Interim Results

RNS Number : 8168W

Aukett Fitzroy Robinson Group PLC

17 June 2008

 



Embargoed until 7am on Tuesday 17 June 2008

Aukett Fitzroy Robinson Group Plc

Interim Results

for the six months ended 31 March 2008

Aukett Fitzroy Robinson Group Plc, the international practice of architects and interior design specialists, with offices in London, Bristol,Southampton, Abu Dhabi, Berlin, Bogota, Bratislava, Frankfurt, Prague, Moscow & Warsaw, announces its interim results for the six months ended 31 March 2008.

Key points

• Revenue increase to £11.3m (2007: £9.4m) a rise of 19.7%.

• Profit before tax of £1.2m (2007: 1.3m) with profits from Russia and Continental Europe up by 52% and 45% respectively.

• Operating margins down two percentage points to 14.2% due to delays on UK projects and resource investment in new Middle East projects.

• Solid financial position with net funds of £1.7m.

• Interim dividend of 0.10 pence per share to be paid in July 2008. The record and payment dates will be notified shortly.

• Strong UK and overseas order book, with UK secured revenues for the next financial year being 11% higher now, than at the same time last year.

• Continuation of strategy to reduce exposure to UK property market through development of Moscow and Abu Dhabi hubs.

Nicholas Thompson, Chief Executive Officer of Aukett Fitzroy Robinson commented:

'Whilst the more difficult climate in the UK makes forecasting increasingly complex we are particularly pleased that our revenues continue to grow, especially in those markets that we have been investing in for some time. We therefore expect full year results to show an improvement over last year in both revenue and profit.'

Enquiries

Aukett Fitzroy Robinson - 020 7636 8033

Nicholas Thompson, Chief Executive Officer

Duncan Harper, Group Finance Director

www.aukettfitzroyrobinson.com

[e-mail]

FinnCap - 020 7600 1658

Sam Smith

Clive Carver

Adventis Financial PR - 020 7034 4759

Chris Steele

Tarquin Edwards

  Interim statement

Overview

The group's financial performance in the first six months of the year produced a profit before tax of £1,182,000 (2007: £1,335,000). 

At revenue level all geographical sectors have experienced growth: particularly Russia at 141% and Continental Europe at 19%. UK revenue grew at a more modest 7% with a lower profit level as a direct result of a lengthening of project programmes and planning permission delays on a number of major projects.

Summary of results

Revenues for the six months increased to £11,277,000 (2007: £9,423,000), an increase of 19.7% primarily due to an increase in pass through sub consultant income of £1,810,000.

Operating profit was £1,193,000 (2007: £1,364,000). After accounting for our share of joint venture losses of £13,000 (2007: profits of £23,000), net interest receivable of £2,000 (2007: payable of £52,000) and taxation of £380,000 (2007: £413,000) retained profit for the period was £802,000 (2007: £922,000).

International Financial Reporting Standards

These interim results have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the European Union.

Although there been significant changes in presentation, the overall impact on the reported numbers has been relatively small with adjustments only required in respect of goodwill amortisation, staff holiday entitlement and deferred tax on overseas unremitted earnings.

Operations

Group cashflow has maintained the improvement from last year with net funds standing at £1,652,000 (2007: £463,000).

Revenue from UK operations, which comprise 73% of group income, rose during the period principally due to an increase in non-UK destination revenues from our new operation in the Middle East. We have been successful with our short term strategy to offset the decline in UK property market opportunities by moving into oil-based growth economies. New hotel projects in the Middle East, covering some 2,200 hotel rooms, have contributed £858,000 to UK revenues during the period.

The UK continues to have a strong order book, with secured revenues for the next financial year being 11% higher now, than at the same time last year. However, there is a clear level of volatility appearing in client decision-making which necessitates a more rigorous operational model to be used to ensure our limited staff resources are used most effectively. The operational model of the UK management team has been reorganised to ensure that this matter is addressed as we move forward

Internationally, Russia continues to grow in scale and now contributes 17% to group revenues and 22% of profits. We are now seeing a shift in development to the periphery of Moscow and Russia's regional cities resulting in a greater variety of project opportunities. 

