Half Yearly Report

1 August 2013

LAIRD PLC

RESULTS FOR THE SIX MONTHS TO 30 JUNE 2013

(unaudited)

Laird PLC today announces its Interim Results for the period from 1 January 2013 to 30 June 2013. Laird is a global technology company focused on providing components and solutions that protect electronic devices from electromagnetic interference and heat, and that enable connectivity through wireless applications and antennae systems.

Positioned for a strong H2, investing in the future and good level of cash conversion

Financial:

·; Revenue of £243.5 million (2012: £249.6 million) - Q2 consistent with Q1

·; Gross profit percentage maintained year on year at 39%

·; Investment in R&D up 28%

·; Increased capacity maintained to support H2 2013 ramp up

·; Underlying operating margin of 8.6% (2012: 12.4%)

·; Cash conversion of 80%

·; Underlying profit before tax £17.3 million (2012: £27.3m)

·; Underlying earnings per share of 5.4p (2012: 8.6p)

·; Interim dividend declared of 4.1 pence (2012: 3.4 pence), up 21% on 2012

Operational:

·; June order intake 14% higher than previous year

·; Tablet market more mature driving lower content

·; Broadening of the supply base by customers for mature product lines

·; Increasing contract wins based on Laird's differentiation

·; H1 softness in European industrial and US public safety markets

Outlook:

·; Full year result will be second half weighted due to product launches and seasonality

·; Expected growth from both uplift in activity and strategic progress

·; Increasing investment in R&D

David Lockwood, Chief Executive, said:

"Our confidence in delivering a strong second half comes from product launches from us and our customers, increasing market recognition of the differentiation we provide, and the continuing success of globalising our business model. This will be delivered from our robust operational platform and the benefits we are already seeing from collaborative selling.

In Performance Materials, we have secured design wins on customer product launches for the second half of the year which are expected to result in a significant uplift in revenue compared with the first six months. Long-term contract wins and good market penetration in Wireless Systems gives us confidence for this division's prospects. This, together with the increase in demand from markets such as telecoms infrastructure, underpins our confidence in our ability to grow the business.

We have made good progress against the strategy I laid out at the end of 2012 to penetrate further new markets and diversify our customer base which should reduce revenue volatility. This, together with our consistent good levels of cash generation, allows us to invest in our business for growth whilst also maintaining a progressive dividend policy."

Explanatory notes:

i) Laird uses underlying results as key performance indicators. Underlying profit before tax and underlying earnings per share are stated before exceptional items, the amortisation of acquired intangible assets, deferred tax on acquired intangible assets, goodwill and US capitalised development costs, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments and acquisition transaction costs. The narrative is based on underlying operating profit, profit before tax and earnings per share, as the directors believe that these provide a more consistent measure of operating performance.

ii) The weighted average number of shares used to calculate earnings per share was 265.7 million in the first half of 2012 and 265.6 million in the first half of 2013.

STRATEGY

We are making good progress in diversifying our revenue base with customers who recognise Laird for the differentiation we provide - innovation, reliable fulfilment and speed. Adherence to this core differentiation is proving important in the delivery of contract wins.

Our commitment to innovation is a core tenet of our strategy and Laird has defined product roadmaps in anticipation of the changing industry needs. Our increased investment in R&D will ensure we bring products to market more rapidly and the changes we have made, and are continuing to make, to service customers differently have been designed to build and strengthen our strategic relationships.

Collaboration across our businesses has brought results including a key contract win with a consumer gaming customer which will bring significant revenue in the second half of 2013 for the Performance Materials Division.

RESULTS

As previously announced we have seen a slow start to the year but this is expected to reverse in the second half of the year.

Revenue in the six months to 30 June 2013 was £243.5 million (2012: £249.6 million). Organic revenue in the half year was down 7%. Results are stated in US Dollars on page 8.

