Interim Results

RNS Number : 6073U

Holidaybreak PLC

16 May 2008

 



16 May 2008: For immediate release

HOLIDAYBREAK PLC

Results for the six months ended 31 March 2008

Holidaybreak, the European specialist holiday and educational activity group, announces interim results for the six months ended 31 March 2008.

Financial Highlights

	Six months to 31.3.08 £m	Six months to 31.3.07 £m	Year to 30.9.07 £m
Revenue	156.0	100.6	357.9
Operating (loss) profit	(12.8)	(6.8)	41.3
Headline operating (loss) profit*	(10.0)	(5.7)	43.8
(Loss) profit before tax	(18.2)	(7.9)	37.5
Headline (loss) profit before tax*	(15.4)	(6.8)	40.0
EPS (p)	(27.1p)	(11.5p)	54.5p
Headline EPS (p)*	(22.9p)	(9.8p)	59.4p
Dividend per share (p)	9.25p	8.8p	32.1p
Net debt	165.7	29.6	146.5

*Headline operating (loss) profit, headline (loss) profit before tax and headline EPS are stated before amortisation of acquired intangible assets of £2.8m (H1 2007: £1.1m; FY 2007: £2.5m). 

Carl Michel, Holidaybreak Chief Executive, said: 

"Holidaybreak has performed well. Revenue for the half year is up 55% and we have been delighted with the progress of our newly acquired Education businesses."

"The Group enjoys a sound financial position and once again expects to deliver industry-leading margins. Operating cashflow is expected to remain strong. Our operations are resilient and that gives us confidence about the longer-term outlook for the Group."

Summary

• Interim results are in line with management expectations. The Group traditionally reports an operating loss in the first half due to the seasonal nature of the Camping and Education businesses. This is the first Interim Period including the Education Division. This division made an operating loss of £3.0m for the period.
• Revenue for the period is 55% up on 2007 at £156.0m.
• Overall Group sales intake is 6% ahead of last year. The Group enjoys a sound financial position and once again expects to deliver industry-leading margins. 
• The Education Division, formed from the acquisitions of PGL and NST last year, now accounts for approximately 22% of pro forma Group revenues. It is currently 94% booked for 2008 and 32% for 2009. Sales intake for 2008 for the division is currently 9% above last year's comparative on a like-for-like basis. The Division acquired a new site at Windmill Hill in Sussex on 2nd April for £2.5m. This 400+ bed facility will open in summer 2009 and we have already taken £0.3m of bookings.
• Sales intake for Hotel Breaks is currently 7% above last year. We are very pleased with the robust demand for packaged business into London. 
• Adventure Travel sales are 3% up. Geopolitical events occurred at key trading times, impacting results in the current year. However, the division is seeing strong bookings for next year.
• Camping sales to date are 2% up on last year in the context of a 5% reduction in capacity. The division is currently over 90% booked for the whole season, in line with our expectations and compared with 87% last year. Camping is expected to deliver cash and good margins in the full year.
• We continue to make significant investments in our businesses. In Education, the Group is investing £1.8m to increase bed stock in adventure centres. Various bolt-on acquisitions are being pursued in the division. The extension of product ranges in the Adventure Division continues with the launch of its tailor made product later in the summer offering bespoke tours for individual travellers. In Camping, the Group is investing £10.6m (net of disposal proceeds) to replace older mobile homes and to upgrade the fleet.
• The Group's enlarged Credit facilities were completed on 9th May.

Enquiries: 

Carl Michel / Bob Baddeley                                    Holidaybreak      [phone] 

James Hogan / Craig Breheny / Oliver Hughes     Brunswick         [phone] 

Note to Editors 

Holidaybreak (HBR.L) is listed on the London Stock Exchange. Holidaybreak has four operating divisions: Education, Hotel Breaks, Adventure Travel and Camping. Each is a market leader in its respective specialist sector of the European holiday and educational activity industry, has multi-channel distribution and is recognised for providing high standards of product and service quality. For more information, please go to www.holidaybreak.co.uk. 

  CHAIRMAN'S STATEMENT

Introduction

Holidaybreak is the leading European specialist holiday and educational activity group. Following the creation of the Education Division last year, the pro-forma revenue composition of the Group is now: Education (22% of sales); Hotel Breaks (33%); Adventure Travel (21%) and Camping (24%). 

