26th Feb 2008 07:00
White Young Green PLC26 February 2008 For immediate release 26 February 2008 WHITE YOUNG GREEN PLC Interim results for the six months ended 31 December 2007 White Young Green Plc, consultant to the built, natural and social environment,announces its interim results for the six months ended 31 December 2007. Highlights: - 35% increase in revenue to £134.1m (2006: £99.1m) - 38% increase in adjusted operating profit to £11.7m (2006: £8.4m)* - 31% increase in adjusted profit before tax to £9.0m (2006: £6.9m)* - 21% organic growth in revenue - 22% increase in adjusted earnings per share to 13.1p (2006: 10.7p)* - 10% increase in interim dividend to 3.2p (2006: 2.9p) - 18% increase in net order book to a record of £390m (2006: £330m) - 3 acquisitions completed since July 2007 Statutory disclosures: - 43% increase in operating profit to £9.7m (2006: £6.8m) - 35% increase in profit before tax to £7.1m (2006: £5.3m) - 43% increase in earnings per share to 10.3p (2006: 7.2p) Commenting on the results, Chairman Peter Wood said: "The outlook for White Young Green continues to be positive with an order bookat record levels and a service offering which continues to expand. The strategyof having a broadly based business with no disproportionate dependence onspecific sectors of the economy means the Group is well positioned to meet theincreasing demands of its growing client base. This resilient business modelwill enable it to continue to progress and the Board expects to deliver fullyear results in line with its expectations." * Adjusted business performance excludes the amortisation of acquired intangible assets For further information, please contact: WHITE YOUNG GREEN PLC Tel: (0113) 278 7111Lawrie Haynes, Chief Executive OfficerBob Hartley, Finance Director BUCHANAN COMMUNICATIONS Tel: (020) 7466 5000Tim Anderson / Rebecca Skye Dietrich CHAIRMAN'S STATEMENT White Young Green ("WYG") has made further substantial progress over the lastsix months and has delivered an excellent set of results in the period to 31December 2007. Gross revenue, net revenue and profit before tax and intangibleamortisation have all increased by over 30% as a result of strong organicrevenue growth of 21% and the contribution from businesses acquired in the past18 months which are all integrating well. The range of services now offered by WYG and the geographic footprint in whichthe Group operates provide a resilient base from which to continue to developthe business. It is a major part of the Group's strategy to have a broadlybased business with no disproportionate dependence on either a particular sectorof the economy or a particular client. This means that the Group is wellpositioned to take advantage of investment commitments from wherever they mayarise, in a continually changing market environment. RESULTS In the six month period to 31 December 2007, gross revenue grew by 35% to£134.1m (2006: £99.1m). Net revenue attributable to in-house services increasedby 38% to £108.9m (2006: £79.0m). This increase has been generated by a mixtureof acquisitive and organic growth. Excluding the contribution from acquisitionsmade in 2006 and 2007, organic growth in revenue was particularly pleasing at21% (2006: 11%). Operating profit before amortisation of acquired intangibles increased by 38% to£11.7m (2006: £8.4m). Operating profit margin on net revenue was 10.7% (2006:10.7%). Profit before tax and amortisation of acquired intangibles increased by31% to £9.0m (2006: £6.9m). Profit before tax increased by 35% to £7.1m (2006:£5.3m). Earnings per share adjusted to exclude amortisation of acquired intangibleassets increased by 22% to 13.1p (2006: 10.7p). This increase reflects theincrease in profitability whilst taking account of the increase in the averagenumber of shares in issue in the period of 8% to 50.3m (2006: 46.5m), followingthe issue of shares in satisfaction of consideration for acquisitions and shareoption arrangements. Earnings per share after amortisation of acquiredintangibles increased by 43% to 10.3p (2006: 7.2p). The six months have seen a significant improvement in the cash generated fromoperations to £7.5m (2006: (£0.2m)) as a result of improved management ofworking capital. Working capital days in the UK and Ireland have fallen to 109days (2006: 114 days). This is particularly important at a time when revenue isgrowing so quickly. Working