Preliminary Results

STYLES & WOOD GROUP PLC

("Styles&Wood" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

Styles & Wood Group plc, the integrated property services and project delivery specialist announces its unaudited Preliminary Results for the year ended 31 December 2014.

Financial Highlights

· Revenue up 3.2% to £97.0m (2013: £94.0m)

· Gross margin increased to 8.5% (2013: 7.4%)

· Operating profit up 50% to £1.8m (2013: £1.2.m)

· Underlying* profit before tax up 200% to £2.1m (2013: £0.7m)

· Profit before tax £0.6m (2013: Loss £0.5m)

· Earnings per share at 3.2p (2013: Loss 11.7p)

· Order book at year end increased 20% to £79.9m (2013: £66.5m)

· The order book at week 23 for FY2015 is £103.0m, 23% ahead of prior year of £86.3m

* underlying profit is before charging non-recurring items and preference share accounting

Operational Highlights

· Banking & Finance: enhanced service line offer and new business interest

A national branch improvement programme awarded for one of the UK's leading high street banks with a contract value of c.£18m. Service lines within ongoing Styles&Wood banking frameworks enhanced to include full portfolio provision for buildings' refurbishment and refit.

· Commercial: increased demand for refurbishment in corporate real estate

A number of high quality reference projects completed within the private commercial sector on behalf of a range of blue chip clients, with particular growth in the North West and London.

· Higher Education: complex project successes

Following the successful remodelling of the Royal Northern College of Music Concert Hall, signature design and build contract secured for the refurbishment of the University of Lancaster Library, contract value of c.£9m.

· Business Systems: prestigious award

The Styles&Wood information management systems HUB received critical acclaim, winning the PfM 2014 Innovation in Facilities Technology Award.

· Energy: strategic framework appointments

Post period end secured preferred supplier status on major frameworks with Lightsource, the UK's leading solar energy investor and one of the country's largest business services providers.

· Retail: national new space provision for Lidl

22 new, refurbished and extended stores delivered in period across the UK.  

· International: significant hospitality and leisure project awards

A strong performance from the DutcoStyles&Wood Joint Venture in the UAE, notably the award* winning refurbishment of the four star, 200 bedroom Al Manzil Hotel in Dubai.

· Safety: exceptional performance benchmark

A second consecutive RoSPA Presidents Award in recognition of consistent excellence in safety.

*2015 Middle East Hotel Awards, category 'Best Hotel Refurbishment'

Stock Exchange Listing

· Transferred listing from the Official List to the AIM market of the London Stock Exchange.

Board Changes

· Appointment of Paul Mitchell as Chairman, replacing Jim Martin who stepped down in June 2014

Tony Lenehan, CEO of Styles & Wood Group plc, said:

"The anticipated improvement in trading for the second half of 2014 has realised a significant increase in underlying profit before tax to £2.1m, in line with management expectations. Our opening order book for 2015 was 20% ahead of 2014 and at the end of May remained significantly ahead of the prior year and alongside the improvement in gross margin is a positive endorsement of the Group's diversification strategy and selective market focus.

We now have best practice references in our chosen sectors and segments. This is creating an environment where we are able to provide a broader portfolio of services to support our customers' property interests. This expert capability can effectively support a wide range of work streams and provides business resilience, reflected by our strengthening order book and trading since the period end."

Enquiries:

CHAIRMAN'S STATEMENT

There was clear evidence of improving fortunes for the Group in 2014. I am pleased to report a positive set of results which reflect the strengthened position of the business to address the growing opportunities in its selected markets.

Results

In the year to 31 December 2014, underlying Group profit before tax increased to £2.1m compared with £0.7m for 2013. Full year revenue of £97.0m (FY2013: £94.0m) included a particularly strong performance in the second half of £63.4m (H2 2013: £53.5m). The overall result is reinforced by strong framework arrangements with blue chip commercial organisations and a selective approach to the sourcing of new business opportunities.

