12th Sep 2006 07:02
Chime Communications PLC12 September 2006 CHIME COMMUNICATIONS PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2006 • Operating income up 38% to £38.3 million (£27.8 million) - Organic growth of 8.5% • Operating profit up 65% to £6.1 million (£3.7 million) • Continued margin improvement to 15.8% (2005 after non-recurring restructuring costs of £0.7 million was 13.3%). • Profit before tax up 62% to £5.4 million (£3.3 million) • Earnings per share up 12% to 1.45p (1.29p) • Net cash of £0.8 million compared to net debt at 31st December 2005 of £3.0 million • Interim dividend increased by 12.5% to 0.18p per share (0.16p) (Bracketed figures are for 2005 first half year). Lord Bell, Chairman of Chime Communications, said: "The results for the first half of 2006 are very encouraging and we are positiveabout the outcome for the full year". For further information please contact: Lord Bell, Chairman 020 7861 8515Chime Communications Christopher Satterthwaite, Chief Executive 020 7861 8515Chime Communications Charles Cook/Geoff Callow/Chris Hamilton 020 7861 3232Bell Pottinger Corporate & Financial SUMMARY OF RESULTS Actual Organic (1) 2006 £m 2005 £m % change 2006 £m 2005 £m % change Operating income 38.3 27.8 + 38.0% 30.1 27.8 + 8.5% Operating profit 6.1 3.7 + 64.6% 4.7 3.7 +29.0% Operating profit margin 15.8% 13.3% 15.8% 13.3% (1) Excluding acquisitions in 2005 and 2006 The results for the first half of 2006 show marked improvement over last yearwith growth across all of our divisions. Operating income for the first half of 2006 increased by 38% to £38.3 millionand operating profit increased by 65% to £6.1 million, resulting in an operatingprofit margin increase to 15.8%. Operating income (excluding acquisitions) rose by 8.5% and operating profit grewby 29.0%. Excluding restructuring costs of £0.7 million in 2005, like for likeoperating profit for the first half grew by 9.5%. Earnings per share has increased by 12.4% to 1.45p from 1.29p. Excluding theone- off tax reduction in the first half of 2005, earnings per share in 2006grew by 43.6%. The Board is proposing an interim dividend of 0.18p per share compared to 0.16pin 2005. Net cash at 30th June 2006 was £0.8 million compared to net debt at 30th June2005 of £5.2 million and net debt at 31st December 2005 of £3.0 million. REVIEW OF OPERATIONS All three of our divisions showed growth in both operating income and operatingprofit. Following the successful acquisition of VCCP in 2005 our advertising andmarketing services division has returned to growth. The percentage contribution from each of our divisions in the first half year isas follows : Operating Income % Operating Profit % 2006 2005 2006 2005 Public Relations 59 70 62 83 Advertising and Marketing Services 34 24 29 9 Research 7 6 9 8 -------------------------------------------- 100 100 100 100 ============================================ Public Relations - Bell Pottinger Group Six months to 30 June 2006 2005 % change £m £m Operating income 22.8 19.4 +17.5%Operating profit 4.0 3.2 +22.5%Operating margin 17.3% 16.6% Our Public Relations division incorporates financial public relations, investorrelations, consumer public relations, public affairs, digital public relationsand sport and sponsorship. Operating income for the first half of 2006 increased by 17% to £22.8 millionand operating profit increased by 22% to £4.0 million, resulting in an operatingprofit margin of 17.3%. Bell Pottinger Public Relations Group retained its position at the top of the PRWeek league table published in April 2006. It has been number one for fouryears. New business wins in 2006 have included : BDO Stoy Hayward National GridBlockbuster Network RailBody Shop NickleodeonBritish Technology Group (BTG) Pernod RicardDigital UK Polo Ralph LaurenDubai Aerospace Royal MailFoxtons Toshiba MobileHogg Robinson Group Vichy LaboratoriesMerck Pharmaceuticals Advertising and Marketing Services - VCCP Group The advertising and marketing services division incorporates VCCP, VCCP Digital,SFW, Gasoline, Pure Media, Teamspirit and TTA Six months to 30 June 2006 2005 % change £m £m Operating income 13.0 6.7 +95.1%Operating profit 1.8 0.4 +425.7%Operating profit margin 14.0% 5.2% Operating income for the first half of 2006 increased by 95% to £13.0 millionand operating profit increased by 426% to £1.8 million, resulting in anoperating profit margin of 14.0%. VCCP performed ahead of our expectations and there were strong performances