novar plc annual report and accounts 2002
annual report and accounts 2002
novar plc
novar house
24 queens road
weybridge
surrey kt13 9ux
england
telephone 4401932 850 850
fax 4401932 823 328
website wwwnovarcom
7632coverssp2103  24032003  335 pm  page 1 contents
1 highlights
2 chairman’s statement
4 group chief executive’s review
6 intelligent building systems
8 indalex aluminum solutions
10 security printing services
12 operating review
15 financial review
18 the board
19 report of the directors
22 corporate social responsibility
23 report to shareholders 
on directors’ remuneration
27 independent auditors’ report
28 2002 results
46 notice of annual general meeting
47 notice of class meeting
48 shareholder information
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7632coverssp2103  24032003  335 pm  page 2 01 novar annual report 2002
highlights
intelligent building systems
indalex aluminum solutions
security printing services
solid profit and cash performance
• market share gains in all three sectors
• headline pre tax profits recovered to £94m
• headline eps increased from 34p to 116p
• full year dividend maintained
• group free cash flow again strong at £55m
covering dividend 14 times
see notes at foot of page 
notes
1 headline pre tax profit referred to above is calculated from group profit before tax of £727m adjusted for
exceptional items of £22m profit and goodwill amortisation of £231m
2 headline eps is earnings per share before goodwill amortisation and post tax exceptional items
3 free cash flow is defined as operating cash flow of £1196m less capital expenditure of £417m net interest
of £164m taxation of £154m and preference dividends of £106m plus dividend received from associated
undertaking of £16m and proceeds of fixed asset disposals of £178m
north america’ s second largest supplier of extruded aluminum components and services the company
serves the building and construction information technology machinery and equipment consumer durables
transportation electrical automotive and other industry sectors
clarke american provides cheques and chequerelated products contact centre services and direct
employee response marketing solutions to more than 4000 us financial institutions
supplier of products and services to the worldwide construction industry the strength of the business lies
in its global reach and its comprehensive product portfolio of electrical and data management solutions 02 novar annual report 2002
chairman’s statement novar’ s results in 2002 support the decisive action taken
since the significant downturn of some of our markets last
year  the group not only undertook a major restructuring
programme over the last 18 months but also raised
investment in new products and commercial initiatives
as a result good operating progress was made across the
group market share increases compensated for lower
markets overall sustaining turnover  improving operating
profit and producing a welcome recovery of headline 
pretax profits and earnings per share and another year
of excellent cash generation underpins our proposal to
maintain novar’ s dividend
group turnover was stable at £1448m in difficult markets
while operating profit before restructuring at £117m was
up 2 on a like for like basis headline earnings per share
increased to 116p the balance sheet has been further
strengthened with net debt reducing from £273m to £219m
year end gearing of 46 and interest costs covered 10 times
the development of the group has continued in 2002
investment in new products and marketing initiatives
reached new highs in intelligent building systems we
strengthened the technology base in cctv  and dedicated
resources to take on large projects that span multiple
businesses we expect this to continue to drive our market
shares in the years ahead
the acquisition of alerton announced separately on
26 february 2003 will further expand our portfolio of
building control brands provide valuable technology  and
expand our routes to market in north america it is a quality
business that offers excellent returns and future prospects
in some of the toughest markets seen for many years novar
is performing well that we have delivered the results we
have owes much to the efforts of our employees who
remain committed to the group’ s continued progress
i thank them on behalf of my colleagues
the board is recommending an unchanged final dividend
of 66p per ordinary share payable on 6 june 2003 to all
shareholders on the register at the close of business on
2 may 2003 
sir graham hearne
chairman
03 novar annual report 2002
the development of the 
group has continued in 2002
investment in new products and
marketing initiatives reached
new highs we expect this to
continue to drive our market
shares in the years ahead 04 novar annual report 2002
group chief executive‘s review
our businesses continue to recover in response to the
actions we have been taking new products and
commercial initiatives are improving our share in markets
that remain generally soft costs are coming down but we
continue to invest to enhance our competitiveness when
market demand returns to more normal levels
our intelligent building systems ibs businesses have been
able to compensate for the contraction we have seen in all
but one of our markets our security and controls business
introduced new products and launched new initiatives in
our market channels building further market share on the
strength of these actions electrical accessories had a strong
year with the introduction of a new range of diy security
products datacoms markets continue to be depressed and
are at their lowest levels for many years in response we
have adjusted our cost base to these market demand levels
our capability in ibs has been strengthened with the
acquisition of visioprime providing state of the art digital
cctv technology  t ogether with our existing access control
product suite this cctv capability allows us to provide
enhanced security solutions to our customers all ibs
products can now also be offered through novar projects
launched this year in several markets to enable us to meet
the wider needs of larger projects this allows us to
