2014 Financial Results

19 March 2015

LAMPRELL PLC("Lamprell" and with its subsidiaries the "Group")

2014 FINANCIAL RESULTS

Strong operational performance drives record financial results for 2014

Lamprell (ticker: LAM), a leading provider of fabrication, engineering and contracting services to the onshore and offshore energy industry, announces its Financial Results for the year ended 31 December 2014.

2014 FINANCIAL RESULTS

1Financial results for the year 2013 have been re-presented due to IFRS 5 (discontinued operations) and further details are provided in the notes to the Financial Statements.

*For the years 2014 and 2013, the financial results shown above are from the Group's continuing operations.

Note, exceptional items during 2013 relate to the costs of the debt refinancing (US$ 8.4 million).

Highlights

Exceptional financial results

· Excellent financial results driven by robust operational performance, favourable phasing of project cycles and supported by early savings from productivity improvements

· Revenues broadly flat against FY 2013 as expected

· Record profit levels for 2014, only two years after the challenges of 2012

· Rights issue and refinancing successfully completed, putting the Company in a position of relative strength during current period of industry and market weakness

Strong operational performance and project execution

· Delivered nine major projects in a single year, a record for the Group

· Delivery of three further jackup rigs to largest client, National Drilling Company, strengthening client relationship and leading to additional jackup orders in November 2014

· Record-breaking 13,200 tonne production utilities and quarters deck delivered to Nexen with ten million manhours completed without a day away from work case

· Orders for six new build jackup rigs won during 2014 with top tier clients

· Backlog of US$ 1.2 billion at year-end (31 December 2013: US$ 0.9 billion) with bid pipeline at approximately US$ 5.2 billion at 31 December 2014 (31 December 2013: US$ 4.7 billion)

Delivering on our strategic objectives

· World-class safety performance, achieving highest safety standards in Company's history

· Leveraging our key strengths to diversify client base with major awards from new top tier clients

· Project Evolution progressing well with initial savings realised

· Organisational restructuring implemented generating overhead reductions

· Maintaining our focus on core markets, with long-term goal of broadening addressable markets

· Disposal of a non-core service business completed with a second nearing completion

Current trading and outlook

· Oil price decline has led to falling oil & gas and renewable energy capex

· Focus remains on conversion of bid pipeline, with awards for some projects delayed

· Six new build jackup rig orders, a large piperack module project and a number of minor refurbishment projects currently underway and progressing well

· Options for additional rigs from Ensco and NDC extended to Q4 2015 and Q2 2015 respectively

· Adjusted revenue coverage at approximately 80% for the year, affirming earlier guidance for 2015

John Kennedy, Non-Executive Chairman for Lamprell, said:

"2014 was a year of outstanding performance. Record financial results were driven by strong project execution and cost savings, and some exceptional factors such as the favourable phasing of the construction cycles. The successful completion of the rights issue and refinancing during the year provide the Group with a strong basis to deliver on our strategy. Lamprell started the New Year in a position of relative strength, with good revenue coverage for 2015, a solid bidding pipeline and a firm financial platform. The Board is mindful of the challenges facing the industry in a lower oil price environment and affirms the revised guidance given in January."

James Moffat, Chief Executive Officer for Lamprell, said:

"2014 was a year of record operational and business performance on every level. We completed nine major projects during the year, including the largest rig conversion and a record-breaking deck for Nexen. With all the legacy projects now behind us, we were pleased to secure best ever figures for new orders from clients. Our performance was further enhanced by early gains from our programme of productivity improvements and cost efficiencies, which is well underway. Our safety record reached an industry-leading level and all these elements, in combination with the stronger balance sheet, make Lamprell a leaner, fitter and overall stronger business.

With continuing low oil prices, securing new work remains challenging as the industry adjusts to the new realities. We remain in a position of relative strength with a strong balance sheet and high backlog, and will continue to focus on maintaining our competitive position in the sector."