fromVCCP Digital, Teamspirit and TTA Group. New business wins in 2006 have included : Allied Irish Bank House of FraserChannel Five London LiteCoke Zero QatarDepartment of Work and Pensions SportechHeinz Weightwatchers Sheila's WheelsHoseasons Research - OLR Group The Research division incorporates Opinion Leader Research and Ledbury. Six months to 30 June 2006 2005 % change £m £m Operating income 2.5 1.7 +49.8%Operating profit 0.6 0.3 +75.9%Operating profit margin 21.9% 18.7% Operating income for the first half of 2006 increased by 50% to £2.5 million andoperating profit increased by 76% to £0.6 million, resulting in an operatingprofit margin of 21.9%. Opinion Leader Research had an extremely good start to the year and establisheditself as the market leader in deliberative research. Following its acquisition,Ledbury Research has developed well and should achieve further growth in theirniche sector of luxury goods and high net worth individuals. New business wins in 2006 have included : Department of Work and Pensions Norwich UnionHer Majesty's Treasury Liverpool VictoriaNational Housing Federation Ofcom Note: All figures above for 2005 are shown after restructuring costs. BUSINESS ACTIVITY The Group acted for 905 clients in the first half of 2006, compared to 808 inthe same period in 2005. 155 of these clients used more than one of ourbusinesses (130 in 2005). 134 clients paid us over £50,000 in the first half of 2006, compared to 117 inthe same period in 2005. Our top 30 clients represented 43% of total operatingincome (30th June 2005 - 37%) and our largest client represented 8.4% of totaloperating income. (Year to 31st December 2005 - 8.8%). Average income per employee in the first half year was £52,000 (2005 - £49,000).Average fee income per client was £42,000 compared to £34,000 in the first halfof 2005. High profile activities where we advised clients included: • Devising and managing this year's National Pensions Day, bringing together some 11,000 citizens to debate the recommendations of the Pension Commission on pension reform. • The switch of GSK's leading migraine treatment, Imigran, from prescription only to over the counter. • O2's winning of the Marketing Society's Loyalty Award in the 2006 Awards for Excellence. • The successful implementation of the rebrand of Scottish Widows. • The successful battle to retain the Chemistry Department at Sussex University. • The new labelling campaign for the UK's leading food manufacturers. • The communications strategy for Sky's carbon neutral campaign - "Green Sky thinking". • DP World's £3.9 billion contested bid for P&O Ports. • Evolution Group's acquisition of Williams de Broe. • Playtech's £550 million IPO on the London market. • The £34 million sponsorship of Tottenham Hotspur Football Club by Mansion. • The Meat & Livestock Commission's 'Prescription for Health' campaign to encourage eating more meat in a healthy diet. • Polo Ralph Lauren launching the new Wimbledon uniforms. BANKING ARRANGEMENTS The Group generated £4.3 million of cash from trading activities in the firsthalf of 2006. Net cash at 30th June 2006 was £0.8 million compared to net debtat 31st December 2005 of £3.0 million and net debt of £5.2 million at 30th June2005. The Group continues to operate comfortably within its banking covenants and debtfacility of £15 million. This is a three year facility, maturing in March 2009. As in the previous two reporting periods the Group had unusually high levels ofcash paid in advance by clients. If this returned to more normal levels then thenet cash position would reduce by almost £4.0 million. The maximum deferred considerations remaining to be paid are £21.4 million ofwhich £11.1 million is in cash and £10.3 million is in shares. The maximumpayable in the second half of 2006 is £0.5 million, 2007 is £3.7 million and2008 is £11.5 million. DIVIDENDS The Board is proposing to pay an interim dividend of 0.18p per share (2005 -0.16p). This will be payable on 9th November 2006 to shareholders on theregister at 13th October 2006. The expected ex-dividend date is 11th October2006. TAXATION The effective tax charge for the first half of 2006 was 31% compared to 14% lastyear when there was a one-off adjustment as a result of agreeing some prior yeartax charges. CORPORATE AND SOCIAL RESPONSIBILITY The Group has made a commitment to improve its environmental practices and as aresult to become carbon neutral by early 2007. CORPORATE DEVELOPMENTS We have expanded