6-K 1 feb04036k.txt AMVESCAP PLC REPORTS 2002 YEAR END RESULTS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER Pursuant to Rule 13a-16 or 15d-16 Under the Securities Exchange Act of 1934 For the month of February, 2003 -------------- Commission File Number 001-13908 --------- AMVESCAP PLC ------------------------------------------------ (Translation of registrant's name into English) 30 Finsbury Square, London EC2A 1AG, ENGLAND -------------------------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F X Form 40-F ----- ----- Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ------ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ------ Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No X ------- ------- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A ------------- Description of document filed: AMVESCAP PLC REPORTS RESULTS FOR YEAR ENDED ------------------------------------------- DECEMBER 31, 2002 ----------------- For Immediate Release Contact: Robert F. McCullough Phone: 404-724-4251 Contact: Angus Maitland Phone: (44) 0207-379-5151 AMVESCAP PLC Reports Results for Year Ended December 31, 2002 London, February 4, 2003 - AMVESCAP reported that profit before tax, goodwill amortization and exceptional items decreased 33% to (pound)320.9 million ($516.6 million) from (pound)477.9 million ($693.0 million) in 2001. Diluted earnings per share before goodwill amortization and exceptional items was 27.2p for the 2002 year (2001: 40.0p). Revenues amounted to (pound)1,345.3 million ($2,165.9 million) compared to (pound)1,619.8 million ($2,348.7 million) in 2001 (NYSE: AVZ).
Results for Year Ended 2002 2001 2002++ 2001++ --------------- --------------- --------------- -------------- Revenues (pound)1,345.3m (pound)1,619.8m $2,165.9m $2,348.7m Profit before tax, goodwill amortization and exceptional items (pound)320.9m (pound)477.9m $516.6m $693.0m Earnings per share before goodwill amortization: --basic 20.5p 36.3p $0.66+ $1.05+ --diluted 20.3p 35.2p $0.65+ $1.02+ Earnings per share before goodwill amortization and exceptional items: --basic 27.5p 41.2p $0.89+ $1.19+ --diluted 27.2p 40.0p $0.88+ $1.16+ Dividends per share 11.5p 11.0p $0.37+ $0.32+
+ Per American Depositary Share equivalent to 2 ordinary shares. ++ For the convenience of the reader, pounds sterling for the year ended December 31, 2002 have been translated to US dollars using $1.61 per (pound)1.00 (2001: $1.45 per (pound)1.00). "We reduced expenses in a controlled manner throughout 2002 while maintaining our breadth of product, distribution capabilities and quality of service. We have aligned our corporate structure under our primary brands in response to clients' and distributors' increasing need for integrated solutions," said Mr. Charles W. Brady, Executive Chairman. "We achieved fundamental change that has strengthened the firm and will benefit us in the future." The Company previously announced that it has initiated a cost reduction program to reduce operating expenses by $150 million by the end of 2003. An exceptional charge of (pound)69.2 million (including (pound)49.2 million recorded in the fourth quarter) relating to these cost reduction initiatives was recorded in 2002. This charge amounts to (pound)56.4 million after tax or 6.9p per diluted share. Funds under management totaled $332.6 billion ((pound)206.6 billion) at December 31, 2002 compared to $397.9 billion at December 31, 2001. Money market funds, included above, amounted to $57.0 billion at December 31, 2002 compared to $63.6 billion at the end of the prior year. Approximately 50% of the total funds under management was invested in equity securities and 50% was invested in fixed income and other securities at December 31, 2002. The equity securities were invested in the following disciplines at December 31, 2002: 36% in growth, 38% in core and 26% in value styles. Average funds under management amounted to $336.6 billion for the fourth quarter compared to $348.4 billion for the previous quarter and $384.9 billion for the fourth quarter of 2001. Average funds under management amounted to $365.8 billion for 2002 compared to $395.0 billion for the prior year. The average money market fund levels totaled $59.6 billion for the year ($60.7 billion for 2001). Net debt at December 31, 2002 amounted to (pound)652.4 million (excluding client cash) compared to (pound)837.0 million at December 31, 2001. Earnings before interest, taxes, depreciation and