14th Aug 2006 07:00
Michael Page International PLC14 August 2006 Half Year Results for the Period Ended 30 June 2006 Michael Page International plc ("Michael Page"), the specialist professionalrecruitment company, announces its half year results for the period ended 30June 2006. Key Points • Turnover up 24.6% to £312.0m (2005: £250.4m)• Gross profit up 30.0% to £166.6m (2005: £128.2m)• Operating profit up 47.4% to £45.1m (2005: £30.6m)• £26.7m of cash generated from operations (2005: £20.1m)• Gross profit from permanent placements up 33.6%• Gross profit split between permanent and temporary placements was 75:25 (2005: 73:27)• Basic earnings per share up 37.9% to 9.1p (2005: 6.6p). Diluted earnings per share 8.8p (2005: 6.5p)• 11.35m shares repurchased at a cost of £39.7m• Interim dividend up by 20.0% to 1.8p per share (2005: 1.5p) Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said: "This is a strong set of results, with good increases in gross profit, operatingprofit and dividends. We experienced excellent growth in most geographies andare particularly encouraged by our performances in Europe and the Americas. "Our investment in developing existing staff, hiring new people, launching newbusinesses and opening new offices and countries ensures we are well positionedfor continued growth. The outlook remains positive and we remain confident ofsustained progress into the second half of the year." Enquiries: Michael Page International plc Steve Ingham, Chief Executive 01932 264144 Stephen Puckett, Finance Director 01932 264144 Financial Dynamics Richard Mountain/Susanne Walker 020 7269 7121 CHAIRMAN'S STATEMENT The Group produced a strong set of results for the first half of 2006. Goodgrowth was achieved, delivering significantly improved profits. We continued toinvest in the business and there remain numerous opportunities for furtherexpansion. The Group's turnover for the six months ended 30 June 2006 increased by 24.6% to£312.0m (2005: £250.4m) and gross profit increased 30.0% to £166.6m (2005:£128.2m). The Group's business model with inherent high operational gearing,combined with management's close attention to costs, has resulted in operatingprofit increasing by 47.4% to £45.1m (2005: £30.6m). Profit before tax was£45.2m (2005: £30.5m). We continued to invest in our global office network and our own people. At 30June 2006 our staff numbers had increased to 3,230 (2005: 2,747) operating from122 offices in 19 countries. During the period we opened in Mexico and ourongoing organic expansion programme will continue in the second half withopenings planned in South Africa, Republic of Ireland, United Arab Emirates andRussia. We generated significantly higher growth in gross profit from permanentplacements (+33.6%) than from temporary placements (+20.1%). In the first halfof 2006 the mix of the Group's turnover and gross profit between permanent andtemporary placements was 42:58 (2005: 39:61) and 75:25 (2005: 73:27)respectively. The gross margin on temporary placements increased to 23.2%(2005: 22.9%). UNITED KINGDOM Turnover of the UK operations increased by 19.7% to £153.1m (2005: £127.9m),gross profit increased by 20.8% to £76.0m (2005: £62.9m) and operating profitincreased by 26.5% to £19.6m (2005: £15.5m). Excluding our Scottish operations,which are managed separately from the rest of the UK, gross profit from Financeand Accounting increased by 15%, Marketing, Sales and Retail increased by 14%and the other disciplines increased by 42%. In Scotland we had a very successfulfirst half with gross profit increasing by 66%. During the first half staffnumbers increased by 70 to 1,387 at the end of June. CONTINENTAL EUROPE Turnover of the Continental European operations increased by 35.2% to £104.4m(2005: £77.2m), gross profit increased by 45.6% to £59.3m (2005: £40.7m) andoperating profit increased 106.8% to £16.1m (2005: £7.8m). Our largest businessin this region is France, which currently contributes approximately 40% of theregion's gross profit and grew 25% in the first half of 2006. Elsewhere in theregion our businesses are all performing well growing gross profits by 64%. Wecontinue to invest in all countries in the region as we roll-out ourdisciplines. Since the beginning of the year we have added 140 staff making theregion's headcount 1,181 at the end of June 2006. ASIA PACIFIC Turnover of the Asia Pacific operations increased by 9.9% to £41.0m (2005:£37.3m). Gross profit increased by 14.6% to £21.6m (2005: £18.8m). Operatingprofit increased by 18.3% to £7.8m (2005: £6.6m). At the end of June we had 390staff in the region, an increase of 31 since the start of the year. Our largest business in the region, Australia, produced a disappointingperformance in the first half