31st Aug 2007 07:01
Rightmove Plc31 August 2007 RIGHTMOVE PLC 2007 INTERIM RESULTS Rightmove plc, the UK's no. 1 property website, announces Interim Results forthe six months ended 30 June 2007. Financial Highlightsfor the six months ended 30 June 2007 Highlights • Revenue up 68% to £25.4m (2006: £15.1m)• Underlying operating profit * up 60% to £13.2m (2006: £8.3m)• Net cash of £17.5m (2006: £5.2m)• Underlying earnings per share up 70% to 8.2p (2006: 4.9p)• Interim dividend of 2.0p per ordinary share (2006:1.5p)• Share buy back programme initiated with 1.7m shares (at a cost of £10.5m) transferred into treasury by 26 July 2007• Number of advertisers up 26% to 18,514 (2006: 14,680)• Visits to Rightmove.co.uk up 58% to 24.3m per month• Successful launch of Rightmove Choice products contributing to an increase in average revenue per advertiser per month of 29% to £234. * from continuing operations and excludes share-based payments expense, National Insurance on share options under issue and flotation costs Ed Williams, Group Managing Director, said: "Rightmove continued to grow rapidly in the first half of the year as weincreased our membership of agents and new homes developers. We introduced asuite of new products under the Rightmove Choice name, giving our members theopportunity to stand out from their competitors and further enhance the valuefor money of their online marketing spend. Rightmove has become an essentialtool for all homebuyers with around nine out of ten properties available in theUK now presented on the website. Rightmove will continue to expand its advertising services both to propertyadvertisers on Rightmove.co.uk and to a wider group of advertisers on our newmapping site, Aboutmyplace.co.uk. We also offer a service to holiday homeowners who wish to advertise their properties for holiday letting, through ouracquisition of a two-third stake in holidaylettings.co.uk. We are confident about the Company's prospects for the second half of the year." Chairman and Group Managing Director's statement Overview The Interim Results reflect continued rapid and profitable growth in theRightmove business. Revenue increased 68% to £25.4m compared to the same period last year, driven bystrong growth in revenue per advertiser and in sales to new members. Underlyingoperating profit* grew by 60% to £13.2m. The number of advertisers grew 26% to 18,514 members compared with the first sixmonths of 2006. Rightmove Choice was launched, allowing agents and developers todifferentiate themselves by increasing their online profile. 2,900 RightmoveChoice products were in use at the mid-year. As at June 2007, the averagerevenue per advertiser per month, including Rightmove Choice products, increasedby 29% to £234 (2006: £181). The operating margin for the first half of 2007 was 51.9% compared to 54.7% forthe first half of 2006 and 52.1% for the whole of 2006. Operating margin istypically lower in the first half of the year than in the second half, makingthe 2007 first half number consistent with a further strengthening of margin inthe full year. In the first half of 2006, operating margin reflected the estateagency sales force working on the sale of Home Information Packs (HIPs) ratherthan on the core business alone. Costs of continuing operations excluding share-based payment and NationalInsurance expenses for the first six months were up 79% compared to the sameperiod twelve months ago at £12.2m (2006: £6.8m) due primarily to higherpersonnel costs associated with sales and technology, together with the plannedincrease in marketing spend in line with revenue growth. Membership growth The first six months have seen continued growth on all key metrics compared withthe same period a year ago: • Overall membership up 26% to 18,514• Estate agency membership up 19% to 12,295• New homes developments up 47% to 3,478• Letting agents up 47% to 2,234• Overseas homes agents up 18% to 507• Retention rate among members unchanged at 93% The percentage of estate agents who are members has increased from 74% a yearago to around 88%. The growth rates have been highest in Northern England,Scotland and in Wales, which started from a lower base. Evidence from the SouthEast and East Anglia suggests there is no inherent reason why Rightmove cannotachieve close to 100% adoption among estate agents. Though Rightmove had already established a very strong position among thelargest estate agency groups and new homes developers, there have nonethelessbeen some key customer gains of note. Kinleigh Folkard & Hayward, a major Londonestate agent, joined during 2007 which means that all 15 of the largest UKestate agents list on Rightmove. Among house builders, McCarthy