6th Jun 2006 07:02
Synergy Healthcare PLC06 June 2006 Draft Release 6 June 2006 SYNERGY HEALTHCARE PLC ("Synergy" or the "Group") Preliminary results for the year to 2 April 2006 Synergy Healthcare plc (AIM: SYR), a leading provider of outsourced healthcaresupport services, is pleased to announce its preliminary results for the yearended 2 April 2006. Summary The results excluding the acquisition reflected the solid progress made duringthe year, with turnover rising by 23.7% and operating profit (before goodwillamortisation) rising by 25.2% with an increase in net operating margin of 0.2%.Organic sales in the UK grew by 13.3% on a comparable basis with the 53 weekprior period. Shiloh PLC ("Shiloh") was acquired on 5 August 2005 as part of the Group'sstrategy to provide its customers with a complete range of services to improvethe patient environment and clinical outcomes. Including the acquisition,turnover rose by 62.6% and operating profit (before goodwill and exceptionalcosts) grew by 35.7%, with net operating margin falling to 11.4% (2005: 13.7%),mainly due to lower margins in the acquired businesses. Shiloh had been heavilyloss-making prior to acquisition but, before goodwill and exceptional items,achieved an operating profit of £1.0m in the eight month post-acquisitionperiod, with a net operating margin of 3.7%, rising to 5% by the end of theyear. Highlights •Operating profit (after goodwill and exceptional costs) increased 21.7% to £10.5m (2005: £8.6m) •Profit before tax increased 21.9% to £10.3m (2005: £8.4m) •Cash flow from operating activities at £27.9m (2005: £21.1m), including £3.3m from Shiloh •Total dividend of 7.0p per share (2005: 6.0p) recommended representing a 17% increase •Basic EPS increased 8.5% to 17.9p (2005: 16.5p), adjusted basic EPS increased 20.3% to 24.2p (2005: 20.1p) •Forward order book continues to grow, rising to £600m, including Shiloh being announced as preferred bidder on North West Sterile Services Partnership Wave One under the NHS national decontamination programme •LTS appointed as preferred bidder on sterilisation and decontamination services for one of Netherlands largest acute hospitals, establishing Synergy's surgical business in the Netherlands •The pipeline of opportunities remains strong, including seven further open bids in the NHS' national decontamination programme •Barts and the London decontamination facility opened successfully last month. Richard Steeves, Chief Executive commented: "On behalf of the team I am pleased to be able to report another very good yearfor Synergy across all businesses. We are delighted with the progress that hasbeen made with the former Shiloh business and look forward to furtherimprovements this year as part of Patient Care. Looking ahead we expect to seefurther progress across both the Netherlands and the UK with Patient Careshowing good growth and Surgical gaining momentum as the 2007 deadline fordecontamination improvements in the UK nears and as the Dutch market opens up." ENQUIRIES:SYNERGY HEALTHCARE PLCDr Richard Steeves, Chief Executive 01332 387 107Ivan Jacques, Group Finance Director 01332 387 140BREWIN DOLPHINMark Brady 01132 410 130BUCHANAN COMMUNICATIONSTim Anderson/ Mark Court/ Isabel Podda 020 7466 5000 Chairman's statement I am pleased to report that Synergy Healthcare plc ("Synergy") has had anotherexcellent year, with strong growth in revenues and earnings and further progressin increasing the forward order book. The Group's sales increased by 62.6% from £71.9 million to £116.9 million.Underlying sales pre-acquisition increased by 23.7% to £88.9 million. Thisstrong organic sales growth is reflected in the forward order book increasing to£600 million. Profit before tax increased by 22.6% from £8.4 million to £10.3 million, whilstprofit before tax, amortisation of goodwill and exceptional items rose 32.0%from £9.7 million to £12.8 million. Operating margins, before interest, tax,amortisation of goodwill and exceptional items, were diluted by the acquisitionof Shiloh PLC ("Shiloh") reducing from 13.7% to 11.4%. However, underlyingoperating margins increased pre-acquisition by 0.2% with operating profits,before interest, tax, amortisation of goodwill and exceptional items, increasing25.2% from £9.8 million to £12.3 million. At the beginning of August 2005, Shiloh was acquired as part of a strategy toprovide Synergy with an expanded range of products and services in patient carefor both acute and primary care trusts. Shiloh's range of products and servicesincludes infection control, wound care and continence care. Additionally, Shilohis an established provider of decontamination and sterilisation services in theScottish market, and the acquisition has enhanced Synergy's credentials in thisarea. EPS and Dividend Basic earnings per share were 17.9p, up 8.5% from 16.5p last year. Based onprofit before goodwill amortisation and exceptional items, basic earnings pershare were 24.2p, up 20.3% from 20.1p last year. As a result of this positive performance, the Board is recommending that thefinal dividend be increased to 5.0p per share, making a total annual dividend of7.0p per share, an increase of 17%. If approved, the final dividend will be paid on 28 July 2006 to shareholders onthe register at 30 June 2006. Group Operations Overview The Group's strong performance has been widely based and all areas of thebusiness made good progress during the year. The UK business has had anotheryear of sound organic growth and improved operating performance. Healthtex, the UK's healthcare linen management business, expanded itsoperations with the new facility in Dunstable resulting in sales growth of 17%.The Surgical business continued to perform well with further expansion into thePCT and Independent Sector Treatment Centre ("ISTC") markets and sales growthwas just short of 10%. The Surgical team has also invested a considerable amountof time in progressing bids under the NHS' national decontamination programmeand we were delighted to announce in April that Shiloh had been appointed aspreferred bidder on the North West Sterile Services Partnership Wave One bid. The Board is very pleased with the progress made in integrating and improvingthe operations of Shiloh. During the integration, an excellent core managementteam within Shiloh was freed to develop the business, taking advantage of thestrengths of the wider Synergy Group and its business model. As a result, thecontinuing businesses increased like for like sales by 14% whilst operatingmargins rose from 2% to 5% by the end of the year. Operating cash flow was £3.3million underlining the genuine improvement in performance. Shiloh had been indecline for the last three years and heavily loss-making in the year prior toacquisition. Shiloh Mobility Limited trading as Shiloh Active Care, which wasengaged in the sale and servicing of mobility products, has been closedresolving one of the fundamental issues within Shiloh. Following the acquisition the majority of Shiloh's businesses now form part ofSynergy's Patient Care business where they will play an important role withinthe overall strategy of developing Synergy as a strategic supplier to healthcareproviders. There has also been another good year for our Dutch based subsidiary, LipsTextielservice Holding B.V. ("LTS"), where the management team is repositioningLTS as a healthcare company. As a result of this strategy, the Group has beenselected as preferred bidder to provide sterilisation and decontaminationservices to one of the Netherlands largest acute hospitals. It is expected