Interim Results
Carclo plc
05 December 2006
Carclo plc
('Carclo')
Interim Results for the six months ended 30 September 2006
Key Points
• Profit before tax doubled to £1.7 million (2005 - £0.8 million).
• Operating margins in Technical Plastics more than doubled, benefiting
from cost reduction programmes and the continued focus on medical and
specialist markets.
• Net debt is below the £20 million target and will reduce further with
planned property disposals in the second half of the year. This will allow
us to increase investment in new technologies and growth opportunities.
• CIT have successfully printed directly onto the surface of silicon
wafers opening up the exciting new fields of solar-power cells and
microelectronics.
• Successful disposal of the automotive control cables business completed.
Commenting on the results, Christopher Ross, chairman, said:
'Our recovery is on plan. Profits and margins in Technical Plastics are
improving as the business mix shifts towards medical markets and as our global
operations return to growth.
Our investment in new technologies is delivering new business opportunities
which should contribute to top line growth.
Finally, our much improved balance sheet and higher than expected proceeds from
property disposals are allowing us to increase investment in attractive areas of
growth such as medical diagnostics.
The board is confident of continuing this progress into the second half of this
year and the next financial year.'
-ends-
For further information please contact:
Carclo plc
Ian Williamson, Chief Executive On 5 December 2006: 020 7067 0700
Robert Brooksbank, Finance Director Thereafter: 01924 268040
Weber Shandwick/Square Mile
Richard Hews 020 7067 0700
James White
A presentation for analysts will be held at 9.30 am at the offices of Weber
Shandwick Square Mile, Fox Court, 14 Gray's Inn Road, London WC1X 8WS
Notes to editors
• Carclo plc is a global supplier of technical plastic components. It is a
public company whose shares are quoted on the London Stock Exchange.
• 70% of sales are derived from the supply of fine tolerance, injection
moulded plastic components, which are used in medical, automotive, telecom
and electronics products. This business, Carclo Technical Plastics, operates
internationally in a fast growing and dynamic market underpinned by rapid
technological development.
• 30% of sales are derived from the supply of manufactured systems to the
automotive and aerospace industries.
• Carclo's strategy is to grow rapidly in low cost manufacturing regions
and to develop new technologies and products to underpin future growth.
CHAIRMAN'S STATEMENT
Overview
The six months to 30 September 2006 was an encouraging period for the group with
improved profitability, a better and more stable mix of business, good cash
generation and promising developments in new technologies. Profit before tax
more than doubled to £1.7 million (2005 - £0.8 million). Growth in medical and
specialist markets, together with a cost reduction programme, helped the
Technical Plastics division to more than double its operating margins. As
expected, sales and margins in Precision Products were below the prior period
due to reduced volumes in specialist lighting.
The disposal of Gills Cables in May 2006 helped to reduce net debt by nearly
£2.0 million to £18.8 million.
The board has declared an unchanged interim dividend of 0.4 pence per share. The
dividend will be paid on 10 April 2007 to shareholders on the register on 2
March 2007. The shares will be traded excluding the right to the dividend from
28 February 2007.
Financial position
Net debt at 30 September 2006 was £18.8 million, a reduction of £2.0 million
since the start of the financial year. This represents gearing on assets,
excluding the net pension deficit, of 42.6% (2005 - 49.2%). The group benefited
from the receipt of £1.2 million, net of costs, on the disposal of CTP Gills
Cables and the 50% holding in the associated Indian joint venture, completion of
which was approved by shareholders on 11 May 2006. In addition, as expected,
£0.6 million deferred consideration was received from last year's disposal of
ECC Card Clothing.
We expect group debt to reduce further in the second half of the year due to the
significant disposal proceeds from the planned sale of three surplus properties
which have a carrying value of £3.5 million. As recently announced, we have
already entered into contracts for the disposal of two of these properties which
will generate around £6.0 million of cash income by the year end.