Holidaybreak continues to stand out amongst its peers in terms of generating margins and operating cash flows. We are market leaders in our specialist sectors. At the same time, the diversity of Holidaybreak's businesses gives the Group additional resilience.  

The Board thanks management and staff throughout the Group for their continued hard work and commitment during the period.

Financial results

The Group has traditionally reported an operating loss in the first half due to the seasonal nature of certain of its businesses. The acquisition of the Education Division businesses in the second half of the year ended 30 September 2007 has, as expected, increased the first half losses. The Division made an operating loss in the period of £3.0m, before amortisation of acquired intangible assets.

In the six-month period to 31 March 2008, Holidaybreak recorded a pre-tax loss on ordinary activities of £18.2m, (2007: loss of £7.9m), whilst the operating loss was £12.8m (2007: loss of £6.8m). 

Capital expenditure for the half year, net of disposals, was £10.8m (2007: £9.0m) and net capital expenditure for the full financial year is expected to be approximately £20m (2007: £12.9m). 

The half year-end typically represents close to a low point in our cash flow cycle. On an annualised basis, all Holidaybreak's operations generate a good level of cash. Net debt at the half year was £165.7m (2007: £29.6m). Net debt levels typically reduce rapidly during May and June as final summer holiday balances are paid. The pro-forma average net debt for the last financial year was approximately £162m.

As previously announced, the refinancing of the Group's debt facilities was recently completed. The refinancing package consists of a £275m committed five-year facility with a range of banks led by Barclays and RBS. It replaces the Group's previous facilities, which totalled £255m. The average interest rate on our new facilities is 130 basis points over LIBOR.

Dividend

The Board has declared a half year dividend of 9.25p per share (2007: 8.8p), representing an increase of 5% on 2007. This will be payable on 12th August 2008 to shareholders on the register on 18th July 2008. The ex-dividend date will be 16th July 2008.

Divisional review

Education

The Education Division, formed from the acquisitions of PGL and NST in June and September of last year respectively, now accounts for approximately 22% of pro forma Group revenues. 

The seasonal nature of the business means that it generates an operating loss in the first half of the financial year. First-half operating loss for the Division was, as expected, £5.1m on revenues of £39.5m. Operating loss before amortisation of intangible assets was £3.0m.

The division is currently 94% booked for 2008 and 32% for 2009. Sales for the division are currently 9% above last year on a like-for-like basis. 

We have plans to further grow this division and recently acquired a new site at Windmill Hill in Sussex. This 400+ bed facility will open in summer 2009 and we have already taken £0.3m of bookings. The acquisition cost for this site was £2.5m with a further £4.5m of planned expenditure over the next three years to build lodges and activity bases in the grounds, as we have done at Caythorpe Court.

Hotel Breaks

Hotel Breaks' first-half operating profit was £6.8m (2007: £6.1m) with revenues £75.5m (2007: £61.3m). Operating profit before amortisation of intangible assets was £7.3m (2007: £6.7m).

West End Theatre Breaks was acquired in January 2007 and included for a full six months in these interim accounts.

Sales intake for Hotel Breaks is currently 7% above last year. We are very pleased with the extremely robust demand for packaged business into London. 

The London theatre break market remains strong, boosted by exhibitions such as Tutankhamun and China Warriors and theatre shows such as Joseph and Jersey Boys. 

The division has already acquired tickets for the 2009 production of Oliver! which is expected to be a major attraction for our customers.

Adventure Travel

First-half operating profit for the Adventure Travel Division was £0.3m (2007: £0.7m) on revenues of £40.4m (2007: £39.1m). Operating profit before amortisation of intangible assets was £0.5m (2007: £1.2m).

Adventure Travel sales are 3% up. Recent civil unrest in Kenya and Tibet and the lack of capacity in the Antarctic following the sinking of the cruise ship MS Explorer in November are expected to reduce full year revenues by about £2m and margin by approximately £0.8m. These destinations are expected to recover in 2009 and the division is seeing strong bookings for next year. Adventure is also seeing a benefit from a drive to increase agency sales and this will continue in 2008 and 2009. 

Camping 

With, as always, almost all revenues falling in the second half of the financial year, the interim operating loss for Camping was £14.8m (2007: £13.6m). 