our representation in the Middle East by opening offices inboth Qatar and Saudi Arabia. These report to our existing headquarters in Dubai- Bell Pottinger Middle East. We have also made good progress towards establishing a public affairs office inWashington as part of Bell Pottinger Sans Frontieres. We have established an integrated digital business as part of the VCCP Group.This is to take advantage of the fast growing digital market. OUTLOOK AND PROGRESS AGAINST THREE YEAR PLAN Our performance in the first half of 2006 was very encouraging and we have madethe following progress against our three year plan: • Margin improved to 15.8% from 13.3% which keeps us on track to achieve our target of 18% within three years. • In developing our position as the leading modern communications group we established an integrated digital business within VCCP which offers pay-per-click and natural search engine optimisation services, an online creative advertising agency and an online media buying capability. • Eliminated our net debt six months ahead of our target. • International income has increased to 32% of total income in the first half of 2006 from 30% in the first half of 2005. • The average value of fee per client has increased to £42,000 from £34,000. • Average income per employee has increased to £52,000 from £49,000. • The number of clients shared between more than one company in the Group has increased to 155 from 130. • Introduced a new incentive scheme for senior management linked to the achievement of the three year plan. The results for the first half of 2006 are very encouraging and we are positiveabout the outcome for the full year and beyond. Lord BellChairman12th September 2006 Consolidated Income StatementSix months ended 30 June 2006 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Note CONTINUING OPERATIONS Turnover 83,080 47,810 116,403 Cost of sales (44,763) (20,047) (53,371) --------------------------------------- OPERATING INCOME 38,317 27,763 63,032 Other operating income - 5 - Operating expenses (32,254) (23,429) (53,410) --------------------------------------- 6,063 4,339 9,622 Restructuring costs - (655) (1,286) --------------------------------------- OPERATING PROFIT 5 6,063 3,684 8,336 Share of results of associates (241) 1 (111) Investment income 62 80 152 Finance costs (256) (408) (830) Finance cost of deferred consideration (253) (34) (222) -------------------------------------- PROFIT BEFORE TAX 5,375 3,323 7,325 Tax (1,678) (470) (1,608) -------------------------------------- PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 3,697 2,853 5,717 DISCONTINUED OPERATIONS Loss for the period from discontinued operations - (201) (660) Profit for the period from sales of associate - - 2,662 ------------------------------------- PROFIT FOR THE PERIOD 3,697 2,652 7,719 ===================================== Attributable to: Equity holders of the parent 3,584 2,590 7,536 Minority interest 113 62 183 ------------------------------------- 3,697 2,652 7,719 ===================================== EARNINGS PER SHARE 2 From continuing operations Basic 1.45p 1.39p 2.49p Diluted 1.44p 1.36p 2.46p From continuing and discontinued operations Basic 1.45p 1.29p 3.39p Diluted 1.44p 1.26p 3.34p Consolidated Statement of Recognised Income and ExpenseSix months ended 30 June 2006 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Exchange differences on translation of foreign subsidiaries (36) (269) (137) -------------------------------------- Net expense recognised directly in equity (36) (269) (137) Profit for the period 3,697 2,652 7,719 Total recognised income and expense -------------------------------------- for the period 3,661 2,383 7,582 -------------------------------------- Attributable to: Equity holders of the parent 3,548 2,321 7,399 Minority interest 113 62 183 Total recognised income and expense -------------------------------------- relating to the period 3,661 2,383 7,582 -------------------------------------- Consolidated Balance Sheet as at 30 June 2006 As at As at As at 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Non-current assets Goodwill 72,956 43,919 68,606 Other intangible assets 75 199 140 Property, plant and equipment 2,681 1,823 2,305 Investments in associates 680 915 891 Due from deferred consideration 800 - 950 Available for sale investments - 1 - Deferred tax asset 1,340 784 1,338 ------------------------------------- 78,532 47,641 74,230 ------------------------------------- Current