of shares by EBT - - 1 - - (1) -on exercise of options Equity dividends - - - - - (3,246) (3,246)------------------------------------------------------------------------------------------------------------------------At 31 March 2006 2,796 27,309 265 (134) 221 13,280 43,737Total recognised - - - 245 (271) 10,660 10,634income/(expense) for theyear Share based payment charge - - - - - 654 654Issue of shares 277 13,007 - - - - 13,284Less: costs on - (414) - - - - (414)issue of shares Equity dividends - - - - - (3,667) (3,667)------------------------------------------------------------------------------------------------------------------------At 31 March 2007 3,073 39,902 265 111 (50) 20,927 64,228------------------------------------------------------------------------------------------------------------------------ FINANCIAL RECORD IFRS IFRS IFRS UK GAAP UK GAAP 2007 2006 2005 2004 2003 £000 £000 £000 £000 £000RevenueSensors 104,286 50,158 48,100 44,089 34,216Electronic tubes 69,639 62,118 52,447 53,477 58,669--------------------------------------------------------------------------------Total revenue 173,925 112,276 100,547 97,566 92,885-------------------------------------------------------------------------------- Adjusted profit before tax 25,307 15,403 12,614 11,525 9,446and net finance costs* Amortisation of intangible (6,047) (369) (10) (1,084) (710)assets arising onacquisitions Acquisition costs (300) - - - -Integration costs (755) - - - -Voluntary severance payments - (819) (61) - -Share based payment charges (654) (450) (142) - -Initial public offering - - (1,901) - -costs Restructuring costs - - - (124) (681)Environmental costs - - - (402) (346)Costs associated with the MBO - - - (60) (946)--------------------------------------------------------------------------------Profit before tax and netfinance costs 17,551 13,765 10,500 9,855 6,763-------------------------------------------------------------------------------- Net finance charges (3,835) (1,849) (4,941) (5,212) (3,336)--------------------------------------------------------------------------------Profit before tax 13,716 11,916 5,559 4,643 3,427--------------------------------------------------------------------------------Income tax expense (4,048) (3,768) (2,167) (1,362) (1,007)--------------------------------------------------------------------------------Profit for the year 9,668 8,148 3,392 3,281 2,420attributable to equityholders of the parent -------------------------------------------------------------------------------- Basic earnings per share 16.46p 14.81p 6.93p 9.19p--------------------------------------------------------------------------------Adjusted* basic earnings per 25.80p 16.89p 13.72p 10.33pshare --------------------------------------------------------------------------------Interim dividend paid 2.20p 2.00p 0.63p Nil--------------------------------------------------------------------------------Final dividend proposed 4.75p 4.25p 3.90p Nil-------------------------------------------------------------------------------- Cash generated from 19,539 26,469 11,789 20,212 13,823operations --------------------------------------------------------------------------------Net debt 78,657 17,757 21,782 44,307 47,769-------------------------------------------------------------------------------Average employee numbers 1,621 1,292 1,296 1,292 1,339-------------------------------------------------------------------------------- *Before amortisation of acquired intangibles, acquisition and integration costs,initial public offering costs, voluntary severance costs, share-based paymentcharges, other non-recurring expenses and their tax impact in the adjustedearnings per share calculation. 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