Final Results

ISG PLC

("ISG" or "the Group")

Final results for the year ended 30 June 2013

Improvement in underlying profits, NET CASH AND increasED order book

ISG plc, the international construction services group, today announces its final results for the year ended 30 June 2013.

Group Highlights

· Increased margins and profit despite difficult market conditions

· UK Fit Out and Engineering Services and UK Retail both strengthened their market-leading positions

· Established ISG's international reputation for the delivery of data centers

· Overseas businesses performing well with increased repeat work from blue-chip multinationals

· UK Construction has delivered an improvement in margin and profit in an ongoing competitive environment

· Order book ahead by 12% at £854m (2012: £760m) of which 20% is overseas

· Net cash balance of £36.1m at 30 June 2013 (2012: £25.4m)

· Successfully raised net proceeds of £7.4m to fund acquisitions, attracting a number of new institutional shareholders

· Entering of new markets and strengthening existing presence through the acquisition post year end of a minority stake in ACE in Brazil and the acquisition of Tecton in Germany

· Total full year dividend maintained at 9.00p per share (2012: 9.00p)

David Lawther, Chief Executive Officer, said:

"ISG has delivered an improved performance and growing order book.

In the UK, we have seen signs of improvement in the London office fit out market and have maintained our market leading positions in the office fit out and retail sectors. We have had considerable success in the data center sector. Our UK Construction business has increased its level of repeat work through its focus on key customers and frameworks.

Overseas, our businesses are performing well and we are entering new markets and strengthening our existing presence through selective acquisitions.

We are looking forward to the future with growing confidence."

10 September 2013

1restated (Note 1)

2from underlying items (Notes 2 and 3)

3from earnings attributable to owners of the company from underlying items (Note 10)

4from earnings attributable to owners of the company (Note 10)

52012 from continuing operations (Note 8)

ENQUIRIES:

chairman's statement

At long last there are positive signs that we are emerging from the economic challenges of the last few years.

I am pleased to report that we have seen improvement across the three key indicators of our performance - underlying profits1, net cash and our forward order book. Underlying profit before tax1 for the year ended 30 June 2013 amounted to £8.5m (2012: £7.5m) - an increase of 14%. Net cash at the year end amounted to £36.1m compared to £25.4m last year and the order book stood at £854m compared with £760m at 30 June 2012.

These results, achieved in what remains a competitive and challenging market overall, demonstrate the resilience of our business model. Underlying basic earnings per share2 increased by 15% from 18.03p3 to 20.80p. The Board is proposing a maintained final dividend of 4.59p per share, making a total of 9.00p (2012: 9.00p) for the year.

Our improving performance is reflected in the growing investor confidence that underpinned our ability to fund further overseas expansion by the placing in June of five million new shares at 155p, to raise net proceeds of £7.4m. Since year end part of the proceeds have enabled us to purchase a 20% initial stake in ACE - a leading Brazil-based fit out and refurbishment business - with offices in Sao Paulo and Rio de Janeiro, and we have an option to acquire the remaining shares. In addition, we have strengthened our European operations by acquiring a fit out company, Tecton Engineering GmbH (Tecton), operating in the German commercial office sector.

Our UK Fit Out and Engineering Services business saw a significant improvement in profits as it strengthened its market-leading position in the London office fit out market. As the economic conditions improve, the confidence of key customers is returning, particularly in the insurance and technology sectors. During the year we progressed towards completion of the City's largest fit out project for Jardine Lloyd Thompson at the St Boltolph's Building, and won the £50m refurbishment project of the iconic Bush House.

In addition, the business has now firmly established its Engineering Services offering that has underpinned its rapid progress in the delivery of data centers. This vibrant sector is offering the business great opportunities and during the year we announced contracts for two data center facilities in the Nordics valued at circa £280m.

Our UK Retail business performed well in a competitive market, and we have successfully added a number of new relationships.

Notwithstanding that the market for our UK Construction business remains highly challenging, the business achieved a modest improvement in profitability. However, we are taking significant steps to restructure with the aim of improving margins further and reducing costs. These actions are expected to underpin improved performance in the future.

Overseas, our order book continues to grow based on the increase in business from repeat multinational customers and accounted for 20% of the Group's order book at 30 June 2013 (2012: 11%).

After a difficult year in Europe, with a strengthened management team and the benefit of the newly acquired German business, we anticipate an improved performance going forward.

