abacus group plc
annual report  accounts 2004 the abacus group is a leading franchised distributor of electronic components flatpanel
displays printers and related products and provides additional value added services
including technical support cable and electromechanical subassembly and the design
and build of display systems
following the purchase of tdc the group now employs approximately 800 people and
has 9 principal trading businesses operating in the uk ireland benelux nordic and italy
the group’s philosophy is to offer as wide a product range as possible in order to be in
tune with the widespread market trend towards supply chain management and vendor
reduction to work at design level with both existing and new customers in order to be
involved in the proliferation of new products that typifies the electronics industry and to
combine these features with an unusually high level of personal service and commitment
this philosophy has enabled the group to grow its uk market share and to achieve a
return to shareholders well above the industry average
the group has a continual programme of investment to ensure that the logistics and
systems are in place to support and further these aims
contents
financial and operational highlights 1
abacus group at a glance 2
chairman’s statement 4
chief executive’s review 5
financial review 8
the board of directors secretary and advisors 11
directors’ report 12
corporate governance statements 14
corporate social responsibility 18
directors’ remuneration report 20
statement of directors’ responsibilities 28
auditors’ report 29
financial statements 30
five year summary 54
notice of annual general meeting 55
geographic coverage 57 the principle reason for abacus’ success in 2004 has been the strong
performance of its core uk business this has been achieved as the result of our
focus on excellent local customer service good logistics and a proactive
approach to the introduction of new products into a changing marketplace where
we have gained new customers
abacus group plc   1
financial and operational highlights
l profit before tax and goodwill increased by 25 to £100m
2003 £80m after goodwill by 22 to £93m 2003 £76m
l turnover increased 28 to £1878m 2003 £1470m
l basic earnings per share before goodwill increased by 18
to 159p 2003 135p after goodwill increased by 14 to
142p 2003 125p
l organic sales growth of 9 exceeds industry growth of 7 
l dividend increase of 3 to 105p 2003 102p
the five year summary is shown on page 54
00 01 02 03
80
88
97
102
dividend per share
pence
00 01 02 03
1526
1550
1470
turnover
£m
00 01 02 03 00 01 02 03
158
171
95
80
270
271
98
125
profit before tax and
goodwill
£m
earnings per share after
goodwill
pence
00 01 02 03
268
287
166
135
earnings per share before
goodwill
pence
2015
04
1878
04
100
04
159
04
142
04
105 abacus polar has been at the forefront of electronic
component distribution for over 30 years the sales operation
is run through a network of regional sales offices offering local
customer support it currently has 19 sales operations in 10
locations covering the uk and eire a wide range of market
leading franchises are represented across all product
technologies abacus polar prides itself on its high level of
customer service
micromark ccd is based in maidenhead and distributes
products across the uk and eire micromark was formed in
1970 combining with ccd in 2000 micromark ccd is a
narrow line broadbased technology electronic component
distributor the company is dedicated to providing excellent
technical support alongside a high level of 
personal service
tdc was acquired by the abacus group in june 2004 the
company is based in basingstoke and was founded in 1992
it specialises in wireless and wired products for embedded
applications in machine to machine m2m automotive
consumer electronic and telecommunication products 
abacus group at a glance
2 abacus group plc
promax is headquartered in them in denmark and was
established in 1985 from its original base it now markets its
services through a network of 8 sales offices in all four nordic
countries promax offers a complete range of electronic
technologies from the world’s leading suppliers offering a
high level of technical support through its highly trained and
qualified workforce has enabled promax to become a leading
distributor in the nordic region
ecc was purchased outright in 2004 and is now solely
owned by the abacus group with its headquarters in milan
it covers italy through a network of regional offices the
company has three divisions itc which sells it peripherals
components which acts as a manufacturer’s representative
for a number of ‘blue chip’ manufacturers and distribution
which holds franchises across all product groups
electronic component distribution
telecom design communication tdc
the specialist distributor in telecoms
  ctl is based in stonehouse gloucestershire and markets its
services across the uk and eire ctl offers a range of sub
contract manufacturing services to the electronics industry
including standard cable assemblies electromechanical sub
assembly through to complex box build and associated
testing the 40000 sq ft facility in gloucestershire employs a
cell manufacturing technique to utilise space and processes
most efficiently automated and semiautomated equipment is
extensively used and where hand assembly is required the
technicians are highly trained and qualified the facility holds
approval to iso and babt and an iip award
ccs is based in runcorn and offers cost efficient wiring and
box build solutions from design through to complete project
management ccs markets its services in the uk and eire
and is approved to iso and ul 
abacus group plc   3
dubilier is headquartered in dunmow essex and has been
supplying products for the electronics industry for over 50
years originally a uk manufacturer dubilier now has its
products manufactured globally dubilier’s comprehensive
range of passive products has in recent years been
supplemented by electromechanical products such as fans
connectors fuses and more recently batteries the dubilier
name is synonymous with quality and value dubilier markets
its products through europe selling both direct and through
its distribution network 
the trident microsystems group was formed in 1967 and
has grown to become the leading flatpanel displays and
printer specialist in the uk in addition it has a benelux
operation and is currently expanding into the nordic region
and italy
its expertise has been earned by successfully managing
customer projects through signing key franchises and by
investing in skilled people the group has products for oem
industrial medical retail instrumentation and automotive
designers as well as the capability to develop bespoke
display and manmachineinterface systems according to
customer need trident’s products and expertise are available
through field sales engineers a network of comprehensive
websites and through its inhouse technicians and product
specialists all ready to find solutions for customers needing
display printer industrial computer and card reader products 
value added distribution services the board is recommending an increase in the final dividend
of 3 making a total for the year up 3 at 105p
the principal reason for abacus’ success in 2004 has been
the strong performance of its core uk business  this has
been achieved as the result of our focus on excellent local
customer service good logistics and a proactive approach to
the introduction of new products into a changing marketplace
where we have gained new customers our electro
mechanical assembly businesses have fared even better than
the core distribution business with sales growth of 17
overseas our performance has been uneven with a good
result in denmark being offset by downturns in our swedish
and finnish companies  in italy the market showed no growth 
over the period
in may 2004 we announced the acquisition of 40 of the
share capital of ecc distribution limited taking our ownership
to 100 ecc is the uk holding company of ecc elettronica
spa an italian electronic component distributor which is
headquartered in milan and covers italy through a network of
five additional regional offices the ownership of ecc has
given abacus the opportunity to enhance ecc’s franchise line
card and develop its product offering
we believe that the market for wired and wireless applications in
communications shows significant growth potential and in june
2004 we acquired t elecom design communications ltd tdc
for £2 million tdc fits well with the abacus culture of adding
value to the products it sells by providing customers with design
and technical support in an attractive sector of the market
we remain cautious on the global economic outlook but
abacus has entered the current year with a strong order book
and a range of customer and product opportunities the
group will continue to expand its areas of operation both
geographically and into areas of market growth as in the year
under review this will be achieved organically and by
acquisition whenever suitable opportunities arise 
there have been a number of board changes during the year
in june bob lambourne joined the group as senior
independent director and we welcome the experience he
brings to the board in september both brian murdoch and
gary kibblewhite retired as directors brian joined abacus in
1987 as managing director and was a major force in the
company over 17 years he stepped down as chief executive
in 2000 at which time he became deputy chairman on a part
time basis we are grateful for his very considerable
contribution gary became a nonexecutive director in 1991
and his knowledge of the industry has been of great benefit to
the board we wish both brian and gary well for the future
again i thank and congratulate everyone in the abacus group
for their support and hard work over the past twelve months
harry westropp
chairman
23 november 2004
chairman’s statement
i am pleased to report another strong performance from the abacus group with
group sales rising 28 to £188 million from £147 million in the previous year
sales on a likeforlike basis prior to acquisitions increased by 9 to £160 million
this compares with growth of 7 for our industry in the uk market over the same
period the two acquisitions made during the year added a further £28 million to
sales profit before taxation and goodwill was up by 25 to £100 million and
earnings per share increased by 18 after goodwill profits were up by 22 to
£93 million and earnings per share increased by 14 
4 abacus group plc 
ctl’s new clean room and
custom lead preform service abacus group plc   5
general review 
the year has seen an improvement in market conditions for
our distribution businesses primarily in the uk and eire the
uk industry association afdec reports a 7 growth in the
market during our financial year compared to the same period
the previous year this growth has been driven by increased
demand from uk customers while average selling prices
have remained relatively stable in the nordic region afdec
statistics show a market growth of 5 and in italy assodel
their industry association reports a flat market improvement
in the uk market also benefited our uk based electro
mechanical assembly businesses ctl and ccs at trident
the display and related products specialist there was a further
disappointing delay in billings on our medical contracts 
during the year we completed the acquisition of 100 of the
share capital of ecc our italian based distribution business
and in june 2004 the group acquired 100 of telecom
design communications ltd tdc a uk based distributor of
wireless modules and wired communication semiconductors
an area which has strong growth potential for the future 
overall our group sales grew by 28 or by 9 on a likefor
like basis when excluding acquisitions and our group
bookings showed a 30 growth or 10 on a like for like
basis the largest growth contributors were our uk and eire
distribution businesses which outgrew their markets afdec
data for both the nordic and uk markets were restated
during the year to take account of new members the
statistics now represent 86 of the uk distribution market
and 54 of the nordic region based on these restated
numbers our share in the uk and eire grew to 14 in 2004
compared to 135 in 2003 but decreased from 49 to
46 in the nordic region in italy ecc had a 4 market share
according to assodel whose members represent 74 of the
distribution market 
the impact of movement in component volumes and average
selling prices is significant and we measure and closely
monitor these statistics our uk distribution businesses
excluding acquisitions showed a growth in volumes of 17 in
2004 compared to 2003 but a reduction in average selling
prices of 3 in the nordic region our volumes grew by 7
and average selling prices declined by 4 our workloads as
measured by the number of lines shipped showed a yearon
year growth of 10 in the uk and a reduction of 8 in the
nordic region
all of the markets that we supply are extremely competitive
due to the need to support our customers with the right
products at the right price and consequently our gross
margins are constantly under pressure to continue to invest
in the business to support both customers and suppliers
requires us to maintain margins at a level that makes this
possible and this has therefore always been a high priority for
abacus management our gross margins in our continuing
businesses were 238 compared to 232 in 2003 due to
the lower gross margins prevalent in our industry in europe
the acquisition of ecc during the year resulted in the group
margin for 2004 being 229 
headcount in our continuing distribution businesses
increased by 21 in 2004 with the majority of our sales growth
coming from increased activity rather than improving prices
plus our focus on attracting new customers and maintaining
service levels 80 of this growth has been in new positions
within sales and marketing  including acquisitions our
distribution headcount ended the year at a total of 605
chief executive’s review
abacus polar has continued to perform extremely well benefiting from its local
sales office culture and an increased focus on promoting new products to its
customers it has again strengthened its position in the uk and eire market and
has seen its new order intake increase by 21 in 2004 compared to 2003 billings
increased by 16 over the same period 6 abacus group plc
individual company review
we approach the market with an extremely high level of
personal service combined with a broad product offering a
strong technical capability supports the introduction of new
products to our existing and potential customer base and we
combine this with the policy of having other businesses that
create a differentiation which distinguishes abacus from our
competitors
abacus polar our uk and eire based distribution business
has continued to perform extremely well benefiting from its
local sales office culture and an increased focus on
promoting new products to its customers it has again
strengthened its position in the uk and eire market and has
seen its new order intake increase by 21 in 2004 compared
to 2003 billings increased by 16 over the same period
the movement of manufacturing from the uk to lower cost
areas has slowed significantly and the impact on abacus
polar has again been minimal during the year  however we
recognise that it is still a threat to our growth and during the
course of the year we have invested in additional sales
personnel to find and introduce new customers into the
group  by adding headcount to support the increased
activity we can ensure the service offered to our existing loyal
customers is unaffected this improved focus on taking new
products to market and approaching potential new customers
will be a key driver for the business in the coming year
micromark ccd has also performed well with its order
intake growing by 9 over 2003 and its billings by 7 we
continue to look for opportunities to expand its franchise
base particularly in noncommodity areas in the electro
mechanical product range although these products do not
have the same potential growth opportunities as a major
semiconductor franchise they are inherently less cyclical with
regard to demand and price and usually have higher average
selling prices and gross margins
promax our nordic distribution business has not performed
as well as our uk businesses and has seen its order intake
remain at the same level as 2003 and its billings decline by
2 resulting in a small loss of market share its position in
the danish market is as strong as abacus polar’s in the uk
but it has not performed as well as we had expected in the
three other countries within the nordic region whilst we will
continue to deliver an excellent service in denmark our focus
during the next financial year will be on improving our result
from the other nordic countries we believe that the
introduction of our uk based it system during the past
summer will aid this process
ecc our italian distribution business joined the group at the
beginning of the year when we increased our shareholding to
60 and the balance of 40 was acquired in may 2004 we
have been working with ecc as a commercial partner since
1999 and therefore have a good understanding of its
business since joining the group ecc has been able to add
new franchises and will build on these in the future ecc’s
performance has met our expectations although compared
to financial year 2003 its order intake and billings have
declined by 3 in a flat market 
chief executive’s review continued
customer sectors
contract manufacturing 
local 312
audio visual 20
medical 22
contract manufacturing 
global 29
distribution 36
printer 
peripherals 58
communication 59
fire  security 73
instrumentation 101
others 143
industrial control 147
the new recruits – ccs expands  abacus group plc   7
tdc a uk based distributor focusing on the wireless and
wired communications market was acquired in june 2004 in
last year’s review we identified this as a potential growth
market and in such a circumstance the option is either to
attempt to attract new franchises and personnel into the
group which is not easy or to identify existing companies
that already have the franchises the personnel and the
expertise tdc fitted this profile well we welcome them to the
group and look forward to their providing potential growth
opportunities as we move through the new financial year one
of tdc’s major franchises has already agreed to work with us
from january 2005 in the italian market providing ecc with
further new products to take to existing and potential
customers
trident our display and related products specialist did not
perform as well as we had anticipated due in the main to the
lack of shipments against their medical contracts  its new
order intake declined by 7 and its billings by 2 when
compared to its 2003 result these products remain a growth
market and having established trident in the nordic region at
the end of 2003 we have now introduced the concept into
italy trident will continue to focus on its core distribution
business as well as other system build opportunities which
will bring growth in markets not normally covered by an
electronic component distributor we will also continue to
seek ways to expand the business both in the uk and
abroad
ctl and ccs our electromechanical assembly businesses
have both benefited from the improvement in the uk market
with a combined growth in their new order intake of 16 in
2004 compared to 2003 and a billings growth of 17 in the
same period they both offer a high quality local
manufacturing facility to uk customers whose volume or
complexity of product does not lend itself to offshore
manufacturing we remain convinced that offering a different
service from our competition is another key factor to our