I am confident that the platform for growth established by the Board will enable the delivery of sustainable business performance.

Strategy

We have continued to focus on strategic sectors to align with segments where we now have positive references and relevant skill sets. This approach has further enhanced our diversification plans and provides a robust operating platform and resilience to the cyclical nature of our markets. We are seeing significant scope for growth across a broad range of sectors including commercial office, higher education, banking and retail as well as specific geographic areas such as London and Dubai.

People

The Group has developed customer centric teams to provide clarity of purpose for relationship development. Investment in management and leadership development programmes has additionally equipped the business for future growth. These initiatives provide a sound basis for creating the right environment for our people. As ever, a considerable amount of hard work and effort through the course of the year has underpinned our result. I would like to take this opportunity to express the appreciation of the Board to all our colleagues for their contribution.

Board

Following eight years as a non executive director, I was delighted to accept the Board's invitation to become Chairman in June 2014. I am looking forward to the next stages of the Company's development where I believe my experience of business and corporate finance will be of particular relevance.

Outlook

The positive trading seen in the second half of 2014 has continued into 2015 and the Group has generated significant momentum across all of its key sectors. The business is well positioned with a number of long term relationships with customers with significant property holdings. Organisational development, driven by changes in market dynamics, is creating an increasing demand for integrated property support services to enable change in use and enhance asset life cycle performance. Styles&Wood has broadened the range of its service provision in order to address this requirement.

CHIEF EXECUTIVE OFFICER'S REVIEW

The Group delivered a robust set of results for 2014 reinforced by a significant improvement in trading in the second half of the year which was forecast at the time of the Interim Results. Revenue for the full year increased by 3.2% to £97.0m while corresponding underlying profit before tax improved by £1.4m to £2.1m (2013: £0.7m). Our international joint venture in Dubai recorded its best financial result since its incorporation in 2009, contributing £0.3m (2013: loss £0.2m) to the Group. It is pleasing to see the investment made in diversification and restructuring has supported a recovery in the Group's overall gross margin to 8.5% (2013: 7.4%).

The Group incurred significant working capital requirements during the first half of the year which mostly unwound in the second half, closing the year with net cash of £1.2m, notwithstanding £1.4m preference share redemption and coupon payments.

The opening order book for 2015 at £79.9m was 20% ahead of the like-for-like carry through position for 2014 (2013: £66.5m) and provides confidence regarding the Group's plans for growth.

Business Review:

Professional Services: Revenue within the period for Professional Services incorporating Building Intelligence, Design and Frameworks was £64.3m (2013: £56.9m). This included a significant proportion of workload characterised by full service line provision. Importantly, the portfolio of services provided within frameworks has broadened within the reporting period. This is evidenced, in particular, by the conversion of an £18m contract for Automated Teller Machine ("ATM") replacement for one of the UK's leading high street banks as well as rebranding 600 of their branches across the UK and Ireland. Within banking and finance the Group is now providing support services in the retail, office, complex projects and technologies segments. The associated framework arrangements have residual tenure of two to three years.

Profit contribution generated from Professional Services increased from £6.5m to £9.0m due to additional volumes, improved efficiency of operations and a more favourable mix of work towards management programmes.

Contracting Services: Revenue for Contracting Services, Projects and Renewables, was £32.7m (2013: £37.1m). This included the successful completion of the Royal Northern College of Music Concert Hall, a number of new stores for Lidl and securing the £9m contract for the refurbishment of Lancaster University Library. The strike rate for tendered project wins remained at approximately 1 in 4, consistent with best practice within the industry, by both value and number for the second year in succession. The loss in the year after allocation of overheads increased marginally from £0.2m to £0.4m.

Market Review:

Banking and Finance: The main clearing banks are overtly pursuing a strategy to focus on retail and commercial banking on the domestic front with a structured reduction of business interest in investment banking. This is evidenced in real estate terms by an increasing workload promoting brand and new technology enhancing the customer experience, estate rationalisation and new concept property models.