A presentation for analysts and investors will be held at 9.00 am (UK time) today at JP Morgan Cazenove, 60 Victoria Embankment, London, EC4Y 0JP and a live webcast will be made available on Lamprell's website: http://lamprell.com/investors-centre/reports-and-presentations/2014.aspx

- Ends -

Enquiries:

Chairman's Statement

2014 was a successful year for Lamprell. I am pleased to report on the significant progress achieved operationally and financially. Following its return to profitability in 2013, the Group completed its recovery process in delivering an exceptional financial performance and a number of major operational milestones. These results have been driven by strong project execution and major business improvements, allowing the Group to deliver improved returns.

Delivering strong performance

This improved performance has been possible as a result of robust project execution and the implementation of important structural changes. A strong cost discipline has been established, with significant reductions achieved. This is being monitored closely by the Board. The safety and quality standards in our yards are paramount and in 2014 achieved world-class levels. The Company has disposed of a non-core business in order that the management team may focus on its core markets. Lamprell is now leaner, fitter and stronger, and aiming to accomplish more.

Strategy

Beyond operational performance, Lamprell's overall success is highly geared to its ability to win new business. In the first half of 2014, we took steps to overhaul our strategy and the business development function to ensure that the Group remains competitive. The Board reviewed the strategy and concluded that there was a need to focus on our core markets in the short to medium term. Our long term goal is to broaden our offering into related markets such as the modular plant and FPSO markets where we have already been successful and have a proven track record. In doing this we will leverage the Group's proven expertise in project execution to diversify our client base. Key strategic principles are: focus on high quality clients, on improved margin projects and on bids with a higher probability of winning.

Financial platform and stakeholders

A strong financial platform was put in place in 2014 to enable the management team to implement our strategy. The rights issue and refinancing allowed us to ensure there is now a strong balance sheet and sufficient cash resources to support the strategy implementation.

In line with our commitment to best practice in corporate governance, we maintained clear controls and looked to enhance certain processes such as risk management. Our primary focus was on greater communication and transparency with our investors when we explained the drivers behind the rights issue and refinancing; we appreciate the overwhelming support we received for these transactions.

Markets

In the final quarter of 2014 we saw a significant deterioration in the oil & gas markets and reductions in industry capital expenditure programmes following a steep decline in oil prices. In a period of uncertain market environment, the Board has ensured that the management team's remuneration targets are stretching and closely linked to the Company's strategic objectives. Our management team is measured against every pillar of our strategy for success, including Lamprell's safety record, cost management, delivery of operational efficiencies and financial performance.

John Kennedy

Non-Executive Chairman

Chief Executive Officer's Review

2014 was a year of strong operational delivery for Lamprell, which led to exceptional financial performance. We have seen significant improvements across the board, completing the recovery from prior difficulties and building a strong platform for the future delivery of our strategy. 

Maintaining strong operational performance

Our operational performance in 2014 was consistently strong throughout the year. We delivered nine major projects, a record for the Group. We delivered all projects as planned and on budget and as a result made a number of savings, allowing the Company to benefit from the release of contingencies and early results from our programme of productivity improvements and cost efficiencies, Project Evolution. This had a positive impact on our financial performance.

This year has seen some major achievements in our yards. The Nexen production, utilities and quarters ("PUQ") deck made it into the Guinness World Book of Records. We completed our largest rig conversion project to date, the "MOS Frontier", without a single day away from work case. We also delivered the last of the problematic projects, the "Mercury" Caspian Sea rig, which was a challenging project with remote operations. We secured three contracts to build six new jackup rigs, two for Ensco, two for Shelf Drilling and two more for our largest client, National Drilling Company ("NDC"). We concluded the year with the delivery of "Shuwehat", the third rig delivered in 2014 to one client, NDC, another record for Lamprell.

Safety is paramount to the success of our business and in 2014 we continued to improve the track-record, with world-class performance reached at the end of the year. Under the helm of a new VP HSESQ we have cut our total recordable incident rate to 0.28 in 2014, less than half of the figure of 0.67 in 2013.

