3rd Sep 2007 07:01
Lavendon Group PLC03 September 2007 3 September 2007 Lavendon Group plc Interim Results for the six months ended 30 June 2007 Lavendon Group plc, Europe's market leader in the rental of powered accessequipment, today announces its Interim Results for the six months ended 30 June2007. Highlights Financial •Revenues £83.3m (2006: £57.1m), increase of 46% •EBITDA £27.4m (2006: £15.7m), increase of 75% •Operating profit £11.6m (2006: £3.3m), increase of 252% •Profit before tax £8.3m (2006: £1.1m), increase of 654% •Earnings per share 15.42p (2006: 1.99p), increase of 675% •Interim Dividend proposed 2.75p (2006: 1.50p), increase of 83% •Cash generated from operating activities £18.0 million (2006: £10.2 million), increase of 76% Operational •Record first half of the year, achieved through organic and acquisitive growth: - Organic growth achieved through utilisation and hire rate improvements - Acquisitions of Rise Hire Limited and Wizard Workspace Limited in UK, performing well •Margins strengthened in core geographic divisions •High growth in Middle East, investment delivering increased returns •German market recovery continuing, business returned to profit •Market conditions remain favourable John Gordon, Chairman, said: "We have had an excellent first half. We have continued to implement ourstrategy which has enabled us to improve performance ahead of our expectationsand strengthen our position in all our geographical markets. "We will continue to develop our UK group to ensure we maximise theopportunities that the current market presents, while focusing on furtherenhancing the performance of our German business and keeping apace with thegrowth in the Middle East. We are actively seeking further acquisitionopportunities that are cash generative and either complement our existingoperations or provide entry into other market sectors. "Our momentum has continued in the second half. With strong cash generation,improved margins and encouraging market conditions, we are confident that wewill deliver a strong financial performance in the full year for ourshareholders." For further information please contact: Lavendon Group plc Kevin Appleton, Chief Executive On 3 Sept T: +44(0)207 831 3113Alan Merrell, Group Finance Director Thereafter T: +44(0)1455 558874 Financial Dynamics Jonathon Brill/Billy Clegg/Caroline Stewart T: +44(0)207 831 3113 CHAIRMAN'S STATEMENT Financial Overview The Group's trading performance has been strong in the six months ended 30 June2007, with revenues, profits and margins all growing significantly. Grouprevenues increased by 46% to £83.3 million (2006: £57.1 million), through bothorganic growth and the impact of the acquisitions completed in 2006 and thefirst half of 2007. This growth in revenues, combined with an improved operatingprofit margin of 13.9% (2006: 5.8%), produced a three and a half-fold increasein operating profits to £11.6 million (2006: £3.3 million). Net interest chargeshave increased to £3.3 million (2006: £2.2 million) following the Group'sinvestment programme undertaken over the last 18 months, however the improvedtrading performance that this investment facilitated enabled the Group's profitbefore tax to increase more than seven-fold to £8.3 million (2006: £1.1million). Earnings per share for the six months to 30 June 2007 increased to15.42p (2006: 1.65p). Earnings before interest, tax, depreciation and amortisation ("EBITDA")increased by 75% to £27.4 million (2006: £15.7 million), with net cash generatedfrom operating activities increasing by 76% to £18.0 million (2006: £10.2million). Dividend The directors are declaring an interim dividend of 2.75p, an increase of 83%over 2006 (2006: 1.50p). This will be paid on 6 November 2007 to shareholders onthe register at the close of business on 11 October 2007. Acquisitions and Investment During the first half of the year, the Group made two further acquisitions inthe UK for an aggregate cash consideration of £3.9 million and invested £26.5million (of which £18.8 million remains payable at 30 June 2007) in themaintenance and expansion of its existing operations. The two newly acquiredbusinesses, Rise Hire Limited and Wizard Workspace Limited, have performed wellsince being acquired and will benefit in the coming months from an increasedlevel of investment by the Group. The investment undertaken in the first sixmonths has increased the Group's net debt level at the half year to £114.5million (June 2006: £90.6 million), with a corresponding debt to equity ratio of113% (June 2006: 115%). This higher debt level is well supported by the strengthof the Group's cash flows, and