22nd May 2006 07:00
Treatt PLC22 May 2006 TREATT PLC INTERIM RESULTS ANNOUNCEMENT - SIX MONTHS ENDED 31 MARCH 2006 Treatt PLC, the manufacturer and supplier of flavour and fragrance ingredients,primarily from essential oils, announces today its interim results for the sixmonths ended 31 March 2006. SUMMARY • Profit before tax for the period up 26% to £1,621,000 (2005: £1,288,000)• Group turnover up by 18% to £17,322,000 (2005: £14,713,000)• EBITDA increased by 18% to £2,164,000 (2005: £1,835,000)• Interim dividend raised by 10% to 3.4p (2005: 3.1p)• Absence of last year's one-off stock gains on citrus oil• Group borrowings up by £1.8m, gearing of 25% (2005: 16%) Edward Dawnay, Chairman commented: "The Group has performed excellently over the last six months with both the UKand US subsidiaries replacing last year's one-off orange and grapefruit profitswith strong sales growth across the Group's highly diversified product range.The prospects for the remainder of the year are good with Treatt USA expected tocontinue its growth with Group profits in the second half expected, as usual, tobe stronger than the first half." CHAIRMAN'S STATEMENT "The Group performed excellently with profits increasing by 26% to £1.6m acrossbroad product portfolio, in spite of the absence of last year's substantialone-off stock gains" The Group had a strong result for the six months to 31 March 2006, with Groupturnover growing by 18% to £17,322,000 (2005: £14,713,000). In spite of theabsence of last year's substantial stock gains from citrus oils, EBITDA(Earnings before Interest, Tax, Depreciation and Amortisation) rose by 18% to£2,164,000 (2005: £1,835,000) and profit before tax increased by 26% to£1,621,000 (2005: £1,288,000). Earnings per share have consequently increased to11.1 pence per share (2005: 8.7 pence per share). The Board has declared an increase in the interim dividend of 9.7% to 3.4 penceper share (2005: 3.1 pence per share) which will be payable on 2 October 2006 toall shareholders on the register at close of business on 1 September 2006. The first six months of this financial year saw the Group enjoy increasedprofits as a result of sales growth across the broad product range, both interms of sales value and volume, as well as an increase in order activitylevels. Margins held up well in spite of the absence of last year's one-offstock gains from orange and grapefruit oil. Overall, the Group benefited fromincreasing prices in both essential oil and aroma chemical products as well as aslowly strengthening US Dollar, which has moved by 9% compared to the sameperiod last year. During the period orange oil prices remained firm, well abovetheir long term historical average, whilst demand for grapefruit oil productshas weakened. Treatt USA performed well with turnover growing by 22% in US Dollar terms,although with lower margins profits are slightly down on last year. Asexpected, overheads increased compared to the same period last year, whichreflects the impact of last year's investment in Treatt USA's infrastructure inorder to provide the platform for continued growth. Sales of the uniquespecialty TreattaromeTM "From the Named Food" range of products continued todrive Treatt USA's growth, whilst sales and margins across the broad range ofmanufactured citrus products remained steady. R.C. Treatt, the Group's UK operating subsidiary, had an excellent first sixmonths with sales growing by 14%, but with slightly lower margins compared tothe same period last year due to the absence of the one-off citrus stock gainsreferred to earlier. The main factors contributing to this success were thecontinuing process improvements flowing from the Enterprise Resource Planning(ERP) system, generally increasing commodity prices underpinned by higher energyprices and increased competitiveness following the introduction of flexibleemployee contracts last year. Again, a stronger US Dollar was also advantageousalthough this trend has reversed since the end of the period. During the period there was a net cash outflow for the Group of £2,291,000largely as a result of increased investment in stock as a consequence mainly ofhigher prices. As a result, net debt (including the Treatt USA IndustrialDevelopment Loan) increased to £4.5 million and gearing was 25% (2005: 16%),with short term gearing of 12% (2005: 2%). Based upon our current projectionsthe cash flow in the second half is expected to be neutral. International Financial Reporting Standards (IFRS) As previously announced, the results for the year ended 30 September 2006 arethe first set of results to be published by Treatt Plc in accordance