3 Adjusted performance measures
Spectris uses adjusted figures as key performance measures in addition to those reported under adopted IFRS. Adjusted figures are stated before amortisation of acquisition-related intangible assets, goodwill impairment 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 11).
The business segments for which information has been included in these accounts are different from those disclosed in prior years. The results of the group based upon the 2006 segmentation are shown at the end of this Note. The new disclosures for business segments reflect the manner in which the business is currently managed by the Board of Directors. Prior year comparatives have been restated accordingly.
The adjusted performance measures are derived from the reported figures under adopted IFRS as follows:
| Adjusted sales | Note | 2007 £m |
2006 £m |
|||
| Sales as reported under adopted IFRS | 4 | 668.4 | 684.5 | |||
| Divested businesses | (8.6) | (41.9) | ||||
| Adjusted sales for continuing businesses | 659.8 | 642.6 | ||||
| Adjusted sales by segment – 2007 | Note | Materials Analysis |
In-line Instrumentation |
Test and Measurement |
Industrial Controls |
2007 Total £m |
| Sales as reported under adopted IFRS | 4 | 213.8 | 208.8 | 207.5 | 38.3 | 668.4 |
| Divested businesses | – | (8.6) | – | – | (8.6) | |
| Adjusted sales for continuing businesses | 213.8 | 200.2 | 207.5 | 38.8 | 659.8 | |
| Adjusted sales by segment – 2006 restated | Note | Materials Analysis |
In-line Instrumentation |
Test and Measurement |
Industrial Controls |
2006 Total £m |
| Sales as reported under adopted IFRS | 4 | 205.7 | 234.5 | 201.5 | 42.8 | 684.5 |
| Divested businesses | – | (38.0) | – | (3.9) | (41.9) | |
| Adjusted sales for continuing businesses | 205.7 | 196.5 | 201.5 | 38.9 | 642.6 | |
| Adjusted operating profit | Note | 2007 £m |
2006 £m |
|||
| Operating profit as reported under adopted IFRS | 102.9 | 82.7 | ||||
| Amortisation of acquisition-related intangible assets | 15 | 1.9 | 1.8 | |||
| Goodwill reduction | 14 | – | 1.2 | |||
| Adjusted operating profit | 104.8 | 85.7 | ||||
| Divested businesses | (0.5) | (2.5) | ||||
| Adjusted operating profit for continuing businesses | 104.3 | 83.2 | ||||
| Restructuring charges for continuing businesses | 0.9 | 7.7 | ||||
| Adjusted operating profit for continuing businesses before restructuring charges | 105.2 | 90.9 | ||||
| Adjusted operating
profit by segment – 2007 |
Note | Materials Analysis |
In-line Instrumentation |
Test and Measurement |
Industrial Controls |
2007 Total £m |
| Segment result under adopted IFRS | 4 | 33.5 | 34.8 | 26.0 | 8.6 | 102.9 |
| Amortisation of acquisition-related intangible assets | 1.3 | 0.4 | 0.2 | – | 1.9 | |
| Adjusted operating profit | 34.8 | 35.2 | 26.2 | 8.6 | 104.8 | |
| Divested businesses | – | (0.5) | – | – | (0.5) | |
| Adjusted operating profit for continuing businesses | 34.8 | 34.7 | 26.2 | 8.6 | 104.3 | |
| Restructuring charges for continuing businesses | 0.1 | 0.7 | 0.1 | – | 0.9 | |
| Adjusted operating profit for continuing businesses before restructuring charges | 34.9 | 35.4 | 26.3 | 8.6 | 105.2 | |
| Adjusted operating
profit by segment – 2006 restated |
Note | Materials Analysis |
In-line Instrumentation |
Test and Measurement |
Industrial Controls |
2006 Total £m |
| Segment result under adopted IFRS | 4 | 28.2 | 28.1 | 18.4 | 8.0 | 82.7 |
| Amortisation of acquisition-related intangible assets | 1.1 | 0.1 | 0.6 | – | 1.8 | |
| Goodwill impairment charge | 1.2 | – | – | – | 1.2 | |
| Adjusted operating profit | 30.5 | 28.2 | 19.0 | 8.0 | 85.7 | |
| Divested businesses | – | (2.3) | – | (0.2) | (2.5) | |
| Corporate cost reallocation | (0.2) | 0.4 | (0.2) | – | – | |
| Adjusted operating profit for continuing businesses | 30.3 | 26.3 | 18.8 | 7.8 | 83.2 | |
| Restructuring charges for continuing businesses | 0.5 | 5.1 | 2.1 | – | 7.7 | |
| Adjusted operating profit for continuing businesses before restructuring charges | 30.8 | 31.4 | 20.9 | 7.8 | 90.9 | |
| The adjustment for corporate cost reallocation is a consequence of the adjustment for divested businesses and reallocates all corporate costs to the continuing businesses. | ||||||
| Adjusted profit before tax | Note | 2007 £m |
2006 £m |
|||
| Profit before tax as
reported under adopted IFRS |
118.1 | 85.6 | ||||