In the Middle East, confidence is returning and the business is once again profitable. In Asia, while the office fit out market remains challenging, the rapid progress we have made in the retail and hospitality sectors has led to profits increasing overall.

John Barnes, our Senior Independent Director, has decided to retire from the Board after nine years' service at the conclusion of the next AGM. John's marketing background, experience in developing brands overseas and general business acumen has been of significant value. On behalf of all the shareholders and directors I would like to thank John for his wise counsel through the most challenging of environments. Richard Mully will succeed John as Senior Independent Director.

It gives me great pleasure to be able to report that across all our markets we have achieved an outstanding record in health and safety, with an Accident Incident Rate score of 2.12 against a UK industry average of 6.71. This achievement has been recognised by the industry and we have won an impressive 39 ROSPA awards and medals, including our first President's Award, in the period.

These results are first and foremost an accolade to our dedicated employees. While the market is starting to show signs of improvement, it remains highly competitive. Only those achieving the highest standards and quality of customer service succeed and we thank them for their efforts.

We enter the current year with more confidence than we have for some time as supported by the increase in our order book of 12% to £854m (2012: £760m). We will start to benefit from the improvement in certain of our traditional key markets and will continue to target new growth markets and geographies. We expect to sustain steady progress.

1profit before tax from underlying items (Notes 2 and 3)

2from earnings attributable to owners of the company from underlying items (Note 10)

3restated (Note 1)

Roy Dantzic

Chairman

10 September 2013

CHIEF EXECUTIVE OFFICER'S STATEMENT

I am pleased to report an improved set of results with both underlying profit before tax1 and margins increasing in the year, and our revenue in line with last year. While the UK market remains competitive, towards the end of the year we started to see evidence of recovery in certain sectors - particularly in London office fit out.

We are looking to the future with growing confidence. A combination of more positive signs in our traditional markets combined with growing successes in our new sectors, services and geographies demonstrates that we have the right strategy.

Our strategy is to:

· Maintain and build on our leading positions in the UK office fit out and retail fit out markets

· Increase repeat business from framework and blue-chip multinational customers

· Increase our geographic reach and market penetration through following clients overseas

· Establish ourselves in new high growth market sectors such as Engineering Services and Hospitality

· Grow our specialist services under the Realys and Commtech brands

· Focus on maximising operating efficiencies

Results

For the year ended 30 June 2013, underlying profit before tax1 increased to £8.5m (2012: £7.5m) on revenue of £1,284m (2012: £1,281m). Underlying basic earnings per share2 increased to 20.80p (2012: 18.03p3). Profit before tax was £2.5m (2012: £1.2m).

We finished the year with a strong net cash position of £36.1m (2012: £25.4m). There was a net cash inflow from operating activities from continuing operations for the year of £8.5m (2012: £nil) reflecting the improved result for the year as well as a positive working capital inflow. We have renewed our banking facilities with a term loan of £6.0m and a revolving credit facility of £10.0m through to September 2015, with the latter undrawn at year end. In addition, in June 2013, the Group undertook a placing of five million new shares that generated net proceeds of £7.4m, to fund a number of acquisitions going forward.

Non-underlying items

As set out in Note 3 of the financial statements, the Group has incurred non-underlying costs including restructuring costs of £3.1m (2012: £3.0m), principally arising from the reorganisation of our UK Construction business, as well as £0.6m (2012: £nil) of acquisition related expenses and £0.2m (2012: £0.3m) of deferred consideration arising from the acquisition of Realys.

Dividend

The Board is proposing to pay a final dividend of 4.59p (2012: 4.59p) making a total for the year of 9.00p (2012: 9.00p).

The ex-dividend date will be 23 October 2013 and the dividend will be payable on 10 December 2013 to shareholders on the register on 25 October 2013. A scrip alternative is again being offered. The final dividend for the previous financial year of 4.59p was paid on 12 December 2012.