capital management will continue to be an area ofsignificant focus for the Group and further improvements are targeted for thesecond half of the financial year. Net debt at 31 December 2007 increased as anticipated to £70.6m (2006: £43.2m),principally as a result of expenditure on acquisition activity in the period of£22.1m. This gives a gearing level of 67% (2006: 52%). Finance costs in theperiod increased to £2.7m (2006: £1.5m) mainly due to the increase in borrowingsand the increase in LIBOR and EURIBOR rates in the period. The interest cost ofborrowings was covered 4.8 times (2006: 6.2 times) by operating profit. DIVIDEND The interim dividend is being increased by 10% to 3.2p (2006: 2.9p). This willbe paid on 11 May 2008 to shareholders on the register at 25 March 2008. REVIEW OF OPERATIONS WYG has enjoyed another six months of successful trading with the order book up18% to £390m (2006: £330m) and prospects for future growth continuing tostrengthen across all three business segments. The business mix across the Group has continued to evolve and remains wellbalanced between the public and private sectors at 48% and 52% respectively. Inthe six month period to December 2007, the strongest growth has been deliveredin Engineering, with revenue up by 42%. In part this was due to the acquisitionof Adams Kara Taylor ("AKT"), the award winning civil and structural engineeringconsultancy but it was also due to excellent organic growth of 23%, particularlyin Rail and in Ireland. As a result of this growth Engineering now accounts for43% (2006: 41%) of Group revenue. Management Services, which comprises 33% (2006: 36%) of Group revenue, enjoyedsignificant organic growth of 20% in the period, fuelled by the ongoingdevelopment of the recently acquired businesses of Tweeds, Nolan Ryan and TrenchFarrow and a significant increase in throughput from WYG International in areassuch as Poland, Romania and Turkey. Environment saw growth of 39% in the six month period and comprises 24% (2006:23%) of Group revenue. This growth is in part due to the acquisition of TurnerHolden and Savell, Bird and Axon but was also bolstered by a 20% rate of organicgrowth. Engineering Engineering revenues grew in the period by 42% to £58.3m (2006: £41.1m) of whichorganic growth was an excellent 23%. Operating profit increased in the periodby 40% to £3.7m (2006: £2.7m). Operating margin on net revenue was maintainedat 7%. Favourable trading conditions and a successful track record in providingeffective business solutions continue to see WYG win work in strong growthsectors such as energy, education and transportation. Recent project wins haveincluded a multi-disciplinary opportunity in the energy sector, on a BioethanolPlant at Stallingborough, Lincolnshire on behalf of Abengoa Bioenergy UK. Theplant will be the largest of its kind in the UK and will contribute towards thepromotion of the UK fuel diversity policy by reducing the UK's dependence onfossil fuels. In education WYG has been appointed to provide civil andstructural engineering services for a new multi-storey £7m Sixth Form and ITCentre within the existing Blackburn College campus. The Olympics in 2012continue to generate opportunities and in the period AKT was successful as amember of the winning team chosen to design the Carpenter's Lock Footbridge.The footbridge will form a focal point between the Olympic stadium, the aquaticscentre and the basketball arena. In transportation WYG was appointed toundertake a programme of extensive inspections and design assessments as part ofthe strategic appraisal process for Network Rail on the Victoria Station easternroof renewal design works. Management Services Gross revenue from Management Services grew in the period by 26% to £44.4m(2006: £35.4m). The organic growth in the period was strong at 20%. Operatingprofit grew in the period by 23% to £4.3m (2006: £3.5m). Operating margin onnet revenue was maintained at 15% (2006: 15%). Management Services is defined as non-design related skills and comprise, in GBand Ireland, three key components: cost management, project and propertymanagement and health and safety management. In the international arenaManagement Services comprises the socio-economic advisory service provided byWYG International to the development aid donor market including the EU, WorldBank and UK Department for International Development. These services are