amortization ("EBITDA") reached (pound)433.7 million ($698.3 million) for 2002, compared to (pound)603.4 million ($874.9 million) for the 2001 period. The Board has recommended a final dividend of 6.5p resulting in a total dividend of 11.5p for 2002 (2001: 11.0p), an increase of 5% over the prior year but the same level as the 2001 final dividend. This dividend, if approved by the shareholders at the Annual General Meeting in May, will be paid on May 3, 2003 to shareholders on the register on April 4, 2003. The ex-dividend date for the dividend will be April 2, 2003. THE YEAR IN REVIEW Effective January 1, 2003, the Company realigned several business units under the AIM and INVESCO brands. The following summary of activities for 2002 is presented under the former business unit structure. The operating data for 2002, recast into the new structure, is included for comparison purposes in the attached schedules. Managed Products The Managed Products group reported revenues of (pound)770.3 million during 2002 compared to (pound)986.2 million for the prior year. Operating profits were (pound)322.6 million, compared to (pound)436.5 million in 2001. The group generated approximately $34.9 billion of gross sales in 2002. In spite of this, market declines of $31.5 billion and net redemptions of $7.0 billion led to a reduction in funds under management for the year. Funds under management amounted to $166.1 billion at December 31, 2002, including $57.0 billion of money market funds. INVESCO Institutional The INVESCO Institutional group reported revenues and operating profits of (pound)199.2 million and (pound)49.3 million in the 2002 period. This group generated approximately $20.2 billion in gross sales during 2002; market declines and net redemptions were $8.4 billion and $5.7 billion, respectively for the year. Funds under management amounted to $102.9 billion at December 31, 2002. INVESCO Global INVESCO Global's revenues amounted to (pound)281.7 million for 2002 compared to (pound)340.3 million in 2001. Operating profit totaled (pound)33.9 million for the year ended December 31, 2002 versus (pound)76.4 million for the prior year. Funds under management were $55.3 billion at December 31, 2002. Gross sales for 2002 totaled approximately $29.2 billion; market declines totaled $9.3 billion and net redemptions were $1.3 billion for the year. AMVESCAP Retirement AMVESCAP Retirement's assets under administration were $30.9 billion at December 31, 2002. Net sales for the group amounted to $2.5 billion for 2002. This group services 1,400 plans with 624,000 participants at December 31, 2002. Private Wealth Management Revenues and operating profits for the Private Wealth Management (PWM) division totaled (pound)34.5 million and (pound)1.8 million for 2002, its first full year of operation. Funds under management were $8.3 billion at December 31, 2002. OUTLOOK "The global economic and political climate contains many uncertainties that are directly affecting the capital markets and our business. The worst bear market in over 65 years has badly eroded investor and business confidence, and it will understandably take some time to restore this confidence after the markets have stabilized," noted Mr. Brady. "As we enter 2003, AMVESCAP will continue to maintain our focus on the business fundamentals within our control - serving our clients well and prudently managing our business." AMVESCAP is a leading independent global investment manager, dedicated to helping people worldwide build their financial security. Operating under the AIM, INVESCO and Atlantic Trust brands, AMVESCAP strives to deliver outstanding investment performance and service through a comprehensive array of retail and institutional products for clients in over 100 countries. The Company is listed on the London, New York, Paris and Toronto Stock Exchanges with the symbol "AVZ." Members of the investment community and general public are invited to listen to the conference call today, Tuesday, February 4, 2003 at 9:30 a.m. Eastern Time (2:30 p.m. London Time), by dialing one of the following numbers: 1-888-201-4990 for US callers or 630-395-0027 for international callers. An audio replay of the conference call will be available until Tuesday, February 11, 2003 at 5:00 pm Eastern Time by calling 1-888-568-0380 for US callers or 402-530-7921 for international callers. AMVESCAP PLC Group Profit and Loss Account (in thousands)