Overview

Key features of our business performance during the year included the following:

· We increased our margins and profit on maintained revenue despite difficult market conditions

· Our order book and cash position have improved at the year end

· Our UK Fit Out and Engineering Services and UK Retail businesses both strengthened their market-leading positions and increased market share

· Through the development of our Engineering Services offering we established ISG's international reputation for the delivery of data centers

· Overseas, our businesses are performing well, increasing the number of blue-chip multinationals they work for on a repeat basis, although in parts of the Eurozone there is caution among our customers due to ongoing economic uncertainty

· We are entering new markets and strengthening our existing presence through the acquisition of a minority stake in ACE in Brazil and the acquisition of Tecton in Germany (completed post year end)

· We successfully placed five million new shares to fund acquisitions, attracting a number of new institutional shareholders

· In line with the market, our UK Construction business continues to experience competitive pressure. An ongoing restructuring has delivered an improvement in margin and profit against a planned, small reduction in revenue

UK Fit Out and Engineering Services4

In my statement last year I predicted that the London office fit out market was set for recovery. I am pleased to say that this proved accurate as we saw an upturn in opportunities in the last quarter and we expect these improved conditions to continue through the current year as confidence returns. Also, through its Engineering Services, the business continued to build its reputation in the international data center market and this area of our operations is already making a significant contribution.

During the year, revenue increased to £288m (2012: £202m), of which £88m relates to our overseas Engineering Services activity (2012: £nil). Operating profit was up at £5.0m (2012: £3.9m), resulting in an operating margin of 1.7% (2012: 1.9%) which is a reflection of the continued competitive pressures in the market.

Office fit out projects for high profile customers delivered during the year included 95,000 sq ft for the Department of International Development, 88,000 sq ft for Microsoft Skype and 82,000 sq ft for GlaxoSmithKline. We are also nearing completion of the single largest fit out in London for 2012-13 comprising 280,000 sq ft for Jardine Lloyd Thompson.

In addition, we commenced work on a £multimillion scheme by British Airways to create a world-class flight training campus at its East Maintenance Base near Heathrow. We also secured the refurbishment and fit out of 300,000 sq ft of Cat A office space valued at £52m at the iconic Bush House at Aldwych.

We now have an established Engineering Services offering. Our reputation for the delivery of data centers was buoyed further by the award of two consecutive data center projects for the University of Cambridge. Additionally, we recently announced a second data center facility in the Nordics valued at £130m for which only the initial Letter Of Intent for £15m has been recognised in the order book as at the end of June.

The increased activity in the London office fit out market and our continued success in Engineering Services has significantly boosted our order book as at 30 June 2013 to £210m (2012: £111m), all of which will be delivered in the current financial year. With the increased order book, we anticipate increased revenue and improved results in the current financial year.

UK Retail

Our UK Retail business continued to strengthen its position as market leader. The sector was particularly affected by the UK economy but our action to reorganise our operations in the previous year contributed to an improved picture overall. So, while revenue was in line with expectations at £267m (2012: £323m), an improved operating margin of 2.1% (2012: 1.6%) led to a rise in operating profit to £5.5m (2012: £5.0m).

We continue to be a leading contractor on every framework for the major food retailers and demand has now stabilised in this market. While the overall trend is still away from large format new-build stores towards a focus on refresh programmes, we continued new build activity with Morrisons and Asda. Projects in the year included a fast-track refurbishment for Tesco in Truro, the construction of two Morrisons' stores and a series of fit outs for Asda. Marks & Spencer continued to expand its Simply Food network and ISG delivered three new stores for the brand in the year. We also commenced work for Waitrose, following the development of our relationship with the John Lewis Partnership.

In Retail Banking we remain a top performer on the frameworks for the five major banking brands. In the year we completed over 600 projects for these customers. We were appointed to carry out an ATM replacement programme throughout the UK for one of the UK's largest banks, replacing 140 ATM machines predominately over a 10-week programme.

On the High Street our successful delivery of Primark's flagship store in Manchester was followed by the award of the retailer's new Cardiff store. We delivered new outlets for Pret A Manger and a £2.3m fit out in Manchester for a well-known international lingerie retailer. We continued our successful relationship with Monsoon and Accessorize for whom we delivered a series of projects including outlets at Gatwick and Luton airports. Our relationship with the John Lewis Partnership continues to grow. Following on from ISG's successful delivery of their administrative offices and projects for the Partnership's Waitrose brand, we were awarded our first John Lewis store refurbishment project at Kingston upon Thames. Additionally, during the year we secured a new four-year appointment to a framework with one of the UK's major high street chemists.

Flagship Hackett stores were delivered in Edinburgh and in Sloane Street and Covent Garden in London. We are currently on site delivering a major project for one of the world's most famous department stores in London's Knightsbridge.

Our reputation in hospitality continued to grow and the business delivered a £37m fit out of the InterContinental Hotel in Westminster and commenced the fit out of the new United Airlines lounge in the new Terminal 2 at Heathrow.