all ofa high strategic value to clients assisting them in key decision makingprocesses and, as a consequence, attract high margins. Recent project success in Management Services has included an exciting contractwith Somerset County Cricket Club to redevelop the cricket ground in Taunton forPegasus Retirement Homes. It is one of the first of its kind in the UK toinclude an "up-market" retirement homes development in a sports venue. TheManagement Services team in Ireland was appointed to the Citymart Kilkennyproject, a major new mixed-use urban development which will service the SouthEast region of Ireland. WYG International has seen strong growth in its traditional socio-economicregeneration market together with continued benefit from its diversificationinto technical services. Examples of project success in socio-economicregeneration have included Ready for Work Support for Disabled People in Poland,and Technical and Vocational Training in Romania. Technical project successesinclude the Development of Transport Strategy in Algeria and the Water andSanitation improvement project in Syria. Environment WYG helps to support and sustain the environment through the application of awide range of technology based environmental sciences and through the provisionof town planning services. Gross revenues from these business streams increasedin the period by 39% to £31.4m (2006: £22.6m) of which 20% was achievedorganically. Operating profit increased by 59% to £3.7m (2006: £2.3m) andoperating margin on net revenue improved to 14% (2006: 13%). WYG has been appointed by Peel Holdings to provide town planning services on themassive redevelopment programme at Liverpool docks. WYG also continues todevelop its reputation in the sustainability arena and is assisting DTZ todevelop a sophisticated methodology to assess the performance of building stockfor compliance with sustainable principles. In Northern Ireland WYG isassessing and mitigating the possible impacts on landscape, ecology and of noiseduring road improvements to the M1 Newry Bypass and A1 junction for the Amey,Lagan and Ferrovial Agroman consortium. In addition, WYG has been appointed by National Grid to provide comprehensiveconsultancy services in the specialist area of contamination and remediation.Increasingly clients are seeking WYG's professional and creative input in thedesign and development of innovative processes and systems that supports theiractivities in a sustainable and viable way. ACQUISITIONS WYG has completed three acquisitions since 1 July 2007 for a total initialconsideration of £33.1m. These comprise Independent Transport ConsultantsLimited trading as Savell, Bird and Axon ("SBA") and Management ConsultantsGroup Limited ("IMCL") in August 2007 and P H McCarthy Consulting EngineersLimited ("PHMP") in October 2007. The financial details of these acquisitionsare contained in Note 8 of the interim financial information. SBA operates from offices in London, Manchester and Cardiff and provides highlevel transportation consultancy to a range of clients across the public andprivate sector. They are recognised as leaders in their field and complementthe existing transportation expertise within WYG. IMCL provides international financial management consultancy services togovernments and public bodies in third world and transitional countries. Itoperates from a base in Southampton and provides services to clients such as theUK Department for International Development, the World Bank and the AsianDevelopment Bank. Its specialist expertise allows WYG International to broadenthe range of donor aid projects in which it participates. PHMP is one of Ireland's leading engineering consultancies with offices inDublin and Limerick. It specialises in large public infrastructure projects inthe water and highways sectors and also has a significant expertise in thebuilding sector. Its acquisition complements the current private sector/buildings expertise of the existing WYG Ireland Engineering team and allows theenlarged business to better access the public infrastructure development marketboth in Ireland and internationally. These acquisitions, together with those made last year, are continuing theprocess of integration into WYG and are performing in line with expectations.The acquisition pipeline remains strong and WYG intends to continue its strategyof growth both by acquisition and