14th Jan 2008 07:01
IG Group Holdings plc14 January 2008 14 January 2008 IG GROUP HOLDINGS PLC Interim Results for the six months ended 30 November 2007 IG Group Holdings plc ("IG" or "the Group") today announces interim results forthe six month period ended 30 November 2007. Highlights • Turnover up 54% at £85.8 million • EBITDA1 up 60% at £48.4 million • Strong EBITDA margin of 56.4% • Earnings per share up 61% at 9.99p • Interim dividend of 3.0p per share • Paris and Madrid operations successfully opened • Acquisition of US exchange in December 2007 Tim Howkins, Chief Executive "IG continues to deliver excellent growth across all areas of the business, witha substantial increase in both revenue and profits. This continued success hasbeen underpinned by consistently strong levels of client recruitment, both inthe UK and abroad. Current trading is strong and IG is well positioned forfurther growth." Financial highlights Unaudited Unaudited six months six months ended ended 30 November 30 November 2007 2006 Growth £000 £000 % Revenue 85,778 55,673 +54%EBITDA1 48,419 30,350 +60%Profit before taxation 48,197 29,588 +63%Profit after taxation 33,143 20,416 +62%Basic earnings per share 10.16p 6.25p +63%Diluted earnings per share 9.99p 6.20p +61%Interim dividend per share 3.00p 2.00p +50% 1 EBITDA represents earnings before exceptional administrative costs,depreciation, amortisation charges, amounts written off property, plant andequipment and intangible, taxation, interest payable on debt and interestreceivable on corporate cash balances and includes interest receivable onclients' money net of interest payable to clients. Chief Executive's statementFor the six months ended 30 November 2007 Our revenue in the six months to 30 November 2007 was £85.8m, an increase of 54%over the same period last year. Profit before tax increased by 63% to £48.2m.Even when viewed against our track record of nine years of sustained compoundannual growth in revenue of 40%, these growth levels are excellent. We couldnot achieve such high levels of growth year after year without the talented andhardworking team here at IG. I would like to thank all of our people worldwidefor helping to deliver such good results. Market volatility undoubtedly played a part in the growth that we have seen inthe last six months. Volatility is an important short-term driver of clientactivity as it makes trading of the financial markets more interesting forexisting clients and it also helps with the recruitment of new clients. While heightened market volatility certainly contributed, we do not believe thatthe rise in our growth rate is solely as a result of it. Our long-run growth isdriven by the rate at which we recruit new clients and I view that as the keylead-indicator of the strength of the business. The strong momentum seen at theend of the last financial year in relation to the number of financial accountsopened has continued into this financial year. Two years ago we were, onaverage, opening 650 UK spread betting accounts and 350 CFD accounts worldwideper month. Both figures have increased progressively and over the last quarterwe averaged more than 1,900 spread betting accounts and around 1,400 CFDaccounts opened per month. I think we are seeing a steady shift in investor behaviour. Many people want totake more ownership of their own financial affairs and, with at least aproportion of their investable wealth, they want to manage that money activelythemselves, trading a broad range of asset classes. If you are an activeshort-term speculator then both spread betting and CFDs give you leverage andeasy, transparent access to virtually every significant global financial market. In falling markets they give you the ability to go short and profit from thefall. In addition, the Internet makes it increasingly easy for the investor todo his own research and form his own market views. Alongside these externalfactors we have invested heavily in technology and are devoting increasingresources to client education and to marketing. For all these reasons we haveseen increasing demand in the UK and the same pattern is being replicated in ourAustralian office, which we opened five years ago. We have businesses now infour European countries and I believe that, in time, all of these have potentialsimilar to that of the UK or Australia. In July we launched our new online financial dealing platform, PureDeal, for UKspread betting. This platform has been very well received by our clients and Ibelieve that the increase in client recruitment is thanks in part to the qualityof our technology. We have continued to roll this platform out across our CFDoffering with it going live for UK and Australian CFDs in November and acrossmost of our European offerings in December. The roll-out of PureDeal will besubstantially completed by the end of this