8th Sep 2006 07:01
Marshalls PLC08 September 2006 Embargoed until 7.00am on Friday 8 September 2006 INTERIM RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2006 Marshalls plc, the specialist Landscape Products Group, delivers an improvedtrading performance despite mixed market conditions. • Revenue, including acquisitions, up 6.9 per cent with like for like revenue up 3.4 per cent• Profit before tax up 3.7 per cent at £25.1 million (2005: £24.2 million)• EPS on continuing operations up 3.5 per cent• Interim dividend up 4.9 per cent at 4.30 pence per share• Continued investment in new business initiatives to drive growth Half year ended Half year ended Increase 30 June 2006 30 June 2005 %Revenue £197.9m £185.2m 6.9EBITDA £38.2m £36.9m 3.5Operating profit £28.3m £27.6m 2.3Profit before tax £25.1m £24.2m 3.7Basic EPS(continuing operations) 12.21p 11.80p 3.5Interim dividend per share 4.30p 4.10p 4.9 Commenting on these results, Graham Holden, Chief Executive, said: "The Construction Products Association is forecasting similar demand overall in2006 to 2005 followed by growth in 2007 and 2008. As far as the immediateoutlook for the Domestic market is concerned, consumer confidence, as measuredby the climate for major purchases, and installer order books are at a similarlevel to last year. Forecasts for the Public Sector and Commercial market remainpositive. Order intake and despatches since the end of the half year have continued toshow similar like for like growth. The continuing tight control of our costbase, our strong balance sheet and the range of initiatives that we are pursuingto drive future growth ensure that we are well placed to benefit from anyimprovement in market conditions." Enquiries: Graham Holden Chief Executive Marshalls plc 01484 438900Ian Burrell Finance Director Marshalls plc 01484 438900 Jon Coles Brunswick Group LLP 0207 404 5959Kate Miller Brunswick Group LLP 0207 404 5959 Chief Executive's Statement Group Results Marshalls' revenue from continuing operations was up 6.9 per cent, includingacquisitions, in the half year ended 30 June 2006 at £197.9 million (2005:£185.2 million). Like for like revenue, on a day for day basis, was up 3.4 percent and this increases to 4.2 per cent if the additional working day in thecurrent period is included. Acquisitions contributed an additional £5.0 million. Operating profit from continuing operations for the period was £28.3 million(2005: £27.6 million) after expensing start-up and one-off costs in the periodamounting to £1.7 million (2005: £1.4 million) and relating to revenueinvestment in our new Drive & Garden Transformation Centres and works closurecosts associated with previously announced site closures. Operating profitbefore these costs was £30.0 million (2005: £29.0 million) which represents anincrease of 3.4 per cent. Net financial expenses were £3.2 million (2005: £3.4 million) with the smalldecrease due to a lower IAS 19 notional interest charge compared with the priorhalf year period. Interest cover was 8.9 times (2005: 8.1 times). Basic earnings per share, from continuing operations, was up 3.5 per cent at12.21 pence (2005: 11.80 pence). The interim dividend will be 4.30 pence per share (2005: 4.10 pence per share),an increase of almost 5 per cent. Our dividend policy continues to be thatdividends will move in line with medium term earnings growth. Operating Performance Half of the revenue of the business is from the consumer driven Domestic marketand half from the Public Sector and Commercial market. This provides balance asthe performance of the two markets can be countercyclical. In the first half of 2006, like for like sales to the Public Sector andCommercial market were 7 per cent ahead of 2005 reflecting the relative strengthof this market. Like for like sales to the Domestic market were at a similarlevel to the prior year reflecting the widely experienced slowdown in consumerspending on home improvements, particularly for DIY. We continue to invest in and develop the business whilst keeping tight controlof costs and production levels. We continue to innovate in distribution and manufacturing as we build a WorldClass customer service and product delivery system. We have increased theproportion of product delivered on our own vehicles from 20 per cent to 42 percent over the past three years and a further 30 per cent is delivered bydirectly managed hauliers. This has enabled us to improve "on time" deliverysignificantly. In addition, we have designed and implemented sophisticated demand forecastingand production planning software