organically. EMPLOYEES WYG owes its success to its staff of over 3,000 people who dedicate their time,energy and enthusiasm to deliver a range of skills and disciplines to a largeand varied client base. A number of members of staff are recognised authoritiesin their field and it is encouraging to see staff being recognised in the periodby external organisations such as The Institution of Civil Engineers and TheCommission for Architecture and the Built Environment. The continued success of WYG is dependent upon being able to attract, retain anddevelop staff in what is a competitive environment and it has been pleasing tosee the progress made in the structured learning and development initiativesintroduced over the past six months. I would like to take this opportunity to thank all staff for their continuedhard work and effort. BOARD OF DIRECTORS In January 2008, Richard McCaffrey the Chief Operating Officer resigned from theBoard and the Company. During his seven years at WYG, Richard played asignificant role in developing both the scale and reach of the business and wethank him for his valued contribution. Lawrie Haynes, Chief Executive, will oversee the operations of the businessuntil a successor is appointed and the individual Business Units will continueto be managed and controlled by their respective Managing Directors. OUTLOOK Lawrie Haynes has now been with the Group for eight months and has completed hisinitial review of the business. The review highlights the quality of the staff,the client base and service offering at WYG and recognises the capacity to grow,both organically and by acquisition. It has also identified the opportunity toimprove staff retention, working capital management and to streamlineinformation management across the Group. These will be areas of additionalfocus in the second half of the financial year. The overall outlook for White Young Green continues to be positive in spite ofthe general economic uncertainty in the UK. The order book is at record levelsand continues to grow, the service offering continues to expand as new skillsare added and the workforce remains flexible and resilient. With these strongfoundations the Group is confident in its ability to continue to progress andthe Board expects to deliver full year results in line with its expectations. Unaudited consolidated income statement for the six months ended 31 December 2007 Six months ended 31 December Six months ended 31 December 2007 2006 Before Before Year ended amortisation Amortisation amortisation Amortisation 30 June of acquired of acquired of acquired of acquired 2007 intangibles intangibles Total intangibles intangibles Total Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000Continuing operationsRevenue 4 134,068 - 134,068 99,140 - 99,140 220,641Operating expenses (122,389) (1,937) (124,326) (90,703) (1,644) (92,347) (203,729)Operating profit 4 11,679 (1,937) 9,742 8,437 (1,644) 6,793 16,912Finance costs (2,652) - (2,652) (1,529) - (1,529) (3,548)Profit before tax 9,027 (1,937) 7,090 6,908 (1,644) 5,264 13,364Tax 5 (2,456) 542 (1,914) (1,934) - (1,934) (3,480)Profit attributable to equity 6,571 (1,395) 5,176 4,974 (1,644) 3,330 9,884shareholders Earnings per share 6Basic 13.1p (2.8p) 10.3p 10.7p (3.5p) 7.2p 21.0pDiluted 12.6p (2.7p) 9.9p 10.2p (3.4p) 6.8p 20.0p Dividend per shareInterim - proposed 3.2p - 3.2p 2.9p - 2.9p 2.9pFinal - proposed - - - - - - 5.4p 3.2p - 3.2p 2.9p - 2.9p 8.3pPaid 5.4p - 5.4p 4.6p - 4.6p 7.5p Dividends recognised in the period amounted to £2.7m (six months ended 31December 2006: £2.1m, year ended 30 June 2007: £3.5m). The interim dividendproposed but not recognised in these interim financial statements amounted to£1.7m (six months ended 31 December 2006: £1.3m). Unaudited consolidated balance sheet As at 31 December 2007 As at As at As at 31 31 30 June December December 2007 2006 2007 £'000 £'000 £'000Non-current assetsGoodwill 109,412 74,102 81,122Other intangible assets 17,047 11,058 10,506Property, plant and equipment 13,373 10,279 10,841Deferred tax assets 2,886 2,779 2,761Derivative financial instruments 183 52 305 142,901 98,270 105,535Current assetsWork in progress 42,112 34,842 38,896Trade and other receivables 83,925 57,909 66,548Tax recoverable 1,135 893 709Cash and cash equivalents 11,488 9,553 8,619 138,660 103,197 114,772Current liabilitiesTrade and other payables (82,934) (57,093) (68,100)Current