Public and Community: Despite continuing constraints on public sector spending, investment in Health and Education remains a priority for the government. There is a continuing emphasis on maximising the potential of existing real estate through refurbishment and rationalisation schemes, as opposed to new build, which reinforces confidence in our ability to drive growth in this sector. This creates increasing opportunities for the bespoke skills associated with working in end user occupied spaces.

Commercial: Commercial offices represent a major end use sector in terms of interior refurbishment and fit-out. The continued shortage of new build office space on the market looks likely to create significant opportunity over the next 3-4 years for high quality refurbishment projects. As a result, retrofit, refurbishment and remodelling of existing space are expected to be the main focus for occupiers requiring premises' upgrades over the short to medium term.

Retail and Leisure: 

The UK's major grocery retailers are being challenged by a need to compete with value based retail offerings which are driving an expansion into discount, convenience, on-line and multichannel formats. This has created an increasing demand for smaller units, refresh, refit and refurbishment which is expected to provide significant deal flow over the short to medium term. Between 2013 and 2017, the UK market for shop fitting is forecast to increase by between 4% and 5% per annum, reflecting the market imperative to improve and realign existing formats.

Specific Geographies:

London is leading the refurbishment market in all of our target sectors. As such we have established a dedicated business unit located in the capital and are ideally situated to source new market share. With Dubai hosting World Expo 2020, the hospitality industry has become one of the key drivers for economic growth in the region, with at least 600 new build hotel developments planned alongside the refurbishment and fit-out of bars, restaurants and retail spaces all contributing to an increased level of opportunity in a much improved market.

Growth Strategy:

As outlined previously, the Group has a clearly defined plan to develop business interest in its strategic sectors and segments. Particular focus has been applied to sourcing opportunities where our transferrable skill sets are both relevant and value adding to our clients.

Commercial: Due to a lack of investment in new office space, there is growing demand nationally for improvement and enhancement of existing buildings. This has afforded the Group the opportunity to position itself as a key deliverer of multiple service lines, assisting clients looking to proactively plan

for space demand, alongside programming and delivery of refurbishment programmes to upgrade older office stock to prime, Grade-A accommodation. The success of our approach has been demonstrated by our appointment, post period end, as 'Preferred Contractor' for a £12 million office refurbishment in Manchester to be completed in H1 2016 for one of the UK's largest insurance services providers. This will be the second project delivered for this client and will see the design, construction and Category A refurbishment of over 150,000ft² of lettable office and retail space.

Banking and Finance: Changes in business model and customer focus are driving new operating concepts for existing buildings. This trend lends itself well to the Group's operating model as our service lines work collaboratively to provide clients with a range of contracting, design and technology services, all delivered through one single point of contact. Anticipating this demand for a multi-service offer, we have restructured our internal teams to provide an account focused management structure, which fully aligns with the business interests of our customers, allowing us to deliver the level of service our clients require, but on a much more agile basis, allowing us to flex with client demand.

Retail: Discount retailers are challenging the market dominance of the major grocery chains. Extensive smaller format expansion plans are under development, which in turn create the context for major remodelling programmes for larger format stores. Our comprehensive geographic coverage and core ability to mobilise rapidly are a sound strategic fit with these business needs and requirements.

Education: Universities and Colleges are investing in campus real estate to create market advantage. Refurbishment programmes are being created with an emphasis on remodelling existing buildings in order to expedite operational improvements. Complex refurbishment and fit-out solutions provide the potential to make better use of and improve existing assets. Our skill sets developed through working in occupied environments, collaboratively with end users, aligns particularly well with the Higher Education segment.

Specific Geographies: The Group is able to differentiate its approach in specific geographies by providing a programme and projects delivery capability which is informed by expertise in business systems, space planning and energy solutions.