thatthis service will start early this summer and will be followed by further newdevelopments later in the year. Directors I was delighted to welcome Marcello Smit, the Chief Executive of LTS, to theBoard in November. This appointment reflects the good work that has been done byMarcello and his team since the acquisition of LTS in July 2004, and Synergy'scommitment to the Netherlands and the European market. Employees The success of the Group is based on the quality and commitment of its people.All levels of the organisation appreciate the importance of our services andproducts to our customers and are dedicated to achieving the highest standards. I would also like to welcome our new colleagues who joined from Shiloh. Somedifficult decisions were taken during the year to restore Shiloh to a profitableposition. However, Shiloh's management team and staff have embraced the changesand their excellent performance has moved the business back onto a solidfoundation as reflected in the second half result. Our workforce has continued to grow in line with the business and we now employover 2000 people across the UK and Netherlands. The Board recognises theimportant contribution that all of the employees have made and I would like tothank them for their endeavours throughout the year. Outlook Synergy has a sound strategy and business model that is sustaining organicgrowth and underlying performance. The forward order book provides a solidfoundation for the Group whilst its development activities further enhance thedepth of its relationships with its customer base enabling further growthopportunities. The changes in the healthcare markets increase the demand forSynergy's innovative approach to outsourced services enabling the Board toremain highly confident that the business will continue to enjoy success. Stephen G WilsonChairman Market overview The provision of a high quality, cost effective healthcare system remains highon the political agendas of both the UK and Continental Europe. Demographictrends are placing increasing strain on healthcare systems, whilst at the sametime individuals are demanding more information and choice in the way thathealthcare is delivered. As part of its response to these trends, in January 2006 the UK Governmentissued its White Paper, 'Our Health, our care, our say: a new direction forcommunity services'. This proposed a radical and sustained shift in the way inwhich services are delivered, ensuring that they are more personalised and fitinto people's busy lives. The declared objective is to give people a strongervoice so that they are the major drivers of service improvement and are able tomake their own choices. United Kingdom UK healthcare spending has increased by an average of 7% above inflation overthe last five years and is set to continue to grow at a similar rate until 2008when it is expected to grow more in line with inflation. Increased funding hasbeen accompanied by a considerable amount of reform aimed at increasing clinicalcapacity and the quality of outcomes. These reforms include encouraging theindependent and charitable sectors to provide additional diagnostic and surgicalprocedures and to introduce an element of competition to NHS Trusts. Thesereforms mirror successful health economies in the Netherlands, Sweden and otherparts of Continental Europe. ISTCs are now providing diagnostic and surgical procedures alongside NHSproviders, creating an alternative for the patient. It was envisaged that theISTCs would provide 15% of surgical procedures by 2008, but this is currentlyunder review by the Secretary of State for Health. The supply-side reforms haveproved successful, with waiting lists reduced to less than six months. TheGovernment has set a new target of 18 weeks by 2008. The expansion of the UK healthcare system has not been without its challengesand for the year 2005/06, the NHS is expected to have an overall budget deficitof around £750 million. NHS Trusts have seen a large increase in centrallynegotiated pay costs, most notably following the pay settlements with hospitaldoctors, general practitioners and NHS staff. These uplifts in remuneration andbenefits have been increased through a pay modernisation programme referred toas Agenda for Change ("AfC") that was intended to improve productivity andeffectiveness. However AfC is estimated to have increased staff pay costs inacute hospital trusts by over 10%, and with total pay costs accounting forapproximately 65% of their cost base, there has been a dramatic deterioration infinances with little or no improvement in productivity. There have also been reforms on the demand-side, with patient choice beingintroduced to allow patients to decide where they would wish to be treated, andwith Payment by Results ("PBR") which moves away from block budgets andreimburses trusts for the number of procedures undertaken based on a nationaltariff. PBR encourages hospitals to improve productivity, understand costs perprocedure and improve capacity utilisation of their facilities. The NHS in England has been receptive to outsourcing support services, rangingfrom traditional facilities management ("FM") services such as cleaning,catering and property management through to decontamination and sterilisationservices, equipment management and linen management. The demand for theseservices will increase as trusts focus on their core competencies being thedelivery of effective, low risk, cost efficient clinical services. Decontamination and sterilisation of surgical instruments has been given a largeamount of attention by the Department of Health ("DoH") following concerns aboutrisks to patient safety including cross-contamination. A survey of hospitals in2000 confirmed that most were not compliant with European standards (Medicaldevices directive 93/42/EEC). Commercial providers are required to comply withthis standard with Synergy having established the first compliant facility in1996. Over the last five years, the UK Chief Medical Officer has sponsored a programmeto ensure that both acute and primary care trusts become compliant with thestandard by 2007. The programme is led by a team from the DoH and has encouragedTrusts to collaborate to outsource their services on a regional basis wheremajor investment is required to meet the standard. The overall level of servicesto be transferred to commercial providers is expected to be over £100 millionper annum. Netherlands Netherlands healthcare providers generally are not owned by the Government orthe public sector and whilst they are tightly regulated, there is less centralcontrol of healthcare provision. The acute hospitals are not for profitorganisations and charities which are funded through a state controlled healthinsurance system, which ensures that healthcare can be accessed by everyone. The hospital system is well regarded across Europe for patient safety and forstandards of clinical care. In particular, the level of secondary infections isfar less than in the UK and hygiene and cleanliness practices are recognised asbeing amongst the best within Europe. In particular levels of secondaryinfections that are resistant to antibiotics ("MRSA") are the lowest in Europeand 40 times lower than the UK, based on the last European survey published inSeptember 2002. Despite the UK government's initiatives to reduce levels ofMRSA, the latest available statistics show that it is continuing to rise, with a1.5% increase in the second half of 2004/05 from a position which was alreadythe highest in Western Europe. There have been a number