Interim Results
Fisher (James) & Sons PLC
27 August 2003
27 August 2003
James Fisher and Sons plc
('James Fisher' or 'the Company')
Interim Results - Further growth in Support Services
James Fisher, the marine services provider, today announces results for the six
months ended 30 June 2003 with an 11% increase in pre tax profits before loss on
ship sales and exchange translation gains.
The Marine Support Services Division now accounts for 39% of operating profits,
against 17% last year, emphasising its increasing importance to the Company and
confirming James Fisher's strategy to grow its service businesses both
organically and by acquisition.
Financial Highlights
• Turnover up 11% to £39.51m (H1 2002: £35.63m).
• Total operating profit up 20% to £8.82m (H1 2002: £7.36m).
• Pre tax profit (before losses on ship sales and exchange translation
gains) up 11% to £6.5m (H1 2002: £5.83m).
• Proposed interim dividend up 12% to 2.47p (H1 2002: 2.20p).
• Cash flow strong, gearing reduced, despite £9m acquisition.
Operational Highlights
• Marine Support Services operating profits up 164% to £4.34m.
• Tankships profit on ordinary activities up 24% to £4.6m.
• Strengthening relationships with the Ministry of Defence.
• Better quality earnings.
Commenting on the outlook, Chairman, Tim Harris, CBE, said:
'James Fisher enjoys an encouraging combination of strong cash flow, based on
committed income, together with excellent growth opportunities both organically
and by acquisition in Marine Support Services, which now accounts for 39% of our
operating profits before common costs. We are confident that we are well
positioned to continue growing shareholder value through our commitment to
value-added service activities.'
For further information
James Fisher and Sons plc Binns & Co PR
Tim Harris, Chairman Paul McManus
Angus Buchanan, Chief Executive Peter Binns
Mike Shields, Finance Director Tel: 020 7786 9600
Tel: 020 7338 5808 Mob: 07980 541893
Chairman's Statement
Financial
James Fisher has again experienced good growth both in terms of total operating
and pre tax profits before losses on ship sales and exchange conversion gains.
The contribution from the Marine Support Services Division almost doubled over
last year emphasising its increasing importance to the Company and confirming
our strategy to grow our service businesses both organically and by acquisition.
The cash flow generated was again very strong and gearing was reduced from 58%
at 31 December 2002 to 54% at 30 June 2003, despite the outlay of £9.19 million
for the Scan Tech acquisition.
Turnover +11% £39.51m (2002 - £35.63m)
Total operating profit +20% £8.82m (2002 - £7.36m)
Pre tax profit before losses on ship sales and
exchange translation gains +11% £6.50m (2002 - £5.83m)
Pre tax profit -1% £6.03m (2002 - £6.11m)
Basic earnings per share -17% 11.57p (2002 - 13.92p)
The basic earnings per share in 2002 benefited from a one-off tax credit of
£609,000 (1.27p per share).
Dividend
The Board is increasing the interim dividend by 12% to 2.47 pence per ordinary
share (HI 2002 - 2.20 pence per ordinary share) payable on 3 November 2003 to
the shareholders on the register on 3 October 2003.
Tankships
The Tankships profit on ordinary activities of £4.6 million was 24% up on the
first half of last year owing both to better contract volumes (3.24 million
tonnes 2003 v 2.69 million tonnes 2002) and a stronger spot market.
The Prestige tanker incident off Spain in November 2002 has highlighted the
issue of tanker age as well as that of the growing requirement for double hulls.
Although the average age of our fleet is younger than that of our main
competitors, at lst January 2003 all seven of our ships in the smallest ship
size (3,000 tonnes) were more than twenty years old. Consequently we have sold
two and while we have incurred a book loss of £0.59 million on these sales, we
realised £1.2 million in cash and avoided 2003 refit costs of £0.5 million.
Moreover, we anticipate that new tonnage, for which plans are well advanced,
will be by charter without the requirement for capital reinvestment. This is
one of the advantages of the Tonnage Tax regime which removes the need for ship
purchase to enable an operator to benefit from the tax shelter that capital
allowances provide.