The UAE has seen resurgence in fit-out with the award of the 2020 Expo to Dubai and in particular the emergence of a secondary market in hotel and office refurbishment. We have recently completed the full refurbishment of a 200 bedroom hotel for Emaar.

London remains an increasingly active market both for our existing framework customers and new project opportunities. A team has now been established which has the appropriate skills and capabilities to develop our London centric opportunities. Post period we have secured significant framework allocation in this respect which will anchor our business interest in the capital.

New Work Order Book:

The current order book at week 23 for 2015, secured and anticipated workload, is £103.0m which is significantly ahead of prior year of £86.3m. This position is consistent with market expectations and reinforces our growth agenda. Projects under negotiation and secured to date in year, include around 200,000ft2 of office fit-out and refurbishment in Manchester and the level of framework workload allocations, given a more diverse mix of work streams, are much improved over prior year.

Corporate:

During the period the Group undertook a capital reorganisation and transferred its listing from the

Official List to the AIM market of the London Stock Exchange. The Board believes that the transfer to the AIM market will provide the Group with the regulatory flexibility to agree and execute certain transactions more quickly and cost effectively, while the capital reorganisation will provide the Group with the ability to make future share issues should the appropriate opportunity arise.

In June 2014 Jim Martin stepped down from his role as Chairman, after serving for eight

years on the Board, to be replaced by Paul Mitchell. We would like to repeat our thanks to Jim for

his substantial contribution to the Group and wish him well for the future.

Outlook[1]:

The property support services market in interior fit-out and refurbishment is now forecast to recover to 2008 levels by 2017 and the corresponding annual growth rate from 2014 to 2018 is anticipated to be in the region of 4-5%. This would be a significant improvement over the preceding five years and represents a considerable opportunity for the period ahead. In order to optimise outcomes to support an improved business result, Styles&Wood has targeted a number of sector priorities providing a more diverse and resilient focus for the Group.

We remain encouraged by the growing confidence being seen in these key sectors and believe

we are well positioned to continue growing our market share.

[1] Interior Refurbishment and Fit Out Market Report UK 2014-18: AMA Research May 2014

Tony Lenehan Chief Executive Officer

GROUP FINANCE DIRECTOR'S REVIEW

Financial Performance

Revenue for the year ended 31 December 2014 increased by 3.2% to £97.0m (2013:£94.0m). The improvement was most noticeable in the second half of 2014, where revenues of £63.4m (2013: £53.5m) were the best half year revenues for the Group since 2009.

The improved revenues are a consequence of the investment and diversification undertaken by the Group over the past two years and an increase in activity and confidence in our major markets.

The investment and diversification, restructuring the operational cost base of the Group and improving efficiency has helped gross margin to recover to 8.5% (2013: 7.4%).

Underlying administrative expenses were £5.7m (2013: £5.4m). The improved trading performance is reflected in a 63.3% increase in Group operating profit to £2.5m (2013: £1.5m).

Underlying profit before tax increased by £1.4m to £2.1m (2013: £0.7m). Non-recurring expenditure on restructuring of £0.3m (2013: £0.4m), fees associated with transfer to AIM £0.1m (£nil), corporate finance fees £0.3m (2013: £nil) and accounting for notional interest on preference shares of £0.8m (2013: £0.8m) reduced the result to a profit before taxation of £0.6m (2013: loss £0.5m).

Financing Costs

Net financing costs for the year were £1.5m (2013: £1.5m) and included £0.8m (2013: £0.8m) of notional interest on preference shares.

Net interest and fees on bank borrowings were £0.2m (2013: £0.1m). Finance costs include the payment of interest on the preference shares of £0.43m (2013: £0.45m), being the 3% cash coupon on outstanding preference shares which became payable from 1st September 2012.

Accounting For Preference Share Capital

The 15,000,000 convertible redeemable preference shares of £1 each carry a cash coupon of 3% from 1 September 2012 and are redeemable in tranches from December 2013 through to December 2019 or convertible into ordinary shares at a price of £9.375 at any time between August 2012 and July 2019 following the 1 for 10 consolidation in 2014.

