Notes to the financial statements - Plasmon

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Finance Director’s Review Timothy Arthur Finance Director Plasmon Plc Annual Report 2003 Finance Director’s Review 14 In the year ended 31 March 2003 overall Group turnover declined by 2% but the retained loss reduced by 41% as the benefits of the US reorganisation began to come through and the level of exceptional costs fell significantly.
Plasmon Plc Annual Report 2003 The US reorganisation was finally completed in September 2002 when the Minneapolis library development operations were relocated to Colorado Springs at an exceptional cost of £0.5m, principally comprising employment related severance costs. The UDO drive and media development programmes continue to make good progress with working prototypes being demonstrated at trade shows in both the US and Europe. During the year ended 31 March 2003, £6.5m of UDO development costs were fully expensed and a further £3.9m was spent on related capital purchases. To assist in the funding of the UDO capital expenditure, £1.7m of cash was raised through a successful 5% placing completed in June 2002. In March 2003 we completed a new £7m debt and working capital facility with Venture Finance PLC that is committed for three years. We also renewed the $10m facility with Silicon Valley Bank for a further year in May 2003 and we now have sufficient funds to complete the UDO development project and marketing launch initiatives. Turnover Turnover fell by 2% to £60.1m from £61.6m in the previous year, after a £1.6m adverse foreign exchange movement on US sales. Sales to IBM also declined a further £4m as anticipated, however, this was largely offset by increased channel sales. In geographical terms, US origin revenues decreased by 11% to £39.6m due to the adverse foreign exchange impact compounded by the decline in IBM sales. In contrast, European origin sales rose by Finance Director’s Review 15 17% to £20.5m due to strong channel sales, particularly in the UK and Germany, and increased sales by our mastering business in Caen, Northern France. Operating profit Operating profits excluding UDO development costs, goodwill amortisation and exceptional costs rose by 30% to £5.5m with a £0.7m reduction in gross profits being more than offset by a £2.0m decrease in operating expenses. In percentage terms, gross margin fell slightly to 36.3% in 2002/3 from the 36.7% achieved in the previous year, primarily due to the reduced revenue. The 11% reduction in overheads was primarily due to the savings from the US reorganisation combined with the weaker dollar. First half operating profits excluding UDO development costs, goodwill amortisation and exceptional costs of £2m were followed by a second half adjusted profit of £3.5m with the benefits of the US reorganisation accounting for the majority of the improvement. Losses before tax and interest in North America totalled £5.2m compared to the prior year loss of £6.4m with the reduced reorganisation costs more than offsetting the increased UDO expenditure. In Europe profits before tax and interest rose by 269% to £2.5m due to a strong contribution by our mastering business, a return to profitability in the European sales business as a result of the sales growth and the non-reoccurrence of the prior year £0.6m exceptional bad debts. Interest Net interest payable of £0.7m in the current year compared to £0.5m incurred during the previous year, largely as a result of the increased debt levels arising from the UDO expenditure.
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Page 3 and 4: Plasmon Overview Plasmon manufactur
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Page 9 and 10: In the first half of 2002/3, the Gr
Page 11 and 12: from Nichia, our Japanese supplier.
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Page 15: Outlook 2002/3 has been a year of c
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Page 33 and 34: Notes to the financial statements c
Page 51 and 52: Directors John Barrie Morgans (Chai

Notes to the financial statements - Plasmon

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