Year Ended December 31, ---------------------------------------- 2002 2001 ----------------- ------------------ Revenues (pound)1,345,263 (pound)1,619,847 Expenses: Operating (978,338) (1,096,487) Exceptional (69,248) (59,997) Goodwill amortization (149,415) (137,477) ----------------- ------------------ Operating profit 148,262 325,886 Investment income 6,561 10,433 Interest expense (52,558) (55,881) ----------------- ------------------ Profit before taxation 102,265 280,438 Taxation (85,372) (125,635) ----------------- ------------------ Profit after taxation 16,893 154,803 Dividends (93,479) (89,260) ----------------- ------------------ Retained profit for the period (pound)(76,586) (pound)65,543 ================= ================== Earnings per share before goodwill amortization and exceptional items: --basic 27.5p 41.2p --diluted 27.2p 40.0p ----------------- ------------------ Earnings per share: --basic 2.1p 19.2p --diluted 2.1p 18.6p ----------------- ------------------ Average shares outstanding: --basic 810,042 805,061 --diluted 819,518 829,983 ----------------- ------------------
AMVESCAP PLC Group Balance Sheet (in thousands)
Dec 31, 2002 Dec 31, 2001 ----------------------- -------------------- Fixed assets Goodwill (pound)2,542,306 (pound)2,696,045 Investments 248,408 224,282 Tangible assets 197,060 213,579 ----------------------- -------------------- 2,987,774 3,133,906 Currents assets Debtors 725,547 882,516 Investments 69,195 81,495 Cash 355,111 350,978 ----------------------- -------------------- 1,149,853 1,314,989 Current liabilities Current maturities of long-term debt (222,089) (125,828) Creditors (917,216) (1,025,344) ----------------------- -------------------- (1,139,305) (1,151,172) Net current assets 10,548 163,817 ----------------------- -------------------- Total assets less current liabilities 2,998,322 3,297,723 Long-term debt (595,600) (844,285) Provisions for liabilities and charges (119,234) (171,974) ----------------------- -------------------- Net assets (pound)2,283,488 (pound)2,281,464 ======================== ===================== Capital and reserves Called up share capital (pound)198,614 (pound)196,037 Share premium account 619,250 552,524 Exchangeable shares 383,105 433,597 Profit and loss account 609,298 685,884 Other reserves 473,221 413,422 ----------------------- -------------------- Shareholders' funds, equity interests (pound)2,283,488 (pound)2,281,464 ======================= ====================
AMVESCAP plc Group Cash Flow Statement (in thousands)
Year Ended -------------------------------- Dec 31, 2002 Dec 31, 2001 -------------- --------------- Operating profit (pound)148,262 (pound)325,886 Amortization and depreciation 209,647 207,102 Change in debtors, creditors and other 68,609 10,245 ------------- -------------- Net cash inflow from operating activities 426,518 543,233 ------------- -------------- Interest paid, net of investment income (41,558) (45,596) Taxation (105,557) (166,573) Capital expenditures, net of sales (54,584) (71,542) Net purchases of fixed asset investments (37,322) (8,640) Acquisitions -- (311,441) Dividends paid (93,531) (84,365) Net (repayment)/incurrence of debt (54,304) 15,035 Change in bank overdraft (5,656) 2,040 Foreign exchange on cash at bank and in hand (29,873) (6,532) ------------- -------------- Increase/(decrease) in cash at bank and in hand (pound)4,133 (pound)(134,381) ============= ==============
AMVESCAP PLC Segmental Information (in thousands)
Year Ended Dec 31, 2002 -------------------------------------------------- Revenues Expenses Profit ----------------- ---------------- ------------- Managed Products (pound)770,313 (pound)(447,748) (pound)322,565 INVESCO Institutional 199,187 (149,853) 49,334 INVESCO Global 281,653 (247,749) 33,904 INVESCO Retirement 57,552 (53,493) 4,059 Private Wealth 34,538 (32,742) 1,796 New Business 2,020 (14,068) (12,048) Corporate -- (32,685) (32,685) ----------------- ---------------- ------------- (pound)1,345,263 (pound)(978,338) (pound)366,925 ================= ================ =============
Year Ended Dec 31, 2001 --------------------------------------------------- Revenues Expenses Profit ----------------- ---------------- -------------- Managed Products (pound)986,234 (pound)(549,763) (pound)436,471 INVESCO Institutional 211,917 (158,365) 53,552 INVESCO Global 340,293 (263,871) 76,422 INVESCO Retirement 58,224 (53,247) 4,977 Private Wealth 21,211 (19,972) 1,239 New Business 1,968 (12,179) (10,211) Corporate -- (39,090) (39,090) ----------------- ------------------ ------------- (pound)1,619,847 (pound)(1,096,487) (pound)523,360 ================= ================== =============
Organizational Structure Effective January 1, 2003
Year Ended Dec 31, 2002 -------------------------------------------------- Revenues Expenses Profit ----------------- ---------------- ------------- AIM US (pound)487,956 (pound)(281,350) (pound)206,606 Canada 151,345 (73,702) 77,643 ----------------- ---------------- ------------- 639,301 (355,052) 284,249 ----------------- ---------------- ------------- INVESCO US 333,457 (244,614) 88,843 UK 195,265 (165,555) 29,710 Europe/Asia 86,969 (84,744) 2,225 ----------------- ---------------- ------------- 615,691 (494,913) 120,778 ----------------- ---------------- ------------- Private Wealth/Retirement 90,271 (95,688) (5,417) Corporate -- (32,685) (32,685) ----------------- ---------------- ------------- (pound)1,345,263 (pound)(978,338) (pound)366,925 ================= ================ =============
Notes 1. The taxation charge is primarily made up from overseas taxation. After adjusting for the amortization of goodwill and the exceptional items, the effective tax rate for 2002 and 2001 was 30.6%. 2. The calculation of earnings per share is as follows:
2002 ---- Number of Profit after taxation shares Per share (pound)'000 '000 amount ---------------------------------- -------------------- ---------------- Basic earnings per share 16,893 810,042 2.1p ================ Dilutive effect of options -- 9,476 ---------------------------------- -------------------- Diluted earnings per share 16,893 819,518 2.1p ================================== ==================== ================
Profit before goodwill amortization and exceptional items is a more appropriate basis for the calculation of earnings per share since this represents a more consistent measure of the year by year performance of the business, therefore the calculation below is presented on that basis. Basic earnings per share is based on the weighted average number of ordinary and exchangeable shares outstanding during the respective periods. Diluted earnings per share takes into account the effect of dilutive potential ordinary and exchangeable shares outstanding during the period.
2002 ---- Profit before goodwill amortization and Number of exceptional items shares Per share (pound)'000 '000 amount ---------------------------------- -------------------- ---------------- Basic earnings per share 222,724 810,042 27.5p ================ Dilutive effect of options -- 9,476 ---------------------------------- -------------------- Diluted earnings per share 222,724 819,518 27.2p ================================== ==================== ================
2001 ---- Profit before goodwill amortization and Number of exceptional items shares Per share (pound)'000 '000 amount ---------------------------------- -------------------- ---------------- Basic earnings per share 331,670 805,061 41.2p ================ Dilutive effect of options -- 24,922 ---------------------------------- -------------------- Diluted earnings per share 331,670 829,983 40.0p ================================== ==================== ================
Number of shares outstanding at December 31, 2002 (in thousands):
Ordinary shares 794,456 Exchangeable shares 34,899 Less: ESOT shares (19,264) Shares in stock plans (5,000) ----------------- Shares outstanding 805,091 ================= Shares reserved for: Options 129,192 ESD's 6,107 ----------------- Total shares 940,390 =================
3. The consolidated profit and loss includes exceptional charges in 2002 and 2001 as follows:
(pound)'000 2002 2001 ----------- ------------------ ---------------- Acquisitions -- 43,310 Redundancy and reorganizations 44,544 9,993 Project costs 12,882 -- Leases and other 11,822 6,694 ------------------ ---------------- Total exceptional items 69,248 59,997 ------------------ ---------------- Total exceptional items net of tax 56,416 39,390 ================== ================
The restructuring charges include costs associated with redundancy programs and expenses associated with internal reorganizations. Project costs include charges for systems and other terminated initiatives. The leases and other provisions relate to moves to new office facilities, office closures and the write-off of other fixed assets. 4. Dividends for 2002 and 2001 were as follows:
2002 2001 (pound)'000 (pound)'000 ---------------- -------------- Interim paid: 5.0p per share (2001: 4.5p) 40,823 36,552 Final proposed: 6.5p per share (2001: 6.5p) 52,656 52,708 ---------------- -------------- 93,479 89,260 ================ ==============
5. The 2001 balance sheet presentation has been reclassified to conform to the current year presentation of the Group's banking and insurance subsidiaries. Certain amounts previously shown as credits to the share premium account, and which arose on various acquisitions, have now been reclassified to other reserves in accordance with the requirements of S131 of the Companies Act. 6. The financial information set out above does not constitute the Company's statutory accounts for the years ended December 31, 2002 or 2001. Statutory accounts for 2001 have been reported on by the Company's Auditors and delivered to the Registrar of Companies. The report of the Auditors was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. AMVESCAP PLC Funds Under Management (in billions)
Managed Products ----------------------------- INVESCO INVESCO Private Total AIM INVESCO Inst Global Wealth ------------- ------------ -------------- -------------- -------------- ---------- Dec 31, 2001 $397.9 $179.8 $31.4 $116.8 $60.0 $9.9 Market gains/(loss) (50.8) (23.6) (7.9) (8.4) (9.3) (1.6) Net new (lost) business (14.2) (3.7) (3.3) (5.7) (1.3) (0.2) Change in Money Market Funds (5.8) (6.3) (0.5) -- 1.0 -- Transfers -- (0.1) -- 0.1 -- -- Foreign currency 5.5 0.3 -- 0.1 4.9 0.2 ------------- ------------ -------------- -------------- -------------- ---------- Dec 31, 2002 $332.6 $146.4 $19.7 $102.9 $55.3 $8.3 ============= ============ ============== ============== ============== ========== Dec 31, 2002 + (pound)206.6 (pound)91.0 (pound)12.2 (pound)63.9 (pound)34.3 (pound)5.2 ============= ============ ============== ============== ============== ==========
Organizational Structure Effective January 1, 2003
AIM INVESCO --------------------- -------------------------------------- PWM/ Total US Canada US UK Europe/Asia Retirement ------------ ----------- ----------- ----------- ----------- ------------- -------------- Dec 31, 2001 $397.9 $157.7 $22.1 $148.8 $38.1 $21.8 $9.4 Market gains/(loss) (50.8) (21.5) (2.1) (16.3) (6.8) (2.5) (1.6) Net new (lost) (14.2) (5.4) 1.7 (9.0) (1.3) (0.1) (0.1) business Change in Money Market Funds (5.8) (6.4) 0.1 (0.5) 1.2 (0.2) -- Transfers -- -- (0.1) 0.1 -- -- -- Foreign currency 5.5 -- 0.3 0.1 2.8 2.1 0.2 ------------ ----------- ----------- ----------- ----------- ------------- -------------- Dec 31, 2002 $332.6 $124.4 $22.0 $123.2 $34.0 $21.1 $7.9 ============ =========== =========== =========== =========== ============= ============== Dec 31, 2002 + (pound)206.6 (pound)77.3 (pound)13.7 (pound)76.5 (pound)21.1 (pound)13.1 (pound)4.9 ============ =========== =========== =========== =========== ============= ==============
+ Translated at $1.61 per (pound)1.00. Note: INVESCO Retirement has $30.9 billion in assets under administration as of December 31, 2002, compared to $34.6 billion as of December 31, 2001. AMVESCAP PLC Reconciliation to US Accounting Principles (in thousands)
Year Ended December 31, ----------------------------------------- 2002 2001 -------------------- ------------------ Net profit under UK GAAP (pound)16,893 (pound)154,803 US GAAP Adjustments: Acquisition accounting 137,790 (35,538) Redundancy and reorganizations 11,961 -- Taxation (5,198) (40,539) Other 420 1,495 -------------------- ------------------ Net income under US GAAP (pound)161,866 (pound)80,221 ==================== ================== Earnings per share before amortization: --basic 20.4p 34.8p --diluted 20.2p 33.8p Earnings per share: --basic 20.0p 10.0p --diluted 19.8p 9.7p Dec 31, 2002 Dec 31, 2001 -------------------- ------------------ Shareholders' funds under UK GAAP (pound)2,283,488 (pound)2,281,464 US GAAP Adjustments: Acquisition accounting 1,034,168 984,436 Redundancy and reorganizations 11,961 -- Treasury stock (162,104) (97,580) Dividends 52,656 52,708 Other (11,934) (20,443) -------------------- ------------------ Shareholders' equity under US GAAP (pound)3,208,235 (pound)3,200,585 ==================== ==================
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMVESCAP PLC ------------------------------ (Registrant) Date 4th February, 2003 By /s/ MICHAEL S. PERMAN ------------------ -------------------------- (Signature) Michael S. Perman Company Secretary