and centralised our planning function. This hasenabled us to improve significantly product availability whilst progressivelyallowing us to reduce volumes of finished goods stock. We also continue to invest in robotics and now have 44 active robots with afurther 20 planned. These are delivering a 5 to 10 per cent productivity gainper machine hour. There is an added health and safety benefit from the reductionin manual handling. During the first half of the year, we have opened two additional Drive & GardenTransformation Centres in Bramhall, Cheshire and Roxton, Bedfordshire. Theseimprove awareness of the Marshalls brand by displaying a wide range of gardenand driveway products in an aspirational setting. The original site we openedlast year in Falkirk, Scotland, is performing well with turnover in the areaincreasing both in terms of volume and added value products and it isoutperforming the rest of the country. Further expansion of this initiative isplanned. The commercial alignment in Scotland of Stonemarket and our newly acquired PaverSystems business, based in Lanarkshire, is delivering excellent results. Furthercommercial and operational benefits are expected to arise as we extend thisassociation into England. We continue to develop an integrated solution for clients, architects, designersand contractors in response to market demand. We have made a number ofacquisitions, which are explained below. These expand our portfolio of productsand widen our Public Sector and Commercial offer. After extensive consultation with the employees affected and theirrepresentatives, we introduced a new defined contribution section to the pensionscheme to replace the existing defined benefit section which closed to futureservice accrual on 1 July 2006. This allows us to manage risk better and reducevolatility in the future. Following this change, the Company made a special cashcontribution of £5 million to the Marshalls plc Pension Scheme in July 2006 anda further cash contribution of £5 million will be made at the end of the year. Corporate Activity We are continually seeking to increase the flow of suitable acquisitionopportunities. On 4 May 2006, we completed the acquisition of Urban Engineeringbased in Southport, Merseyside. The business specialises in the sale of a rangeof shelters and associated products, particularly to the Education Sector, andwill form part of our Street Furniture business unit. Since the half year we have completed the purchase of the assets of two smallbusinesses, being Tempakerb, a business that manufactures temporary kerbs fromrecycled materials, and Decathlon, which manufactures high capacity drainagesystems and complements well our linear drainage products. Although small, theseacquisitions demonstrate our commitment to growing the Group in part throughbolt-on acquisitions and to adding value by organic growth. It is also our intention to continue to develop the Group's Natural Stonebusinesses and, to demonstrate this commitment, we have acquired the rights todevelop an aggregate reserve in North West England. Capital equipment ofapproximately £2 million is being installed at present and we intend to commenceoperations in mid 2007. Balance Sheet Net assets at 30 June 2006 were £177.2 million which represented 123.8 pence pershare. At 30 June 2006 net debt was £47.4 million with gearing at 26.7 per cent. Thisis very similar to the position at the last year end. New bank facilities have been agreed with the Group's principal bankers. Theseamount to £100 million comprising of a mixture of committed term loans anduncommitted short term facilities plus a further £15 million seasonal workingcapital facility. The liability for defined benefit pension obligations decreased from £65.3million at 31 December 2005 to £58.9 million at 30 June 2006. This reduction islargely due to an increase in the AA corporate bond rate from 4.8 per cent to5.2 per cent and partially offset by a continued strengthening of the mortalityrate. An actuarial gain of £5.7 million (net of deferred taxation) has beenrecorded in the Consolidated Interim Statement of Recognised Income andExpenses. As a consequence of the change to the actuarial assumptions followingthe move to defined contribution for future service, there will be a one-offcurtailment gain which will reduce the outstanding liability in the second half. Dividend The Board has decided to declare an interim dividend of 4.30 pence (2005: 4.10pence) per ordinary share, an increase of 4.9 per cent. This dividend will bepaid on 6 December 2006 to shareholders on the register