assets Work in progress 1,141 598 565 Trade and other receivables 31,976 18,805 27,098 Cash and cash equivalents 2,642 6,618 6,997 ------------------------------------- 35,759 26,021 34,660 ------------------------------------- Total assets 114,291 73,662 108,890 ------------------------------------- Current liabilities Trade and other payables (41,455) (22,735) (34,964) Current tax liabilities (2,772) (2,232) (1,865) Obligations under finance leases (127) (134) (142) Bank overdraft - (1,246) - Short-term provisions (2,106) (782) (690) ------------------------------------- (46,460) (27,129) (37,661) ------------------------------------- Net current liabilities (10,701) (1,108) (3,001) ------------------------------------- Non-current liabilities Bank loans (911) (8,940) (8,485) Long-term provisions (11,406) (690) (8,880) Obligations under finance leases (83) (142) (129) ------------------------------------- (12,400) (9,772) (17,494) ------------------------------------- Total liabilities (58,860) (36,901) (55,155) ------------------------------------- Net assets 55,431 36,761 53,735 ------------------------------------- Equity Share capital 12,654 10,363 12,654 Share premium account 26,475 16,826 26,475 Own shares (7,397) (6,967) (6,961) Equity reserve 32,957 32,698 32,817 Translation reserve (103) (271) (139) Accumulated losses (9,460) (16,049) (11,375) ------------------------------------ Equity attributable to equity holders of the parent 55,126 36,600 53,471 Equity minority interest 305 161 264 ------------------------------------ Total equity 55,431 36,761 53,735 ------------------------------------ Consolidated Cash Flow StatementSix months ended 30 June 2006 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Note Net cash inflow from operatingactivities 4 4,279 2,426 8,239 Investing activitiesInterest received 62 79 147Dividends received from associates - - 5Proceeds on disposal of property,plantand equipment 29 114 218Purchases of property, plant and equipment (846) (310) (1,090)Purchases of other intangible assets - - (5)Proceeds from disposal of investment - 264 266Acquisition of investment in anassociate (51) - (72)Disposal of investment in associate - - (50)Loans granted to associates (1) (75) (411)Loans granted to joint ventures - (120) -Acquisition of subsidiaries (334) (44) (7,191)Net proceeds from disposal of subsidiaries 2,888 (312) (98)Net cash inflow/(outflow) fromreturns oninvestment and servicing of ------------------------------------- finance 1,747 (404) (8,281) ------------------------------------- Financing activitiesDividend paid (793) (606) (1,009)Dividends paid to minorities (92) (160) (122)Repayments of borrowing (7,574) - (410)New bank loan raised - 45 -Repay loan notes (530) (431) (527)Repayments of obligations underfinance leases (81) (56) (143)Proceeds on issue of ordinarysharecapital - - 4,692Buy back of warrants (800) - -Sale/(purchase) of own shares (511) 2 2Net cash (used in)/from financing ---------------------------------------activities (10,381) (1,206) 2,483 --------------------------------------- Net (decrease)/increase in cashand cashequivalents (4,355) 816 2,441 Cash and cash equivalents atbeginning of period 6,997 4,556 4,556 Cash and cash equivalents at end --------------------------------------of period 2,642 5,372 6,997 ====================================== Cash and cash equivalents comprise cash at bank, loan note deposits less overdraftsand taking into account the following borrowings net cash/(debt) was: Bank loans (911) (8,940) (8,485)Finance leases (210) (276) (271)Loan notes outstanding (724) (1,317) (1,254) ------------------------------------ Overall net cash/(debt) 797 (5,161) (3,013) Notes: 1. Business Segments For management purposes, the group is currently organised into three operatingdivisions - Public Relations, Advertising and Marketing Services and Research.These divisions are the basis on which the group reports its primary segmentinformation. Principal activities are as follows: Public Relations The public relations division comprises some of the leading names in theindustry, including Bell Pottinger, Good Relations, The Smart Company, Harvardand Insight, which together advise the owners and promoters of more than 300major UK and international brands. The public relations division is ranked firstin the PR Week public relations consultancy league table for 2006. Advertising and Marketing Services ('AMS') The AMS division