21st Sep 2007 07:02
Cenkos Securities PLC21 September 2007 CENKOS SECURITIES PLC UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 AND THE SIX MONTH PERIOD ENDED 31 MAY 2006 Cenkos Securities plc today announced its unaudited interim results for the sixmonths ended 30 June 2007. The highlights of the results comparing them withthe first six months of the last accounting period (which was for thirteenmonths) which have been produced on a pro forma basis (to illustrate the effecton the Group's profit had all individual members of Cenkos LLP been employed bythe Group) are: Financial Highlights Revenue up 46 % to £ 28.4 million (2006: £ 19.5 million). Profit before tax for the period is up 21% to £ 11.4 million (2006: £ 9.4million) based on the pro forma accounts set out in the operating andfinancial review. Profit before tax for the period based on the figurespresented on page 6 of the attached interim financial information is down 30% to£11.6 million (2006: £16.4 million). Diluted EPS down 22% to 11.1p (2006: 14.2p), whilst earnings are up 24% to £8.1million (2006: £6.6 million). This fall reflects the issue of partly paid Bshares to new teams recruited in the latter part of 2006. Net assets up 222% to £44.1 million (£2006: £13.7 million) due to an increase inretained profits and the issue of B shares. The Board declares an interim dividend of 10p per share. This reflects theCompany's dividend policy which was set out in the last year's report andaccounts, and this policy will be continued with the declaration of the finaldividend. Business Highlights Continued success in attracting new institutional and corporate clients. The new teams recruited in the second half of 2006 have made a significant contribution to the present set of results. Since 30 June 2007 the establishment of a fund management operation, therecruitment of a team charged with setting up a private client operation inJersey and opening an office in Edinburgh. Andrew Stewart, Chief Executive Officer commented: "I am delighted that Cenkos continues to build on its strong financial base andthat the partnership spirit has been maintained throughout all thebusinesses." "We are pleased to have started the second half of the financial year on apositive note. At present the market is experiencing turbulent conditions.However we have an encouraging pipeline and are confident that with ourentrepreneurial philosophy we will continue to grow our revenues. Against thisbackground, we will continue to expand our corporate client base and believethat our ability to attract high quality individuals will serve the Groupwell in its objective of being a first class, relationship based stockbroking business." Enquires: Andrew Stewart - CEO Tel. 020 7397 8900 Further information on the Group and its activities is available on the Group's website www.cenkos.com. Chairman's Statement I am delighted to announce a very strong set of interim results for the firsthalf of 2007. Revenue has increased by 46% from £19.5 million to £28.4 million,which represents a considerable achievement given that most commentators wouldconsider the market conditions faced during the period were less benign thanthose in the previous year. It has also been very pleasing that this result hasbeen produced by strong performances from all our teams, including the teamsrecruited in the second half of 2006. These teams, which include onespecialising in investment funds and another in providing corporate broking services to small cap companies, have now been fully integrated into the Groupand have quickly adopted the Cenkos culture. During the period our teamscompleted 16 transactions raising approximately £1.2 billion of funds for ourclients. These fund raisings covered a number of industry sectors including media, oil, minerals and technology. At 30 June we had a client base which included 65 quoted companies with acombined market capitalisation of approximately £9.2 billion. Thisrepresents a net increase of 17 clients during the period. It is very much theGroup's intention to continue to enlarge this base without compromising thequality of our client base. We are continually looking to recruit further teamswho have a proven track record who will respond positively to the Cenkosenvironment. Over the last two months world stock markets have been significantly affected bythe uncertainty caused by concerns over the US sub-prime market. Cenkos has nodirect exposure to this market, however we can not completely isolate ourselvesfrom any fall out this may cause. We entered the second half with a healthypipeline of transactions and were able to complete a number of these in theperiod since 30 June 2007. Only time will tell what longer term effects thepresent instability will have on the markets we operate in. However as Ihave said