successful growth in the uk market
dubilier our “own brand” component business which has in
excess of 80 of its sales in passive products has seen an
increase in volumes of 10 but a further reduction in average
selling prices of 14 it continues to seek new products in the
electromechanical product area to broaden its product range
and as with ctl and ccs remains both a key differentiator
and a useful contributor to the group’s gross margins
outlook
we enter the new year with a number of key parameters in
our business showing improvement over the position at the
beginning of financial year 2004 our 90 day order book
across the group is up 3 whilst in the uk and eire
distribution it is up 8 the daily turns business measured as
new orders booked and billed in the same month is up 18
in our uk and eire distribution companies however whilst a
number of the major semiconductor manufacturers have
experienced strong growth over the past 12 months we have
seen a minimal rise in average selling prices for
semiconductors and virtually no supply problems industry
forecasters are currently predicting smaller growth in 2005
and consequently we do not expect to get any benefit from
supply shortages or increased prices in the near future
organic growth in our business will come from us continuing
to offer an excellent level of service to all our customers this
ensures that we remain focused on the fundamentals of our
business so that we deliver an overall performance above the
average for our industry however we are committed to
seeking opportunities to strengthen our presence in existing
markets and to expanding our geographical coverage for the
various divisions of the group
martin kent
chief executive
23 november 2004 8 abacus group plc
turnover
in the year to 30 september 2004 sales increased by 28 to
£188 million or by 9 on a like for like basis excluding the
sales for ecc and tdc which were acquired in october 2003
and june 2004 respectively on a like for like basis sales in
the first half were up 6 on the prior year whilst sales in the
second half were up 11 on the comparable period a year
earlier  during a year in which sales in the uk excluding
tdc increased by 11 year on year all operations continued
to deliver profit with the exception of promax the group’s
distributor in the nordic region which suffered a drop in sales
of 2 in both local currency terms and sterling
looking at the geographical markets 67 2003 79 
12 2003 15 and 13 2003 0 of the group’s turnover
arose in the uk nordic and italian regions respectively
based on afdec’s restated market figures the group
increased its uk market share in 2004 to 14 from 135 in
2003 but in the nordic region promax’ share declined slightly
from 49 to 46  the group now holds 40 of the italian
market following the acquisition of ecc
gross margins
margins improved slightly during the course of the year
reversing the deterioration in the latter half of the previous
year with the gross profit margin for 2004 excluding tdc and
ecc coming in at 238 as against 232 in the previous
year  after including tdc and ecc the group gross margin
in 2004 was 229 
operating expenses and goodwill
other operating expenses excluding goodwill of £07million
for the year ended 30 september 2004 were £321 million as
compared to £255 million in 2003 excluding tdc and ecc
they rose by 9 to £278 million this increase arose mainly
from expenditure on improving the group’s business system
and on servicing the increase of 9 in organic sales
demonstrating the group’s ability to control its cost base  
during the year distribution headcount increased from 516 
at september 2003 to 605 at september 2004 this increase
in heads resulted from a net organic increase of 21 staff with
the acquisitions of ecc and tdc adding a further 51 and 17
staff respectively  this tight headcount control has been
achieved by continuing to focus on operational efficiencies
whilst ensuring that our customer service levels and franchise
support have not diminished 
all acquired goodwill is written off over a 20 year period on a
straightline basis subject to investment impairment reviews
the group’s goodwill amortisation charge increased to
£07million in 2004 compared to £03 million in the previous
year this increase reflects the reduction made in 2003 in the
estimated deferred consideration payable on the trident
acquisition and the subsequent adjustment to the goodwill
charge in 2003 
finance charges 
finance charges rose from £06million to £09million but
excluding tdc and ecc remained flat at £06 million this
was achieved in part through our strategy of utilising lower
interest rates on yen euro and us borrowings even after
the tdc and ecc acquisitions the group achieved a robust
interest cover of 125 times 2003 15 based on profit before
interest and goodwill 116 times after goodwill amortisation
taxation 
the group’s effective tax rate for the year based on profits
before taxation and goodwill was 327 against 294 in the
previous year 352 and 310 respectively after goodwill
this increase primarily resulted from
a the acquisition of ecc which has a higher tax rate 
b the group moving from a position of a net deferred tax 
asset which the group had prudently not recognised to 
one of a net deferred tax liability and the consequent 
increase in tax charge and
financial review
the directors are recommending a final dividend of 70p giving a total dividend
for the year of 105p this 3 increase on 2003 reflects the group’s confidence in
effectively managing its working capital and in its ability to generate cash
abacus group stand –
electronica exhibition munich
november 2004 abacus group plc   9
c an increase in carried forward losses and consequent 
deferred tax asset which the group does not recognise as
recoverability is uncertain 
working capital and cash flow
the group retains its key focus throughout each business 
on maintaining tight management of working capital 
the group’s cash flow varies both during the course of each
month and seasonally across the year debt tends to be
highest at the month end dipping sharply during the first ten
days of each month as some debtors pay a few days late it
is the group’s policy to pay its creditors on time and the bulk
of these payments are due at the end of each month during
the course of the year cash flow tends to improve during the
latter part of the summer which coincides with the group’s
year end in addition both at the half year mark and at the end
of the year the group’s credit control departments make
extra efforts to resolve outstanding issues and this tends to
lead to the debtors’ figure being lower than in the preceding
few months
debt for the year increased by £108million compared to an
increase of £02million in 2003 the change related mainly to
a cash inflow from operating activities rising to £131million 
from £107million in the previous year however this 
increase was more than offset by
b capital expenditure of £24million 2003 £48million 
c acquisition expenditure of £16million for ecc and 
£20million for tdc and the consolidation of their
associated debts of £79million and £02million
respectively and 
d a payment of £24million of deferred consideration on 
the trident acquisition made in the year ending 30
september 2001
looking at each of these in turn
operating activities 
operating profit before depreciation and goodwill increased
to £126million in 2004 from £98million in 2003 see note
21 and cash inflow from creditors and provisions was
£32million against an outflow in 2003 of £23million the latter
in part reflects the 9 increase in like for like year on year
sales and the associated increase in cost of sales 
in 2004 cash outflow on debtors was £30million against 
an outflow of £03million in 2003 the £27million increase 
in outflows again reflected the 9 increase in sales the
group’s year end gross debtors’ days were 67 in 2004
against 62 in 2003 mainly due to the acquisition of ecc
which has higher debtors’ days there was a £03 million
inflow from a decrease in stock 2003 inflow of £34million 
capital expenditure 
during the year the group’s capital expenditure amounted 
to £24million 2003 £48million whilst depreciation was
£16million 2003 £12million during the year we invested 
a further £15million in upgrading our business system 
2003 £23million 
it is the group’s policy that its larger properties be acquired
on a freehold basis in order to optimise our use of each
property although if circumstances would indicate leasing to
be more appropriate in certain specific situations then such 
a route would be considered
acquisitions 
as part of the acquisition price for the trident microsystems
limited group which was acquired in october 2000 an
element of consideration was deferred until after april 2004
based upon the profit performance of trident during the two
years ending 30 september 2003 this deferred consideration
amounted to £24million and was paid during the year
in january 1999 the group sponsored a management buyout
of ecc elettronica spa in august 2003 the group purchased
9 of ecc distribution limited the parent company of ecc
elettronica spa for £02million and during the year the
group purchased a further 51 and 40 in october 2003
and may 2004 respectively bringing the total investment 
to £18million 
debt
net debt at the end of the year was £294million as against
£187 million at the end of the previous year as mentioned
before this increase was mainly due to the £141million cost
of acquisitions comprising cost of investment £36million
consolidation of acquired debt £81million and payment of
deferred consideration £24million  10 abacus group plc
treasury
the group’s treasury function is managed centrally from
newbury providing a service to the operating businesses
with regular reporting to the board the group’s treasury
policy is to ensure that adequate capital is available to the
group for its business operations and that this is provided in
a costeffective fashion no speculative transactions as such
are undertaken in that all foreign currency purchases are
related to current or projected transactions however the
nature of treasury management is such that the timing and
extent of currency hedging will of necessity always involve a
degree of speculation as to the future movement of rates 
the group’s practice is to review its hedging programme
continually with a policy of increasing the use of hedging at 
a time of substantial currency movements
an explanation of the group’s objectives policies and
strategies for the role of derivatives and other financial
instruments in creating and changing the risks of the group
can be found in the corporate governance report  details of
the group’s debt currency and interest rate structure can be
found in note 24 to the accounts 
currency translation and exposure
the results of the group’s overseas subsidiaries are translated
into sterling at the monthly average exchange rates for the
relevant year the balance sheets of these subsidiaries are
translated into sterling at the spot exchange rates at the end
of each year any gain or loss arising from such translations
from one year to the next is recorded in reserves the principal
currencies to which the group is exposed are the us dollar
the danish kroner the euro and the japanese yen
pensions
the group operates a number of staff pension schemes all
of which are of a defined contribution nature the group has
never operated a defined benefits scheme
balance sheet
the group’s balance sheet continues to be strong
shareholders’ funds at 30 september 2004 were £442million
2003 £424million the increase primarily comprising the 2004
retained earnings of £16million the return on capital employed
before goodwill profit before interest taxation and goodwill
divided by shareholders’ funds and net debt was 148 
2003 141 and after goodwill was 138 2003 134   
dividend
the directors are recommending a final dividend of 70p
giving a total dividend for the year of 105p this 3 increase
on 2003 reflects the group’s confidence in effectively
managing its working capital and in its ability to generate
cash the final dividend will be paid on 25 january 2005 to
those shareholders on the register at the close of business
on 10 december 2004 subject to shareholder approval at the
annual general meeting on 20 january 2005
dividend cover before and after goodwill for the year ending
30 september 2004 is respectively 15 times 2003 13 and
13 times 2003 12
earnings per share
basic earnings per share before goodwill were 159p 2003
135p and after goodwill were 142p 2003 125p
peter griffithjones
finance director
23 november 2004
financial review continued
cabvision – trident’s state of the art computer and
screen technology provide london cab users with
the latest in ‘infotainment’ abacus group plc 11
the board of directors secretary and advisors
the board of directors
the board currently comprises three nonexecutive directors and four executive directors 
current board directors
a h westropp nonexecutive chairman
aged 59 has been chairman of the company since 1994 he
is chairman of the upperpoint group and a nonexecutive
director of the throgmorton trust plc he is also a director of
a number of other companies
p l griffithjones ma aca finance director and secretary
aged 50 qualified as a chartered accountant with arthur
andersen he spent three years working in the semiconductor
test industry before moving to digital research a software
company for four years he joined abacus as finance director
in 1987 and was a member of the buyout team
g j grover managing director trident
aged 49 joined trident in 1978 before becoming sales director
in 1983 he was instrumental in moving the business into the
displays market he was appointed managing director in 1987
and joined the board of abacus in march 2004 
r e lambourne nonexecutive director
aged 52 a chartered accountant joined the board of abacus
in june 2004 he is the senior independent director of pace
micro technology plc he has held a number of public
company directorships including appointments as finance
director of fosesco plc hepworth plc and rmc group plc
m r kent chief executive
aged 53 has been chief executive of the group since
november 2000 he has been in the industry since 1969 he
joined abacus in 1975 was the marketing director for the
group from december 1987 and was a member of the buyout
team
g mcbeth managing director ecd uk  nordic
aged 42 developed his career within national semiconductor
for 11 years before moving to abacus in 1995 he was
appointed to the board in 1997 he is now responsible for the
ecd companies in the uk and nordic region
mrs m ricejones nonexecutive director
aged 43 joined the board of abacus in january 2003 she has
considerable experience as a senior executive in major
companies in the electronics industry she is a corporate vice
president of motorola inc and regional general manager of
the network business in europe the middle east and africa
retirements from the board during the year
b r murdoch ma deputy chairman
aged 58 has worked in electronics distribution since 1970 he
joined abacus in 1987 as managing director and led the
management buyout in february 1989 he was chief
executive until november 2000 at which time he became
deputy chairman he retired from the board on 30 september
2004 
s e wotherspoon commercial director
aged 57 joined polar electronics in 1983 and was appointed
to its board in 1984 he was part of the team which launched
polar plc on the usm in 1989 he is now commercial director
involved in front line sales and responsible for developing
abacus polar gold a division focused on sales to bluechip
customers he stepped down from the board in february
2004
g kibblewhite nonexecutive director
aged 64 joined the board of abacus in 1991 and has worked
within the electronic components industry for over 30 years he
is chairman of afdec in the uk and the international
distribution of electronics association in milan also he is a
partner in europartners consultants specialised consultants to
the electronics industry he retired from the board on
30 september 2004
secretary
p  l griffithjones ma aca
registered office
abacus house bone lane
newbury berkshire rg14 5sf
stockbrokers
hoare govett limited
250 bishopsgate london ec2m 4aa
auditors
deloitte  touche llp
chartered accountants  registered auditors
abbots house abbey street
reading berkshire rg1 3bd
solicitors
hammonds
rutland house 148 edmund street
birmingham b3 2jr 
registered number
2278260
financial advisors
hoare govett limited
250 bishopsgate london ec2m 4aa
principal bankers
hsbc bank plc
70 pall mall london sw1y 5es
registrars and transfer office
computershare services plc
po box 82 the pavilions
bridgwater road bristol bs99 7nh
web site
wwwabacusgroupcouk the directors present their annual report on the affairs of the group the accounts and auditors’ report for the year ended 30
september 2004
principal activity 
the abacus group distributes electronic components
business review and future developments
the chairman’s statement chief executive’s review and the financial review comment on the results for the year and future
developments
results and dividends
the results for the year ended 30 september 2004 are shown in the consolidated profit and loss account on page 30
the directors recommend a final ordinary dividend of 70 pence per share which with the interim dividend of 35 pence makes a
total for the year of 105 pence 2003 102 pence if approved the company will pay the final ordinary dividend on 25 january
2005 to shareholders on the register at the close of business on 10 december 2004
directors
the names of the current directors and those who retired during the year are given on page 11 all the current board directors
served at 30 september 2004 and during the year except g grover and r lambourne who were appointed on 30 march 2004
and 1 june 2004 respectively the interests of all the directors who served at any time in the year in the share capital of the
company at 30 september 2004 are given in the directors’ remuneration report 
mr kent and p l griffithjones who retire at every third annual general meeting agm and ah westropp who now retires at
every agm being eligible offer themselves for reelection g grover and r lambourne who were appointed by the board as
directors on 30 march 2004 and 1 june 2004 respectively offer themselves for reappointment at the agm these three
executives’ and two nonexecutives’ service contracts can be terminated by either party giving in writing not less than twelve and
six months notice respectively
events since the balance sheet date
there have been no significant events since 30 september 2004
substantial shareholdings
the company has been advised of the following interests in 3 per cent or more of the ordinary shares in issue at 23 november
2004 
no of 
shares 
insight investment management 3623604 852
topfib ltd 3230500 759
m  g investment management 2853458 671
morley fund management 2704468 636
threadneedle asset management 2226900 524
aegon asset management 2149123 505
unicorn asset management 1867205 439
legal  general investment management 1697376 399
j p morgan fleming asset management 1674089 394
collins stewart 1554486 365
supplier payment policy
group policy is to set terms of payment when agreeing each transaction with suppliers clearly explain payment procedures
consistently settle bills within contract terms and only extend terms with prior agreement the group operates systems for
promptly advising suppliers of and resolving queried and contested items
trade creditors of the group at 30 september 2004 were equivalent to 34 days purchases 2003 37 days the company has no
trade creditors
charitable donations
the group contributed £2089 2003 £1957 to charities during the year
fixed assets