We continued to grow the specialist services we offer to customers in the sector with the launch of the Realys brand in the UK. This brand has operated successfully for us in Asia, focused on project management and design, and the UK team is already providing design-led solutions to customers.

Our standing as market leader and our reputation for excellence were further established through the winning of the Contractor of the Year Award by Global Retail & Leisure International magazine for the fourth time and Shopfitter of the Year by Retail Week magazine for the second consecutive year.

Despite caution in the sector our order book remained robust at £142m (2012: £175m), all of which will be delivered in the current financial year (2012: £163m). We expect to see results in the current year in line with prior year.

Continental Europe

In Continental Europe the continued uncertainty in the Eurozone affected confidence among some of our blue-chip, multinational customers. We saw a decline in some of our markets, in particular in Italy and Moscow. This resulted in a lower revenue overall of £92m (2012: £101m) although some markets, particularly the Paris retail and office sectors, showed more resilience. Operating profit of £1.6m (2012: £2.3m) was impacted by the lower level of activity.

The size and scope of our projects in Continental Europe have continued to increase. The recent completion of Google's office in Paris encompassed 160,000 sq ft and entailed the structural refurbishment of a partially listed building. Recent projects secured in Italy include Alcatel Lucent, which will encompass a variety of works spread over 19 floors, and a 160,000 sq ft residential refurbishment project for the Carlyle Group.

The business delivered a range of office projects for long-standing customers. In Paris, we worked for Deutsche Bank, Disney and Google in the year. In addition to Paris, we completed projects for Google in Hamburg, Berlin and Zurich and for international asset managers Invesco in Munich and Frankfurt. Following the completion in Milan of our tenth project for Western Union, we were awarded another fit out project for the company in Frankfurt, and subsequently we have been appointed to Western Union's global framework.

The business also won major new customers, delivering office fit outs in the past financial year for organisations including Heineken, Honeywell and Etihad Airways in Italy; The Rezidor Hotel Group, Thema Properties and international legal firm Proskauer in France and motoring icon Fiat in Germany. An international diplomatic embassy also selected ISG to deliver a project in Brussels followed by two consecutive projects in Paris.

Demand for our Continental European retail offering continued to grow, particularly in Paris. Here, our work for Marks & Spencer continued with the completion of a new Parisian store in the So Ouest shopping mall and the securing of two further projects in the Beaugrenelle and Aeroville shopping malls. Our reputation for quality has driven growth with many luxury retailers. Parisian projects in this sector included the world's largest watch shop for Bucherer, a Tiffany flagship store, a number of projects for Paul Smith and projects for Longchamp in Paris, St Tropez and Geneva.

As part of our strategy to continue to develop our fit out offering in the region, in July 2013 we completed the acquisition of 90% of Tecton Engineering GmbH. This company provides office fit out and facilities management services to owners of commercial office buildings in the Rhine / Ruhr area and Berlin. The acquisition will strengthen our relationships with German property investors, landlords and multinational companies and provide greater scale for us within the largest European market.

At the end of the year, the order book for Continental Europe increased to £54m (2012: £40m). With the improved opening order book position and the new acquisition, we expect the business to deliver improved results in the current year.

Middle East and Africa

The Middle East business maintained its focus on commercial fit out within the Dubai and Abu Dhabi markets, providing services for a mix of multinational and local customers primarily within the energy sector.

Confidence started to return to the region and revenue increased to £26m (2012: £21m). Margins improved in a still highly competitive market, resulting in the business delivering an operating profit of £0.1m (2012: £0.5m loss).

An important development during the year saw the business successfully win and deliver larger office projects including Mubadala Petroleum (57,000 sq ft) and our first complete building fit out for China National Petroleum Corporation (215,000 sq ft).

The pipeline of potential projects in Abu Dhabi continues to be strong and Dubai shows signs of greater market activity driven by confidence around the bid for World Expo 2020. The opportunity for hospitality projects in Dubai has increased and growth in this sector is a strategic target for the year ahead.

We have established an office in Johannesburg in South Africa and delivered projects locally and in Kenya and Tanzania.

The order book is stable at £15m (2012: £14m) and we anticipate a further improvement in performance in the current year. 

Asia

The focus of our activities across Asia continued to be on the retail and hospitality sectors where we saw growth, with the office sector in our key markets relatively quiet. In line with this there was a modest reduction in revenue to £74m (2012: £81m), while operating margins improved, resulting in an increase in operating profit to £2.2m (2012: £1.7m).