before given our low fixed cost base and an overall remunerationpackage heavily skewed towards performance, we are in a better position thanmost to deal with such an event. In the years ahead, it is our intention to continue to invest in the growth ofour core operations. Given the cash generative nature of our business, wealso aim to offer our shareholders an above average dividend return. Thiscan, of course, be affected by the market conditions prevailing during theperiod. The Board is declaring an interim dividend of 10p per share, thisdividend will be payable on 1 November 2007 to all shareholders on the registerat 5 October 2007. In the view of your Board, after this distribution theGroup still has sufficient funds to pursue its growth strategy and meet itsregulatory capital obligations. It is the Board's intention to adhere to thispolicy for all future periods. John Hodson Chairman 21 September 2007 Operating and Financial Review Financial Review In order to provide greater clarity about the 2007 and 2006 performance, set out below is unaudited proforma financial information. The pro forma statement of profits has been prepared to illustrate the effect on the profits of the Group if all individual members of Cenkos Securities LLP had been employedby the Group during the periods to 30 June 2007, 31 December 2006 and 31 May 2006. On the basis of these pro forma figures revenue in the six month period ended 30 June 2007 rose by 46% to £28.4 million(six month period to 31 May 2006: £19.5 million) and profit before tax increased by 21% to £11.4 million (2006: £9.4 million). Pro forma Unaudited Six months Six months Thirteen to to months to 30 June 2007 31 May 2006 31 December 2006 £ £ £ Continuing Operations Revenue 28,359,546 19,471,517 32,670,329 Administrative expenses (17,497,458) (10,166,290) (20,477,994) Operating profit 10,862,088 9,305,227 12,192,335 Investment revenues - interest receivable 554,064 151,606 811,526 Finance costs - interest payable (11,364) (11,848) (13,740) Profit before tax 11,404,788 9,444,985 12,990,121 Tax (3,261,346) (2,881,476) (3,978,747) Profit for the period 8,143,442 6,563,509 9,011,374 Attributable to: Equity holders of the parent 8,143,442 6,572,103 9,011,374 Minority interests - (8,594) - 8,143,442 6,563,509 9,011,374 Earnings per share Basic 11.2p 14.2p 16.2p Diluted 11.1p 14.2p 16.2p In the statements for each period the administrative expenses have beenincreased by the amount of the minority interest (30 June 2007 - £165,491, 31May 2006 - £6,975,130, 31 December 2006 - £7,762,584) as this would be theestimated increase in the Group's costs if all members of the Cenkos LLP were tobe employed by the Group. As a result the minority interest has beeneliminated. Diluted earnings per share decreased by 22% to 11.1 p from 14.2p. Whilstearnings are up 24%, this decrease is predominantly due to the fact thatthe weighted average number of shares in the current period includes thetotal number of B shares granted to the new teams, even though they are partlypaid shares, as these shares are entitled to a full dividend payout. We are delighted by the first half performance of the Group, which represents asignificant increase of 233% in profitability on the seven months to 31 December2006 and increase of 24% in profitability on the six months to 31 May 2006. Wehave seen an increase in both secondary issues and other corporate transactions including mergers and acquisitions advisory work as well as a 15%increase in placing fees received from our primary activity. The Board declaresan interim dividend of 10p per share The level of dividend payout reflects thepolicy set by the Board and set out in our last annual report and accounts. Corporate broking and advisory We have seen another period of growth, not only in turnover, but also in thenumber of transactions completed and funds raised. We continue to grow thenumber of retained corporate clients and have a firm strategy in place toattract new clients. The Group was nominated adviser or corporate broker to 42companies as at 30 June 2007. During the period, the Group also raised some £1billion for its clients. During the period we have added to these teamswhich we believe will allow us to continue the growth in this area. Finally wehave taken the decision to set up an office in Edinburgh. In our view thiswill allow us to service the important Scottish institutions and companies moreeffectively. Institutional equities The institutional equities team currently provides research-driven investmentrecommendations to institutional clients. At present, the team hasparticular expertise in the business services, and consumer sectors, havingrecruited professionals who were previously top-ranked analysts in these sectors. The Group intends to expand its institutional equities team