As the preference shares have a conversion option, the Group has to account for them in accordance with IAS 39 with the result that a proportion of the preference share capital is classed as debt with the remainder treated as equity. At 31 December 2014 £2,000,000 (2013: £1,000,000) of the preference share capital was classified as a current liability, being repayable on 31 December 2015 and £8,025,000 (2013: £9,197,000) of the preference share capital was classified as noncurrent liabilities with the balance of £2,975,000 (2013: £3,803,000) shown as shareholders' equity.

In addition, IAS 32 requires that notional interest payable on the debt component is calculated based on a notional interest rate, which is significantly higher than the actual coupon rate, on the preference shares. The notional interest is charged through the Income Statement. The notional interest charge on the preference shares in 2014 was £828,000 (2013: £820,000) with the cash dividend paid on the preference shares being £427,000 (2013: £450,000).

An amount corresponding to the notional interest charge, to the extent it exceeds the cash coupon,

is credited to reserves, ensuring that the distributable reserves and net assets of the Group are unaffected by the accounting treatment.

Taxation

The tax charge for the year amounted to £0.4m (2013: £0.2m). This results in an effective tax charge on the profit before tax of 65.8% (2013: -40.8%). The largest factor affecting the effective tax rate compared to the UK corporation tax rate of 21.5% (2013: 23.25%) is the preference share interest charge of £1.5m (2013: £1.5m) which being part notional charge and part preference share coupon does not qualify for tax relief. Other factors impacting the effective rate are non-deductible expenses and the tax treatment of losses incurred by the joint venture.

Dividend

No dividends on ordinary shares have been proposed in respect of the year ended 31 December 2014 (2013: £nil) and it is not currently envisaged that a dividend will be proposed on ordinary shares in the new financial year.

Earnings Per Share

Earnings per share were 3.2p (2013: loss 11.7p). Underlying earnings per share were 25.3p (2013: 6.0p).

Net Cash and Cash Flow

The Group closed the year with net cash (cash balances less short term facilities) at 31 December 2014 of £1.2m (2013: £2.5m), an outflow of £1.3m. The net cash outflow was after a £1.0m (2013: £1.0m) redemption of preference shares and payment of preference share coupon of £0.43m (2013: £0.45m).

The business generated net cash of £1.5m (2013: £1.3m) from operations. Capital expenditure increased by £0.14m to £0.50m (2013: £0.36m) with investment in new premises for the Nottingham operations, IT equipment and software.

Whilst the Group has experienced a seasonal cash outflow in the first five months of 2015, the outflow is materially lower than the corresponding period in 2014. The overdraft position at the end of May 2015 was more than £2.5m lower than May 2014.

International

The Group's joint venture operation in the UAE was established in May 2009. The business has now established credentials providing interior fit-out services to a range of markets including commercial premises, leisure and hospitality and education. The share of profits included within the consolidated results is a profit of £0.25m (2013: loss £0.16m).

Outlook

The opening order book for 2015 was 20% ahead of that for 2014 and at week 23, continues to track at this level. As a result, H1 2015 will further strengthen relative to the prior year with a more typical 40:60 workload weighting targeted to the second half of the year. Additionally, the order book at

week 23 revenue for year ending 31st December 2016 stands at £26.7m, which compares with the 2014 week 23 position for 2015 revenue of £5.5m.

Consolidated income statement for the year ended 31 December 2014

* Net of tax. The calculation of earnings per share uses a weighted average of 6,182,000 (2013: 6,182,000) ordinary shares in issue.

There is no difference between the profit for the year and the total comprehensive income for the period.