at the close of businesson 3 November 2006. The ex-dividend date will be 1 November 2006. Outlook The Construction Products Association is forecasting similar demand overall in2006 to 2005 followed by growth in 2007 and 2008. As far as the immediateoutlook for the Domestic market is concerned, consumer confidence, as measuredby the climate for major purchases, and installer order books are at a similarlevel to last year. Forecasts for the Public Sector and Commercial market remainpositive. Order intake and despatches since the end of the half year have continued toshow similar like for like growth. The continuing tight control of our costbase, our strong balance sheet and the range of initiatives that we are pursuingto drive future growth ensure that we are well placed to benefit from anyimprovement in market conditions. Graham HoldenChief Executive Consolidated Interim Income Statementfor the half year ended 30 June 2006 Half year Year ended ended June December Notes 2006 2005 2005 £'000 £'000 £'000Revenue 2 197,898 185,202 359,310 Net operating costs (169,638) (157,588) (314,885) --------- --------- ---------Operating profit 2 28,260 27,614 44,425Financial expenses 3 (7,853) (7,238) (14,421)Financial income 3 4,688 3,815 8,014 --------- --------- ---------Profit before tax 2 25,095 24,191 38,018Income tax expense (7,628) (7,442) (11,661) --------- --------- ---------Profit after tax but before gain onsale of discontinued operation 17,467 16,749 26,357 Gain on sale of discontinued operation 4 - 31,517 31,517 --------- --------- ---------Profit for the financial period 17,467 48,266 57,874 --------- --------- ---------Earnings per share (total operationsincluding gain on sale in 2005):Basic 5 12.21p 34.01p 40.73p --------- --------- ---------Diluted 5 12.21p 33.94p 40.71p --------- --------- ---------Earnings per share (continuing operations):Basic 5 12.21p 11.80p 18.55p --------- --------- ---------Diluted 5 12.21p 11.78p 18.54p --------- --------- ---------Dividend:Pence per share 6 8.40p 8.00p 12.10p --------- --------- ---------Dividends paid 6 12,010 11,353 17,169 --------- --------- --------- Consolidated Interim Balance Sheetas at 30 June 2006 June December 2006 2005 2005 £'000 £'000 £'000AssetsNon-current assetsProperty, plant and equipment 200,281 192,790 198,030Intangible fixed assets 49,882 40,694 46,461 --------- --------- --------- 250,163 233,484 244,491 --------- --------- ---------Current assetsInventories 69,096 68,616 67,759Trade and other receivables 64,016 67,194 36,598Cash and cash equivalents 3,912 21 5,210 --------- --------- --------- 137,024 135,831 109,567 --------- --------- ---------Total assets 387,187 369,315 354,058 --------- --------- ---------LiabilitiesCurrent liabilitiesTrade and other payables 92,800 99,404 64,570Current instalments of loans 161 - 348 --------- --------- --------- 92,961 99,404 64,918 --------- --------- ---------Non-current liabilitiesTrade and other payables - 2,000 475Interest bearing loans andborrowings 51,143 40,350 51,550Employee benefits 58,877 65,118 65,264Deferred tax 7,001 3,020 5,511 --------- --------- --------- 117,021 110,488 122,800 --------- --------- ---------Total liabilities 209,982 209,892 187,718 --------- --------- ---------Net assets 177,205 159,423 166,340 --------- --------- ---------EquityCapital and reserves attributable to equity holdersShare capital 35,777 35,482 35,772Share premium account 2,732 320 2,694Own shares (407) (444) (102)Capital redemption reserve 72,986 72,138 72,573Consolidation reserve (213,067) (213,067) (213,067)Hedging reserve (4) (14) (2)Retained earnings 279,188 265,008 268,472 --------- --------- ---------Equity shareholders' funds 177,205 159,423 166,340 --------- --------- --------- Consolidated Interim Cash Flow Statementfor the half year ended 30 June 2006 Half year Year ended ended June December Notes 2006 2005 2005 £'000 £'000 £'000Net cashflow from operatingactivities 7 12,154 3,049 42,750Net cashflow from investingactivities 7 (12,597) 54,270 35,668Net cashflow from financingactivities 7 (855) (52,414) (56,539) --------- --------- ---------Net (decrease)/increase in cashand cash equivalents (1,298) 4,905 21,879Cash and cash equivalents atbeginning of period 5,210 (16,669) (16,669) --------- --------- ---------Cash and cash equivalents at endof period 3,912 (11,764) 5,210 --------- --------- --------- The above includes the operating, investing and financing cashflows of thediscontinued operation disclosed in Note 7. The relevant cash flows of thediscontinued operation are included in Note 