Camping sales to date are 2% up over last year in the context of a 5% reduction in capacity. The division is currently over 90% booked for the whole season, in line with our expectations, and compared with 87% last year. 

Camping is again expected to deliver cash and good margins in the full year.

As previously stated, we are investing £10.6m (net of disposal proceeds) in the current financial year to replace older mobile homes and to upgrade the fleet.

Board Changes

Mark Wray will stand down from the Board on 31 May 2008 due to family bereavement. He will remain Joint Managing Director of the Hotel Breaks Division.

James Wallace, non-executive Director, Senior Independent Director and Chairman of the Audit Committee, has completed his second term of 3 years. James has agreed to remain on the Board until a new appointment is made which is expected to be within twelve months.

Outlook

The Board continues to believe that the Group is well positioned to exploit opportunities to grow, both organically and by acquisition.

We again expect to deliver industry leading margins and operating cash flow is expected to remain strong.

Robert Ayling

Chairman

Condensed consolidated income statement
For the six months ended 31 March 2008
		Six months ended		Year ended
		31 March  2008	31 March  2007	30 September 2007
	note	£'m	£'m	£'m
Revenue	3	156.0	100.6	357.9
Net operating costs		(168.8)	(107.4)	(316.6)
Net operating costs before amortisation of other intangible assets acquired via business combinations		(166.0)	(106.3)	(314.1)
Amortisation of other intangible assets acquired via business combinations		(2.8)	(1.1)	(2.5)
Operating (loss) profit	3	(12.8)	(6.8)	41.3
Investment income		1.0	0.8	1.6
Finance costs		(6.4)	(1.9)	(5.4)
(Loss) profit before tax		(18.2)	(7.9)	37.5
Tax	4	5.1	2.4	(11.3)
(Loss) profit for the period		(13.1)	(5.5)	26.2
Attributable to:
Equity holders of the parent		(13.1)	(5.5)	26.2
		Six months ended		Year ended
		31 March  2008	31 March  2007	30 September 2007
		Pence	Pence	Pence
Basic (loss) earnings per share	5	(27.1)	(11.5)	54.5
Diluted (loss) earnings per share	5	(27.1)	(11.5)	54.1
Headline basic (loss) earnings per share	5	(22.9)	(9.8)	59.4
Headline diluted (loss) earnings per share	5	(22.9)	(9.8)	59.0

Condensed consolidated statement of recognised income and expense  For the six months ended 31 March 2008
	Six months ended		Year ended
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Exchange differences on translation of foreign operations	(4.6)	-	0.6
Actuarial gains on defined benefit pension schemes	-	-	0.1
Net income recognised directly in equity	(4.6)	-	0.7
(Loss) profit for the period	(13.1)	(5.5)	26.2
Total recognised income and expense for the period	(17.7)	(5.5)	26.9
Attributable to:
Equity holders of the parent	(17.7)	(5.5)	26.9

Condensed consolidated balance sheet
31 March 2008
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Non-current assets
Goodwill	142.9	64.8	138.4
Other intangible assets	33.7	11.8	34.3
Property, plant and equipment	180.9	65.7	168.6
Defined benefit pension asset	0.4	-	0.4
	357.9	142.3	341.7
Current assets
Inventories	3.1	1.1	4.1
Trade and other receivables	54.8	52.0	33.5
Cash and cash equivalents	55.7	50.2	59.7
	113.6	103.3	97.3
Non-current assets classified as held for sale	1.1	0.5	1.8
Total assets	472.6	246.1	440.8
Current liabilities
Trade and other payables	(170.7)	(116.8)	(116.1)
Current tax liabilities	(1.8)	(0.7)	(7.8)
Obligations under finance leases	(5.8)	(5.4)	(5.7)
Interest bearing loans and borrowings	(204.4)	(67.4)	(189.7)
	(382.7)	(190.3)	(319.3)
Net current liabilities	(269.1)	(87.0)	(222.0)
Non-current liabilities
Deferred tax liabilities	(33.9)	(4.2)	(37.0)
Obligations under finance leases	(11.2)	(7.0)	(10.8)
	(45.1)	(11.2)	(47.8)
Total liabilities	(427.8)	(201.5)	(367.1)
Net assets	44.8	44.6	73.7
Equity
Share capital	2.4	2.4	2.4
Share premium account	38.9	38.5	38.9
Own shares	(2.6)	(2.8)	(2.6)
Other reserves	1.3	1.0	1.3
Retained earnings	4.8	5.5	33.7
Total equity	44.8	44.6	73.7