with IFRS.Following the publication of restated results for the year ended 30 September2005, these results confirm that, to date, IFRS has not had a material impact onthe Group's Income Statement and that, as expected, the most significant impactflows from recognising a pension liability of £2.3m (2005: £2.1m) which has beenoffset by a reduction in dividends payable of £0.3m (2005: £0.3m). Prospects The Board is of the view that the breadth of the Group's diversified productrange and customer base will result in Treatt USA and R.C. Treatt continuing toperform well in the second half of the year although US Dollar volatility mayhave a negative impact. In the absence of any unforeseen circumstances, theBoard believes that Group profits in the second half will, as usual, be strongerthan in the first half of the year. Edward Dawnay Chairman 19 May 2006 TREATT PLCINTERIM STATEMENTFor the six months ended 31 March 2006 GROUP INCOME STATEMENT Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) Notes £'000 £'000 £'000 Revenue 3 17,322 14,713 32,521Cost of Sales (12,178) (10,314) (21,952) ______ ______ ______Gross profit 5,144 4,399 10,569 Administrative expenses (3,405) (3,030) (7,020) ______ ______ ______Operating profit 1,739 1,369 3,549 Finance revenue 99 - 176Finance costs (217) (81) (319) ______ ______ ______Profit before taxation 1,621 1,288 3,406 Taxation 4 (508) (405) (1,070) ______ ______ ______Profit for the year attributable to equity 1,113 883 2,336shareholders ______ ______ ______ Earnings per share - Basic 5a 11.1p 8.7p 23.3p - Diluted 5b 11.1p 8.7p 23.2p GROUP STATEMENT OF RECOGNISED INCOME AND EXPENSE Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) Notes £'000 £'000 £'000 Profit for the period 1,113 883 2,336 Currency translation differences on foreign 99 (160) 123 currency net investments Actuarial gain/(loss) on defined benefit - - (257) pension scheme 2b Deferred tax on actuarial gain/(loss) - - 77 ______ ______ ______ Total recognised net income for the period 1,212 723 2,279 ______ ______ ______ GROUP BALANCE SHEET As at As at As at 31 March 31 March 30 September Notes 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) Notes £'000 £'000 £'000ASSETSNon-current assets Intangible assets 2f 640 840 730 Property, plant and equipment 8,700 8,302 8,644 Deferred tax 521 375 521 ______ ______ ______ 9,861 9,517 9,895 ______ ______ ______Current assets Inventories 12,727 9,774 11,395 Trade and other receivables 6,448 6,224 5,718 Cash and cash equivalents 110 67 297 ______ ______ ______ 19,285 16,065 17,410 ______ ______ ______LIABILITIESCurrent liabilities Bank loans and overdrafts (2,251) (426) (144) Trade and other payables (3,505) (4,165) (3,934) Corporation tax payable (420) (315) (589) ______ ______ ______ (6,176) (4,906) (4,667) ______ ______ ______ ______ ______ ______Net current assets 13,109 11,159 12,743 ______ ______ ______ Non-current liabilities Bank loans (2,222) (2,175) (2,179) Post-employment benefits 2b (3,254) (2,952) (3,239) ______ ______ ______ (5,476) (5,127) (5,418) ______ ______ ______ ______ ______ ______Net assets 17,494 15,549 17,220 ______ ______ ______ GROUP BALANCE SHEET (continued) As at As at As at 31 March 31 March 30 September Notes 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) £'000 £'000 £'000SHAREHOLDERS' EQUITY Called up share capital 1,029 1,029 1,029 Share premium account 2,143 2,143 2,143 Own shares in share trust (625) (723) (625) Employee share option reserve 2c 25 9 14 Foreign exchange reserve 2e (600) (982) (699) Profit and loss account 15,522 14,073 15,358 ______ ______ ______Shareholders' equity 17,494 15,549 17,220 ______ ______ ______ STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) Notes £'000 £'000 £'000 Total recognised net income for the period 1,212 723 2,279 Dividends 6 (949) (893) (881) Share based payments 2c 11 7 12 Movement in own shares in share trust - (445) (347) ______ ______ ______ Increase/(decrease) in shareholders' equity 274 (608) 1,063 Shareholders' equity at 1 October 17,220 16,157 16,157 ______ ______ ______ Shareholders' equity at period end 17,494 15,549 17,220 ______ ______ ______ GROUP CASH FLOW STATEMENT Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) £'000 £'000 £'000 Cash flow from operating activitiesProfit before taxation 1,621 1,288 3,406Adjusted for: Foreign exchange gain/(loss) 64 (100) 104 Depreciation of property, plant and equipment 425 466 963 Loss on disposal of property, plant and equipment - - 135 Share option charge 11 7 12 Pension funding 15 8 38 ______ ______ ______ 2,136 1,669 4,658Changes in working capital: Decrease/(increase) in