| Amortisation of acquisition-related intangible assets | 15 | 1.9 | 1.8 | |||
| Goodwill reduction | 14 | – | 1.2 | |||
| Profit on disposal of businesses | 28 | (19.0) | (9.5) | |||
| Unrealised change in fair value of cross-currency interest rate swaps | 21 | (3.0) | (2.8) | |||
| Adjusted profit before tax | 98.0 | 76.3 | ||||
| Operating cash flow | 2007 £m |
2006 £m |
||||
| Net cash from operating activities under adopted IFRS | 91.2 | 80.5 | ||||
| Corporation tax paid | 23.8 | 21.5 | ||||
| Purchase of property, plant and equipment | (12.7) | (10.5) | ||||
| Proceeds from sale of property, plant and equipment | 1.4 | – | ||||
| Operating cash flow for management purposes | 103.7 | 91.5 | ||||
| Adjusted earnings per share | Note | 2007 £m |
2006 £m |
|||
| Profit after tax as reported under adopted IFRS | 86.2 | 61.4 | ||||
| Adjusted for: | ||||||
| Amortisation of acquisition-related intangible assets | 15 | 1.9 | 1.8 | |||
| Goodwill reduction | 14 | – | 1.2 | |||
| Profit on disposal of businesses | 28 | (19.0) | (9.5) | |||
| Unrealised change in fair value of cross-currency interest rate swaps | 10 | (3.0) | (2.8) | |||
| Tax effect of the above | 11 | 4.5 | 3.4 | |||
| Other tax items not forming part of the underlying tax rate | 11 | – | (1.2) | |||
| Adjusted earnings | 70.6 | 54.3 | ||||
| Weighted average number of shares outstanding (millions) | 13 | 121.6 | 124.3 | |||
| Adjusted earnings per share (pence) | 58.1p | 43.7p | ||||
| Adjusted diluted earnings per share | Note | 2007 | 2006 | |||
| Adjusted earnings (as above) (£m) | 70.6 | 54.3 | ||||
| Diluted weighted average number of shares outstanding (millions) | 13 | 122.1 | 124.7 | |||
| Adjusted diluted earnings per share (pence) | 57.8 | 43.5 | ||||
| Basic and diluted earnings per share in accordance with IAS 33 are disclosed in Note 13. | ||||||
| Analysis of net debt for management purposes | 2007 £m |
2006 £m |
||||
| Bank overdrafts | 4.0 | 4.0 | ||||
| Bank loans – secured | 2.5 | 2.7 | ||||
| Unsecured loan notes | 106.0 | 106.1 | ||||
| Cross-currency interest rate swaps – currency portion (see Note 21) | 16.2 | 9.8 | ||||
| Finance lease liabilities | – | 0.1 | ||||
| Total borrowings | 128.7 | 122.7 | ||||
| Cash balances (see Note 19) | (51.4) | (51.0) | ||||
| Net debt | 77.3 | 71.7 | ||||
| Analysis of revenue by geographical destination | 2007 £m |
2006 £m |
||||
| UK | 28.5 | 28.6 | ||||
| Continental Europe | 254.6 | 244.5 | ||||
| North America | 152.5 | 157.0 | ||||
| Japan | 53.6 | 55.5 | ||||
| China | 55.0 | 49.0 | ||||
| Rest of Asia Pacific | 73.1 | 74.7 | ||||
| Rest of the world | 42.5 | 33.3 | ||||
| Total continuing businesses | 659.8 | 642.6 | ||||
| Divested businesses | 8.6 | 41.9 | ||||
| Group total | 668.4 | 684.5 | ||||
| Process Technology | In-line Instrumentation | Electronic Controls | Total | |||||
| Results of the group based upon the 2006 segmentation |
2007 £m |
2006 £m |
2007 £m |
2006 £m |
2007 £m |
2006 £m |
2007 £m |
2006 £m |
| Sales | 352.3 | 343.6 | 177.7 | 202.2 | 138.4 | 138.7 | 668.4 | 684.5 |
| Divested businesses | – | – | (8.6) | (38.0) | – | (3.9) | (8.6) | (41.9) |
| Sales for continuing businesses | 352.3 | 343.6 | 169.1 | 164.2 | 138.4 | 134.8 | 659.8 | 642.6 |
| Operating profit | 52.0 | 42.6 | 29.7 | 22.9 | 21.2 | 17.2 | 102.9 | 82.7 |
| Amortisation of intangibles | 1.5 | 1.7 | 0.4 | 0.1 | – | – | 1.9 | 1.8 |
| Goodwill reduction | – | 1.2 | – | – | – | – | – | 1.2 |
| Adjusted operating profit | 53.5 | 45.5 | 30.1 | 23.0 | 21.2 | 17.2 | 104.8 | 85.7 |
| Divested businesses | – | – | (0.5) | (2.3) | – | (0.2) | (0.5) | (2.5) |
| Corporate cost reallocation * | – | (0.3) | – | 0.4 | – | (0.1) | – | – |
| Adjusted operating profit for continuing businesses | 53.5 | 45.2 | 29.6 | 21.1 | 21.2 | 16.9 | 104.3 | 83.2 |
| Restructuring charges for continuing businesses | 0.2 | 1.9 | 0.7 | 5.1 | – | 0.7 | 0.9 | 7.7 |
| Adjusted operating profit for continuing businesses before restructuring charges | 53.7 | 47.1 | 30.3 | 26.2 | 21.2 | 17.6 | 105.2 | 90.9 |
| Return on sales after restructuring | 15.2% | 13.2% | 17.5% | 12.9% | 15.3% | 12.5% | 15.8% | 12.9% |
| Return on sales before restructuring | 15.2% | 13.7% | 17.9% | 16.0% | 15.3% | 13.1% | 15.9% | 14.1% |
| * Reallocates corporate costs from divested businesses to continuing businesses | ||||||||