and Stone joinedresulting in 19 of the largest 20 house builders now also listing on Rightmove. Rightmove Choice Prior to February 2007, estate agents and developers could not invest more thanthe basic membership fee on their marketing with Rightmove. Furthermore, estateagents and developers primarily used traditional classified advertising mediasuch as newspapers to promote their brand and attract new home listings. Withthe launch of Rightmove Choice, we now offer a selection of ways in which agentsand developers can increase their marketing effectiveness and their onlineprominence on Rightmove. The initial three products BrandPlus, Premium Displayand Showcase cost from £50 to £275 per month depending on the product type andnumber of properties listed. Adoption has exceeded expectations with over 2,900 products in use at the end ofJune 2007. This means that more than one in six estate agent offices and newhomes developers have chosen to differentiate the way they present themselvesand their properties on Rightmove. Based on the mix of sales achieved to datethe average price per product per month is approximately £95. Revenue per advertiser The 12-month period from June 2006 to June 2007 has seen a substantial increasein the average revenue per advertiser which now stands at £234, up 29% on a yearago. Among the major contributors to this increase have been: • An increase on 1 January in our base membership price among estate agents from £195 to £250 per office per month, with similar percentage increases for new homes developers and letting agents• The significantly higher rates paid by new joiners than by our longer standing members who benefit from a loyalty discount (new joiners in the last 12 months comprising 26% of our total customers)• Adoption of Rightmove Choice products. Growth prospects The property industry's marketing spend is directed predominantly towardsnewspapers. Indeed, even with the strong revenue growth year-to-date, Rightmoveaccounts for a mere 10% of the total spend. Were Rightmove to achieve fullpenetration in its markets (implying a further increase of around a third overcurrent membership levels) this spend would still only represent around 13% ofthe total. Rightmove continues to appear cost effective and demonstrable value for money.This can be seen by the sales growth and the retention rate despite increases inthe basic membership charge on 1 January. It is further reinforced by theinitial adoption of Rightmove Choice products. Holiday Lettings Limited In March 2007 we completed our acquisition of a 66.7% interest in HolidayLettings Limited (www.holidaylettings.co.uk ), one of the leading three holidayhomes rental advertising websites. Immediately following the acquisition,Rightmove's embryonic holiday lettings business was folded into the HolidayLettings proposition. The acquisition gives Rightmove a level of know-how in thetravel and tourism business which is as important in the holiday rentals sectoras knowledge of the property market. The business has traded well ahead of both expectations and the projections usedto make the investment case. Whilst currently driven by higher sales and higherretention rates than anticipated, we also believe there will be earlyopportunities to increase prices. Holiday Lettings is earlier in its development than Rightmove. It is achieving adoubling on most of its key metrics, just as Rightmove did two or three yearsago. Already profitable, we see the prospect of the business generating 50%margins in two to three years' time. Expanding our advertising services During the first half of 2007 we have phased in our own mapping service based onMicrosoft Virtual Earth TM technology. In terms of maps served, simply by peoplelooking to identify the precise location of a property, Rightmove is already theUK's fifth largest mapping site. We have named this service "Aboutmyplace" withits own URL www.aboutmyplace.co.uk. This gives us the flexibility to develop theservice as a fully fledged mapping site and to widen the range of informationand services we can provide without distracting or deflecting users of theRightmove.co.uk website from their main objective of finding their right home. The first step in the commercialisation of Aboutmyplace has been theintroduction of banner advertising around the maps, currently limited to twobanners per page. This allows non-property advertisers to reach the Rightmoveaudience. With more than 20m pages of maps being served this provides aninventory of 40m banner adverts per month. Initial adoption by advertisers has been encouraging based on the demographicsof our users generally and the interest of many advertisers to reach an audiencewhich