its "affordability" is demonstrated by theimprovement in the Group's debt to rolling 12 month EBITDA ratio, which, at thehalf year, had improved to 2.29 compared to 2.75 at the same stage in 2006. The Group's strong and increasing cash flows, together with access to furthercredit facilities, will support the Group's future development plans. Since the half year, the Group has made a further acquisition in the UK,acquiring Higher Platforms Group Limited for a total cash consideration of £8.9million, of which £1.3 million represents deferred consideration. BUSINESS REVIEW UK The UK operation has benefited from favourable market conditions during thefirst half of the year, with healthy levels of demand from both the industrialand commercial construction and the repair and maintenance sectors. All businesses within the UK group are trading strongly and the strategy tomaximise re-hire opportunities within these operations is deliveringconsiderable benefits through increased utilisation of the combined fleet ofover 10,000 rental units. The revenue-generating capacity of this combined fleetis being further enhanced by focusing replacement capital expenditure onremoving under-performing assets and replacing them with higher demand andincreased specification equipment. The implementation of the Group's standard IT system into the acquiredbusinesses is underway and will be completed by mid-2008, further improving theGroup's ability to manage and enhance the return on the investment in theoverall fleet. The acquisition of Rise Hire Limited in April moved the UK business into thestrongly growing market for the rental of van-mounted platforms to localauthorities and utilities sectors. Further investment will be made into thisbusiness in the coming months, to ensure that the Group takes advantage of theopportunities available in this market. In June, Wizard Workspace Limited was acquired, due to the compatibility of itsdepot network, fleet and customer base, and is currently in the process of beingintegrated into the Group's largest UK business, Nationwide Access. Revenues for the UK Group for the first six months increased by 27% to £47.1million (2006: £37.2 million), including like for like revenue growth of 11%.Operating profits increased by 48% to £6.9 million (2006: £4.7 million), withall businesses contributing to the operating profit margin improvement to 14.7%from 12.6% in the previous year. Germany The first half of the year has provided increasing confidence that the Germaneconomy is firmly recovering after a five-year period of declining demand.Utilisation levels have been solid throughout the first half, enabling hirerates to strengthen noticeably. The acquisition of Gardemann, completed in December 2006, has made the Group theclear market leader in Germany, with a combined fleet of over 4,500 rentalunits. The early focus has been on benchmarking our two German companies andthis has identified a number of opportunities to improve revenue quality andreduce the combined cost base, which are now being scoped, planned andimplemented. In the first half, two service locations have been consolidated andinter-company rental activities, similar to those operated in the UK, havecommenced. The next stage will see the implementation of the Group's IT systeminto Gardemann during the coming months. Once implemented, it will facilitateeven closer co-operation between the two companies and enable back-officesupport services to be shared. This project will also place the combinedbusiness in an excellent position to undertake further consolidation of theGerman market, should appropriate opportunities present themselves. Revenues for the first half show a growth of 131% to £22.7 million (2006: £9.8million), of which an encouraging 17% is attributable to strong organic growthin our existing business. Strong performance in both the acquired and existingbusinesses have propelled the overall German business back into an operatingprofit of £2.3 million (2006: loss of £2.1 million), with our existing businessrecording an operating loss of £0.7 million (2006: loss of £2.1 million) andGardemann delivering operating profits of £3.0 million. France and Spain The French market continues to present a difficult rate environment, althoughour operation has made some progress in reducing its operating losses. Revenuesfor the first six months declined by 7% to £3.2 million (2006: £3.4 million),with operating losses reducing to £0.3 million (2006: £0.5 million). Market conditions in Spain remain broadly favourable, and this environment,combined with our rate-focused initiatives, has enabled the business