Operating review
Technical Plastics
The Technical Plastics division increased its underlying operating profits by
129% to £1.6 million (2005 - £0.7 million) on a similar level of turnover to the
prior period. The increase in margins (from 2.5% to 5.7%) confirms our strategy
of concentrating on medical and specialist markets and growing our operations in
low cost regions, particularly China and the Czech Republic. We continue to
reduce costs in mature markets such as the UK and the USA, but the pace of this
cost reduction is now slowing. During the period we commenced the closure of a
small moulding plant in the UK which resulted in an exceptional cost of £0.1
million. The closure will be completed early in the second half of the financial
year.
The rate of new business awards in the first half has been good and we are now
planning some modest increases in capacity with an extension to our China
facility, increased medical and clean room capacity in the USA and a new
facility in India.
Precision Products
The Precision Products division delivered underlying operating profits of £1.0
million (2005 - £1.4 million) on sales down 9.8% at £10.0 million.
The division's performance was impacted by an expected downturn in specialist
lighting products which are fitted on the latest generation of super cars. In
automotive, we also experienced a swing in demand for antenna products away from
higher contribution multiband antennas. We have responded by reducing the cost
base of the automotive business to match current demand.
Our precision engineering business delivered another excellent performance with
profits ahead of the prior period.
Conductive Inkjet Technology ('CIT')
Progress at Conductive Inkjet Technology has been good, and the emphasis of the
business has now moved toward the commercialisation of the technology for Radio
Frequency Identification ('RFID') and sensor applications. The technical
programme to develop the MetalJet 6000 print line is close to completion and
discussions are well advanced with a launch customer. We are now undertaking
industrial scale trials of printed RFID antennas and other sensor devices and
have a number of advanced enquiries for the MetalJet range.
This month, Carclo Technical Plastics commences production of sensors for a
global electronics customer using the CIT process. A second contract, using the
same production facility, for an innovative medical sensor is in the final
stages of testing.
CIT is leading a consortium, including Cambridge Display Technology Limited
('CDT'), to produce very fine conductive tracks for solid state displays. The
project is making excellent progress and was the subject of a recent press
release by CDT which can be accessed via the Carclo web site www.carclo-plc.com.
The universe of CIT applications continues to grow. We have now successfully
printed directly onto the surface of silicon wafers opening up an exciting new
field of potential application in solar-power cells and microelectronics.
We continue to examine ways to maximise the value to shareholders from our
investment in CIT. One option is to spin off CIT as a stand alone company listed
on AIM. We have reviewed this and other options with our advisers, major
shareholders and our partner in CIT and have decided that an early spin off
would not be in the interests of Carclo shareholders at this stage. In our view
CIT will eventually benefit from standing alone as a science based company, but
we are confident that it will command a higher value as the commercial success
of the technology broadens.
Innovation
We continue to invest in new process technologies which help us to add value to
our customers' products. Two developments, which we have reported on in the
past, are planned to enter production in the coming six months. The soluble
capsule application, developed jointly with Stanelco plc, is being commercially
developed with Agrimin Limited to deliver drugs in veterinary applications. We
are discussing other innovative applications of this technology with a range of
customers. Our ink jet optical hard coating technology will also enter
production in a high volume automotive application. These successful
developments add to our confidence in the future growth prospects of the group.
Financial strategy
The group's term loan facilities are secured by way of charges over some of the
group's assets. These charges fall away if certain financial criteria are
achieved in two consecutive reporting periods. We anticipate that the release
criteria will be achieved by March 2007 and we have therefore started the
process of negotiating replacement facilities.
We have also initiated discussions with the trustees of our pension schemes to
agree a long term pension funding plan for the schemes. As part of these
discussions, we have brought forward the triennial valuation of the larger
scheme to 31 March 2006. We hope to gain the agreement of all parties to a long
term funding solution which would permit the board to recommend a dividend more
consistent with underlying earnings.
Property disposals in our second half are set to generate more cash than we had
budgeted and we are therefore examining new investment opportunities to further
accelerate our growth in medical and diagnostic markets. These opportunities are
focussed on business sectors using our existing skills and capacity in medical
moulding and in surface treatments.
Outlook
Our recovery is on plan. Profits and margins in Technical Plastics are improving
as the business mix shifts towards medical markets and as our global operations
return to growth.
Our investment in new technologies is delivering new business opportunities
which should contribute to top line growth.