inventories (1,332) (1,419) (3,040) Decrease/(increase) in trade and other (730) (217) 288 receivables Increase/(decrease) in trade and other (429) 846 642 payables ______ ______ ______Cash generated from operations (355) 879 2,548 Tax paid (677) (352) (812) ______ ______ ______Net cash from operating activities (1,032) 527 1,736 ______ ______ ______ Cash flow from investing activitiesPurchase of property, plant and equipment (310) (234) (862) ______ ______ ______ Cash flow from financing activities Repayment of bank loans - - (144) Dividends paid (949) (881) (895) Net acquisition of own shares by Share Trust - (445) (347) ______ ______ ______ (949) (1,326) (1,386) ______ ______ ______ Net decrease in cash and cash equivalents (2,291) (1,033) (512) Cash and cash equivalents at beginning of period 297 809 809 ______ ______ ______Cash and cash equivalents at end of period (1,994) (224) 297 ______ ______ ______ NOTES TO THE INTERIM STATEMENT (1) Basis of preparation Prior to 2006 the Group prepared its audited financial statements under UK Generally Accepted Accounting Principles (UK GAAP). For the year ended 30 September 2006 the Group is required to prepare its annual consolidated financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)). These interim financial statements have been prepared in accordance with the accounting policies set out below, taking into account the requirements and options in IFRS 1 'First-time adoption of International Financial Reporting Standards'. The Group has not adopted the reporting requirements of IAS 34 'Interim Financial Reporting'. The transition date for the Group's application of IFRS is 1 October 2004 and the comparative figures for 31 March 2005 and 30 September 2005 have been restated accordingly. Reconciliations of the income statement (previously profit and loss account), balance sheet and cash flow statement from previously reported UK GAAP to IFRS are shown in note 7. The consolidated interim statements are prepared on the basis of all International Accounting Standards (IAS) and IFRS published by the International Accounting Standards Board (IASB) that are currently in issue. An element of uncertainty still surrounds the application of IFRS as the EU may not endorse all IASB pronouncements, new interpretations may be issued by the International Financial Reporting Interpretations Committee (IFRIC) on existing standards and best practice continues to evolve. It is therefore possible that the accounting policies set out below may be updated by the time the Group prepares its first full set of financial statements under IFRS for the year ending 30 September 2006. The information relating to the six months ended 31 March 2006 and 31 March 2005 is unaudited and does not constitute statutory accounts. The comparative figures for the year ended 30 September 2005 are not the company's statutory accounts for that financial year. The statutory accounts for the year ended 30 September 2005, prepared under UK GAAP, have been reported on by the company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The interim financial statements are unaudited but have been reviewed by the auditors and their report to the Board of Treatt PLC is set out at the end of this document. (2) Accounting Policies The interim financial statements have been prepared on the basis of the accounting policies set out in the Group's 30 September 2005 annual report other than the following changes which reflect the implementation of International Financial Reporting Standards (see note 1): (a) Presentation of Financial Statements The primary statements within the financial information contained in this document have been presented in accordance with IAS 1, "Presentation of Financial Statements". (b) Defined Benefit Pension Scheme In accordance with IAS 19, "Employee Benefits", the deficit, net of deferred tax, in the defined benefit pension scheme for certain UK employees is recognised as a liability of the Group under non-current liabilities. This was previously disclosed as a note to the financial statements under the transitional arrangements under FRS17 in accordance with UK GAAP. In addition, the service cost and expected return on assets net of interest on scheme liabilities is reflected in the income statement for the period, in place of the actual cash contribution made. All experience gains or losses on the assets and liabilities of the scheme, together with the effect of changes in assumptions, is reflected as a gain or loss in the Statement of Recognised Income and Expense (previously the Statement of Total Recognised Gains and Losses). (2) Accounting