Interim results

SEPURA PLC

INTERIM RESULTS ANNOUNCEMENT

FOR THE HALF YEAR ENDED 1 OCTOBER 2010

Sepura plc (the "Company"), a leading global provider of TETRA digital mobile radios, today announces its interim results for the six month period ended 1 October 2010.

An analyst presentation of the interim results will be held on 25 November 2010 at 9.00 am at The Wright Room, The Mermaid Conference & Events Centre, Puddle Dock, Blackfriars, London, EC4V 3DB.

Board Strengthened:

Appointment of Paul Goodridge as Chief Financial Officer and John Hughes as Chairman

Operational Highlights:

·; 69,000 radios delivered to customers in 68 countries

·; Germany: Significant contract win in Rheinland-Pfalz for 36,000 radios

·; Netherlands: Refresh cycle commences in line with the UK model

·; Pipeline: Framework contracts now provide a pipeline of over 100,000 radios for future delivery

·; Key milestones achieved in development of DMR platform

Financial Highlights:

·; Trading in line with expectations, with the usual weighting of revenues to H2

·; Revenue up 3% on constant currency basis

·; Gross margin of 44.3%, compared to 45.3% for the second half of FY10, reflecting expected changes to product mix and framework contracts

·; Continued investment in R&D and routes to market led to 2% increase in cash opex

·; EBITDA of £6.1m

·; Closing net cash increased by £3.7m from the year end to £5.4m

·; Interim dividend increased 7% to 0.45p per share

John Hughes, Chairman of Sepura, commenting on the first half performance and outlook, said:

"I am pleased to say that we have delivered a solid performance over the last six months. We increased volumes by 28%, secured an important new contract from the State of Rheinland-Pfalz and have seen increasing geographical diversity in our customer base. We are also encouraged by signs of recovery in our commercial markets, especially in the energy sector in Latin America and Australasia. Based on the long-term view of our business and our strengthening balance sheet, we are pleased to announce an increase in the interim dividend to 0.45p per share.

Our growing pipeline of future business and the proven model of winning follow-on awards gives us a platform from which to achieve our full year targets, although we acknowledge that orders are subject to uncertain timing in the short-term. As a result at this stage we remain cautiously optimistic on the outlook for the remainder of the year."

The Interim Report to Shareholders will be issued on 8 December 2010.

FOR FURTHER INFORMATION PLEASE CONTACT:

Sepura Tel: 01223 876 000

Gordon Watling, Chief Executive Officer

Paul Goodridge, Chief Financial Officer

Powerscourt (Media Enquiries) Tel: 020 7250 1446

Paul Durman / Rob Greening

CAUTIONARY STATEMENT:

This Interim Results announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of Sepura. By their nature, future events and circumstances can cause results and developments to differ from those anticipated. Nothing in this Interim Results announcement should be construed as a profit forecast. No undertaking is given to update the forward-looking statements whether as a result of new information, future events or otherwise.

NOTES TO EDITORS:

About Sepura

Sepura is a global leader in the design, manufacture and supply of TETRA (TErrestrial Trunked RAdio) digital radios, which are used predominantly by the emergency services around the world and in the transport, utilities and commercial sectors. Our products deliver mission critical communications.

Sepura offers one of the broadest ranges of TETRA products available, is often first to market with innovative products and features, and is a market leader in the supply of surveillance and other specialist TETRA radios and accessories. Founded in the UK in 2002, Sepura has expanded rapidly across the world with a network of regional partners that sell and provide local support for our market-leading products and is market leader in over 30 countries.

Based in Cambridge, England and employing some 300 employees, Sepura was admitted to the Official List of the London Stock Exchange on 3 August 2007. For further information please visit www.sepura.com.

1 Adjusted to exclude the capitalisation of research and development costs (together with associated amortisation) and the IFRS2 share option charge.