Marine Support Services Division
Operating profits grew by 164% to £4.34 million, emphasising the growing
importance of Marine Support Services to the Company. These include our 25%
share of the operating profit of AWSR, the MoD's Strategic Sealift Service. The
return on capital continues to be excellent, both before and after goodwill.
Our MoD related businesses continue to grow well supported by an increased
investment in sales and marketing and technical backup. James Fisher Rumic
Limited, which manages the Royal Navy's submarine rescue service, had a good
first half and has been joined by the world's leading RoV operator, Oceaneering
International Inc, the design integrator for current replacement of the US
submarine system, to bid for the new NATO submarine rescue service scheduled to
be in service for 2006/7. Initial profits from our small Ocean Fleets
investment were well above expectations. AWSR now has all six vessels in
service with the two commercial vessels on charter until late 2005 to a
Scandinavian operator.
The North Sea businesses, which now trade under the Scan Tech name, had a good
first half. In Norway both the rental and engineering sales sectors performed
strongly whilst in Aberdeen both these sectors were quieter, but the
HydroDigger, after some modification, has begun to prove itself both technically
and financially. We are taking steps to draw the synergies from the Norwegian
acquisition by strengthening the sales and marketing in Aberdeen and expanding
the product range.
The acquisition of Rumic's nuclear decommissioning business has broadened our
relationship with British Nuclear Fuels plc for whom we manage seven vessels and
provide other technical support services.
Cable Layers
As anticipated, the contribution from this division of £2.3 million was well
down on last year's first half, the main reason being the lay-up of Nexus
following the conclusion in December 2002 of the nine-year charter with Global
Marine Systems. The weakness of the US dollar also had an effect on the dollar
revenues of Oceanic Princess and Oceanic Pearl.
Oceanic Princess and Oceanic Pearl remain chartered to it International Telecom
until May 2006 and December 2006 respectively with the charters guaranteed by
its parent company, General Dynamics. That company has decided to discontinue
its cable laying business and we have reached agreement with them, while
protecting our future profit stream from the existing charters, to market the
ships on our own account. This effectively gives us all the upside potential
from employment prior to the end of their charters.
We have secured a short-term charter of up to three months duration for the
Nexus in the second half of 2003 and continue actively to promote a number of
options for her long-term future.
Changes to the Board
It will be a great pleasure to welcome Maurice Storey CB, the recently retired
CEO of the Maritime Coastguard Agency (MCA), to the Board as a non-executive
director with effect from 1 December 2003. Maurice is highly respected
throughout the shipping industry as an innovative and authoritative head of MCA.
His joining James Fisher emphasises our commitment to maintaining the highest
marine standards, both operationally and technically. Terry Moore, who is now
seventy-one, has decided to retire with effect from 31 December 2003 after five
years as non-executive director. I would like to thank him for his excellent
service to the Company.
I would also like to thank all James Fisher staff for their efforts and
commitment in meeting the not inconsiderable challenges of the first half and
for making possible the result achieved.
Outlook
James Fisher has enjoyed a good first half in 2003, in which the growth in our
Marine Support Service Division has more than made up for the loss of profits
from the conclusion of the nine-year Nexus charter.
Tankships continue to trade satisfactorily although as always we expect the
second half to be weaker because of the summer refit season. The average age of
our fleet compares well with our main competitors and following the Prestige
incident we have brought forward our renewal programme and have sold a further
3,000 tonne vessel in the second half.
With our cable layers, we have the opportunity to improve profits in the short
and medium terms through employment for Nexus, including short term charters in
the second half of 2003, and from the new agreement with General Dynamics, which
gives us the opportunity to market Oceanic Princess and Oceanic Pearl on our own
account while maintaining and protecting the existing profit stream.
James Fisher enjoys an encouraging combination of strong cash flow, based on
committed income, together with excellent growth opportunities both organically
and by acquisition in Marine Support Services which now accounts for 39% of our
operating profits before common costs. We are confident that we shall continue
to produce growth both in profitability and dividends for our shareholders.