Policies (continued) (c) Share-based Payments IFRS 2, "Share-based Payments", requires that an expense for equity instruments granted be recognised in the financial statements based on their fair value at the date of grant. This expense, which is in relation to employee share option schemes for staff in the UK and US, is recognised over the vesting period of the scheme. IFRS 2 has been applied to all options granted after 7 November 2002 and not fully vested by 31 March 2006. The Group has adopted the Black Scholes model for the purposes of computing fair value of options under IFRS. (d) Post Balance Sheet Events and Dividends IAS 10, "Events after the Balance Sheet Date" requires that final dividends proposed after the balance sheet date should not be recognised as a liability at that balance sheet date, as the liability does not represent a present obligation as defined by IAS 37, "Provisions, Contingent Liabilities and Contingent Assets". Instead, final dividends for Treatt Plc should only be recognised as a liability once formally approved at the Annual General Meeting. Furthermore, interim dividends, in accordance with ICAEW Technical Release 57/05, are no longer recognised as a liability until paid. The interim and final dividends in relation to the financial years ended 30 September 2004 and 2005 of £893,000 and £949,000 have, therefore, been reversed in the respective balance sheets and the interim dividend for the year ended 30 September 2006 of £340,000 (2005: £310,000) will be accounted for in the results for the year ended 30 September 2007. (e) Effect of Changes in Foreign Exchange Rates Under IAS 21, "The Effects of Changes in Foreign Exchange Rates", cumulative translation differences, which are recognised in the Statement of Recognised Income and Expense, are separately accounted for within reserves and are transferred from equity to the income statement in the event of the disposal of a foreign operation. All such foreign exchange differences arising on the net investment in the Group's US subsidiary, Treatt USA, since its formation in 1990, have been transferred from the 'Profit and Loss Reserve' to this newly created 'Foreign Exchange Reserve'. (f) Computer Software In accordance with IAS 38 "Intangible Assets" computer software is now required to be disclosed as a class of intangible assets rather than be included as part of tangible fixed assets, as was the case under UK GAAP. (g) Cash Flow The cash flow statement has been restated to explain the movement in short term cash and cash equivalents, instead of the movement in total short and long term cash. (h) IFRS Comparatives For a reconciliation from UK GAAP to IFRS for prior period comparatives see note 7. (3) Turnover by destination Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) £'000 £'000 £'000 United Kingdom 3,118 2,907 6,314 Rest of Europe 4,998 4,092 9,331 The Americas 5,420 3,941 8,816 Rest of the World 3,786 3,773 8,060 ______ ______ ______ 17,322 14,713 32,521 ______ ______ ______ (4) Taxation Taxation has been provided at 31.3% (2005: 31.4%) which is the effective group rate currently anticipated for the financial year ending 30 September 2006. (5) Earnings per share (a) Basic earnings per share for the six months ended 31 March 2006 are based on the weighted average number of shares in issue and ranking for dividend in the period of 9,991,890 (2005: 10,109,727) and earnings of £1,113,000 (2005: £883,000) being the profit after taxation. (b) Diluted earnings per share for the six months ended 31 March 2006 are based on the weighted average number of shares in issue in the period, adjusted for the effects of all dilutive potential ordinary shares of 10,041,628 (2005: 10,127,653) and the same earnings as above. (6) Dividends Six months ended Year ended 31 March 31 March 30 September 2006 2005 2005 (Unaudited) (Unaudited - (Audited - restated) restated) £'000 £'000 £'000 Equity dividends on ordinary shares: Interim dividend for year ended 30 September 2004 - 2.7p - 278 278 Final dividend for year ended 30 September 2004 - 6.1p - 615 615 Interim dividend for year ended 30 September 2005 - 3.1p 310 - - Final dividend for year ended 30 September 2005 - 6.4p 639 - - Over accrual from previous year - - (12) ______ ______ ______ 949 893 881 ______ ______ ______ The declared interim dividend for the year ended 30 September 2006 of 3.4p was approved by the Board on 19 May 2006 and in accordance with IFRS has not been included as a deduction from equity at 31 March 2006. The dividend will be paid on 2 October 2006 to those shareholders on the register at 1 September 2006 