Annual report 2005 - Xeikon

5
FINANCIAL REVIEW
Introduction
The results published in this annual report have been
prepared under the International Financial Reporting
Standards as adopted by the European Union.
The group has delivered a first year of excellent sales,
profits and earnings per share. The proceeds of the IPO
are being used to reinforce the company’s balance sheet,
speed up its development and extend its geographic
presence.
Minority interests and earnings per share
Minority interests decreased slightly. The group acquired
the minority interests in the UK and France at the time
of the IPO.
In the reported year, earnings per share increased by
more than 51% to 13.32 euro cent. The average number
of shares in issue used in the calculation of earnings per
share was 93,258,058. For 2004 the company used a
number of 80,000,000 shares.
Trading
Sales increased from €105.2m, in 2004, to €153.2m in
2005. Of this amount €15m relates to the acquisition of
basysPrint, which was acquired in December 2004. For
this reason, only the balance sheet figures are included
in the comparable figures of 2004. That year basysPrint’s
turnover was €17.7m.
The split between digital printing and pre-press was 65%
against 35%. The split between equipment sales and
recurring revenues (sales of consumables for the digital
printing machines, spare parts and servicing) saw results
comparable to the previous year: 57% equipment and
43% recurring revenues. Geographically, Europe is the
most important market (67%), followed by the US (28%)
and Asia (5%).
The EBITDA (earnings before interest, tax, depreciation
and amortisation) increased by 69%, from €20.6m, in
2004, to €34.7m in 2005. In sales terms this represents
a margin of 22.6%. Operating profit on sales for the year
was €21.5 m (14%), which represents an increase of
1.1 percentage points.
The tax charge of €5.5 m reflects an effective tax rate
of 30.3%. This compares to an effective rate of 31.7% in
2004. The group has benefited from some tax losses in
Belgium and Germany.
Dividend
The Board recommends a final dividend of 2.35 euro
cent. This is a payout ratio of approximately 20% of the
net profit.
Cash flow
Cash flow from operating activities was €3.9m due to an
increase in working capital of €21m.
Receivables were up by €13m due to the increase in
sales and a very strong last quarter. Inventories increased
by €4m, primarily by using more sea freight instead of
air freight for purchasing raw materials and transporting
Punch Graphix equipment and consumables.
Capital expenditure was €7.9m for tangible assets,
spent on improvements or replacements of production
equipment and own assets held for rental contracts and
demonstration equipment. For intangible assets a total
amount of €6.6m was spent on software development
and implementation, as well as on capitalised development
costs.
During the year Punch Graphix created its own sales
organisation in Canada and Brazil. It also embarked on a
joint venture in China to sell and service the company’s
digital printing presses.
10
Cash and short-term investments at the end of the year
amounted to €30m.