possesses specialist skills in advertising and marketingservices - sales promotion, direct marketing, advertising, design, mediaplanning and buying, digital online content creation, customer publishing andcustomer loyalty, and specialises in the niche markets of property, financialservices and healthcare. Research The research division is made up of Opinion Leader Research and LedburyResearch. Opinion Leader Research is one of the UK's leading researchconsultancies and Ledbury Research provides research and advice to brands whomarket and sell to high net worth consumers. The group's operations are located in the United Kingdom, Germany and USA. Thegroup's Advertising and Marketing Services and Research divisions are locatedsolely in the United Kingdom. Public Relations is carried out in the UnitedKingdom, Germany and USA Operating Income Operating Profit 6 months to 6 months to 12 months 6 months to 6 months to 12 months to to 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 2005 (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) £'000 £'000 £'000 £'000 £'000 £'000 Class of business Public Relations:Continuing operations 22,832 19,435 40,801 3,950 3,225 6,661 Advertising andMarketing Services:Continuing operations 12,956 6,640 18,637 1,819 346 1,482 Research:Continuing operations 2,529 1,688 3,594 554 315 688 --------------------------------------------------------------------- 38,317 27,763 63,032 6,323 3,886 8,831 Chime Central Costs - - - (260) (207) (495)Other operating income - - - - 5 - --------------------------------------------------------------------- 38,317 27,763 63,032 6,063 3,684 8,336 --------------------------------------------------------------------- Operating Margin 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) % % %Class of business Public Relations:Continuing operations 17.3% 16.6% 16.3% Advertising andMarketing Services:Continuing operations 14.0% 5.2% 8.08% Research:Continuing operations 21.9% 18.7% 19.1% --------------------------------- 16.5% 14.0% 14.0% Chime Central CostsOther operating income --------------------------------- 15.8% 13.3% 13.2% --------------------------------- As explained in note 5, the prior year and prior period segment comparativeshave been restated. 2. Earnings per share From continuing and discontinued operations The calculation of the basic and diluted earnings per share is based on thefollowing data: 12 months Six months ended 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000EarningsEarnings for the purpose of basic earnings pershare being net profitattributable to the equity holders of the parent 3,584 2,590 7,536 ------------------------------------- Number of sharesWeighted average number of ordinary shares forthe purposes ofbasic earnings per share 247,504,382 201,193,198 222,362,754 Effect of dilutive potential ordinary shares:Share options and deferred shares 1,227,355 2,252,031 1,895,423Warrants - 1,746,696 1,075,622 Weighted average number of ordinary shares forthe purposes of -------------------------------------diluted earnings per share 248,731,737 205,191,925 225,333,799 ------------------------------------- From continuing operations 12 months Six months ended 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000EarningsNet profit attributable to equity holders of the parent 3,584 2,590 7,536 Adjustments to exclude loss for the periodfrom discontinuedoperations - 201 660Adjustments to exclude profit for the period from sale of associates - - (2,662) Earnings from continuing operations for thepurposes of basicearnings per share excluding discontinued --------------------------------- operations 3,584 2,791 5,534 --------------------------------- The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. From discontinued operations 12 months Six months ended 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) Basic - 0.1p 0.9pDiluted - 0.1p 0.9p The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. 