This statement is issued in accordance with the requirements of the Disclosure and Transparency Rules and relates to the period from 1 November 2011, the beginning of our new financial year, to the date of publication of this statement.
Performance
Sales in the ten months to the end of August are 1 per cent ahead of equivalent period last year at constant exchange rates. Movements in average rates over the period result in a 1 per cent decline in consolidated numbers. Equipment revenues are 2 per cent below prior year; average selling prices are broadly stable. Fluids and other consumable revenues are 5 per cent ahead of prior year; this is in line with year on year growth of our installed base of printers. Spares and services revenues are marginally ahead of prior year after adjusting for the disposal of the non-coding element of the solid state laser business of Photon Energy made last year.
The rate of gross profit margin remains stable and in line with that reported in interim results. We are maintaining close control over operating costs while continuing to invest in our businesses in developing markets and in key research and development projects.
Market conditions
Market conditions remain fragile and customers' confidence to make investment decisions is low. We continue to see deferral in replacement of equipment in some more mature markets, including much of Europe, and reduced levels of investment in expanding capacity in developing markets. Confidence levels among manufacturers in China continue to fall and expansion plans in many customers have been put on hold. Our businesses in India and North America continue to report good growth.
Initiatives
We continue to make progress in our key strategic projects. TEN Media field trials are continuing to take place and these will be followed by validation. Our full colour label press the N600i has completed extensive field trials and we expect full launch in Europe and North America imminently. The monochrome version continues to attract new customers and we are pleased to report that order intake for the product is already in excess of our target for the year.
Acquisitions
During June we completed the acquisitions of Graph-Tech and PostJet. Graph-Tech is a technology and product development based company critical to the success of our digital press business. We are pleased with progress in the integration of the team with our core digital print group. PostJet is working on major opportunities in large postal markets.
Balance Sheet
Cash has been used during the period since the interim results on the acquisitions of Graph-Tech and PostJet (total £17.6m) and on the final payments due under the earn-out arrangements with the former owners of our Portuguese subsidiary and on-line coding TTO business (total £2.9m). Payment of the interim dividend (£8.0m) was made during August. Net cash at the end of August 2012 was £2 million.
Outlook
We remain cautious about market conditions and reiterate comments made in our earlier statements that we expect sales in the full year to be at similar levels to last year. We are controlling costs carefully but remain committed to key investments.
Looking further ahead, we see good opportunities for growth of the business in the medium term, assisted by legislation and our strategic initiatives, and will continue to invest so as to position the Group to address them.
