7th Mar 2007 07:01
Devro PLC07 March 2007 DEVRO PLC 7 March 2007 PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Results 2006 2005Revenue £153.5m £152.5mOperating profit before exceptional items £19.3m £21.3mExceptional items £(1.0)m £6.3mProfit before tax £16.3m £25.8mEarnings per share 7.2p 11.5pEarnings per share before exceptional items 7.6p 8.7pDividend per share 4.45p 4.4pNet debt £27.0m £17.7m Pat Barrett, Chairman of Devro, commented: "In 2006 Devro achieved a solid increase in sales volumes, with many marketsshowing good growth. However, this was not sufficient to fully offset the factthat, in many respects, it was a very challenging year, with adverse foreignexchange movements and significant increases in energy costs each having asubstantial impact on group profits, which were behind prior year as a result. "We continue to enjoy strong positions in what is fundamentally a resilientglobal market and we have an excellent geographic spread. We also have a goodknowledge of the developing market regions and, as a consequence, are well setto take advantage of the opportunities as the sausage industry becomes moreautomated in these areas. "The programme for further improving our operational effectiveness is wellunderway and, with the initial prospects of the developing markets beginning tofirm up and be converted into increased sales, we believe a base has been laidfor a return to a stronger performance in 2007. The Directors are thereforeconfident about the future prospects for the company." Enquiries:---------Graeme Alexander Chief Executive 020 7404 5959 on 7 March 2007John Neilson Finance Director 01236 879191 thereafterJon Coles / Mark Antelme Brunswick 020 7404 5959 CHAIRMAN'S STATEMENT In 2006 Devro achieved a solid increase in sales volumes, with many marketsshowing good growth. However, this was not sufficient to fully offset the factthat, in many respects, it was a very challenging year, with adverse foreignexchange movements and significant increases in energy costs each having asubstantial impact on group profits, which were behind prior year as a result. Pre-tax profit before exceptional items was £17.3 million compared with £19.4million in 2005. As previously announced, an exceptional charge of £1.0 millionwas incurred in the first half to effect annual savings of a similar amount inoverhead costs in Scotland. In 2005, an exceptional gain of £6.3 million wasrecorded in connection with the sale of land at Moodiesburn. Pre-tax profit asreported, therefore, was £16.3 million in 2006 against £25.8 million in 2005.Basic earnings per share before exceptional items was 7.6 pence compared with8.7 pence in 2005. Sales volumes increased in each of our major collagen categories - ediblecasing, non-edible casing and film - resulting in total volume across the groupbeing 2.3% ahead of prior year. This was largely offset by an adverse movementof 1.5% in price/mix, driven mainly by the increased strength of the Czechkoruna which reduced Cutisin's effective export sales prices. The net effect ofincreased volumes and the impact of price/mix and exchange resulted in reportedsales in sterling being £0.9 million (0.6%) ahead of prior year. Trading around the world was mixed, with two contrasting themes present.Excellent growth was achieved in a number of the newer, developing markets,while sales in the more mature markets of the UK and US were a little subdued. Sales into Eastern European markets were particularly buoyant, continuing thetrend of recent years. In these markets, volumes and revenues were each wellahead of prior year, driven by a mixture of increased conversion from gutcasings to collagen, an increase in market share, and growth in the underlyingsausage market. Currency movements had a major adverse impact on both sales and profit, withCutisin in particular experiencing an adverse transactional effect of £1.5million on profit. In total, foreign exchange movements had a negative impact of£1.9 million on group profitability. In common with most manufacturing industries, increased energy prices had asignificant effect on the cost of production, particularly in our Europeanoperations. While this particular pressure on costs began to ease towards theend of the year, the total impact on group profits for the year as a whole was,nevertheless, £1.8 million. In addition, variations in the inherent quality ofthe collagen raw material led to some disruption in our Australian and USplants. Early action to address these issues was implemented and the impact onoperations was largely confined to the first half. The new manufacturing facility at Cutisin was progressively brought on streamduring the second half and was officially opened in early December. The projectwas completed on budget and ahead of time, and early indications are that theoutput of the new process will exceed planned levels. With the greater part of theexpansion programme in Cutisin completed, attention is now being directed toother parts of the group where investment is required in additional capacity, process improvementand technology upgrades. Each of our operations around the world has adevelopment plan appropriate to its