7. Reconciliation of Net Cash Flow to Movement in Net Debt 2006 2005 2005 £'000 £'000 £'000Net (decrease)/increase in cash andcash equivalents (1,298) 4,905 21,879Cash outflow from decrease in debtand lease financing 594 51,027 39,910Finance leases acquired onacquisition of subsidiary undertakings - - (238) --------- --------- ---------Movement in net debt in the period (704) 55,932 61,551Net debt at beginning of the period (46,688) (108,239) (108,239) --------- --------- ---------Net debt at the end of the period (47,392) (52,307) (46,688) --------- --------- --------- Consolidated Interim Statement of Recognised Income and Expenses 2006 2005 2005 £'000 £'000 £'000Cash flow hedges: Effective portion ofchanges in fair value (2) (12) 4Actuarial gains/(losses) (net ofdeferred taxation) 5,672 (9,218) (8,563) --------- --------- ---------Net expense recognised directly inequity 5,670 (9,230) (8,559)Profit for the period 17,467 48,266 57,874 --------- --------- ---------Total recognised income and expenses forthe period (equity) 23,137 39,036 49,315 --------- --------- --------- Notes to the Consolidated Interim Financial Statements 1. Basis of preparation Marshalls plc (the "Company") is a company domiciled in the United Kingdom. TheConsolidated Interim Financial Statements of the Company for the half year ended30 June 2006 comprise the Company and its subsidiaries (together referred to asthe "Group"). The Consolidated Interim Financial Statements have been prepared on the basis ofthe recognition and measurement requirements of IFRSs in issue and endorsed bythe EU and effective (or available for early adoption) at 30 June 2006. The Consolidated Interim Financial Statements do not include all the informationrequired for full annual Financial Statements. The Consolidated Interim Financial Statements have been prepared applying theaccounting policies and presentation that were applied in the Company'spublished Consolidated Financial Statements for the year ended 31 December 2005.The accounting policies are included on the Company's website and have beenapplied consistently throughout the Group for the purposes of these ConsolidatedInterim Financial Statements. The preparation of financial statements in conformity with IFRSs requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgementsabout carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. 2. Segmental analysis Revenue Operating Profit Half year Year ended Half year Year ended ended June December ended June December 2006 2005 2005 2006 2005 2005 £'000 £'000 £'000 £'000 £'000 £'000 Continuing operations 197,898 185,202 359,310 28,260 27,614 44,425 ------- ------- --------Financial income and expenses (net) (3,165) (3,423) (6,407) ------- ------- --------Profit before tax 25,095 24,191 38,018 ------- ------- -------- 2006 2005 2005 £'000 £'000 £'000Geographical destination of revenue:United Kingdom 196,055 182,736 356,051Rest of the world 1,843 2,466 3,259 ------- ------- -------- 197,898 185,202 359,310 ------- ------- --------All revenue originates in the United Kingdom from continuing operations andthere is no material inter-segmental turnover. 3. Financial expenses and income Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000(a) Financial expensesInterest expense on bank loans,overdrafts and loan notes 1,376 1,247 2,487Interest on obligations under thedefined benefit pension scheme 5,278 4,769 9,505Debenture interest expense 1,137 1,137 2,275B share dividend expense 48 76 132Finance lease interest expense 14 9 22 ------- ------- -------- 7,853 7,238 14,421 ------- ------- --------(b) Financial incomeExpected return on plan assets underthe defined benefit pension scheme 4,678 3,773 7,953Interest receivable and similar income 10 42 61 ------- ------- -------- 4,688 3,815 8,014 ------- ------- --------4. Assets held for sale and discontinued operations On 4 January 2005 Marshalls Clay Products Limited (the "Clay Products Division")was sold to Hanson PLC for a cash consideration of £65.0 million (including therepayment of all inter-group indebtedness) and a pre-tax gain of £31.5 millionwas realised. No tax is payable on the gain due to the utilisation of capitallosses. The gain on sale has been disclosed under discontinued activities in theConsolidated Interim Income Statement. 