leverage the strengths of our existing customer and installer
relationships across the sector  
indalex ias began to recover in 2002 volumes grew 9
in flat markets the business continued to invest in safety
across the plant network as well as improving the quality 
cost and delivery of our products indalex has started to
benefit from north american sales of product sourced from
asia aluminum our strategic partner and leader in the
buoyant chinese extrusions market in 2002 we received
our first dividend from this investment we also supported
asia aluminum in the acquisition of two plants in china 
security printing services sps produced another solid
performance owing to the now discontinued disposal
process a number of restructuring actions were delayed
they are now well under way  but the timing of this action
impacted second half profits which were also affected by
set up costs for new business wins along with increased
investment in new plant and call centre capacity  we
continue to invest in improving the sps cost base opening
two new high capacity plants closing two smaller plants in
2002 with a further four plants to close in 2003 sps has
continued to generate significant cash flows for the group
across the group our concentration on cash generation
has again produced free cash flows above £50m our
balance sheet remains sound
our businesses continue to
recover in response to the 
actions we have been taking
costs are coming down but 
we continue to invest to 
enhance our competitiveness 05 novar annual report 2002
outlook
novar is of course affected by what happens to the
economies in which we trade current uncertainties make
forecasting even more difficult than usual we are also
facing the prospect of continued weakness in the us
dollar impacting reported results and further increases
in pension costs
our response will be to drive for increased market shares
in all three sectors and to continue our cost cutting
programme this when taken together with the
improvement already achieved should allow us to
compensate for any adverse pension and currency effects
we will also continue to invest in new product and
commercial initiatives and position novar for strong growth
when economic activity returns to more normal levels
jurgen hintz
group chief executive 06 novar annual report 2002
intelligent building systems
hong kong covered


Summary:
 04 novar annual report 2002
group chief executive‘s review
our businesses continue to recover in response to the
actions we have been taking new products and
commercial initiatives are improving our share in markets
that remain generally soft costs are coming down but we
continue to invest to enhance our competitiveness when
market demand returns to more normal levels
our intelligent building systems ibs businesses have been
able to compensate for the contraction we have seen in all
but one of our markets our security and controls business
introduced new products and launched new initiatives in
our market channels building further market share on the
strength of these actions electrical accessories had a strong
year with the introduction of a new range of diy security
products datacoms markets continue to be depressed and
are at their lowest levels for many years in response we
have adjusted our cost base to these market demand levels
our capability in ibs has been strengthened with the
acquisition of visioprime providing state of the art digital
cctv technology  t ogether with our existing access control
product suite this cctv capability allows us to provide
enhanced security solutions to our customers all ibs
products can now also be offered through novar projects
launched this year in several markets to enable us to meet
the wider needs of larger projects this allows us to
leverage the strengths of our existing customer and installer
relationships across the sector  
indalex ias began to recover in 2002 volumes grew 9
in flat markets the business continued to invest in safety
across the plant network as well as improving the quality 
cost and delivery of our products indalex has started to
benefit from north american sales of product sourced from
asia aluminum our strategic partner and leader in the
buoyant chinese extrusions market in 2002 we received
our first dividend from this investment we also supported
asia aluminum in the acquisition of two plants in china 
security printing services sps produced another solid
performance owing to the now discontinued disposal
process a number of restructuring actions were delayed
they are now well under way  but the timing of this action
impacted second half profits which were also affected by
set up costs for new business wins along with increased
investment in new plant and call centre capacity  we
continue to invest in improving the sps cost base opening
two new high capacity plants closing two smaller plants in
2002 with a further four plants to close in 2003 sps has
continued to generate significant cash flows for the group
across the group our concentration on cash generation
has again produced free cash flows above £50m our
balance sheet remains sound
our businesses continue to
recover in response to the 
actions we have been taking
costs are coming down but 
we continue to invest to 
enhance our competitiveness 05 novar annual report 2002
outlook
novar is of course affected by what happens to the
economies in which we trade current uncertainties make
forecasting even more difficult than usual we are also
facing the prospect of continued weakness in the us
dollar impacting reported results and further increases
in pension costs
our response will be to drive for increased market shares
in all three sectors and to continue our cost cutting
programme this when taken together with the
improvement already achieved should allow us to
compensate for any adverse pension and currency effects
we will also continue to invest in new product and
commercial initiatives and position novar for strong growth
when economic activity returns to more normal levels
jurgen hintz
group chief executive 06 novar annual report 2002
intelligent building systems
hong kong covered