2 Adjusted to exclude the capitalisation of research and development costs (together with associated amortisation), the IFRS2 share option charge and gains and losses arising on marking open foreign exchange contracts to market value, all net of UK Corporation Tax at the standard rate.

CHAIRMAN'S STATEMENT

I am delighted to join the Board of Sepura at such an exciting time for the business, and am pleased to announce that we have delivered a solid performance over the last six months. We increased volumes by 28% compared to the same period last year through continued focus on delivering the products our customers need today. We have generated £11m of operating cashflow, which has enabled us to make targeted investment in developing the products they will need tomorrow.

Our success during the first half of the year has come from global demand, with our international volumes increasing by over 50% with sales to customers in 68 countries. As expected we have seen reduced demand from the UK and Southern Europe, but we have also seen the anticipated increase in demand from Northern Europe, including 21,500 radios delivered to Germany where the network roll-out continues. We secured an important new contract from the State of Rheinland-Pfalz in Germany for a total of 36,000 radios, and now have framework contracts in place for over 100,000 radios which we expect to deliver over the next three years. We have also seen the start of the refresh cycle in the Netherlands, another mature market which is following the same model as the UK.

The continued reporting of cuts to European public sector budgets needs to be balanced by recognition of the ongoing demand for mission critical communications around the world as consumers, businesses and governments migrate to digital technologies. In addition to major wins in our core public safety markets we have shipped 2,000 radios against our first order from Brazil for several years, and delivered 4,000 radios to customers across the Middle East, as economies outside Europe grow faster than their European counterparts. We are also encouraged by signs of recovery in our commercial markets, especially in the energy sector in Latin America and Australasia, which we expect to continue through the second half of the year.

While we continue to maintain tight control over cash operating expenditures, we have made targeted investments in additional sales resources for important emerging markets and achieved key milestones in the development of our DMR platform. After making these investments our net cash has increased by £3.7m to £5.4m since the end of our last financial year and our balance sheet remains robust. Based on this robust balance sheet and the long-term view of our business, we are pleased to announce an increase in the interim dividend to 0.45p per share.

Our growing pipeline of future business and the proven model of winning follow-on awards gives us a platform from which to achieve our full year targets, although we acknowledge that orders are subject to uncertain timing in the short-term. As a result at this stage we remain cautiously optimistic on the outlook for the remainder of the year.

INTERIM MANAGEMENT REPORT

Although our customers have not been immune to government austerity measures introduced across the globe, we grew our volumes by 28% over the same period last year. TETRA continues to be the digital communications standard of choice for public safety users, and our customers during the period reflected a wide range of end-users in both emerging markets where new TETRA networks are being deployed, and mature markets where established customers have returned to Sepura as they replace older generations of radios. Deliveries during the period reflected the usual weighting towards the second half of the year, which includes the end of the UK and German public sector fiscal years and the corresponding increase in business as customer budgets are confirmed.

(1) Average Revenue Per Unit Shipped

Revenue

Reported revenue for the period was flat at £31.5m, although on a constant currency basis revenue increased 3% before reflecting the weakening of the Euro over the last 12 months. ARPUS was £456, down 4% from £473 for the six months ended 31 March 2010, of which 3% was due to the weaker Euro and the remaining 1% due to product and geographical mix. The reduction relative to the first half of last year reflects a combination of the increased proportion of international business, where we sell through distribution partners, the impact of the pricing in the high volume contracts we were awarded in Germany and product mix. The fixed prices in our framework contracts, together with the specific product and geographical mix in our internal forecasts, should result in an increase in ARPUS for the remainder of the year.

As expected, deliveries to UK customers declined as a proportion of our overall volumes as the first UK police refresh cycle nears completion. We delivered 7,000 radios to UK police refresh customers, compared to 16,000 radios in the same period last year. We expect to deliver a similar volume in the second half of the year to further customers with ageing fleets of radios which are no longer in warranty, and we understand from regular meetings with them that budgets are available for these scheduled refresh orders to proceed during the current year. We are also seeing the start of a similar refresh cycle in the Netherlands, which was also an early adopter of TETRA. We have successfully retained the first Dutch Police customer to refresh their fleet, who purchased 3,500 radios to replace first generation radios we supplied in 2004. We expect a similar volume of radios will be required by further Dutch refresh customers in the second half of the year.