Underlying operating profit was £21.0 million in the first half of 2013 (2012: £31.0 million). Underlying operating profit margin percentage, before interest and tax, in the half year decreased to 8.6% (2012: 12.4%).

Notwithstanding lower revenues, investment in the future increased and there was a good level of cash conversion.

Underlying profit before tax in the six months to 30 June 2013 was £17.3 million (2012: £27.3 million).

Statutory profit after tax in the six months to 30 June 2013 was £5.5 million (2012: £16.8 million).

Underlying earnings per share in the period were 5.4 pence (2012: 8.6 pence).

Operating cash flow after capital expenditure in the six months to 30 June 2013 was £16.7 million (2012: £36.2 million). Operating cash conversion after capital expenditure in the half year was 80% (2012: 117%).

Net borrowings at the end of June 2013 were £122.9 million (December 2012: £106.8 million).

In the first half of 2013, the percentage of our total revenues from our "top 5" customers was 33% (2012: 34%). Revenue from our top customer was 15% (2012: 16%).

DIVIDEND

The Board has declared an interim dividend of 4.1 pence per share, up 21% on 2012. This is payable on 6 December 2013 to shareholders registered on 8 November 2013. It is anticipated that we will also be recommending a full year dividendof 12.0 pence for 2013, in line with our recommendation for dividend payments to deliver a compound annual growth rate averaging 24% from 2010 to 2013.

Beyond 2013, the intention is to maintain a progressive dividend policy to Shareholders.

PERFORMANCE MATERIALS DIVISION

Our Performance Materials Division holds market leading positions in electromagnetic interference shielding ("EMI") and in active and passive thermal management and solutions. We design and supply a range of EMI shielding materials, Thermal management solutions and Signal Integrity products which provide critical protection for a wide range of electronic devices, allowing them to function and connect effectively.

Expressed in US Dollars, revenue in the half year decreased by 5% compared with 2012. On an organic basis revenue was 8% lower.

Gross profit percentage has been maintained compared to H1 2012 even though we have expanded capacity. Investment in R&D has increased and this together with lower volumes in the first half, has had an impact on operating margins.

EMI shielding materials provided 64% (2012: 67%) of divisional revenues in the period, Thermal management solutions 25% (2012: 24%) and Signal Integrity Products 11% (2012: 9%).

EMI

Revenue from our EMI business was 9% lower (in US Dollars) than in the first half of 2012, as a result of sales to our largest customer being down on the prior year and more subdued demand from other customers in the B2B markets we serve.

We are continuing to diversify our smartphone customer base and are focused on increasing sales to our second largest customer within the handset segment.

The innovation in and maturity of design, and the preference for consumers to favour smaller tablet devices, as well as a broadening of the supply base by customers to mitigate dependency on any one supplier, has resulted in lower Laird content.

The additional capacity we installed in 2012 to meet demand in the second half of the year has been underutilised in the first half of 2013, but this will reverse in the second half of the year due to seasonality and as new products are launched.

EMI has won a significant new customer in the consumer gaming market which was secured through collaboration with the other businesses across the Performance Materials Division.

We are refocusing our strategic and tactical selling processes for new and existing customers and expect to progress this further in the second half of 2013.

Thermal

Our Thermal business provides both thermoelectric modules, including thin-film technology, and thermal materials to the telecoms, IT, industrial and medical markets. Revenue in this business was 2% higher (in US Dollars) than in the first half of 2012.

Our thermal materials products have performed well. There has been stable demand from customers in the IT, telecoms and industrial markets and we have seen positive trends indicating an increase in demand for the second half of the year. Other drivers of volume in the second half will be the launch of new products in the consumer gaming market and demand for LED lighting.

Revenue from our thermoelectric assemblies has also been stable ahead of the much anticipated increase in large scale investment in the telecoms segment. The planned investment in Asia for LTE (4G) will be significant for our thermal business and we are already seeing areas of growing investment in North America. During the first half of the year we have further expanded our offering in the medical market for customers requiring active cooling solutions.