Continental Europe contributed 10% to group revenues and 20% to profits. Within this geographical area the Czech operation has continued the improvement seen last year with only Poland continuing to show a decline in revenues and incurring further losses. Action has been taken at local management level to mitigate the ongoing position which should breakeven in the second half. 

  Corporate outlook

Of our two key group financial objectives: to double turnover to £25m by 2010 and raise net profit margins, we have maintained progress on the first of these albeit the underlying position is less visible due to the increased proportion of pass through income. Pass through sub consultant income is a feature of non-UK destination projects and is therefore a good indicator of our success in winning more overseas commissions. Operating margins, excluding pass through sub consultant income, have fallen slightly reflecting a change in UK market conditions.

Historically, our international income (of non-UK origin) has been around 25% of turnover. We are now seeking to maintain our top line income objective but move our income aspirations to the more buoyant property markets of the UAE and former CIS states thereby reducing our exposure to the UK property market and generating more project opportunities for our international network of offices in the forthcoming period. We see the UK as remaining broadly static over the next six to eighteen months.

With our organic growth prospects of achieving our long term income objective of £25m beginning to materialise management attention will commence a more strategic review of opportunities to grow the business by non-organic means. Smaller scale acquisitions can be financed from existing funds but any significant merger or acquisition would require new funds.

People

Following our year end announcement, Gerry Deighton retired as both Chairman and as a Director on 1st May 2008 and has taken up the position of President for a term of two years. Gerry has been an excellent steward of the group's affairs in his term as Chairman. 

Tim Hodgson a Group Director in the executive team of DTZ Holdings Plc and its former Group Chief Operating Officer has accepted the role of non-executive Chairman. Tim joins us with a wealth of experience in growing an international property-based consultancy business by both organic and non-organic means.

Dividends

In 2007 we made a single dividend payment of 0.2 pence per share. In line with our new policy of regular and progressive dividend distributions an interim dividend of 0.1 pence per share will be paid in July 2008. A final, higher, dividend payment is expected after the year end. 

Prospects 

Whilst there have been changes in market conditions, particularly in the UK, these changes were anticipated and strategies to extend our network of operations principally in Abu Dhabi have been advancing well.  

The Group maintains a strong liquid asset position and can therefore manage both changes to market conditions and consider limited expansion within existing working capital facilities.

We see the second half as being more challenging than the first, principally because of the move to establish a larger ratio of non-UK destination income to direct UK income.  

Whilst the more difficult climate in the UK makes forecasting increasingly complex we are particularly pleased that our revenues continue to grow, especially in those markets that we have been investing in for some time. We therefore expect full year results to show an improvement over last year in both revenue and profit.  

Aukett Fitzroy Robinson Group Plc

14 Devonshire Street

London, W1G 7AE

17 June 2008

  Independent review report to

Aukett Fitzroy Robinson Group Plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the interim report for the six months ended 31 March 2008 which comprises the consolidated income statement, consolidated statement of recognised income and expense, consolidated balance sheet, consolidated cash flow statement, and the related explanatory notes 1 to 10. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report, including the conclusion, has been prepared for and only for the company for the purpose of meeting the requirements of the AIM Rules for Companies and for no other purpose. We do not, therefore, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Directors' responsibilities

The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing and presenting the interim report in accordance with the AIM Rules for Companies.

As disclosed in note 1, the annual financial statements of the group will be prepared in accordance with International Financial Reporting Standards and International Financial Reporting Interpretations Committee ('IFRIC') pronouncements as adopted by the European Union. The condensed set of financial statements included in this interim report has been prepared in accordance with the measurement and recognition criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee ('IFRIC') pronouncements, as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

  Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the six months ended 31 March 2008 is not prepared, in all material respects, in accordance with the measurement and recognition criteria of International Financial Reporting Standards and International Financial Reporting Interpretations Committee ('IFRIC') pronouncements as adopted by the European Union, and the AIM Rules for Companies.