The refresh business in the UK and the Netherlands confirms the strategic importance of securing early tenders in new markets, which will generate additional future revenues over the life of the TETRA network. We expect this to be the case in Germany, the largest TETRA market in the short to medium term, where we have built on our earlier success by winning the contract with Rheinland-Pfalz for 36,000 radios. We delivered 21,500 radios to German customers, compared to 8,000 during the same period last year, and the framework contracts we now have in place provide a pipeline of over 85,000 radios for Germany which we expect to be called down over the next three years. To date contracts for approximately 250,000 radios out of the expected first phase of 550,000 radios have been awarded, and we remain confident that we will secure further business in Germany as the network roll-out continues. Other European markets have performed as expected to date, with strong demand from our traditional Northern European markets balanced by the expected limited demand from Southern Europe.

Our recent investment in our routes to market outside Europe is also yielding positive results. This is particularly true in Latin America, where we supplied 2,000 radios to Brazil for use in the recent World Military Games, and 2,000 radios to oil and gas customers in Argentina. The latter is an encouraging sign of increased demand from commercial customers around the globe, especially in the energy sector where we also secured several orders totalling 1,000 radios from Australasian mining businesses.

Gross margin

Although pricing for new business in our market remains competitive, we believe that the pipeline provided by our framework contracts, which have fixed prices for the duration of each contract, together with the specific product and geographical mix in our internal forecasts, should result in improved gross margins for the remainder of the year.

Average product costs fell by 3% during the period, reflecting the weakening Euro and our ongoing programme of value engineering. This mitigated much of the 4% reduction in ARPUS and, after allowing for product and geographical mix, gross margin for the period was 44.3% compared to 45.3% for the six months ended 31 March 2010.

Research and development

We have continued to invest in expanding our product portfolio to address opportunities in new markets. We launched the SRB8000, the first TETRA radio board with 1.8 Watt transmitting power. This highly flexible and customisable TETRA engine enables our specialist data and telemetry solution partners to provide products which transmit secure data directly to a TETRA network. We also expanded our range of accessories, and developed further software functionality tailored to the specific requirements of our major public safety markets. We continue to balance the need to address short-term revenue opportunities with longer term development work on our DMR platform. Progress on DMR is on-track with key milestones met during the period.

Gross expenditure on R&D totalled £6.8m (2010: £6.4m), with the increasing proportion of R&D spend relating to longer-term projects resulting in 78% of the gross spend being capitalised compared to 74% last year. The amortisation charge for the period increased as forecast by 20% to £4.6m from £3.9m, due to a full period of amortisation for significant software releases and new products launched during the last year. This led to the income statement charge for R&D increasing by 12% to £6.2m.

Selling, marketing and distribution costs and administrative expenses

During the first half of last year we restructured the business to improve efficiency and generate resources to invest in key emerging markets. Sales and marketing costs increased 9% to £4.8m (representing 15% of revenues, compared to 14% last year) as this investment continued during the period under review, with additional sales resource recruited in those regions expected to see the fastest growth in the short to medium term. These include the Middle East, Latin America, and the Benelux, and we have secured significant wins in each of these regions during the period. Since the end of the period we have also recruited a senior Business Development Manager dedicated to forthcoming opportunities in India, which we expect to become a major TETRA market over the medium term.

Administrative expenses fell 7% to £2.7m (representing 8% of revenues, compared to 9% last year) as we delivered increased volumes to customers through our existing supply chain and infrastructure. This was a direct result of the improving operational leverage within our business model following last year's restructuring.

