Northern Electric PLC 25 April 2005 NORTHERN ELECTRIC plc ANNOUNCEMENT 25 APRIL 2005 PRELIMINARY STATEMENT OF ANNUAL RESULTS AND DIVIDENDS FOR YEAR ENDED 31 DECEMBER 2004 The financial information set out below does not constitute the Group and Company's statutory accounts for the years ended 31 December 2004 and 31 December 2003. Statutory accounts for the year ended 31 December 2003 have been delivered to the Registrar of Companies and those for the year ended 31 December 2004 will be delivered to the Registrar of Companies by 31 July 2005. The Group's auditors have reported on the accounts for the year ended 31 December 2004. Their report was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. This announcement has been prepared on the basis of accounting policies set out in the Annual Report and Accounts for the year ended 31 December 2003, with the exception that during the year the Group ceased the capitalisation of interest costs. This change in policy was made in order to bring the Group into line with the accounting policies of companies operating in the same sector. The impact on the current year's results of the change in accounting policy was to decrease the profit attributable to members by £1.7m. The impact on the results for the year ended 31 December 2003 of the change in accounting policy was to decrease the profit attributable to members by £1.7m. The results for the year to 31 December 2004 show a profit on ordinary activities before taxation of £133.0m. After allowing for £9.0m of preference dividends paid, the profit transferred to reserves for the year was £87.8m. Cash generated enabled the Group to reduce net debt by £44.2m to £64.0m. Enquiries: Enquiries should be made to John Elliott, Company Secretary, on 0191 223 5103. NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2004 GROUP PROFIT AND LOSS ACCOUNT 2004 2003 Restated £m £m TURNOVER 282.2 293.2 OPERATING PROFIT 114.6 121.0 Share of operating profit in associates and joint ventures 36.3 2.2 Profit on disposal of fixed assets of continuing operations 0.1 5.8 Loss on sale of discontinued operations - (4.5) Income from fixed asset investments - 0.3 PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST 151.0 124.8 Net interest (18.0) (20.5) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 133.0 104.3 Tax on profit on ordinary activities (36.2) (20.7) PROFIT FOR THE FINANCIAL YEAR 96.8 83.6 Dividends on non-equity shares (9.0) (9.0) RETAINED PROFIT FOR THE FINANCIAL YEAR TRANSFERRED TO RESERVES 87.8 74.6 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2004 2003 £m £m Profit for the financial year 96.8 83.6 Prior year profit adjustment relating to capitalised interest (25.3) Total gains recognised since last annual report 71.5 NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2004 SUMMARY GROUP BALANCE SHEET 2004 2003 Restated £m £m FIXED ASSETS 663.0 616.5 CURRENT ASSETS Stocks 14.1 10.7 Debtors 203.9 165.1 218.0 175.8 CREDITORS: amounts falling due within one year (200.4) (84.2) NET CURRENT ASSETS 17.6 91.6 TOTAL ASSETS LESS CURRENT LIABILTIES 680.6 708.1 CREDITORS: amounts falling due after more than one year (98.3) (198.1) PROVISIONS FOR LIABILITIES & CHARGES (15.9) (35.7) DEFERRED TAX (61.4) (57.1) NET ASSETS 505.0 417.2 Equity interests 503.9 416.1 Non-equity interests 1.1 1.1 SHAREHOLDERS' FUNDS 505.0 417.2 NORTHERN ELECTRIC plc ANNUAL RESULTS - YEAR ENDED 31 DECEMBER 2004 SUMMARY GROUP STATEMENT OF CASH FLOWS 2004 2003 Restated £m £m Operating profit 114.6 121.0 Depreciation 22.2 19.7 Increase in stocks (3.4) (0.1) Decrease in debtors 5.4 9.4 Increase/(decrease) in creditors 3.7 (8.1) Increase in provisions 2.8 1.0 Cash inflow from operating activities 145.3 142.9 Dividends received from joint ventures 0.2 0.2 Returns on investments and servicing of finance (20.6) (23.1) Taxation (10.4) (17.5) Capital expenditure and financial investment (69.1) (52.5) Acquisitions and disposals (1.1) 2.4 Cash inflow before financing 44.3 52.4 Management of liquid resources (42.6) (75.0) Financing (1.7) 20.4 Decrease in cash in the year - (2.2) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2004 2003 £m £m Decrease in cash in the year - (2.2) Change in loans to/from parent undertakings 1.7 (20.4) Cash outflow from management of liquid resources 42.6 75.0 Change in net debt resulting from cash flows 44.3 52.4 Amortisation of bond issue costs (0.1) (0.1) Change in net debt in the year 44.2 52.3 Net debt at 1 January (108.2) (160.5) Net debt at 31 December (64.0) (108.2) This information is provided by RNS The company news service from the London Stock Exchange