month when we launch it in Singapore.In each case the launch of PureDeal is accompanied by a major re-working ofour web-site, a programme of client communication followed by an advertisingcampaign show-casing the features of PureDeal. We are continually developingand refining PureDeal, and many of our other systems, so as to make the userexperience as rich as possible. Our client education programme, TradeSense, has now also been rolled out acrossvirtually all of our operations world-wide. The roll-out will be completedlater this month when it is launched in Singapore. Financial business Overall our financial business achieved revenue growth of 60%, up to £79.4m.The proportion of this revenue which derives from clients based outside the UKis up to 27% of all financial business, from 21% in the corresponding periodlast year. UK Our UK financial betting business continues to deliver strong growth. Revenuefor this business was £48.2m compared to £33.7m in the corresponding period lastyear, an increase of 43%. In the six months to 30 November 2007 we recruited10,100 financial spread betting clients in our UK business, up almost 100% onthe corresponding period last year. Revenue from UK based CFD clients was up 67.5% to £9.6m. Accounts opened in theperiod were 2,513, again an increase of almost 100% on the corresponding periodlast year. Europe Revenue from the rest of Europe rose by 94% to £8.9m. The European operationsthat we established in the Autumn of 2006 have continued to show good growth inrevenue and in rate of account opening. We continue to see good levels ofbusiness from clients in Ireland and our revenue from Irish clientsapproximately doubled to £4m. The advent of the Markets in Financial Instruments Directive ("MiFID") allowedus to set up offices in France and Spain, both of which started to recruitclients in early November. It is obviously too early to draw any conclusions,but the early signs from both of these new markets are encouraging with bothgetting good levels of interest. Together our offices in Paris and Madrid willadd about £2.5m to our annual costs. We do not anticipate that they willcontribute materially to our revenue in the current year, but in the longer termI believe they will all be important sources of revenue. Asia Pacific Asia Pacific delivered our strongest growth with revenue up by 124% to £12.1m.This growth was driven primarily by a very strong performance by our Australianoperation, but also reflects a strong performance from our Singapore officewhich we established in the Spring of 2006. While Singapore is only a smallcountry with a population of around 4.5m, we are pleased with the levels ofaccount opening and revenue this office has generated. In the six month periodour Singapore office opened almost 750 accounts. Our Australian office openedalmost 4,000 accounts in the six month period, 54% more than in thecorresponding period of the prior year. Account opening in Australia is nowrunning at a similar rate to that of our UK spread betting business two yearsago. US In December we completed our acquisition of HedgeStreet Inc, which is a USexchange regulated by the Commodity Futures Trading Commission ("CFTC"). Ourfirst step in the development of that business will be to re-open the exchangewith its existing, relatively limited, offering of binary options. We hope todo that before the end of this month. We have plans to offer additionalproducts on the exchange and we will continue to develop the product set duringthe course of 2008. We are also in the process of activating our US-based forex business, IG MarketsInc, which will offer OTC forex contracts, including OTC forex binary options.We anticipate that this business will commence trading in March. We have leased office space in Chicago and begun recruiting the additional staffthat we need. We expect that these two new US businesses will add approximately£2m to our costs in the second half of the year. While neither of these USbusinesses is likely to contribute significant revenue in this financial year,in the longer term, I believe that the US should become an interesting andprofitable market for us. Future Developments We have made significant progress over the last two years in our strategy ofinternational expansion and now have offices or operations targeting many of themajor economies worldwide. Some of these are fledgling; some are alreadycontributing significantly. Germany, Italy and Singapore, all establishedduring the course of 2006, together accounted for 4% of the Group's revenue inNovember. More importantly, they made up 24% of our global CFD accounts openedthat month. There is now a great deal of work to be done, particularly onmarketing and consumer education, to build these newer operations intosubstantial businesses. This will take time and we expect the businesses