Preliminary Announcement for the year ended 31 March 2009
Posted 14 May 2009PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 20091
Orders and cash flow performance demonstrate strength in current economic climate
Recommended resumption of dividend payments
Highlights
- Orders rose by 38% (21% at CER2) to £2,806 million (2008: £2,036 million) driven by strong performances by Process Systems (up 19% at CER) and Invensys Rail (up 109% at CER)
- Revenue rose by 8% (down 4% at CER) to £2,284 million (2008: £2,108 million)
- Operating profit3 down 4% (down 16% at CER) to £244 million (2008: £254 million) with an excellent performance from Invensys Rail, robust results from Process Systems offsetting a sharp second half decline in Invensys Controls
- Underlying earnings per share4 reduced to 14.1p (2008: 17.0p) due mainly to higher restructuring costs
- Basic earnings per share were 17.4p (2008: 21.1p)
- Free cash flow was £296 million (2008: £64 million), with operating cash flow of £298 million (2008: £258 million) and operating cash conversion of 122% (2008: 102%)
- Recommended final dividend of 1.5p per share (2008: nil)
- Continued strengthening of financial position with no debt5, net cash and deposits totalling £309 million, together with a £400 million banking facility
- Triennial review of UK Pension Scheme completed with no material change to the level of annual payments
- Integration of Invensys Process Systems, Wonderware and Eurotherm to create a new division, Invensys Operations Management
Contact:
Invensys plc Steve Devany tel: +44 (0) 20 7821 3758
Annabel Michie tel: +44 (0) 20 7821 2121
Financial Dynamics Andrew Lorenz
Richard Mountain tel: +44 (0) 20 7269 7121
Ulf Henriksson, Chief Executive of Invensys plc, commented:
“I am pleased to be able to report that we achieved a robust performance during the past year against the background of one of the most difficult global economies in decades. We had strong order intake, which is testimony to our customers’ belief in our ability to deliver projects and solutions. We had strong cash flow across the Group which has further strengthened our financial position; we are debt free with £309 million of net cash and deposits on the balance sheet.
“We have managed our pension assets and liabilities to reduce volatility and have agreed the future funding schedule with the Trustee of the UK Pension Scheme with no change to our annual payments. We have undertaken restructuring where there has been a need to realign capacity and improve productivity. This overall performance has given the Board confidence to recommend the resumption of dividend payments to shareholders.
“Relative to the market, there is strength in demand for our projects and solutions within our newly formed Invensys Operations Management division and Invensys Rail has been successful in both its core and export markets. This gives us confidence that both will continue to perform well during the current financial year. Invensys Controls faces continued weakness in its markets and we continue to manage it for positive cash flow.
“Our strong financial position is enabling us to take further actions in the current year to protect profitability and cash flow across the Group and, based upon our current expectations, we anticipate that restructuring charges in the current year will be around £65 million.
“Overall we look to the future with confidence and expect to improve our performance in the current year.”
Notes
- The financial information for the year ended 31 March 2009 is audited and has been prepared under the Group’s accounting policies for the year ended 31 March 2009. The Group’s accounting policies for the year ended 31 March 2009 are set out in the Annual Report and Accounts.
- Unless otherwise stated, % change is measured at constant exchange rates (CER) as a percentage of the 2008 adjusted base and is calculated based upon underlying amounts in £’000s.
- All references to operating profit (OPBIT) and operating margin in this announcement are before exceptional items.
- Underlying earnings per share is calculated on profit from continuing operations before exceptional finance costs and income, and foreign exchange losses on financial items. The prior year earnings per share also exclude the exceptional credit from the PPP settlement.
- 144A notes of £9 million due January 2010 remain outstanding; the Company has no right to call these notes prior to maturity but the notes have been covenant defeased through cash collateralisation. In addition, there were £1 million of finance leases at 31 March 2009.
Conference call
Ulf Henriksson, Chief Executive, and Steve Hare, Chief Financial Officer, will be hosting a presentation and conference call for analysts and fund managers at 9.00am BST this morning:
Venue: J.P.Morgan Cazenove
20 Moorgate
London
EC2R 6DA
Dial-in details (please note that the passcode is required).
UK: +44 (0) 20 3003 2666
US: + 1 866 966 5335
Passcode: Invensys
The presentation will be audio webcast live with slides, which can be accessed at:
http://www.invensys.com/webcast/
A recording will be available at this address shortly after the completion of the call. This announcement and the presentation materials are also available at http://www.invensys.com
Safe harbor
This announcement contains certain statements that are forward-looking. These statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition and liquidity, and the development of the industries in which the Group operates, may differ materially from those made in or suggested by these statements and a number of factors could cause the results and developments to differ materially from those expressed or implied by these forward-looking statements.