in the opinion of the directors the current open market value of the group’s interests in freehold land and buildings is equal to its
fair value
12 abacus group plc
directors’ report international financial reporting standards ifrs
the group has undertaken an extensive exercise to evaluate the impact of ifrs which the group will adopt from the 1 october
2005 the group considers that ifrs will have the most significant effect in the following areas
a the fair value of share options granted after 7 november 2002 will be expensed to the profit and loss account 
b there will be greater recognition of intangibles on acquisitions and a consequent reduction in goodwill 
c goodwill will be subject to impairment review and will no longer be amortised
d greater disclosure of segmental information in the accounts 
e dividends approved after the balance sheet date will no longer be included in the profit and loss or balance sheet prior to date
of approval and
f some operating leases will be treated as finance leases
auditors
a resolution for the reappointment of the auditors deloitte  touche llp will be proposed at the forthcoming annual general
meeting deloitte were first appointed as the group’s auditors in july 2002
annual general meeting
the notice of the annual general meeting on 20 january 2005 follows the report and accounts and a proxy voting form is
enclosed 
ordinary resolutions 1 to 9 constitute the ordinary business of the meeting to approve the accounts appoint directors and
auditors and approve the directors’ remuneration report 
resolutions 10 to 12 constitute special business
ordinary resolution 10 authorises the directors to issue ordinary shares up to a nominal value of £708933 one third of the
issued share capital at 30 september 2004
special resolution 11 allows the directors to issue ordinary shares for cash without applying the preemptive rights in section 89
of the companies act 1985 it empowers the directors to make rights issues and issue shares up to a total nominal value of
£106340 5 of the issued share capital at 30 september 2004 the authority expires within 15 months or at the end of the
annual general meeting in the year 2005 if earlier
special resolution 12 sets out the framework in which the company may purchase its own shares it limits a purchase to a
maximum of 15 percent of the issued share capital and sets the upper and lower prices to be paid the directors intend to
exercise this power only if in the light of market conditions prevailing at the time they believe that a purchase will increase
earnings per share and be in the best interest of shareholders generally in reaching their decision they will consider other
investment opportunities appropriate gearing levels and the overall position of the group abacus group plc shall cancel shares
purchased in this way and reduce the number of shares in issue
shareholders may inspect copies of the directors’ service contracts and the register of directors’ interests at any time from the
date of the notice of annual general meeting until the end of the annual general meeting these documents are held at the
registered office which is open during normal business hours 
by order of the board
abacus house bone lane newbury p l griffithjones ma aca
berkshire rg14 5sf registered office secretary
23 november 2004
abacus group plc 13 abacus group plc has for several years been committed to maintaining high standards of corporate governance and remains so
committed these statements describe how the company applies and complies with the principles of the combined code
annexed to the listing rules of the financial services authority and for which the board is accountable to its shareholders 
following the higgs and smith reports into the roles of nonexecutive directors and audit committees the code was superceded
and replaced in july 2003 
statement of compliance with code of best practice
the company has complied throughout the year with the code provisions set out in the previous and updated section 1 of the
combined code on corporate governance issued by the financial reporting council 
the board of directors
at 30 september 2004 the board included a nonexecutive chairman harry westropp a chief executive martin kent three other
executive and two other nonexecutive directors including a senior independent director sid robert lambourne to whom
concerns may be conveyed during the year brian murdoch and stuart wotherspoon stepped down as executive directors on
12 february and 30 september 2004 respectively and graham grover was appointed an executive director on 30 march 2004
in addition gary kibblewhite stepped down as a nonexecutive director on 30 september 2004 and robert lambourne was
appointed as a nonexecutive director on 1 june 2004 
all nonexecutive directors who served during the year were considered by the board to be independent of management
although mr westropp has been a board member for more than nine years he is considered to be independent as he has never
had business or personal relationships with the company is not a significant shareholder does not hold crossdirectorships
receives only fixed directors’ fees has never been an employee of the company and is considered to be of sufficient calibre and
experience that he can exercise judgement free from undue influence of management the board considered mr kibblewhite
independent whilst he served as a nonexecutive director for the same reasons 
the company believes it has a balance of executive and nonexecutive directors appropriate for a business of its size 
each individual executive director’s performance is formally appraised at an annual review by the chief executive whose
performance in turn is appraised by the nonexecutive chairman the chairman’s performance is appraised by the nonexecutive
directors who in turn are appraised by the chairman chief executive and finance director 
the company secretary is responsible to the board for ensuring that the board in conducting its business follows its procedures
and best practice whilst complying with applicable rules and regulations all directors have access to the advice and services of
the company secretary
conduct of board meetings
the board meets each month to consider matters specifically reserved to it for decision during the year the board had twelve
such monthly meetings and details of attendance are given on page 15 when required the board convenes between the regular
meetings
within seven days of each meeting all members receive up to date reports on key areas of the business and information to support
decisions where information is insufficient to enable the board to discharge its duties board members may make further
enquiries
a part of each meeting is devoted to strategy and planning and in dealing with issues of strategy performance resource
allocation key appointments and standards of conduct board members use their independent judgement in carrying out their
duties board members may also take independent professional advice at the company’s expense
retirement of directors
the articles of association of abacus group plc require that
a the directors must submit themselves for election by shareholders at the next annual general meeting after appointment
b nonexecutive directors who have served nine years or less on the board and all executive directors are required to retire
every three years and
c nonexecutive directors who have served more than nine years on the board are required to retire annually
the names of directors retiring at the next annual general meeting are given on page 12 and biographical details of the directors
on page 11
the board has established three committees namely the nominations committee the remuneration committee and the audit
committee the terms of reference for which are available from the company secretary and which will also be available at the
annual general meeting details of and attendees at each of these committees are as follows 
nominations committee
abacus group plc has developed formal and transparent procedures for appointing new directors to the board these duties are
discharged through the nominations committee which harry westropp chairs its other members are margaret ricejones martin
kent peter griffithjones gary kibblewhite until his retirement on 30 september 2004 and robert lambourne with effect from
1 june 2004 if appropriate the committee instructs external professional consultants to ensure a wide range of candidates is put
14 abacus group plc
corporate governance statements
for the year ended 30 september 2004 forward before appointing suitable candidates the board considers the recommendations of the committee the committee met
three times during the year to discuss the appointments of graham grover and robert lambourne and to consider the
resignations of stuart wotherspoon brian murdoch and gary kibblewhite
newly appointed directors undertake appropriate training to enable them to discharge the responsibilities of their office
remuneration committee
to avoid potential conflicts of interest the board has delegated responsibility for defining remuneration policy for executive
directors and senior management to the remuneration committee robert lambourne is chairman previously gary kibblewhite
with its other members being harry westropp and margaret ricejones the committee met six times during the year 
the board is responsible for establishing the fees and responsibilities of the nonexecutive directors and takes into account
relevant market information
the remuneration report on pages 20 to 27 describes the company’s remuneration policy and the procedures for developing it
and for determining remuneration
audit committee and accountability
robert lambourne is chairman of the audit committee formerly harry westropp its other members are harry westropp
margaret ricejones and until his resignation on 30 september 2004 gary kibblewhite robert lambourne is a chartered
accountant who qualified with pricewaterhousecoopers and has previously been group finance director of three listed
companies including hepworth plc and rmc plc the committee has clear terms of reference under which the board gives it
authority to examine matters concerning the financial affairs of the group internal and external audit reports annual and interim
accounts internal control procedures accounting policies and other matters referred to it by the board including arrangements for
‘whistleblowing’
periodically the audit committee reviews the cost effectiveness of the audit the independence and objectivity of the auditors and
the level of nonaudit services the board’s practice when contracting for nonaudit services is to ensure that the level of fees and
importance of the work is considered alongside the audit work in such a way that nonaudit services are provided without
detriment to the auditors’ independence for the year ending 30 september 2004 the audit committee considered that the level
of nonaudit fees of £6000 compared to the audit fee of £113000 did not prejudice the independence of the auditors
minutes of the committee’s proceedings are copied to the board and discussed by it where appropriate
attendees at board and committee meetings 
number convened board nominations remuneration audit
attended by directors meetings committee committee committee
number convened 12 3 6 3
executive director
martin kent 12 3 2 in attendance 2 in attendance
brian murdoch 10
peter griffithjones 12 3 3 in attendance 3 in attendance
graham mcbeth 11
graham grover 4 
stuart wotherspoon 4
non executive director
harry westropp 12 3 6 3
gary kibblewhite 10 3 6 3
margaret ricejones 9 3 4 1
robert lambourne 4 1 1 1
external auditors
deloitte  touche llp na na na 3 in attendance
 graham grover and robert lambourne were appointed as directors on 30 march 2004 and 1 june 2004 and in addition to
the above attended four and one board meetings respectively before their board appointments
 stuart wotherspoon resigned as a board director on 12 february 2004 and brian murdoch and gary kibblewhite on 30
september 2004
maintenance of a sound system of internal control
the board has applied principle d2 of the combined code by establishing a continuous process for identifying evaluating and
managing the significant risks which the group faces the board regularly reviews the process which has been in place
throughout the year and up to the date of approval of this report and which is in accordance with internal control guidance for
directors on the combined code published in september 1999 the board is responsible for the group’s system of internal
abacus group plc 15 control and for reviewing its effectiveness such a system is designed to manage rather than eliminate the risk of failure to achieve
business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss
in compliance with provision d21 of the combined code the board continuously reviews the effectiveness of the group’s system
of internal control the board’s monitoring covers all controls including financial operational and compliance controls and risk
management it is based principally on reviewing reports from management to consider whether significant risks are identified
evaluated managed and controlled and whether any significant weaknesses are promptly remedied and indicate a need for more
extensive monitoring in addition a regular assessment is carried out to identify and evaluate all significant risks and consider all
significant aspects of internal control in place to manage them
the audit committee assists the board in discharging its review responsibilities
managing business risk
discussed below are the group’s five major business risks together with the systems and initiatives in place to address them
market
the year under review has seen an improvement in market conditions for abacus’ distribution businesses primarily in the uk and
eire where statistics produced by afdec show a 7 market growth during the 12 months of the financial year compared to the
same period in the previous financial year this growth has been driven by increased volume demand from uk customers as
average selling prices have remained relatively stable abacus’ uk based electromechanical assembly businesses ctl and ccs
have also benefited from the improvement in the uk market at trident the display and related products specialist the
disappointing delay in billings on medical contracts has impacted the growth opportunity
the movement of manufacturing from the uk to lower cost areas has slowed significantly and the impact on abacus polar has
again been minimal during the year however it is recognised that it is still a threat to growth potential and during the course of the
year abacus invested in additional sales personnel to find and introduce new customers into the group by adding headcount to
support the increased activity abacus can ensure the service offered to its existing loyal customers is unaffected abacus has also
implemented its strategy of identifying and benefiting from potential growth areas by purchasing tdc a uk distributor focussing on
the wireless and wired communications market during the year abacus increased its uk market share from 135 to 140
in the nordic region statistics produced by afdec show a market growth of 5 and in italy assodel their industry association
report a flat market the group’s nordic share of the market declined from 49 to 46 management’s strategy next year is to
focus on the swedish norwegian and finnish markets and to leverage the benefits from the introduction of its uk based it
system ecc the group’s recent italian acquisition performed in line with expectations with the focus next year being on
extending its franchised lines 
operational
this relates to the risk of financial loss or impairment to reputation resulting from inadequate or failed internal processes and
systems and from the actions of people or external events such as a catastrophic disaster the group’s business units manage
this risk through appropriate controls and loss mitigation actions examples include
a bespoke business system providing comprehensive management reporting
b taking sufficient insurance cover including for business interruption
c maintaining a detailed disaster recovery plan for all major sites and installing sprinkler systems in the main uk warehouse
d maintaining rigorous data backup procedures
e performing regular risk assessments at each of the group’s locations
f carrying out a regular review of the principal suppliers and customers of the group and how each impacts on the group’s
business
g regularly reviewing actual performance against budgets and forecasts
h establishing clearly defined procedures for the authorisation of major new investments and commitments
in addition specialist support functions provide expertise in ensuring the group adheres to local regulatory and legal requirements
credit
the group scores the creditworthiness of any new major customers before commencing trade with them based on this and the
customer’s capital base authorised limits of trade are set a proactive approach to the identification and control of bad and
doubtful debts is maintained and significant credit risks are highlighted to the board
16 abacus group plc
corporate governance statements continued
for the year ended 30 september 2004 liquidity
this relates to the risk that the group is unable to fund its requirements either because of insufficient banking facilities or because it
is constrained by the risk of breaching banking covenants the group funds its day to day operations and short term assets
through a mixture of retained profits shortterm bank overdraft facilities and creditors and its long term assets and acquisitions
through bank term loans the group’s policy on liquidity is to ensure that there are sufficient medium and longterm committed
borrowing facilities to meet funding requirements debt is principally raised centrally and then lent to operating subsidiaries on
commercial terms it is group policy not to trade in or enter into speculative transactions except for finance leases loan notes and
a danish kroner loan the group pays interest on all debt financing arrangements at an agreed margin over bank base rates the
majority of the cash comprises bank balances with hsbc bank plc unibank as and a number of italian banks institutions which
the group considers creditworthy the group complied with all the relevant bank covenants during the year 
foreign currency risk
the group has significant transactional currency exposures such exposures arise from sales and purchases by operating units in
currencies other than the unit’s functional currency when appropriate the group seeks to cover net foreign exchange exposures
with forward contracts which are arranged centrally and by negotiating sales and purchases in the same currency where
appropriate the net assets of the group’s nonsterling operations represent only 11 of the group’s total assets the group does
not consider it significant enough to justify borrowing any foreign currency to mitigate any structural currency exposure that may
arise from the translation of the foreign currency assets the group finance director appraises the board of any significant
movement in the group’s foreign currency exposure 
internal audit
the board has formally reviewed the need for an internal audit function at the current time a formal internal audit function is not
considered necessary for a number of reasons the size of the group widespread executive involvement in the group’s day to day
business the depth of management reporting from all subsidiary managers to the board the level of variance analysis during the
review of the monthly management accounts by both senior management and the board directors robust internal controls and the