Condensed consolidated cash flow statement
For the six months ended 31 March 2008
	Six months ended		Year ended
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Operating (loss) profit	(12.8)	(6.8)	41.3
Adjustments for:
Amortisation of intangible assets	2.8	1.1	3.3
Depreciation of property, plant and equipment	2.3	1.1	11.1
Share-based payment charge	-	0.3	0.6
(Increase) decrease in inventories	1.0	-	(2.1)
Increase in receivables	(21.3)	(31.3)	(5.9)
Increase (decrease) in payables	34.9	26.8	(11.5)
Cash (outflow) inflow from operating activities	6.9	(8.8)	36.8
Tax paid	(6.5)	(5.4)	(9.0)
Net cash from operating activities	0.4	(14.2)	27.8
Investing activities
Acquisitions of subsidiaries net of cash acquired	(1.8)	(2.0)	(39.7)
Purchases of intangible assets	(1.0)	(1.3)	(3.5)
Purchases of property, plant and equipment	(12.4)	(10.8)	(16.8)
Proceeds on disposal of property, plant and equipment	1.6	1.8	3.9
Net cash used in investment activities	(13.6)	(12.3)	(56.1)
Financing activities
Finance costs paid	(7.6)	(1.7)	(4.3)
Interest received	1.3	0.8	2.1
Proceeds on issue of ordinary shares	0.1	0.6	1.0
Proceeds of sale on own shares	-	0.3	0.6
New bank loans raised	12.8	22.1	44.0
New finance leases	3.4	3.4	10.3
Payments under finance leases	(2.8)	(2.6)	(5.4)
Dividends paid	-	-	(14.5)
Net cash from financing activities	7.2	22.9	33.8
Net (decrease) increase in cash and cash equivalents	(6.0)	(3.6)	5.5
Cash and cash equivalents at beginning of period	58.8	53.3	53.3
Cash and cash equivalents at end of period	52.8	49.7	58.8

Analysis of net debt & reconciliation of net cash flow to movement in net debt
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Cash	55.7	50.2	59.7
Bank overdrafts	(2.9)	(0.5)	(0.9)
Cash and cash equivalents	52.8	49.7	58.8
Debt due within one year	(201.5)	(66.9)	(188.8)
Finance leases less than one year	(5.8)	(5.4)	(5.7)
Finance leases more than one year	(11.2)	(7.0)	(10.8)
Net debt at the end of the period	(165.7)	(29.6)	(146.5)
	Six months ended		Year ended
	31 March  2008	31 March  2007	30 September 2007
Reconciliation of net cash flow to movement in net debt
(Decrease) increase in cash and cash equivalents	(6.0)	(3.6)	5.5
Cash inflow from movement in net debt	(56.7)	(22.9)	(48.9)
Cash inflow from increase in net debt	(60.9)	(26.5)	(43.4)
Foreign exchange	(5.0)	-	(1.1)
Non-cash (increase) decrease in net debt	48.5	-	(98.9)
Increase in net debt in the period	(19.2)	(26.5)	(143.4)
Net debt at the beginning of the period	(146.5)	(3.1)	(3.1)
Net debt at the end of the period	(165.7)	(29.6)	(146.5)

  Notes to the condensed interim financial statements

1.      General information

The financial information for the year ended 30 September 2007 contained within these interim financial statements, does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

The Group's Interim financial statements were approved by the Board of Directors on 16 May 2008. This announcement is being sent to shareholders and will be made available at the Company's registered office at Hartford Manor, Greenbank Lane, Northwich, Cheshire, CW8 1HW.

The financial information for the period ended 31 March 2008 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board.

2. Basis of preparation

The annual financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' and International Financial Reporting Standards as adopted by the European Union, and in accordance with those policies disclosed within the Annual Report for the year ended 30 September 2007.

3. Business segments

For management purposes, the Group is currently organised into the following divisions: Education, Hotel Breaks, Adventure Travel and Camping. These divisions are the basis on which the Group reports its primary segment information.