to delivera strong improvement during the first half of the year. Revenues have increasedby 29% to £2.6 million (2006: £2.0 million), with margins earned from theserevenues improving significantly to deliver operating profits of £0.4 million(2006: £0.1 million). Middle East Demand levels have continued to develop strongly, with a number of significantinfrastructure projects across the region, either underway or scheduled tocommence in the near future. The reliance on the UAE for the majority of the business's revenues continues todiminish as the business develops strong positions in other markets,particularly in Saudi Arabia. The business has continued to improve itsinfrastructure, and has now implemented the Group's IT system, automating anumber of previously manual processes. Revenues for the first half grew by 70% to £7.9 million (2006: £4.7 million).Operating profits are recovering from the cost drag of transferring fleet intothe region, which depressed 2006's results, and have increased by 85% to £2.3million (2006: £1.2 million), helped by particularly strong equipment sales.This financial progress has been achieved despite an adverse 6% year on yearcurrency translation impact due to the continued weakness of the US Dollar. SUMMARY AND OUTLOOK Trading conditions across the Group's main markets have been good during thefirst half of the year. At the same time, extended lead times from equipmentsuppliers mean that the ability of the market to add substantial capacity tonational fleets is limited. These factors, together with the ever-increasingawareness and application of work at height legislation across the EuropeanUnion, should ensure market conditions remain favourable for some time. Whilst these structural factors have contributed to a positive marketenvironment, the mild winter and spring weather, experienced across much ofEurope, led to the acceleration of many weather-dependent projects, whichundoubtedly benefited the Group's revenues and earnings in the first quarter ofthis year. Our approach of developing a strong operational base in our chosen markets, withrobust systems, bolting quality acquisitions to that core business, and thendriving revenue and cost synergies is bearing fruit. As part of this process, wehave put considerable focus on improving our management depth and quality as theGroup moves through this period of rapid growth. These efforts are reflected inthe improved financial performance of the Group as it continues to make goodprogress towards producing acceptable economic returns from the markets in whichwe operate. We believe that this approach can continue to deliver benefits forthe Group over the coming years, and consequently believe that there remainsconsiderable scope for further improvement in business performance and enhancedshareholder returns. Trading since the end of the first half of the year has continued to be strongand we expect the Group's performance for the year to be ahead of our previousmarket expectations. John Gordon3 September 2007 Group income statement 6 months ended 6 months ended 12 months ended 30 June 2007 30 June 2006 31 December 2006 £000 £000 £000-------------------- -------- -------- ---------- Revenue 83,321 57,062 124,740Cost of sales (45,543) (33,209) (69,588)-------------------- -------- -------- ---------- Gross profit 37,778 23,853 55,152Operating expenses (26,170) (20,551) (42,487)-------------------- -------- -------- ---------- Operating profit 11,608 3,302 12,665Investment income 74 81 152Interest payable (3,375) (2,249) (5,070)----------------------- -------- -------- ---------- Profit before taxation 8,307 1,134 7,747Taxation on profit (1,952) (513) (892)----------------------- -------- -------- ---------- Profit for the period 6,355 621 6,855----------------------- -------- -------- ---------- Profit per ordinary share - basic 15.42p 1.65p 18.09p - diluted 15.37p p 1.64p 17.67p----------------------- -------- -------- ---------- All of the Group's trading activities relate to continuing operations. Group balance sheet As at As at As at 30 June 2007 30 June 2006 31 December 2006 £000 £000 £000--------------------------- ---------- ---------- ------------AssetsNon-current assetsIntangible assets 3,189 2,168 3,399Goodwill 35,680 10,223 32,920Property, plant andequipment 211,624 172,860 187,102--------------------------- ---------- ---------- ------------ 250,493 185,251 223,421Current assetsInventories 1,755 908 1,556Trade and otherreceivables 41,066 30,747 32,099Financial assets -derivative financialinstruments 380 308 323Cash and cash equivalents 4,646 7,429 