annual indepth review of the group’s subsidiary companies’ accounting functions by a senior group accountant 
dialogue with institutional shareholders
the directors seek to build on a mutual understanding of objectives between the company and its institutional shareholders the
chief executive and finance director are the main contacts in addition all shareholders have the opportunity to meet with the
executive and nonexecutive directors after the annual general meeting to discuss any issues they may have and are available
upon request at all other times
the company maintains regular dialogue with institutional investors and presents the interim and preliminary results to them
the board is regularly briefed on feedback from institutional visits
shareholder relations
the company encourages participation by and communication with its shareholders it welcomes and responds to all contacts by
shareholders on a wide range of issues and uses the annual general meeting to communicate with private investors the
chairmen of the audit remuneration and nomination committees attend the annual general meeting and are available along with
operational management to answer questions from shareholders at the meeting
the annual general meeting is conducted in accordance with the combined code this includes informing members present at
the meeting of proxy votes for and against resolutions once the resolution has been voted on by a show of hands
the group’s annual and interim results are circulated to shareholders and the financial press the group’s share price is listed in
the financial times the daily telegraph and the times investor relations information and news releases are made available on
the company’s website address wwwabacusgroupcouk
going concern
on the basis of current financial projections and the facilities available the directors have a reasonable expectation that the
company and the group have adequate resources to continue in operational existence for the foreseeable future for this reason
they continue to adopt the going concern basis in preparing the accounts
abacus group plc 17 general
whilst the board’s primary accountability is to its shareholders it is also tries to maximise value for all its other “stakeholders”
including employees customers suppliers and the community at large as well as considering the impact of its actions on health
safety and the environment overall responsibility for each of these areas ultimately resides with the full board however specific
responsibility for employeerelated and environmental issues resides with the group finance director peter griffithjones and
external stakeholder issues with the chief executive martin kent the group’s social environmental and ethical risk management
procedures are currently being implemented and will be subject to a process of regular reviews
management at all levels in the organisation is committed to taking account of its corporate social responsibility in its actions
endeavours to show due respect for human rights and works to high standards of integrity and ethical propriety as a multinational
organisation abacus takes account of cultural differences between the various territories in which it operates
through its continuing commitment to corporate social responsibility abacus group is a member of the ftse4 good series index
employee consultation
the group values the involvement of its employees it has continued to inform employees through meetings noticeboards and the
intranet of matters affecting them and of group performance the group consults employee representatives regularly on a wide
range of matters affecting their current and future interests all eligible employees may join the sharesave scheme at periodic
intervals
employee development
the group places great importance on the development and retention of staff it operates a formal appraisal scheme whereby the
employee and manager provide each other with performance feedback after commencement of employment and at annual
intervals thereafter at each of these meetings objectives against which performance is regularly measured are set for the coming
period and training needs identified 
over the last three years a formal and structured training programme has been established for uk employees promoting such
areas as communication skills appraisal training train the trainer and management development the group adopts practices to
encourage promotion from within including notifying employees via email of any vacancies and identifying individuals for certain
positions as part of its formal succession planning graham mcbeth executive director responsible for the uk and nordic
companies holds overall responsibility for training throughout the group
equal opportunities
group companies are committed to providing equal opportunities to all employees irrespective of sex gender orientation marital
status creed colour race religious belief ethnic origin or disability the group’s philosophy is that all discrimination on any of the
above grounds is abhorrent and it will condone no discrimination whatsoever whether negative positive or of any other nature
the commitment covers recruiting training career development performance appraisal and social interaction both in and outside
the workplace the group continues to monitor its application of this policy and its compliance with legislation and codes of best
practice
disabled employees
the group gives full consideration to applications for employment from disabled persons where the requirements of the job can be
adequately fulfilled by a handicapped or disabled person
where existing employees become disabled it is the group’s policy to provide continuing employment under normal terms and
conditions and to provide training career development and promotion to disabled employees wherever appropriate
ethical conduct
we expect our staff to act according to the highest standards of ethical behaviour covering such areas as fraud conflict of interest
internet abuse bribery and corruption this is reinforced through written policies the inclusion of an antiharassment clause in
contracts of employment and the application of disciplinary procedures the group does not make corporate political donations
and prohibits the use of bribery and facilitation payments 
health and safety
the maintenance and improvement of working standards to safeguard the health and well being of staff is a continuing priority
this is achieved through a documented health and safety policy endorsed by the chief executive annual risk assessments
carried out at the group’s main locations and training staff in areas such as ‘manual handling’ which all warehouse staff receive on
their induction and ‘hotwork handling’ all sites maintain accident books the data from which is collected centrally every quarter
and reviewed by the health and safety committee any actions identified are implemented wherever possible the group complies
with all local health and safety regulations 
in the interests of staff health smoking inside company premises is permitted only in designated areas
fire wardens and first aiders are appointed at each location and receive periodic training 
18 abacus group plc
corporate social responsibility suppliers and customers
the group believes that long term relationships founded on trust and mutual advantage are vital to abacus’ success to foster
these relationships the group promptly advises suppliers and customers of queries and contested items it always endeavours to
resolve any queries through dialogue and adopts a commercial stance in their resolution contract terms are clearly explained and
payment terms are only extended with prior agreement the group has iso approval which covers procedures such as dealing
with customer queries supplier assessments customer contract review sales order entry and logistics the group’s business
systems monitor delivery performance and these statistics are studied closely with corrective action being implemented where
appropriate customers and suppliers frequently tour company warehouses and factories and conduct their own competence
audits of the group’s performance in various different areas of its operations the results of these audits are discussed with the
appropriate management with a view to continuous improvement in the group’s performance
the environment
it is group policy to operate in a responsible manner with regard to the environment the group wherever possible uses recycled
and recyclable packaging materials and it recycles waste paper 
examples of current initiatives include
a reusing approximately 20 of outer packaging from incoming warehouse deliveries for outbound shipments
b segregating compacting and baling waste cardboard and paper packaging before dispatching to recycling mills
c encouraging customers to return empty specialist antistatic packaging for reuse
d using durable returnable pallet box containers for intercompany shipments
e dispatching empty printer and photocopier cartridges and waste office paper for recycling
f disposing of electronics components and waste cable via registered scrap merchants which recycle the product where
possible
g encouraging suppliers to send data electronically rather than using paper 
the group sets objectives to reduce waste and engages with its staff customers and suppliers with the mandate to continually
find ways to minimise the use of resources
the group operates a continual review of its energy and resource utilisation with a view to minimising the impact of the group’s
activities on the environment an example is the refurbishment of the newbury office in which the most energy efficient lighting
boilers and air conditioning units were installed in addition the lighting is now activated by motion sensors thereby reducing
energy consumption
assisted by the change in emphasis in state legislation in the uk to an emissions based tax on company cars the group
continues to actively encourage employees to downsize cars the board also continues to encourage the use of push bikes as
commuter transport
the group requires company car drivers to comply with the laws on the use of mobile telephones whilst driving and pays for the
cost and installation of hands free kits informing staff by email of the latest legislation and penalties for contravening it and
including guidance on the use of telephones in the group’s car policy document
although the group uses minimal environmentally damaging or hazardous material it ensures that all personnel receive appropriate
training in its handling and all material is properly disposed of
abacus group plc 19 introduction
this report has been prepared so as to comply with requirements introduced by the “directors’ remuneration report regulations
2002” the report covers all directors both executive and nonexecutive 
the regulations require the auditors to report to the company’s members on the ‘auditable part’ of the directors’ remuneration
report and to state whether in their opinion that part of the report has been properly prepared in accordance with the companies
act 1985 the report has therefore been divided into two separate sections audited and nonaudited information
as required by the regulations a resolution to approve the report will be proposed at the annual general meeting of the
company at which the financial statements will be approved
unaudited information
composition of the remuneration committee
the members of the remuneration committee comprise the three nonexecutive directors whose names are given on page 15
and none of whom had any personal financial interest in decisions other than as shareholders and no crossdirectorships or
participation in any incentive schemes
during the year the committee consulted the chief executive and company secretary on its proposals
terms of reference
the board agrees the terms of reference of the remuneration committee its principal functions are to determine on behalf of the
board and shareholders 
■ remuneration and incentives for the executive directors senior managers and other key staff of the group
■ targets for performance related bonuses for the executive directors the committee also monitors performance against these
targets
■ contractual terms of service agreements including termination pension arrangements and other benefits
the composition of the remuneration committee and its operation comply with the combined code the members are the non
executive directors harry westropp margaret ricejones and robert lambourne following his appointment on 1 june 2004
gary kibblewhite resigned from the committee on 30 september 2004 
remuneration policy
in framing policy the committee seeks and will continue to seek to balance the cost of packages which attract retain and
motivate directors of the highest quality whilst avoiding paying more than is necessary
the package of each executive director reflects the principles of the combined code in setting remuneration and takes into
account group objectives and personal achievement
the committee seeks to balance the amount of remuneration paid to an individual director within the overall package these
packages are aimed to provide a competitive reward having regard to the remuneration paid by comparable public companies and
relative performance in evaluating the remuneration packages offered by comparable companies the committee sought advice in
june 2004 from an independent source new bridge street consultants which also acted as consultants on the 2003 share
option scheme and 2004 sharesave scheme in determining pay increases the committee is sensitive to pay and employment
conditions of all staff in the group staff pay is determined by market conditions and by both the group’s and the individual’s
performance
performancerelated elements of the remuneration packages are established as a significant proportion of total pay these
elements are designed both to motivate executive directors to perform at the highest levels and to align their interests with those of
shareholders
there are no provisions in any of the directors’ service contracts for compensation on early termination compensation payments
for early termination would be tailored within legal constraints to avoid rewarding poor performance and to deal equitably with the
director
whilst the company has stated its current and future remuneration policy of offering competitive and cost effective packages
which incorporate a significant performance related element it is conscious that any remuneration policy needs to be flexible any
changes to this policy will be stated in subsequent annual reports 
20 abacus group plc
directors’ remuneration report
for the year ended 30 september 2004 abacus group plc 21
components of the policy for executive directors’ remuneration
■ basic salary an executive director’s basic salary review is carried out by the committee prior to the beginning of the year and
when an individual changes position or responsibility in deciding appropriate levels the committee takes into account the
individual’s responsibilities and performance and if considered necessary will take external advice in june 2004 the board
undertook an extensive benchmarking exercise with the assistance of new bridge street consultants in addition to basic
salary the executive directors receive certain benefitsinkind including a car or car allowance business and private fuel
permanent health insurance life assurance and private medical insurance 
■ annual bonuses in which the chief executive officer the finance director and the managing director ecd participate the
bonuses are based on minimum targets set by the committee being exceeded these bonuses are capped at 100 of basic
salary level and are based on actual profit before tax and goodwill exceeding the company broker’s forecast set before
commencement of the performance year bonuses as a percentage of salary are earned as follows
actual exceeds forecast by formula bonus
 5 0 0
5  9 2 per complete 1 10  18
10  25 4 per complete 1 40  100
25  capped 100
50 of any bonus is payable in cash the remaining 50 of the bonus is deferred for three years all or some of the deferred
bonus may be invested in the company’s shares or taken as a cash amount the deferred elements will be delivered three
years after the end of the performance year subject to continued employment during those three years or if appropriate the
director being a “good” leaver redundancy illhealth or retirement
an additional maximum of 20 of basic salary can be earned for achieving predetermined personal objectives set at the outset
of the financial year 
for the year ending 30 september 2004 the company’s broker in september 2003 forecast profit on ordinary activities before
goodwill and taxation of £8000000 compared to an actual profit of £10025000 for both acquisitions and existing
operations as actual profit exceeded forecast by over 25 the three eligible directors earned bonuses totaling £544000
equivalent to 100 of their basic salaries no bonuses were earned for the year ending 30 september 2003
■ share options the committee seeks to encourage share ownership by executive directors and senior staff through share
option arrangements the committee may consider granting share options to individual executive directors as part of an overall
remuneration and incentive package in establishing share option schemes the committee determines the scope of
participation of the executive directors and appropriate performance targets 
it is an expectation that directors participating in the share option scheme 2003 will build up personal shareholdings in the
company amounting to a value between two and three times their salary within five years of their first participation in the
scheme the scheme allows for the grant of two types of share options those approved by the uk inland revenue approved
and those not unapproved the targets for the scheme were set after receiving independent external advice from new
bridge street consultants in consultation with the group’s major shareholders
following adoption of the 2003 scheme options may no longer be granted under the 1993 executive share option scheme
approved and the 1996 unapproved share option scheme  22 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2004
details of each of the schemes are as follows
■ pensions the executive directors participate in personal pension schemes or the group’s pension plans all pension
schemes are defined contribution details of the company’s pension contributions which are based on a  of each executive
director’s basic salary are summarised below
age company contribution as a
 of basic salary
under 45 15 graham mcbeth
45 to 50 20 peter griffithjones
graham grover
above 50 25 martin kent
brian murdoch
stuart wotherspoon
 peter griffithjones was 50 in september 2004 and his pension contribution increased to 25 with effect 1 october 2004 
 graham grover’s pension contribution increased from 15 to 20 with effect 1 october 2004
 brian murdoch and stuart wotherspoon resigned 30 september 2004 and 12 february 2004 respectively 
should an executive director’s age cross one of the above thresholds then the 5 increase in contribution is effective from
the month following his birthday
executive share option scheme 2003 approved unapproved
approved unapproved
1993 1996
vesting period from date of grant 3 years 3 years 3 or 5 years 3 or 5 years
lapse period from date of grant 10 years 10 years 10 years 7 years
maximum award lower of 
absolute limit £30000 none £30000 none
limit as a  of salary
eps growth required in excess of
rpi between date of grant and
vesting
retesting
period in which option can be
exercised following eps criteria
being met
dilution limits
the cumulative number of
unlapsed options which can be
granted over a period as
constrained by set  limits of
issued share capital
cash alternative