specific requirements, with the generalthrust being to increase capacity, improve productivity and make more productsof even higher quality, while also significantly reducing the cost ofmanufacture. Investment in 2007 will be focused principally on the Devro plantsin Scotland and Australia. Net debt at the end of the year was £27.0 million (2005: £17.7 million). Whilethis increase was due in part to higher pension payments and the effect ofreduced group profits, the major contributor was the high level of capitalinvestment. In 2006, capital expenditure totalled £16.7 million, of which over£10 million was invested in Cutisin. Notwithstanding our investment plans, weexpect a significant reduction in capital expenditure in 2007. Dividend-------- The Board is proposing a final dividend of 3.025 pence (2005: 3.025 pence)bringing the total for the year to 4.45 pence (2005: 4.4 pence). This will bepaid on 16 May 2007 to shareholders on the register as of 20 April 2007. Pleasealso note the offer approach update section below. We intend continuing ourpolicy of providing sustainable yet progressive dividend growth that remainsconsistent with underlying company performance. Board changes------------- In November of last year, I announced that Dr Graeme Alexander had decided toretire from the role of Chief Executive and from the Board of Directors during2007. Graeme has been with Devro for 30 years and has been Chief Executive for 14years. He has been the key pivotal influence in leading Devro into the globalleadership position of our industry during that time. He will be greatly missedby colleagues throughout the group, all of whom are delighted that he willmaintain his association with us in an advisory capacity following hisretirement. The search for his successor is well advanced. Offer approach-------------- On 29 January 2007, the company announced that it had received a preliminaryapproach, which may or may not lead to an offer being made for the whole of theissued share capital of Devro plc at 150 pence per share in cash. Talks are progressing with the potential offeror; due diligence is largelycomplete and discussions are now taking place with the trustees of Devro's UKpension scheme. This update is made without the potential offeror's agreement orapproval and there can be no certainty that an offer will be made nor as to theterms upon which any offer might be made. Shareholders should note that the potential offer price of 150 pence per shareis inclusive of any final dividend payable by the company in respect of the yearended 31 December 2006. Employees--------- Once again, our employees have risen to the task of meeting both the challengesand the opportunities in what has not been an easy year. Their hard work andcommitment to the group is greatly appreciated and, on behalf of the Board, Iwould like to thank them for their contribution. Prospects--------- We continue to enjoy strong positions in what is fundamentally a resilientglobal market and we have an excellent geographic spread. We also have a goodunderstanding of the developing markets and are well placed to take advantage ofthe opportunities as sausage production becomes increasingly automated in theseareas. Our current investment programme is specifically designed to support ourmarket strategies in these regions. We believe that this programme, which willfurther improve our technology base, broaden our production capability andsignificantly enhance key product attributes, will help to underpin ourcontinued leadership as we actively seek to exploit these developing marketopportunities. The significant investment in our Czech operation is already beginning to bearfruit in terms of enhanced production capability and increased sales volumes.The improvements being made to the Devro Scotland product range are alsostarting to yield benefits in terms of better product attributes, leading toincreased sales in Europe. The programme for further improving our operational effectiveness is wellunderway and, with the initial prospects of the developing markets beginning tofirm up and be converted into increased sales, we believe a base has been laidfor a return to a stronger performance in 2007. The Directors are thereforeconfident about the future prospects for the company. OPERATING REVIEW Trading in 2006 was generally mixed, with a quiet first half being followed by amuch more solid second half. Second half volumes showed significant increasesagainst both the equivalent period in 2005 and the first half of 2006. Withsecond half growth in excess of 4% compared to the prior year, a broadly neutralvolume position at the end of the first half was converted into a 2.3% full yeargain. The impact of foreign exchange movements, however, together with someprice/mix effects, largely offset these gains and, at £153.5 million, grouprevenue for the full year was 0.6% ahead of the 2005 value of £152.5 million. While both volumes and revenues were ahead of prior year, some external factors,in particular much higher energy prices and adverse currency movements, resultedin a lower trading profit. Positive results were achieved in Continental European, Asian and Latin