tax liabilities (3,255) (4,067) (3,298)Financial liabilities (2,210) (9,306) (2,381) (88,399) (70,466) (73,779)Net current assets 50,261 32,731 40,993Non-current liabilitiesFinancial liabilities (79,854) (43,465) (50,810)Retirement benefit obligation (2,953) (4,103) (3,966)Deferred tax liabilities (4,608) (233) (2,823)Derivative financial instruments - (25) - (87,415) (47,826) (57,599)Net assets 105,747 83,175 88,929 Shareholders' equityShare capital 2,583 2,387 2,408Share premium account 73,206 56,907 58,124Hedging and translation reserve (1,786) (612) (687)Retained earnings 31,744 24,493 29,084Total shareholders' equity 105,747 83,175 88,929 Unaudited consolidated cash flow statement for the six months ended 31 December 2007 Six months Six months Year ended ended ended 31 31 December 30 June December 2007 2006 2007 Notes £'000 £'000 £'000Operating activitiesCash generated from/(used in) operations 7 7,512 (154) 11,351Interest paid (1,874) (1,046) (2,607)Tax paid (2,485) (967) (4,362)Net cash generated from/(used in) operating activities 3,153 (2,167) 4,382 Investing activitiesProceeds on disposal of property, plant and equipment 149 145 242Purchases of property, plant and equipment (1,981) (1,296) (2,390)Purchases of businesses (22,073) (10,444) (13,909)Purchases of intangible assets (computer software) (734) (635) (976)Cash balances acquired with businesses 1,611 2,829 3,061Net cash used in investing activities (23,028) (9,401) (13,972) Financing activitiesNet proceeds on issue of ordinary share capital 185 408 833Equity dividends paid (2,713) (2,119) (3,503)Repayment of borrowings (323) - (29,413)Draw down of loan facilities 27,433 11,500 48,102Repayments of obligations under finance leases (1,201) (1,574) (3,002)Purchase of own shares for Employee Benefit Trust (622) - (868)Net cash generated from financing activities 22,759 8,215 12,149 Net increase/(decrease) in cash and cash equivalents 2,884 (3,353) 2,559Cash and cash equivalents at beginning of period 8,604 6,045 6,045Cash and cash equivalents at end of period 11,488 2,692 8,604 Unaudited analysis of changes in net financial liabilities:for the six months ended 31 December 2007 At Other At 1 July Cash non cash 31 December 2007 flows Acquisitions items 2007 £'000 £'000 £'000 £'000 £'000Cash and cash equivalents 8,619 1,258 1,611 - 11,488Bank overdrafts (15) 15 - - -Bank loans due after one year (47,901) (27,433) - - (75,334)Loan notes due within one year (323) 323 (1,114) - (1,114)Finance leases and hire purchase contracts (4,952) 1,201 - (1,865) (5,616)Total (44,572) (24,636) 497 (1,865) (70,576) Unaudited consolidated statement of recognised income and expensefor the six months ended 31 December 2007 Six months Six months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 £'000 £'000 £'000Profit attributable to equity shareholders 5,176 3,330 9,884Net exchange adjustments offset in reserves net of tax (977) (207) (560)Actuarial losses on defined benefit pension schemes - - (84)(Losses)/gains on cash flow hedges (122) 27 305Tax on items taken directly to equity 55 439 133Total recognised income and expense for the period 4,132 3,589 9,678 Unaudited consolidated statement of changes in shareholders' equityfor the six months ended 31 December 2007 Six months Six months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 £'000 £'000 £'000Profit attributable to equity shareholders 5,176 3,330 9,884Net exchange adjustments offset in reserves net of tax (977) (207) (560)Actuarial losses on defined benefit pension schemes - - (84)(Losses)/gains on cash flow hedges (122) 27 305Share-based payments 142 694 505New share capital issued, net of expenses 15,257 5,658 6,896Tax on items taken directly to equity 55 439 133Equity dividends paid (2,713) (2,119) (3,503)Net addition to shareholders' equity 16,818 7,822 13,576Equity attributable to equity shareholders of the Company at beginning 88,929 75,353 75,353of the periodEquity attributable to equity shareholders of the Company at end of the 105,747 83,175 88,929period 1. Company details WYG is an international business providing consultancy services to the built,natural and social environment. 2. General information The interim financial report is unaudited. The financial information does notconstitute statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The financial information relating to the year ended 30 June 2007 isan extract from the latest published accounts which have been delivered to theRegistrar of Companies; the report of the auditors on these accounts wasunqualified. 