the total of option grants issued in any one
year under the 2003 scheme is not to
exceed 200 of salary 
the total of options held under grant at any
one time across both schemes is not to
exceed 400 of salary 
options vest on a straightline basis
between real eps growth of 4 50 of
award vests and 6 per annum full
vesting
100 of award
vests on real eps
growth exceeding
1 per annum
100 of award
vests on real eps
growth exceeding
3 per annum
if targets not met in 3 years retested on
fourth and fifth anniversary of grant
retested from date of grant to any
anniversary falling between vesting date
and lapse date 
to the extent that the performance
condition has been satisfied that part of
the option that can be exercised may be
exercised irrespective of future eps
performance until lapse of option
options can be exercised only in the period
in which eps growth is met
10 of ordinary share capital sc over 10
years for all employee share option
schemes including sharesave scheme
no longer applicable no longer applicable
no discretion of
remuneration
committee
no discretion of
remuneration
committee abacus group plc 23
■ contracts of service the required notice for terminating an executive director’s service contract is twelve months the
committee considers this period of notice to be appropriate
details of the executive directors’ contracts are summarised below
contract date notice period
martin kent 1 february 2004 one year
peter griffithjones 1 february 2004 one year
graham mcbeth 1 february 2004 one year
graham grover 30 march 2004 one year
brian murdoch 19 february 1998 one year
stuart wotherspoon 19 february 1998 one year
nonexecutive directors’ remuneration and contracts
the board has delegated the responsibility for determining the remuneration and services of the nonexecutive directors to a sub
committee whose members are the chief executive and the finance director
details of the nonexecutive directors’ contracts which have no automatic renewal provisions are summarised below
contract expiry date notice period
commencement date
harry westropp 1 january 2004 1 january 2005 6 months
robert lambourne 1 june 2004 january 2007 agm 6 months
margaret ricejones 22 january 2003 22 january 2006 6 months
 subject to approval at the january 2005 agm
the nonexecutive directors’ remuneration packages are
a set to attract motivate and retain the appropriate level of nonexecutive talent
b proportional to their contribution towards the interest of the business
c consistent with recognised best standards
d in the form of cash fees payable monthly 
e never received in the form of share options in order to maintain independence 
details of the remuneration options and interests of the directors are given later in this report performance graph
the regulations require this remuneration report to contain a graph showing the performance of the company and a ‘broad
equity index’ over the past five years the comparative index chosen is the ftse small cap index excluding investment trusts as
the company is a constituent of the ftse small cap index but is not an investment trust the regulations require that
performance is measured by total shareholder return share price growth with dividends deemed to be reinvested gross on the
exdividend date 
this graph shows the value over the 5 year period ending on 30 september 2004 of £100 invested in abacus group plc on
30 september 1999 compared with the value of £100 invested in the ftse small cap index excluding investment trusts
24 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2004
value £
source datastream audited information
the total amounts for directors’ remuneration were as follows
2004 2003
£’000 £’000
emoluments 1245 868
money purchase pension contributions 395 168
gains on exercising share options 106 92
1746 1128
emoluments
details of individual emoluments in respect of qualifying services of each person who served during the year were as follows 
salary taxable bonus total total
or fees benefits  2004 2003
£’000 £’000 £’000 £’000 £’000
executive
mr kent 219 17 219 455 231
br murdoch 40 8 – 48 110
p l griffithjones 47 14 180 241 183
g mcbeth 129 18 145 292 146
g grover 57 6 – 63 –
se wotherspoon 27 4 – 31 97
nonexecutive
ah westropp chairman 55 – – 55 55
g kibblewhite 27 – – 27 27
m ricejones 25 – – 25 19
r lambourne 8 – – 8 –
total 634 67 544 1245
2003 totals 783 85 – 868
pensions and bonuses are calculated in line with the relevant scheme rules
 g kibblewhite’s fees and services were billed by europartners for the full year 
 50 of the bonus is payable in cash and 50 deferred for three years
pension contributions
all the executive directors are members of defined contribution pension schemes contributions payable by the company are
given below
2004 2003
£’000 £’000
br murdoch 98 28
p l griffithjones 187 39
mr kent 55 51
g mcbeth 39 29
g grover 9 –
se wotherspoon 7 21
395 168
abacus group plc 25 share options
aggregate emoluments on the previous page do not include the value of options to acquire ordinary shares granted to or held by
the directors these are given in the table below
30 sept
1 oct 2003 granted exercised 2004 exercise earliest date last date 
number number number number price for exercise for exercise
mr kent 100000 – – 100000 3920p 21122003 21122007
mr kent 92550 – – 92550 2215p 20032006 20032013
mr kent 135000 – – 135000 2285p 19112005 19112012
mr kent – 182758 – 182758 2320p 01122006 01122016
p l griffithjones 17952 – 17952 – 940p 22122003 22062004
p l griffithjones 100000 – – 100000 3920p 21122003 21122007
p l griffithjones 79000 – – 79000 2215p 20032006 20032013
p l griffithjones 134750 – – 134750 2285p 19112005 19112012
p l griffithjones – 155172 – 155172 2320p 01122006 01122016
p l griffithjones – 6673 – 6673 2450p 19022004 19082009
g mcbeth 20000 – – 20000 2000p 22062000 22062005
g mcbeth 75000 – – 75000 975p 04012002 04012006
g mcbeth 14361 – 14361 – 940p 22122003 22062004
g mcbeth 20000 – – 20000 3920p 21122003 21122007
g mcbeth 1054 – – 1054 3200p 20122003 20062006
g mcbeth 61850 – – 61850 2215p 20032006 20032013
g mcbeth – 125000 – 125000 2320p 01122006 01122016
g mcbeth – 3077 – 3077 2450p 19022004 19082009
br murdoch 17952 – 17952 – 940p 22122003 22062004
se wotherspoon 20000 – – 20000 3920p 22122003 21122007
889469 472680 50265 1311884
 these options are held by the directors under the sharesave scheme
no options lapsed during the year
details of the share option schemes in which the directors participate are given earlier in the directors’ remuneration report
the market price at 30 september 2004 was 244p and the range during the year was 225p to 355p
p l griffithjones b r murdoch and g mcbeth all excerised their options when the market price was at 3035p on 6 january
2004 giving rise to gains of £38000 £38000 and £30000 respectively
directors’ interests in shares
2004 2004 2003 2003
beneficial nonbeneficial beneficial nonbeneficial
ahwestropp 17300 – 17300 –
br murdoch 1525063 – 1505111 –
p l griffithjones 1069252 261399 1119300 273758
mr kent 53462 – 53462 –
g kibblewhite 3571 – 9071 –
g mcbeth 31861 – 17500 –
g grover –– ––
se wotherspoon –– 20000 –
r lambourne 5000 – ––
 in addition this director is the beneficial owner of 628975 2003 – 527616 5p ordinary shares held by a pension scheme 
 b r murdoch and g kibblewhite resigned as directors at close of business on 30 september 2004 and s wotherspoon on 12
february 2004
there have been no changes to the interests of the directors between 30 september 2004 and the date of these accounts
26 abacus group plc
directors’ remuneration report continued
for the year ended 30 september 2004 directors’ interests in contracts
during the year none of the directors had a material interest in any contract which was of significance in relation to the business of
the group
approval
this directors’ remuneration report has been approved by the board and signed on its behalf by
abacus house bone lane newbury p l griffithjones ma aca
berkshire rg14 5sf registered office secretary
23 november 2004
abacus group plc 27 united kingdom company law requires the directors to prepare financial statements for each financial period which give a true and
fair view of the state of affairs of the company and the group as at the end of the financial period and of the profit or loss of the
group for that period
in preparing those financial statements the directors are required to
■ select suitable accounting policies and then apply them consistently 
■ make judgements and estimates that are reasonable and prudent 
■ state whether applicable accounting standards have been followed and
■ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business 
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that the financial statements comply with the companies act
1985 they are also responsible for the system of internal controls for safeguarding the assets of the company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities
28 abacus group plc
statement of directors’ responsibilities we have audited the financial statements of abacus group plc for the year ended 30 september 2004 which comprise the
consolidated profit and loss account the balance sheets the consolidated cash flow statement the consolidated statement
of total recognised gains and losses and the related notes numbered 1 to 27 together with the statement of accounting
policies these financial statements have been prepared under the accounting policies set out therein we have also audited the
information in the part of the directors’ remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to
them in an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body for our audit work for this report or for
the opinions we have formed
respective responsibilities of directors and auditors
as described in the statement of directors’ responsibilities the company’s directors are responsible for the preparation of the
financial statements in accordance with applicable united kingdom law and accounting standards they are also responsible for
the preparation of the other information contained in the annual report including the directors’ remuneration report our
responsibility is to audit the financial statements and the part of the directors’ remuneration report described as having been
audited in accordance with relevant united kingdom legal and regulatory requirements and auditing standards of the financial
services authority
we report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the directors’ remuneration report described as having been audited have been properly prepared in accordance
with the companies act 1985 we also report to you if in our opinion the directors’ report is not consistent with the financial
statements if the company has not kept proper accounting records if we have not received all the information and explanations
we require for our audit or if information specified by law regarding directors’ remuneration and transactions with the company
and other members of the group is not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the seven provisions of the
combined code specified for our review by the listing rules of the financial services authority and we report if it does not we
are not required to consider whether the board’s statements on internal control cover all risks and controls or form an opinion on
the effectiveness of the group’s corporate governance procedures or its risk and control procedures
we read the directors’ report and other information contained in the annual report for the above year as described in the
contents section including the unaudited part of the directors’ remuneration report and consider the implications for our report if
we become aware of any apparent misstatements or material inconsistencies with the financial statements
basis of opinion
we conducted our audit in accordance with united kingdom auditing standards issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements and the part
of the directors’ remuneration report described as having been audited it also includes an assessment of the significant
estimates and judgments made by the directors in the preparation of the financial statements and of whether the accounting
policies are appropriate to the circumstances of the company and the group consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the directors’
remuneration report described as having been audited are free from material misstatement whether caused by fraud or other
irregularity or error in forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial
statements and the part of the directors’ remuneration report described as having been audited
opinion
in our opinion the financial statements give a true and fair view of the state of affairs of the company and the group as at
30 september 2004 and of the group’s profit for the year then ended and the financial statements and part of the directors’
remuneration report described as having been audited have been properly prepared in accordance with the companies act
1985
deloitte  touche llp
chartered accountants and registered auditors
reading
23 november 2004
abacus group plc 29
independent auditors’ report
to the members of abacus group plc consolidated profit and loss account
for the year ended 30 september 2004
2004 2003
notes £’000 £’000 £’000 £’000
before goodwill after
goodwill amortisation goodwill
amortisation note 9 amortisation total
turnover
existing operations 159658 – 159658 146980
acquisitions 28140 – 28140 –
1 187798 – 187798 146980
cost of sales 144808 – 144808 112854
gross profit 42990 – 42990 34126
other operating expenses 32091 719 32810 25935
operating profit
existing operations 10289 649 9640 8191
acquisitions 610 70 540 –
10899 719 10180 8191
finance charges net 2 874 – 874 571
profit on ordinary activities before taxation 3 10025 719 9306 7620
tax on profit on ordinary activities 5 3280 – 3280 2359
profit on ordinary activities after taxation 6745 719 6026 5261
dividends paid and proposed on equity shares 6 4466 – 4466 4296
retained profit for the year 18 2279 719 1560 965
earnings per share 8
basic before goodwill 159p 135p
basic after goodwill 142p 125p
diluted before goodwill 158p 134p
diluted after goodwill 141p 124p
all the activities of the group comprise continuing activities
consolidated statement of total recognised gains and losses
for the year ended 30 september 2004
2004 2003
£’000 £’000
profit for the financial year 6026 5261
loss profit on foreign currency translation 135 493
5891 5754
the accompanying notes are an integral part of the consolidated profit and loss account and consolidated statement of total
recognised gains and losses
30 abacus group plc consolidated balance sheet
30 september 2004
notes 2004 2003
£’000 £’000
fixed assets
intangible assets 9 11826 9105
tangible assets 10 18387 15826
investments 11 – 159
30213 25090
current assets
stocks 12 34751 31754
debtors 13 41107 28788
cash at bank and in hand 3136 1228
78994 61770
creditors amounts falling due within one year 14 56274 34103
net current assets 22720 27667
total assets less current liabilities 52933 52757
creditors amounts falling due after more than one year 15 7272 8258
45661 44499
provisions for liabilities and charges 16 1433 2050
net assets 44228 42449
capital and reserves
calledup share capital 17 2127 2108
share premium account 18 9118 8783
merger reserve 18 3323 3323
capital redemption reserve 18 428 428
profit and loss account 18 29232 27807
equity shareholders’ funds 19 44228 42449
minority interests 20 – –
total capital employed 44228 42449
the accompanying notes are an integral part of the consolidated balance sheet
abacus group plc 31 company balance sheet
30 september 2004
notes 2004 2003
£’000 £’000
fixed assets
investments 11 5614 3604
current assets
debtors amount falling due within one year 13 3 3
debtors amount falling due after one year 13 9914 10806
cash at bank and in hand 3059 2983
12976 13792
creditors amounts falling due within one year 14 4072 3452
net current assets 8904 10340
total assets less current liabilities 14518 13944
creditors amounts falling due after more than one year 15 2399 2399
net assets 12119 11545
capital and reserves
calledup share capital 17 2127 2108
share premium account 18 9118 8783
capital redemption reserve 18 428 428
profit and loss account 18 446 226
equity shareholders’ funds 12119 11545
the accompanying notes are an integral part of the balance sheet
the accounts on pages 30 to 53 inclusive were approved by the board of directors on 23 november 2004 and signed on their
behalf by
m r kent
p  l griffithjones directors
32 abacus group plc consolidated cash flow statement
for the year ended 30 september 2004
notes 2004 2003
£’000 £’000
net cash inflow from operating activities 21 13146 10670
returns on investments and servicing of finance 22 874 571
taxation 22 2499 2893
capital expenditure and financial investment 22 2412 3683
7361 3523
acquisitions 22 9345 441
equity dividends paid 4355 4160
net cash outflow before financing 6339 196
financing 22 3635 1803
decrease increase in cash in the year 23 9974 1607
the accompanying notes are an integral part of the consolidated cash flow statement
abacus group plc 33 statement of accounting policies
30 september 2004
the principal accounting policies are summarised below they have all been applied consistently throughout the year and the
preceding year
basis of accounting
the accounts are prepared under the historical cost convention and in accordance with applicable uk accounting standards
basis of consolidation
the group accounts consolidate the accounts of abacus group plc and its subsidiary undertakings drawn up to 30 september
each year the results of subsidiaries acquired or sold are consolidated for the periods from or to the date at which control
passed acquisitions are accounted for under the acquisition method
intangible assets  goodwill
goodwill arises on the acquisition of subsidiary undertakings and businesses if the fair value of the consideration given exceeds
the fair value of the identifiable assets and liabilities acquired the difference goodwill is capitalised goodwill is written off on a
straightline basis over its useful economic life a maximum of twenty years provision is made for any impairment
negative goodwill is similarly included in the balance sheet and is credited to the profit and loss account in the periods in which
the acquired nonmonetary assets are recovered through depreciation or sale negative goodwill in excess of the fair values of the
nonmonetary assets acquired is credited to the profit and loss account in the periods expected to benefit
goodwill arising on acquisitions in the year to 30 september 1997 and in earlier years was written off to reserves in accordance
with the accounting standard then in force as permitted by the current accounting standard the goodwill previously written off to
reserves has not been reinstated in the balance sheet
on disposal or closure of a previously acquired business the attributable amount of goodwill previously written off to reserves is
included in determining the profit or loss on disposal
investments
subsidiary undertakings and other fixed asset investments are stated at cost which includes the costs of acquisition less
provision for impairment current asset investments are stated at the lower of cost or net realisable value
where appropriate and in accordance with sections 131 and 133 of the companies act 1985 the company records the cost of
investment as the nominal value of shares issued plus the costs of acquisition the resulting difference arising on consolidation is
taken to merger reserve
tangible fixed assets
tangible fixed assets are shown at cost net of depreciation and provision for impairment depreciation is provided on all tangible
fixed assets other than freehold land at rates calculated to write off the cost less estimated residual value of each asset over its