Across our Asia region we continued to build on our reputation for quality and delivery excellence and this has helped us build up an enviable customer list of luxury retail brands. We have completed significant projects for Abercrombie & Fitch, Dior, Hackett, Patek Phillipe and Rolex during the year. In July we were awarded our second commission in the region for Louis Vuitton (LV) - a 15,000 sq ft flagship store in Kuala Lumpur, which will be Malaysia's largest LV retail outlet.

There was further activity in the hospitality sector, with commissions including both fit out of new rooms as well as refurbishment. The Singapore team was appointed to a second project at the Fairmont Hotel - the refurbishment of 365 guest rooms, corridors, executive suites and lift lobbies, which will complete in mid-2014. In Hong Kong, we completed the 250-key Ozo Hotel on Hong Kong Island. Also in the year we successfully completed phase two of the Hong Kong Club refurbishment, and have secured work in Singapore for a major branded health club.

Office fit out projects completed included an office fit out in Kuala Lumpur for one of the world's leading technology companies, and a new space for repeat client Tudor Capital in the Marina Bay Financial Centre (MBFC) in Singapore. To date we have delivered six projects within the MBFC development covering a total area of circa 200,000 sq ft.

Both of our specialist services brands - Realys, our design, consultancy and project management business, and Commtech, which provides commissioning management services - continued to expand geographically. The specialist services have enabled us to form deeper relationships with key customers and to offer them a broader range of services.

Realys secured further work with Audi, BMW, Jaguar Land Rover, Mercedes and Porsche. With Standard Chartered Bank, we continued to work on both their retail branch network and office space. We are also working with Western Union across a wide geography including Australia, Hong Kong, Japan, New Zealand and Singapore. During the year we extended our Realys offering into Thailand, and we will start to review opportunities in Myanmar.

Against the background of a weaker office market, we refocused services at Commtech across the mission critical facilities, energy enhancement and environmental controls sectors. Key projects include Wonder 8 - Hong Kong Financial Data Center for NTT Communications, phase one of which covers 400,000 sq ft and a major mixed use development scheme in Singapore, which when completed in 2016 will be the tallest building in the country. We are now extending the Commtech offering to the Middle East.

Our Asia division is carrying forward an improved order book of £42m as at 30 June 2013 (2012: £30m). With the improving market conditions in the retail and hospitality sector in Asia, we anticipate that the business will continue to grow in the current financial year.

UK Construction

Our UK Construction business continued to operate in a challenging market. As planned, revenue declined to £538m (2012: £554m), although there was a slight improvement in margins leading to improved operating profits of £1.1m (2012: £0.7m).

We continued to concentrate on repeat customers and frameworks and encouragingly 72% of our order book was secured from these relationships. In line with this we are the sole appointee to a £22m capital build framework with Cleveland Fire Authority. Frameworks with customers such as the Ministry of Justice and The North West Construction Hub (NWCH) continued to generate a strong pipeline of opportunities and our relationship with a major drinks company in Scotland was further strengthened with some key wins including a £multimillion new warehousing facility.

In the year, we secured and commenced work on the £61m Center Parcs development in Woburn Forest where we will deliver 625 lodges across the 365-acre site.  The project further builds on our strong relationship with Center Parcs' owner, private equity firm Blackstone.

Our reputation for delivering complex and time-pressured construction projects grew through the successful delivery of the London 2012 Games. The contract to deliver the overlay works, which saw us working on every venue both on and off-park - as well as the construction of the iconic Velodrome - underpinned the award of our first legacy project. We will deliver the South Park Hub for the London Legacy Development Corporation.

In the year we secured a number of larger schemes. In South Yorkshire, we began construction of a new 110,000 sq ft Tesco Extra store in a circa £19m town centre regeneration project in Rotherham. We secured a new retail and leisure destination in Swindon, with the £17m construction contract to build the new Regent Circus scheme, which incorporates Cineworld Cinema, a 50,000 sq ft Morrisons' supermarket and eight restaurant units. Additionally we embarked on a £16m redevelopment of the New Theatre Royal in Portsmouth and a £27m project to reclad part of St Thomas' Hospital site in central London.

We successfully completed the £39m Wood Lane Studios, a joint development between Voreda and Imperial College London, and The Crystal for Siemens, which is one of the few buildings in the world to have received both BREEAM Outstanding and LEED Platinum accreditations.