Nextreme was acquired in February 2013 and has been successfully integrated into our Thermal business. Through this acquisition we can combine the most innovative technology with our market presence and ability to scale operations. Nextreme delivers high precision cooling in an ultra-small form factor.

Signal Integrity Products

Revenues from our Signal Integrity Products used in applications to filter unwanted or harmful electromagnetic "noise", were 9% higher (in US Dollars) than the first half of 2012 as a result of higher revenues from the automotive and telecoms markets.

Performance Materials Summary

In Performance Materials, our aim is to "own the electronics environment". Through early engineering engagement with our customers, we design-in solutions earning the right to be a leading supplier, underpinned by our reliable fulfilment.

As the industry requirements continue to be for smaller, more powerful devices, our technical teams are innovating in anticipation of changing industry needs to ensure we continue to be recognised by customers for our differentiated offering.

 WIRELESS SYSTEMS DIVISION

Our Wireless Systems Division holds leading positions in telematics, infrastructure and mobile non-handset antennae and industrial control systems. We design and supply a range of telematics and infrastructure antennae products, machine-to-machine ("M2M") wireless modules and software enabled control systems.

When expressed in US Dollars, divisional revenues decreased by 4%. Organic revenue was down 6%.

Operating margin has been affected by the lower revenue and its associated profit drop-through, as well as the increased investment in R&D.

Telematics / M2M provided 61% (2012: 58%) of the division's revenue, while Wireless Automation and Control Solutions contributed 21% (2012: 21%) and Infrastructure Antennae Systems contributed 18% (2012: 21%).

Telematics / M2M

Revenue from this business was 1% higher (in US Dollars) than in the first half of 2012.

There was underlying growth in our automotive telematics business but as expected, this has been offset in the first half by the exit from lower margin M2M / asset tracking products. We have secured a number of contract wins with automotive OEMs in Europe, the US and China - which we would expect to drive growth at least 50% in excess of the industry average from 2014 onwards. We expect demand to be sustained during the second half of the year.

There are also planned product launches for new Bluetooth models in the second half of the year, including those for a new medical customer, which will bring a revenue benefit from early 2014.

Wireless Automation and Control Solutions

There has been weaker demand in rail and industrial markets, with revenues down 6% (in US Dollars) than in the first half of 2012. After-sales service revenues continue to partially offset the reduced new system sales. Quoting activity for industrial and North American rail has been picking up which is encouraging for the second half. We are continuing to focus on broadening our geographic sales reach into Asia and other emerging markets.

Infrastructure Antennae Systems

Infrastructure Antennae Systems revenues were 16% lower (in US Dollars) than in the first half of 2012 as a result of sequestration measures in the USA having had a significant impact on spending in the public safety markets and from lower revenues for gaming device antennae. We expect to see an improvement in the second half of the year as non-government infrastructure markets pick up.

There has been mixed demand for enterprise networking solutions from major customers. Contracts have been won to supply high density Wi-Fi antennae for use in stadiums, which were secured due to our ability to meet the high technical specifications.

Wireless Systems Summary

We enable smart systems by providing innovative technology through our antenna and connectivity modules. We provide control and automation systems, which build on our core wireless module capability, for end-to-end applications.

We continue to evolve our position in wireless systems markets through expansion of existing markets, penetration of new markets and acquiring complementary technology with attractive market positions.

BOARD CHANGES

During the first six months of the year there have been further changes to the Laird Board as we continue our programme to refresh the Board.

We announced in May that Jack Boyer had joined the Board as a non-executive director and as a member of the Audit and Remuneration Committees. He will succeed Tony Reading as Chairman of the Remuneration Committee.

Tony Reading will be retiring as a non-executive director on 31 August 2013 having completed nine years with Laird. Paula Bell will succeed Tony Reading as the Senior Independent Director.