GROUP PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
Six months to Six months to Year ended
Note 30 June 2003 30 June 2002 31 December
£000 £000 £000
Turnover:
group and
share of joint
ventures 42,937 35,707 72,322
less share of
joint venture (3,423) (77) (1,211)
--------- --------- ----------
39,514 35,630 71,111
ongoing 36,190 35,498 70,979
acquisitions 3,324 - -
discontinued - 132 132
Group turnover 2 39,514 35,630 71,111
Cost of sales (30,044) (25,969) (53,269)
--------- --------- ----------
Gross profit 9,470 9,661 17,842
Administrative expenses
others (2,121) (1,880) (4,266)
goodwill
amortisation (277) (19) (58)
(2,398) (1,899) (4,324)
Group operating profit/(loss)
ongoing 6,423 7,788 13,541
acquisitions 649 - -
discontinued - (26) (23)
7,072 7,762 13,518
Share of
operating
profit/(loss)
in joint
ventures 1,749 (401) (298)
--------- --------- ----------
Total
operating
profit: group
and share of
joint ventures 8,821 7,361 13,220
Loss on sale
of ships (588) (8) (335)
Provision for
termination of
business - - (794)
--------- --------- ----------
8,233 7,353 12,091
Net interest payable
Group (1,197) (1,412) (2,519)
Joint venture 3 (1,126) (115) (355)
Exchange gain
on loan
conversion 123 283 501
(2,200) (1,244) (2,373)
--------- --------- ----------
Profit on
ordinary
activities
before
taxation 6,033 6,109 9,718
Taxation 4 (489) 505 318
--------- --------- ----------
Profit on
ordinary
activities
after taxation 5,544 6,614 10,036
Dividends
Non equity (2) (2) (4)
Equity (1,183) (1,041) (2,832)
(1,185) (1,043) (2,836)
--------- --------- ----------
Retained
profit for the
period/year 4,359 5,571 7,200
========= ========= ==========
pence pence pence
Basic earnings
per ordinary
share 11.57 13.92 21.11
Diluted
earnings per
ordinary share 11.43 13.81 20.93
Ordinary dividends paid or
payable:
Interim 2.47 2.20 2.20
Final 3.74
GROUP BALANCE SHEET
Unaudited Unaudited Audited
30 June 2003 30 June 2002 31 December 2002
£000 £000 £000
Fixed assets
Intangible assets - goodwill 10,362 598 2,721
Tangible assets 123,036 129,815 126,109
Investments 3,082 2,300 2,397
---------- ---------- ----------
136,480 132,713 131,227
Current assets
Stocks 1,083 750 1,115
Debtors 12,206 17,585 14,918
Cash and short-term deposits 6,604 4,204 4,904
---------- ---------- ----------
19,893 22,539 20,937
---------- ---------- ----------
Creditors: amounts falling
due within one year
Trade and other (14,272) (15,439) (15,854)
Bank loans (9,182) (10,347) (8,614)
---------- ---------- ----------
(23,454) (25,786) (24,468)
---------- ---------- ----------
Net current liabilities (3,561) (3,247) (3,531)
---------- ---------- ----------
Total assets less current
liabilities 132,919 129,466 127,696
Creditors: amounts falling
due after more than one year
Trade and other (534) (35) (500)
Bank loans (44,649) (48,079) (44,358)
---------- ---------- ----------
(45,183) (48,114) (44,858)
---------- ---------- ----------
Provisions for liabilities
and charges (448) (763) (147)
---------- ---------- ----------
Net assets 87,288 80,589 82,691
========== ========== ==========
Capital and reserves
Called up share capital 12,150 12,068 12,138
Non equity - cumulative
preference shares 100 100 100
Share premium account 23,429 23,050 23,380
Profit and loss account 51,609 45,371 47,073
---------- ---------- ----------
Shareholders' funds 87,288 80,589 82,691
========== ========== ==========
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 2003 30 June 2002 31 December
2002
Notes £000 £000 £000
Net cash inflow
from
operating
activities 5(a) 11,990 12,737 24,712
Returns on
investments and
servicing of
finance 5(b) (1,184) (1,477) (2,548)
Taxation 5(c) (215) (357) (542)
Capital expenditure
and
financial
investment 5(d) 127 (595) (2,653)
Acquisitions and
disposals 5(e) (7,517) (1,621) (3,310)
Equity dividends
paid (1,796) (1,534) (2,570)
---------- ---------- ---------
Cash inflow before
management
of liquid
resources and
financing 1,405 7,153 13,089
Management of