Foreign exchange

The Group's results are increasingly subject to the strength or weakness of the Euro relative to Sterling as the proportion of overseas business grows. The period under review has seen significant volatility in the Euro / Sterling exchange rate, which was 1.124 at the end of March 2010 and reached a high of 1.235 during June before strengthening to 1.154 at the end of September. In the light of this volatility, we decided during the first quarter of the year to take out a series of forward currency contracts to cover approximately 90% of the forecast net Euro cash inflows relating to the current financial year. These mature at monthly intervals through to June 2011 at rates between 1.166 and 1.194. Under IFRS the contracts outstanding at 30 September 2010 have been valued at the market rate on that date of 1.154, resulting in an unrealised loss of £1m being recognised during the period as a financial expense. In the event that the Euro strengthens during the remainder of the year then the reported Sterling value of second half revenues and gross margin will increase, offsetting any further losses on open contracts. If the Euro weakens then the unrealised loss will mitigate the impact on gross margin.

Taxation

The Group continues to benefit from research and development credits, which reduce the tax charge in the income statement relative to the standard UK rate of Corporation Tax of 28%. This rate will reduce to 27% from 1 April 2011, giving rise to a £0.1m charge during the period from revaluing the net deferred tax asset to the rate scheduled to be in force when the underlying timing differences reverse. The timing of our eligible expenditure, relative to trading profits, generated a tax credit of £1.4m during the period (2010: £0.3m). The Group has unutilised trading losses of approximately £30m to offset against future UK trading income.

Earnings Per Share

Our basic and diluted EPS for the period was 0.4p, compared to 1.6p for the six months ended 30 September 2009. After excluding the impact of non-cash items, namely capitalising our research and development costs, the IFRS2 share option cost and marking open forward contracts to market rates, adjusted diluted EPS was 0.7p (2010: 1.1p).

Dividends

The Board has declared a dividend of 0.45 pence per Ordinary share. This interim dividend will be payable on 6 January 2011 to those shareholders on the register at 3 December 2010.

Cashflow and financing

Net funds increased £3.7m from £1.7m at 31 March 2010 to £5.4m. We generated £11.0m (2010: £4.5m) of operating cash during the period under review, with £4.7m of inflows from working capital (2010: increase in working capital of £1.5m after settling £1m of non-recurring costs incurred during FY09) including the settlement of outstanding receivables from 31 March 2010. Controlling working capital remains an important area of focus for the Group.

R&D expenditure capitalised during the period totalled £5.3m (2010: £4.7m) as work continued on new product development, while other capital expenditure totalled £0.9m (2010: £0.7m). Other significant cash outflows during the period were unchanged, with £1.6m of scheduled repayments and net interest on our borrowings and £1.2m in relation to last year's final dividend.

Our cash balances at 1 October 2010 were £11.3m (2010: £12.1m), and our net funds, after deducting outstanding borrowings, were £5.4m (2010: £3.2m). Our borrowings comprise a term loan, of which £6m was outstanding at 1 October 2010 with scheduled capital repayments of £3m a year for the next two years. We also have £15m of undrawn committed credit facilities which are available until September 2012.

Share capital

During the period the Company issued 840,000 Ordinary shares of £0.0005 each following the exercise of employee share options, and options previously granted over 0.2m Ordinary shares lapsed or were forfeited. The Company issued its third annual invitation to staff to participate in the all-employee SAYE scheme, which resulted in a further grant of options over 0.4m Ordinary shares, and granted options over a total of 3.5m shares to senior executives under the Company's Long-Term Incentive Plan. These will vest if EPS targets relating to the year ending 31 March 2013 are achieved.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group for both the first six months and the remaining six months of the financial year continue to be those stated on Page 18 of the Group's 2010 Annual Report and Accounts, which are summarised as follows:

·; The risk that customers delay issuing tenders or orders, as a result of changes in political and economic conditions, with a consequential delay in the timing of our revenues.