of market based reforms aimed at creating competitionbetween healthcare providers and reducing the power of local suppliermonopolies. The reforms have also encouraged providers to be more transparentregarding costs, increasing pressure on the hospitals to seek new ways toimprove efficiency. In local areas healthcare and social care providers areseeking to share infrastructure and services to increase efficiency and thecommercial sector has an important role to play, especially as a strategicpartner. The Dutch hospitals have a long-standing tradition of working with privatesector providers of support services. For example the healthcare linen market isvirtually all outsourced, compared with approximately 65% outsourced in the UK.A number of Dutch hospitals are now looking at the possibility of outsourcingdecontamination and sterilisation of surgical instruments. Decontaminationservices are mainly provided in-house and there is a desire to improve standardsin line with European directives through increased investment and newtechnology. A leading Dutch hospital has already taken the decision to outsourcethe service and has appointed Synergy in the Netherlands as preferred bidder. Across the European market, healthcare providers are seeking value for money andaffordable solutions from their commercial partners. At the same time contractsare becoming larger in size, long-term partnerships with service providers areseen as important, and the level of risk management being transferred is alsogrowing. Against this background, it is important for healthcare providers toselect commercial partners that are experienced and financially strong. Synergyis uniquely placed as a service provider with a demonstrable track record ofmanaging large, complex outsourcing programmes together with the financialstrength to meet these challenges. Chief Executive's review of strategy Group strategy Synergy is a leading provider of non-clinical, outsourced healthcare supportservices to the NHS, the Netherlands and North West Germany. Our strategy is tocontinue to invest in our service infrastructure and product development toenable us to competitively differentiate Synergy, whilst at the same timelooking for opportunities to expand the business through specific acquisitionsto gain economies of scale as well as geographic expansion. In measuring ourprogress against our strategic aims, I am pleased to report that we have againmoved forward considerably. During the year we have organised the Group into two business units which arealigned with our customers. The Surgical business covers all of the products andservices that are supplied to the operating theatres ranging from customisedprocedure packs through to decontamination services. The remainder of thebusiness now operates as Patient Care which provides products and services toacute hospitals outside of the operating theatre, primary care facilities andnursing homes. The Patient Care business includes infection control, wound care,continence care, pressure care and linen management services. Market developments The healthcare markets in the UK and Continental Europe are undergoing a shifttowards a more market based approach to clinical provision. As a resulthealthcare providers are required to improve the effectiveness of their servicesin an increasingly competitive environment. Healthcare support services havehistorically been a collection of fragmented services measured on inputs ratherthan outcomes. As the market reforms take hold, healthcare providers willincreasingly look for a more holistic approach to service provision with anincreasing emphasis on achieving outcomes. This creates the opportunity forservice based companies with a deep understanding of the needs of the healthcaresector, such as Synergy, to thrive. In this new market, a systematic approach toservice and process design takes precedence over product technology. Today muchof the available product technology is under used or misused and failing todeliver the clear economic benefits. Synergy is capitalising on thisinefficiency in the market by designing services that better use availableproduct technologies. Surgical strategy The Surgical business has made progress with a 2% increase in its market sharewith the addition of new Primary Care work, new ISTC work and the acquisition ofShiloh. In May 2006 the new facility serving the St Barts and the London PFI("Barts") opened successfully. It is one of the largest facilities to be builtin England and its successful opening demonstrates Synergy's expertise as themarket leader in decontamination services. Much effort has been focused on bidding for the National Decontaminationclusters, where Synergy has eight open bids. As part of the acquisition ofShiloh the Group inherited three open Wave One bids and I am pleased to reportthat the first of these has reached preferred bidder stage. Synergy's objectiveis to increase its market share from c.9% to 20% of the UK market and ifsuccessful with the existing bid pipeline should reach its target around 2008. Outside of the UK our objective has been to develop the surgical market in theNetherlands and in due course elsewhere in Continental Europe. One of thelargest hospitals in the Netherlands will begin taking a decontamination servicefrom Synergy starting in the early summer. Once this service has beenestablished we expect a number of LTS customers to look at outsourcing theirdecontamination services, providing underlying growth over the medium term.Looking further out we expect to expand our services organically into otherEuropean countries and by the end of the decade we aim to achieve marketleadership in Europe. Patient Care strategy The strategy to create a Patient Care business was formed last year as part ofSynergy's objective to deepen the services provided to healthcare providersoutside of the operating theatre. During the summer the acquisition of Shilohenabled Synergy to take a quantum step forward in the execution of thisstrategy. The majority of Shiloh has now been merged together with the UK linenmanagement services to create a business that focuses on patient care. The overall objective for the business is to enhance the patient experiencewhilst at the same time decrease risk for the healthcare provider. By puttingtogether an integrated service package the business will be able to help improvepatient perception whilst at the same time proactively addressing key risks inthe healthcare environment such as infection control. The same strategy is envisaged for the LTS business in the Netherlands withinitial opportunities to cross sell Group products and services into the Dutchmarket. The Dutch healthcare providers are increasingly looking to consolidatetheir supplier relationships and LTS is seeking opportunities to enhance itsposition as a strategic partner. Looking ahead Synergy has identified infection control and wound care as twoimportant areas for future investment. Synergy will increase the amount ofresource targeted at infection control to assist our customers to establish bestpractice in line with European directives. With UK healthcare acquired infectionrates double some European countries and MRSA rates 40 times higher than somecountries, including the Netherlands, there is an opportunity to develop astrategy to help improve the UK position. The business is therefore investing inresearch and development to support the development of best practice amongst itscustomer base. Synergy currently has a niche position in wound care in the areas of