is specifically considering moving home. Dividend and shareholdings The Board intends to pay an interim dividend of 2.0p (2006:1.5p) in line withthe declared progressive dividend policy. The interim dividend will be paid on12 October 2007 to members on the register on 14 September 2007. In June 2007, Rightmove initiated a share buy back programme in addition toreturning cash to shareholders by way of dividend. As at the end of June 2007,Rightmove had bought back into treasury 1.18m shares at an average price of 606pper share. The Board of Rightmove anticipates that, subject to marketconditions, the share buy back programme will continue. The ability to buy backshares has been made possible by the significant increase in the proportion ofshares in public hands which now approximates 60% of the total share capital, ascompared to around 25% at the start of the year. This significant change hasarisen as a result of Countrywide plc's distribution of Rightmove shares to itsshareholders coincident with its acquisition by a private equity firm (returningtheir approximate 22% Rightmove interest to Countrywide's former investors) andthe subsequent sell-down of approximately six million shares each by foundingshareholders Connells Ltd and Halifax Estate Agencies Ltd (leaving each witharound 21.3m shares). Board changes At the Annual General Meeting in May 2007, Jane Pridgeon stepped down from theBoard as the Halifax Estate Agencies Ltd nominee and was replaced by Colin Kemp.We thank Jane for her support and guidance over the years and wish her well inretirement. Prospects for the second half of 2007 Whilst equity and debt markets have been turbulent in recent weeks, the outlookcontinues to be positive in terms of our 2007 performance. The Board alsobelieves that Rightmove will continue to benefit from wider structural changesin the property advertising industry in which it operates. Scott Forbes Ed WilliamsChairman Group Managing Director 31 August 2007 For further information please contact: RightmoveEd Williams, Group Managing Director andGraham Zacharias, Group Finance Director 020 7087 0700 MaitlandNeil Bennett / Brian Hudspith /Charlotte Walsh 020 7379 5151 Consolidated income statementfor the six months ended 30 June 2007 6 months 6 months ended 30 June 2006 12 months ended 31 December 2006 ended 30 June 2007 Continuing Continuing Discontinued Total Continuing Discontinued Total Note operations operations operations operations operations £000 £000 £000 £000 £000 £000 £000 Revenue 25,425 15,099 - 15,099 33,626 - 33,626 -------- -------- -------- -------- -------- -------- -------Administrativeexpenses (13,780) (9,020) (4,650) (13,670) (19,869) (6,668) (26,537) -------- -------- -------- -------- -------- -------- -------Operating profit beforeshare-based payments, NIon share options underissue and flotation costs 13,184 8,256 (4,650) 3,606 17,530 (6,668) 10,862 Share-based payments 4 (1,210) (794) - (794) (2,168) - (2,168) NI on share options under issue 4 (329) - - - - - - Flotation costs - (1,383) - (1,383) (1,605) - (1,605) -------- -------- -------- -------- -------- -------- ------- Operating profit 11,645 6,079 (4,650) 1,429 13,757 (6,668) 7,089 -------- -------- -------- -------- -------- -------- -------Financial income 488 78 - 78 322 - 322 Financial expenses - - - - (66) - (66) -------- -------- -------- -------- -------- -------- -------Net financial income 488 78 - 78 256 - 256 -------- -------- -------- -------- -------- -------- -------Share of associate - 129 - 129 (77) - (77)profit / (loss) -------- -------- -------- -------- -------- -------- ------- Profit before tax 12,133 6,286 (4,650) 1,636 13,936 (6,668) 7,268Income tax expense 6 (3,447) (2,532) 1,395 (1,137) (4,917) 1,993 (2,924) -------- -------- -------- -------- -------- -------- -------Profit for the period 8,686 3,754 (3,255) 499 9,019 (4,675) 4,344 -------- -------- -------- -------- -------- -------- -------Attributable to:Equity holders of the Parent 8,686 3,754 (3,255) 499 9,019 (4,675) 4,344 -------- -------- -------- -------- -------- -------- ------- Earnings per ordinary share (pence) Basic 5 7.00 3.11 (2.70) 0.41 7.37 (3.82) 3.55 Diluted 7.00 3.03 (2.63) 0.40 7.27 (3.77) 3.50 Consolidated statement of recognised income and expensefor the six months ended 30 June 2007 6 months 6 months 12 months ended ended ended Note 30 June 2007 30 June 2006 31 Dec 2006 £000 £000 £000Tax in respect ofshare optionsrecognised directly inequity 6 857 3,305 4,681 -------- -------- --------Net income recogniseddirectly in equity 857 3,305 4,681Profit for the period 8,686 499 4,344 -------- -------- -------- Total recognisedincome and expense forthe period 9,543 