3. Accounting policies The interim financial report has been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted by the European Union. The sameaccounting policies and methods of computation are followed in the interimfinancial statements as the latest published audited accounts, which areavailable on the Company's website at www.wyg.com. The interim financial reporthas been prepared in accordance with the Disclosure and Transparency Rules ofthe Financial Services Authority and with IAS 34 (Interim Financial Statements)as adopted by the European Union. 4. Segmental information For management purposes, the Group is currently organised into three operatingbusiness segments - Engineering, Management Services and The Environment. Thesebusiness segments are the basis on which the Group reports its primary segmentinformation. The segment results for the six months ended 31 December 2007 are as follows: Management The Engineering Services Environment Group £'000 £'000 £'000 £'000RevenueExternal sales 60,865 44,833 32,045 137,743Inter-segment sales (2,557) (451) (667) (3,675)Total revenue 58,308 44,382 31,378 134,068 ResultOperating profit before amortisation of acquired intangibles 3,731 4,258 3,690 11,679Amortisation of acquired intangibles (547) (801) (589) (1,937)Operating profit 3,184 3,457 3,101 9,742Finance costs (2,652)Profit before tax 7,090Tax (1,914)Profit attributable to equity shareholders 5,176 4. Segmental information continued The segment results for the six months ended 31 December 2006 are as follows: Management The Engineering Services Environment Group £'000 £'000 £'000 £'000RevenueExternal sales 43,787 35,622 23,334 102,743Inter-segment sales (2,645) (263) (695) (3,603)Total revenue 41,142 35,359 22,639 99,140 ResultOperating profit before amortisation of acquired intangibles 2,658 3,453 2,326 8,437Amortisation of acquired intangibles (280) (1,234) (130) (1,644)Operating profit 2,378 2,219 2,196 6,793Finance costs (1,529)Profit before tax 5,264Tax (1,934)Profit attributable to equity shareholders 3,330 5. Tax The tax charge for the six months ended 31 December 2007 has been calculated at27%, the estimated effective tax rate for the year ended 30 June 2008. 6. Earnings per share Adjusted earnings per share is calculated after adding back acquired intangibleasset amortisation after tax of £1.40m (2006: £1.64m), giving adjusted earningsof £6.57m (2006: £4.97m) which are divided by the average number of shares inissue during the period ranking for dividend of 50,302,601 (2006: 46,509,024). Earnings per share is calculated on the profit after tax of £5.18m (2006:£3.33m) and the average number of shares in issue disclosed above. Diluted earnings per share is calculated by taking the earnings as disclosedabove and the average number of shares that would be issued on the full exerciseof outstanding share options and the issue of shares in respect of deferredconsideration of 52,328,566 (2006: 48,923,768). 7. Cash generated from operations Six months Six months Year ended ended ended 31 December 31 December 30 June 2007 2006 2007 £'000 £'000 £'000Profit from operations 9,742 6,793 16,912Adjustments for: Depreciation of property, plant and equipment 2,137 1,848 3,773 Amortisation of intangible assets 2,404 2,022 3,458 (Profit)/loss on disposal of property, plant and equipment (24) 22 48 Share options charge 856 699 1,573Operating cash flows before movements in working capital 15,115 11,384 25,764 Increase in inventories (1,875) (3,469) (7,459) Increase in receivables (11,383) (2,735) (10,946) Increase/(decrease) in payables 5,655 (5,334) 3,992Cash generated from/(used in) operations 7,512 (154) 11,351 8. Business combinations On 6 August 2007 the Group acquired the entire share capital of IndependentTransport Consultants Limited. The Company trades as Savell, Bird and Axon. Theinitial consideration was £18.0m comprising £10.8m in cash and loan notes and1,661,858 shares in White Young Green Plc at a market value of £4.333 per share.Further consideration of up to £4.0m is payable if certain performance targetsare met. The additional consideration will be paid in either shares or loannotes at the option of the Group. On 14 August 2007 the Group acquired the entire