byrecruiting further professionals with specific sector expertise.The team focuses on servicing large institutional and hedge fund clients, aswe believe that this avoids the reduction in margins caused by servicing a larger number of smaller clients. Market making The Group has market making capabilities to support the other services that itprovides to its clients. The Group makes markets in the securities of allcompanies where it has a broking relationship, its strategy being to takesmall positions in a wide range of stocks, thereby providing liquidity. The Group does not engage in proprietary trading. By following this strategy we havenot experienced significant losses on our market making positions as aresult of the recent instability in world stock markets. Investment funds In 2006, the Group recruited an investment funds team. This team provides abroad range of services, including corporate broking, corporate finance,market making and sales, with a sole focus on investment funds. Theyact as counterparty for a large number of investment fund investors, and have detailed knowledge of their asset allocation strategies enabling successfulsecondary distribution and primary sales. The Group currently makes markets inapproximately 200 investment fund securities, and by 30 June 2007, the Grouphad been appointed as corporate broker to 23 investment funds raising over £200 million, having completed 2 transactions. Offshore wealth management and stockbroking services Offshore wealth management and stockbroking services are provided through CenkosChannel Islands Limited, a 75 per cent. owned subsidiary of the Company,which was founded in 2005 and is based in Guernsey. Varying levels ofstockbroking services, from discretionary to execution-only, are provided primarily to high net-worth individuals, and also to financial intermediariesand institutions. The business during the period has grown both in terms ofthe number of clients and funds managed, these now stand at 386 and £212million respectively. We have recently recruited a team of experienced professionals to set up a business in Jersey servicing the stockbrokingrequirements of high net worth private clients. This business will, we feel,complement our already successful Guernsey based operation. Fund Management Business Through a subsidiary we have recently set up a fund management business. Thisoperation already has an investment management agreement with a £60 million AIMquoted fund. The fund, The Rapid Realisations Fund Ltd, specialises in makinginvestments in pre-IPO companies. The team we have recruited to run thisbusiness has a well established track record in this area. Whilst we believethat this will be a valuable contributor to the Group in the future, it isunlikely to make a positive contribution until 2008. Balance Sheet As can be seen from the balance sheet, the investment funds team uses (and willcontinue to use) significant levels of capital to take positions in theshares of quoted investment funds. These positions primarily facilitateinstitutional client trading and support the strategies of its investment fund clients. As the investment funds business grows, the level ofcapital used is expected to increase. In order to reduce the amount of capitalused we have arranged a substantial banking facility to fund a portion ofthis activity. This obviously increases our return on capital produced fromthis activity. During the period, we have increased the amount of secondary trading, weundertake. This has caused a significant increase in both our tradereceivables and payables. The amounts included represent outstandingtrades at the balance sheet date. In addition, net assets are up 221% to £44.1 million (2006: £13.7 million) dueto an increase in retained profits and the issue of B shares. People We have continued to invest in our staff whilst maintaining a tight control overon overhead base and are looking to acquire further high quality teams andbusinesses. We believe that these teams should be rewarded by a mixture of bonusand equity based payments that align their interests with that of our shareholders. We have assembled an excellent team and I should like to thankthem all for their achievements and hard work. We have made a commitmentto grow the business and we look forward to their continued support. Outlook We are pleased to have started the second half of the financial year on apositive note. At present the market is experiencing turbulent conditions.However we have an encouraging pipeline and are confident that with ourentrepreneurial philosophy we will continue to grow our revenues. Against this background, we will continue to expand our corporate client base andbelieve that our ability to attract high quality individuals will servethe Group well in its objective of being a first