3,804 9,025 -------- -------- -------- Consolidated balance sheetas at 30 June 2007 Note 30 June 2007 30 June 2006 31 Dec 2006 £000 £000 £000Non-current assetsProperty, plant andequipment 1,511 998 1,375Intangible assets 6,876 4,737 1,471Investments - 185 -Deferred tax asset 2,262 3,012 1,241 --------- --------- ---------Total non-currentassets 10,649 8,932 4,087 --------- --------- ---------Current assetsTrade and otherreceivables 4,912 2,282 2,921Income tax receivable 163 1,585 163Cash and cashequivalents 17,464 5,206 14,881 --------- --------- ---------Total current assets 22,539 9,073 17,965 --------- --------- ---------Total assets 33,188 18,005 22,052 --------- --------- ---------Current liabilitiesTrade and otherpayables 7 (10,169) (5,371) (5,835)Income tax payable (3,692) - -Provisions (96) - (96) --------- --------- --------- Total currentliabilities (13,957) (5,371) (5,931) --------- --------- ---------Non-current liabilitiesDeferred taxliabilities (126) - -Deferred consideration (2,202) - -Provisions (64) - (112) --------- --------- ---------Total non-currentliabilities (2,392) - (112) --------- --------- ---------Net assets 16,839 12,634 16,009 --------- --------- ---------EquityShare capital 1,327 1,327 1,327Share premium 105 18,711 -EBT own shares reserve (17,149) (17,707) (17,663)Retained earnings 32,556 10,303 32,345 --------- --------- ---------Total equityattributable to equityholders of the Parent 9 16,839 12,634 16,009 --------- --------- --------- Consolidated statement of cash flowfor the six months ended 30 June 2007 6 months 6 months 12 months ended ended ended Note 30 June 2007 30 June 2006 30 Dec 2006 £000 £000 £000Cash flows from operating activities Profit for the period 8,686 499 4,344 Adjustments for: Depreciation charges 218 368 385 Amortisation charges 185 - 304 Impairment of tangibleand intangible assets - 971 1,011 Loss on sale ofinvestment inassociate - - 206 Investment income - (129) (129) Interest income (488) (78) (322) Interest expense - - 1 Share options charge 1,210 794 2,168 Income tax expense 3,447 1,137 2,924 ---------- ---------- ----------Operating profitbefore changes inworking capital 13,258 3,562 10,892 (Increase) / decreasein trade and otherreceivables (1,728) 172 (471) Increase / (decrease)in trade and otherpayables 1,117 (1,305) (839) (Decrease) / increasein provisions (48) - 208 ---------- ---------- ----------Cash generated fromoperations 12,599 2,429 9,790 Income taxes (paid) /received - (164) 1,259 ---------- ---------- ----------Net cash fromoperating activities 12,599 2,265 11,049 ---------- ---------- ----------Cash flows from investingactivities Interest received 488 78 322 Acquisition ofproperty, plant andequipment (341) (307) (938) Acquisition ofintangible assets (157) (222) (249) Acquisition ofinvestment inassociate - (3,243) (3,319) Acquisition ofsubsidiary (net ofcash acquired) 10 (3,177) - - Proceeds from sale ofinvestment in associate - - 3,243 ---------- ---------- ----------Net cash frominvesting activities (3,187) (3,694) (941) ---------- ---------- ----------Cash flows from financingactivities Interest paid - - (1) Dividends paid (3,729) - (1,861) Purchase of treasury shares (4,043) - -Share issue 105 1,055 1,055 Proceeds on exerciseof share options 838 - - ---------- ---------- ----------Net cash fromfinancing activities (6,829) 1,055 (807) ---------- ---------- ----------Net increase /(decrease) in cash andcash equivalents 2,583 (374) 9,301 Cash and cashequivalents at 1January 14,881 5,580 5,580 ---------- ---------- ----------Cash and cashequivalents at period end 17,464 5,206 14,881 ---------- ---------- ---------- Notes 1 General information Rightmove plc is a Company incorporated in England and Wales No. 03997679, underthe Companies Act 1985. 2 Basis of preparation This interim financial information has been prepared applying the accountingpolicies and presentation that were applied in the preparation of the Group'sfinancial statements for the year ended 31 December 2006.The financial statements are prepared on the historical cost basis.The financial statements for the half year ended 30 June 2007 have not beenaudited, although the auditor, KPMG Audit Plc, has carried out an independentreview. The comparative figures for the financial year ended 31 December 2006 areextracted from the Group's statutory accounts for that financial year. Thoseaccounts have been reported on by the Company's auditors and delivered to theregistrar of companies. The report of the auditors: (i) was unqualified,(ii) did not include a reference to any matters to which the auditors drewattention by way of emphasis without qualifying their report, and(iii) did not contain a statement under section 237(2) or (3) of the CompaniesAct 1985. 