Interim Results

CORSIE GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2006 Highlights * Turnover from continuing operations up 7.8% at £1.93m (2005, £1.78m) * Gross profit from continuing operations up 19% at £785,000 (2005, £662,000) * Gross margin up 4% at 41% (2005, 37%) * Launch of E-Commerce platform - www.shopspa.co.uk * Solid platform for growth. CHAIRMAN'S REPORT Introduction I was delighted to be appointed as Chairman of the company in June 2006. This is an exciting and positive time to be involved with the Corsie Group as the opportunities for growth in the Company's markets are significant. The Company is a young company in the early stages of its development and with a supportive shareholder base is actively seeking further profitable routes for expansion both organically and by acquisition. Admission to AIM The Company's admission to AIM in June this year was a major event in the Company's development and will provide both the profile and financial platform for growth. The Corsie Group operates from the UK with customers worldwide and the dynamic young management team is actively seeking new products and distributorships for its worldwide leisure markets. The Group's improved financial base is enabling the management team to consider many new opportunities for expansion. To position the group for anticipated growth, the business is being relocated to a large adjacent property later in the year. Financials Turnover is up 7.8% at £1.93m and gross profit up 19% at £785000. Gross margins have improved from 37% to 41%. The profit in the 6 months to June is a major milestone which we expect to build on during the second half. The Corsie Group is showing steady growth in its continuing business with improved turnover, margins and operating profits. The financial statements for the six month period contain several one off charges associated with the Group's restructuring and Admission to AIM but the underlying growth of the business is soundly based. All divisions of the Group have steady order flows and a series of additional product lines is helping to drive this growth .The introduction of the Group's e commerce facility should add to this trend. As the Company is in the development phase no interim dividend will be paid. Board and Employees The Corsie Group has a small and highly motivated management team many of whom participate in the Group's EMI share option scheme. The Group is attracting young professional talent and with a senior management team who has largely worked together for many years the Group has stability in its management structure. Over the period the business has been streamlined into three operating divisions which have reduced the Group's headcount and operating costs substantially. I should like to express my thanks to the employees of the Group who have worked extremely hard to help bring about the AIM admission and to position the Group for its expansion plans. Outlook The Group is involved in the worldwide leisure market and is identifying many opportunities for growth. Current trading is in line with expectations and with the new found sense of purpose following the placing and admission to AIM. I look forward to the future with confidence. David Mathewson, 3 August 2006 CHIEF EXECUTIVE'S REPORT I am pleased to report a trading improvement during the first half of this financial year. The business performed well in its markets, with turnover, gross margin and profits comfortably ahead of the corresponding period on a like-for-like basis. The decision to focus on 3 key sectors within a distribution based model has been successful. It is our belief that this model offers the best top and bottom line growth going forward. The successful fundraising in June will enable the capacity of our business model to increase by moving to larger premises on the same estate later this year. This will eliminate current space constraints and provide capacity to execute our focussed distribution strategy. We have also increased our Spa sales force and will continue to invest in this particular division in the short term. Greengauge Sports Our Sports Division is the leading bowls distributor in the UK. The division performed well during the period with good demand for current lines. New products have been well received with demand for certain lines outstripping supply. The profile of our products was enhanced further this year through our sponsored players and employees. Alex Marshall, our northern sales manager, lifted a pairs Gold medal at the Commonwealth games in Melbourne and Greg Harlow, our southern sales manager, was crowned World No 1 for the season 2006/ 07. The business continues to lead by design and innovation with new branded products continually being developed in house. Greengauge Surfaces Our surfaces division historically addressed the bowls market only. Our sales continued to grow in line with expectations. Over the past 12 months we have successfully diversified into new markets such as multi-sports surfaces and safety related surfaces, reducing our heavily weighted bowls revenue. This diversification has been successful and we will continue to expand sales within those new markets which offer good growth potential. Overall surfaces delivered a good performance during the period. Overseas activity was strong, with contracts recorded in Malaysia, Australia, New Zealand and Europe. New business wins continue, with some key contracts booked in the second half of this financial year. Spa Solutions The core business is the supply of quality consumables to the Spa market in the UK and Ireland. The division is now gaining momentum following the recruitment of additional sales resources and the arrival of new inventory. We are confident the second half will show a positive step change following our investment in additional resources. New client wins include Sheraton, Ragdale Hall and Pennyhill Park. The spa business is the smallest within the group but has good top and bottom line growth potential which we aim to exploit. Shop Spa www.shopspa.co.uk has been launched today offering luxury Spa and beauty products direct to the consumer. This was a logical extension to expanding our sales channels and increasing revenue accordingly. Richard Corsie, 3 August 