OUTLOOK

Our confidence in delivering a strong second half comes from product launches from us and our customers, increasing market recognition of the differentiation we provide, and the continuing success of globalising our business model. This will be delivered from our robust operational platform and the benefits we are already seeing from collaborative selling.

In Performance Materials, we have secured design wins on customer product launches for the second half of the year which are expected to result in a significant uplift in revenue compared with the first six months. Long-term contract wins and good market penetration in Wireless Systems gives us confidence for this division's prospects. This, together with the increase in demand from markets such as telecoms infrastructure, underpins our confidence in our ability to grow the business.

We have made good progress against the strategy I laid out at the end of 2012 to penetrate further new markets and diversify our customer base which should reduce revenue volatility. This, together with our consistent good levels of cash generation, allows us to invest in our business for growth whilst also maintaining a progressive dividend policy.

A live audio webcast for Shareholders and Analysts will be available at 9am (UK time) at: http://www.laird-plc.com/laird/investor-relations/results-centre/

FINANCE REVIEW

Revenue

Revenue was £243.5 million in the first half of 2013 against £249.6 million in 2012. In US Dollars, revenue was 4% lower year on year, with Performance Materials revenues 5% less than in the first half of 2013 and Wireless Systems revenues 4% lower. Revenue in US$ for each division is summarised in the table below.

Revenue on an organic basis was 7% lower in the first six months of 2013. Revenue on an organic basis is defined as the increase or decrease in revenue, year on year, with the base revenue for the prior year including revenue from the newly acquired companies as if Laird had owned those acquired companies for the same period in the prior year. Revenue on an organic basis for the "base" businesses (excluding the acquisitions) was also 7% lower.

Underlying Profit

The table below shows underlying operating profit in US$ for the business segments. Margins were 8.6% in the first half of 2013 (2012, 12.4%).

The table below provides further analysis in US$ of the underlying operating profit. The gross profit percentage has been maintained.

The year on year reduction in net operating profit was $16.4 million. The margin reduction largely arising from the lower revenue on an organic basis was $11.7 million, there was an increase in the investment in R&D in the base business of $2.9 million (13%) and an increase in general overheads of $1.9m (2%). These were offset in part by a $0.1m contribution from acquisitions.

Underlying profit before tax in the half year decreased by 37% to £17.3 million (2012: £27.3 million). Underlying profit is defined as profit before tax, exceptional items, amortisation of acquired intangible assets, the gain or loss on sale of businesses, the impact arising from the fair valuing of financial instruments, and acquisition transaction costs.

Exceptional Items

Acquisition transaction costs amounting to £0.5 million and restructuring costs of the same amount have been disclosed as exceptional.

Profit

Profit after tax from continuing operations was £5.5 million (2012: £13.6 million). There was no profit / (loss) from discontinued operations in the period (2012: £3.2 million profit). The profit for the period was £5.5 million (2012: £16.8 million).

Finance Costs

Finance costs, before fair value adjustments, were £3.7 million (2012: £3.7 million). Interest cover was 8.6 times.

Taxation

The underlying tax charge on underlying profit before tax is equivalent to an average tax rate of 17.5% (2012: 16.5%) being the best estimate of the outcome for the full year in 2013.

Underlying Earnings

Underlying earnings per share were 5.4p (2012: 8.6p). Underlying earnings are based on underlying profit less underlying tax. The average number of shares in issue in the first half of 2013 was 265.6 million compared with 265.7 million in the first half of 2012.

Cash Flow

In the first half of 2013, Laird produced an operating cash flow surplus of £16.7 million (2012: £36.2 million from continuing operations and £9.5 million from discontinued operations), a cash conversion of 80% of operating profit.

* after adjusting for creditor decreases on exceptional items of £0.5 million.

Net Borrowings and Debt Facilities

Overall, net borrowings increased during the half year by £16.1 million, to £122.9 million. Most of our borrowings and cash deposits are in US dollars. As at 30 June 2013, £29.2 million of borrowings were in Euros.