Americanmarkets, but these were offset to some degree by weaker sales in the UK and USmarkets. Nevertheless, with an overall second half increase of almost 7%, ediblecollagen casing volumes finished the year around 3.5% ahead of 2005. In Continental European markets, the success of our Cutisin product offering,together with some initial volume of new and improved products coming from DevroScotland, led to further growth in each of our major trading areas. WesternEurope, Eastern Europe and Russia each saw significant increases, with EasternEurope and Russia, in particular, continuing the very strong trend of recentyears, resulting in an overall increase in these markets of close to 20%.Cutisin increased its total edible volumes in Europe by 14%, while both Devroand Coria also achieved substantial growth, with Coria doing particularly well.As has been the case in the recent past, these increases reflect the move fromgut to more productive collagen. The large majority of Cutisin's sales are made in currencies other than theCzech koruna. As a consequence, the strength of the koruna, compared to itsmajor trading currencies of the euro and the US dollar, had an adverse impact of£1.8 million on Cutisin's sales revenue. Although this exchange impact shows upas an adverse price movement, underlying prices in Cutisin's markets weregenerally stable. While trading in Continental Europe moved ahead of prior year, UK revenue wasbehind 2005. The UK collagen market was relatively subdued for much of the year,and some volume was also lost in the face of aggressive competitive pricing.While much of this volume was subsequently regained, the net impact over theyear as a whole was nevertheless negative. The combination of market conditions,lost volume and pricing pressure resulted in UK revenue being around 7% behindprior year. In the Americas, local currency revenue was over 2.5% ahead. However, theweakening of the dollar had a negative impact, and in sterling terms revenue wasonly marginally ahead of prior year. Strong growth in our edible collagen salesin Latin America in the second half helped to recover much of the volume deficitexperienced in the Americas in the first half. Second half growth in the regionas a whole was around 7.5% compared to the equivalent prior year period. Thiscontrasts sharply with the 10% downturn recorded for the first half. Pricemovements were generally beneficial. In the US, the market was weaker than has been the case in the past few years,with much of the industry indicating slower sales of sausage products.Nevertheless, the second half did show a 3% increase over the same period in2005, which compares to a downturn of almost 9% for the first half. For theyear, therefore, volumes in the US were slightly over 3% behind, and while anelement of this downturn was due to the quieter market conditions, much of itwas due to an unusually strong first half performance in 2005. As previously reported, volumes into Latin America were restricted in the prioryear due to capacity constraints. With the US market being slower, at least forthe time being, the opportunity was taken to increase our Coria sales in otherparts of the world. As a result, in Latin America we achieved second half growthin revenue in excess of 25%, driven by the very strong growth in volume. In the Asia/Pacific region there was an overall decrease of slightly less than2% in sterling revenue. Foreign exchange movements had a negative impact of over£1.2 million, or around 4% of revenue, and this more than offset an overallvolume growth of over 2%. Trading was steady in Australia and New Zealand. Collagen sales volumes wereahead by almost 1.5%, but this understates the true increase as there was aswitch by some customers from smaller to larger diameter products. Pricing wasrelatively stable in these markets, with a slight upward trend. A weakening ofthe New Zealand dollar, however, had a negative impact on Devro Australia'ssales revenues. As was the case with Cutisin, this exchange movement had anegative impact on pricing, offsetting the otherwise upwards movement in averageprice. In the Japanese market, the solid growth of 2004 and 2005 continued through2006, albeit at a slightly slower rate. Volumes in this market were up by almost9% over the prior year. This growth is a reflection of continued conversion fromgut casing to collagen, together with our ability to supply productsmanufactured using Australian-sourced collagen, which is particularly wellregarded by our customers. Following a slower start to the year, sales into other Asian markets improvedmarkedly in the second half. With an increase of over 40% in second half volumescompared to the equivalent period in 2005, a sluggish first half performance wasconverted to a gain of over 5% for the year as a whole. The large second halfincrease was driven primarily by sales into China, where the market continues todevelop well, with customers looking to benefit from the improved productivitywhich collagen casing brings to their manufacturing operations. In other product areas, revenues from sales of non-edible collagen casing werecomfortably ahead of prior year on the back of