Baker Tilly UK Audit LLP

Chartered Accountants

2 Bloomsbury Street

London, WC1B 3ST

17 June 2008

  Consolidated income statement

For the six months ended 31 March 2008

Continuing operations	Note	Unaudited six months  to 31 March 2008 £’000	Unaudited six months to 31 March 2007* £’000	Unaudited year to 30 September 2007* £’000
Revenue		11,277	9,423	19,748
Sub consultant costs		(2,868)	(1,058)	(2,238)
Revenue less sub consultant costs		8,409	8,365	17,510
Staff costs		(4,407)	(4,091)	(8,711)
Depreciation expense		(106)	(107)	(275)
Other operating charges		(2,747)	(2,874)	(6,236)
Other operating income		44	71	105
Operating profit		1,193	1,364	2,393
Finance income		40	7	55
Finance costs		(38)	(59)	(109)
Profit after finance costs		1,195	1,312	2,339
Share of results of associate & joint ventures		(13)	23	49
Profit before income tax		1,182	1,335	2,388
Income tax expense		(380)	(413)	(817)
Profit for the period		802	922	1,571
Earnings per share
- Basic	3	0.55p	0.64p	1.08p
- Diluted	3	0.55p	0.63p	1.08p
Dividends per share	4	-	-	0.20p

* Restated in accordance with IFRS

All of the profit for the period is attributable to equity holders of the parent.

Consolidated statement of recognised income and expense

For the six months ended 31 March 2008

		Unaudited six months  to 31 March 2008 £’000	Unaudited six months to 31 March 2007* £’000	Unaudited year to 30 September 2007* £’000
Currency translation differences		85	38	40
Net income recognised directly in equity		85	38	40
Profit for the period		802	922	1,571
Total recognised income for the period		887	960	1,611

* Restated in accordance with IFRS

Consolidated balance sheet

At 31 March 2008

	Note	Unaudited As at 31 March  2008 £’000	Unaudited As at 31 March 2007* £’000	Unaudited As at 30 September 2007* £’000
Non current assets
Goodwill		1,596	1,596	1,596
Property, plant & equipment		246	256	275
Investments in associate & joint ventures		50	36	60
Deferred tax		174	115	175
Total non current assets		2,066	2,003	2,106
Current assets
Trade and other receivables		9,349	8,104	8,041
Cash and cash equivalents	6	2,740	1,873	2,819
Total current assets		12,089	9,977	10,860
Total assets		14,155	11,980	12,966
Current liabilities
Trade and other payables		(6,916)	(6,214)	(6,887)
Current tax		(1,023)	(388)	(713)
Short term borrowings	6	(150)	(323)	(150)
Total current liabilities		(8,089)	(6,925)	(7,750)
Non current liabilities
Long term borrowings	6	(938)	(1,087)	(975)
Total non current liabilities		(938)	(1,087)	(975)
Total liabilities		(9,027)	(8,012)	(8,725)
Net assets		5,128	3,968	4,241
Capital and reserves
Share capital	7	1,456	1,456	1,456
Share premium account	7	-	1,498	-
Merger reserve	7	-	1,542	-
Foreign currency translation reserve	7	125	38	40
Retained earnings	7	799	(566)	(3)
Other distributable reserve	7	2,748	-	2,748
Total equity	7	5,128	3,968	4,241

* Restated in accordance with IFRS

All of the capital and reserves are attributable to equity holders of the parent.

Consolidated cash flow statement

For the six months ended 31 March 2008

	Note	Unaudited six months  to 31 March 2008 £’000	Unaudited six months to 31 March 2007* £’000	Unaudited year to 30 September 2007* £’000
Cash flows from operating activities
Cash generated from operations	5	7	771	2,637
Interest paid		(39)	(59)	(112)
Income taxes paid		(102)	(68)	(192)
Net cash from operating activities		(134)	644	2,333
Cash flows from investing activities
Purchase of property, plant & equipment		(77)	(42)	(228)
Interest received		44	7	26
Net cash used in investing activities		(33)	(35)	(202)
Cash flows from financing activities
Proceeds from issue of share capital		-	34	34
Repayment of borrowings		(37)	(111)	(387)
Payment of finance lease liabilities		-	-	(9)
Dividends paid		-	-	(291)
Net cash used in financing activities		(37)	(77)	(653)
Net change in cash & cash equivalents		(204)	532	1,478
Cash & cash equivalents at start of period		2,819	1,341	1,341
Currency translation differences		125	-	-
Cash & cash equivalents at end of period	6	2,740	1,873	2,819

* Reclassified in accordance with IFRS

  Notes to the interim results

1    Basis of preparation

The financial information presented in this interim report has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the EU that are expected to be applicable to the financial statements for the year ending 30 September 2008 and on the basis of the accounting policies expected to be used in those financial statements. The significant accounting policies of the group are set out below.