Delivering on our strategy

The return to profitability in 2013 allowed us to review the debt and equity structure of the Company from a position of renewed strength. Having recognised the need for additional financial firepower to fund our near-term plans and longer-term ambitions, Lamprell approached its banks and investors for an equity injection through a rights issue and for a full debt refinancing. The plans were met with overwhelming support from all parties and resulted in a fully underwritten rights issue of USD 120 million and new debt facilities of USD 350 million.

This strengthened balance sheet allowed us to implement the key elements of our strategy: commencing a major capital investment programme for our facilities which will improve our operational performance and strengthen our competitive position by reducing our costs. This consequently will enable us to broaden our addressable markets.

Strengthening our competitive position

With the implementation of Project Evolution, Lamprell has been able to identify a number of measures which will result in a better layout and a higher degree of automation in our yards, leading to more efficient and cost effective operations. This formed a key component of our strategy and half of the funds raised in the rights issue were directed towards the funding of these measures. Project Evolution has been under way since mid-2014 and is expected to reach the full savings runrate in 2016.

Whilst Lamprell remained strong in winning orders based on our existing key strengths including high standards of safety, quality and reliability, some of its competitors leveraged the commercial advantage to offer back-ended payments. The debt refinancing package secured in the summer of 2014 enables us to offer this option which effectively levelled the playing field. This significantly broadened our addressable market and has already contributed to us securing additional contract wins, albeit without having to draw on the funding facility.

Market Overview, Current Trading and Outlook

Our financial performance in 2014 was exceptional. We will maintain the high standards of operational performance which was a key factor to the results of 2014, however in 2015 our ongoing projects are at different stages in their construction cycles. In addition, the wider market environment is weak due to the steep decline in the oil price in late 2014.

Lamprell entered 2015 in a position of relative strength with a robust balance sheet and a strong cash position, with a high proportion of this year's revenue secured and a good bid pipeline. The sharp market deterioration at the end of the year has brought significant uncertainty around 2015. Our business has a certain degree of flexibility built in and we will look to mitigate the impact on Lamprell but pressure on margins and the inevitable slowdown is likely to affect everyone.

Our focus will be on maintaining the highest standards of project execution and using our competitive position to convert our pipeline into contract wins. Our approach to winning business has been restructured and improved further with the hire of a new Chief Commercial Officer and a VP Business Development strengthening our broader commercial team. The new approach developed by the team resulted in us winning a record number of awards during 2014. With a backlog in line with seasonal norms at USD 1.2 billion and a strong pipeline of nearly USD 5.2 billion, we believe that Lamprell is well positioned to face the challenges of 2015.

Jim Moffat

Chief Executive Officer

Financial Review

2014 was a year of exceptional financial performance. It was driven by strong project execution, as well as some cost savings and exceptional gains. We finished the year with a solid balance sheet and a strong net cash position.

Results from operations

The Group continued on its path to financial recovery started in 2013. Lamprell's strong operational performance was the main driver behind our exceptional financial results in 2014.

The Group's total revenue for the year was USD 1,084.9 million, in line with earlier guidance. The revenue was mainly driven by the new build segment with a contribution from rig refurbishment, partially offset by weaker revenues in the offshore and onshore construction market. The good performance in the refurbishment business was supported by the large-scale rig conversion project for MOS which was delivered in 2014. We had 10 refurbishment projects, albeit of significantly smaller scale.

In 2014, the Group completed a record number of major projects with some projects being delivered ahead of time and also ahead of budget. As a result of this improved performance, the project contingencies were not utilised delivering enhanced margins. This was also supported by some early savings from Project Evolution being implemented across the Group, and by our efforts to reduce overheads.

As a result the Group's gross margin significantly increased over the previous year to USD 182.1 million from USD 120.0 million. Lower offshore/onshore construction revenues had a negative mix impact on margins but this was more than offset by a material improvement in margins in our new build jackup rig business. This was partially driven by a more favourable phasing of the construction cycle, but mainly resulted from the Group's continuing improvement in project execution. As referred to earlier, initial procurement savings and productivity gains also contributed to our strong profitability. Our Land Rig Services and our Engineering & Construction business units have also contributed to the improvement in margins.