10,349--------------------------- ---------- ---------- ------------ 47,847 39,392 44,327LiabilitiesCurrent liabilitiesFinancial liabilities -borrowings (27,402) (21,910) (24,874)Trade and other payables (52,294) (29,828) (37,039)Current tax liabilities (4,203) (1,507) (4,790)--------------------------- ---------- ---------- ------------ (83,899) (53,245) (66,703)--------------------------- ---------- ---------- ------------Net current liabilities (36,052) (13,853) (22,376)--------------------------- ---------- ---------- ------------Non-current liabilitiesFinancial liabilities -borrowings (91,695) (76,150) (84,449)Deferred tax liabilities (18,655) (14,668) (17,703)Other non-currentliabilities (3,026) (1,515) (4,645)--------------------------- ---------- ---------- ------------ (113,376) (92,333) (106,797)--------------------------- ---------- ---------- ------------Net assets 101,065 79,065 94,248--------------------------- ---------- ---------- ------------ Shareholders' equityOrdinary shares 419 379 407Share premium 82,123 72,440 79,787Shares to be issued - - 1,688Capital redemption reserve 4 4 4Retained earnings andother reserves 18,519 6,242 12,362--------------------------- ---------- ---------- ------------Total equity 101,065 79,065 94,248--------------------------- ---------- ---------- ------------ The interim financial statements were approved by the Board of Directors on 3September 2007 and were signed on its behalf by: John GordonChairman Alan MerrellDirector Group cash flow statement 6 months ended 6 months ended 12 months ended 30 June 2007 30 June 2006 31 December 2006 £000 £000 £000-------------------------- -------- -------- ---------- Cash flows from operating activities: Profit for the periodafter tax 6,355 621 6,855Taxation charge 1,952 513 892Net interest expense 3,301 2,168 4,918Amortisation anddepreciation 15,829 12,372 25,664Gain on sale ofproperty, plant and equipment (744) (331) (283)Other non-cash movements 216 347 650Net increase in working capital (2,725) (1,533) (1,810)-------------------------- -------- -------- ---------- Cash generated fromoperations 24,184 14,157 36,886 Net interest paid (3,469) (2,227) (4,237)Taxation paid (2,706) (1,711) (3,045)-------------------------- -------- -------- ---------- Net cash generated fromoperating activities 18,009 10,219 29,604 Net cash used by investing activities: Acquisition of subsidiaries (net of cash acquired andmovement in consideration deferred) (6,411) (12,382) (24,574)Proceeds from sale ofproperty, plant andequipment 2,635 2,406 6,862Purchase of property,plant and equipment (9,666) (2,639) (9,886)-------------------------- -------- -------- ---------- Net cash used byinvesting activities: (13,442) (12,615) (27,598) Cash flows from financing activities: (Repayment)/drawdown ofloans (2,020) 6,914 13,538Repayment of principalunder hire purchaseagreements (7,067) (6,176) (12,973)(Repayment)/issue ofloan notes (600) - 1,400Equity dividends paid (1,238) (853) (1,421)Proceeds from equityshares issued 660 2,000 8-------------------------- -------- -------- ---------- Net cash used byfinancing activities (10,265) 1,885 552-------------------------- -------- -------- ---------- Net (decrease)/increasein cash and cashequivalents beforeexchange differences (5,698) (511) 2,558Effects of exchange rates (5) (40) (189)-------------------------- -------- -------- ---------- Net (decrease)/increasein cash and cashequivalents beforeexchange differences (5,703) (551) 2,369 Cash and cash equivalents at start of period 10,349 7,980 7,980-------------------------- -------- -------- ---------- Cash and cashequivalents at end ofperiod 4,646 7,429 10,349-------------------------- -------- -------- ---------- Analysis of changes in net borrowings during the six months At Acquired Currency At 1 January Cash with Other non translation 30 June 2007 flows subsidiaries cash items differences 2007 £000 £000 £000 £000 £000 £000------------------ -------- ------- --------- -------- -------- ---------Cash and cashequivalents 10,349 (5,056) (642) - (5) 4,646------------------ -------- ------- --------- -------- -------- ---------Bank debt duewithin one year (13,167) 6,103 (10) (4,551) - (11,625)Bank debt dueafter one year (56,111) (4,083) (417) 4,551 (10) (56,070)Loan notes andguaranteed loan note consideration (4,767) 600 - - 5 (4,162)Hire purchase and finance leaseagreements (35,278) 7,067 (13,534) (5,508) 13 (47,240)------------------ -------- ------- --------- -------- -------- --------- (109,323) 9,687 (13,961) (5,508) 8 (119,097)------------------ -------- ------- --------- -------- -------- ---------Total netborrowings (98,974) 4,631 (14,603) (5,508) 