Consolidated balance sheet as at 31 December 2014

Consolidated cash flow statement for the year ended 31 December 2014

Consolidated statement of changes in equity for the year ended 31 December 2014

Notes to the preliminary results

1. Basis of Preparation

The preliminary financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 but is derived from the accounts for the years ended 31st December 2014 and 31st December 2013. The figures for the year ended 31st December 2013 were audited. The preliminary financial information is prepared on the same basis as will be set out in the statutory accounts for the year ended 31st December 2014. The figures for the year ended 31St December 2014 are unaudited.

The preliminary financial information was approved for issue by the Board of Directors on 19th June 2015.

The statutory accounts for the year ended 31st December 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Statutory Accounts for the year ended 31st December 2013 have been filed with the Registrar of Companies. The auditor's report on those 2013 accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Going concern

Having made appropriate enquiries, the directors consider the Group has adequate resources to enable it to continue in operation for the foreseeable future.

The financial position of the Group and its cash flows are set out in the primary statements of this financial information. Detailed projections have been made for the 12 months following the approval of the financial statement and sensitivity analysis undertaken. Accordingly, the directors continue to adopt the going concern basis for the preparation of the financial statements.

Segmental reporting

Segmental reporting disclosures have been made for the following operating segments.

Contracting Services

• Projects and Renewables: Styles&Wood fulfils the role of Principal Contractor for projects with typical project values ranging from less than £100,000 to over £10m. Projects range from minor refresh to comprehensive refurbishment, shell fit-out, acquisition conversion, or complex structural re-configuration and renewable solutions.

Professional Services

• Frameworks: Formal framework agreements with contractors and suppliers create the ideal forum for sharing best practice in planning, procurement and delivery. Styles&Wood delivers major roll-out programmes for its framework customers and has been actively providing collaborative services to many of these customers through systems developed and refined in over a decade of Partnering and formal Framework Agreements.

• Design: Design provides outsourced design and development services including architectural services, space planning, retail initiative design and models and standards work.

• Building Intelligence: iSite provides clients with technology based property information solutions that store, manage and communicate critical data relating to their property portfolio and associated property activities. This data can include design models and supplier allocations as well as project specific data.

The Group's trade is generated primarily in the United Kingdom and as such the Group has only one geographical segment. The Group has a joint venture in Dubai and its results are currently immaterial to those of the Group. Its business segments are therefore its reportable segments. Segment revenues, results, assets and liabilities include amounts directly attributable to a segment and amounts that can be reasonably allocated to a segment. Amounts that cannot be allocated to segments are included as unallocated.

2. Segmental reporting

Year ending 31 December 2013 (as restated)

All revenue arises from external customers for the provision of property related services in the UK. All assets are domiciled in the UK. Operating segments are reported in a manner consistent with the internal reporting to the Chief Executive who is the chief operating decision maker. The segments reflect internal management, the business and contractual characteristics of the Groups' operations.

Unallocated assets and liabilities include property, plant and equipment, software, cash and cash equivalents, interest payable, current and deferred tax liabilities and borrowings. Unallocated segment result reflects expenses relating to overall operation of the Group rather than a particular segment and includes central people costs, professional fees and share option expenses.

Transactions between segments are eliminated on consolidation.

In 2014 revenue of £44,332,000 was generated from three external customers, each of which contributed more than 10% of Group revenue. The most significant contributed revenue of £16,132,000. In 2013 two external customers each contributed more than 10% of Group revenue; the total revenue from these two customers was £47,252,000.

3. Non-recurring items and preference share accounting

The Group's results include the following items:

(a) In both 2014 and 2013, restructuring costs relate to exercises to restructure the management within the Group's trading subsidiary, Styles & Wood Limited.

(b) Transfer of listing from Premium Market to Alternative Investment Market ("AiM")

(c) Corporate Finance fees are for work on transactions in 2014

(d) Tax on non-recurring items reflects the tax credit available on the restructuring and redundancy costs.