Finally, our much improved balance sheet and higher than expected proceeds from
property disposals are allowing us to increase investment in attractive areas of
growth such as medical diagnostics.
The board is confident of continuing this progress into the second half of this
year and the next financial year.
Christopher Ross
5 December 2006
Unaudited consolidated income statement
Six months Six months Year ended
ended ended 30 March 2006
30 September 30 September
2006 2005
_________________________________________________________________________________________
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
£000 £000 £000 £000 £000 £000 £000
___________________________________________________________________________________________________________________
Revenue 37,731 1,025 38,756 38,536 6,711 45,247 88,006
___________________________________________________________________________________________________________________
Underlying operating
profit
Operating profit before
exceptional costs 2,148 84 2,232 1,700 228 1,928 5,020
- rationalisation costs (291) (62) (353) (150) (463) (613) (964)
- exceptional bad debts - - - (125) - (125) (375)
After exceptional costs 1,857 22 1,879 1,425 (235) 1,190 3,681
___________________________________________________________________________________________________________________
Operating profit / (loss) 1,857 22 1,879 1,425 (235) 1,190 3,681
Site closure costs (77) - (77) - - - (869)
Loss on sale of
properties - - - - - - (237)
_________________________________________________________________________________________
Profit / (loss) before
financing costs 1,780 22 1,802 1,425 (235) 1,190 2,575
Finance revenue 194 7 201 300 3 303 383
Finance expense (856) - (856) (971) (40) (1,011) (1,778)
Other finance revenue
- retirement benefits 4,999 - 4,999 4,548 - 4,548 9,041
Other finance expense
- retirement benefits (4,433) - (4,433) (4,257) - (4,257) (8,522)
_________________________________________________________________________________________
Profit / (loss) before
tax 1,684 29 1,713 1,045 (272) 773 1,699
Income tax expense (169) (2) (171) - - - -
_________________________________________________________________________________________
Profit / (loss) after
tax but before gain /
(loss) on discontinued
operations 1,515 27 1,542 1,045 (272) 773 1,699
Gain / (loss) on
disposal of discontinued
operations, net of tax - 529 529 - (947) (947) (1,082)
_________________________________________________________________________________________
Profit / (loss) for the
period 1,515 556 2,071 1,045 (1,219) (174) 617
_________________________________________________________________________________________
_________________________________________________________________________________________
Attributable to:
Equity holders of the
parent 1,553 556 2,109 1,053 (1,219) (166) 652
Minority interest (38) - (38) (8) - (8) (35)
_________________________________________________________________________________________
Profit / (loss) for the
period 1,515 556 2,071 1,045 (1,219) (174) 617
_________________________________________________________________________________________
_________________________________________________________________________________________
Earnings per ordinary
share
Basic 2.8 p 1.0 p 3.8 p 1.9 p (2.2) p (0.3) p 1.2 p
Diluted 2.8 p 1.0 p 3.8 p 1.9 p (2.2) p (0.3) p 1.2 p
Dividend per ordinary
share
Arising in respect of the
period 0.4 p 0.4 p 1.2 p
Paid in the period 1.2 p 1.2 p 1.2 p
Unaudited consolidated balance sheet
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
_____________________________________________________________________________________
Assets
Intangible assets 24,992 18,863 24,868
Property, plant & equipment 25,953 31,393 29,899
Investments 10 10 11
Investment in joint ventures - 262 -
Deferred tax assets 9,133 9,937 8,681
Trade and other receivables 400 1,100 1,100
___________________________________________________
Total non current assets 60,488 61,565 64,559
Inventories 7,954 8,545 7,634
Trade and other receivables 16,580 18,142 16,736
Cash and cash deposits 678 13,265 11,258
Assets classified as held
for sale 3,451 970 2,078
___________________________________________________
Total current assets 28,663 40,922 37,706
___________________________________________________
Total assets 89,151 102,487 102,265
___________________________________________________
Liabilities
Interest bearing loans and
borrowings 7,347 28,592 26,765
Deferred tax liabilities 4,158 3,874 3,851
Retirement benefit obligations 22,277 26,533 22,383
___________________________________________________
Total non current liabilities 33,782 58,999 52,999
Trade and other payables 12,251 14,660 13,027
Current tax liabilities 2,507 1,362 2,353
Dividends payable - - 220
Interest bearing loans and
liabilities 12,105 4,897 5,249
Liabilities associated with
assets classified as held
for sale - - 1,223
___________________________________________________
Total current liabilities 26,863 20,919 22,072
___________________________________________________
Total liabilities 60,645 79,918 75,071
___________________________________________________
___________________________________________________
Net assets 28,506 22,569 27,194
