26th Sep 2005 07:01
Cape PLC26 September 2005 Cape plc Interim Results for the six months ended 30 June 2005 Highlights Interim Report Financial highlights• Cape Industrial Services performed ahead of forecast• Group turnover up 8.8% to £120.7m (2004: £110.9m)• Cape Industrial Services operating profit up 34% to £5.1m (2004: £3.8m)• Group operating profit before exceptional items up 53% to £2.3m (2004: £1.5m)• Operating exceptional expenditure relating to scheme of arrangement of £5.7m (2004: nil)• Group operating loss of £3.4m (2004: profit of £1.5m) Business highlights• Continued solid progress in all key markets• Forward order book continues to grow and remains strong• Further significant contract wins in UK and international markets• £32m placing and proposed scheme of arrangement Chairman's Statement I am pleased to report that Cape Industrial Services ("CIS") has continued todeliver solid growth in turnover and operating profit in the first half of thisfinancial year. CIS, which specialises in the provision of scaffolding,insulation, fire protection and other essential services to major industrialclients in the energy sector, has performed ahead of forecast, winning moresignificant contracts and contract renewals in the UK and internationally. On turnover of £120.7 million in the first six months of 2005 (2004: £110.9million), the Group made an operating profit before exceptional items of £2.3million (2004: £1.5 million), an increase of 53%. However, an exceptionalcharge of £5.7 million for the costs of the proposed scheme of arrangement(which is covered in more detail below) resulted in the Group making anoperating loss of £3.4 million (2004: profit of £1.5 million). Although the effect of the exceptional charge resulted in a basic loss per shareof 5.1 pence (2004: earnings of 2.1 pence), the adjusted basic earnings pershare, i.e. excluding the effects of operating and non-operating exceptionalitems is 2.2 pence (2004: 2.1 pence). The Group's net debt at £13.3 million is £2.9 million higher than at 30 June2004 (2004: £10.4 million). This reflects both increased levels of activity inthe business as well as the costs of the proposed scheme of arrangement. Itremains the case that the annual cycle of the business is such that cash inflowinvariably only occurs in the second half of the year. An interim dividend is not proposed. Operating review CIS, the Group's operating business, made an operating profit of £5.1 million(2004: £3.8 million) up 34%, on improved turnover of £120.7 million (2003:£112.9 million) up 6.9%, in the six months ended 30 June 2005. CIS continued to win new contracts for projects and recurring maintenance workon major sites in each of its core markets as well as expanding the range ofservices it offered. The growth in turnover, which CIS has been forecasting overthe past 18 months can clearly be seen in these results. The businessenvironment remains highly competitive (particularly in the UK) and the cost ofcomplying with ever more challenging employment legislation and health, safetyand environmental regulations places ever increasing demands on the business andits managers. Nevertheless, management's successful focus on cost control meansthat CIS has maintained its profit margins both in the UK, where the Groupmakes the majority of its sales, and also overseas where, as a result ofincreased oil prices leading to new investment, further opportunities havearisen. Contract wins CIS has continued to win significant new contracts and contract renewals,reflecting strong demand for its world-class technical expertise and reinforcingits market leading positions. Since 1 January 2005, we have announced: •a new three year contract (with the option to renew annually thereafter up to a total of five years) with British Nuclear Fuels plc ("BNFL") under which CIS will provide site wide access services as sole supplier on BNFL's nuclear processing facility at Sellafield. The contract has an estimated annual value of £6 million; •the renewal of CIS' contract with British Energy to perform maintenance work on five of British Energy's nine power stations for an initial period of three years with the option to renew for a further two years. This contract has an estimated annual value of in excess of £6 million; •a new five year contract with CNR International (UK) Limited for maintenance work on four of its platforms in the North Sea. The contract has an estimated annual value of more than £3 million; •a new £8 million per annum contract with Huntsman for the delivery of multi-disciplinary services on their North Eastern petrochemicals sites. The contract is for an initial three year period with a further two year renewal option; •the renewal of CIS' contract with BP to provide the full range of platform and fabric maintenance services on a number of BP's offshore and onshore locations. The contract, which will take effect from 1 January 2006 , will be for an initial three year term with