 EBITDA excluding discontinued operations and exceptional items for the period was USD 137.0 million (2013: USD 84.4 million). The Group's EBITDA margin increased from 7.9% in 2013 to 12.6% in 2014, reflecting the improved operating performance of the business.

 Finance costs and financing activities

Net finance costs in the period decreased to USD 18.3 million (2013: USD 22.0 million). Interest costs were USD 1.7 million lower due to the lower cost of debt following the refinancing in the summer.

Net profit after exceptional items and earnings per share

The Group recorded a profit for 2014 attributable to the equity holders of USD 118.1 million (2013: USD 36.4 million), including a USD 31.3 million gain from the disposal of Inspec. The fully diluted earnings per share for the year were 37.38 cents (2013: 12.67 cents).

Capital expenditure

The Group's capital expenditure in 2014 increased to USD 22.5 million (2013: USD 14.6 million). The main area of investment consisted of additions to operating equipment with the major items being new cranes, a new panel line, welding facilities and equipment as part of Project Evolution and to a lesser extent infrastructure. We also continue to invest in our new ERP system, Oracle, a proven top tier solution that has helped us realign our processes with best practices and ensure accurate assessment of our financial performance. The major capital investment programme enabled by the rights issue has reduced operating costs in 2014, and will continue to reduce these costs with the major part of the investment being committed over the course of 2015.

Cash flow and liquidity

The Group's net cash flow from operating activities for 2014 reflected a net outflow of USD 39.8 million (2013: net inflow of USD 117.7 million) primarily driven by increased working capital due to the natural cycle of major projects.

Cash and bank balances increased by USD 27.1 million during the year, resulting from the net proceeds from the rights issue and the disposal of Inspec, less a net repayment of debt and net cash outflow from operations.

Borrowing and debt refinancing

In 2013, the Group concluded a refinancing through a syndicate of banks for an aggregate amount of USD 181.0 million. In May 2014, the Group agreed with a range of banks a new set of funded facilities on substantially more favourable terms amounting to USD 350 million replacing the previous facilities. It comprised (a) a USD 100 million term loan; (b) USD 50 million for general working capital purposes; and (c) USD 200 million of working capital for project financing. In addition, the lending banks committed a USD 250 million bonding facility that may be used by the Group for project bonding requirements in connection with new contract awards funded by the working capital project financing facility. Along with greater financial flexibility, the new facilities have generated initial savings at the end of 2014 and are expected to deliver lower bonding costs on future projects.

Our borrowings were USD 99.0 million at 31 December 2014 (31 December 2013: USD 160.8 million).

Going concern

After reviewing its cash flow forecasts for a period of not less than 12 months from the date of signing these financial statements, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

Dividends

The repayment of the balance of term loan facility B under the 2013 debt facility agreement removed the restriction on the payment of dividends. Given the ambitious investment programme to be funded by the proceeds of the rights issue in 2014, as well as the uncertain market environment, the Directors do not currently support the payment of a final dividend for 2014. However, the Directors recognize the importance of dividends and remain optimistic about the future of the Group and will seek to review and restore the payment of a dividend at the most appropriate time.

Tony Wright

Deputy Chief Financial Officer

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

Lamprell plc

Consolidated cash flow statement

Lamprell plc

Notes to the financial statements for the year ended 31 December 2014

1 Legal status and activities

Lamprell plc ("the Company") and its subsidiaries ("the Group") are engaged in the upgrade and refurbishment of offshore jackup rigs; fabrication; assembly and new build construction for the offshore oil and gas sector and renewable sector, including jackup rigs and lift boats; Floating Production, Storage and Offloading ("FPSO") and other offshore and onshore structures; and oilfield engineering services, including the upgrade and refurbishment of land rigs.

2 Basis of preparation

The Group is required to present its annual consolidated financial statements for the year ended 31 December 2014 in accordance with EU adopted International Financial Reporting Standards ("IFRS"), International Financial Reporting Interpretations Committee ("IFRIC") interpretations and those parts of the Isle of Man Companies Acts 1931-2004 applicable to companies reporting under IFRS.

This financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the year ended 31 December 2014. The financial information has been extracted from the consolidated financial statements for the year ended 31 December 2014 approved by the Board of Directors on 18 March 2015 upon which the auditors' opinion is not modified, and did not contain a statement under section 15(4) or 15(6) of the Isle of Man Companies Act 1982.

 The financial information comprises the Group balance sheets as of 31 December 2014 and 31 December 2013 and related Group income statement, statement of comprehensive income, cash flows, statement of changes in equity and related notes for the twelve months then ended, of Lamprell plc. This financial information has been prepared under the historical cost convention except for the measurement at fair value of share options, financial assets at fair value through profit or loss and derivative financial instruments.

The preliminary results for the year ended 31 December 2014 have been prepared in accordance with the Listing Rules of the London Stock Exchange.

The preparation of financial information in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group financial information are disclosed in Note 4.

3 Accounting policies

The accounting policies used are consistent with those set out in the audited financial statements for the year ended 31 December 2013 and reviewed interim financial information for the period ended 30 June 2014, which are available on the Company's website, www.lamprell.com.

4 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Revenue recognition

The Group uses the percentage-of-completion method in accounting for its contract revenue. Use of the percentage-of-completion method requires the Group to estimate the stage of completion of the contract to date as a proportion of the total contract work to be performed in accordance with the accounting policy. As a result, the Group is required to estimate the total cost to completion of all outstanding projects at each period end. The application of a 10% sensitivity to management estimates of the total costs to completion of all outstanding projects at the year-end would result in the revenue and profit increasing by USD 4.4 million (2013: USD 28.3 million) if the total costs to complete are decreased by 10% and the revenue and profit decreasing by USD 4.4 million (2013: USD 29.7 million) if the total costs to complete are increased by 10%.

Estimated impairment of goodwill

The Group tests goodwill for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is monitored by management at the 'cash generating unit relating to upgrade and refurbishment of offshore jackup rigs, fabrication, assembly and new build construction for the offshore oil and gas and renewables sectors, including FPSO and other offshore and onshore structures, oilfield engineering services, including the upgrade and refurbishment of land rigs' ("CGU1").

The recoverable amount of CGU1 is determined based on value-in-use calculations. These calculations require the use of estimates.

The amount of headroom is USD 290.6 million (2013: 187.1 million).

If the revenue growth rate used was to differ by 0.5% from management's estimates, in isolation, there would be a reduction of USD 5.7 million (2013: USD 3 million) in the headroom if the revenue growth rate was lower or the headroom would be higher by USD 5.7 million (2013: USD 3 million) if the revenue growth rate was higher.

If the discount rate used was to differ by 0.5% from management's estimates, in isolation, there would be a reduction in the headroom of USD 55.2 million (2013: USD 27.6 million) if the discount rate was to increase or an increase in the headroom by USD 63.5 million (2013: USD 31.2 million) if the discount rate was to decrease.

If the net profit as a percentage of revenue used was to differ by 0.5% from management's estimates, in isolation, there would be an increase of USD 62.1 million (2013: USD 56.1 million) in the headroom if the net profit was to increase or there would be an reduction in the headroom of USD 62.1 million (2013: USD 56.1 million) in the headroom if the net profit was to decrease.

If the terminal value growth rate used was to differ by 0.5% from management's estimates, in isolation, there would be a reduction in the headroom of USD 43.4 million (2013: USD 19.9 million) if the terminal value growth rate was lower or an increase in the headroom of USD 49.8 million (2013: USD 22.5 million) if the terminal value growth rate was higher.