expected useful life as follows
straightline basis expected useful life
freehold buildings 50 years
leasehold improvements over the lease term
fixtures fittings and equipment 3 or 8 years
computer equipment 3 years
plant and tooling 10 years
reducing balance basis 
motor vehicles at 25 per annum
residual value is calculated on prices prevailing at the date of acquisition
stocks 
stocks are stated at the lower of cost and net realisable value cost includes materials direct labour and an attributable proportion
of manufacturing overheads based on normal levels of activity on a weighted average basis net realisable value is based on
estimated selling price less further costs expected to be incurred to completion and disposal
provision is made for obsolete slowmoving and defective items where appropriate
debt
debt is initially stated at the amount of net proceeds after deduction of issue costs if material the carrying amount is increased by
the finance cost in respect of the accounting period and reduced by payments made in the period
taxation
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax
rates and laws that have been enacted or substantially enacted by the balance sheet date
deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax or a
right to pay less tax at a future date at rates expected to apply when they crystallise based on current tax rates and law timing
differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in
34 abacus group plc which they are included in financial statements deferred tax is not provided on timing differences arising from the revaluation of
fixed assets where there is no commitment to sell the asset or on unremitted earnings of subsidiaries and associates where there
is no commitment to remit these earnings 
deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered deferred tax
assets and liabilities are not discounted
pension costs
the group offers pensions to all eligible employees including directors through defined contribution pension schemes the assets
of the schemes are held independently of the group
the amount charged to the profit and loss account for all defined contribution schemes is the total of the contributions payable in
the year
differences between contributions payable in the year and contributions actually paid are shown in the balance sheet as either
accruals or prepayments
foreign currency
trading activities denominated in foreign currencies are recorded in local currencies at the exchange rates effective on the dates of
the transactions or where appropriate at the rate of exchange of related forward currency contracts
monetary assets and liabilities denominated in foreign currencies at the year end are reported at the rates of exchange prevailing at
the year end or where appropriate at the rate of exchange of related forward currency contracts
the results of overseas operations are translated at the average monthly exchange rate and their balance sheets at the rates of
exchange prevailing at the balance sheet date
exchange differences arising from retranslating opening net assets and results are dealt with through reserves all other differences
are included in the profit and loss account
forward foreign exchange contracts
the group uses forward foreign exchange contracts to reduce exposure to foreign exchange risk it does not hold or issue
derivative financial instruments for speculative purposes
a forward foreign exchange contract is treated as a hedge if the contract reduces exposure to exchange movements and is
related to actual assets liabilities or probable commitments denominated in the same or similar currency as the contract
gains or losses arising on these contracts are deferred until the hedged transaction itself is reflected in the group’s accounts at
this point the difference is recognised in the profit and loss account
turnover
turnover represents sales less returns by subsidiary companies to external customers excluding value added tax transactions
are recorded as sales when the delivery of products or performance of services takes place in accordance with the contractual
terms of sale
leases
assets held under hire purchase contracts and finance leases are capitalised as tangible fixed assets and are depreciated over the
shorter of the lease term and their useful lives the capital elements of future lease obligations are recorded as liabilities while the
interest elements are charged to the profit and loss account over the period of the lease
rentals under operating leases are charged on a straightline basis over the lease term even if payments are not made on the
same basis
finance costs
finance costs of debt are recognised in the profit and loss account over the term of such instruments at a constant rate on the
carrying amount 
related party transactions
under the provisions of financial reporting standard 8 the company is not required to disclose details of certain related party
transactions between wholly owned subsidiaries there were no other related party transactions throughout the year 
abacus group plc 35 notes to the accounts
30 september 2004
1 results and operations
geographical segments
both the turnover and profit before taxation of the group are attributable to one class of business electronic component
distribution these are analysed below by geographical segment
united kingdom nordic italy group
2004 2003 2004 2003 2004 2003 2004 2003
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
turnover by origin 
sales to third parties 139620 124738 21731 22242 26447 – 187798 146980
profit loss before taxation 9729 7921 789 301 366 – 9306 7620
net assets 39576 37993 3608 4456 1044 – 44228 42449
turnover by origin arising from acquistions in the united kingdom and italy were £1693000 and £26447000 respectively
2003
existing 2004 existing
operations acquisitions total operations
£’000 £’000 £’000 £’000
turnover by destination
united kingdom 124822 1562 126384 115699
nordic 21722 26 21748 22296
italy 62 24831 24893 52
other european union 10138 1642 11780 6761
other 2914 79 2993 2172
159658 28140 187798 146980
the directors have not presented further analysis of operating expenses as in their opinion a meaningful analysis is not available
in relation to the acquisitions of ecc distribution limited and telecom design communications limited continuing operations in
2004 include cost of sales of £23144000 gross profit £4996000 and operating expenses of £4456000
2 finance charges net
2004 2003
£’000 £’000
other interest receivable and similar income 171 163
interest payable and similar charges
bank loans  overdrafts 1044 727
finance leases and hire purchase contracts 1 7
1045 734
net interest payable 874 571
36 abacus group plc 3 profit on ordinary activities before taxation
2004 2003
£’000 £’000
profit on ordinary activities before taxation is stated after charging
depreciation and other amounts written off tangible fixed assets
– owned 1555 1131
– held under hire purchase agreements and finance leases 91 69
amortisation of goodwill 719 316
impairment of goodwill – 89
loss on disposal of fixed assets 11 37
operating lease rentals
– plant and machinery 962 838
– other 521 460
auditors’ remuneration for
– audit services to abacus group plc 11 10
– audit services to group companies 102 70
– nonaudit services to abacus group plc – 25
– nonaudit services to group companies 6 –
4 staff costs
2004 2003
£’000 £’000
employee costs during the year were
wages and salaries 21569 18175
social security costs 2635 1823
other pension costs 1531 1149
25735 21147
the average monthly number of persons employed by the group during the year including executive directors was as follows
2004 2003
number number
assembly 175 168
distribution 582 530
757 698
details of directors’ remuneration for the year are provided in the audited section of the directors’ remuneration report on pages
25 and 26
abacus group plc 37 5 tax on profit on ordinary activities
2004 2003
£’000 £’000
current tax
the tax charge is based on the profit for the year and comprises
uk corporation tax at 30 2793 2174
overseas taxation 283 –
3076 2174
adjustment in respect of prior periods
– uk corporation tax 51 187
– foreign tax 1 2
total current tax 3128 2359
deferred tax
effect of increase in tax rate on opening liability 9 –
origination and reversal of timing differences 143 –
total tax on profit on ordinary activities 3280 2359
the difference between the total current tax shown above and the amount calculated by applying the standard rate of uk
corporation tax to the profit before tax is as follows
2004 2003
£’000 £’000
group profit on ordinary activities before tax 9306 7620
tax on group profit on ordinary activities at standard uk
corporation tax rate of 30 2003 – 30 2792 2286
effects of
goodwill amortisation and impairment 216 121
other expenses not deductible for tax purposes 207 128
timing differences on deferred tax asset not recognised 5 91
capital allowances in excess of depreciation 108 237
unrelieved losses in foreign subsidiaries 217 137
utilisation of brought forward losses 282 170
higher tax rates on overseas earnings 39 –
adjustments to tax charge in respect of previous periods 52 185
group current tax charge for year 3128 2359
the group earns its profits primarily in the uk and therefore the tax rate used for tax on profit on ordinary activities is the standard
rate for uk corporation tax currently 30
the group’s overseas tax rates are higher than those in the uk primarily because the profits earned in italy are taxed at a
standard rate of 37 adjusted for disallowables
6 dividends paid and proposed on equity shares
2004 2003
£’000 £’000
equity shares
– interim paid of 35p per share 2003 – 34p 1488 1429
– final proposed of 70p per share 2003 – 68p 2978 2867
4466 4296
38 abacus group plc
notes to the accounts continued
30 september 2004 7 profit attributable to abacus group plc
the profit for the financial year dealt with in the accounts of the parent company abacus group plc was £4686000 2003 –
£3988000
as permitted by section 230 of the companies act 1985 no separate profit and loss account is presented for the parent
company
8 earnings per share
earnings per share in both years are calculated in accordance with frs 14 by dividing the earnings by the weighted average
number of shares outstanding in the year
basic diluted
2004 2003 2004 2003
£’000 £’000 £’000 £’000
earnings after goodwill 6026 5261 6026 5261
goodwill 719 405 719 405
earnings before goodwill 6745 5666 6745 5666
weighted average number of shares outstanding number 42426373 42035246 42809417 42372634
earnings per share after goodwill pence 142 125 141 124
effect on earnings per share resulting from goodwill pence 17 10 17 10
earnings per share before goodwill pence 159 135 158 134
weighted average number of shares 2004 2003
number number
of shares of shares
for basic earnings per share 42426373 42035246
exercise of options 383044 337388
for diluted earnings per share 42809417 42372634
the directors have also presented earnings per share before goodwill as they believe it reflects the underlying performance of the
group
9 intangible fixed assets goodwill
group positive negative total
goodwill goodwill goodwill
£’000 £’000 £’000
cost
beginning of year 13038 1426 11612
additions 3440 – 3440
end of year 16478 1426 15052
amortisation
beginning of year 3933 1426 2507
provided during the year 719 – 719
end of year 4652 1426 3226
net book value
beginning of year 9105 – 9105
end of year 11826 – 11826
abacus group plc 39 9 intangible fixed assets goodwill continued
the increase in goodwill by £3440000 arose following
a a £446000 increase between the estimated and actual earnout consideration paid on the acquisition of trident microsystems
limited and the purchase of the minority interest of asp uk limited both of which were made in the year ending
30 september 2001 the earnout consideration was based on trading results for the financial years ending 30 september
2002 and 2003 the total consideration paid was £12407000 2003 – £11961000
b the purchase of 100 of the share capital of telecom design communications limited for £2010000 the fair value assets of
which were £463000 goodwill £1547000
c the purchase of the remaining 91 of ecc distribution limited for £1599000 bringing the total investment cost to
£1758000 ecc distribution limited’s fair value assets excluding its own goodwill of £946000 were £311000 and goodwill
arising on acquisition was £1447000
goodwill on all acquisitions is amortised over the presumed useful economic lives of 20 years 
10 tangible fixed assets
group land and buildings
freehold leasehold plant 
improvements machinery total
£’000 £’000 £’000 £’000
cost
beginning of year 11987 202 7282 19471
acquisition of subsidiary undertakings 1284 – 447 1731
additions 30 3 2532 2565
disposals – – 2031 2031
difference on foreign currency translation 60 – 17 77
end of year 13241 205 8213 21659
depreciation
beginning of year 1059 141 2445 3645
charge for the year 246 19 1381 1646
disposals – – 2014 2014
difference on foreign currency translation 6 – 1 5
end of year 1299 160 1813 3272
net book value
beginning of year 10928 61 4837 15826
end of year 11942 45 6400 18387
freehold land at cost amounting to £1717000 2003 – £1612000 has not been depreciated the net book value of tangible
fixed assets includes £75000 2003 – £41000 financed by hire purchase contracts and finance leases
11 fixed asset investments
group company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
subsidiary undertakings – – 5614 3604
other investments – 159 – –
cost and net book value – 159 5614 3604
group
other investments
during the year abacus electronics holdings limited purchased the remaining 91 of the share capital of ecc distribution
limited which owns 100 of the share capital of ecc elettronica spa hence the investment of £159000 was reclassified to
subsidiary undertaking which is eliminated on group consolidation 
40 abacus group plc
notes to the accounts continued
30 september 2004 abacus group plc 41
11 fixed asset investments continued
company
investments in subsidiary undertakings
£’000
cost
beginning of year 3604
acquisitions 2010
end of year 5614
provision for impairment
beginning and end of year –
net book value
beginning of year 3604
end of year 5614
during the year the company acquired 100 of the share capital of telecom design communications limited for £2010000
abacus group plc owns 100 of the share capital of abacus electronics holdings limited which in turn holds all other
investments in trading subsidiaries 
principal group investments
the company and group have investments in the ordinary equity share capital or local equivalent of the subsidiary undertakings
listed below which principally affected the profits and net assets of the group all companies except innovative electronic
components group limited distribute electronic components innovative electronic components group limited provides central
administrative support
country of incorporation proportion of shares
and operation held by
company group
abacus electronics holdings limited united kingdom 100
telecom design communications limited united kingdom 100
promax denmark as denmark 100
promax sweden ab sweden 100
promax finland oy finland 100
promax norway as norway 100
innovative electronic components group limited united kingdom 100
micromark electronics limited united kingdom 100
trident microsystems limited united kingdom 100
ecc elettronica spa italy 100
voting rights in each of the above subsidiaries are equal to the proportion of ordinary shares held
dormant and intermediate holding companies subsidiaries have been omitted to avoid a statement of excessive length
the company acquired 100 of the issued share capital of telecom design communications limited in june 2004 abacus
electronics holdings limited acquired the remaining 91 of the issued share capital of ecc distribution limited in two tranches
51 in october 2003 and 40 in may 2004 the results of the two companies were consolidated from 1 june 2004 and
1 october 2003 respectively the trade assets and liabilities of telecom design communications limited were transferred to
abacus electronics holdings limited on 30 september 2004
in addition abacus electronics holdings limited paid £2207000 of deferred consideration on its acquisition of 100 of the share
capital of trident microsystems limited and trident microsystems limited in turn paid £156000 of deferred consideration for the
purchase of the remaining 49 minority interest of asp uk limited both acquisitions were made in the year ending
30 september 2001 and both deferred considerations were based on trading results for the financial years ending 30 september
2002 and 2003 the total considerations paid were £11966000 and £441000 respectively
the acquisition method of accounting has been adopted for all acquisitions and the goodwill arising on the purchases has been
capitalised and is being amortised through the profit and loss account over a period of 20 years 42 abacus group plc
notes to the accounts continued
30 september 2004
11 fixed asset investments continued
the consideration paid for each of the acquired companies during the year is as follows
loan group company
cash notes total total
£’000 £’000 £’000 £’000
telecom design communications limited 1819 181 2000 2000
ecc distribution limited 1593 – 1593 –
total before acquisitions costs 3412 181 3593 2000
costs of acquisitions 16 – 16 10
total including acquisition costs 3428 181 3609 2010
during the year the acquisitions generated £1855000 of the group’s net operating cashflows paid £177000 in respect of net
returns on investments and servicing of finance paid £296000 of taxation and utilised £355000 for capital expenditure and
financial investment
the profit after tax and minority interest for ecc from 1 october 2003 to the date of acquisition 3 october 2003 by the abacus
group were £nil the loss after tax and minority interest for ecc’s financial year ending 30 september 2003 were £6000 and £nil
respectively the profit after tax for telecom design communications limited from 1 january 2004 to the date of acquisition
17 june 2004 was £147000 a loss after tax of £48000 for the year ending 31 december 2003 11 fixed asset investments continued
the net assets at the dates of acquisition are as follows
book and fair book value fair value
value
telecom design ecc adjustments ecc total
communications distribution accounting distrubtion
limited limited revaluation policy limited
alignment
£’000 £’000 £’000 £’000 £’000 £’000
fixed assets
intangible – 946 946 – – –
a
tangible 42 1689 – – 1689 1731
investment – 69 69 – – –
b
current assets
stock 165 3891 605 – 3286 3451
c
debtors 827 8681 – – 8681 9508
deferred taxation – 178 – 229 51 51
d
cash 8 690 – – 690 698
total assets 1042 16144 1620 229 14295 15337
liabilities
overdrafts 222 6393 – – 6393 6615
loans and finance leases – 2246 – – 2246 2246
trade creditors 174 3444 – – 3444 3618
other creditors 183 850 – – 850 1033
provisions
provisions for agency and
employee termination indemnities – 922 129 – 1051 1051
e
total liabilities 579 13855 129 – 13984 14563
net assets acquired 463 2289 1749 229 311 774
minority interest 4018 of ecc 
distribution limited – 533 533
remaining 4018 of minority 
interest acquired – 533 533
goodwill 1547 1447 2994
2010 1758 3768
satisfied by
cash 1819 1752 3571
loan notes 181 – 181
acquisition costs 10 6 16
2010 1758 3768
adjustments
a elimination of goodwill arising on prior acquisitions
b fair value adjustment to investment held by ecc
c increase in stock provision by £605000 following review of excess and obsolete stock 
d elimination of deferred tax asset of £229000 in line with group policy
e increase in fair value of agency termination indemnity by £129000