As market conditions remain challenging we are in the process of reorganising our Construction business into three regions in order to optimise operational efficiency. The order book for our UK Construction business is in line with prior year at £391m (2012: £390m), of which £338m is for delivery in the current financial year (2012: £335m). We would anticipate revenue for the current financial year being slightly below prior year, however we are targeting to improve margins.

Brazil

In July 2013, we extended the Group's capabilities into Brazil by acquiring a minority interest of 20% in ACE. This is a company that provides office fit out and refurbishment services in Sao Paulo and Rio de Janeiro to both local and international clients.

Our method of entry via a non-controlling interest will permit us to gain a deeper market knowledge and understanding of the business, before we commit to exercising our option to acquire the remaining shares over a four-year time period.

The acquisition allows us to:

· Expand ISG's international presence into a developing economy with excellent long-term prospects

· Provide an opportunity to market ACE's offering to our existing customer base

· Provide opportunities to assist ACE in expanding into new sectors in which the Group has expertise

Outlook

Our strategy to target growth sectors and geographies, along with our focus on broadening the number of multinational companies we work for, positions us well for the year ahead as we start to see early signs of improvement in some of our key traditional markets. Our order book at year end increased by 12% to £854m (2012: £760m) with the private: public sector balance weighted 78% towards the private sector (2012: 81%).

In the UK, our blue-chip customer base remains the backbone of our businesses. We are seeing a definite improvement in market conditions for our fit out business. Market conditions for our formal frameworks in our UK Retail business remain stable, and we continue to grow new relationships. Undoubtedly our UK Construction business will continue to operate in a challenging market, but our strategy here is to focus on better contract selection, delivery excellence and overhead efficiency.

We have an established presence in the provision of data centers and we anticipate opportunities in this sector looking ahead. We will also further establish ourselves in other growth sectors where there is opportunity such as hospitality and high-end residential.

Overseas, we anticipate increased volumes and margins as we continue to benefit from greater brand recognition, strengthening of local management teams and stronger demand from global clients. We will continue to target new geographies where there is demand from our blue-chip international customer base.

The Group is well placed to benefit from a recovery in the UK and from our presence in key global locations that are attracting inward investment. We are confident of our strategy and will continue to target growth both organically and via acquisition.

1from underlying items (Notes 2 and 3)

2from earnings attributable to owners of the company from underlying items (Note 10)

3some 2012 balances restated (Notes 1 and 2)

4formerly UK Fit Out (Note 2)

David Lawther

Chief Executive Officer

10 September 2013

CONSOLIDATED INCOME STATEMENT │Year ended 30 June 2013

AUDITED

* Restated (Note 1)

CONSOLIDATED STATEMENT OF comprehensive INCOME │Year ended 30 June 2013

AUDITED

* Restated (Note 1)

Items in the statement above are disclosed net of tax. The tax relating to each component of other comprehensive income is disclosed in Note 7.

CONSOLIDATED BALANCE SHEET │At 30 June 2013

AUDITED

* Restated (Note 1)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY │Year ended 30 June 2013

AUDITED

* Restated (Note 1)

The foreign currency translation reserve is used to record cumulative translation differences on the goodwill and other intangible assets of foreign operations (Notes 11 and 12). The cumulative translation differences are recycled to the income statement on disposal of the foreign operation.

CONSOLIDATED CASH FLOW STATEMENT │Year ended 30 June 2013

AUDITED

* Restated (Note 1)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS │At 30 June 2013

AUDITED

1. GENERAL INFORMATION

The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 June 2013 or 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 will be delivered following the company's annual general meeting. The auditor has reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

The information has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS). This announcement does not contain sufficient information to comply with all the disclosure requirements of IFRS.

The preliminary announcement for the year ended 30 June 2013 has been prepared in accordance with the accounting policies as disclosed in the 2012 Annual Report, as updated to take effect of any new accounting standards applicable for 2013 as set out in the 2013 Interim Report.

The directors have prepared cash flow forecasts for the Group for a period in excess of twelve months from the date of approval of the 2013 consolidated financial statements. These forecasts are based on the Group's existing order book together with assumptions in respect of new business and reflect an assessment of current and future market conditions and risks and uncertainties in the businesses, their impact on the Group's trading performance and the actions taken by management in response to the challenging market conditions. The forecasts completed on this basis demonstrate that the Group will be able to operate within the current committed debt facilities and show continued compliance with the financial covenants. In addition, management has considered various mitigating actions that could be taken in the event that future market conditions deteriorate beyond their current assessment. Such measures include further improvements in working capital within management's control, further reductions in costs and capital expenditure and use of the Group's undrawn credit facilities.