class, relationship basedstock broking business. Andy Stewart Chief Executive Officer 21 September 2007 Consolidated Income Statement For the six month period ended 30 June 2007 01 January 07 01 December 01 December 05 05 Note to to to 30 June 07 31 May 06 31 December 06 £ £ £ Unaudited Unaudited Audited Continuing Operations Revenue 28,359,546 19,471,517 32,670,329Administrative expenses (17,331,967) (3,191,160) (12,715,410) Operating profit 11,027,579 16,280,357 19,954,919 Investment income - 554,064 151,606 811,526interest receivable Finance costs - interest payable (11,364) (11,848) (13,740) Profit before tax 11,570,279 16,420,115 20,752,705Tax 2 (3,261,346) (2,881,476) (3,978,747) Profit for the period 8,308,933 13,538,639 16,773,958 Attributable to: Equity holders of the parent 8,143,442 6,572,103 9,011,374Minority interests 165,491 6,966,536 7,762,584 8,308,933 13,538,639 16,773,958 Earnings per share Basic 4 11.2p 14.2p 16.2p Diluted 4 11.1p 14.2p 16.2p All amounts shown in the consolidated financial statements derive from continuing operations of the Group. Consolidated Balance Sheet As at 30 June 2007 30 June 07 31 May 06 31 December 06 £ £ £ Unaudited Unaudited Audited Non-current assets Property, plant and equipment 815,075 339,498 737,174 Available for sale investments 5,023,144 5,067,993 3,229,164Deferred tax asset 463,156 - 158,356 6,301,375 5,407,491 4,124,694 Current assets Trading investments - long positions 23,451,142 2,719,817 13,123,643 Trade and other receivables 99,942,701 7,040,666 39,620,045Cash and cash equivalents 9,180,779 16,876,878 9,780,584 132,574,622 26,637,361 62,524,272 Total assets 138,875,997 32,044,852 66,648,966 Current liabilities Trading investments - short positions (7,666,170) (184,025) (5,127,238) Trade and other payables (85,954,200) (16,921,273) (26,968,091) (93,620,370) (17,105,298) (32,095,329) Net current assets 38,954,252 9,532,063 30,428,943 Non-current liabilities Deferred tax liabilities (1,205,226) (1,218,681) (669,032) Total liabilities (94,825,596) (18,323,979) (32,764,361) Net assets 44,050,401 13,720,873 33,884,605 Equity Share capital 725,936 482,283 725,936Share premium account 22,699,777 4,340,551 22,733,114Revaluation reserves 2,812,195 2,843,589 1,556,408Retained earnings 17,698,501 6,031,043 8,843,146 Equity attributable to equity holders of the parent 43,936,409 13,697,466 33,858,604 Minority interests 113,992 23,407 26,001 Total equity 44,050,401 13,720,873 33,884,605 Consolidated cash flow statement For the six month period ended 30 June 2007 01 January 07 01 December 01 December 05 05 to to to 30 June 07 31 May 06 31 December 06 £ £ £ Unaudited Unaudited Audited Profit for the period 8,308,933 13,538,639 16,773,958Adjustments for: Finance costs (542,700) (139,758) (797,786)Tax 3,261,346 2,881,476 3,978,747Depreciation of property, plant and 103,251 46,834 133,552equipment Share-based payment expense 675,125 - 372,832 Operating cash flows before movements in working capital 11,805,955 16,327,191 20,461,303 Net increase in trading investments (7,788,567) (2,513,252) (7,973,865)(Increase)/decrease in trade and other receivables (60,305,303) 661,193 (14,198,456)Increase in trade and other payables 55,454,859 4,657,537 13,452,715Distributions to minority interests (77,500) (6,975,130) (7,762,584) Net cash (outflow)/inflow from operating activities (910,556) 12,157,539 3,979,113 Interest paid (11,364) (11,848) (13,605)Taxation paid (106) (2,883,221) (2,891,208) Net cash (outflow)/inflow from operating activities (922,026) 9,262,470 1,074,300 Investing activities Interest received 536,710 151,606 535,729Purchase of property, plant and equipment (181,152) (21,887) (506,281) Purchase of available-for-sale investments - - - Net cash generated by investing activities 355,558 129,719 29,448 Financing activities Dividends paid - (4,822,834) (4,822,834)Proceeds from issue of equity shares - 420,000 1,612,147 Fees related to issue of equity shares (33,337) - - Redemption of preference shares - (400,000) (400,000)Issue of capital by subsidiary to minority interests - 26,000 26,000 Net cash used in financing activities (33,337) (4,776,834) (3,584,687) Net (decrease)/increase in cash and cash equivalents (599,805) 4,615,355 (2,480,939) Cash and cash equivalents at beginning of period 9,780,584 12,261,523 12,261,523 Cash and cash equivalents at end of period 9,180,779 16,876,878 9,780,584 Consolidated statement of changes in equity For the six months ended 31 May 2006, thirteen months ended 31 December 2006 and six months ended 30 June 2007 Share Share Revaluation Retained Minority Total capital premium reserve earnings Interests £ £ £ £ £ £ Attributable to equity holders of the parent at 1 December 2005 440,283 3,962,551 2,325,452 4,281,774 6,001 11,016,061 Shares issued 42,000 378,000 - - - 