the option to renew for three further two year periods, potentially therefore for up to nine years. The contract has an estimated annual value of in excess of £20 million. Cape was also pleased to announce earlier in the year that RB Hilton Limited,its operating subsidiary in Saudi Arabia had received approval from the SaudiArabian national oil company, Aramco, to provide scaffolding works on itsfacilities throughout the Kingdom. RB Hilton's pre-qualified status leddirectly to the award of a new scaffolding contract on Aramco's Riyadh refinery- a part of the Aramco business for which RB Hilton had not previously worked. In addition, CIS has recently concluded negotiations on another long-termmulti-discipline maintenance contract with Gasco (a joint venture between theAbu Dhabi National Oil Company, Shell, Total and Partex). The contract, whichis for five years, is to carry out insulation, painting and scaffolding serviceson Gasco's LNG plants at Asab, Bu Hasa and Ruwais in the United Arab Emirates.This contract maintains CIS' continuous association with Gasco that goes backto 1980 when CIS was involved in the construction of the Bu Hasa and Ruwaisplants. Proposed scheme of arrangement ("Scheme") On 16 June, the Company announced proposals to provide for the long termfinancing of a great majority of all future UK asbestos-related claims likely tobe successfully made against the Group. The proposals include the establishmentof an initial £40 million fund, into which the Company will have ongoing top-upobligations, to be used in the settlement of claims covered by the Scheme. On 11 July, the Company's shareholders approved the proposed Scheme and on 15July the Company completed the issue of 29,090,910 new ordinary shares to raiseapproximately £32 million (before expenses) of which £22 million is to part-fundthe Scheme. The balance of the initial funding is being provided by a new £15million bank facility and £3 million from the Group's own resources. The Directors believe that, if accepted by claimants and approved by the Court,these proposals should provide significant de-risking for both the Company andfuture claimants, remove a significant obstacle to the Group's growth and leavethe Group better able to generate the resources needed to secure the continuedpayment of compensation to claimants. However, as stated in the announcement of 16 June, in the event that the Schemedoes not become effective, the Directors would use the £22 million raised fromshareholders to reduce Group borrowings, provide working capital to the Group,invest in organic growth of the overseas business (particularly in the MiddleEast and on Sakhalin Island) and other opportunities, and to fund suitableacquisition opportunities which expand the range of services or extend existingGroup activities. It was originally envisaged that following a period of active consultation, theCompany would seek the Court's permission in the second half of July to post theScheme documentation in mid August 2005 with Scheme meetings convened for earlyOctober 2005. However, as announced on 21 July 2005, a number of interestedparties requested that the timetable be extended to provide a furtheropportunity to review and evaluate the proposed Scheme prior to the meetings ofScheme creditors. The Company naturally considers that it is important for allrelevant parties and their advisers to have the necessary time to evaluate theScheme. Accordingly, the Company announced it would not be seeking the Court'spermission to convene the Scheme meetings on the timetable originally envisaged. The Company continues to consult with interested parties, claimants, asbestosvictims support groups and their representatives, providing further detail andexplaining the merits of the Scheme. The Company is mindful of the need to giveall parties sufficient time to fully understand the impact of the Scheme and thebalance of risk for claimants with or without the Scheme. It is envisaged thatthe consultation period will come to an end by the end of October at which pointthe approval of the Court will be sought to convene Scheme meetings. Consequently the original timetable, whereby the Scheme became effective by 31st December 2005, cannot now be met. Once the consultation period has ended it will be necessary to seek approval from shareholders for an extension of the date by which the provisions that relate to the special Scheme shares must become effective and to renew loan facilities from the Company's bank to complete the initial Scheme funding. The Directors remain of the view that the Scheme will be in the best interestsof the Company, asbestos-related disease claimants and shareholders and intendto continue to seek both creditor and Court approval. The Company will make afurther announcement on the progress of the Scheme as soon as it is in aposition to do so. Although the net charge to the Profit and Loss account for industrial diseaseclaims in the six months to 30 June 