On the basis of the exercise described above, the directors have a reasonable expectation that the Group and company have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements of the Group and the company.

Restatement of prior year balances

In January 2013 the IFRS Interpretation Committee (IFRIC) clarified the measurement and presentation required in accordance with IFRS 3 'Business Combinations' for contingent payments to selling shareholders in circumstances in which those selling shareholders become, or continue as, employees. Following this clarification, the prior year comparatives have been restated with the deferred contingent consideration in relation to the acquisition of Realys Group Limited (Realys) in April 2011 previously presented within goodwill and recognised as a liability at that time now presented as post-acquisition remuneration and expensed as incurred as a non-underlying item. Further information on the impact of this restatement is included within Notes 2, 3, 4, 6, 7, 10 and 11.

Additionally, the Group has amended its segmentation during the year as described in Note 2.

The restatement of the financial information for the year ended 30 June 2012 has been audited.

2. SEGMENTAL INFORMATION

For management purposes, the Group is organised into operating segments on both a geographic and product perspective. The performances of these segments are considered by the Board when making strategic decisions. During the year, the Group has reorganised its operations to align itself with its strategy and also the opportunities in the market. In line with this, the Group has amended its segmentation to reflect the revised structure of its businesses with elements of UK Fit Out and Engineering Services (formerly UK Fit Out) now managed and therefore re-segmented to UK Retail and UK Construction. The prior year comparatives have been restated to reflect this new segmentation. These segments include the UK, Continental Europe, Middle East and Africa and Asia, whilst the UK is further segregated by product into UK Fit Out and Engineering Services, UK Retail and UK Construction.

Although the Middle East and Africa geographical segment does not meet the quantitative thresholds required by IFRS 8 'Operating Segments', management has concluded that this segment should be reported. It is closely monitored by the Board as a potential growth region and is expected to materially contribute to Group revenue in the future.

The principal activities of each of these divisions are as follows:

The segmental information provided to the Board for the reportable segments for the year ended 30 June 2013 is as follows:

Revenue and profit analysis

Annual revenue from no one customer amounted to more than 10% of the Group's total revenue.

The revenue disclosed is from external customers and is reported to the Board in a manner consistent with that in the income statement.

* Restated (Note 1) and to reflect the revised segmentation

3. NON-UNDERLYING ITEMS

*Restated (Note 1)

The Group has incurred restructuring costs of £3.1m (2012: £3.0m). This is due to the completion of the exercise that commenced in the previous year in respect of the UK Construction operations with the reorganisation of the South West region and in the current year, the South East region. Furthermore, the consolidation of the Group's retail operations into a single uniform management structure and the consolidation of the UK IT teams into a single location have now been completed.

Subsequent to the year end (Note 19), the Group completed the acquisition of a minority stake in ACE in Brazil and the acquisition of a majority stake in Tecton in Germany. £0.6m of costs were incurred during the year ended 30 June 2013.

The acquisition of 85% of the issued share capital of Realys was completed on 8 April 2011, with a deferred contingent element payable (in cash and shares) over the following three years depending on achieving certain performance targets in each of those years and the vendors' continuing employment. As at 30 June

2012, the value of the contingent consideration for the first year was calculated to be £0.3m. This amount was recognised as a liability in the Group's consolidated financial statements at that time and was subsequently paid in July 2013. Non-operating gains of £1.4m for the year ended 30 June 2012 no longer arise due to the restatement described in Note 1. As at 30 June 2013, the value of the contingent consideration for the second and third years was calculated to be £0.2m and nil respectively, and was paid in July 2013.

4. STAFF COSTS INCLUDING DIRECTORS' REMUNERATION

* Restated (Note 1)

Included in salaries above is a bonus accrual payable in respect of the financial year ended 30 June 2013.

Directors' remuneration included in the aggregate remuneration above comprised:

Directors' emoluments (excluding social security costs) disclosed above include £716,276 paid to the highest paid director (2012: £476,730).

Certain subsidiary undertakings of the Group had operated defined contribution pension schemes. The assets of the schemes were held separately from those of the Group by an independently administered fund. The only other pension contributions made by the Group are to employees' personal pension schemes under a salary waiver arrangement.

* Restated to reflect the revised segmentation

The Corporate segment in the table above includes three directors (2012: three).

5. FINANCE INCOME

6. Finance costs

* Restated (Note 1)

7. TAX ON PROFIT ON ORDINARY ACTIVITIES

a. Taxation charge

* Restatement of profit before tax for the prior year (see Note 1) has resulted in an increase in deferred tax from origination and reversal of temporary differences from £0.6m to £1.0m for the year ended 30 June 2012

Corporation tax is calculated at 23.75% (2012: 25.5%) of the estimated taxable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

b. Taxation reconciliation for continuing operations

The charge for the year can be reconciled to the profit per the income statement as follows:

*Restated (Note 1)

8. discontinued operations

In November 2011, the Group discontinued its Construction's Affordable Housing activity in South West and it was classified as a discontinued operation for the year ended 30 June 2012.

The results of the Group's discontinued operations are presented below.

9. DIVIDENDS

In accordance with IAS 10 'Events after the Reporting Date', dividends are accounted for in the period in which they are paid. Accordingly, the final dividend proposed in respect of the year ended 30 June 2013 has not been included as a liability as at 30 June 2013.

There are no tax consequences attaching to the payment of dividends by the Group to its shareholders.

10. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to owners of the company by the weighted average number of ordinary shares during the year, determined in accordance with the provisions of IAS 33 'Earnings per Share'.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential ordinary shares. The Group has two categories of dilutive potential ordinary shares, being share options granted where the exercise price is less than the average price of the company's ordinary shares during the year, and conditional shares not vested where contingent consideration conditions are yet to be met.

Underlying basic earnings per share is calculated by dividing the earnings from underlying items attributed to owners of the company by the weighted average number of ordinary shares during the year. The Group believes that this measure of earnings from underlying items is more reflective of the ongoing trading of the Group.

A total of 4,554,031 share options that could potentially dilute earnings per share in the future were excluded from the calculations below because they were anti-dilutive at 30 June 2013 (2012: 3,497,375).

* Restated (Note 1)

* Restated (Note 1)

The impact of the restatement of profit for prior year (see Note 1) has resulted in a decrease in basic earnings per ordinary share from continuing and discontinued operations from 2.43p to (1.95p) and a decrease in diluted earnings per ordinary share from continuing and discontinued operations from 2.41p to (1.93p) for the year ended 30 June 2012.

11. GOODWILLL

* Restated (Note 1)

Goodwill has been allocated for impairment testing purposes to six groups of cash-generating units (CGUs) identified according to operating segments, being UK Fit Out and Engineering Services, UK Retail, Continental Europe, Middle East and Africa, Asia and UK Construction1. The allocation of goodwill is dependent on the CGU that is expected to benefit from the business combination.

The additional goodwill in the prior year relates to the acquisition of the trade and business assets of the French branch of Alpha.

The goodwill recognised on acquisition of Realys in April 2011, has been reduced by £2.1m to reflect the restatement as described in Note 1.

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and margins for the period. The Board estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the business, giving a pre-tax discount rate of 11.3% (2012: 11.0%). The Group discount rate is applied to all CGUs, on a pre-tax basis with the individual CGU cash flow forecasts risk adjusted. The long-term growth rate of 2.25% is based on the estimated industry growth forecasts and long-term growth in gross domestic product.

The Group prepares cash flow forecasts derived from the most recent financial forecasts approved by the Board for the next two years and extrapolates cash flows for the following three years based on the estimated growth rate of 2.25% and thereafter applied into perpetuity.

At 30 June 2013 and 30 June 2012, the carrying amounts of goodwill for CGUs were tested for impairment and deemed not to be impaired.

The Group's impairment review is sensitive to changes in the key assumptions used. The major assumptions that result in significant sensitivities are the growth rate, the discount rate and the forecast year two cash flows. Except as noted below, a reasonably possible change in a single assumption will not give rise to impairment in any of the Group's CGUs. The UK Construction goodwill is £24m and the key assumptions are the discount rate and the forecast year two cash flow which assumes a recovery in performance compared to current levels. At the Group's pre-tax discount rate of 11.3%, the fair value of the CGU exceeds the carrying value by £2m or 6%. The fair value is equal to the carrying value at either a discount rate of 12.0% or if the forecast year two cash flow is reduced by 6%.

12012 restated to reflect the revised segmentation (Note 2)

12. OTHER INTANGIBLE ASSETS

13. ANALYSIS OF NET CASH POSITION