420,000Capital contributed by minority interest - - - - 26,000 26,000 Retained profit for the period - - - 6,572,103 - 6,572,103Profit allocated to minority interests - - - - 6,966,536 6,966,536 Distribution of profit to minority interest - - - - (6,975,130) (6,975,130) Revaluation of available-for-sale investments - - 518,137 - - 518,137 Dividends paid - - - (4,822,834) - (4,822,834) Attributable to equity holders of the parent at 31 May 2006 482,283 4,340,551 2,843,589 6,031,043 23,407 13,720,873 Shares issued 243,653 20,441,945 - - - 20,685,598Retained profit for the period - - - 2,439,271 - 2,439,271Profit allocated to minority interests - - - - 796,048 796,048 Distribution of profit to minority interest - - - - (787,454) (787,454) Transfer of amounts to payables on retirement of minority interest members - - - - (6,000) (6,000) Revaluation of available-for-sale investments - - (1,616,771) - - (1,616,771) Reversal of deferred tax liability on revaluation of available-for-sale investments - - 329,590 - - 329,590 Credit to equity for equity-settled share-based payments - - - 372,832 - 372,832 Share issue costs taken through Share Premium - (2,049,382) - - - (2,049,382) Attributable to equity holders of the parent at 31 December 2006 725,936 22,733,114 1,556,408 8,843,146 26,001 33,884,605 Consolidated statement of changes in equity For the six months ended 31 May 2006, thirteen months ended 31 December 2006 and six months ended 30 June 2007 (continued) Share Share Revaluation Retained Minority Total capital premium reserve earnings Interests £ £ £ £ £ £ Attributable to equity holders of the parent at 31 December 2006 725,936 22,733,114 1,556,408 8,843,146 26,001 33,884,605 Retained profit for the period - - - 8,308,933 - 8,308,933Revaluation of available-for-sale investments - - 1,793,980 - - 1,793,980 Deferred tax liability arising on fair valuation of available-for-sale investments - - (538,193) - - (538,193) Profit allocated to minority interests - - - (165,491) 165,491 - Distribution of profit to minority interest - - - - (77,500) (77,500) Credit to equity for equity-settled share-based payments - - - 675,125 - 675,125 Deferred tax asset arising on share-based payments charged to equity - - - 36,788 - 36,788 Share issue costs taken through Share Premium - (33,337) - - - (33,337) At 30 June 2007 725,936 22,699,777 2,812,195 17,698,501 113,992 44,050,401 Notes to the financial information 1. Accounting Policies General Information Cenkos Securities plc ("the Company") is a company incorporated in UnitedKingdom under the Companies Act 1985. The Company's principal activity isinvestment banking. These financial statements are presented in poundssterling because that is the currency of the primary economic environment inwhich the Group operates. Basis of accounting The accounting policies used in arriving at these interim figures are consistentwith those followed in the preparation of the Group's annual financialstatements for the thirteen month period ended 31 December 2006. While the financial information included in this preliminary announcement hasbeen computed in accordance with International Financial ReportingStandards (IFRSs) as adopted by the European Union, this announcement does notitself contain sufficient information to comply with IFRSs. The Group's 2006statutory account comply with IFRSs. The financial information contained in this interim report does not constitutethe Company's statutory accounts within the meaning of section 240 of theCompanies Act 1985. The comparative information contained in this reportfor the year ended 31 December 2006 does not constitute the statutory accountsfor that financial period. The statutory accounts for the year ended 31 December2006 have been reported on by the Company's auditors, Deloitte & ToucheLLP, and delivered to the Registrar of Companies. The report of theauditors was unqualified and did not contain a statement under section 237 (2)or (3) of the Companies Act 1985. The interim financial information is unaudited and was approved by the Board ofDirectors on 20th September 2007. These financial statements have been prepared on the historical cost basis,except for the revaluation of certain financial instruments. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions thataffect the reported amounts of assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management'sbest knowledge of the amount, event or actions, actual results ultimately maydiffer from those of estimates. 