Employees' end of service benefits

The rate used for discounting the employees' post-employment defined benefit obligation should be based on market yields on high quality corporate bonds. In countries where there is no deep market for such bonds, the market yields on government bonds should be used. In the UAE, there is no deep market for corporate bonds and no market for government bonds and therefore, the discount rate has been estimated using the US AA-rated corporate bond market as a proxy. On this basis, the discount rate applied was 3.5% (2013: 4.25%). If the discount rate used was to differ by 0.5 points from management's estimates, the carrying amount of the employee's end of the service benefits provision at the balance sheet date would be an estimated USD 1.5 million (2013: USD 1.3 million) lower or USD 1.6 million (2013: USD 1.4 million) higher. If the salary growth rate used was to differ by 0.5 points from management's estimates, the carrying amount of the employee's end of the service benefits provision at the balance sheet date would be an estimated USD 1.5 million (2013: USD 1.5 million) higher or USD 1.6 million (2013: USD 1.4 million) lower.

5 Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Executive Directors who make strategic decisions. The Executive Directors review the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports.

The Executive Directors consider the business mainly on the basis of the facilities from where the services are rendered. Management considers the performance of the business from Sharjah ("SHJ"), Hamriyah ("HAM") and Jebel Ali ("JBA") in addition to the performance of Land Rig Services ("LRS"), Sunbelt, Engineering and Construction ("E&C") and Operations and Management ("O&M").

SHJ, HAM, JBA and LRS are reported as a single segment (Segment A). Services provided from Sunbelt, E&C and O&M do not meet the quantitative thresholds required by IFRS 8, and the results of these operations are included in the "all other segments" column.

The reportable operating segments derive their revenue from the upgrade and refurbishment of offshore jackup rigs, fabrication, assembly and new build construction for the offshore oil and gas and renewables sectors, including FPSO and other offshore and onshore structures, oilfield engineering services, including the upgrade and refurbishment of land rigs.

Sunbelt derives its revenue from safety and training services, E&C derives its revenue from site works, compression and chemicals and O&M derives its revenue from the labour supply and other operations and maintenance services.

Sales between segments are carried out on agreed terms. The revenue from external parties reported to the Executive Directors is measured in a manner consistent with that in the consolidated income statement.

The Executive Directors assess the performance of the operating segments based on a measure of gross profit. The staff, equipment and certain subcontract costs are measured based on standard cost. The measurement basis excludes the effect of the common expenses for yard rent, repairs and maintenance and other miscellaneous expenses. The reconciliation of the gross operating profit is provided as follows:

Information about segment assets and liabilities is not reported to or used by the Executive Directors and accordingly, no measures of segment assets and liabilities are reported.

The breakdown of revenue from all services is as follows:

The Group's principal place of business is in the UAE. The revenue recognised in the UAE with respect to services performed to external customers is USD 1,075.2 million (2013: USD 1,057.3 million), and the revenue recognised from the operations in other countries is USD 9.7 million (2013: USD 15.5 million).

Certain customers individually accounted for greater than 10% of the Group's revenue and is shown in the table below:

The revenue from these customers is attributable to Segment A. The above customers in 2014 are not necessarily the same customers in 2013.

6 Cost of sales

7 Selling and distribution expenses

8 General and administrative expenses

9 Staff costs

10 Finance costs - net

Finance income

Finance income comprises interest income on bank deposits of USD 2.17 million (2013: USD 0.98 million).

11 Other gains/(losses) - net

12 Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the profit attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares (Note 19).

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the free share awards, options under the executive share option plan and the performance share plan, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share awards/options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share awards/options.

On 26 June 2014, the Company announced a rights issue of five shares for every sixteen shares held at a discounted price of 88 pence per share resulting in the issue of 81,363,469 new ordinary shares (Note 19). The calculation of the weighted average number of ordinary shares for the current period was affected by the issue of the new ordinary shares. The Group has treated the discount element of the rights issue as if it were a bonus issue, using the theoretical ex-rights price of 132 pence per share. The effect of this is to increase the weighted average number of shares reported in the prior period, with a resulting reduction in the reported basic and diluted earnings per share for the previous period. The adjustment factor, to effect the increase in the weighted average number of shares, has been calculated by dividing the share price immediately before the shares were quoted ex-rights (146p) with the theoretical ex-rights price (132p), giving an adjustment factor of 1.104. These adjustments to the comparative EPS calculations do not impact the consolidated income statement and consolidated balance sheet previously reported.

13 Property, plant and equipment

14 Intangible assets