3 (114,451)------------------ -------- ------- --------- -------- -------- --------- Shareholders' funds and statement of changes in equityFor the six months ended 30 June 2007 Cash Net Shares Capital flow investment Share Share to be redemption Translation hedge hedge Retained capital premium issued reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 1January 2007 407 79,787 1,688 4 (4,075) 323 3,338 12,776 94,248Profit for theperiod - - - - - - - 6,355 6,355Share basedpayments - - - - - - - 193 193Deferred taxmovement onshare basedpayments - - - - - - - 1,099 1,099Cash flowhedges - fairvalue gains inthe period - - - - - 57 - - 57Deferred taxmovement oncash flowhedges - - - - - (106) - - (106)Shares issued 12 2,336 (1,688) - - - - - 660Dividends paidin the period - - - - - - - (1,238) (1,238)Currencytranslationdifferences - - - - (230) - 27 - (203)----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 30June 2007 419 82,123 - 4 (4,305) 274 3,365 19,185 101,065----------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- For the six months ended 30 June 2006 Cash Net Shares Capital flow investment Share Share to be redemption Translation hedge hedge Retained capital premium issued reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 1January 2006 370 70,449 - 4 (2,232) (9) 1,810 6,671 77,063Profit for theperiod - - - - - - - 621 621Share basedpayments - - - - - - - 163 163Deferred taxmovement onshare basedpayments - - - - - - - (35) (35)Cash flowhedges - fairvalue gains inthe period - - - - - 317 - - 317Shares issued 9 1,991 - - - - - - 2,000Dividends paidin the period - - - - - - - (853) (853)Currencytranslationdifferences - - - - (297) - 86 - (211)----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 30June 2006 379 72,440 - 4 (2,529) 308 1,896 6,567 79,065----------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- For the twelve months ended 31 December 2006 Cash Net Shares Capital flow investment Share Share to be redemption Translation hedge hedge Retained capital premium issued reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 1January 2006 370 70,449 - 4 (2,232) (9) 1,810 6,671 77,063Profit for theperiod - - - - - - - 6,855 6,855Share basedpayments - - - - - - - 383 383Deferred taxmovement onshare basedpayments - - - - - - - 288 288Cash flowhedges - fairvalue gains inthe period - - - - - 332 - - 332Shares issued 37 9,338 - - - - - - 9,375Shares to beissued - - 1,688 - - - - - 1,688Dividends paidin the period - - - - - - - (1,421) (1,421)Currencytranslationdifferences - - - - (1,843) - 1,528 - (315)----------------- ------- ------- ------- ------- ------- ------- ------- ------- -------Balance at 31December 2006 407 79,787 1,688 4 (4,075) 323 3,338 12,776 94,248----------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Notes to the interim financial statements 1. These interim financial statements are prepared using the IFRS accountingpolicies (including IAS and interpretations issued by the InternationalFinancial Reporting Interpretations Committee ("IFRIC")) that are expected to beapplicable for the full reporting year in 2007. These remain subject to ongoingamendment and/or interpretation and are therefore subject to possible change.Consequently, information contained in these interim financial statements mayneed updating for any subsequent amendments to IFRS, or for any new standardsthat the Group may elect to adopt early. The interim financial statements set out on pages 8 to 15 are unaudited and donot comprise statutory accounts for the purpose of section 240 of the CompaniesAct 1985. Comparative figures for the six months to 30 June 2006 and 12 monthsto 31 December 2006 have been previously presented in the Group's Interim andAnnual reports for 2006, further details of these and the accounting policiesunder IFRS are available on the Group's website (www.lavendongroup.com). 2. The accounting policies used have been consistently applied to both thecurrent and prior year information. 3. Primary segmental analysis - geographical segments 6 months ended 6 months ended 12 months ended 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000Revenue------------------- -------- --------- -----------UK 47,054 37,194 81,342Germany 22,664 9,819 21,799France 3,169 3,416 7,054Spain 2,551 1,983 4,200Middle East 7,883 4,650 10,345------------------- -------- --------- -----------Total 83,321 57,062 124,740------------------- -------- --------- ----------- Operating profit/(loss)------------------- -------- --------- -----------UK 6,921 4,672 12,176Germany 2,253 (2,149) (1,940)France (282) (510) (493)Spain 446 64 372Middle East 2,270 1,225 2,550------------------- -------- --------- -----------Total 11,608 3,302 12,665------------------- -------- --------- ----------- Note: The information disclosed for the UK operation includes centralised groupcosts, which may relate to the operation and financing of overseas subsidiaries. 