5. Earnings per share Basic earnings per share on total operations of 12.21 pence (30 June 2005: 34.01pence) (31 December 2005: 40.73 pence) is calculated by dividing the profitattributable to ordinary shareholders from total operations of £17,467,000 (30June 2005: £48,266,000) (31 December 2005: £57,874,000) by the weighted averagenumber of shares in issue during the period of 143,001,830 (30 June 2005:141,918,011) (31 December 2005: 142,106,234). Basic earnings per share on continuing operations of 12.21 pence (30 June 2005:11.80 pence) (31 December 2005: 18.55 pence) is calculated by dividing theprofit attributable to ordinary shareholders from continuing operations of£17,467,000 (30 June 2005: £16,749,000) (31 December 2005: £26,357,000) by theweighted average number of shares in issue during the period of 143,001,830 (30June 2005: 141,918,011) (31 December 2005: 142,106,234). Basic earnings per share on discontinued operations of nil pence (30 June 2005:22.21 pence) (31 December 2005: 22.18 pence) is calculated by dividing theprofit attributable to ordinary shareholders from discontinued operations of£Nil (30 June 2005: £31,517,000) (31 December 2005: £31,517,000) by the weightedaverage number of shares in issue during the period of 143,001,830 (30 June2005: 141,918,011) (31 December 2005: 142,106,234). Profit attributable to ordinary shareholders Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000Profit attributable to ordinary shareholders- Continuing operations 17,467 16,749 26,357- Discontinued operations - 31,517 31,517 ------- ------- --------Total 17,467 48,266 57,874 ------- ------- -------- Weighted average number of ordinary shares Half year Year ended ended June December 2006 2005 2005 Number Number NumberIssued ordinary shares atbeginning of period 143,087,712 141,913,313 141,913,313Effect of share transactionsin the period (85,882) 4,698 192,921 ----------- ----------- -----------Weighted average number ofordinary shares at end of period 143,001,830 141,918,011 142,106,234 ----------- ----------- ----------- Diluted earnings per share on total operations of 12.21 pence (30 June 2005:33.94 pence) (31 December 2005: 40.71 pence) is calculated by dividing theprofit attributable to ordinary shares and potentially dilutive ordinary sharesfrom total operations of £17,467,000 (30 June 2005: £48,266,000) (31 December2005: £57,874,000) by the weighted average number of shares in issue during theperiod of 143,001,830 (30 June 2005: 141,918,011) (31 December 2005:142,106,234) plus dilutive shares of 96,345 (30 June 2005: 303,107) (31 December2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31 December2005: 142,150,537). Diluted earnings per share on continuing operations of 12.21 pence (30 June2005: 11.78 pence) (31 December 2005: 18.54 pence) is calculated by dividingprofit attributable to ordinary shares, and potentially ordinary dilutiveshares, from continuing operations of £17,467,000 (30 June 2005: £16,749,000)(31 December 2005: £26,357,000) by the weighted average number of shares inissue during the period of 143,001,830 (30 June 2005: 141,918,011) (31 December2005: 142,106,234), plus dilutive shares of 96,345 (30 June 2005: 303,107) (31December 2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31December 2005: 142,150,537). Diluted earnings per share on discontinued operations of nil pence (30 June2005: 22.16 pence) (31 December 2005: 22.17 pence) is calculated by dividingprofit attributable to ordinary shares, and potentially ordinary dilutiveshares, from discontinued operations of £Nil (30 June 2005: £31,517,000) (31December 2005: £31,517,000) by the weighted average number of shares in issueduring the period of 143,001,830 (30 June 2005: 141,918,011) (31 December 2005:142,106,234), plus dilutive shares of 96,345 (30 June 2005: 303,107) (31December 2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31December 2005: 142,150,537). Weighted average number of ordinary shares (diluted) Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000 Weighted average number ofordinary shares 143,001,830 141,918,011 142,106,234Effect of share options 96,345 303,107 44,303 ----------- ----------- -----------Weighted average number ofordinary shares (diluted) 143,098,175 142,221,118 142,150,537 ----------- ----------- ----------- 6. Dividends The following dividends were approved by the shareholders in the period. Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000 8.40 pence per qualifying ordinary share(30 June 2005: 8.00 pence) (31 December2005: 12.10 pence) 12,010 11,353 17,169 ------- ------- ------- After the balance sheet date, the following dividends were proposed by theDirectors. The dividends have not been provided and there were no income taxconsequences. Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000 4.30 pence (30 June 2005: 4.10 pence) (31December 2005: 8.40 pence) 6,154 5,816 12,010 ------- ------- ------- 7. Notes to the cash flow statement Half year Year ended ended June December 2006 2005 2005 £'000 £'000 £'000Cashflows from operating activitiesProfit before tax 25,095 24,191 38,018 Adjustments for:Depreciation 9,750 9,155 18,716Amortisation 160 111 259Gain on sale of property, plant and equipment (39) 4 (1,545)Loss in hedging instrument (2) - -Financial income and expenses (net) 3,165 3,423 6,407 ------- ------- -------Operating cashflow before changes inworking capital and provisions 38,129 36,884 61,855(Increase) in trade and other receivables (26,940) (29,613) (533)(Increase) in inventories (1,039) (7,995) (6,805)Increase in trade and other payables 8,745 11,102 3,336Increase in provisions and employeebenefits 1,117 704 1,225 ------- ------- -------Cash generated from the operations 20,012 11,082 59,078Financial expenses paid (2,338) (2,902) (4,969)Non equity dividends paid (105) (76) (75)Income tax paid (5,415) (5,055) (11,284) ------- ------- -------Net cash flow from operating activities 12,154 3,049 42,750 ------- ------- ------- Cash flows from investing activitiesProceeds from sale of property, plant andequipment (net of costs) 125 274 3,172Financial income received 4 40 61Disposal of subsidiary, net of cash disposed of - 65,000 65,000Acquisition of subsidiaries (1,000) (291) (9,406)Bank balance acquired with subsidiaries - - 664Acquisition of property, plant andequipment (11,726) (10,753) (23,823) ------- ------- -------Net cash flow from investing activities (12,597) 54,270 35,668 ------- ------- -------Cash flows from financing activitiesProceeds from issue of share capital 43 37 2,701Increase in other debt and lease financing (181) - (293)Redemption of B shares (687) (764) (1,102)Repayment of borrowings - (50,126) (38,281)Payment of transaction costs (30) (1,561) (2,395)Equity dividends paid - - (17,169) ------- ------- -------Net cash flow from financing activities (855) (52,414) (56,539) ------- ------- ------- Analysis of continuing operations and discontinued items Half year Half year ended June 2006 ended June 2005 Continuing Discontinued Group Continuing Discontinued Group operations operations operations operations £'000 £'000 £'000 £'000 £'000 £'000 Net cash flowfrom operatingactivities 12,154 - 12,154 3,049 - 3,049 ------- ------ ------ ------- ------- -------Net cash flowfrom investingactivities (12,597) - (12,597) (10,730) 65,000 54,270 ------- ------ ------ ------- ------- -------Net cash flowfrom financingactivities (830) (25) (855) (50,920) (1,494)(52,414) ------- ------ ------ ------- ------- ------- Year ended December 2005 Continuing Discontinued Group operations operations £'000 £'000 £'000 Net cash flow from operating activities 42,750 - 42,750 ------- ------- -------Net cash flow from investing activities (29,332) 65,000 35,668 ------- ------- -------Net cash flow from financing activities (54,262) (2,277) (56,539) ------- ------- ------- 8. Borrowing facilities New bank facilities have been agreed with the Group's principal bankers. Totalbank borrowing facilities are now £100 million analysed as follows: £'000 Committed - expiry in more than two years but not more than five years 30,000Uncommitted - expiry in one year or less(with option to convert to committed) 30,000Uncommitted - expiry in one year or less 40,000 ------- 100,000 ------- 9. Comparative information The comparative figures for the financial year ended 31 December 2005 are notthe Company's statutory financial statements for that financial year. Thosefinancial statements have been reported on by the Company's auditors anddelivered to the Registrar of Companies. The report of the auditors was (i)unqualified, (ii) did not include a reference to any matters to which theauditors drew attention 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. Independent Review Report to Marshalls plc Introduction We have been instructed by the Company to review the Financial Information forthe six months ended 30 June 2006 which comprises Income Statement, BalanceSheet, Cash Flow Statement and the related notes. We have read the otherinformation contained in the Interim Report and considered whether it containsany apparent misstatements or material inconsistencies with the FinancialInformation. 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 financial statements exceptwhere any changes, 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 2006. KPMG Audit Plc Chartered AccountantsLeeds8 September 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Marshalls