4. Finance costs

5. Taxation

The standard rate of Corporation Tax in the UK changed from 23% to 21% with effect from 1 April 2014. Accordingly the standard rate of tax applied for the year ended 31 December 2014 is 21.5% (2013: 23.25%). The effective tax rates tax for the years ended 31 December 2014 (65.8%) and 31 December 2013 (-40.8%) are different from the standard rate of corporation tax. The differences are explained as follows.

In the Autumn statement 2012 it was announced that the main Corporation Tax rate would be reduced from 23% to 21% from 1 April 2014. Following the March 2013 Budget, the main rate of Corporation Tax in the UK was reduced by a further 1% to 20% from 1 April 2015. Of the deferred tax charge of £76,000, £7,000 relates to changes in the tax rate in the year.

6. Earnings per share

Reconciliations of the earnings and the number of shares used in the calculation are set out below:

During the year the Ordinary shares were consolidated in a 1 for 10 share exchange. Accordingly the number of shares in issue was reduced tenfold. The comparative earnings per share figures have been adjusted accordingly.

On 29th June 2009 the Group issued 15,000,000 convertible preference shares which are convertible into 16,000,000 ordinary shares. On 31st December 2013 and 31st December 2014, 1,000,000 of the shares were redeemed leaving 13,000,000 shares in issue which are convertible into 1,386,667 ordinary shares. These shares are not currently dilutive and neither are share options that are currently in issue in the Group. Hence there is no difference between basic and diluted earnings per share (2013: no difference).

7. Dividends

No interim dividend on ordinary shares was paid during the year (2013: nil) and no final ordinary dividend is proposed (2013: nil). A dividend on the preference shares accrued from 1 September 2012 at a rate of 3%. The charge for the year ended 31 December 2014 was £427,000 (2013: £450,000).

8. Cash flow from operating activities

9. Net cash

Net cash represents cash at bank and in hand and excludes preference shares classified as debt.

10. Related party transactions

In the year ended 31 December 2014 the Group paid fees of £50,000 (2013: £35,000) to Rickitt Mitchell & Partners Limited in respect of Paul Mitchell's services as a non executive director and Chairman.

The following transactions have taken place between the Group and one entity over which Paul Bell, who has a 35% shareholding in the Group and who is a director of the Group's trading subsidiary Styles & Wood Limited, has significant influence and is therefore considered to be a related party. The entity, Fusion People Limited, is a recruitment company through which the Group hires agency labour at open market rates.

All transactions were undertaken in the ordinary course of business with normal commercial terms and with no security given.

Styles&Wood received a dividend from its subsidiary company Styles & Wood Investments Limited during the year of £1.9m (2013: £7.5m).

There were no sales and purchases between Group companies during the year (2013: nil). Movements in intercompany balances occur in relation to the loan of cash, the transfer of group relief for taxation purposes (£174,000 in total) and where certain expenses of the company are paid for by a subsidiary company (£880,000 expenses for Styles&Wood Group plc and £51,000 for Maraq Limited paid for by Styles&Wood Limited).

Additional disclosures

Risks and uncertainties

As with any business, risk assessment and the implementation of mitigating actions and controls are vital to the achievement of the Group's strategy. Information on the key risks and mitigating factors can be found in the 2014 annual report and financial statements that will be published on the website www.stylesandwood-group.co.uk in due course.

Statement of Directors' responsibilities

The Directors confirm that, to the best of their knowledge, the information set out in this announcement has been prepared in accordance with the Disclosure and Transparency Rules of the UK Financial Services Authority, International Financial Reporting Standards (IFRS) and the International Financial Reporting Interpretation Committee (IFRIC) Interpretations, as endorsed by the European Union (EU). Except as described in the basis of preparation, the accounting policies applied are consistent with those set out in the annual report and financial statements for the year ended 31 December 2014. In preparing this announcement the Directors have also made reasonable and prudent judgements and estimates. The financial information, Chairman's statement, Chief Executive's statement and the Financial Review contained herein give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.

The Directors of Styles & Wood Group plc at the date of this announcement are as set out below: