10 Other Costs Two key components: Operating costs General and Admin costs Operating cost increases due to: Technology mix Energy, R&M Logistics - new General and Admin cost increases due to: Share schemes IFRS Training
11 Cost Dynamics We are essentially a fixed cost business but: Costs do increase over time, therefore Revenue growth is critical in determining profitability and Technology mix will infl cost growth Impact of strategic investments need to be considered e.g. IT / new capacity
18 Acquisition of Ebis Iotron Ltd - 1/09/05 Physical 3 process lines, 2 buildings at Harwell (40 minutes from Swindon) - 25 people Consideration £2.55m in cash Dynamics for Isotron Strengthen UK Medical Market New Market - Semiconductor processing Irradiation of Gemstones (Topaz) Increase in beam expertise Actions Integration / restructuring Rebalancing medical processing Potential development of unique technology
19 Thailand Expansion Total cost circa £2.0m – 75% in current year On-stream 2006 / 2007 Tote v’s Pallet Expansion is customer led (multi-national)
20 Visibility of Earnings Fundamentally Good: Long term relationships (esp Medical) Daily/weekly/monthly processing Medical market grows steadily overall Costs have a fixed element But No order book / no minimum volume is contracted or guaranteed Medical market is product diverse, with mixed growth rates Chemical business is volatile Consequence Fast changes to bottom line, both up and down Difficulty on guidance
21 Outlook “Another successful year is expected”
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