___________________________________________________
___________________________________________________
Equity
Ordinary share capital issued 2,789 2,789 2,789
Share premium 2,768 44,540 2,768
Other reserves 4,160 1,270 4,160
Translation reserve 1,016 1,021 1,479
Retained earnings 16,645 (27,014) 14,833
___________________________________________________
Total equity attributable to
equity holders of the parent 27,378 22,606 26,029
___________________________________________________
Minority interest 1,128 (37) 1,165
___________________________________________________
Total equity 28,506 22,569 27,194
___________________________________________________
___________________________________________________
Unaudited consolidated statement of cash flows
Six months Six months Year ended
ended ended
30 September 30 September 31 March 2006
2006 2005
£000 £000 £000
_________________________________________________________________________________________
Cash flows from operating activities
Profit before financing costs 1,802 1,190 2,575
Adjustments for:
Pension fund contributions in
excess of service costs 12 (35) (3,364)
Depreciation charge 1,489 2,087 3,734
Amortisation of intangible assets 52 32 63
Exceptional bad debt provision - 125 375
Loss on disposal of properties - - 237
(Profit) / loss on disposal of
other plant and equipment (11) 28 32
Impairment of assets on site
closures - - 124
Cash flows on closures charged in
prior year - (165) (190)
Share based payment charge / (credit) 143 13 (6)
__________________________________________________
Operating cash flow before changes in
working capital 3,487 3,275 3,580
Changes in working capital (excluding the effects of acquisition and disposal of
subsidiaries)
(Increase) / decrease in inventories (422) 692 898
(Increase) / decrease in trade and
other receivables (58) 1,132 3,121
Decrease in trade and other payables (889) (2,593) (2,932)
__________________________________________________
Cash generated from operations 2,118 2,506 4,667
Interest paid (893) (991) (1,766)
Tax - - -
__________________________________________________
Net cash from operating activities 1,225 1,515 2,901
Cash flows from investing activities
Proceeds from sale of property,
plant and equipment 14 82 1,073
Interest received 177 317 395
Disposal of subsidiary, net of cash
disposed of 1,811 5,438 5,201
Acquisition of subsidiary, net of
cash acquired - (1,476) (1,503)
Acquisition of share in joint
venture - (262) (129)
Acquisition of property, plant and
equipment (968) (906) (2,271)
Acquisition of intangible assets
- computer software (10) - (64)
Disposal / (acquisition) of trade
investment 1 - (1)
Development expenditure (670) (220) (861)
Repayment of loan by / (loan to)
joint venture 390 (440) (833)
__________________________________________________
Net cash from investing activities 745 2,533 1,007
Cash flows from financing activities
Proceeds from the issue of share
capital - 2,963 2,963
Repayment of borrowings (11,437) (2,584) (4,548)
Payment of finance lease liabilities (4) (22) (17)
Dividends paid (661) (613) (644)
__________________________________________________
Net cash from financing activities (12,102) (256) (2,246)
Net increase in cash and cash
equivalents (10,132) 3,792 1,662
Cash and cash equivalents at beginning
of period 6,734 5,014 5,014
Effect of exchange rate fluctuations
on cash held (117) 97 58
__________________________________________________
Cash and cash equivalents at end of
period (3,515) 8,903 6,734
__________________________________________________
__________________________________________________
Cash and cash equivalents comprise:
Cash at bank and in hand 678 13,265 11,258
Bank overdrafts (4,193) (4,362) (4,524)
__________________________________________________
(3,515) 8,903 6,734
__________________________________________________
__________________________________________________
Unaudited consolidated statement of recognised income and expense
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
£000 £000 £000
_______________________________________________________________________________
Foreign exchange translation
differences (436) 404 749
Net loss on hedge of net
investment in foreign subsidiary (28) (129) (16)
Actuarial gains on defined
benefit schemes - - 593
Other - 3 -
Taxation on items taken directly
to equity - - (178)
______________________________________________
Income and expense recognised
directly in equity (464) 278 1,148
Profit / (loss) for the period 2,071 (174) 617
______________________________________________
Total recognised income and
expense for the period 1,607 104 1,765
______________________________________________
______________________________________________
Attributable to:
Equity holders of the parent 1,645 112 1,800
Minority interest (38) (8) (35)
______________________________________________
Total recognised income and
expense for the period 1,607 104 1,765
______________________________________________
______________________________________________
Notes on the interim statement
1. Basis of preparation
The interim financial statements have been prepared on the basis of the
accounting policies set out in the audited accounts for the year ended 31 March
2006.