toexperience different growth rates reflecting the wider spectrum of cultures andrisk attitudes of our growing client base. We continue to evaluate new markets, in particular in Asia, and I am hopefulthat during the course of 2008 we will make further progress in extending thegeographic reach of our business. Sport Our sports business grew by 6%, up to revenue of £6.3m. This growth rate isdistorted by the inclusion of the football World Cup in the comparator period,which is the most significant event in the four year sporting calendar. Dividend An interim dividend of 3p per share (2006: 2p), amounting to £9.8m will be paidin February. Current trading and outlook While it remains difficult to predict future trends in volatility or customerreaction to any change in market conditions, IG is well positioned for furthergrowth. We have continued to see good levels of client activity since the period end.All parts of the business are performing well and we remain confident about thegroup's prospects for the current year. Tim HowkinsChief Executive14 January 2008 For further information please contact: IG Group 020 7896 0011Tim HowkinsSteve Clutton Financial Dynamics 020 7269 7114Robert BailhacheNick Henderson www.iggroup.com Analyst Presentation There will be an analyst presentation on the results at 09:30am on Monday 14January 2008 at Financial Dynamics, Holborn Gate, 26 Southampton Buildings,London WC2A 1PB. Those analysts wishing to attend are asked to contact FinancialDynamics. The presentation will also be accessible via a conference call forthose unable to attend in person. The international dial-in is +44 (0) 1452 560304 and the passcode is 29861517. A web cast of the presentation will be available at www.iggroup.com. Interim consolidated income statementfor the six months ended 30 November 2007 Unaudited Unaudited Audited six months six months year ended ended ended 30 November 30 November 31 May 2007 2006 2007 Notes £000 £000 £000 Revenue 85,778 55,673 121,990 Cost of sales (4,882) (2,912) (4,214) Gross Profit 80,896 52,761 117,776 Administrative expenses (39,971) (27,603) (58,574) Operating profit 40,925 25,158 59,202 Finance revenue 16,361 8,703 22,604Finance costs (9,089) (4,273) (12,912) 48,197 29,588 68,894 Profit before taxation Tax expense (15,054) (9,172) (21,027) Profit for the period 33,143 20,416 47,867 Attributable to:Equity holders of the parent 33,143 20,416 47,867 Earnings per share- basic 4 10.16p 6.25p 14.67p- diluted 4 9.99p 6.20p 14.52p Dividends per share- interim proposed 5 3.00p 2.00p -- interim paid 5 - - 2.00p- final paid 5 - - 6.50p The interim proposed dividend of 3.0p per share was declared after the periodend and is not included in the results. The total dividend will amount to£9,825,000. All of the group's revenue and profit for the period were derived fromcontinuing operations. Interim consolidated balance sheetas at 30 November 2007 Unaudited Unaudited Audited 30 November 30 November 31 May 2007 2006 2007 Notes £000 £000 £000 Non current assetsProperty, plant and equipment 6 8,054 9,602 8,158Intangible assets 107,440 107,517 107,675Deferred tax assets 5,861 2,927 3,940 121,355 120,046 119,773Current assetsTrade receivables 7 283,980 192,242 352,628Prepayments and other receivables 3,939 3,675 3,954Cash and cash equivalents 8 423,849 350,052 484,556 711,768 545,969 841,138Total assets 833,123 666,015 960,911 Current liabilitiesTrade payables 9 581,111 461,592 726,144Other payables 17,907 12,215 18,472Income tax payable 16,812 13,999 14,547 615,830 487,806 759,163Non-current liabilitiesRedeemable preference shares 40 40 40 40 40 40Total Liabilities 615,870 487,846 759,203 NET ASSETS 217,253 178,169 201,708 Capital and reservesEquity share capital 16 16 16Share premium 125,235 125,235 125,235Treasury shares (704) (503) (503)Retained earnings 92,666 53,381 76,920Shareholders' equity 217,213 178,129 201,668Minority interests 40 40 40TOTAL EQUITY 217,253 178,169 201,708 Interim consolidated statement of changes in equityfor the six months ended 30 November 2007 (unaudited) Own shares Share held in Employee Share premium Benefit Retained Shareholders' Minority Total capital account Trusts earnings equity interests Equity £000 £000 £000 £000 £000 £000 £000 Balance at 1 June 2006 16 125,235 - 45,157 170,408 40 170,448 Total recognised income and expense - - - 20,416 20,416 - 20,416for the periodEmployee share-based payments - - - 908 908 - 908Purchase of own shares held in - - (503) - (503) - (503)Employee Benefit TrustEquity dividends paid - - - (13,100) (13,100) - (13,100) Balance at 30 November 2006 16 125,235 (503) 53,381 178,129 40 178,169 Profit for the period - - - 27,451 27,451 - 27,451Excess of tax deduction benefit on - - - 1,814 1,814 - 1,814share-based payments recogniseddirectly in equityTotal recognised income and expense - - - 29,265 29,265 - 29,265for the periodEmployee share-based payments - - - 824 824 - 824Equity dividends paid - - - (6,550) (6,550) - (6,550) Balance at 1 June 2007 16 125,235 (503) 76,920 201,668 40 201,708 Profit for the period - - - 33,143 33,143 - 33,143Excess of tax deduction benefit on - - - 1,710 1,710 - 1,710share-based payments recogniseddirectly in equityTotal recognised income and expense - - - 34,853 34,853 - 34,853for the periodEmployee share-based payments - - - 2,181 2,181 - 2,181Purchase of treasury shares - - (201) - (201) - (201)Equity dividends paid - - - (21,288) (21,288) - (21,288) Balance at 30 November 2007 16 125,235 (704) 92,666 217,213 40 217,253 Interim consolidated cash flow statementfor the six months ended 30 November 2007 Unaudited Unaudited Audited six months six months year ended ended ended 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Operating activities 40,925 25,158 59,202 Operating profitAdjustments to reconcile operating profit to netcash flow from operating activities: Depreciation of property, plant and equipment 1,936 1,589 3,513 Amortisation of intangible assets 420 417 856 Share-based payments 2,210 908 1,842 Property, plant and equipment written off 15 98 211 Intangible assets written off - - 10 Impairment of trade receivables 1,148 768 1,416 (Increase)/decrease in trade and other 67,464 (67,704) (226,563)receivables Increase/(decrease) in trade and other (146,810) 175,175 442,587payablesCash (used in)/generated from operations (32,692) 136,409 283,074Income taxes paid (13,000) (15,604) (26,110)Net cash flow from operating activities (45,692) 120,805 256,964 Investing activitiesInterest received 16,409 8,288 21,000Purchase of property, plant and equipment (1,831) (7,196) (7,793)Payments to acquire intangible fixed assets (170) (574) (1,414)Purchase of subsidiary undertakings - (235) -Net cash flow from investing activities 14,408 283 11,793 Financing activitiesInterest paid (9,744) (4,273) (11,508)Equity dividends paid to equity holders of the (21,288) (13,100) (19,650)parentPurchase of own shares held in Employee (201) (503) (503)Benefit TrustRepayment of financial liabilities - (92) (92)Payment of redeemable preference share dividends - - (3)Net cash flow used in financing activities (31,233) (17,968) (31,756) Net (decrease)/increase in cash and cash (62,517) 103,120 237,001equivalents Cash and cash equivalents at the beginning of the 484,556 247,277 247,277periodEffect of foreign currency differences on operating 1,810 (345) 278balances of cash and cash equivalents Cash and cash equivalents at the end of the period 423,849 350,052 484,556 Notes to the interim condensed consolidated financial statements At 30 November 2007 (unaudited) 1. General information The interim condensed consolidated financial statements of IG Group Holdings plcand its subsidiaries for the six months ended 30 November 2007 were authorisedfor issue by the board of directors on 14 January 2008. IG Group Holdings plc isa public limited company incorporated and domiciled in England and Wales. TheCompany's ordinary shares are traded on the London Stock Exchange. The interim information, together with the comparative information contained inthis report for the year ended 31 May 2007, does not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. However,the information has been reviewed by the company's auditors, Ernst & Young LLP,and their report appears at the end of the interim financial report. Thefinancial statements for the year ended 31 May 2007 have been reported on by thecompany's auditors, Ernst & Young LLP, and delivered to the Registrar ofCompanies. The report of the auditors on those accounts was unqualified and didnot contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Basis of preparation and accounting policies Basis of preparation The interim condensed consolidated financial statements for the six months ended30 November 2007 have been prepared in accordance with IAS 34 Interim FinancialReporting and the disclosure requirements of the Listing Rules. The interim condensed consolidated financial statements do not include all theinformation and disclosures required in the annual financial statements andshould be read in conjunction with the Group's annual financial statements forthe year ended 31 May 2007. The interim condensed consolidated financial statements are presented inSterling and all values are rounded to the nearest thousand pounds (£000) exceptwhere otherwise indicated. Significant accounting policies The accounting policies adopted in the preparation of the interim condensedconsolidated financial statements are consistent with those followed in thepreparation of the Group's annual financial statements for the year ended 31 May2007. 