·; The risk that the Group fails to secure a market-leading position in emerging markets, with a detrimental effect on future revenue opportunities and profitability.

·; The risk that alternative products and technologies are developed by our competitors, which threaten our future profitability.

·; The risk that we are unable to manage our rapid growth profitably, with reduced margins and inefficiencies adversely affecting our future profitability and financial position.

·; The risk that a material customer defaults on outstanding receivables.

·; The risk that fluctuations in exchange rates, especially the Euro, give rise to revaluations of assets and liabilities which impact our future profitability.

The results above relate to continuing operations.

1 Re-presented to reflect the classification of gains and (losses) on forward currency contracts as a component of financial expense (see Note 2)

The condensed consolidated financial statements were approved by the Board and authorised for issue on 24 November 2010 and are signed on its behalf by:

Gordon Watling Paul GoodridgeChief Executive Officer Chief Financial Officer

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTSFOR THE HALF-YEAR ENDED 1 OCTOBER 2010

1. General information

Sepura plc ("the Company") is a public limited company incorporated and domiciled in England and Wales, whose Ordinary shares of £0.0005 each are traded on the Main Market of the London Stock Exchange. The Company's registered office is Radio House, St Andrew's Road, Cambridge, CB4 1GR, England.

The Company has prepared condensed consolidated financial statements for the period to 1 October 2010, being the nearest Friday to the end of the period. The Company will prepare future financial statements to the nearest Friday to the period end, to align external reporting dates with internal reporting periods and in accordance with industry practice.

The condensed consolidated financial statements were approved for issue on 24 November 2010.

The condensed consolidated financial statements do not constitute the statutory accounts of the Company within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2010 have been delivered to the Registrar of Companies. The auditors have reported on those accounts and their report was not qualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Basis of preparation

The condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 "Interim financial reporting" as adopted by the European Union. The condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2010, which have been prepared in accordance with IFRS as adopted by the European Union. These condensed consolidated financial statements have been prepared under the same accounting policies and methods of computation as those applied in the preparation of the most recent Annual Report.

As at 1 October 2010 the Company has changed the presentation of gains and losses on forward currency contracts in the consolidated statement of comprehensive income. Such contracts are classified under IAS 39, "Financial Instruments: Recognition and Measurement" as "at fair value through profit or loss". They are recognised initially and re-measured throughout the contract's life at fair value, with changes in fair value taken to the consolidated statement of comprehensive income. Historically, these changes in fair value have been included within operating profit as other gains or losses. During the period to 1 October 2010 the Company has amended its Treasury Policy to hedge non-specific future cashflows and therefore considers it to be more appropriate to present the gains and losses on the associated forward currency contracts within financial income and expense. The comparative figures have been re-presented accordingly.

3. Segmental reporting

IFRS 8 defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resources. IFRS 8 also sets out the process by which operating segments may be amalgamated into reportable segments because they share the same economic characteristics due to the nature of the products sold, the production processes used and the type of customer for the products. The Company has a single reportable segment, being the design, development and supply of TErrestrial Trunked RAdio ("TETRA") digital mobile radios.

4. EBITDA and adjusted operating profit

Earnings before interest, tax, depreciation and amortisation has been calculated as follows:

Adjusted operating profit has been calculated as follows:

5. Income tax (credit) expense

The income tax (credit) expense for the period is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full year. The tax credit for the period is higher than the standard rate of Corporation Tax in the UK, which is 28% (2010: 28%). The differences are explained below:

6. Earnings per share

Basic earnings per share has been calculated by dividing earnings attributable to ordinary shareholders by the weighted average number of shares of the Company. For diluted earnings per share, the weighted average number of shares is adjusted to allow for the conversion of all dilutive equity instruments.

