Annual Report 2014
After reading through these reports What I have noticed is:
Sales have increased from £1177.2m in 2012 to £1197.8m in 2013 but dropped to £1173.7m in 2014.
Operating Profit went from £216.9m in 2012 to £214.7m in 2013 but dropped to £198.1m in 2014.
Adjusting earnings went from 130.3 pence in 2012 to 132.9 pence in 2013 then dropped to 124.4 pence in 2014.
Dividends have increased from 39pence in 2012 to 42.75pence in 2013 and 46.5pence in 2014.
National Debt to EBITDA went from 1.0 times in 2012 to 0.4 times in 2013 to 0.6 times in 2014.
Links to Media Releases
Struggles my firms faces:
While Spectris sales in 2014 was driven by the UK and North America market it has an overall decrease in sales in the overseas market by £24.1m. This has contributed to a 8% ( £17.6m) overall decrease in sales in 2014 for the company.
The future challenges for Spectris lie in the Eurozone and China markets.
There has been an overall decline of 6% in adjusted profit before tax from £205.6m in 2013 to £ £192.5m in 2014.
Although Cash Flow was strong with a conversion rate of 89% Spectris debt increased by $21,5m in 2014.
Strategies to Overcome Struggles:
1) Maintain focus on investment on key strategic growth initiatives.
2) Continue to invest in innovation and new product development, launching new products. This investment will further strengthen our market position.
3) Expand Omega engineering beyond the US market to become a global business.
4) Increase investment on Reliasoft engineering software
5) Increase investment in Test and Measure department to improve monitoring and analysis solutions in the coal, gas and mining sector.
The Outlook:
Spectris expects to deliver progress as they benefit for their investment in new products and from acquisitions made during 2014. Investments together with our broad end-market exposures and strong financial position provide the Board of Spectris with confidence that the company is well positioned for 2015 and beyond.
Assets, Liabilities and Equity:
Assets
1) Property, plant and equipment (Non Current Asset)
(Also refered to as a tangible fixed asset, this represents the sum of Spectris total purchases).
2) Cash and Cash Equivalent (Current Asset)
(Short term life span)
3) Good Will (Intangible Non Current Asset)
(This is the amount that would be paid over and above the total value of Spectris Assets and Liabilities).
Liabilities
1) Short term Borrowings (Current Liabilities)
(This is the amount Spectris is due to pay within the year)
2) Deferred Tax Liability (Non Current Liability)
(This is the result of temporary differences between what Spectris can deduct for tax and accounting purposes. Deferred Tax Liability records the fact that the company will in the future pay more income tax because of a transaction that took place during the current year).
3) Retirement Benefit Obligations (Non Current Liability)
(This amount represents Spectris monetary obligations to its employees for pension entitlements).
Equity
1) Shared Capital
(Funds raised by issuing shares in return for cash)
2) Retained Earnings
(This is the portion of net income that Spectris retains rather that distributes to its shareholders in the form of dividends).
3) Translation Reserve
(This relates to the gain or loss during fluctuations in exchange rates).
My KCQ's
A couple of things that I noticed when reading through Spectris Annual Reports is how different reports can be in the real world compared to what we learn in books. For example:
a) I had no idea what Translation Reserve, deferred tax liability, retirement benefit obligations is or was. Does anybody else understand these terms?
b) The naming of each report is not just an income statement or balance sheet. It is all a Consolidated view of each report?
c) All of these reports are a lot more in depth than I had anticipated and attempting to understand the key elements and terms is still doing my head in.
d) In the Changes in Equity report I do not understand the differences between owners share base payments and share options exercised from own shares in relation to dividends. Does anyone have a similar Report and can explain these terms?
e) What does (treasury) purchased mean?
f) What does Derivative financial instruments mean in the Statement of Financial Position report?
g) What is a hedging reserve and a merging reserve in the Statement of Financial Position Report?
h) If anyone has a Statement of Cash Flow report like Spectris could they please explain?
Am I happy with my company?
Overall I am pretty satisfied with my chosen company. As Spectris is a UK based company I admit I did not understand all the lingo and terms used in their annual reports however by doing a little further investigation a few key areas became a little easier to interpret.
As I have a small background into Quality Assurance i can say that i was able to relate somewhat to Spectris. It is for this reason that if I had the chance to change or stay with my chosen company, I would stick with Spectris.
My top 3 Blogs:
I found Nick's blog be very informative, had lots of great links and was easy to read. I liked how Nick mentioned shared his struggles with this assignment. Nick's blog helped me to understand that i am not the only one that is having troubles understanding Annual Reports. Each company has a very different outlook on the presentation of their reports.
Christian's Blog was simple but direct, informative and easy to read. Nick's Blog helped me when it came to putting information on a page as simply and as directly as possible.
While Christyn's Blog was full of cats it was however extremely informative, very colorful and it made for a nice reading. Christyn also shared her thoughts, feelings and struggles with this assessment piece which i was able to identify with. Christyn's Blog helped me to ensure that i try hard not to miss anything.
Nice succinct review jason. I think I've gone into too much detail now but I found my company interesting. YES - real life is much different then the books. I'm in Taxation Accounting and people aren't text book!
ReplyDeleteYou have raised some good quality questions in your "what are?" etc Hopefully along the next 9 weeks we can answer these.
Feel free to come and check out my blog: http://ladyofledgers.blogspot.com.au/
Great work so far Jason. Can I ask, what do your 3 Assets, Liabilities & Equity that you have listed mean to you??
ReplyDeleteGreat blog Jason! I have provided some feedback via email today.
ReplyDelete