eczema,dressing retention and pressure sores. Synergy has identified an opportunity toapply its business model to the wound care sector enabling patients andcustomers alike to achieve improved outcomes. Over the next three years weintend to invest in the development of new technologies that will see thisbusiness increase in significance. Geographic Expansion Synergy has a clear strategy to expand its business in Europe over the next fouryears. In the short term the emphasis will be on organically developing thesurgical business in the Netherlands, with an extension into neighbouringcountries. At the same time Synergy will step up its search for acquisitions inspecific countries where its strategy and business model can be appliedsuccessfully. Operations Review - United Kingdom The UK businesses performed well having anticipated the changes in the NHSmarket and prepared for their effect. Overall sales for the UK businesspre-acquisition were up 13% on a comparable basis with operating profits up 7%,slightly diluted by the opening of the new facility in Dunstable. Patient Care Shiloh joined the Synergy Group on 5 August 2005 with most of its subsidiariesforming part of the Patient Care business. The integration of the Shiloh seniormanagement teams was undertaken quickly resulting in an acceleratedrestructuring of Shiloh. The business has been reorganised with ShilohHealthcare now incorporated into the Patient Care business and Trust SterileServices integrated with Synergy's Surgical Business. Shiloh Active Care'sservice business is now established as a new business unit named Synergy ManagedEquipment Services, whilst Shiloh Active Care's trading business has beenclosed. As a result of the swift integration Shiloh's financial performance exceededinitial expectations and the business starts the new financial year in a strongposition. Shiloh's sales in the ongoing business were £26.7 million, up 14% on alike for like basis reflecting the strength and benefit of the wider Group.Operating profits for the continuing business before exceptional costs were £1.0million, up 232% on a like for like basis against the same period last year. Synergy's linen management business, which now forms part of Patient Care,performed in line with expectations. The new facility in Dunstable has been wellreceived adding new capacity to the business and enabling Synergy's market shareto increase by 3% to 14%. The NHS has recently completed a national frameworkagreement for linen management services for the whole of England, standardisingpricing and enabling NHS trusts to acquire these services without formaltendering. Around 35% of the market remains in-house and it is expected that theframework agreement will allow benchmarking that could result in an accelerationof further outsourcing particularly as the NHS seeks to improve its financialefficiency. Looking ahead the Patient Care business is planning a number of new productlaunches within the infection control and wound care sectors as part of astrategy to grow overall market share. At the same time the business is sharingbest practice with the Dutch business facilitating the joint development of newservices and creating opportunities for cross selling. Surgical Growth in the Surgical business has been held back by the delayed start of theBarts project together with delayed decision making particularly within thePrimary Care market where other priorities have taken precedent overdecontamination services. However the business was successful in securing newcontracts and together with the inclusion of Shiloh's subsidiary Trust SterileServices ("TSS"), increased its overall UK market share from 6.3% to 8.3%inclusive of the new Barts service. At the end of the year TSS was fully integrated with the Surgical business. TSShas a good management team that is now supporting the overall growth anddevelopment of Surgical business. The Healthcare Commission begins reviewing decontamination services in the NHSthis year on an advisory basis and with next year's audits forming part of theirassessment of trust performance. As a result we expect to see an increased levelof demand as the current financial year progresses with the HealthcareCommission audits highlighting the shortcomings of the existing in-houseprovisions. There has been an increase in the level of inquiries since the startof the new financial year. The business continues to bid actively for the work being tendered under thenational decontamination programme. There are eight open bids of which one fromWave One is at the preferred bidder stage and should commence in the early partof the 2007/08 financial year. During the year Surgical has continued to invest in its software systems tomaintain its competitive advantage in the market. In addition it has launched anew pay and grading structure along with a training programme to enhance skills,which in turn will improve service and quality standards. Synergy has led theindustry with its service standards and tactically is continuing to raise itsstandards to maintain competitive differentiation. The success of this strategy is reflected in the successful start of the Bartsdecontamination project, which is one of the largest of its kind in England. Thein-house service transferred to a new super centre operated by Synergy in earlyMay 2006 and in the short period since then has seen a significant uplift inservice and quality standards that in turn substantially improve patient care.Whilst Synergy has new competitors entering the market, it remains the onlycompany with a demonstrable track record in a technically demanding service. Team Development The UK business appointed a Director of Human Resources following theacquisition of Shiloh to proactively support the strategic development of ourteams. During the year all middle managers have completed their initialmanagement training started in the last financial year. Further training anddevelopment is planned in the new financial year, including a senior managementprogramme. During the year employee councils have been introduced to the UK mirroring thesuccessful use of these consultative forums in the Netherlands. The introductionof these employee councils supports Synergy's overall strategy to recognise thecontribution of our employee teams as stakeholders in the development of thebusiness. Operations Review - Netherlands The Dutch business performed well in what is a relatively stable and maturemarket. Overall sales for the business were £49.2 million with operating marginsimproving 1%, continuing last year's progress. Operating profit before goodwilland exceptionals was £7.3 million. LTS has been migrating towards the PatientCare strategy whilst the Group has been establishing the new Surgical business. LTS LTS has focused primarily on improving operations with increased investment inautomation and improved purchasing. The improvements in operating margins arethe result of a small rationalisation of facilities from 14 to 13 together withimproved purchasing. A further site will be closed in the current financial yearsustaining the improved operating performance. During the year the facility atDe Wijert was rebuilt with the introduction of the latest processing technology.Across the country LTS has been successful in achieving the internationalenvironment standard 14001:2004. Strategically LTS is continuing to evolve into a healthcare company. Thebusiness has participated in workshops with its customers looking at theintroduction of the Patient Care strategy which will enable the business