share capital of ManagementConsultants Group Limited. The initial consideration was £1.6m comprising £0.8min cash and 179,776 shares in White Young Green Plc at a market value of £4.450per share. Further consideration of up to £0.4m is payable if certainperformance targets are met. The additional consideration will be paid in eithershares or loan notes at the option of the Group. On 9 October 2007 the Group acquired the entire share capital of P H McCarthyConsulting Engineers Limited. The initial consideration was £13.5m comprising£8.1m in cash and 1,183,893 shares in White Young Green Plc at a market value of£4.571 per share. Further consideration of up to £1.7m is payable if certainperformance targets are met. The additional consideration will be paid in eithershares or cash at the option of the Group. The following table sets out the fair value of the net assets acquired and theresulting goodwill: Carrying value Fair value Fair pre-acquisition adjustments value £'000 £'000 £'000Property, plant and equipment 961 - 961Work in progress 1,676 (335) 1,341Trade and other receivables 7,281 (574) 6,707Cash and cash equivalents 1,611 - 1,611Trade and other payables (4,693) (741) (5,434)Tax liabilities (44) (2,306) (2,350) 6,792 (3,956) 2,836Goodwill 28,902Customer relationships 6,703Order book 1,531 39,972 Satisfied by:Cash (including directly attributable costs) 19,312Shares issued 13,412Issue of loan notes 1,114Contingent consideration 6,134Total consideration 39,972 All assets and liabilities including intangible assets were recognised at theirrespective fair values. The residual excess over the net assets acquired isrecognised as goodwill in the accounts. The fair value adjustments made onacquisition relate to alignments of the acquired businesses' accounting policieswith those of the Group. Included within goodwill are the following assets which are specificallyexcluded by IFRS 3 in the identification of intangible assets on acquisition: • staff acquired as part of the business; and • strategic acquisition synergies. Contingent consideration is dependent on the future performance of the businessacquired. It is assumed that the performance targets will be achieved andtherefore the maximum consideration payable is included within deferredconsideration. Since acquisition the operations of the businesses acquired in the year havebeen integrated into the Group's existing operations. As a result it isimpractical to isolate the cash flows of the acquired businesses. The currentyear income statement includes revenue of £7,520,000 and an operating profit of£1,073,000 from entities acquired in the year. Had all acquisitions been made at the beginning of the year, the Group's revenueand profit before interest, acquired intangibles amortisation and tax would havebeen reported as £137,142,000 and £12,954,000 respectively. This information isnot necessarily indicative of the results of operations that would have occurredhad the purchase been made at the beginning of the year or the future results ofthe combined operations. 9. Availability of Interim Report The Interim Report will be posted to shareholders on 12 March 2008 and copieswill be available at the Company's registered office at Arndale Court,Headingley, Leeds LS6 2UJ, or on the Company's website www.wyg.com. Directors' Responsibility Statement in respect of the Interim Financial Report: We confirm that to the best of our knowledge: • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; • the interim management report includes a fair review of the information required by: (i) DTR 4.2.7R of the Disclosure and Transparency Rules, beingan indication of important events that have occurred during the first six monthsof the current financial year, their impact on the condensed set of financialstatements and a description of the principal risks and uncertainties for theremaining six months of the year; and (ii) DTR.4.2.8R of the Disclosure and Transparency Rules, beingrelated party transactions that have taken place in the first six months of thecurrent financial year and that have materially affected the financial positionor performance of the entity during that period and any changes in the relatedparty transactions described in the last annual report that could do so. For and on behalf of the Board of Directors R HARTLEY DIRECTOR This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
WYG