the net assets of ecc distribution limited were not significantly different as at 3 october 2003 and 17 may 2004 when 51 and
40 of the share capital were purchased respectively 9 of the share capital had been acquired in the year ending
30 september 2003
abacus group plc 43 11 fixed asset investments continued
net cash outflows in respect of the acquisitions comprised
£’000
cash at bank and in hand acquired 698
bank overdrafts acquired 6615
5917
total cash consideration paid before acquisition costs 3571
acquisition costs paid by cash 16
cash consideration paid in prior year 159
total cash consideration and acquisition costs
paid in year ending 30 september 2004 3428
net cash outflow on acqusitions 9345
split by
purchase of subsidiary undertakings 2721
purchase of minority interests 707
3428
12 stocks
group group
2004 2003
£’000 £’000
finished goods and goods for resale 34751 31754
there is no material difference between the replacement cost of stocks and the balance sheet values
13 debtors
group company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
amounts falling due within one year
trade debtors 40241 27590 – –
corporation tax recoverable 152 78 – –
prepayments and accrued income 675 1120 3 3
41068 28788 3 3
amounts falling due after more than one year
amounts owed by subsidiary undertaking – – 9914 10806
corporation tax recoverable 29 – – –
other debtors 10 – – –
39 – 9914 10806
41107 28788 9917 10809
44 abacus group plc
notes to the accounts continued
30 september 2004 14 creditors amounts falling due within one year
group company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
bank loans and overdrafts 24846 11373 – –
obligations under finance leases and 
hire purchase contracts 75 9 – –
other loans 362 249 362 181
trade creditors 16813 10893 – –
corporation tax 1927 978 – –
other taxation and social security 3796 3035 56 27
accruals and deferred income 5477 4699 676 377
proposed dividend 2978 2867 2978 2867
56274 34103 4072 3452
bank overdrafts and loans repayable within one year were £23136000 and £1710000 respectively of these utilised facilities
£17381000 are secured 2003 – £11373000 after taking into account cash balances which may be offset total bank overdraft
facilities are £40682000 2003 – £24065000 
group operating companies have granted fixed and floating charges over their assets to secure bank and loan overdraft facilities
finance leases are secured against specific assets
other loans of £362000 comprise nonguaranteed and guaranteed loan notes of £181000 each the former attracts interest of
3 the latter interest of 4 plus a 2125 bank guarantee charge the date of repayment of the former is september 2005 the
latter is subject to the resolution of outstanding tax issues all loan notes are redeemable at par
15 creditors amounts falling due after more than one year
group company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
bank loans secured 7272 8258 – –
amounts owed to subsidiary undertakings – – 2399 2399
7272 8258 2399 2399
the borrowings of the group and company are repayable
group company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
on demand or within one year
hire purchase and finance leases 75 9 – –
loans and overdrafts 25208 11622 362 181
25283 11631 362 181
between one and two years
bank loans 1554 68 – –
between two and five years
bank loans 5718 8190 – –
total borrowings 32555 19889 362 181
abacus group plc 45 46 abacus group plc
notes to the accounts continued
30 september 2004
16 provision for liabilities and charges
employment
group deferred earnoutand agency 2004 2003
taxation consideration termination total total
£’000 £’000 £’000 £’000 £’000
beginning of year 134 1916 – 2050 3865
acquisition of subsidiary undertakings 51 – 1051 1102 –
charged to profit and loss 152 – 92 244 –
reduction in the year – 1916 – 1916 1829
utilised in the year – – 30 30 –
foreign exchange difference 2 – 19 17 14
end of year 339 – 1094 1433 2050
2004 2003
deferred taxation £’000 £’000
accelerated capital allowances 275 –
other timing differences 64 134
provision for deferred taxation 339 134
there was no unprovided deferred tax liability at either balance sheet date 
the directors have not provided for a deferred tax asset balance of £1003000 2003 – £298000 of this £341000 2003 –
£263000 relates to losses incurred in promax’s norwegian and finnish overseas subsidiaries £474000 of timing differences on
provisions in italy and £188000 of depreciation in excess of capital allowances these deferred tax assets would be recognised
when the directors could forecast with certainty that
a the promax operations would move into profit and
b the italian provisions would be utilised in the forseeable future
earnout consideration
as stated in note 9 the provision for earnout consideration was in respect of the acquisitions of trident microsystems limited and
the purchase of a 49 minority interest of asp uk limited the actual amount paid was £2363000 2003 – £1916000 –
estimate and was based on the profits of the companies for the two years ending 30 september 2003
employment and agency termination
the termination provisions related to ecc and are payable by law on the termination of employment or agency contracts during
the year £30000 was paid in connection with agency contracts the directors expect that payments from terminating contracts
could arise at any time in the future depending on the performance of ecc elettronica spa its employees and agents
17 called–up share capital
company
2004 2003
£’000 £’000
authorised share capital
70000000 2003 – 70000000 ordinary shares of 5p each 3500 3500
allotted called–up and fully–paid
42536007 ordinary shares of 5p each 2003 – 42169041 2127 2108 17 called–up share capital continued
during the year 366966 ordinary shares of 5p each were issued for a total consideration of £354000 the company has options
outstanding for the following shares
option scheme number of number number number number of exercise exercise
shares at granted exercised lapsed shares at period price per
1 oct 2003 30 sep 2004 share
2003 26258 – – – 26258 2005–2012 2285p
approved – 25862 – – 25862 20062013 2320p
2003 263492 – – – 263492 2005–2012 2285p
unapproved 233400 – – – 233400 2006–2013 2215p
– 462930 – – 462930 20062013 2320p
1996 21429 – – – 21429 2001–2005 1050p
unapproved 75000 – – – 75000 2002–2006 1205p
75000 – – – 75000 2002–2006 975p
390000 – – – 390000 2003–2007 3890p
240000 – – – 240000 2003–2007 3920p
1993 82500 – – – 82500 1998–2005 2000p
approved 11000 – – – 11000 1999–2006 2710p
43571 – – – 43571 2001–2008 1050p
sharesave 364411 – 363334 – 1077 2003–2004 940p
89858 – 3632 60400 25826 2003–2006 3200p
– 347473 – 10913 336560 20072010 2450p
total 1915919 836265 366966 71313 2313905
details of the above approved and unapproved option schemes may be found in the ‘share options’ section of the directors’
remuneration report
18 reserves
non–distributable distributable
––––––––––––––––––––––––––––––––––––––– ––––––––––––
share merger capital profit
premium reserve redemption and loss
account reserve account
£’000 £’000 £’000 £’000
group
beginning of year 8783 3323 428 27807
premium on share issue 335–––
loss on foreign current translation – – – 135
retained profit for the year – – – 1560
9118 3323 428 29232
company
beginning of year 8783 – 428 226
premium on share issue 335–––
retained profit for the year – – – 220
9118 – 428 446
cumulative goodwill of £34642000 has arisen on the acquisition of subsidiary undertakings in the years to 30 september 1997
this goodwill has been written off to reserves in line with the group’s accounting policy as described on page 34
abacus group plc 47 19 reconciliation of movement in group equity shareholders’ funds
2004 2003
£’000 £’000
profit for the year 6026 5261
dividends paid and proposed 4466 4296
1560 965
new share capital subscribed 354 183
loss profit on foreign currency translation 135 493
new addition to equity shareholders’ funds 1779 1641
opening equity shareholders’ funds 42449 40808
closing equity shareholders’ funds 44228 42449
20 minority interests
2004 2003
£’000 £’000
beginning of year – 16
acquisition of subsidiary undertaking 533 –
acquisition of minority interest 533 –
disposal of minority interest – 16
end of year – –
as stated in note 11 minority interests relate to the acquisition of 4018 of ecc distribution limited which comprise only equity
interests
21 reconciliation of operating profit to operating cash flows
2004 2003
£’000 £’000
operating profit 10180 8191
loss on disposal of fixed assets 11 37
depreciation 1646 1200
goodwill amortisation 719 316
goodwill impairment loss – 89
operating profit before depreciation and goodwill 12556 9833
decrease in stocks 297 3415
increase in debtors 2941 309
increase decrease in creditors 3179 2269
increase in provisions 55 –
net cash inflow from operating activities 13146 10670
48 abacus group plc
notes to the accounts continued
30 september 2004 22 analysis of cash flows
2004 2003
£’000 £’000
returns on investments and servicing of finance
interest received 171 163
interest paid 1044 727
interest element of hire purchase and finance lease contracts 1 7
net cash outflow 874 571
taxation
uk corporation tax paid 2203 2847
overseas tax paid 296 46
net cash outflow 2499 2893
capital expenditure and financial investment
purchase of tangible fixed assets 2418 4780
repayment of loan – 1000
sale of tangible fixed assets 6 97
net cash outflow 2412 3683
acquisitions
purchase of subsidiary undertakings 2721 –
purchase of minority interests 707 –
purchase of other investments – 159
net overdrafts acquired with subsidiary undertakings 5917 –
repayment of acquisition consideration – 600
net cash outflow inflow 9345 441
financing
issue of ordinary share capital 354 183
new loans – 8380
repayment of loans 1195 6316
repayment of loan notes – 319
payment of deferred consideration 2363 –
capital element of finance lease rental payments 431 125
net cash outflow inflow 3635 1803
abacus group plc 49 23 analysis and reconciliation of net debt
1 oct cash acquired other exchange 30 sept
2003 flow with noncash differences 2004
subsidiaries changes
£’000 £’000 £’000 £’000 £’000 £’000
cash at bank 1228 1926 – – 18 3136
bank overdrafts 11373 11900 – – 137 23136
9974
debt due after one year 8258 – 1047 2005 28 7272
debt due within one year 249 1195 849 2186 17 2072
finance leases due within one year 9 431 350 147 – 75
1626
18661 8348 2246 328 164 29419
excluding cash and overdrafts
2004 2003
£’000 £’000
decrease increase in cash for the year 9974 1607
cash outflow inflow from decrease increase
in debt and lease financing 1626 1620
change in net debt resulting from cash flows 8348 13
loans and finance leases acquired with subsidiary 2246 –
issue of loan notes to purchase subsidiary undertaking 181 –
new finance leases 147 –
finance leases disposed of with subsidiary undertaking – 33
foreign exchange difference 164 195
movement in net debt in the year 10758 175
net debt at beginning of year 18661 18486
net debt at end of year 29419 18661
24 financial instruments
an explanation of the group’s objectives policies and strategies for the role of derivatives and other financial instruments in
creating and changing the risks of the group can be found in the ‘managing business risk’ section of the corporate governance
statements as permitted under frs 13 short term debtors and creditors have been excluded from all disclosures other than the
currency exposure disclosure
interest rate risk
the group’s interest charge and income primarily arise on bank loans overdrafts and loan notes which are mainly denominated in
sterling euro us dollars yen and danish kroner for overdrafts the interest charge and income is based on the daily base rate
plus or minus a fixed percentage for loans the group has committed facilities
a to borrow up to £7200000 which may be denominated in any currency at a forward libor rate for periods between
one week and six months
b of dkr2723000 which is repayable in equal instalments of dkr60000 until june 2008 and attracts interest at a fixed
rate of 563
c of two loans one of euro1000000 which is repayable in equal instalments of euro250000 until may 2006 the other of
euro500000 repayable in full in may 2006 both of which attract interest based on the daily euribor rate
d of a loan of £500000 repayable in full in january 2005 and which attracts interest based on the daily libor rate
within each country all bank accounts of the same currency are pooled which practice the group actively utilises to minimise
interest charges given the group’s low materiality of its interest rate risk profile the group does not consider hedging instruments
appropriate in managing interest risk 
50 abacus group plc
notes to the accounts continued
30 september 2004 24 financial instruments continued
the interest rate profile of the financial liabilities excluding short term debtors and creditors of the group at 30 september was as
follows
financial assets and liabilities
excluding short term debtors and creditors floating rate fixed rate
–––––––––––––– –––––––––––––––––––––––––––––––––––––––––––––
balance balance weighted weighted
outstanding outstanding average average
interest rate period
for which rates 
are fixed
£’000 £’000  years
2004
assets
sterling 92–––
euro 2774–––
other 270–––
3136–––
liabilities
sterling 19392 437 38 09
us dollar 77 – – –
euro 12096 – – –
yen 301 – – –
other – 252 56 37
31866 689 45 19
2003
assets
sterling 247–––
us dollar 784–––
other 197–––
1228–––
liabilities
sterling 10463 190 61 10
us dollar 780 – – –
euro 1304 – – –
yen 5444 – – –
other 1382 326 56 47
19373 516 58 34
assets in the above table for 2004 and 2003 comprise only cash balances 
floating rate liabilities comprise sterling and euro bank loans of £7700000 and £1030000 euro1500000 respectively and
overdrafts in multiple currencies of £23136000 all bearing interest based on daily base rates fixed rate liabilities comprise a
danish kroner bank loan of £252000 dkr2723000 outstanding obligations on finance leases £75000 and sterling loan notes
£362000
interest rates on floating rate assets and liabilities are based on the relevant national interbank rates
currency exposures
as described in the ‘managing financial risk’ section of the corporate governance statements the group may enter into forward
foreign currency contracts to protect against the currency exposures that arise on purchase and sale transactions the table
overleaf shows the group’s currency exposures these exposures give rise to currency gains and losses recognised in the profit
and loss account and arise from monetary assets and liabilities not denominated in the functional currency of the operating unit
abacus group plc 51 24 financial instruments continued
net foreign currency monetary assets liabilities
functional currency sterling euro us dollar yen other total
of group operation £’000 £’000 £’000 £’000 £’000 £’000
sterling – 1591 382 300 47 1462
danish kroner 70 2366 94 166 32 2540
euro 1 – 420 165 – 586
total 2004 69 3957 896 301 15 3416
total 2003 5 2400 5377 4846 – 12618
short term debtors and creditors have been included in the above disclosure as at year end the group had outstanding
commitments for forward exchange contracts of £nil 2003 – £nil
maturity of financial liabilities
the maturity profile of the group’s financial liabilities as at 30 september was as follows
2004 2003
£’000 £’000
on demand or within one year 25283 11632
between one and two years 1554 68
between two and five years 5718 8189
32555 19889
borrowing facilities
the group had £49663000 2003 – £32391000 of borrowing facilities at 30 september 2004 of which £17545000 2003 –
£12692000 were undrawn and £8982000 2003 – £8326000 were committed
the maturity of the borrowing facilities both drawn and undrawn at 30 september was as follows
2004 2003
£’000 £’000
on demand or within one year 42391 24133
between one and two years 1554 68
between two and five years 5718 8190
49663 32391
the principal uk facilities were established in april 2003 with hsbc bank plc the overdraft facility repayable on demand is
£20000000 and is renewed every twelve months the loan facility at 30 september 2004 is £7200000 repayable in annual
instalments until january 2008 in addition there is a £500000 loan facility with cariplo bank repayable in january 2005
the nordic facilities are with unibank as and comprise a total loan and overdraft limit of dkr46500000 the overdraft is rolled
over every january for twelve months and the loan dkr2723000 at 30 september 2004 is repayable in equal monthly
instalments of dkr60000 until june 2008 
the italian facilities comprise overdraft and loan facilities of euro24250000 and euro1500000 respectively the overdraft facilities
repayable on demand are with seven italian banks and are due for renewal between march and april 2005 the loan facilities
comprise two loans one of euro1000000 repayable in equal instalments of euro250000 until may 2006 the other of
euro500000 repayable in full in may 2006 
52 abacus group plc
notes to the accounts continued
30 september 2004 24 financial instruments continued
the maturity of the undrawn committed facilities available at 30 september in respect of which all conditions precedent had been
met at that date was as follows 
2004 2003
£’000 £’000
on demand or within one year 17545 12692
gains and losses on hedges
gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged materialises there
was no material difference on unrecognised gains and losses on hedges at 30 september 2004 between the carrying and
estimated fair values 2003 – £nil 
fair value
there was no material difference between the book and fair values of financial assets and liabilities at either 30 september 2004
or 30 september 2003
25 financial commitments
capital commitments
the group and company had capital expenditure commitments of £80000 2003 – £450000 and £nil 2003 – £nil respectively
at 30 september 2004
operating lease commitments 
the group is committed to pay the following annual amounts under leases outstanding at 30 september the company has no
operating lease commitments
land and buildings other
2004 2003 2004 2003
£’000 £’000 £’000 £’000
operating leases which expire
within one year 186 33 378 254
between two and five years 108 135 709 512
after more than five years 231 210 – –
525 378 1087 766
26 pension contributions
the group operates a number of defined contribution pension schemes the total cost of pension contributions for the year was
£1531000 2003 – £1149000
27 related party transactions
there were no significant transactions with related parties during the year
abacus group plc 53 2000 2001 2002 2003 2004
£’000 £’000 £’000 £’000 £’000
income statement
sales 152607 201473 154963 146980 187798
profit before tax and goodwill 15749 17125 9484 8025 10025
goodwill 59 681 2850 405 719
profit before tax 15808 16444 6634 7620 9306
profit after tax 11204 11324 4112 5261 6026
assets employed
fixed assets 5414 26995 25185 25090 30213
other net assets 31373 39307 34125 36020 43434
capital employed 36787 66302 59310 61110 73647
net debt 4478 25992 18486 18661 29419
32309 40310 40824 42449 44228
financed by
shareholders’ funds 32309 40294 40808 42449 44228
minority interests – 16 16 – –
32309 40310 40824 42449 44228
cash flow
operating cash flow 9328 18968 16890 10670 13146
free cash flow 6470 5422 10826 2459 7355
dividends 3115 3418 3802 4160 4355
sale of tangible fixed assets 4 114 105 97 6
acquisitions and investments – 23459 – 1441 14135
equity financing 416 122 410 183 354
new finance leases – 303 – – 147
foreign exchange 207 8 33 195 164
movement in net debt 3982 21514 7506 175 10758
net debt 4478 25992 18486 18661 29419
statistics
average no of shares ‘000 41562 41688 41816 42035 42426
earnings per share basic pre goodwill 268p 287p 166p 135p 159p
free cash flow per share 156p 130p 259p 58p 173p
dividends per share 80p 88p 97p 102p 105p