2006GROUP UNAUDITED PROFIT AND LOSS ACCOUNT For the six months ended 30 June 2006 Six months Six months Year ended ended ended 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Turnover Continuing 1,925 1,785 3,160 Discontinued 0 433 473 1,925 2,218 3,633 Cost of Sales Continuing 1,140 1,123 2,047 Discontinued 0 267 357 1,140 1,390 2,404 Gross Profit Continuing 785 662 1,113 Discontinued 0 166 116 785 828 1,229 Administration expenses (excluding exceptional items) Continuing 597 449 1,044 Discontinued 0 214 384 Total administration 597 663 1,428 expenses Operating profit/(loss) 188 165 (199) Loss/(profit) on disposal of fixed 1 (2) (874) assets Net interest payable and similar 85 89 335 charges Exceptional items (profit)/ (1,070) 72 0 loss Profit/(loss) on ordinary activities before 1,172 6 340 taxation Tax on profit on ordinary activities 0 0 159 Retained profit/(loss) for the 1,172 6 181 period Earnings per ordinary share Basic earnings per share 0.01 0.13 3.82 Diluted earnings per share 0.01 0.07 2.09 GROUP UNAUDITED BALANCE SHEET As at 30 June 2006 As at As at As at 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Fixed assets Tangible assets 127 126 119 Intangible 345 377 358 assets 472 503 477 Current assets Stocks 597 787 561 Debtors 1,417 648 243 Cash at bank 879 0 1,153 2,893 1,435 1,957 Creditors : amounts falling due within 2,566 2,472 2,641 one year Net current assets/ 327 (1,037) (684) (liabilities) Creditors : amounts falling due after 1,574 2,856 2,780 more than one year Provisions for liabilities and 366 0 366 charges Net assets/(liabilities) (1,141) (3,390) (3,353) Capital and reserves Called up share capital 167 116 116 Share premium account 990 0 0 Other reserves 435 435 435 Profit and loss account (2,733) (3,941) (3,904) Shareholders (1,141) (3,390) (3,353) funds GROUP UNAUDITED CASH FLOW STATEMENT For the six months ended 30 June 2006 Six months Six months Year ended ended ended 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Net cash outflow from operating (343) (59) (63) activities Return on investments and servicing of finance Interest paid 85 89 169 Dividends on shares classed as 0 0 90 liabilities (85) (89) (259) Taxation (36) 0 (60) Capital expenditure Payments to acquire tangible 26 0 9 fixed assets Proceeds from the disposal of tangible (2) 0 (875) fixed assets (24) 0 866 Financing Cash received from issue of shares (net 1,041 0 0 of expenses) 1,041 0 0 Increase in cash in the period 553 (148) 484 Reconciliation of operating profit to net cash outflow from operating activities Operating profit 1,228 63 (199) Depreciation 16 20 31 Amortisation 12 12 34 Gain on sale of fixed 1 0 0 assets (Increase)/Decrease in (36) 44 255 stock (Increase)/Decrease in (1,174) (152) 261 debtors Increase/(Decrease) in (390) (46) (445) creditors Net cash inflow from operating (343) (59) (63) activities Reconciliation of net cash movement to net funds Increase in cash in the 553 (148) 484 period Movement in net funds during the 553 (148) 484 period Net funds at start of (2,134) (2,625) (3,719) the period Net funds at end of the (1,581) (2,773) (3,235) period NOTES TO THE UNAUDITED FINANCIAL STATEMENTS For the six months ended 30 June 2006 1. Basis of preparation The interim financial information does not constitute statutory accounts for the purpose of section 240 of the Companies Act 1985. The figures for the year ended 31 December 2005 have been extracted from the Group accounts for that year. Those financial statements have been delivered to the Registrar of Companies and included an auditors' report, which was unqualified. The interim financial information has been prepared using the same accounting policies and estimation techniques as set out in the Group accounts for the year ended 31 December 2005. 2. First period of trading The Company, which was incorporated on 28 February 2006, did not trade until 5 June 2006, following the acquisition of Company 91 Limited (formerly Corsie Group Limited). From this date until 30 June 2006, the following financial information is available: Period 5-Jun to 30-Jun 2006 (Unaudited) £'000 Turnover 260 Gross Profit 108 Retained profit for the period (including 1023 exceptionals) 3. Earnings per share Basic and diluted earnings per ordinary share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period. For the first reporting period to 30 June 2006, the shares on issue at flotation were treated as if they had been in issue for the whole financial year. Profit for Weighted Earnings average the period per number of share £000 shares £ Year to 31 December 181 47,332 3.82 2005 Period to 30 June 2005 6 47,332 0.13 Period to 30 June 2006 1172 86,228,499 0.01 If all outstanding share options were exercised in full there would be a dilution of EPS as defined in FRS 14 as shown below: Profit for Weighted Dilutive Diluted average the period ordinary earnings number of per share £000 shares shares £ Year to 31 December 181 47,332 39,277 2.09 2005 Period to 30 June 2005 6 47,332 39,277 0.07 Period to 30 June 2006 1172 86,228,499 510,856 0.01 4. Reconciliation of movement in shareholders' funds 5. Six months ended 30-Jun 2006 (Unaudited) £'000 Profit for the 1,172 financial year Share premium on shares issued 1,522 Costs of shares issue (482) Net addition to shareholders' 2,212 equity deficit Opening shareholders' equity (3,353) deficit Closing shareholders' equity (1,141) deficit 5. Restated comparatives The interim statements of the Group have been prepared using merger accounting. This represents a change in approach from that adopted in our consolidated accounts for the year ended 31 December 2005, which were prepared under acquisition accounting. Although it is the Group's preference to report the results on a consistent basis, we have adopted this approach to reflect current accounting treatment for group reorganisations. The audited financial statements for the year ended 31 December 2005 and the unaudited six months ended 30 June 2005, have been restated using merger accounting. 6. Availability of accounts Copies of the interim statement are available from the registered office of the Company during office hours, at Newhailes Industrial Estate, Musselburgh, East Lothian EH21 6SY.

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