Segment information about these divisions is presented below:

6 months ended 31 March 2008	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	39.5	75.5	40.4	0.6	156.0
Result
Operating (loss) profit before amortisation of other intangible assets acquired via business combinations	(3.0)	7.3	0.5	(14.8)	(10.0)
Amortisation of other intangible assets acquired via business combinations	(2.1)	(0.5)	(0.2)	-	(2.8)
Operating (loss) profit	(5.1)	6.8	0.3	(14.8)	(12.8)
Investment income					1.0
Finance costs					(6.4)
Profit before tax					(18.2)
Tax					(5.1)
Loss for the year					(13.1)

6 months ended 31 March 2008	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Other information
Capital additions¹	3.6	1.1	0.6	9.2	14.5
Depreciation and amortisation	3.4	1.0	0.3	0.5	5.2
Non current assets held for sale²	-	-	-	1.1	1.1
Balance sheet
Assets
Segment assets	123.5	122.5	24.3	119.2	389.5
Unallocated corporate assets					83.1
Consolidated total assets					472.6
Liabilities
Segment liabilities	(88.3)	(89.8)	(18.6)	(53.5)	(250.2)
Unallocated corporate liabilities					(177.6)
Consolidated total liabilities					(427.8)
¹ Includes software capital additions included within other intangible assets.
² Non current assets held for sale are mobile homes held within the camping division.

6 months ended 31 March 2007	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	-	61.3	39.1	0.2	100.6
Result
Operating (loss) profit before amortisation of other intangible assets acquired via business combinations	-	6.7	1.2	(13.6)	(5.7)
Amortisation of other intangible assets acquired via business combinations	-	(0.6)	(0.5)	-	(1.1)
Operating (loss) profit	-	6.1	0.7	(13.6)	(6.8)
Investment income					0.8
Finance costs					(1.9)
Profit before tax					(7.9)
Tax					2.4
Loss for the year					(5.5)

6 months ended 31 March 2007	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Other information
Capital additions¹	-	4.5	0.3	10.0	14.8
Depreciation and amortisation	-	1.0	0.7	0.5	2.2
Non current assets held for sale²	-	-	-	0.5	0.5
Balance sheet
Assets
Segment assets	-	132.7	9.3	103.5	245.5
Unallocated corporate assets					0.6
Consolidated total assets					246.1
Liabilities
Segment liabilities	-	(85.4)	(17.8)	(45.4)
Unallocated corporate liabilities					(52.9)
Consolidated total liabilities					(201.5)
¹ Includes software capital additions included within other intangible assets.
² Non current assets held for sale are mobile homes held within the camping division.

Year ended 30 September 2007	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Revenue
Total revenue	26.1	139.0	90.0	102.8	357.9
Result
Operating profit before amortisation of other intangible assets acquired via business combinations	8.5	17.0	6.6	11.7	43.8
Amortisation of other intangible assets acquired via business combinations	(0.8)	(1.1)	(0.6)	-	(2.5)
Operating profit	7.7	15.9	6.0	11.7	41.3
Investment income					1.6
Finance costs					(5.4)
Profit before tax					37.5
Tax					(11.3)
Profit for the year					26.2

Year ended 30 September 2007	Education £m	Hotel Breaks £m	Adventure Travel £m	Camping £m	Consolidated £m
Other information
Capital additions¹	115.9	1.8	0.5	14.3	132.5
Depreciation and amortisation	1.6	2.4	1.5	8.9	14.4
Non current assets held for sale²	-	-	-	1.8	1.8
Balance sheet
Assets
Segment assets	125.8	98.9	35.4	105.1	365.2
Unallocated corporate assets					75.6
Consolidated total assets					440.8
Liabilities
Segment liabilities	(85.6)	(76.9)	(21.8)	(31.4)	(215.7)
Unallocated corporate liabilities					(151.4)
Consolidated total liabilities					(367.1)
¹ Includes software capital additions included within other intangible assets.
² Non current assets held for sale are mobile homes held within the camping division.

Geographical segments

The following table provides an analysis of the Group's revenue by geographical market:

	6 months ended		Year ended
	31 March 2008	31 March 2007	30 September 2007
	£'m	£'m	£'m
United Kingdom	128.9	79.8	260.1
Ireland	4.7	-	7.6
Netherlands and Belgium	16.0	15.0	61.0
Germany, Switzerland and Austria	4.7	4.1	23.1
Other	1.7	1.6	6.1
	156.0	100.5	357.9

  4. Taxation

The taxation charge for the period ended 31 March 2008 is based on the estimated effective tax rate for the full year of 28 % (2007: 30 %).