2005 was up slightly from the same periodlast year at £2.1 million (2004: £1.8 million), given the outlook for the Groupand assuming that future settlements broadly follow recent history, we remainconfident that future claims, to the extent not matched by insurance recoveries,can be met from operating cash flows. Outlook CIS continues to maintain its leading position in the majority of the markets inwhich it operates. Sales remain strong in all of the Group's activities andthe prospects for new project work driven by rising oil prices are encouraging.The Board is pleased with the results of the first half of the year, and expectsthe Group to continue the solid growth and steady progress of the past twoyears. Martin K MayChairman26 September 2005 Further information: Cape plcMartin May, Chairman01924 876276 Bell Pottinger Corporate & FinancialNick Lambert020 7861 3232/07811 358764 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE HALF-YEAR ENDED 30 JUNE 2005 ----------------------- --- --------- --- --------- --- --------- Unaudited Unaudited Audited Half-year Half-year Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £m £m £m Turnover Total turnover including group 120.9 112.9 238.9share of joint venturesLess share of turnover of (0.2) (2.0) (5.3)joint ventures Group turnover 120.7 110.9 233.6 Group operating profit before operating exceptional items 2.3 1.5 5.8 Operating exceptional items (5.7) - (1.1) Group operating (loss)/profit (3.4) 1.5 4.7 Share of operating profit in joint ventures - - 0.4 Total operating (loss) / profit: group and share of joint ventures (3.4) 1.5 5.1 Profit on sale of fixed assets - 0.1 0.5 Loss on sale and subsequent closure costs of Calsil Division - (0.1) - (Loss) / profit on ordinary activities before interest (3.4) 1.5 5.6 Net interest payable (0.6) (0.4) (1.0)Other finance income 0.4 0.6 1.2 (Loss) / profit on ordinary activities before taxation (3.6) 1.7 5.8 Tax credit / (charge) on (loss)/ profit on ordinary activities 0.9 (0.5) - (Loss) / Profit for the period (2.7) 1.2 5.8 (Loss) / earnings per ordinaryshare:- Basic (5.1)p 2.1p 10.7p- Diluted (4.9)p 2.1p 10.6p All of the above operating results are attributable to continuing operations CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 Unaudited Unaudited Audited 30 June 30 June 31 December 2005 2004 2004 £m £m £mFixed assetsIntangible assets 0.1 0.1 0.1Tangible assets 26.6 23.2 23.4 Interest in joint venturesShare of gross assets 0.4 - 1.2Share of gross liabilities (0.1) - (0.8)-------------------------------------------------------------------------------- 0.3 - 0.4-------------------------------------------------------------------------------- 27.0 23.3 23.9-------------------------------------------------------------------------------- Current assetsStocks 10.8 11.9 9.7Debtors 79.4 65.0 63.3Cash at bank and in hand 7.7 4.4 7.8-------------------------------------------------------------------------------- 97.9 81.3 80.8 Creditors: amounts falling duewithin one yearShort term borrowings (8.2) (2.7) (4.7)Other creditors (60.2) (50.8) (51.1)------------------------------------------------------------------------------- (68.4) (53.5) (55.8)------------------------------------------------------------------------------- Net current assets 29.5 27.8 25.0-------------------------------------------------------------------------------- Total assets less current liabilities 56.5 51.1 48.9 Creditors: amounts fallingdue after more than one year (12.8) (12.1) (5.5) Provisions for liabilities and charges (18.6) (16.1) (16.1)--------------------------------------------------------------------------------Net assets excluding pension asset 25.1 22.9 27.3 Pension asset 3.7 4.3 3.6--------------------------------------------------------------------------------Net assets including pension asset 28.8 27.2 30.9 Capital and reservesCalled up share capital 18.2 18.2 18.2Share premium account 1.7 1.6 1.7Revaluation reserve 2.3 2.4 2.3Profit and loss account 6.6 5.0 8.7--------------------------------------------------------------------------------Shareholders' funds 28.8 27.2 30.9-------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 30 JUNE 2005 Unaudited Unaudited Audited Half-year Half-year Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £m £m £m Net cash (outflow) / inflow from operating activities (5.5) (1.0) 10.7Returns on investments and servicing of finance (0.6) (0.4) (1.0) Taxation (0.4) (0.2) (0.8)Net cash outflow from capital expenditure and financial investment (4.8) (3.1) (5.3)Net cash outflow from acquisitions - (0.1) -and disposals --------------------------------------------------------------------------------Net cash (outflow) / inflow before (11.3) (4.8) 3.6financing FinancingIssue of ordinary shares - - 0.1Capital element of finance lease rental payments - (0.2) (0.4)Increase in short-term borrowings 3.5 0.4 -Increase / (decrease) in long-term 7.3 1.8 (4.8)borrowings ------------------------------------------------------------------------------- Decrease in cash in the period (0.5) (2.8) (1.5)------------------------------------------------------------------------------- Reconciliation of net cash flow to movement in net debt:Decrease in cash in the period (0.5) (2.8) (1.5)(Inflow) / outflow from debt and lease financing (10.8) (2.0) 5.2 Change in debt resulting from cash flows (11.3) (4.8) 3.7New finance leases - (0.3) (0.5)Exchange movement in period 0.4 0.1 (0.2)-------------------------------------------------------------------------------Movement in net debt in the period (10.9) (5.0) 3.0Net debt at 1 January (2.4) (5.4) (5.4)-------------------------------------------------------------------------------Net debt at end of period (13.3) (10.4) (2.4)------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE HALF-YEAR ENDED 30 JUNE 2005 Unaudited Unaudited Audited Half-year Half-year Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £m £m £m-------------------------------------------------------------------------------- (Loss) / profit on ordinary activities aftertaxation (2.7) 1.2 5.8Currency translationdifferences net oftaxation onforeign currency net investments 0.8 (0.5) (1.0)Acturial loss recognised in the pension scheme (0.4) (4.5) (5.6)Movement on deferred tax relating to pension asset 0.1 1.3 1.8Total recognised (losses) /gains relating to the period (2.2) (2.5) 1.0 Notes to the interim accounts 1. Business analysis Unlisted 6 Months ended 30 June 2005 Loss before tax Non- Operating operating Pre- exceptional exceptional Turnover exceptional items items Total £m £m £m £m £mBusiness analysis---------------------------------------------------------------------------------------------- 2005 - Cape Industrial 120.7 5.1 - - 5.1 Services - Joint 0.2 - - - - ventures ---------------------------------------------------------------------------------------------- - Total Cape 120.9 5.1 - - 5.1 Industrial Services - Head - (0.7) (5.7) (6.4) Office - Compensation for - (2.1) - (2.1) industrial disease----------------------------------------------------------------------------------------------Total operations 120.9 2.3 (5.7) - (3.4)----------------------------------------------------------------------------------------------Net interest payable (0.6)Other finance income 0.4 Loss on ordinary activities before taxation (3.6) There are no significant inter-segment sales between business units Unaudited 6 Months ended 30 June 2004 Profit before tax Non- Operating operating Pre- exceptional exceptional Turnover exceptional items items Total £m £m £m £m £mBusiness analysis---------------------------------------------------------------------------------------------- 2004 - Cape Industrial 110.9 3.8 - - 3.8 Services - Joint ventures 2.0 - - - - - Total Cape Industrial Services 112.9 3.8 - - 3.8 - Head Office - (0.5) - - (0.5) - Compensation for - (1.8) - - (1.8) industrial disease ----------------------------------------------------------------------------------------------Total operations 112.9 1.5 - - 1.5----------------------------------------------------------------------------------------------Net interest payable (0.4)Other finance income 0.6 ------------Profit on ordinary activities before taxation 1.7There are no significant inter-segment sales between business units Audited Year ended 31 December 2004 Profit before tax Non- Operating operating Pre- exceptional exceptional Turnover exceptional items items Total £m £m £m £m £mBusiness analysis----------------------------------------------------------------------------------------------------- 2004Continuing operations - Cape Industrial Services 233.6 11.0 - - 11.0 - Joint ventures 5.3 0.4 - - 0.4 - Total Cape Industrial 238.9 11.4 - - 11.4 Services - Head Office - (1.5) (1.1) - (2.6) - Compensation for - (3.7) - - (3.7) industrial disease ------------------------------------------------------------------------------------------------------Total continuing 238.9 6.2 (1.1) - 5.1 Discontinued operations - Cape Calsil - - - 0.5 0.5Total discontinued - - - 0.5 0.5 ----------------------------------------------------------------------------------------------------Total operations 238.9 6.2 (1.1) 0.5 5.6 Net interest payable (1.0)Other finance income 1.2 Profit on ordinary activities before taxation 5.8 There are no significant inter-segment sales between business units Unaudited Unaudited Audited Half-year Half-year Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £m £m £m------------------------------------------------------------------------------- Operating (loss)/profit (3.4) 1.5 4.7Depreciation charge on fixed assets 2.5 2.4 5.2Profit on sale of fixed assets (0.4) (0.2) (0.1)Changes in working capital (7.1) (4.3) 0.4Difference between pension charge and cash contributions 0.4 0.7 1.2Increase / (decrease) in provisions 2.5 (1.1) (0.7)--------------------------------------------------------------------------------Net operating cash (outflow) / inflow from (5.5) (1.0) 10.7operating activities 3. Financial Information The financial information for the half years ended 30 June 2005 and 30 June 2004is unaudited. The financial information for the year ended 31 December 2004 does notconstitute full accounts, but is an extract from the Company's accounts for theyear, which have been delivered to the Registrar of Companies and on which theauditors gave an unqualified report. In forming their opinion, the auditors considered the adequacy of thedisclosures made in the financial statements concerning the impact of, andaccounting for, potential future claims for industrial disease compensation. Onthe basis of information presently available, it is not possible for theDirectors to quantify, with sufficient reliability the amount required to settlefuture claims and accordingly claims are generally accounted for on the basis ofclaims lodged or settlements reached and outstanding at the balance sheet date. However, if it were possible to assess reliably the present value of the amountrequired to settle future claims such that this was provided in the balancesheet, there would be a materially adverse effect on the Group's financialposition. Details of the circumstances relating to this fundamental uncertaintyare described in the contingent liability note below. The auditor's opinion wasnot qualified in this respect. The results for the half-year ended 30 June 2005 were approved by the Board on15 September 2005. 4. Accounting Policies In preparing these interim statements, management have considered therequirements of FRS 21 "events after the balance sheet date" and FRS 22"earnings per share", which are applicable for accounting periods beginning on or after 1 January 2005. There have been no other changes to the accountingpolicies as set out in the 2004 report and accounts. 5. Earnings / (loss) per ordinary share The basic loss per share calculation for the 6 month period ended 30 June 2005is based on the loss (after tax) of £2.7 million (2004: profit of £1.2 million)divided by the weighted average number of 25p ordinary shares of 54,430,397(2004: 54,326,021). The diluted loss per share calculation for the 6 month period ended 30 June 2005is based on the loss (after tax) of £2.7 million (2004: profit of £1.2 million)divided by the weighted average number of 25p ordinary shares of 55,753,973(2004: 54,801,759). An adjusted basic earnings per share has been disclosed which excludes theeffects of operating and non-operating exceptional items. It is calculated bydividing the adjusted earnings (after tax) of £1.3 million (2004: profit of £1.2million) by the weighted average number of 25p ordinary shares of 54,430,397(2004: 54,326,021). The adjusted numbers have been provided in order that theeffects of exceptional items on reported earnings can be fully appreciated andhas been calculated as follows: Unaudited Unaudited Audited Half-year Half-year Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 Earnings EPS Earnings EPS Earnings EPS £m pence £m pence £m pence--------------------------------------------------------------------------------As stated (2.7) (5.1) 1.2 2.1 5.8 10.7Adjustments:Tax adjusted operating exceptional items 4.0 7.3 - - 1.1 2.0Profit on sale of fixed assets - - 0.1 0.2 (0.5) (0.9)Loss on sale and subsequent closure costs of CalsilDivision - - (0.1) (0.2) - ---------------------------------------------------------------------------------As adjusted earnings per share 1.3 2.2 1.2 2.1 6.4 11.8-------------------------------------------------------------------------------- Diluted (loss)/earnings per share (2.7) (4.9) 1.2 2.1 5.8 10.6 As statedAdjustments: Tax adjusted operating exceptional items 4.0 7.2 - - 1.1 2.0Profit on sale of fixed assets - - 0.1 0.2 (0.5) (0.9)Loss on sale and subsequent closure costs of CalsilDivision - - (0.1) (0.2) - ---------------------------------------------------------------------------------As adjusted diluted earnings per share 1.3 2.3 1.2 2.1 6.4 11.7-------------------------------------------------------------------------------- 6. Contingent Liabilities (i) There is a history of industrial disease claims being lodged against theGroup for a number of years. Where the Group has determined that it isappropriate to do so, settlement has been made. Based on this experience, it islikely that similar claims will continue to be received for the foreseeablefuture. However, there is significant uncertainty over the number, nature,timing and validity of such future claims. This is as a result of, inter alia,uncertainties concerning the population that may have been exposed to asbestosand that may develop asbestos related diseases, the nature and timing of thediseases that may develop, the impact of other factors which might havecontributed to the claimant's condition, changes in the legal environment and tothe typical cost of settlement. These factors affect considerations of liabilityand the quantum