The financial information is unaudited, but has been reviewed by the auditors
and their report to the company is set out on page 12.
The comparative figures for the financial year ended 31 March 2006 are not the
company's statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors and delivered to the Registrar of
Companies. The report of the auditors was (i) unqualified, (ii) did not include
a reference to any matters which the auditors drew attention by way of emphasis
without qualifying their report and (iii) did not contain statements under
Section 237(2) or (3) of the Companies Act.
The interim report was approved by the board of directors on 5 December 2006 and
is being sent to shareholders on 8 December 2006. Copies are available from the
company's registered office, Springstone House, PO Box 88, 27 Dewsbury Road,
Ossett, WF5 9WS and can also be downloaded from the corporate website:
www.carclo-plc.com
2. Segment reporting
At 30 September 2006, the group is organised into two main business segments:
Technical Plastics and Precision Products.
The Technical Plastics segment supplies fine tolerance, injection moulded
plastic components, which are used in medical, telecom and electronics products.
This business operates internationally in a fast growing and dynamic market
underpinned by rapid technological development.
The Precision Products segment supplies systems to the automotive and aerospace
industries.
The primary segment reporting format is determined to be business segments as
the group's risks and returns are affected predominantly by differences in the
products and services provided. Secondary information is reported
geographically. The operating business segments are organised and managed
separately.
Transfer pricing between business segments is set on an arm's length basis.
Segmental revenues and results include transfers between business segments.
Those transfers are eliminated on consolidation.
The group's geographical segments are based on the location of the group's
assets. Sales to external customers disclosed in geographical segments are based
on the geographical location of its customers.
Analysis by
business
segment
The segment results for the six months ended 30 September 2006 were as follows:
Technical Precision Unallocated Eliminations Continuing Discontinued Group
Plastics Products expenses total total
£000 £000 £000 £000 £000 £000 £000
____________________________________________________________________________________________________________
Income Statement
Total revenue 27,876 9,953 - (98) 37,731 1,025 38,756
Less inter-segment
revenue (98) - - 98 - - -
_________________________________________________________________________________________
Total external
revenue 27,778 9,953 - - 37,731 1,025 38,756
Expenses (26,181) (8,942) (460) - (35,583) (941) (36,524)
_________________________________________________________________________________________
Underlying
operating profit 1,597 1,011 (460) - 2,148 84 2,232
Rationalisation
costs (49) (113) (129) - (291) (62) (353)
_________________________________________________________________________________________
Operating profit 1,548 898 (589) - 1,857 22 1,879
Site closure costs (77) - - - (77) - (77)
_________________________________________________________________________________________
Profit before
financing costs 1,471 898 (589) - 1,780 22 1,802
_________________________________________________
_________________________________________________
Net finance costs (96) 7 (89)
Tax (169) (2) (171)
________________________________________
Profit after tax 1,515 27 1,542
________________________________________
________________________________________
The segment results for the six months ended 30 September 2005 were as follows:
Technical Precision Unallocated Eliminations Continuing Discontinued Group
Plastics Products expenses total total
£000 £000 £000 £000 £000 £000 £000
____________________________________________________________________________________________________________
Income Statement
Total revenue 27,628 11,038 - (130) 38,536 6,711 45,247
Less inter-segment
revenue (130) - - 130 - - -
_________________________________________________________________________________________
Total external
revenue 27,498 11,038 - - 38,536 6,711 45,247
Expenses (26,801) (9,639) (396) - (36,836) (6,483) (43,319)
_________________________________________________________________________________________
Underlying
operating profit 697 1,399 (396) - 1,700 228 1,928
Rationalisation
costs (119) - (31) - (150) (463) (613)
Exceptional bad
debts (125) - - - (125) - (125)
_________________________________________________________________________________________
Operating profit 453 1,399 (427) - 1,425 (235) 1,190