3. Segment information The operating businesses are organised and managed separately according to thenature of the products provided, with each segment representing a strategicbusiness unit that offers different products and serves different markets. Primary reporting format - business segments The primary segment reporting format is by business segment as the Group's risksand rates of return are affected predominantly by differences in the productsprovided. The financial segment includes financial binaries, which were reportedseparately in the previous half year. The directors consider that includingfinancial binaries within the financial segment is appropriate for the followingreasons: financial binaries are viewed by most of our clients as an adjunct tothe rest of our financial product range, rather than as a stand-alone product;financial binaries and other financial businesses share common management andprocesses; and financial binaries are predominantly traded by the same clientsas other financial clients on their regulated accounts. Figures for the priorsix months have been restated to aid comparability. The Group operates in two principal areas of activity: financial and sport. Thetypes of financial instrument included within each of the above categories are: Financial Spread bets on equities, equity indices, precious and base metals, softcommodities, exchange rates, interest rates and other financial markets; spreadbets on options on certain of these products; exchange traded futures andoptions. Spot and forward contracts for foreign exchange and contracts fordifferences (CFDs) on shares, indices and other financial markets. Financialbinaries, being fixed odds bets on equities, equity indices, precious and basemetals, soft commodities, exchange rates, interest rates and other financialmarkets. Sports Spread bets and fixed odds bets on sporting and other events. Unaudited Unaudited Audited six months six months year ended ended ended 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000RevenueFinancial 79,447 49,693 109,791Sports 6,331 5,980 12,199 85,778 55,673 121,990 Segment resultFinancial 61,663 35,960 87,948Sports 2,056 1,949 3,679 63,719 37,909 91,627Unallocated administrative expenses (17,651) (9,663) (25,865)Unallocated finance revenue 2,242 1,385 3,426Unallocated finance costs (113) (43) (294)Profit before taxation 48,197 29,588 68,894Tax expense (15,054) (9,172) (21,027)Profit for the period 33,143 20,416 47,867 Unallocated administrative expenses comprise overheads, including informationtechnology costs, which are not specifically attributable to business segments. Secondary reporting format - geographical segments Geographical segment information for revenue and profit is based upon clientlocation. The UK segment includes all clients located in the UK; Europe includesall clients located in Ireland and continental Europe; Asia Pacific includes allclients located in Australasia, Asia and the Far East; all other clients areclassified as Rest of World. The Group has offices in the United Kingdom, Australia, Singapore, France, Spainand Germany. In the six months to 30 November 2006 geographical segments werereported according to office location. The Australia and Singapore segment dealtwith clients serviced from the Melbourne and Singapore offices. The UK segmentincluded the results of all other business. To aid comparability the figures forthe six months ended 30 November 2006 have been restated. Unaudited Unaudited Audited six months six months year ended ended Ended 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000RevenueUnited Kingdom 64,124 45,278 96,841Europe 8,899 4,581 11,771Asia Pacific 12,068 5,509 12,704Rest of World 687 305 674 85,778 55,673 121,990 4. Earnings per share Basic earnings per share is calculated by dividing the profit for the periodattributable to ordinary equity holders of the parent by the weighted averagenumber of ordinary shares in issue during the period, excluding shares purchasedby the Company and held as own shares in Employee Benefit Trusts. Dilutedearnings per share is calculated using the same profit figure as that used inbasic earnings per share and by adjusting the weighted average number ofordinary shares outstanding to assume conversion of all dilutive ordinaryshares. The following reflects the income and share data used in the basic and dilutedearnings per share computations: Unaudited Unaudited Audited six months six months year ended ended ended 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Basic and diluted earnings attributable to 33,143 20,416 47,867equity shareholders Basic weighted average number of equity shares 326,252,385 326,392,804 326,343,794Effect of share-based payments 5,501,599 2,995,258 3,288,896Diluted weighted average number of equity shares 331,753,984 329,388,062 329,632,690 Basic earnings per share 10.16p 6.25p 14.67p Diluted earnings per share 9.99p 6.20p 14.52p 5. Dividends paid and