with gross profit increasing by 4%. As aconsequence we have made a number of management and operational changes whichwill be fully implemented by the end of the third quarter. While we believethese changes will be successful, they are unlikely to have any significantimpact in the remainder of the current year. Our offices in Hong Kong, Shanghai, Tokyo and Singapore all had a strong firsthalf, growing gross profits collectively by 35%. THE AMERICAS In the Americas, turnover increased by 69.0% to £13.5m (2005: £8.0m) and grossprofit increased by 70.4% to £9.7m (2005: £5.7m). Operating profit increased117.0% to £1.6m (2005: £0.7m). While we have not opened a new office in the USAand Canada during the first half, we have invested heavily in new staff into theexisting offices and begun the discipline roll-out starting with HumanResources, Sales and Marketing. In Brazil we achieved strong growth benefitingfrom further investment in new staff. In the region we now have 272 staff, anincrease of 64 since the start of the year. TAXATION AND EARNINGS PER SHARE The charge for taxation is based on the expected effective annual tax rate of32.5% (2005: 26.0%) on profit before taxation. The effective rate was lower in2005 due to the utilisation and recognition of prior years' tax losses. Basic earnings per share for the six months ended 30 June 2006 was 9.1p (2005:6.6p) and diluted earnings per share was 8.8p (2005: 6.5p). CASH FLOW The Group started the year with net cash of £13.1m. In the first half wegenerated £26.7m from operations after funding a £23.9m increase in workingcapital reflecting the increased activity. Tax paid was £10.5m, and net capitalexpenditure was £3.0m. During the first half £39.7m was spent repurchasing11.35m shares at an average price of 347.0p and dividends of £12.1m were paid.20.4m share options were exercised during the first half generating £33.2m. At30 June 2006, 18.4m share options are outstanding of which 6.7m have vested buthave not been exercised. The Group had net cash of £7.5m at 30 June 2006. DIVIDENDS As previously stated, it is the Board's intention to pay dividends at a levelwhich it believes is sustainable throughout economic cycles and to continue touse share repurchases to return surplus cash to shareholders. The Board hasdecided to increase the interim dividend by 20% to 1.8p (2005: 1.5p) per share.The interim dividend will be paid on 13 October 2006 to shareholders on theregister at 15 September 2006. CURRENT TRADING AND FUTURE PROSPECTS The first half of the year produced record results for the Group with a numberof excellent performances around the world. We continued to invest in thebusiness and there remain numerous opportunities for further expansion. We willissue our third quarter trading update on 5 October 2006. Adrian MontagueChairman 14 August 2006 Unaudited Condensed Consolidated Interim Income Statement for the six monthsended 30 June 2006 Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Turnover 3 312,017 250,415 523,810 Cost of sales (145,429) (122,247) (256,229) Gross profit 3 166,588 128,168 267,581 Administrative expenses (121,511) (97,586) (201,062) Operating profit 3 45,077 30,582 66,519 Financial income 376 193 393 Financial expenses (255) (231) (776) Profit before tax 45,198 30,544 66,136 Income tax expense 4 (14,690) (7,942) (16,506) Profit for the period 30,508 22,602 49,630 Attributable to: Equity holders of the parent 30,508 22,602 49,630 Earnings per share Basic earnings per share (pence) 7 9.1 6.6 14.8 Diluted earnings per share (pence) 7 8.8 6.5 14.4 The above results relate to continuing operations. Unaudited Condensed Consolidated Interim Statement of Changes in Equity at 30June 2006 Called -up Capital Currency share Share redemption EBT Treasury translation Retained Total capital premium reserve reserve shares reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2005 3,572 - 178 (9,871) (13,122) (188) 79,931 60,500Currency translation - - - - - (203) - (203)differencesNet expense recognised - - - - - (203) - (203)directly in equity Profit for the six months - - - - - - 22,602 22,602ended 30 June 2005Total recognised - - - - - (203) 22,602 22,399(expense)/income for theperiodPurchase of own shares - - - - (24,920) - - (24,920)Credit in respect of - - - - - - 1,360 1,360share schemesDividends - - - - - - (9,444) (9,444) - - - - (24,920) - (8,084) (33,004) Balance at 30 June 2005 3,572 - 178 (9,871) (38,042) (391) 94,449 49,895 Balance at 1 July 2005 3,572 - 178 (9,871) (38,042) (391) 94,449 49,895Currency translation - - - - - 695 - 695differencesNet income recognised - - - - - 695 - 695directly in equityProfit for the six months - - - - - - 27,028 27,028ended 31 December 2005Total recognised income - - - - - 