A cornerstone of Laird's financial planning is to ensure that it maintains committed loan finance which provides sufficient headroom above expected borrowing requirements and has a significant proportion with terms that exceed one year. Laird has in place £235 million of committed bilateral revolving credit facilities which will not expire until April 2016. In addition, Laird has in issue $140 million (£91.3 million) of US Dollar Private Placement loan notes which have remaining terms in excess of one year (2014, $97 million) and three years (2016, $43 million).

Covenants

A key consideration for financial planning is to maintain sufficient headroom between borrowings and the ceiling set by the covenants. Laird's bank facilities and US Private Placement loan notes contain two principal financial covenants; net debt / EBITDA (earnings before exceptional items, interest, tax, depreciation and amortisation), and interest cover.

For the six months ended 30 June 2013, net borrowings were 1.6 times EBITDA against the maximum permitted of 3.5 times. Interest cover was 8.6 times against the minimum requirement of 3.0 times.

We routinely estimate our expected headroom against the covenants and we test their sensitivity to a number of alternative scenarios to assess ongoing compliance. We do not anticipate approaching our covenant limits in the foreseeable future.

Currencies in 2013

The average and period end exchange rates are set out in note 4. In the first half of 2013, 75% of revenues were invoiced in US$, 11% in Renminbi and 10% in Euros. In the first half of 2013, there was a substantial US$ surplus as just under 40% of costs are in US$ and with 7% of costs in Euros, Laird had a relatively small Euro surplus. In most other currencies, costs exceeded revenues, the most significant being the Renminbi which accounted for just over 40% of cost.

Laird aims to balance local currency exposures but the business operates on a global basis and this can create currency imbalances where operating costs do not match revenues in some currencies. The US$ strengthened against most currencies relevant to Laird in the first half of 2013 compared with the same period in 2012 but was weaker against the Renminbi.

Laird aims to cover forward at least 75% of the unmatched cash flows one quarter ahead. However, the Group has hedged all of the anticipated Renminbi exposure for the balance of 2013 and since the end of June, also half of the estimated exposure for 2014.

In addition, there is a translation impact in converting profits into our reporting currency (Pound Sterling); each US $0.01 appreciation against Sterling approximates to an annual increase in operating profit of £0.4 million.

The majority of Laird's assets are held overseas and these are hedged in part by foreign currency loans.

Principal Risks

Laird operates globally in varied markets. The principal risks and uncertainties that are or may be faced are disclosed in the 2012 Annual Report, (Directors' report), and these are expected to continue to be relevant for the remaining six months of the year.

The risks set out in the 2012 Annual Report, include the competitive markets in which we operate, the need to respond to technological change, the macro economic and political factors and exposure to increases in labour costs in China and world commodity prices, and the requirement to meet increasingly stringent environmental laws and regulations.

The ongoing macroeconomic uncertainty poses some threat to the markets served by our customers. Our European customers have been affected by a slowdown in the European economies. Our net Euro trading and balance sheet exposure is not significant.

Shareholders' Equity

Shareholders' equity at 30 June 2013 was £453.6 million (30 June 2012: £442.2 million). The reconciliation of Shareholders' equity is set out in the Group statement of changes in equity.

Statement of directors' responsibilities

The directors confirm that to the best of their knowledge this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report set out on pages 1-11 herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules. The Board of directors of Laird PLC that served during the six months to 30 June 2013 and their respective responsibilities are set out in the Laird PLC 2012 Annual Report. Details of the changes since the year end are set out on page 7 of this Report.

By Order of the Board:

D C Lockwood, Chief Executive

J C Silver, Finance Director

31 July 2013

INDEPENDENT INTERIM REVIEW REPORT TO LAIRD PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the interim report for the six months ended 30 June 2013 which comprises the Group income statement, Group statement of comprehensive income, Group statement of changes in equity, Group statement of financial position, Group cash flow statement and the related notes 1 to 15. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim report based on our review.