Comparative figures

The comparative figures shown for the six months ended 31 March 2007 and the year ended 30 September 2007 have been adjusted from those originally published to reflect the transition from UK GAAP to IFRS as explained in note 8.

Basis of consolidation

The interim condensed consolidated financial statements incorporate those of the company and its subsidiaries. The interim consolidated financial statements also include the group's share of the results and reserves of its joint ventures and associates. Where the group exercises control over the investment jointly with another party it is classified as a joint venture. Other investments where the group exercises significant influence are classified as associates. Both associates and joint ventures are accounting for using the equity method.

Goodwill

Goodwill arising on acquisitions represents the excess of the fair value of the consideration given and associated costs over the fair value of the identifiable assets and liabilities acquired.

Goodwill is tested annually for impairment and an impairment loss would be recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Foreign currency

Transactions in currencies other than the functional currency of each operation are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Gains and losses arising on retranslation are included in the income statement for the period.

On consolidation, the assets and liabilities of the group's overseas operations are translated at exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognised directly in equity and transferred to the group's foreign currency translation reserve. If an overseas operation is disposed of then the cumulative translation differences are recognised as income or as an expense in the period disposal occurs.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate. The group has elected to treat goodwill and fair value adjustments arising on acquisitions before the date of transition to IFRS as sterling denominated assets and liabilities.

Revenue recognition

Revenue represents the value of services performed for customers under contract (excluding value added taxes). Contracts are assessed on an individual basis with revenue being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contracts and the proportion of total time expected to be required to undertake the contracts which had been performed at the balance sheet date.

The amount by which revenue exceeds progress billings is classified as amounts due from customers for contract work and included in trade and other receivables. To the extent progress billings exceeds relevant revenue, the excess is classified as amounts due to customers for contract work within trade and other payables.

Revenue is only recognised when there is a contractual right to consideration and any revenue earned can be reliably measured. Variations in contract work, claims and incentive payments are only recognised when it is probable they will result in revenue and they are capable of being reliably measured.

Post retirement benefits

Costs in respect of defined contribution type pension arrangements are charged to the income statement on an accruals basis in line with the amounts payable in respect of the accounting period. The group has no defined benefit type pension arrangements.

Property, plant & equipment

Depreciation of property, plant & equipment is calculated so as to write off the cost of acquisition over the expected useful economic lives using the straight line method and over the following number of years:

Leasehold improvements - Unexpired term of lease

Office furniture - 4 years

Office equipment - 4 years

Computer equipment - 2 years

Leased assets are depreciated over the shorter of the useful economic lives shown above and the period to the end of the lease.

Leases

Where lease arrangements result in substantially all the risks and rewards of ownership resting with the group, the arrangement is treated as a finance lease with the assets included in the balance sheet at cost less accumulated depreciation, and the present value of future payments is shown as a liability. The interest element of these arrangements is charged to the income statement over the period of the arrangement in proportion to the balance of capital payments outstanding.

All other lease arrangements are treated as operating leases and the annual rentals are charged to income statement on a straight line basis over the lease term.

Where a rent free period is received in respect of a property lease the incentive is considered an integral part of the agreement, and the cost of the lease net of the incentive is charged to the income statement on a straight line basis over the lease term.

Deferred taxation

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statements.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date, and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax liabilities are recognised in respect of the unremitted earnings of overseas operations where they are expected to be remitted to the UK in the foreseeable future or remittance cannot be controlled by the group.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Share-based payments

The fair value at the date of grant of providing new share-based payments to employees is charged to the income statement over the vesting period of the related share options. The value of the charge may be adjusted to reflect expected and actual levels of vesting. 

Advantage has been taken of the exemption available in IFRS 2: Share-based payment to exclude share options which were granted before 7th November 2002 and had vested by 1st October 2006. For such options, where the market price of the shares at the date of grant is higher than the exercise price, the difference is charged to the income statement over the period the shares are vested with a corresponding credit to reserves.