good growth in Eastern Europe andLatin America. Collagen film sales were also well ahead of prior year, drivenmainly by a very positive performance in Eastern Europe. Overall, sales revenuesfrom non-edible collagen were ahead of prior year by almost 8% and those fromfilm were ahead by over 25%. In the thin-film business, while progress continues to be made operationally,sales are still coming in at a slower rate than expected. The establishment of arange of products has been achieved quite successfully and the market continuesto be interested in our developing a broader portfolio of applications. The leadtimes for taking these more complex products to full scale commercialisation,however, are more extended than originally planned, and it is becomingincreasingly appropriate to review the longer term direction of this venture. While our manufacturing operations continued to provide a solid underlyingperformance, they faced a number of difficult issues during the year whichresulted in a marked increase in our production costs. The significant increase in energy prices was clearly the dominant featurewithin our manufacturing operations. This had a negative impact on operatingprofit of £1.8 million for the full year compared to 2005, with the greatestimpact being felt by our European operations. The situation started to easetowards the end of the year, and the current outlook for 2007 appears to be morebenign. As previously reported, to help offset some of the increased costs, wecarried out a review of our overhead structure in the early part of the year.This resulted in an exceptional charge of £1.0 million, delivering annualisedsavings of a broadly similar amount. Variability in the quality of some of our collagen raw material which occurredduring the first half led to a period of reduced production efficiency in ourAustralian and US plants. Technical solutions were quickly identified andspeedily implemented, and the effects were largely confined to the first half.Our Australian operation, in particular, returned to a high standard ofmanufacturing effectiveness during the second half. The financial impact on 2006profits was, nevertheless, close to £1 million. In Devro Scotland, a range of new and improved products is currently at anadvanced stage of development. In order to accelerate the introduction of thesenew products into full-scale manufacture, extended production trials werecarried out during the second half of the year, which led to an additionalcharge to profit of £0.8 million. The major expansion of the manufacturing facilities in our Czech operation wascompleted during the second half. Pilot production testing was carried out onthe initial installation during the first half and, therefore, when theremaining facilities were brought on-line, they were capable of being speedilycommissioned and product made available for sale. This allowed many of the backorders for Cutisin products to be cleared. The new plant is functioning verywell and is providing quality product at a higher volume than originallyplanned. The development of our fundamental technology base is an important contributorto Devro's overall business development and our commitment to this aspect of thebusiness remains very strong. The group has a network of technology centreswhich employ a range of engineers, technologists and scientists. These centresare located in our operational units in Scotland, the Czech Republic, the US andAustralia. While the overall programme is centrally coordinated, our network oflocal centres allows us to design products to meet customer requirements at alocal level. With each of these centres making an active contribution throughout2006, we continued our efforts to develop, broaden and improve our productoffering across the group. As a result, a number of enhancements were made toboth products and processes, ranging from productivity improvements in Cutisinthrough improved products for Asia to the development in Scotland of a morerobust, commercially attractive product for the important European processedsausage market. We continue to face strong competition in each of the markets we serve. However,with sound financial management, dynamic market and technology development andstringent cost control all supporting the manufacturing of a sophisticatedproduct range, Devro is set to maintain its position as a leading supplier ofhigh-quality, low-cost collagen products. FINANCIAL REVIEW Total sales for 2006 were £153.5 million against a prior year figure of £152.5million. Sales volumes were ahead of prior year by 2.3%, with a particularly strongperformance being recorded by Cutisin. Average selling prices fell by 1.5%,mainly as a result of adverse transactional exchange rate movements, althoughthere was also some pricing pressure. The translation of local currencies intosterling had a small negative impact of 0.2% on group revenue. Operating profit before exceptional items of £19.3 million compares with £21.3million in 2005. An exceptional charge of £1.0 million was incurred in 2006,while an exceptional credit of £6.3 million was recorded in 2005. The reduction in average selling prices adversely affected