totarget future growth outside of linen management by cross selling other Groupproducts and services. LTS had a successful year renewing 51 existing contracts and winning newbusiness totalling £17 million, which leaves the order book at £140 million. Surgical The establishment of the Surgical business in the Netherlands has been astrategic milestone. Having reached preferred bidder stage at one of the largesthospitals in the country Synergy expects to reach financial close in time tobegin the service during the early summer. A well regarded operational managerfor the new business has been recruited to oversee the development of Synergy'sfirst Dutch service. As part of this new service Synergy's software and qualitysystems are being installed to facilitate a service upgrade. At the same timethe facility will become the first CE certified facility in the Dutch market. We expect to see a substantial improvement in the quality of patient carefollowing the development of the new service, similar to the benefits seen atthe Barts facility in the UK. Whilst the service will operate at a premium tothe in-house costs, the hospital has created a clear business case to reducerisks and improve patient care. There is a strong demand for outsourcing in the Dutch market although a shortperiod of time will be required for the market to analyse Synergy's operationalmodel. It is expected that a number of existing LTS customers will migrate tooutsourced decontamination services as our first facility is validated. Team Development LTS has well developed training programmes in place supporting the underlyingbusiness. With the development of the Patient Care strategy further investmentswill be made to support the team as it continues to make the transition to ahealthcare company. Within the new Surgical business Synergy's training and development programmefor decontamination technicians will be introduced to the new service thissummer. Financial review Results It is pleasing to reflect on another year of growth, during which sales havebeen driven upwards by the combination of a significant acquisition and organicsales growth, particularly in the UK. Overall sales increased by £45.0 millionor 63% to £116.9 million, with the Shiloh acquisition contributing £28.0 millionof the increase. Gross margin is slightly down overall on last year at 31.2% (33.9%). Thisreduction is mainly due to the impact of opening a new linen management facilityat Dunstable and the higher cost per unit that this involves during the start-upphase. The facility is operating in line with expectations and consequentlymargins are starting to improve in Healthtex. Margins have also been adverselyimpacted by soaring gas prices, which rose to more than double last year's priceduring the winter, peaking at almost £2 per therm during January 2006. Theacquisition of Shiloh also had a slightly dilutive impact on gross margin. Operating profit increased by 22% to £10.5 million from £8.6 million. Operatingprofit before goodwill amortisation and exceptional costs and profits rose by36% to £13.3 million from £9.8 million. Overall net operating margin (pregoodwill and exceptional costs and profits) reduced to 11.4% from 13.7%. This ismainly due to the Shiloh acquisition and also partly due to the factorsexplained above. Shiloh contributed almost £1.0 million of this operating profit at a net marginof 3.7%. It was recognised at the time of the Shiloh acquisition that it was anunderperforming company and the price paid reflected that. Swift actions had tobe taken to cut costs and rationalise the number of business units, with ShilohActive Care's trading business being closed a month before the year-end. It waspleasing to see a significant contribution from Shiloh and compares to theinterest cost of financing the £14.6 million acquisition of £0.5 million.Therefore the transaction was earnings enhancing on an adjusted basis, beforegoodwill and exceptional charges. It is pleasing to note that operating margins in LTS have grown by 1% to 14.8%following initiatives post acquisition to leverage the Group's purchasing powerto reduce linen, chemicals and other input costs. The Dutch team has also takensteps to rationalise facilities and reduce overheads, leading to an improvementin gross and net margins. Central administrative costs have risen during the year as we have furtherinvested in Group functions such as IT and Commercial to support the growth ofthe Company. The Commercial function has grown to support the significant amountof bid activity undertaken for the national decontamination programme and otherlarge NHS bids. The exceptional items of £1.0 million included within operating profit, relatedto the closure of Shiloh Active Care's trading business at a cost of £0.4million, with the remainder relating to the reorganisation of Shiloh and otherparts of the UK business to create the Patient Care business. The exceptional items below operating profit relate to the profit on disposal ofcertain fixed assets in the Netherlands, and the impairment losses on assets nolonger required in the UK business. Earnings per share Basic earnings per share and diluted earnings per share grew at 8.5% and 8.3%respectively. However, after adjusting for goodwill and exceptional charges, thegrowth was 20%, continuing the track record of previous years which has seenearnings per share increase at or above this level. Taxation The taxation charge for the year of £3.7 million represents an effective rate of35.8% compared with the standard UK rate of 30%. This is affected by the impactof non-deductible items, mainly goodwill. The overall rate of taxation comparedwith profit before goodwill amortisation and exceptional items is 30.5% versus32% last year. The tax charge is a mixture of UK and Dutch corporate taxes. The Netherlandsstandard corporate tax rate is 29.6% to 31 December 2006 down from 31.5% theprevious year. The Dutch government has signalled an intention to bring thisdown further to 25%, although this has not yet been formally approved. Cash flow and liquidity The Group's operations have continued to be cash generative, with net cash flowfrom operating activities in the year totalling £27.9 million. This representscash conversion of 209% of operating profit before goodwill amortisation andexceptional items. Cash inflows from operating activities were strong across all the UK businesses,including Shiloh. Working capital has decreased by £2.7 million over the year. All businesses weresuccessful in keeping debtors below 45 days, similar to last year, and tradecreditors at the year-end were 37 days (2005: 33 days). It was pleasing to notethat Shiloh generated £3.3 million of operating cash post acquisition, driven byinitiatives to reduce working capital, particularly stock where the Shiloh teamdid an excellent job of increasing stock-turn and rationalising product lines. The pattern of operating profits before goodwill amortisation and cash flow fromoperating activities, over the past five years, is summarised in the table below: 2002 2003 2004 2005 2006 £'000 £'000 £'000 £'000 £'000 Operating profit 1,548 2,816 4,110 9,817 13,323Cash generation 3,079 6,314 6,927 21,063 27,882 At the year-end the Group had cash in hand of £11.1 million. At the half-year,shortly following the acquisition the Group's net debt stood at £8.7 million,but by the end of the year this had been reduced to £2.7 million. Looking forward, the Group enters 2006/07 with a healthy cash position and astrong balance sheet. Acquisition The Shiloh acquisition became unconditional