proposed Unaudited Unaudited Audited six months six months year ended ended ended 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Amounts recognised as distributions to equity - - 6,550holders in the period: Interim dividend of 2.00p for 2007Final dividend of 6.50p for 2007 (2006: 4.00p) 21,288 13,100 13,100 21,288 13,100 19,650 9,825 6,550 - Proposed but not recognised as distributions toequity holders in the period: Interim dividend of 3.00p for 2008 (2007: 2.00p)Final dividend of 6.50p for 2007 - - 21,288 9,825 6,550 21,288 The proposed interim dividend for 2008 of 3.00p per share amounting to£9,825,000 was approved by the board on 14 January 2008 and has not beenincluded as a liability at 30 November 2007. This dividend will be paid on 28February 2008 to those members on the register at the close of business on 25January 2008. 6. Property, plant and equipment During the six months ended 30 November 2007 the group acquired assets with acost of £2,000,763. This comprised leasehold improvements of £716,472 andcomputer and other equipment amounting to £1,284,291. 7. Trade receivables Unaudited Unaudited Audited 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Amounts due from brokers 271,200 187,055 345,076Amounts due from clients 12,780 5,187 7,552 283,980 192,242 352,628 8. Cash and cash equivalents Unaudited Unaudited Audited 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Cash at bank and in hand 103,271 94,464 92,116Short-term deposits 5,570 842 1,167Client money held 315,008 254,746 391,273 423,849 350,052 484,556 Cash and cash equivalents are deposited for varying periods of between one dayand three months depending on the immediate cash requirements of the Group andearn interest at the respective short-term deposit rates. The fair value of cashand cash equivalents is not materially different from the book value. Net interest receivable on client balances amounted to £5,143,000 (2006:£3,088,000; year ended 31 May 2007: £6,559,000). 9. Trade payables Unaudited Unaudited Audited 30 November 30 November 31 May 2007 2006 2007 £000 £000 £000 Amounts due to clients 581,111 461,592 726,144 581,111 461,592 726,144 10. Related party transactions During the 6 months to 30 November 2007, fees amounting to £15,000 (2006:£25,000; year ended 31 May 2007: £50,000) were paid to CVC Capital PartnersLimited relating to the services of Robert Lucas as a director of IG GroupHoldings of £15,000 (2006: £15,000; year ended 31 May 2007: £30,000), and fourother individuals as directors of IG Group Limited amounting to £nil (2006:£10,000; year ended 31 May 2007: £20,000). Funds managed or advised by CVC Capital Partners Limited or its affiliates held7.7% of the ordinary share capital of the Company at 30 November 2007 (2006:7.7%; 31 May 2007: 7.7%). There were no further related party transactions during the year or thepreceding year. 11. Acquisition of HedgeStreet On the 6th December 2007, IG Group Holdings plc ("IG") completed the purchase ofthe entire issued share capital of HedgeStreet Inc. ("HedgeStreet") for a totalcash consideration of $6.0m (approximately £2.9m). Net liabilities acquired ofHedgeStreet Inc. and its subsidiaries were $758,000 (approximately £0.4m). HedgeStreet is a US company, which, since 2004, has operated the HedgeStreetExchange ("the Exchange"). The Exchange is a US based Designated Contract Marketoperating under the regulatory oversight of the US Commodity Futures TradingCommission ("CFTC"). HedgeStreet is also registered with the CFTC as aDerivatives Clearing Organisation. The Exchange has previously listed binaryoptions contracts, principally on forex and commodities. The Exchange ceasedlisting contracts at the end of September 2007. Independent review report to IG Group Holdings plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30November 2007 which comprises the group income statement, group balance sheet,group cash flow statement, group statement of changes in equity, and the relatednotes 1 to 11. We have read the other information contained in the half-yearlyfinancial report and considered whether it contains any apparent misstatementsor material inconsistencies with the information in the condensed set offinancial statements. This report is made solely to the company in accordance with guidance containedin ISRE 2410 (UK and Ireland) 'Review of Interim Financial Information Performedby the Independent Auditor of the Entity' issued by the Auditing PracticesBoard. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company, for our work, for this report,or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting," as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 November 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. Ernst & Young LLPRegistered AuditorLondon14 January 2008 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
IG