5. (Loss) Earnings per share

The calculation of the basic and diluted (loss) earnings per share is based on the following data:

	Six months ended		Year ended
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Earnings
Earnings for the purposes of basic and diluted (loss) earnings per share being net profit attributable to equity holders of the parent	(13.1)	(5.5)	26.2
	Number	Number	Number
Number of shares	m	m	m
Weighted average number of ordinary shares for the purposes of basic (loss) earnings per share	48.3	48.1	48.2
Effect of dilutive potential ordinary shares:
Share options and awards	-	-	0.3
Weighted average number of ordinary shares for the purposes of diluted (loss) earnings per share	48.3	48.1	48.5
	Pence	Pence	Pence
Basic (loss) earnings per share	(27.1)	(11.5)	54.5
Diluted (loss) earnings per share	(27.1)	(11.5)	54.1

6. Dividends

	Six months ended		Year ended
	31 March  2008	31 March  2007	30 September 2007
	£'m	£'m	£'m
Amounts recognised as distributions in the period:
Final dividend for the year ended 30 September 2007 of 23.3p (2006: 21.2p)	11.2	10.2	10.2
Interim dividend for the year ended 30 September 2007			4.3
			14.5
Proposed interim dividend for the year ended 30 September 2008 of 9.25p (2007: 8.8p)	4.5	4.3

The amount of £11.2m is in respect of the final dividend for the year ended 30 September 2007; the amount of £10.2m is in respect of the final dividend for the year ended 30 September 2006.

The proposed interim dividend was approved by the Board on 16 May 2008 and has not been included as a liability as at 31 March 2008. The proposed dividend will be payable on 12 August 2008 to shareholders on the register at close of business on 18 July 2008.

7. Bank overdrafts and loans

On the 9th May the Group refinanced its existing banking facilities with a new 5 year £225m revolving bank credit facility and a 5 year term loan of £50m. Both facilities were arranged at interest rates fixed to LIBOR and expose the Group to fair value interest rate risk.

8. Movement in shareholder's equity

		Six months ended		Year ended
		31 March  2008	31 March  2007	30 September 2007
	note	£'m	£'m	£'m
Equity at the beginning of the period		73.7	59.1	59.1
(Loss) profit for the period		(13.1)	(5.5)	26.2
Total recognised income and expense		(13.1)	(5.5)	26.2
Recognised directly in equity
Exchange differences on translation of foreign operations		(4.6)	-	0.6
Actuarial gains on defined benefit pension schemes		-	-	0.1
Dividends declared	6	(11.2)	(10.2)	(14.5)
Credit to equity for share-based payments		-	0.3	0.6
New share issue subscribed		-	0.6	1.0
Movement in owned shares		-	0.3	0.6
Net change recognised directly in equity		(15.8)	(9.0)	(11.6)
Total movements		(28.9)	(14.3)	14.6
Equity at end of the period		44.8	44.6	73.7

9. Risks and uncertainties

There are a number of potential risks and uncertainties that could have a material impact on the Group's performance over the remaining six months of the financial year and beyond, as stated in its 2007 Annual Report.  

Further information on the principal long-term risks and uncertainties of the Group is included within the Group's 2007 Annual report on pages 19 and 20 and include (i) the effect of geopolitical events; (ii) the strength of the UK and European economy; (iii) the ability to grow the business and integrate those businesses acquired; (iv) recruitment and retention of key employees and management; (v) exposure to interest rate and foreign exchange risk; (vi) changes in/ introduction of environmental/ safety regulations; (vii) effects of accidents, incidents. The directors routinely monitor all these risks and uncertainties and appropriate actions are taken to mitigate these risks.

10. Related parties

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.  

There has been no change to the nature of related party transactions in the first six months of the financial year that has materially affected the financial position or performance of the Group.

  Responsibility Statement

We confirm that to the best of our knowledge:

• The condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

• The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

• The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

  
  
  

By the order of the Board,

Carl Michel                    

Group Chief Executive

16th May 2008    

Cautionary Statement

This interim management report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The interim management report should not be relied on by any other party or for any other purpose.

The interim management report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.         

 

END

 

 

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