_________________________________________________________________________________________
Profit before
financing costs 453 1,399 (427) - 1,425 (235) 1,190
_________________________________________________
_________________________________________________
Net finance costs (380) (37) (417)
Tax - - -
________________________________________
Profit after tax 1,045 (272) 773
________________________________________
________________________________________
The segment results for the year ended 31 March 2006 were as follows:
Technical Precision Unallocated Eliminations Continuing Discontinued Group
Plastics Products expenses total total
£000 £000 £000 £000 £000 £000 £000
____________________________________________________________________________________________________________
Income Statement
Total revenue 54,328 22,586 - (297) 76,617 11,389 88,006
Less inter-segment
revenue (297) - - 297 - - -
_________________________________________________________________________________________
Total external
revenue 54,031 22,586 - - 76,617 11,389 88,006
Expenses (51,477) (19,609) (989) - (72,075) (10,911) (82,986)
_________________________________________________________________________________________
Underlying
operating profit 2,554 2,977 (989) - 4,542 478 5,020
Rationalisation
costs (538) (144) (117) - (799) (165) (964)
Exceptional bad
debts (375) - - - (375) - (375)
_________________________________________________________________________________________
Operating profit 1,641 2,833 (1,106) - 3,368 313 3,681
Site closure costs (615) - - - (615) (254) (869)
Loss on sale of
properties - - (237) - (237) - (237)
_________________________________________________________________________________________
Profit before
financing costs 1,026 2,833 (1,343) - 2,516 59 2,575
_________________________________________________
_________________________________________________
Net finance costs (826) (50) (876)
Tax - - -
________________________________________
Profit after tax 1,690 9 1,699
________________________________________
________________________________________
Analysis by geographical segment by destination
United Kingdom North America Rest of World Group total
£000 £000 £000 £000
_____________________________________________________________________________________________________
The analysis of results by geographic destination for the six months ended
30 September 2006 was as follows:
Revenue
Total external revenue 16,831 8,746 13,179 38,756
Less revenue attributable to
discontinued operations (477) (96) (452) (1,025)
_____________________________________________________________
Revenue from continuing operations 16,354 8,650 12,727 37,731
_____________________________________________________________
_____________________________________________________________
The analysis of results by geographic destination for the six months ended
30 September 2005 was as follows:
Total external revenue 19,753 8,921 16,573 45,247
Less revenue attributable to
discontinued operations (1,997) (767) (3,947) (6,711)
_____________________________________________________________
Revenue from continuing operations 17,756 8,154 12,626 38,536
_____________________________________________________________
_____________________________________________________________
The analysis of results by geographic destination for the year ended
31 March 2006 was as follows:
Total external revenue 38,214 17,761 32,031 88,006
Less revenue attributable to
discontinued operations (3,950) (1,439) (6,000) (11,389)
_____________________________________________________________
Revenue from continuing operations 34,264 16,322 26,031 76,617
_____________________________________________________________
_____________________________________________________________
Independent review report to Carclo plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2006 which comprises the unaudited
consolidated income statement, the unaudited consolidated balance sheet, the
unaudited consolidated statement of cash flows, the unaudited statement of
recognised income and expense and the related notes. We have read the other
information contained in the interim report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of Interim Financial Information issued by the Auditing Practices
Board for use in the UK. A review consists principally of making enquiries of
group management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with
International Standards on Auditing (UK and Ireland) and therefore provides a
lower level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
KPMG Audit Plc
Chartered Accountants, Leeds
5 December 2006
This information is provided by RNS
The company news service from the London Stock Exchange