3 Segmental reporting Due to the discontinuance of the Home Information Packs (HIPs) business in 2006all activities in the current year relate to the property advertising segment.There are no other separately identifiable business segment income statement orbalance sheet items. For the six months ended 30 June 2006 Property advertising HIPs Total £000 £000 £000Income statement informationSegmental revenue 15,099 - 15,099Depreciation and amortisation 262 106 368 ---------- ---------- ---------- Segmental operating profit / (loss) 6,079 (4,650) 1,429Financial income 78 - 78Financial expenses - - -Income tax expense (2,532) 1,395 (1,137)Share of associate profit 129 - 129 ---------- ---------- ----------Profit for the period 3,754 (3,255) 499 ---------- ---------- ----------Balance sheet informationCapital expenditure 3,565 207 3,772Property, plant and equipment 998 - 998Intangible assets 4,737 - 4,737 Total assets 17,591 414 18,005 Total liabilities (5,144) (227) (5,371) For the year ended 31 December 2006 Property advertising HIPs Total £000 £000 £000Income statement informationSegmental revenue 33,626 - 33,626Depreciation and amortisation 550 139 689 ---------- ---------- ---------- Segmental operating profit / (loss) 13,757 (6,668) 7,089Financial income 322 - 322Financial expenses (66) - (66)Income tax expense (4,917) 1,993 (2,924)Share of associate loss (77) - (77) ---------- ---------- ----------Profit for the year 9,019 (4,675) 4,344 ---------- ---------- ----------Balance sheet informationCapital expenditure 901 286 1,187Property, plant and equipment 1,375 - 1,375Intangible assets 1,471 - 1,471 Total assets 22,052 - 22,052 Total liabilities (5,612) (431) (6,043) Notes (continued) 4 Share-based payments In accordance with IFRS 2 a charge of £1,210,491 (30 June 2006: £794,000) isincluded in the income statement, being the amortisation of the value of theshare options granted in 2006. Employer's National Insurance is being accrued ata rate of 12.8% on the difference between the share price at the balance sheetdate and the average exercise price of the share options. 5 Earnings per share Earnings per ordinary share is based upon profit after taxation and on aweighted average of 124,136,849 shares in issue during the period(30 June 2006: 120,860,606). Underlying earnings per ordinary share which iscalculated before the charge for HIPs costs, flotation costs, share-basedpayments and National Insurance on share options under issue was 8.24p for thesix months to 30 June 2007 (six months to 30 June 2006:4.85p). 6 Taxation The Group's consolidated effective tax rate for the six months ended 30 June2007 is 28% (30 June 2006: 69 %). The difference between the standard rate andthe effective rate at 30 June 2006 was due to the high level of expenditure onwhich no tax relief was available. This consisted of mainly flotation costs andshare-based payments. The deferred tax asset of £2,262,000 at 30 June 2007 is in respect of tax lossesbrought forward, share options and accelerated capital allowances. The deferred tax asset relating to share options at 30 June 2007 is £1,682,000(1 January 2007: £320,000). This increase is mainly due to the Company's shareprice rising from £3.95 at 1 January 2007 to £6.28 at 30 June 2007. The deferredtax movement on this asset has been recognised in equity (£857,000) to theextent that it exceeds the related IFRS 2 charge reflected in the incomestatement. As at 1 January 2007, the Company had a deferred tax asset in respect of taxlosses carried forward of £689,000. These losses crystallised as a result of thecorporation tax deduction available under Schedule 23 in respect of shareoptions exercised by employees. The large deduction resulted from optionsexercised when the Company listed on the London Stock Exchange. The deferred taxasset in respect of these losses was released directly to equity in accordancewith the requirements of IFRS 2 and a notional charge of £345,000 was applied inthe period ended 30 June 2007. 7 Trade and other payables 30 June 2007 30 June 2006 31 Dec 2006 £000 £000 £000 Trade payables 989 862 925Amounts owed to relatedparties - - 4Amounts accrued in relationto purchase of treasuryshares 3,094 - -Trade accruals 2,060 949 1,472Other creditors 373 - 339Other taxation and socialsecurity 2,201 1,032 1,320Deferred income fromgovernment contract 1,452 2,528 1,775 ---------- ---------- ---------- 10,169 5,371 5,835 ---------- ---------- ---------- 8 Share buy back In June 2007, the Company commenced a share buy back program to purchase its ownshares. Treasury shares represent the aggregate cost of £7,136,921 of theCompany's ordinary shares purchased as at 30 June 2007. These shares wereacquired on the open market using funds provided by the Company. The maximum andminimum prices paid in respect of shares purchased were 612p and 600p per sharerespectively. The total number of shares bought back at 30 June 2007 was1,176,966, representing 1% of the issued share capital. 9 Reconciliation of movements in shareholders' funds 6 months 6 months 12 months ended ended ended 30 June 2007 30 June 2006 31 Dec 2006 £000 £000 £000 At 1 January 16,009 5,622 5,622Profit for the period 8,686 499 4,344Dividends to shareholders (3,729) - (1,861)New shares issued 105 20,037 20,037EBT own shares held 514 (17,707) (17,707)Bonus issue - (1,275) (1,275)Notional corporation taxcharge recognised inreserves - 1,359 -Equity settled share optionscharge 1,210 794 2,168Tax in respect of shareoptions recognised directlyin equity 857 3,305 4,681Purchase of treasury shares (7,137) - -Gain on exercise of shareoptions 324 - - ---------- ---------- ----------Closing shareholders' funds 16,839 12,634 16,009 ---------- ---------- ---------- Notes (continued) 10 Acquisitions On 21 March 2007, the Company acquired 66.67% of the ordinary share capital ofHoliday Lettings Limited (HLL), a provider of online advertising services toowners of holiday rental properties, for consideration of £3,216,208, includingacquisition costs of £72,977. From the date of acquisition to 30 June 2007, theacquisition contributed £483,149 to Group revenue and £92,620 to Group profit.If the acquisition had been completed on the first day of the financial year,the acquisition would have contributed £952,217 to Group revenue and £258,179 toGroup profit. In terms of the shareholders' agreement a put and call option exists to acquirethe remaining 33.33%. The earliest opportunity HLL management has to exercisethe put option is 30 June 2009 based on the audited accounts for the 12 monthsending 31 December 2008. The deferred consideration element has been recognisedbased on management's best estimate of likely EBIT for the year then ending at amultiple of six times the agreed formula and discounted at a risk-free rate of5.72%. All intangible assets were recognised at their respective values. The residualexcess over the net assets acquired is recognised as goodwill in the financialstatements. The adjustments applied to the book values of the assets andliabilities of HLL in order to present the net assets at fair values inaccordance with Group accounting principles are as follows: Carrying Fair Fair values value values pre-acquisition adjustments £000 £000 £000 Net assets acquiredNon-current assetsProperty, plant and equipment 12 1 13Intangible assets -customer relationships - 514 514 ---------- ---------- ---------- 12 515 527Current assetsTrade and otherreceivables 279 (16) 263Cash and othercash equivalents 36 - 36 ---------- ---------- ---------- 315 (16) 299Current liabilities (207) 5 (202) Non-current liabilitiesDeferred tax liabilities (2) (124) (126) ---------- ---------- ----------Fair value of net assetsacquired 118 380 498Purchase consideration- cash 3,213Purchase consideration- accrued expenses 3Purchase consideration - deferred 2,202 ---------- ---------- ----------Total consideration 5,418Goodwill 4,920 Included in the £4,920,003 of goodwill recognised are certain intangible assetsthat cannot be individually separated and reliably measured due to their nature.These items include an assembled workforce and operating synergies. 6 months endedNet cash flow on acquisition 30 June 2007 £000 Cash paid for subsidiary (3,213)Cash acquired 36 ----------Net cash outflow (3,177) ---------- Independent review report to Rightmove plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the primary financialstatements and the related notes 1 to 10. We have read the other informationcontained in 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 the terms of ourengagement to assist the company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the company forour review work, for this report, or for the conclusions we have reached. 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 should be consistentwith 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 guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the UK. A review consistsprincipally of making enquiries of management and applying analytical proceduresto the financial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Statements on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot 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 2007. KPMG Audit PlcChartered AccountantsMilton Keynes31 August 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Rightmove