group profits by £2.2million, primarily due to the adverse impact of foreign exchange. In particular,a further strengthening of the Czech koruna compared with the euro and the USdollar, Cutisin's major trading currencies, resulted in a significant reductionin the value of Cutisin's export sales. Significantly increased energy prices resulted in manufacturing costs rising by£1.8 million in 2006, with the majority occurring in the first half of the year.Prices have stabilised over recent months, and a further significant increase inutility costs in 2007 now appears unlikely. Variability in the quality of collagen raw material resulted in reducedefficiencies in our Australian and US operations. The financial impact was £1.0million, mainly confined to the first half of the year. A new, improved range of casings was introduced into the manufacturing processin Scotland during 2006, causing some disruption to production throughput.Yields and efficiencies have now improved as experience has been gained inrunning these products, but profits in the second half of 2006 were adverselyaffected by £0.8 million. Offsetting these adverse factors, volume growth, a major driver of the group'sprofitability, continued the positive trend of recent years. Sales volumes wereup on prior year, particularly in many continental European markets, generatingan additional £2.0 million of profit. Cutisin completed a major expansion of its manufacturing facilities in the CzechRepublic in the final quarter of 2006, resulting in a significant uplift incapacity. The continued improvement in output and efficiencies in our operationsaround the world, together with the additional output generated by the Cutisininvestment, yielded a benefit to profit of £1.8 million. Pension charges of £2.0 million were broadly in line with prior year despite2005 benefiting from a one-off credit of £0.9 million relating to a reduction infuture obligations of the US pension fund. The charge in 2006 has benefited fromthe measures taken by the group to reduce future obligations of the UK fund, aswell as an increase in bond discount rates. Foreign exchange had a net negative impact of £1.9 million on group profits. Thetotal impact of adverse transactional exchange mentioned earlier was £2.2million, while group profits benefited by £0.3 million when the profits of theoverseas entities were translated into sterling. As part of our ongoing efforts to reduce our cost base, a major review of the UKoverhead structure was carried out in January 2006, leading to an exceptionalrestructuring charge of £1.0 million. Employee numbers were reduced across anumber of departments, resulting in savings of a similar amount. The results in2005 included an exceptional credit of £6.3 million in respect of the sale ofsurplus land at Moodiesburn. Net interest expense totalled £2.0 million in 2006 (2005: £1.8 million). Theaverage level of debt was higher than 2005, due mainly to the level of capitalexpenditure on the Cutisin expansion programme. Net interest cover was 9 times. Net debt at 31 December 2006 amounted to £27.0 million, comprising gross debt of£35.8 million and cash of £8.8 million. Gearing was 37% (2005: 29%). At theyear-end, the group's borrowing facility totalled £42.7 million (2005: £47.8million). In January 2007, a new five year borrowing facility totalling £60million was agreed with our banks. The group's effective tax rate for 2006 was 28.5%. The 2005 rate of 27.5%benefited from an adjustment in respect of the prior year provision for taxationin our US operation. The financial impact of exchange rate fluctuations is minimised by a policy ofhedging foreign exchange risk. All hedging is undertaken centrally by theCorporate Treasury function, based in Moodiesburn, in accordance withBoard-approved policies and authorities. Specifically, policies permit forwardtransaction hedging to a maximum level of 75% of anticipated currency flows forup to one year ahead. They also permit the hedging of up to 100% of interestrate exposures for a period not exceeding five years. As a matter of policy, thegroup does not undertake any speculative transactions which would increase itsforeign exchange or interest rate risks. Cash generated from operations of £22.6 million (2005: £28.5 million) was lowerthan prior year due to reduced operating profits and increased pension payments.Working capital also increased, mainly due to particularly strong sales in thelatter part of the year resulting in a substantial increase in debtors atDecember 2006. Capital expenditure of £16.7 million (2005: £16.7 million) included over £10million invested in Cutisin, of which £8.5 million was in respect of theexpansion programme. Earnings attributable to shareholders have decreased to £11.6 million from £18.7million in 2005. Unadjusted earnings per share was 7.2 pence compared with 11.5pence in 2005. Excluding the exceptional charge of £1.0 million, earningsattributable to shareholders were £12.3 million, giving earnings per sharebefore exceptional items of 7.6 pence compared with 8.7 pence in 2005. A final dividend of 3.025 pence per share is proposed. This, together with theinterim dividend of 1.425 pence