695 27,028 27,723for the periodPurchase of our own - - - - (9,296) - - (9,296)sharesCancellation of treasury (246) - 246 - 47,338 - (47,338) -sharesCredit in respect of - - - - - - 5,562 5,562share schemeDividends - - - - - - (4,988) (4,988) (246) - 246 - 38,042 - (46,764) (8,722) Balance at 31 December 3,326 - 424 (9,871) - 304 74,713 68,8962005 Balance at 1 January 2006 3,326 - 424 (9,871) - 304 74,713 68,896Currency translation - - - - - (811) - (811)differencesNet expense recognised - - - - - (811) - (811)directly in equityProfit for the six months - - - - - - 30,508 30,508ended 30 June 2006Total recognised - - - - - (811) 30,508 29,697(expense)/income for theperiodPurchase of own shares (113) - 113 - - - (39,656) (39,656)for cancellationIssue of share capital 205 33,001 - - - - - 33,206Transfer to EBT reserve - - - 970 - - (970) -Credit in respect of - - - - - - 7,856 7,856share schemesDividends - - - - - - (12,100) (12,100) 92 33,001 113 970 - - (44,870) (10,694) Balance at 30 June 2006 3,418 33,001 537 (8,901) - (507) 60,351 87,899 Unaudited Condensed Consolidated Interim Balance Sheet at 30 June 2006 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000Non-current assetsProperty, plant and equipment 19,649 18,352 19,666Intangible assets - Goodwill 1,539 1,539 1,539 - Computer software 2,082 2,448 2,212Deferred tax assets 7,289 6,891 9,255Other receivables 1,907 1,756 1,106 32,466 30,986 33,778 Current assetsTrade and other receivables 131,758 102,399 104,935Current tax receivable 27 623 336Cash and cash equivalents 10 25,846 14,984 20,060 157,631 118,006 125,331 Total assets 3 190,097 148,992 159,109 Non-current liabilitiesOther payables (599) (2,166) (662)Provisions for liabilities and charges (96) (394) (192)Deferred tax liabilities (230) (219) (147) (925) (2,779) (1,001) Current liabilitiesTrade and other payables (76,511) (62,397) (71,624)Bank overdrafts 10 (18,300) (21,035) (281)Bank loans 10 - - (6,700)Current tax payable (6,174) (12,406) (10,223)Provisions for liabilities and charges (288) (480) (384) (101,273) (96,318) (89,212) Total liabilities 3 (102,198) (99,097) (90,213) Net assets 87,899 49,895 68,896 Capital and reservesCalled-up share capital 3,418 3,572 3,326Share premium 33,001 - -Capital redemption reserve 537 178 424EBT reserve (8,901) (9,871) (9,871)Treasury shares - (38,042) -Currency translation reserve (507) (391) 304Retained earnings 60,351 94,449 74,713 Total equity 87,899 49,895 68,896 Unaudited Condensed Consolidated Interim Statement of Cash Flows for the sixmonths ended 30 June 2006 Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 Cash generated from operations 9 26,660 20,063 65,432Income tax paid (10,548) (1,216) (10,127)Net cash from operating activities 16,112 18,847 55,305 Cash flows from investing activitiesPurchases of property, plant and equipment (3,103) (3,187) (7,167)Purchases of computer software (251) (611) (965)Proceeds from the sale of property, plant and 311 921 1,354equipment, and computer softwareProceeds from the sale of business - - 1,353Interest received 376 193 393Net cash used in investing activities (2,667) (2,684) (5,032) Cash flows from financing activitiesDividends paid (12,100) (9,444) (14,432)Interest paid (249) (216) (773)Proceeds from bank loan - - 6,700Repayment of bank loan (6,700) - -Issue of own shares from the exercise of share 33,206 - -optionsPurchase of own shares (39,656) (24,920) (34,216)Net cash used in financing activities (25,499) (34,580) (42,721) Net (decrease)/increase in cash and cash equivalents (12,054) (18,417) 7,552Cash and cash equivalents at the beginning of the 19,779 12,215 12,215periodExchange (losses)/gains on cash and cash equivalents (179) 151 12Cash and cash equivalents at the end of the period 10 7,546 (6,051) 19,779 Notes to the unaudited condensed consolidated interim financial information 1. Corporate information Michael Page International plc is a limited liability company incorporated anddomiciled within the United Kingdom whose shares are publicly traded. Thecondensed consolidated interim financial statements of the Company as at and forthe six months ended 30 June 2006 comprise the Company and its subsidiaries(together referred to as the "Group"). The condensed consolidated interim financial statements of the Group for the sixmonths ended 30 June 2006 were authorised for issue in accordance with aresolution of the directors on 11 August 2006. 2. Basis of preparation and accounting policies Basis of preparation These condensed consolidated interim financial statements have been prepared inaccordance with the recognition and measurement criteria of IFRS and thedisclosure requirements of the Listing Rules. They do not include all theinformation required for full annual financial statements, and should be read inconjunction with the consolidated financial statements of the Group as at andfor the year ended 31 December 2005. The condensed consolidated interimfinancial statements are unaudited but have been reviewed by the auditors andtheir report is included. Nature of financial information The financial information set out above does not constitute the Group's auditedstatutory accounts within the meaning of Section 240 of the Companies Act 1985.The financial information for the year ended 31 December 2005 has been extractedfrom the statutory accounts for that year which have been delivered to theRegistrar of Companies. The report of the auditors on those accounts wasunqualified and did not contain a statement under Section 237 (2) or (3) of theCompanies Act 1985. Significant accounting policies The accounting policies applied by the Group in these condensed consolidatedinterim financial statements are the same as those applied by the Group in itsconsolidated financial statements as at and for the year ended 31 December 2005. 3. Segment reporting Business is the Group's primary segment. The consolidated entity operates inone business segment being that of recruitment services. As a result, noadditional business segment information is required to be provided. The Group'ssecondary segment is geography. The segment results by geography are shownbelow: a) Turnover and gross profit by geographic region Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 153,120 127,876 269,623 76,027 62,946 129,535 Continental Europe 104,392 77,228 159,157 59,301 40,719 86,138 Asia Pacific Australia 31,604 30,230 61,152 12,874 12,365 24,722 Other 9,378 7,077 15,565 8,677 6,440 14,315 Total 40,982 37,307 76,717 21,551 18,805 39,037 Americas 13,523 8,004 18,313 9,709 5,698 12,871 312,017 250,415 523,810 166,588 128,168 267,581 The above analysis by destination is not materially different to analysis byorigin. The analysis below is of the carrying amount of segment assets, segmentliabilities and capital expenditure. Segment assets and liabilities includeitems directly attributable to a segment as well as those that can be allocatedon a reasonable basis. The individual geographic segments exclude income taxassets and liabilities. Capital expenditure comprises additions to property,plant and equipment, motor vehicles and computer hardware/software. b) Segment assets, segment liabilities and capital expenditure by geographic region Total Assets Total Liabilities Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 76,267 60,981 66,379 52,344 51,634 39,159 Continental 79,858 59,533 64,932 34,535 27,695 31,648Europe Asia Pacific Australia 13,619 14,069 12,256 5,116 4,944 5,547 Other 9,215 7,230 6,877 1,712 1,170 1,694 Total 22,834 21,299 19,133 6,828 6,114 7,241 Americas 11,111 6,556 8,329 2,317 1,248 1,942 Segment assets/liabilities 190,070 148,369 158,773 96,024 86,691 79,990 Income tax assets/ 27 623 336 6,174 12,406 10,223liabilities 190,097 148,992 159,109 102,198 99,097 90,213 Capital Expenditure Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 United Kingdom 947 1,821 3,117 Continental Europe 1,332 852 2,403 Asia Pacific Australia 229 176 773 Other 204 408 584 Total 433 584 1,357 Americas 642 541 1,255 Segment capital expenditure 3,354 3,798 8,132 c) Turnover and gross profit by discipline Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 £'000 Finance and accounting 197,083 160,551 336,207 97,361 76,248 159,463 Marketing, sales and 48,765 40,926 84,591 32,642 26,792 55,111retail Other 66,169 48,938 103,012 36,585 25,128 53,007 312,017 250,415 523,810 166,588 128,168 267,581 d) Turnover and gross profit generated from permanent andtemporary placements Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2006 2005 2005 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 £'000 Permanent 132,419 98,692 205,482 124,896 93,461 194,967 Temporary 179,598 151,723 318,328 41,692 34,707 72,614 312,017 250,415 523,810 166,588 128,168 267,581 e) Operating profit by geographic region Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 United Kingdom 19,568 15,464 31,939 Continental Europe 16,122 7,797 19,449 Asia Pacific Australia 4,018 4,268 8,509 Other 3,774 2,318 5,593 Total 7,792 6,586 14,102 Americas 1,595 735 1,029 Operating profit 45,077 30,582 66,519 The above analyses in notes (b) segment liabilities by geographic region, (c)turnover and gross profit by discipline (being the professions of candidatesplaced), (d) turnover and gross profit generated from permanent and temporaryplacements and (e) by operating profit, have been included as additionaldisclosure over and above the requirements of IAS 14 "Segment Reporting". Note (d) turnover and gross profit generated from permanent and temporaryplacements has been included for the first time this year for the purposes ofproviding additional information. 