on 5 August 2005 when acceptancesand irrevocable undertakings to sell had been received from shareholders owningmore than 75% of Shiloh's share capital. From that date Shiloh's results havebeen consolidated as part of the Synergy Group. The total cost of acquisition was £9.2 million, including professional fees andother related costs of £0.4 million. Additionally at the date of acquisitionShiloh had net debt of £5.4 million and the total investment in Shiloh was £14.6million. This has been funded from Synergy's internally generated cashflow. Capital expenditure and investments Investment in infrastructure to maintain cost leadership and to ensure serviceefficiency remains key to the Group's strategy. The business requires a level of maintenance capital expenditure, particularlyin relation to the linen-rental businesses in the UK and the Netherlands. Thetotal capital expenditure during the year was £18.5 million, includingmaintenance capital expenditure of £9.0 million. The main elements of investment expenditure were completing the new linenmanagement facility in Dunstable, which required investment of £4.1 millionduring the year and re-equipping one of the Dutch facilities following damage byfire earlier in the year at a cost of £3.7 million. Most of the investmentrelated to the latter was covered by insurance. Key investments in the new financial year will include a new Surgicaldecontamination facility in South Manchester which will be developed to deliverthe North West Sterile Services' Partnership project, due to commence in theearly part of the 2007/08 financial year. This is estimated to cost £5 million,including all equipment and development costs and will represent one of the mostmodern facilities of its type in Europe. We shall also relocate the Patient Carebusiness in North West England from its current outdated premises to a modernmanufacturing and distribution unit. A number of potential locations have beenidentified but it is too early to signal the likely cost until a favoured optionand timing have been confirmed. The above projects will be funded by debt finance and the Group's facilities aredescribed below. Funding and deployment of capital The new linen management facility was funded from operating cashflow and from afive-year hire-purchase facility from a leading European bank in the sum of £4million, which is denominated in Euros, representing a partial hedge against LTSnet assets of £15.5 million. The facility also has the benefit of being lockedinto the euro interest rate, which is more than 1% lower than UK inter-bankrates, with a five year fixed rate on this facility of 4.31%. Synergy has acredit approved facility with this bank of £6 million and the bank has anappetite to lend significantly more both in UK and Continental Europe. The Group has also been negotiating with its UK clearing bank, Royal Bank ofScotland, a facility of up to £50 million to support the investment required bythe Surgical business for the national decontamination programme and for otherinvestment projects. The facility is credit approved and can be denominated inpounds or euros; the detailed terms and conditions are currently beingfinalised. In the Netherlands, LTS has term facilities with ABN Amro bank and a loan fromthe LTS' vendor which were established at the time of the acquisition in 2004and totalled £8.0 million (€11.5 million) at 2 April 2006. The interest rate onthe loan facilities is fixed at 3.9%, which compares favourably to UK rates andthe current fixed euro rates that are available. Additionally, the Group has undrawn overdraft facilities totalling £8.8 million,including £5 million in the UK. Return on capital employed has remained at 18% (2005: 18%) notwithstanding theacquisition, and the Group targets a return on capital of at least 20% whenassessing new projects. Systems and reporting procedures The application of technology to improve productivity and provide betterinformation for decision-making remains a vital part of our business. During the year the Group has centralised a number of activities, particularlyin relation to the Surgical business, including stock control and purchasing.This project will be completed during the early part of the new financial year. Additionally a project has been established to harmonise financial systemsacross the UK, including the acquired Shiloh businesses. This should alsoprovide Shiloh's manufacturing businesses with planning tools, which shouldimprove procurement and manufacturing productivity. On a monthly basis, the Board is provided with a comprehensive pack of financialand non-financial reports, including analysis of sales, gross margins and netmargins; balance sheet and cashflow analysis; financial forecasts; operationalreports which include key performance indicators regarding productivity, volumeof activity; employee costs and sickness levels. Additionally any serious riskevents are reported and forward looking information regarding the winning of newsales orders and contracts is also reported. IFRS As the Group is quoted on AIM, there is no legal requirement to report underInternational Financial Reporting Standards ("IFRS") until the year commencingin April 2007. Last year the Group looked at the main areas where IFRS is most likely to havean impact on its earnings and financial position and this has been reviewedfurther this year. The main elements of change are as follows: •Goodwill: in accordance with UK GAAP, goodwill is currently amortised and under IFRS 3 this will be replaced with annual impairment testing. The total goodwill charge in 2006 was £1.9 million and if Shiloh had been owned for a full year the charge would have been £2.0 million. •Share-based payments (IFRS 2): the Group has a policy of awarding share options to employees who make a significant contribution to business performance and last year introduced a long-term incentive scheme for senior executives which would make awards of shares. Under IFRS 2 an annual charge will have to be made to operating profits for the fair value of these awards. Whilst the impact on profit and loss has not been calculated in detail, it is estimated that the total charge would have been approximately £0.5 million this year. •Deferred tax (IAS 12): full provision for deferred tax will be required on any revalued properties. Deferred tax on properties in the Netherlands is already fully reflected under Dutch GAAP in the accounts of LTS totalling £1.3 million, but adjusted in the consolidated accounts as it is not currently required under UK GAAP. This will also have to be reflected in the Group's consolidated accounts under IFRS, but will not impact earnings. •Pensions (IAS 19): the Group has now fully transitioned to FRS 17 and a similar treatment would be adopted under IAS 19, so there would be no material change under IFRS. As an AIM quoted company, Synergy's first full year of adoption of IFRS will be2007/08 and 2006/07 will be the first comparative year. We will continue tomonitor IFRS developments and will communicate with shareholders if there areany further significant changes which would impact earnings. As explained above,currently the most significant changes from an earnings perspective relate togoodwill and share-based payments. Ivan M JacquesGroup Finance Director CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 2 April 2006 Before Goodwill Goodwill and and Exceptional Exceptional Before items items Total Goodwill Goodwill Total 2006 2006 2006 2005 2005 2005 (restated) (restated) £'000 £'000 £'000 £'000 £'000 £'000Turnover Continuing operations 88,895 88,895 71,891 71,891Acquisitions 27,967 27,967 - - 116,862 116,862 71,891 71,891 Cost of sales (80,438) (80,438) (47,524) (47,524) Gross profit 36,424 36,424 24,367 24,367 Net administrativeexpenses (23,101) (23,101) (14,550) (14,550)Goodwill -continuingoperations - (1,528) (1,528) - (273) (273)Goodwill -acquisitions - (343) (343) - (951) (951)Exceptionalcosts - (998) (998) - - - Total netadministrativeexpenses (23,101) (2,869) (25,970) (14,550) (1,224) (15,774) Continuingoperations 12,342 (1,778) 10,564 9,817 (1,224) 8,593Acquisitions 981 (1,091) (110) - - - Operatingprofit 13,323 (2,869) 10,454 9,817 (1,224) 8,593 Profit ondisposal offixed assets - 336 336 - - - Profit onordinaryactivitiesbeforeinterest 13,323 (2,533) 10,790 9,817 (1,224) 8,593 Net interest (491) - (491) (144) - (144) Profit onordinaryactivitiesbefore 12,832 (2,533) 10,299 9,673 (1,224) 8,449taxation Taxation onprofit onordinaryActivities (3,915) 231 (3,684) (3,101) 54 (3,047) Profit for thefinancial year 8,917 (2,302) 6,615 6,572 (1,170) 5,402 Earnings perordinary shareBasic 17.91p 16.51pDiluted 17.51p 16.17p All activities relate to continuing operations. CONSOLIDATED BALANCE SHEETAt 2 April 2006 2006 2005 (restated) £'000 £'000 £'000 £'000Fixed assetsIntangible assets 36,859 28,708Tangible assets 53,413 45,426 90,272 74,134Current assetsStocks 4,733 1,217Debtors 20,493 12,235Cash at bank and in hand 11,051 14,100 36,277 27,552Creditors: amounts falling duewithin one year (34,765) (20,458) Net current assets 1,512 7,094 Total assets less current liabilities 91,784 81,228 Creditors: amounts falling dueafter more than one year (11,916) (9,844) Provisions for liabilities (4,764) (2,706) Pension liability (FRS 17) (1,309) - 73,795 68,678 Capital and reservesCalled up share capital 231 230Share premium account 59,172 58,914Merger reserve 430 430Profit and loss account 13,962 9,104 Shareholders' funds 73,795 68,678 CONSOLIDATED CASH FLOW STATEMENT For the year ended 2 April 2006 2006 2005 £'000 £'000 Net cash inflow from operating activities 27,882 21,063 Returns on investments and servicing of financeInterest received 679 532Interest paid (1,077) (537)Hire purchase loan interest paid (124) (139) Net cash outflow from returns on investments andservicing of finance (522) (144) Taxation (1,249) (2,541) Capital expenditure and financial investmentPurchase of tangible fixed assets (18,484) (11,456)Sale of tangible fixed assets 933 113Net insurance proceeds on disposal 2,108 -Government grants received 337 - Net cash outflow from capital expenditureand financial investment (15,106) (11,343) AcquisitionsAcquisition of business (9,105) (32,648)Overdraft acquired with business (4,781) (877) (13,886) (33,525) Equity dividends paid (2,326) (1,217) FinancingIssue of ordinary share capital 249 37,778Issue costs 10 (1,193)Repayment of borrowings (1,219) (1,202)New hire purchase loans 4,000 -Capital element of hire purchase loan rentals (882) (681) Net cash inflow from financing 2,158 34,702 (Decrease)/ increase in cash (3,049) 6,995 OTHER PRIMARY FINANCIAL STATEMENTSFor the year ended 2 April 2006 Consolidated statement of total recognised gains and losses 2006 2005 (restated) £'000 £'000 Profit for the financial year 6,615 5,402Draft Currency translation differences 116 265Actuarial gains and losses on pension schemes 658 -Less: provision for deferred tax (205) - Total gains recognised in the financial year 7,184 5,667 Statement of movement in shareholders' funds 2006 2005 (restated) £'000 £'000 Profit for the year 6,615 5,402Equity dividends paid (2,326) (1,217) 4,289 4,185Issue of shares in the year 259 37,931Currency translation differences 116 265Actuarial gains and losses on pension schemes 453 - Net increase in shareholders' funds 5,117 42,381Shareholders' funds at 4 April 2005 68,678 26,297 Shareholders' funds at 2 April 2006 73,795 68,678 Notes 1. BASIS OF PREPARATION The preliminary announcement has been prepared in accordance with applicableaccounting standards and under the historical cost convention. The principal accounting policies of the Group are set out in the Group's 2005annual report and financial statements. The policies in this preliminaryannouncement have remained unchanged from the 2005 financial statements with theexception of the adoption of the provisions of FRS 17 'Retirement Benefits' andthe policy relating to the treatment of dividends which has been changed inaccordance with the provisions of FRS 21 'Events After the Balance Sheet Date'. The full adoption of FRS 17 for the first time in 2006 has resulted in a changein accounting policy in respect of the recognition of the Group's definedbenefit pension schemes. The net pension liabilities or assets are nowrecognised in the balance sheet, and the movement in the net pension liabilitiesor assets are recognised in either the profit and loss account or statement oftotal recognised gains and losses. Previously, there has been no suchrecognition in the Group's primary statements, and the information has beendisclosed by way of note only. The adoption of FRS 17 has not resulted in aprior year adjustment, based on the grounds of materiality. If FRS 17 had beenapplied to the 2005 financial statements, this would have resulted in a netincrease in retained profits of £16,000, being the 2005 net pension schemesurplus not recognised as an asset at the balance sheet date. The adoption of FRS21 has resulted in a change in accounting policy in respectof proposed equity dividends. Under the new standard, if the company declaresdividends to shareholders of equity instruments after the balance sheet date thecompany does not recognise those dividends as a liability at the balance sheetdate. Previously where dividends were proposed after the balance sheet date butbefore authorisation of the financial statements they were recorded asliabilities at the balance sheet date. FRS21 also requires that dividendsrecognised in the year are disclosed as a movement on reserves and not on theface of the consolidated profit and loss account. This change results in arestatement of the prior year treatment of dividends declared, as also explainedin note 5 to this preliminary announcement. In addition the Group has also implemented FRS 22 'Earnings Per Share', thepresentational aspects of FRS 25 'Financial Instruments: Disclosures andPresentation', and FRS 28 'Corresponding Amounts'. The implementation of thesenew standards has had no significant effect on the Group's existing disclosures. 