The Group presents an adjusted earnings per share figure which excludes the capitalisation of R&D costs (together with associated amortisation), the IFRS 2 share-option charge and other gains and losses arising on marking open foreign exchange contracts to market value, all net of UK Corporation Tax at the standard rate. This adjusted earnings per share figure has been based on adjusted basic earnings for each financial period and on the same number of diluted weighted average shares in issue as the GAAP earnings per share calculation above.

7. Dividends

During the period the Company paid a final dividend in respect of the financial year ended 31 March 2010 of 0.85 pence per Ordinary share, totalling £1,167,000.

An interim dividend for the financial year ending 31 March 2011 of 0.45 pence per Ordinary share has been declared payable by the Company on 6 January 2011 to shareholders on the register at the close of business on 3 December 2010. The declared dividend has not been included as a liability in these condensed consolidated financial statements.

8. Capital expenditure

Major additions to property, plant and equipment comprised test and IT equipment.

9. Borrowings

On 27 October 2006 the Group entered into a £30,000,000 multi-currency term loan and revolving facilities agreement with a floating interest rate of 1.5% over LIBOR. £15,000,000 was drawn down against the facility on 27 October 2006, and is repayable in 20 equal quarterly instalments which commenced in December 2007. The outstanding capital at 1 October 2010 was £6,000,000 (30 September 2009: £9,000,000; 31 March 2010: £7,500,000), and unamortised issue costs were £98,000 (30 September 2009: £146,000; 31 March 2010: £122,000).

The unused facility of £15,000,000 expires on 11 September 2012.

10. Share capital

During the period the Company issued 840,000 Ordinary shares of £0.0005 each following the exercise of employee share options and at the end of the period the Company's issued share capital comprised 137,318,580 Ordinary shares of £0.0005 each (30 September 2009 and 31 March 2010: 136,478,580).

11. Reconciliation of cash flows to movements in net funds

12. Seasonality

Deliveries during the period reflected the usual weighting towards the second half of the year, which includes the end of the UK and German public sector fiscal years and the corresponding increase in business as customer budgets are confirmed.

13. Contingent liabilities

The Group has entered into a bank guarantee of €11,000 in respect of premises leased by its subsidiary Sepura Deutschland GmbH, and has entered into a number of guarantee and performance bond arrangements in the normal course of business. The Group is also subject to disputes with suppliers during the ordinary course of business. Provision is made for any amounts that the Directors consider will probably become payable under such arrangements.

14. Post balance sheet events

There have been no post balance sheet events of any significance.

Statement of Directors' responsibilities

A copy of the condensed consolidated financial statements of the Group is placed on the Company's website. The Directors are responsible for the maintenance and integrity of information on the Company's website. Information published on the internet is accessible in many countries with different legal requirements. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

·; This condensed set of consolidated interim financial statements has been prepared in accordance with IAS 34 as adopted by the European Union;

·; The interim management report includes a fair review of the information required by:

·; DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remainder of the financial year; and

·; DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any material changes in the related party transactions described in the last Annual Report.

The Directors of the Group are listed in the Group's Annual Report for the year ended 31 March 2010 with the exception of the following changes after the end of the period: Stephen Mole and Philip Nolan resigned on 18 June 2010 and 21 July 2010 respectively, and John Hughes and Paul Goodridge were appointed on 21 July 2010 and 4 October 2010 respectively. A list of the current directors is maintained on the Sepura website: www.sepura.com.

By order of the Board,

Gordon Watling

Chief Executive Officer

Paul Goodridge

Chief Financial Officer

24 November 2010

INDEPENDENT REVIEW REPORT TO SEPURA PLC

Introduction

We have been engaged by the Company to review the condensed consolidated financial statements in the half-yearly financial report for the six months ended 1 October 2010, which comprises the condensed consolidated half-year statement of comprehensive income, condensed consolidated half-year statement of changes in equity, condensed consolidated half-year balance sheet, condensed consolidated half-year statement of cash flows and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements in the half-yearly financial report for the six months ended 1 October 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

Cambridge

24 November 2010