paid in October, gives a total of 4.45 pence. CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2006 2006 2005 £'000 £'000 Revenue - continuing operations 153,500 152,518 --------- --------- Operating profit - continuing operations 18,284 27,600 Analysed as:Operating profit before exceptional items 19,294 21,256Exceptional items (1,010) 6,344 -------- --------Operating profit 18,284 27,600 Finance income 312 351Finance expense (2,343) (2,165) -------- --------Profit before tax 16,253 25,786Taxation (4,632) (7,091) -------- --------Profit for the year 11,621 18,695 ======== ======== Attributable to:-Equity holders 11,621 18,651Minority interest - 44 -------- -------- 11,621 18,695 ======== ========Earnings per share - basic 7.2p 11.5p - diluted 7.1p 11.4p - before exceptional items 7.6p 8.7p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEfor the year ended 31 December 2006 2006 2005 £000 £000 Cash flow hedges: - net fair value gains, net of tax 209 207 - reclassified and reported in operating profit (281) (318)Actuarial gain/(loss) recognised in the group pensionschemes 11,586 (11,264)Actuarial gain recognised in US post-retirement benefitobligations 109 245Movement in deferred tax on retirement benefitobligations (1,933) 3,432Adoption of IAS 32 and 39 - 200Net exchange adjustments (2,421) 2,747 -------- --------Net income/(expense) recognised directly in equity 7,269 (4,751)Profit for the year 11,621 18,695 -------- --------Total recognised income for the year 18,890 13,944 ======== ======== CONSOLIDATED BALANCE SHEETat 31 December 2006 2006 2005ASSETS £'000 £'000Non-current assets Goodwill 177 177Other intangible assets 1,542 901Property, plant and equipment 106,470 101,357Deferred tax assets 10,573 16,500Other receivables 131 171 --------- --------- 118,893 119,106 --------- ---------Current assetsInventories 19,579 21,056Current tax assets 708 870Trade and other receivables 22,596 20,218Financial assets 159 541Cash and cash equivalents 8,790 11,243 -------- -------- 51,832 53,928 -------- --------LIABILITIESCurrent liabilitiesFinancial liabilities - Borrowings 6,367 895 - Derivative financial instruments 73 132Trade and other payables 19,733 21,450Current tax liabilities 3,345 3,571 -------- -------- 29,518 26,048 -------- --------Net current assets 22,314 27,880 -------- --------Non-current liabilitiesFinancial liabilities - Borrowings 29,402 28,068Deferred tax liabilities 12,168 15,406Retirement benefit obligations 26,325 41,985Other non-current liabilities 138 165 -------- -------- 68,033 85,624 -------- --------Net assets 73,174 61,362 ======== ========EQUITY Capital and reserves attributable to equity holdersOrdinary shares 16,283 16,176Share premium 6,070 5,471Other reserves 48,347 49,681Retained earnings/(losses) 2,474 (9,966) -------- --------Total equity 73,174 61,362 ======== ======== CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2006 2006 2005 £'000 £'000Cash flows from operating activitiesCash generated from operations 22,603 28,521Interest received 316 357Interest paid (2,316) (2,218)Tax paid (5,056) (6,434) --------- ---------Net cash from operating activities 15,547 20,226 --------- ---------Cash flows from investing activitiesPurchase of property, plant and equipment (17,311) (14,962)Proceeds from sale of land - 7,305Proceeds from sale of other property, plant andequipment 86 94Purchase of intangible assets (935) (338)Payments to former minority shareholders of Cutisina.s. (7) (13) --------- --------Net cash used in investing activities (18,167) (7,914) --------- --------Cash flows from financing activitiesIssue of ordinary share capital 706 320Net borrowing/(repayments) under the loan facility 6,746 (7,697)Payments under finance leases (18) (41)Dividends paid to shareholders (7,201) (6,639) -------- ---------Net cash generated from/(used in) financing activities 233 (14,057) -------- ---------Net decrease in cash and cash equivalents (2,387) (1,745)Cash and cash equivalents at beginning of year 11,243 11,010Exchange (losses)/gains on cash and cash equivalents (624) 1,978Cash and cash equivalents 8,790 11,243Bank overdrafts (558) -Net cash and cash equivalents at end of year 8,232 11,243 ======== ======== NOTES TO THE PRELIMINARY ANNOUNCEMENT OF THE FINAL RESULTSfor the year ended 31 December 2006 1. Analysis of net debt 2006 2005 £'000 £'000Cash and cash equivalents 8,790 11,243Bank overdraft (558) -Borrowings less bank overdraft and finance leases (35,211) (28,944) ------- -------- (26,979) (17,701)Finance leases - (19) -------- -------- (26,979) (17,720) ======== ======== 2. Statutory accounts The above financial information does not constitute statutory accounts for theyears ended 31 December 2006 and 31 December 2005. The financial information forthe year ended 31 December 2005 is extracted from the full statutory accountsfor that year which have been delivered to the Registrar of Companies. Thereport of the auditors on these accounts was unqualified and did not contain astatement under either section 237 (2) or section 237 (3) of the Companies Act1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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