Scope of review

We conducted our review in accordance with ISRE (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

31 July 2013

Group income statement

(unaudited)

* before amortisation of acquired intangible assets, exceptional items, deferred tax on acquired intangible assets, goodwill and US capitalised development costs, the gain or loss on disposal of businesses, the impact arising from the fair valuing of financial instruments and acquisition transaction costs.

Group statement of comprehensive income

(unaudited)

Group statement of changes in equity

(unaudited)

for the 6 months to 30 June 2013

for the 6 months to 30 June 2012

for the 12 months to 31 December 2012

Group statement of financial position

(unaudited)

Group cash flow statement

(unaudited)

Notes to the Interim Report

(unaudited)

1 Authorisation of interim financial statements

The Group's interim financial statements for the period ended 30 June 2013 were authorised for issue by the Board of Directors on 31 July 2013. Laird PLC is a public limited company incorporated and domiciled in England and Wales and its ordinary shares are traded on the London Stock Exchange.

The comparative financial information for the period to 30 June 2012 and the year ended 31 December 2012 has been extracted from the published financial statements of Laird PLC. The consolidated interim financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. These interim results are unaudited but have been reviewed by the Group's auditor. The statutory accounts for the year ended 31 December 2012 have been reported on by the Group's auditor and delivered to the registrar of companies. The report of the auditor was unqualified and did not contain the statements under section 498(2) or (3) of the Companies Act 2006.

Further copies of the Interim announcement may be obtained from Laird PLC's registered office at 100 Pall Mall, London SW1Y 5NQ.

2 Basis of preparation

Laird PLC prepares its Annual Report and Accounts on the basis of IFRS as adopted for use by the EU. The financial information presented in this Interim Report has been prepared in accordance with the accounting policies expected to be used in preparing the 2013 Annual Report and Accounts which do not differ significantly from those used in the preparation of the 2012 Annual Report and Accounts. 

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and for this reason, they continue to adopt the going concern basis in preparing the financial statements of the Group.

The condensed set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the EU.

Notes to the Interim Report

(unaudited)

3 Segmental analysis

The reportable segments for continuing operations (as defined by IFRS 5) are as follows:

Performance Materials - designs and supplies a range of EMI shielding materials, thermal management solutions and signal integrity products to a wide variety of electronic devices; and

Wireless Systems - designs and supplies a range of high specification wireless antennae, and machine-to-machine ("M2M") wireless modules for a number of markets including infrastructure and automotive markets.

Discontinued operations comprise the Handset Antennae business.

Unallocated costs are central costs related to managing the parent company.

Notes to the Interim Report

(unaudited)

3 Segmental analysis (continued)

\* These relate to other business segments disposed of in years before 2012.

Segment assets

Unallocated assets in the above table include cash and cash equivalents, retirement benefits and other debtors.

Notes to the Interim Report

(unaudited)

4 Exchange rates  

The results and cash flows of overseas subsidiaries are translated into sterling using weighted average rates of exchange for the period. The principal rates used were as follows:

5 Exceptional items

Notes

(a) The total cash outlay for exceptional costs in 2013 was £1.5m (June 2012, £8.7m).

(b) The tax effect on exceptional items in 2013 is £Nil (June 2012, £Nil).

(c) Restructuring costs include redundancy and site rationalisation and closure costs.

(d) Discontinued operations in 2012 comprise the Handset Antennae business.

Notes to the Interim Report

(unaudited)

6 Discontinued operations

Discontinued operations in 2012 comprise the Handset Antennae business. The profit on disposals prior to 2012 represents a reassessment of provisions for warranty claims.

Notes to the Interim Report

(unaudited)

7  Earnings per share

The calculation of basic and diluted earnings per share is based on the profit for the period divided by the daily average of the number of shares in issue during the period. Diluted earnings per share is based on the same profit but with the number of shares increased to reflect the daily average effect of relevant share options granted but not yet exercised where performance conditions have been met and shares contingently issuable.