3. Dividends 12 months Six months ended 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Amounts recognised as distributions to equityholders in the period(approved): Interim dividend for the year ended 31December 2005 of 0.16p pershare - - 395Final dividend for the year ended 31 December2005 of 0.32p(2005:0.30p) per share 793 614 614 -------------------------------- 793 614 1,009Amounts not recognised as distributions toequity holders in thePeriod (declared): Proposed interim dividend for the year ended31 December 2006 of0.18p (2005: 0.16p) per share 446 395 -Proposed final dividend for the year ended 31December 2005 of0.32p per share - - 793 ------------------------------- 446 395 793 ------------------------------- The proposed interim dividend was approved by the Board on 8 September 2006 andhas not been included as a liability as at 30 June 2006. The dividend will bepaid on 9 November 2006 to those shareholders on the register at 13 October2006. The expected ex-dividend date is 11 October 2006. Under an agreement dated 3 April 1996, The Chime Communications Employee Trustwhich holds 5,070,003 ordinary shares representing 2.00% of the company'scalled-up share capital, has agreed to waive all dividends. 4. Notes to the consolidated cash flow statement 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit from operations 6,063 3,684 8,336Adjustments for:Loss from discontinued operation - (292) (757)Share based payment expense 140 116 235Translation differences (14) (5) 6Depreciation of property, plant and equipment 488 560 1,343Amortisation of other intangible assets 65 65 130Gain on disposal of property, plant andequipment (6) (19) (33)Decrease in provisions (280) (219) (10) -------------------------------------- Operating cash flows before movementsinworking capital 6,456 3,890 9,250 Decrease/(increase) in work in progress (575) (172) (80)Increase in receivables (7,609) (91) (1,724)(Decrease)/increase in payables 6,939 (153) 2,929 ------------------------------------- Cash generated by operations 5,211 3,474 10,375 Income taxes paid (700) (615) (1,291)Interest paid (232) (433) (845) ------------------------------------- Net cash from operating activities 4,279 2,426 8,239 ===================================== 5. Accounting policies The consolidated income statement, balance sheet, statement of recognised incomeand expense and cash flow statement have been prepared on a basis consistentwith the financial statements for the year ended 31 December 2005, other than asnoted below with respect to segmental reporting and operating profit. The results for the 6 months ended 30 June 2006 are unaudited and do notconstitute statutory accounts within the meaning of section 240 of the Companiesact 1985. The results for the year ended 31 December 2005 have been extractedfrom the published Financial Statements which have been delivered to theRegistrar of Companies, other than as noted below with respect to segmentalreporting and operating profit. The auditors' report on those accounts wasunqualified and did not contain any statement under section 237 of the CompaniesAct 1985. As required by IAS 14 (Segment Reporting) the prior period comparatives havebeen restated to reflect the change in management reporting of The Smart Companywithin the group. The Smart Company was previously reported within research, itis now included within public relations. The effect of this change is asfollows: Operating income 6 months to 30 June 2005 £362,000, 12 months to 31December 2005 £751,000; Operating profit 6 months to 30 June 2005 £44,000, 12months to 31 December 2005 £120,000 Operating profit is now stated after charging restructuring costs but before theshare of results of associates, investment income and finance costs. This is achange in accounting policy in the period and accordingly, the prior period andprior year comparatives have been reclassified to effect this change. INDEPENDENT REVIEW REPORT TO CHIME COMMUNICATIONS PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprise the income statement, thebalance sheet, the statement of recognised income and expense, the cash flowstatement and related notes 1 to 5. We have read the other information containedin the interim report and considered whether it contains any apparentmisstatements 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 undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose 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 United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) 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 six monthsended 30 June 2006. Deloitte & Touche LLPChartered AccountantsHill House1 Little New StreetLondon EC4A 3TR12 September 2006 Notes: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but no controlprocedures can provide absolute assurance in this area. Legislation in theUnited Kingdom governing the preparation and dissemination of financialinformation differs from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CHW.L