liquid resources 5(f) (1,535) - -
Financing 5(g) 295 (9,774) (15,010)
---------- ---------- ---------
Increase/(decrease)
in cash in the
period 165 (2,621) (1,921)
========== ========== =========
Reconciliation of net
cash flow
to movement in net
debt
Increase/(decrease)
in cash in the
period 165 (2,621) (1,921)
Cash (inflow)/outflow
from
(increase)/decrease
in debt (295) 9,774 15,010
Cash outflow from
increase
in liquid
resources 1,535 - -
---------- ---------- ---------
Movement in net
debt in the
period 1,405 7,153 13,089
Issue of ordinary
share capital 61 - -
Exchange
differences 123 283 501
Loans acquired
with subsidary
undertaking (748) - -
Net debt at the
beginning of
period 5(h) (48,068) (61,658) (61,658)
---------- ---------- ---------
Net debt at end
of period 5(h) (47,227) (54,222) (48,068)
========== ========== =========
NOTES TO THE INTERIM ACCOUNTS
1. Interim accounts
The group's interim result consolidates the results of the company and its
subsidiary companies made up to 30 June 2003.
The interim financial information has been prepared on the basis of the
accounting policies set out in the group's statutory accounts for the year ended
31 December 2002. Expenses are accrued in accordance with the same principles
used in the preparation of the annual accounts.
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is based on the
statutory accounts for the financial year ended 31 December 2002. These
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
The interim report was approved by the board of directors on 26 August 2003.
2. Segmental analysis
Geographical area
Six months Six months Year ended
to 30 June 2003 to 30 June 2002 31 December 2002
£000 % £000 % £000 %
Turnover
Continuing
operations
Tankships
Europe 24,522 62 22,991 65 46,028 65
Cable
layers
Europe 132 2,584 5,005
Americas 4,884 6,258 11,838
5,016 13 8,842 25 16,843 24
Marine
support
services
Europe * 8,929 3,632 7,392
Americas 1,009 - 637
Rest of
World 38 33 79
9,976 25 3,665 10 8,108 11
Discontinued
operations
Shipping
operations
Europe - 132 132
------ --- ------ --- ------ ---
Total
turnover 39,514 100 35,630 100 71,111 100
====== === ====== === ====== ===
* Included in Europe is an amount of £3,324,000 in respect of the acquisition of
Scan Tech group of companies.
2. Segmental analysis (continued)
Turnover and profit on ordinary activities
before taxation
Six months Six months Year ended
to 30 June 2003 to 30 June 2002 31 December 2002
Turnover Profit Turnover Profit Turnover Profit
£000 £000 £000 £000 £000 £000
Group
Continuing operations
Tankships 24,522 4,610 22,991 3,705 46,028 6,150
Cable layers 5,016 2,268 8,842 4,337 16,843 8,260
Marine support services
Ongoing 6,652 1,746 3,665 1,645 8,108 3,455
Acquisitions 3,324 846 - - - -
9,976 2,592 3,665 1,645 8,108 3,455
-------- -------- ------- -------- ------- -------
39,514 9,470 35,498 9,687 70,979 17,865
Share of operating
profit in joint venture - 1,749 - - - 568
Loss on sale of ships - (588) - - - (327)
-------- -------- ------- -------- ------- -------
39,514 10,631 35,498 9,687 70,979 18,106
Discontinued operations
Shipping operations:
Segment operating loss - - 132 (26) 132 (23)
Loss on sale of ships - - - (8) - (8)
Share of operating loss
in joint venture - - - (401) - (866)
Share of provision for
loss on disposal - - - - - (464)
Provision for
termination of business - - - - - (330)
- - 132 (435) 132 (1,691)
-------- -------- ------- -------- ------- -------
39,514 10,631 35,630 9,252 71,111 16,415
======== ======= =======
Common costs (2,121) (1,880) (4,266)
Goodwill amortisation (277) (19) (58)
(2,398) (1,899) (4,324)
Net interest payable
Group (1,197) (1,412) (2,519)
Joint ventures (1,126) (115) (355)
Exchange gain
on loan conversion 123 283 501
(2,200) (1,244) (2,373)
-------- -------- -------
6,033 6,109 9,718
======== ======== =======
Net operating assets
30 June 30 June 31 December
2003 2002 2002
£000 £000 £000
Continuing operations
Tankships 63,212 66,655 67,923
