Balance Sheet and Cash Flow
We continue to maintain a strong balance sheet with a good cash flow. Total capital employed was
down 3% in the first half to £263 million. At constant currency there was an increase of 7%,
comprising a 5% rise in net fixed assets and a rise in working capital where both stock levels and
trade debtors were lower but creditors, including taxation, were also reduced. Increased capital
expenditure of £15 million reflects the previously announced investment projects in the UK at
Falmouth and Cheltenham, and in China.
The net cash balance at 30th June 2009 was £4.1 million (31st December 2008: £17.4 million).
There was a good underlying cash flow, offset by the higher capital expenditure, headcount
reduction costs, increased taxation payments, additional pension cash contributions and payment in
May of the final dividend for 2008. Overall, therefore, there was a net cash outflow of £12.5 million
for the first half. Currency movements reduced net cash balances on translation by £0.8 million in
the period.