2. SEGMENTAL ANALYSIS (a) Turnover and profit before taxation Turnover and profit before taxation are attributable to the one activity of theGroup as set out in the directors' report, being the provision of healthcareproducts and services. Turnover Profit before interest and taxation 2006 2005 2006 2005 £'000 £'000 £'000 £'000By geographic originUK 67,677 35,718 6,057 4,820Rest of Europe 49,185 36,173 7,266 4,997 116,862 71,891 13,323 9,817Exceptional costs (998) -Exceptional profit on fixedassets disposal 336 -Goodwill amortisation (1,871) (1,224) 10,790 8,593 There is no material difference between turnover and profit by origin anddestination. (b) Net operating assets 2006 2005 (restated) £'000 £'000By geographic originUK 31,811 24,554Rest of Europe 20,392 20,459 52,203 43,429Net (debt)/ funds (2,743) 2,909Net unallocated assets 24,335 20,756 73,795 68,678 3. TAXATION ON PROFIT ON ORDINARY ACTIVITIES The taxation charge represents: 2006 2005 £'000 £'000Current taxation:UK tax 632 1,322Overseas tax 2,509 1,653 Total current tax 3,141 2,975 Deferred taxation:Origination and reversal oftiming differences 543 72 Taxation on profit on ordinary activities 3,684 3,047 The current tax assessed for the year is higher (2005: higher) than the standardrate of corporation tax in the UK of 30% (2005: 30%). The differences areexplained as follows: 2006 2005 £'000 £'000 Profit on ordinary activities before taxation 10,299 8,449 Profit on ordinary activities multiplied by standard rate ofcorporation tax in the UK of 30% (2005: 30%) 3,090 2,535 Effect of:Expenses not deductible for tax purposes 328 351Capital allowances for the period in excess of depreciation (28) (145)Other timing differences (355) 72Rate differences - 162Goodwill amortisation 127 -Other (21) - Current tax charge for year 3,141 2,975 4. DIVIDENDS Equity dividends: 2006 2005 (restated) £'000 £'000Paid during the yearEquity dividends on ordinary shares 2,326 1,217 Proposed after the year end (not recognised as a liability)Equity dividends on ordinary shares 1,850 1,584 5. PRIOR YEAR ADJUSTMENT As disclosed in the accounting policies section, FRS21 was adopted in the year.The financial effect of this has been analysed as follows. In the year ended 3 April 2005 dividends of £596,897 were paid which had beendisclosed in the profit and loss account in the previous year. The profitbrought forward at 29 March 2004 in the statement of movement in shareholders'funds has been increased by this amount. In the prior period dividends of £1,583,555 were proposed after the balancesheet date. Under the previous accounting policy these would have been shown asa liability and deducted from profit for the year. Under the new accountingpolicy, the shareholders' funds at 4 April 2005 have been increased by thisamount. In the current period dividends of £1,849,891 were proposed after the balancesheet date. Under the previous accounting policy these would have been shown asa liability and deducted from the profit for the year. Under the new accountingpolicy these are not accrued and are disclosed only in note 4 to thispreliminary announcement. 6. EARNINGS PER SHARE 2006 2005 £'000 £'000Basic and diluted earnings per shareProfit for the financial year 6,615 5,402 Number Number Weighted average number of ordinary shares in issueduring the year 36,928,710 32,726,883 Basic earnings per share 17.91p 16.51p Diluted earnings per share 17.51p 16.17p 2006 2005 Number NumberReconciliation of average number of ordinary sharesused for basic and diluted earnings per shareWeighted average number of ordinary shares used forbasic earnings per share 36,928,710 32,726,883Weighted average number of shares under option 853,857 681,935 Weighted average number of ordinary shares used fordiluted earnings per share 37,782,567 33,408,818 2006 2005 £'000 £'000Adjusted earnings per shareOperating profit 10,454 8,593Goodwill 1,871 1,224Exceptional items 998 - Adjusted operating profit 13,323 9,817Net interest (491) (144) Adjusted profit on ordinary activities before taxation 12,832 9,673Taxation on adjusted profit on ordinary activities (3,915) (3,101) Adjusted profit for the financial period 8,917 6,572 Adjusted basic earnings per share 24.15p 20.08p Adjusted diluted earnings per share 23.60p 19.67p 7. NET CASH INFLOW FROM OPERATING ACTIVITIES 2006 2005 £'000 £'000 Operating profit 10,454 8,593Depreciation 12,546 9,743Profit on sale of tangible fixed assets (4) (23)Amortisation of goodwill 1,871 1,224Exchange differences 274 (265)Decrease in stocks 1,288 179(Increase)/ decrease in debtors (441) 44Increase in creditors 1,894 1,568 Net cash inflow from operating activities 27,882 21,063 8. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2006 2005 £'000 £'000 (Decrease)/ increase in cash in the year (3,049) 6,995Cash outflow from financing 1,219 1,202Cash outflow from hire purchase loans 882 681 Change in net funds resulting from cash flows (948) 8,878Inception of hire purchase loans (4,000) -Hire purchase loans acquired on acquisition (577) (10,000)Exchange differences (127) (302) Movement in net funds in the year (5,652) (1,424)Net funds at 4 April 2005 2,909 4,333 Net (debt)/funds at 2 April 2006 (2,743) 2,909 9. ANALYSIS OF CHANGES IN NET FUNDS At 4 April Cash flow Acquisition Non-cash Exchange At 2 April 2005 items differences 2006 £'000 £'000 £'000 £'000 £'000 £'000 Cash at bank and in hand 14,100 (3,049) - - - 11,051 14,100 (3,049) - - - 11,051Hire purchase loans (2,091) 882 (577) (4,000) - (5,786)Loans (9,100) 1,219 - - (127) (8,008) 2,909 (948) (577) (4,000) (127) (2,743) 10. ACQUISITIONS A recommended cash offer of £1.30 per share was made on 29 June 2005 to Shiloh'sshareholders, which valued Shiloh's share capital at approximately £8.7 million.The Offer became unconditional on 5 August 2005 when the number of shareholderacceptances for the Synergy Offer passed the level of 75%. Accordingly, Shiloh'sresults have been consolidated in Synergy's results from that date. By 9 September 2005 the Company had received acceptances for more than 90% ofvalue of the Shiloh shares to which the Offer related. Shortly thereafter,Synergy exercised its right under Section 429 of the Companies Act 1985 tocompulsorily acquire the balance of shares. As at the balance sheet date, the cost of the acquisition was included as £9.2million including £0.4 million of acquisition costs. The acquisition was fundedfrom Synergy's existing cash resources. Additionally, Shiloh had net debt of£5.4 million at the date of acquisition including an overdraft balance of £4.8million. The most recent financial information in relation to Shiloh PLC showed thefollowing profit and loss account information: 18 weeks from 1 Year ended 31 April 2005 to 5 March 2005 August 2005 £'000 £'000 Turnover 15,183 44,735Operating charges (15,488) (45,408) Operating loss before amortisationand impairment of intangible assets and exceptional operating costs (305) (673)Net goodwill amortisation/impairment - (1,641)Exceptional costs (357) (1,282) Operating loss on continuing operations (662) (3,596)Losses and provisions on sale andcessation of operations - (1,803) Loss on ordinary activities beforeinterest (662) (5,399) Net interest (82) (184) Loss on ordinary activities beforetaxation (744) (5,583)Taxation on loss on ordinary activities 223 317 Loss for the financial period (521) (5,266) Cash Acquisition Total costs capitalised £'000 £'000 £'000 Total consideration comprised 8,794 443 9,237 Total Fair value of Goodwill consideration assets acquired arising £'000 £'000 £'000Total goodwill capitalised in the year comprised 9,237 33 9,204 The acquisition during the year made the following contributions to, andutilisation of, Group cash flows: 2006 £'000 Net cash inflow from operating activities 3,293Capital investment and financial investment (585)Increase in cash 2,708 Analysis of net outflow of cash in respect of acquisition: 2006 £'000Cash consideration 8,794Acquisition costs 311Overdraft acquired with business 4,781 13,886 11. The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The financial information has been extracted from the Group's 2006 statutoryfinancial statements upon which the auditors' opinion is unqualified and doesnot include any statement under section 237 of the Companies Act 1985. 12. The financial statements for the year ended 2 April 2006 will be posted toshareholders on 22 June 2006, and will be delivered to the Registrar ofCompanies following the Company's Annual General Meeting. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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