Cable layers 54,565 58,869 55,833
Marine support services 16,596 6,402* 6,649*
-------- -------- -------
134,373 131,926 130,405
======== ======== =======
2. Segmental analysis (continued)
The net operating assets are reconciled to shareholders' funds as follows:
30 June 2003 30 June 2002 31 December 2002
£000 £000 £000
Net operating assets 134,373 131,926 130,405
Fixed asset investments 1,157 1,157 1,157
Group share of joint
venture 935 - 344
Loans to joint venture - 2,291 1,997
Loans from joint
venture - - (944)
Own shares held under
trust 990 1,143 896
Net borrowings (47,227) (54,222) (48,068)
Corporation tax (1,066) 26 (653)
Deferred tax (191) (689) (147)
Deferred consideration (500) - (500)
Dividends payable (1,183) (1,043) (1,796)
----------- ----------- -----------
87,288 80,589 82,691
=========== =========== ===========
* The net operating assets for Marine Support Services has been restated at
30 June 2002 and 31 December 2002 from £7,559,000 to £6,402,000 and £7,806,000
to £6,649,000 respectively for fixed asset investments.
3. Net interest payable
Net interest payable includes an amount of £1,126,000 (six months to 30 June
2002, £115,000 and twelve months to 31 December 2002, £355,000), in respect of
the joint venture.
4. Taxation
The group has entered the UK tonnage tax regime under which its ship owning and
operating activities are based on the net tonnage of vessels operated. Any
income and profits outside the tonnage tax regime are taxed under the normal UK
corporation tax rules.
Tax on profit on ordinary activities
The tax (charge)/credit is made up as follows:
Six months Six months Year ended
to 30 June 2003 to 30 June 2002 31 December
2002
£000 £000 £000
Current tax:
UK tonnage tax (14) (16) (30)
UK corporation tax (233) (85) (524)
---------- ---------- -----------
(247) (101) (554)
Tax underprovided in
previous years - - (277)
Foreign tax (192) - -
---------- ---------- -----------
Group current tax (439) (101) (831)
Share of joint
venture's current tax (6) (3) (30)
---------- ---------- -----------
Total current tax (445) (104) (861)
---------- ---------- -----------
Deferred tax:
Group deferred tax (44) 609 1,179
---------- ---------- -----------
Tax on profit on
ordinary activities (489) 505 318
========== ========== ===========
5. Group cash flow statement
(a) Reconciliation of operating profit to net cash inflow from operating
activities
Six months Six months Year ended
to 30 June to 30 June 2002 31 December
2003 2002
£000 £000 £000
Group operating profit 7,072 7,762 13,518
Depreciation and refit
amortisation 4,734 4,914 9,818
Amortisation of goodwill 277 19 58
Profit on disposal of tangible
fixed assets (25) (37) (44)
Reduction/(increase) in stocks 206 (55) (255)
Decrease/(increase) in debtors 689 (1,322) 1,650
(Decrease)/increase in creditors (1,327) 1,255 (303)
Increase in provisions 187 118 114
Share based compensation 177 83 156
---------- -------- ---------
Net cash inflow from operating
activities 11,990 12,737 24,712
========== ======== =========
(b) Returns on investments and servicing of finance
£000 £000 £000
Interest received 169 217 470
Interest paid (1,351) (1,692) (3,014)
Preference dividend paid (2) (2) (4)
---------- -------- ---------
Net cash outflow (1,184) (1,477) (2,548)
========== ======== =========
(c) Taxation
£000 £000 £000
Corporation tax paid (215) (466) (651)
Corporation tax received - 109 109
---------- -------- ---------
Net cash outflow (215) (357) (542)
========== ======== =========
(d) Capital expenditure and financial investment
£000 £000 £000
Purchase of own shares by ESOP (94) (505) (258)
Purchase of tangible fixed assets (594) (454) (3,133)
Sale of tangible fixed assets 815 364 738
---------- -------- ---------
Net cash inflow/(outflow) 127 (595) (2,653)
========== ======== =========
(e) Acquisitions and disposals
£000 £000 £000
Net cash acquired with
subsidiary undertaking 679 - 1,768
Purchase of subsidiary undertaking (9,222) - (3,275)