and will, therefore, be accounted for in the results for the year ended 30 September 2007. (7) IFRS reconciliation of prior period comparatives (a) Income Statement for the six months ended 31 March 2005 UK GAAP IFRS IFRS Notes 31/03/2005 Adjustments 31/03/2005 £'000 £'000 £'000 Revenue 14,713 14,713 Cost of sales (10,314) (10,314) Gross profit 4,399 - 4,399 Administrative expenses 2b,c (3,042) 12 (3,030) Group operating profit 1,357 12 1,369 Finance revenue - - Finance costs 2b (54) (27) (81) Profit before tax 1,303 (15) 1,288 Taxation (408) 3 (405) Profit for the year attributable to equity shareholders 895 (12) 883 Earnings per share - basic 8.9p 8.7p Earnings per share - diluted 8.8p 8.7p (7) IFRS reconciliation of prior period comparatives (continued) (b) Statement of recognised income and expense for the six months ended 31 March 2005 UK GAAP IFRS IFRS Notes 31/03/2005 Adjustments 31/03/2005 £'000 £'000 £'000 Profit for the period 895 (12) 883 Currency translation on foreign currency net investment (160) (160) Total recognised net income for the period 735 (12) 723 (c) Income Statement for the year ended 30 September 2005 UK GAAP IFRS IFRS Notes 30/09/2005 Adjustments 30/09/2005 £'000 £'000 £'000 Revenue 32,521 32,521 Cost of sales (21,952) (21,952) Gross profit 10,569 - 10,569 Administrative expenses 2b,c (7,023) 3 (7,020) Group operating profit 3,546 3 3,549 Finance revenue 176 176 Finance costs 2b (266) (53) (319) Profit before tax 3,456 (50) 3,406 Taxation (1,082) 12 (1,070) Profit for the year attributable to equity shareholders 2,374 (38) 2,336 Earnings per share - basic 23.7p 23.3p Earnings per share - diluted 23.6p 23.2p (d) Statement of recognised income and expense for the year ended 30 September 2005 Profit for the financial year 2,374 (38) 2,336 Currency translation on foreign currency net investment 123 123 Actuarial loss on defined benefit pension 2b - (257) (257) scheme Deferred tax on actuarial loss - 77 77 Total recognised net income for the period 2,497 (218) 2,279 (7) IFRS reconciliation of prior period comparatives (continued) (e) Balance Sheet for the six months ended 31 March 2005 UK GAAP IFRS IFRS Notes 31/03/2005 Adjustments 31/03/2005 £'000 £'000 £'000 ASSETS Non-current assets Intangible assets 2f - 840 840 Property, plant and equipment 9,142 (840) 8,302 Deferred tax 2b - 375 375 9,142 375 9,517 Current assets Inventories 9,774 9,774 Trade and other receivables 6,224 6,224 Cash and cash equivalents 67 67 16,065 0 16,065 LIABILITIES Current liabilities Bank loans and overdrafts (426) (426) Trade and other payables 2d (4,473) 308 (4,165) Corporation tax payable (315) (315) (5,214) 308 (4,906) Net current assets 10,851 308 11,159 Non-current liabilities Bank loans (2,175) (2,175) Post-employment benefits 2b - (2,952) (2,952) Deferred tax liabilities (511) 511 - (2,686) (2,441) (5,127) Net assets 17,307 (1,758) 15,549 SHAREHOLDERS' EQUITY Called up share capital 1,029 1,029 Share premium account 2,143 2,143 Own shares in share trust (723) (723) Employee Share Option Reserve 2c - 9 9 Foreign Exchange Reserve 2e - (982) (982) Retained earnings 2b,c,d,e 14,858 (785) 14,073 Total Shareholders' Equity 17,307 (1,758) 15,549 (7) IFRS reconciliation of prior period comparatives (continued) (f) Balance Sheet for the year ended 30 September 2005 UK GAAP IFRS IFRS Notes 30/09/2005 Adjustments 30/09/2005 £'000 £'000 £'000 ASSETS Non-current assets Intangible assets 2f - 730 730 Property, plant and equipment 9,374 (730) 8,644 Deferred tax 2b - 521 521 9,374 521 9,895 Current assets Inventories 11,395 11,395 Trade and other receivables 5,718 5,718 Cash and cash equivalents 297 297 17,410 0 17,410 LIABILITIES Current liabilities Bank loans and overdrafts (144) (144) Trade and other payables 2d (4,883) 949 (3,934) Corporation tax payable (589) (589) (5,616) 949 (4,667) Net current assets 11,794 949 12,743 Non-current liabilities Bank loans (2,179) (2,179) Post-employment benefits 2b - (3,239) (3,239) Deferred tax liabilities (451) 451 - (2,630) (2,788) (5,418) Net assets 18,538 (1,318) 17,220 SHAREHOLDERS' EQUITY Called up share capital 1,029 1,029 Share premium account 2,143 2,143 Own shares in share trust (625) (625) Employee Share Option Reserve 2c - 14 14 Foreign Exchange Reserve 2e - (699) (699) Retained earnings 2b,c,d,e 15,991 (633) 15,358 Total Shareholders' Equity 18,538 (1,318) 17,220 (7) IFRS reconciliation of prior period comparatives (continued) (g) Cash Flow for the six months ended 31 March 2005 UK GAAP IFRS IFRS Notes 31/03/2005 Adjustments 31/03/2005 £'000 £'000 £'000 Cash flow from operating activities Profit before taxation 1,303 (15) 1,288 Adjusted for: Foreign exchange gain/(loss) 2g 2 (102) (100) Depreciation of property, plant and equipment 466 466 Share option charge - 7 7 Pension funding - 8 8 1,771 (102) 1,669 Changes in working capital: Decrease/(increase) in inventories (1,419) (1,419) Decrease/(increase) in trade and other (217) (217) receivables Increase/(decrease) in trade and other 846 846 payables Cash generated from operations 981 (102) 879 Tax paid (352) (352) Net cash from operating activities 629 (102) 527 Cash flow from investing activities Purchase of property, plant and equipment (234) (234) Cash flow from financing activities Dividends paid (881) (881) Net acquisition of own shares by share trust (445) (445) (1,326) 0 (1,326) Net decrease in cash and cash equivalents (931) (102) (1,033) Cash and cash equivalents at beginning of 2g (1,603) 2,412 809 period Cash and cash equivalents at end of period (2,534) 2,310 (224) The effect of transition on the cash flow noted above relates to changes in the 31/03/2005 composition of cash and cash equivalents as detailed below: £'000 Reconciliation of cash flow for period to 31 March 2005 Net debt under UK GAAP (2,534) Long term loans excluded from cash and cash equivalents 2,310 Cash and cash equivalents under IFRS (224) Cash and cash equivalents consist of: Cash at bank 67 Bank overdraft (291) (224) (7) IFRS reconciliation of prior period comparatives (continued) (h) Cash Flow for the year ended 30 September 2005 UK GAAP IFRS IFRS Notes 30/09/2005 Adjustments 30/09/2005 £'000 £'000 £'000 Cash flow from operating activities Profit before taxation 3,456 (50) 3,406 Adjusted for: Foreign exchange gain/(loss) 2g 49 55 104 Depreciation of property, plant and equipment 963 963 Loss on disposal of property, plant and equipment 135 135 Share option charge - 12 12 Pension funding - 38 38 4,603 55 4,658 Changes in working capital: Decrease/(increase) in inventories (3,040) (3,040) Decrease/(increase) in trade and other 288 288 receivables Increase/(decrease) in trade and other 642 642 payables Cash generated from operations 2,493 55 2,548 Tax paid (812) (812) Net cash from operating activities 1,681 55 1,736 Cash flow from investing activities Purchase of property, plant and equipment (862) (862) Cash flow from financing activities Repayment of bank loans 2f (144) (144) Dividends paid (895) (895) Net acquisition of own shares by share trust (347) (347) (1,242) (144) (1,386) Net decrease in cash and cash equivalents (423) (89) (512) Cash and cash equivalents at beginning of 2g (1,603) 2,412 809 period Cash and cash equivalents at end of period (2,026) 2,323 297 The effect of transition on the cash flow noted above relates to changes in the 30/09/2005 composition of cash and cash equivalents as detailed below: £'000 Reconciliation of cash flow for period to 30 September 2005 Net debt under UK GAAP (2,026) Long term loans excluded from cash and cash equivalents 2,323 Cash and cash equivalents under IFRS 297 Cash and cash equivalents consist of: Cash at bank 297 INDEPENDENT REVIEW REPORT TO TREATT PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 31 March 2006 which comprises the Consolidated IncomeStatement, Consolidated Balance Sheet, Consolidated Statement of Changes inShareholders' Equity, Consolidated Cash Flow Statement, Consolidated Statementof Recognised Income and Expense and the related notes 1 to 7. We have read theother information contained in the interim report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial 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, therefore, in producing this report,accept or assume responsibility for any other purpose or to any other person towhom this report is shown or into whose hands it may come, save where expresslyagreed by our prior consent in writing. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with those IFRSs adopted for use by the EuropeanUnion. This interim report has been prepared in accordance with therequirements of IFRS 1, "First Time Adoption of International FinancialReporting Standards". The accounting policies are consistent with those that the directors intend touse in the next annual financial statements. 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 have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit and thereforeprovides a lower level of assurance. Accordingly, we do not express an auditopinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 March 2006. BAKER TILLY Registered Auditor Chartered Accountants Abbotsgate House Hollow Road Bury St Edmunds Suffolk IP32 7FA 19 May 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Treatt