of settlement. Experience to date is that some of these claimswill be at least partially covered by insurance policies, but the amount ofcover will not be known until the details of the claims are available. As aresult of these uncertainties, the amount of the Group's obligation cannotgenerally be measured with sufficient reliability. Accordingly, the Groupprovides in the profit and loss account each period for the estimated liabilityin respect of industrial disease claims lodged and outstanding at theperiod-end. If it were possible to assess reliably the present value of amounts that mightbe paid in future settlements such that this was to be provided in the BalanceSheet, there would be a materially adverse effect on the Group's financialposition. There is great uncertainty over the net present value of the futureclaim settlements. These could occur over a period of more than twenty years.However, in aggregate they are likely to exceed the amount of the net assetsincluded in the current Group Balance Sheet. Based on the recent history of settlements, the Directors anticipate that futuresettlements can be made from the future cash flows generated by the tradingoperations of the Group. Should the future pattern as regards timing and quantumof claims prove to be materially and adversely different from the historictrend, there could be a material adverse effect on the Group's financialposition. (ii) The Company was the defendant in proceedings brought by some 7,500 SouthAfrican residents who claimed that they suffered injury as a result of miningactivities in South Africa undertaken by former subsidiaries of Cape PLC. TheCompany entered into an agreement on 13 March 2003 with the claimants in thegroup action and new claimants who had come forward in 2002. It is possible that claims could arise in the future from claimants who were notincluded in the group action, or who claim they have developed an asbestosrelated disease since the date of the settlement and as a result of the Group'sformer mining activities in South Africa. There is significant uncertainty as towhether such future claims will be made and as to the number, nature, timing andvalidity of such claims. However, no such claims have been received to date. (iii) Certain companies in the Group continue to be named, along with severalasbestos fibre and asbestos product suppliers, as defendants in a number oflegal actions in North America. The plaintiffs in such actions are claimingsubstantial damages as a result of the use of these products. The Company hasreceived legal advice in the UK that default judgments obtained in North Americaagainst Companies within the Group which are not present in North America, wouldnot be enforceable in the UK. Consequently, the Directors believe that theabove-mentioned matters are unlikely to have a material effect on the Group'sfinancial position. (iv) The Company's subsidiary, Cape Industrial Services Limited, together withother companies involved in offshore contracting work, is a defendant inproceedings before the Employment Tribunal under the Working Time Regulations1998 brought by a small number of employees claiming that their paid annualleave should be taken from scheduled working time. If successful, the claimants(and other affected employees who are not party to the proceedings) could beentitled to compensation. Under the terms of certain of its contracts, CapeIndustrial Services Limited would be entitled to additional payment from itsclients. There is significant uncertainty as to whether the claimants willsucceed and, if they do, as to the number of affected employees, the amount ofany compensation that would be awarded and the extent to which it could berecovered under relevant contracts. (v) There are a number of leasehold properties in respect of which the Group isliable for dilapidations, and rent in the event of default by its sub-tenants.Given the nature of these arrangements it is difficult to assess the potentialliability with certainty and as a consequence contingent liabilities may exist.The Directors believe that any such contingent amounts would not have a materialeffect on the Group's financial position. (vi) The Group has contingent liabilities in respect of guarantees and bondsentered into in the normal course of business, in respect of which no loss isexpected. 7. Pensions The Group fully adopted the requirements of FRS17 in the year ended 31 December2001. The last triennial actuarial valuation was performed in April 2004. Inaccordance with FRS17 the valuation as at 31 December 2004 was updated toreflect the latest actuarial assumptions and asset values to June 2005. Thisresulted in an actuarial loss of £0.3 million net of deferred tax (2004: loss of£3.2 million) shown in the Statement of Total Recognised Gains and Losses inrespect of the half year. The net pension surplus at 30 June 2005 was £3.7m (31December 2004: £3.6m). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CIU.L