4. Taxation The Group's consolidated effective tax rate in respect of continuing operationsfor the six months ended 30 June 2006 was 32.5% (30 June 2005: 26.0% , 31December 2005: 25.0%) Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Tax chargeUnited Kingdom 8,102 5,497 9,191Overseas 6,588 2,445 7,315 Income tax expense reported in the condensed 14,690 7,942 16,506consolidated income statement 5. Dividends Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Amounts recognised as distributions to equity holders in the period:Final dividend for the year ended 31 December 2005 of 3.5p per 12,100 9,444 9,444ordinary share (2004: 2.75p)Interim dividend for the period ended 30 June 2005 of 1.5p per - - 4,988ordinary share 12,100 9,444 14,432 Amounts proposed as distributions to equity holders in the period:Proposed interim dividend for the six months ended 30 June 2006 of1.8p per ordinary share (2005: 1.5p) 6,092 4,988 - The proposed interim dividend had not been approved by the Board at 30 June 2006and therefore has not been included as a liability. The comparative interimdividend at 30 June 2005 was also not recognised as a liability in the priorperiod. The proposed interim dividend of 1.8 pence (2005: 1.5 pence) per ordinary sharewill be paid on 13 October 2006 to shareholders on the register at the close ofbusiness on 15 September 2006. 6. Share-based payments In accordance with IFRS 2 "Share-based Payment", a charge of £3.2m has beenrecognised for share options including social charges (30 June 2005: £0.9m, 31December 2005: £2.9m), and £2.0m has been recognised for other share-basedpayment arrangements including social charges (30 June 2005: £0.6m, 31 December2005: £1.5m). 7. Earnings per ordinary share The calculation of the basic and diluted earnings per share is based on thefollowing data: Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 EarningsEarnings for basic earnings per share (£'000) 30,508 22,602 49,630 Number of sharesWeighted average number of shares used for basic earnings per share 336,276 341,591 336,283('000)Dilution effect of share plans ('000) 8,839 5,617 9,014Diluted weighted average number of shares used for diluted earnings per 345,115 347,208 345,297share ('000) Basic earnings per share (pence) 9.1 6.6 14.8Diluted earnings per share (pence) 8.8 6.5 14.4 The above results relate to continuing operations. 8. Property, plant and equipment Acquisitions and disposals During the six months ended 30 June 2006 the Group acquired property, plant andequipment with a cost of £3.1m (30 June 2005: £3.2m, 31 December 2005: £7.2m). Property, plant and equipment with a carrying amount of £0.3m were disposed ofduring the six months ended 30 June 2006 (30 June 2005: £0.7m, 31 December 2005:£1.1m), resulting in neither a gain nor a loss on disposal (30 June 2005: gainof £0.2m, 31 December 2005: gain of £0.2m). Capital commitments The Group had contractual capital commitments of £1.3m as at 30 June 2006 (30June 2005: £0.5m, 31 December 2005: £0.4m) relating to property, plant andequipment. 9. Cash flows from operating activities Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Profit before tax 45,198 30,544 66,136Depreciation and amortisation charges 3,041 3,080 6,162Loss/(profit) on sale of property, plant and equipment, and 359 (150) (183)computer softwareProfit on the sale of business - - (622)Share scheme charges 2,045 955 2,694Net finance (income)/cost (121) 38 383Operating cashflow before changes in working capital and 50,522 34,467 74,570provisionsIncrease in receivables (28,357) (17,096) (17,907)Increase in payables 4,687 3,008 9,381Decrease in provisions (192) (316) (612)Cash generated from operations 26,660 20,063 65,432 10. Cash and cash equivalents Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Cash at bank and in hand 16,654 11,103 11,095Short term deposits 9,192 3,881 8,965Cash and cash equivalents 25,846 14,984 20,060Bank overdrafts (18,300) (21,035) (281)Cash and cash equivalents in the statement of cash flows 7,546 (6,051) 19,779Bank loans - - (6,700)Net funds/(debt) 7,546 (6,051) 13,079 INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprise the condensed consolidatedincome statement, the condensed consolidated statement of changes in equity, thecondensed consolidated balance sheet, the condensed consolidated statement ofcash flows and 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 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 AccountantsLondon14 August 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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