Employee share ownership plan

The group operates an Employee Share Ownership Plan trust and has de facto control of any shares held by the trust and bears their benefits and risks. The group records certain assets and liabilities of the trust as its own. Finance costs and administrative expenses are charged as they accrue. Consideration paid by the ESOP trust for shares of the company is deducted in arriving at shareholders' funds.

2    Segmental reporting

The group's operations currently comprise a single business segment and three separately reportable geographical segments. Geographical segments are based on the location of service delivery operations. Group level activities (such as finance and marketing) are integrated within the UK operations and hence their costs are reported within the UK segment. The group's associate and joint ventures are all based in Continental Europe.

Segment revenue		Six months  to 31 March 2008 £’000	Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
UK		8,228	7,655	15,976
Continental Europe		1,175	990	2,108
Russia		1,874	778	1,664
Total revenue		11,277	9,423	19,748

Segment result		Six months  to 31 March 2008 £’000	Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
UK		694	1,028	1,761
Continental Europe		235	162	344
Russia		264	174	288
Total operating profit		1,193	1,364	2,393
Net finance income / (costs)		2	(52)	(54)
Share of results of associate & joint ventures		(13)	23	49
Profit before income tax		1,182	1,335	2,388

Segment assets		As at 31 March 2008 £’000	As at 31 March 2007 £’000	As at 30 September 2007 £’000
UK		11,713	9,962	10,600
Continental Europe		1,482	1,298	1,440
Russia		910	684	866
Total assets excluding associate & joint ventures		14,105	11,944	12,906
Investments in associate & joint ventures		50	36	60
Total assets		14,155	11,980	12,966

3    Earnings per share

The calculations of basic and diluted earnings per share are based on the following data:

Earnings		Six months  to 31 March 2008 £’000	Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
Profit for the period		802	922	1,571

Number of shares		Six months  to 31 March 2008 ‘000	Six months to 31 March 2007 ’000	Year to 30 September 2007 ’000
Weighted average number of shares		145,619	145,077	145,364
Effect of dilutive options		-	377	179
Diluted weighted average number of shares		145,619	145,454	145,543

4    Dividends

		Six months  to 31 March 2008 £’000	Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
Interim dividend of 0.2 pence per share		-	-	291

5          Reconciliation of profit before income tax to net cash generated from operations

		Six months  to 31 March 2008 £’000	Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
Profit before income tax		1,182	1,335	2,388
Finance income		(40)	(7)	(55)
Finance costs		38	59	109
Share of results of associate & joint ventures		13	(23)	(49)
Depreciation		106	107	275
Change in trade & other receivables		(1,268)	(1,731)	(1,781)
Change in trade & other payables		(24)	1,031	1,750
Net cash generated from operations		7	771	2,637

6    Analysis of net funds

		As at 31 March  2008 £’000	As at 31 March 2007 £’000	As at 30 September 2007 £’000
Cash and cash equivalents		2,740	1,873	2,819
Bank loans		(1,088)	(1,237)	(1,125)
Loan notes		-	(164)	-
Finance lease obligations		-	(9)	-
Net funds		1,652	463	1,694

7    Consolidated statement of changes in equity

For the six months ended 31 March 2008

	Share capital £’000	Share premium £’000	Merger reserve £’000	ESOP share reserve £’000	Foreign currency transl- ation reserve £’000	Retained earnings £’000	Other distribu- table reserve £’000	Total £’000
At 1 October 2007	1,456	-	-	-	40	(3)	2,748	4,241
Profit for the period	-	-	-	-	-	802	-	802
Currency translation differences	-	-	-	-	85	-	-	85
At 31 March 2008	1,456	-	-	-	125	799	2,748	5,128

For the six months ended 31 March 2007

	Share capital £’000	Share premium £’000	Merger reserve £’000	ESOP share reserve £’000	Foreign currency transl- ation reserve £’000	Retained earnings £’000	Other distribu- table reserve £’000	Total £’000
At 1 October 2006	1,448	1,385	1,542	-	-	(1,488)	-	2,887
Profit for the period	-	-	-	-	-	922	-	922
Currency translation differences	-	-	-	-	38	-	-	38
Issue of new shares	8	113	-	-	-	-	-	121
At 31 March 2007	1,456	1,498	1,542	-	38	(566)	-	3,968

 For the year ended 30 September 2007

	Share capital £’000	Share premium £’000	Merger reserve £’000	ESOP share reserve £’000	Foreign currency transl- ation reserve £’000	Retained earnings £’000	Other distribu- table reserve £’000	Total £’000
At 1 October 2006	1,448	1,385	1,542	-	-	(1,488)	-	2,887
Profit for the period	-	-	-	-	-	1,571	-	1,571
Currency translation differences	-	-	-	-	40	-	-	40
Issue of new shares	8	112	-	(120)	-	-	-	-
Share options  exercised	-	-	-	120	-	(86)	-	34
Capital reduction	-	(1,497)	(1,542)	-	-	-	3,039	-
Dividends paid	-	-	-	-	-	-	(291)	(291)
At 30 September 2007	1,456	-	-	-	40	(3)	2,748	4,241

8    Transition to IFRS

The date of transition from UK GAAP to IFRS was 1 October 2006.

In the transition from UK GAAP to IFRS advantage has been taken of the following two exemptions contained in IFRS 1: First-time adoption of international financial reporting standards:

• Business combinations - Business combinations which occurred before the date of transition have not been accounted for in accordance with IFRS 3: Business combinations; and

• Currency translation differences - Currency translation differences arising prior to the date of conversion remain subsumed within retained earnings.

In the transition from UK GAAP to IFRS presentation and disclosure adjustments have been required in the following areas:

• Associates and joint ventures - Under IFRS the group's share of profit after tax is shown as a single line on the face of the income statement whereas under UK GAAP the group's share of operating profit, finance costs and taxation where shown separately under the relevant headings;

• Deferred taxation - Under IFRS deferred tax balances are treated as non current assets whereas under UK GAAP they are treated as current assets;

• Cash flow statement - An IFRS cash flow statement has only three major categories and therefore headings in the previous UK GAAP cash flow have been reclassified; and

• Foreign currency translation reserve - Under UK GAAP foreign currency translation differences were subsumed within retained earnings whereas under IFRS they are required to be segregated in a separate reserve.

In the transition from UK GAAP to IFRS measurement and recognition adjustments have been required in the following three areas:

• Goodwill amortisation reversal - Under UK GAAP goodwill with a finite life is required to be amortised over its useful economic life but under IFRS goodwill is not amortised;

• Staff holiday entitlement accrual - Under IFRS the value of holiday entitlements earned by members of staff but not yet taken must be recognised as a liability; and

• Tax on unremitted overseas earnings - Under IFRS deferred income tax liabilities are recognised in respect of the unremitted earnings of overseas operations where they are expected to be remitted to the UK in the foreseeable future.

Reconciliation of total equity

		As at 31 March 2007 £’000	As at 30 September 2007 £’000	As at 1 October 2006 £’000
Goodwill amortisation reversal		25	51	-
Staff holiday entitlement accrual		(22)	(86)	(79)
Tax on unremitted overseas earnings		(9)	(10)	-
Total transition adjustments		(6)	(45)	(79)
Reported under UK GAAP		3,974	4,286	2,966
Reported under IFRS		3,968	4,241	2,887

Reconciliation of profit for the period

			Six months to 31 March 2007 £’000	Year to 30 September 2007 £’000
Goodwill amortisation reversal			25	51
Staff holiday entitlement accrual			57	(7)
Tax on unremitted overseas earnings			(9)	(10)
Total transition adjustments			73	34
Reported under UK GAAP			849	1,537
Reported under IFRS			922	1,571

9    Status of interim results

The interim results cover the six months ended 31 March 2008 and were approved by the board of directors on 17 June 2008. The interim results are unaudited but have been reviewed by the auditors in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.

The interim condensed set of consolidated financial statements in the interim report are not statutory accounts as defined by Section 240 of the Companies Act 1985.

The statutory accounts for the year ended 30 September 2007, which were prepared in accordance with UK GAAP, have been reported on by the group's auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Sections 237(2) or (3) of the Companies Act 1985.

10    Further information

Copies of the interim report will be dispatched to holders of 10,000 or more shares in due course. Copies will also be available on the company's website (www.aukettfitzroyrobinson.com) and from the registered office of the company (14 Devonshire Street, London, W1G 7AE).

 

END

 

 

IR ZQLFFVQBXBBD