Loan to joint venture (944) (1,621) (2,722)
Loan from joint venture 1,970 - 944
Purchase of interest in joint
venture - - (25)
---------- -------- ---------
Net cash outflow (7,517) (1,621) (3,310)
========== ======== =========
5. Group cash flow statement (continued)
(f) Management of liquid resources
£000 £000 £000
Short term investments (1,535) - -
========== ======== =========
(g) Financing
Six months Six months Year ended
to 30 June 2003 to 30 June 2002 31 December
2002
£000 £000 £000
Issue of ordinary share
capital 61 - -
New secured loans 7,706 - 1,912
Repayment of secured
loans (7,472) (9,774) (16,922)
---------- -------- ---------
Net cash
inflow/(outflow) 295 (9,774) (15,010)
========== ======== =========
(h) Reconciliation of net debt
1 January Exchange 30 June
2003 Acquisitions Cash flow Transfer movement 2003
£000 £000 £000 £000 £000 £000
Cash in hand and at bank 4,904 - 165 - - 5,069
Short term deposits* - - 1,535 - - 1,535
Debt due after 1 year (44,358) - (7,706) 7,312 103 (44,649)
Debt due within 1 year (8,614) (748) 7,472 (7,312) 20 (9,182)
(52,972) (748) (234) - 123 (53,831)
-------- --------- -------- ------- -------- -------
Net debt (48,068) (748) 1,466 - 123 (47,227)
======== ========= ======== ======= ======== =======
* Short term deposits are included within cash at bank and in hand in the
balance sheet.
6. Earnings per share
The calculation of basic and diluted earnings per share are based on the
following profits and numbers of shares:
Six months Six months Year ended
to 30 June 2003 to 30 June 2002 31 December 2002
£000 £000 £000
Profit for the period/year 5,544 6,614 10,036
Preference dividend (2) (2) (4)
---------- ---------- -----------
5,542 6,612 10,032
========== ========== ===========
Weighted average number of shares
Number of Number of Number of
shares shares shares
For basic earnings per share 47,879,575 47,512,491 47,516,302
Exercise of share options 616,395 371,366 405,968
---------- ---------- -----------
For diluted earnings per share 48,495,970 47,883,857 47,922,270
========== ========== ===========
7. Reconciliation of movements in group shareholders' funds
30 June 2003 30 June 2002 31 December 2002
£000 £000 £000
Profit for the financial
period/year 5,544 6,614 10,036
Dividends paid and proposed
equity and non-equity shares (1,185) (1,043) (2,836)
Share based compensation 177 83 156
---------- ---------- ------------
Net addition to shareholders'
funds 4,536 5,654 7,356
Arising on share issue 61 - 400
Opening shareholders' funds 82,691 74,935 74,935
---------- ---------- ------------
Closing shareholders' funds 87,288 80,589 82,691
========== ========== ============
8. Interim dividend
A dividend for the six months to 30 June 2003 on the preference shares was
declared on 30 June 2003. The interim dividend of 2.47p (2002 2.20p) per 25p
ordinary share is payable on 3 November 2003 to those shareholders on the
register of the company at the close of business on 3 October 2003.
9. Interim report
The interim report is to be sent to all shareholders on Friday 5th September
2003, posted first class. Copies of the interim report will also be available
from our registered office at: Fisher House, PO Box 4, Barrow-in-Furness,
Cumbria LA14 1HR.
INDEPENDENT REVIEW REPORT TO JAMES FISHER AND SONS PUBLIC LIMITED COMPANY
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2003 which comprises the group's Profit and Loss
Account, Balance Sheet and Cash Flow Statement and the related notes 1 to 9. 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 soley to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
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
issued by the Auditing Practices Board. 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 presentations 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 Auditing Standards 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 June 2003.
Ernst & Young LLP
Liverpool
27 August 2003
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