4. The taxation charge for the six months to 30 June 2007 has been calculated byapplying the estimated tax rate for the current financial year ending 31December 2007. 5. Earnings per share are calculated on the 41,220,028 ordinary shares in issuefor the six months to 30 June 2007 being the weighted average number of ordinaryshares in issue (6 months 2006: 37,679,011; full year 2006: 37,932,369). Diluted earnings per share assume conversion of all dilutive potential ordinaryshares which arise from share options granted to employees where the exerciseprice is less than the average market price of the Company's ordinary sharecapital during the six months. The effect of this dilution is to increase theweighted average number of ordinary shares to 41,359,969 (6 months 2006:37,892,441; full year 2006: 38,824,734). 6. Acquisition of subsidiary companies Rise Hire Limited, formerly Hoperole Limited (Rise Hire) On 25 April 2007, the Group acquired 100% of the share capital of Rise HireLimited (formerly Hoperole Limited). The initial consideration was £1.1 millionsatisfied in cash. Additional consideration of between £0.45 and £0.65 millionis payable in cash by Lavendon dependent upon Rise Hire's financial performancefor the 12 months to 31 March 2008. Wizard Workspace Limited (Wizard) On 1 June 2007, the Group acquired 100% of the share capital of Wizard WorkspaceLimited. The initial consideration paid on completion was £1.7 million,satisfied in cash. Additional consideration of £0.45 million will be payable incash by Lavendon on 1 June 2008. Details of the acquisitions are provided in aggregate below: 2007 £'000 Book value of assets and liabilities acquired 8Fair value adjustments (i) 1,301 -------Fair value of assets and liabilities acquired 1,309Goodwill on acquisition 2,364Other intangible assets recognised at acquisition 262 ------- Cost of acquisitions 3,935 ------- Satisfied by: Consideration in cash 2,800Deferred consideration (ii) 900Acquisition costs 235 ------- 3,935 ------- The attributed fair values are provisional. Notes (i) The fair value adjustments relate to the restatement of theacquired balance sheets under the Group's accounting policies. The adjustmentsprimarily relate to increases in the carrying value of property, plant andequipment offset by compensatory adjustments to corporation tax and deferredtax. (ii) The carrying value of the deferred consideration isestimated after taking into account forecast future earnings. The maximumdeferred consideration payable is £1.1 million. 7.Post balance sheet event Since 30 June 2007, the Group has acquired Higher Platforms Group Limited(Higher Platforms) in the UK. Total consideration was £8.9 million, payable incash, of which £1.3 million is deferred until August 2008. As part of thistransaction the Group assumed Higher Platform's net cash position of £1.4million. 8.A copy of this interim statement is being sent to all shareholders and copies are available from the Company's registered office at 1 Midland Court, Central Park, Lutterworth, Leicestershire, LE17 4PN. Independent review report to Lavendon Group plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidated interimbalance sheet as at 30 June 2007 and the related consolidated interim statementsof income, cash flows and changes in shareholders' equity for the six monthsthen ended and related notes. We have read the other information contained inthe interim report and considered whether it contains any apparent misstatementsor material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The Listing Rulesof the Financial Services Authority require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. This interim report has been prepared in accordance with the basis set out inNote 1. 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 United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the Listing Rules of the Financial Services Authorityand for no other purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to any other person to whom this reportis shown or into whose hands it may come save where expressly agreed by ourprior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. PricewaterhouseCoopers LLPChartered AccountantsEast Midlands3 September 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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