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Outstanding financial
performance in a challenging
environment
Higher earnings from Australia, Pakistan
and North America were the key drivers
in 2002 that contributed to the overall
increase in profitability from 2001.
Our industry is regionally cyclical in
nature. Different countries or regions have
their own demand-supply cycles and there
is no single global cycle. Our strategy
to have a geographically diverse asset
portfolio has always been one of our
competitive advantages and the benefits
were clearly demonstrated in 2002 with
strong performances in areas such as
Australia, offsetting downward pressure
in other regions.
Group turnover increased 29% to £717
million from £557 million in 2001. Profit
before interest and tax (PBIT), excluding
exceptional items, rose 19% to £388
million from £326 million last year.
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Earnings per share (pre-exceptional items)
was up 26% on last year at 15.5p. In
line with our continuous focus on cash,
our profits were backed by free cash
flow of £252 million, which was up
41% from £179 million in 2001.
Profit and loss account – excluding exceptional items
(continuing business only) |
| |
Year ended
31 December
2002 |
|
Year ended
31 December
2001
(Restated1)
|
|
Year ended
31 December
2000
(proforma2)
(Restated1)
|
|
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 |
| |
£m |
|
£m |
|
£m |
|
| Turnover - gross |
1,129 |
|
1,103 |
|
1,002 |
|
 |
| Profit before interest and tax |
388 |
|
326 |
|
221 |
|
| Interest |
(132) |
|
(123) |
|
(104) |
|
| Tax |
(77) |
|
(64) |
|
(37) |
|
| Minority interests |
(6) |
|
(2) |
|
(6) |
|
|
| |
173 |
|
137 |
|
74 |
|
|
| Earnings per share |
15.5 |
p |
12.3 |
p |
6.6 |
p |
|
1. Restated for the adoption of FRS 19 Deferred Tax.
2. The proforma results for the year ended 31 December 2000 are unaudited and have been derived by aggregating the results of the
continuing business for the nine months ended 31 December 2000 and the management accounts for the three months to 31 March
2000, and making proforma adjustments to interest and tax to reflect the post-demerger capital structure.
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Fiscal discipline has always been one
of our core values. We have never
underestimated or overlooked the value
of capital availability. Over the last two
years, we have been able to demonstrate
this principle through the continued
strength of our balance sheet. In 2002
we maintained our net debt at a very
prudent level, with gearing of 46%
and debt capitalisation of 31% at
31 December 2002.
| Segment results – excluding exceptional items |
| |
Year ended
31 December
2002 |
Year ended
31 December
2001 |
Year ended
31 December
2000
(proforma2)
|
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|
| Turnover |
| North America |
315 |
237 |
150 |
| Europe and Middle East |
440 |
521 |
534 |
| Australia |
226 |
194 |
133 |
| Rest of World |
148 |
151 |
185 |
|
| Gross turnover |
1,129 |
1,103 |
1,002 |
| Less: turnover of joint ventures |
(122) |
(139) |
(110) |
| Less: turnover of associates |
(290) |
(407) |
(496) |
|
| Group turnover |
717 |
557 |
396 |
|
| Profit before interest and tax |
| North America |
99 |
93 |
43 |
| Europe and Middle East |
109 |
141 |
128 |
| Australia |
101 |
72 |
53 |
| Rest of World |
108 |
48 |
40 |
|
| Segmental operating profit |
417 |
354 |
264 |
| Corporate costs |
(29) |
(28) |
(43) |
|
| Operating profit (excluding exceptional items) |
388 |
326 |
221 |
| Exceptional items |
(61) |
30 |
(170) |
|
| Profit before interest and tax |
327 |
356 |
51 |
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In 2002, our key achievement in Pakistan
was the commencement of regular
dividend receipts from Kot Addu Power
Company (KAPCO).
As a consequence of the weak and
uncertain future pricing environment in
England and Wales, we wrote down the
value of our Deeside plant by £45 million
and our Rugeley plant by £58 million.
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