2. Tax The tax charge comprises: 30 June 07 31 May 06 31 December 06 £ £ £ Current tax United Kingdom corporation tax at 30% (2005 - 30%) based on the profit for the period 3,531,355 2,837,631 4,091,258 Adjustment in respect of prior period - 43,845 43,845 Total current tax 3,531,355 2,881,476 4,135,103 Deferred tax Credit on account of timing differences (270,009) - (158,356) Charge on account of timing differences - - 2,000 Total deferred tax (270,009) - (156,356) Total tax on profit on ordinary activities 3,261,346 2,881,476 3,978,747 Notes to the financial information (continued) 2. Tax (continued) The tax charge for the period differs from that resulting from applying the standard rate of UK corporation tax of 30% to the profit before tax for the reasons set out in the following reconciliation. 30 June 07 31 May 06 31 December 06 £ £ £ Profit on ordinary 11,570,279 16,420,115 20,752,705 activities before tax Tax on profit on ordinary activities at the UK corporation tax rate of 30% (2005: 30%) 3,471,084 4,926,034 6,225,812 Tax effect of: Depreciation in excess of capital allowances 2,333 1,664 (22,990) Expenses that are not deductible in determining taxable profits 89,352 26,662 91,161 Different tax rates of subsidiaries operating in other jurisdictions (16,211) (63,046) (31,632) Income not subject to corporation tax (49,647) (2,053,683) (2,327,449) Deferred Tax on share based payments (235,565) - - Adjustment in respect of prior period - 43,845 43,845 Tax expense for the period 3,261,346 2,881,476 3,978,747 In addition to the amount charged to the income statement, deferred tax relating to the fair value of the Group's available for sale investments amounting to £538,193 has been charged directly to equity (2006: £329,590 credited directly to equity). 3. Dividends Amounts recognised as distributions to equity holders in the period: 30 June 07 31 May 06 31 December 06 £ £ £ Interim dividend for the period - 4,822,834 4,822,834 The proposed interim dividend for 2007 of 10p per share (2006: 10p per share.This dividend was paid whilst the company was private and representedthe distribution of retained profits for the period to 30 November 2005and did not relate to profits earned during 2006, although payment was made in the tax year 2006/2007) was approved by the Board on 20 September 2007and has not been included as a liabilitiy as at 30 June 2007. Thedividend will be payable on 1 November 2007 to all shareholders on theregister at 5 October 2007. Notes to the financial information (continued) 4. Earnings per share The calculation of the basis and diluted earnings per share is based on the following data: 30 June 07 31 May 06 31 December 06 £ £ £ Earnings Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent 8,143,442 6,572,103 9,011,374 Effect of dilutive potential ordinary shares: Share options - - - Earnings for the purpose of 8,143,442 6,572,103 9,011,374 diluted earnings per share No. No. No. Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share 72,593,670 46,150,320 55,503,588 Effect of dilutive potential ordinary shares: Share options 445,787 - 57,870 Weighted average number of ordinary shares for the purpose of diluted earnings per share 73,039,457 46,150,320 55,561,458 The denominators for the purpose of calculating both basis and diluted earningsper share have been adjusted to reflect the sub-division of shares on31 October 2006. The weighted average number of shares considered forthe period also includes the total number of B shares, even thoughthey are partly paid shares, as these shares are entitled to a full dividendpayout. Independent review report to Cenkos Securities plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidatedincome statement, the consolidated balance sheet, the consolidated cashflow statement, the consolidated statement of changes in equity and related notes 1 to 4. We have read the information contained in the interimreport and considered whether it contains any apparent misstatement or material inconsistencies with the financial information. This report is made solely to the Company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertakenso that we might state to the Company those matters we are requiredto state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company, for our review work,for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the Directors. TheDirectors are also responsible for ensuring that the accountingpolicies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the UnitedKingdom. A review consists principally of making enquiries of groupmanagement and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whetherthe accounting policies and presentation have been consistently appliedunless otherwise disclosed. A review excludes audit procedures such astests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland)and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the sixmonths ended 30 June 2007. Deloitte & Touche LLP Chartered Accountants London, United Kingdom 21 September 2007 END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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