dividend cover pre excep  goodwill 33 33 17 13 15
gross profit 239 246 247 232 229
return on sales pre excep  goodwill 103 85 61 55 53
effective tax rate pre excep  goodwill 292 299 266 294 327
net gearing 139 645 453 440 665
return on capital employed 436 288 175 141 148
net gearing is defined as net borrowings excluding earnout consideration divided by shareholders’ funds and minority interests
return on capital is defined as profit before exceptional items interest tax and goodwill divided by shareholders’ funds minority
interest and net debt
54 abacus group plc
five year summary notice of annual general meeting
abacus group plc 55
notice is hereby given that the annual general meeting of abacus group plc “the company” will be held at abacus house
bone lane newbury berkshire rg14 5sf on 20 january 2005 at 1000 am the meeting will consider and if thought fit pass the
following resolutions which are to be proposed in the case of resolutions 1 to 10 as ordinary resolutions and in the case of
resolutions 11 and 12 as special resolutions of the company
resolutions
1 to receive and adopt the report of the directors and the accounts for the year ended 30 september 2004 and the auditors’
report thereon
2 to declare and approve a final dividend of 70p per ordinary share for the year ended 30 september 2004
3 to reelect as a director m r kent who retires from the board every third year
4 to reelect as a director p  l griffithjones who retires from the board every third year
5 to reelect as a director a h westropp who now retires every year the board proposes this reelection following the chief
executive’s formal performance evaluation with input from the board which concludes that mr westropp continues to provide
sufficient commitment and effective contribution to his role as nonexecutive chairman of the board and chairman of the
nominations’ committee he attended all of the twelve board meetings and a number of other ad hoc meetings throughout
the year aided by his directorships of other companies mr westropp provides effective input in determining the policies of the
group monitoring the group’s performance and contributing to the formulation of its strategy mr westropp is considered to
be independent by the board for the reasons outlined in the corporate governance section of the annual report
6 to elect as a director g grover following his appointment to the board on 30 march 2004
7 to elect as a director r lambourne following his appointment to the board on 1 june 2004
8 to approve the directors’ remuneration report 
9 to reappoint deloitte  touche llp as auditors and to authorise the directors to fix their remuneration 
10 that the directors be and they are hereby generally and unconditionally authorised to exercise all the powers of the company
to allot relevant securities within the meaning of section 80 of the companies act 1985 “the act” up to an aggregate
nominal amount of £708933 one third of the issued share capital at 30 september 2004 provided that such authority shall
expire on the date being five years after the passing of this resolution unless previously renewed varied or revoked by the
company in general meeting save that the company may before such expiry or the expiry of any renewal of this authority
make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors
may allot relevant securities in pursuance of such offer or agreement as if this authority had not expired and provided further
that this authority shall supersede and revoke any other such authorities 
11 that subject to the passing of resolution 10 the directors be and they are hereby empowered pursuant to section 95 of the
act to allot equity securities as defined for the purposes of sections 89 to 96 of the act for cash pursuant to the general
authority conferred on them by resolution 10 for the purposes of section 80 of the act as if section 891 of the act did not
apply to any such allotment provided that this power shall be limited
i to the allotment of equity securities in connection with an issue or offer by way of rights in favour of holders of ordinary
shares where the equity securities respectively attributable to the interests of such holders of ordinary shares on a fixed
record date are proportionate as nearly as may be to the respective numbers of shares held by them but subject to such
exclusions or other arrangements as the directors may deem necessary or expedient to deal with any legal or practical
problems under the laws of any overseas territory or the requirements of any regulatory body or any other stock
exchange in any territory or in relation to fractional entitlements and
ii to the allotment otherwise than pursuant to paragraph i of this resolution of equity securities having in the case of
relevant shares a nominal amount or in the case of other equity securities giving the right to subscribe for or convert
relevant shares having a nominal amount not exceeding in aggregate the sum of £106340 5 of the issued share
capital at 30 september 2004
and shall expire on the earlier of the date of the next annual general meeting of the company after the passing of this
resolution or fifteen months after the passing of this resolution save that the company may before such expiry make an offer
or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity
securities in pursuance of such offer or agreement as if the power conferred hereby had not expired
12 that the company be generally and unconditionally authorised to make market purchases as defined in section 1633 of
the act of its ordinary shares provided that
i the maximum number of ordinary shares hereby authorised to be acquired is 6380401 15 of the issued share capital
at 30 september 2004
ii the minimum price which may be paid for any such ordinary shares is 5 pence notice of annual general meeting continued
56 abacus group plc
iii the maximum price which may be paid for any such ordinary share is an amount equal to 105 per cent of the average
middle market quotations for an ordinary share according to the london stock exchange daily official list for the five
business days immediately preceding the day on which the ordinary share is contracted to be purchased and
iv this authority shall expire at the close of the next annual general meeting of the company to be held after the date
hereof but a contract of purchase may be made before such expiry which will or may be executed wholly or partly
thereafter and a purchase of ordinary shares may be made in pursuance of any such contract
by order of the board
p  l griffithjones ma aca 15 december 2004
abacus group plc registered office abacus house bone lane newbury berkshire rg14 5sf
notes
1 any member entitled to attend and vote at the above meeting may appoint a proxy to attend and on a poll only vote on
hisher behalf a proxy need not be a member of the company
2 to be valid the enclosed replypaid form of proxy together if appropriate with the power of attorney or other authority if
any under which it is signed or a notarially certified copy of such power or authority must be deposited at the offices of
computershare services plc registrar’s department po box 82 the pavilions bridgwater road bristol bs99 7nh at least
fortyeight hours before the time appointed for holding the meeting
3 completion and return of the form of proxy will not preclude ordinary shareholders from attending the meeting and voting in
person if they wish to do so
4 documents for inspection – copies of the directors’ service contracts and the register of directors’ interests will be available
for inspection at the registered office of the company abacus house bone lane newbury berkshire rg14 5sf during
normal business hours on any weekday excluding public holidays from the date of the notice of the annual general meeting
until the conclusion of the annual general meeting and any adjournment thereof
5 as permitted by regulation 41 of the uncertificated securities regulations 2001 only those shareholders who are registered
on the company’s share register at 6 pm on 18 january 2005 shall be entitled to attend the meeting and to vote in respect
of the number of shares registered in their names at that time changes to entries on the share register after 6 pm on
18 january 2005 shall be disregarded in determining the rights of any person to attend andor vote at the meeting

imprima de bussy – c88732 abacus group
uk and ireland
basingstoke
bolton
boston spa
cambridge
dunmow
leighton buzzard
limerick
livingston
maidenhead
newbury
newcastleunderlyme
redhill
runcorn
southampton
stroud
st just
benelux
amsterdam
denmark
copenhagen
them
finland
helsinki
oulo
norway
oslo
sweden
gothenburg
malmö
stockholm
ecc
italy
florence
milan
padua
bologna
turin
osimo
local offices
abacus group plc   57 abacus house
bone lane
newbury
berkshire
rg14 5sf
wwwabacusgroupcouk
 


Summary:
 abacus group plc   5
general review 
the year has seen an improvement in market conditions for
our distribution businesses primarily in the uk and eire the
uk industry association afdec reports a 7 growth in the
market during our financial year compared to the same period
the previous year this growth has been driven by increased
demand from uk customers while average selling prices
have remained relatively stable in the nordic region afdec
statistics show a market growth of 5 and in italy assodel
their industry association reports a flat market improvement
in the uk market also benefited our uk based electro
mechanical assembly businesses ctl and ccs at trident
the display and related products specialist there was a further
disappointing delay in billings on our medical contracts 
during the year we completed the acquisition of 100 of the
share capital of ecc our italian based distribution business
and in june 2004 the group acquired 100 of telecom
design communications ltd tdc a uk based distributor of
wireless modules and wired communication semiconductors
an area which has strong growth potential for the future 
overall our group sales grew by 28 or by 9 on a likefor
like basis when excluding acquisitions and our group
bookings showed a 30 growth or 10 on a like for like
basis the largest growth contributors were our uk and eire
distribution businesses which outgrew their markets afdec
data for both the nordic and uk markets were restated
during the year to take account of new members the
statistics now represent 86 of the uk distribution market
and 54 of the nordic region based on these restated
numbers our share in the uk and eire grew to 14 in 2004
compared to 135 in 2003 but decreased from 49 to
46 in the nordic region in italy ecc had a 4 market share
according to assodel whose members represent 74 of the
distribution market 
the impact of movement in component volumes and average
selling prices is significant and we measure and closely
monitor these statistics our uk distribution businesses
excluding acquisitions showed a growth in volumes of 17 in
2004 compared to 2003 but a reduction in average selling
prices of 3 in the nordic region our volumes grew by 7
and average selling prices declined by 4 our workloads as
measured by the number of lines shipped showed a yearon
year growth of 10 in the uk and a reduction of 8 in the
nordic region
all of the markets that we supply are extremely competitive
due to the need to support our customers with the right
products at the right price and consequently our gross
margins are constantly under pressure to continue to invest
in the business to support both customers and suppliers
requires us to maintain margins at a level that makes this
possible and this has therefore always been a high priority for
abacus management our gross margins in our continuing
businesses were 238 compared to 232 in 2003 due to
the lower gross margins prevalent in our industry in europe
the acquisition of ecc during the year resulted in the group
margin for 2004 being 229 
headcount in our continuing distribution businesses
increased by 21 in 2004 with the majority of our sales growth
coming from increased activity rather than improving prices
plus our focus on attracting new customers and maintaining
service levels 80 of this growth has been in new positions
within sales and marketing  including acquisitions our
distribution headcount ended the year at a total of 605
chief executive’s review
abacus polar has continued to perform extremely well benefiting from its local
sales office culture and an increased focus on promoting new products to its
customers it has again strengthened its position in the uk and eire market and
has seen its new order intake increase by 21 in 2004 compared to 2003 billings
increased by 16 over the same period 6 abacus group plc
individual company review
we approach the market with an extremely high level of
personal service combined with a broad product offering a
strong technical capability supports the introduction of new
products to our existing and potential customer base and we
combine this with the policy of having other businesses that
create a differentiation which distinguishes abacus from our
competitors
abacus polar our uk and eire based distribution business
has continued to perform extremely well benefiting from its
local sales office culture and an increased focus on
promoting new products to its customers it has again
strengthened its position in the uk and eire market and has
seen its new order intake increase by 21 in 2004 compared
to 2003 billings increased by 16 over the same period
the movement of manufacturing from the uk to lower cost
areas has slowed significantly and the impact on abacus
polar has again been minimal during the year  however we
recognise that it is still a threat to our growth and during the
course of the year we have invested in additional sales
personnel to find and introduce new customers into the
group  by adding headcount to support the increased
activity we can ensure the service offered to our existing loyal
customers is unaffected this improved focus on taking new
products to market and approaching potential new customers
will be a key driver for the business in the coming year
micromark ccd has also performed well with its order
intake growing by 9 over 2003 and its billings by 7 we
continue to look for opportunities to expand its franchise
base particularly in noncommodity areas in the electro
mechanical product range although these products do not
have the same potential growth opportunities as a major
semiconductor franchise they are inherently less cyclical with
regard to demand and price and usually have higher average
selling prices and gross margins
promax our nordic distribution business has not performed
as well as our uk businesses and has seen its order intake
remain at the same level as 2003 and its billings decline by
2 resulting in a small loss of market share its position in
the danish market is as strong as abacus polar’s in the uk
but it has not performed as well as we had expected in the
three other countries within the nordic region whilst we will
continue to deliver an excellent service in denmark our focus
during the next financial year will be on improving our result
from the other nordic countries we believe that the
introduction of our uk based it system during the past
summer will aid this process
ecc our italian distribution business joined the group at the
beginning of the year when we increased our shareholding to
60 and the balance of 40 was acquired in may 2004 we
have been working with ecc as a commercial partner since
1999 and therefore have a good understanding of its
business since joining the group ecc has been able to add
new franchises and will build on these in the future ecc’s
performance has met our expectations although compared
to financial year 2003 its order intake and billings have
declined by 3 in a flat market 
chief executive’s review continued
customer sectors
contract manufacturing 
local 312
audio visual 20
medical 22
contract manufacturing 
global 29
distribution 36
printer 
peripherals 58
communication 59
fire  security 73
instrumentation 101
others 143
industrial control 147
the new recruits – ccs expands  abacus group plc   7
tdc a uk based distributor focusing on the wireless and
wired communications market was acquired in june 2004 in
last year’s review we identified this as a potential growth
market and in such a circumstance the option is either to
attempt to attract new franchises and personnel into the
group which is not easy or to identify existing companies
that already have the franchises the personnel and the
expertise tdc fitted this profile well we welcome them to the
group and look forward to their providing potential growth
opportunities as we move through the new financial year one
of tdc’s major franchises has already agreed to work with us
from january 2005 in the italian market providing ecc with
further new products to take to existing and potential
customers
trident our display and related products specialist did not
perform as well as we had anticipated due in the main to the
lack of shipments against their medical contracts  its new
order intake declined by 7 and its billings by 2 when
compared to its 2003 result these products remain a growth
market and having established trident in the nordic region at
the end of 2003 we have now introduced the concept into
italy trident will continue to focus on its core distribution
business as well as other system build opportunities which
will bring growth in markets not normally covered by an
electronic component distributor we will also continue to
seek ways to expand the business both in the uk and
abroad
ctl and ccs our electromechanical assembly businesses
have both benefited from the improvement in the uk market
with a combined growth in their new order intake of 16 in
2004 compared to 2003 and a billings growth of 17 in the
same period they both offer a high quality local
manufacturing facility to uk customers whose volume or
complexity of product does not lend itself to offshore
manufacturing we remain convinced that offering a different
service from our competition is another key factor to our
successful growth in the uk market
dubilier our “own brand” component business which has in
excess of 80 of its sales in passive products has seen an
increase in volumes of 10 but a further reduction in average
selling prices of 14 it continues to seek new products in the
electromechanical product area to broaden its product range
and as with ctl and ccs remains both a key differentiator
and a useful contributor to the group’s gross margins
outlook
we enter the new year with a number of key parameters in
our business showing improvement over the position at the
beginning of financial year 2004 our 90 day order book
across the group is up 3 whilst in the uk and eire
distribution it is up 8 the daily turns business measured as
new orders booked and billed in the same month is up 18
in our uk and eire distribution companies however whilst a
number of the major semiconductor manufacturers have
experienced strong growth over the past 12 months we have
seen a minimal rise in average selling prices for
semiconductors and virtually no supply problems industry
forecasters are currently predicting smaller growth in 2005
and consequently we do not expect to get any benefit from
supply shortages or increased prices in the near future
organic growth in our business will come from us continuing
to offer an excellent level of service to all our customers this
ensures that we remain focused on the fundamentals of our
business so that we deliver an overall performance above the
average for our industry however we are committed to
seeking opportunities to strengthen our presence in existing
markets and to expanding our geographical coverage for the
various divisions of the group
martin kent
chief executive
23 november 2004