Interim Results

Hays PLC 5 March 2002 5th March 2002 Hays plc INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2001 Financial Highlights: Six months to 31 December (unaudited) 2001 2000 (restated) Turnover from continuing operations £1,198.5m £1,172.9m Operating profit* £122.8m £137.8m Profit before tax* £115.1m £125.8m Earnings per share** 4.65p 5.29p Dividend per share 1.52p 1.32p * Before goodwill amortisation, exceptional items and discontinued operations. ** Before goodwill amortisation and exceptional items. Business Highlights: Personnel _________ - Excellent result with £62 million operating profit, (only 12% lower than the same period last year) in depressed market conditions. - Continued investment in the organic development of our European specialist recruitment network in France, Spain and Belgium. - Landmark contract win with Liverpool and Victoria Assurance for outsourced HR services. - Haysworks (our HR portal) shows rapid growth and is now actively used by 60,000 jobseekers and clients each week. - Highly attractive growth prospects in the medium-term. Business Process Outsourcing ____________________________ - Strong top line growth with sales up by 16%. - Five year contract to develop and operate a performance statistics and management information system for the Department of Health. - New web-enabled call centre at Chalons-sur-Saone, France, will accelerate our development across Europe. Mail and Express ________________ - To the door business mail delivery service launched in central London, Manchester and Edinburgh covering the time critical premium mail market. - Investment in our network reach and customer marketing to take advantage of new opportunities in the deregulating UK mail market. Logistics _________ - Increased profits from our Continental European operations. - New business wins with Carrefour, Scotts and Auchan and successful contract renewals including Scottish Courage. - Retail Crates business continues to grow strongly in the UK. Bob Lawson, Chairman, commented: 'The Group has continued to make progress in developing and focussing its businesses against the backcloth of tough market conditions. The reduction in our earnings per share was as expected being driven principally by the sensitivity to the economy of our Personnel business and by the weak performance of our UK logistics activity. In recent months our Personnel business has performed better than was predicted last Autumn but against this, parts of our Commercial division are performing below expectation. Our balance sheet remains strong with net debt £42 million lower than last year and interest costs covered twelve times. The first priority is to maintain and develop our existing customer relationships and to continue our organic development. We are continuing to invest in our businesses through the downturn and this investment will position the Group to benefit when the economies of Europe begin to improve.' Enquiries: Bob Lawson Chairman + 44 (0)1483 302203 Hays plc Neil McLachlan Group Finance Director + 44 (0)1483 302203 Hays plc Jon Coles Brunswick + 44 (0)20 7404 5959 Conference call: Bob Lawson, Neil McLachlan and Graham Williams of Hays plc will conduct a conference call for analysts and institutional shareholders at 15:30 UK time on 5 March 2002. The dial-in details are as follows: UK/European dial-in number: +44 (0)20 8781 0562 USA dial-in number: 1 800 482 2239 Password: Hays The call will be recorded and available for playback for 10 working days as follows: UK/European replay dial-in number: +44 (0)20 8288 4459 UK/European Freephone Number 0500 637 880 UK/European access code: 649162 USA dial-in number: 1 800 625 5288 USA access code: 1520916 The Instant Replay will be available until 19 March 2002. Presentation on the web-site and delayed web-cast: The presentation to analysts will be available to view on the Hays website from 14:15 UK time on 5 March 2002 - www.hays-plc.com The presentation will also be filmed and distributed by RAW Communications to those who subscribe to that service. CHAIRMAN'S STATEMENT ____________________ Introduction In the six months to 31 December 2001 the Group has continued to make progress in developing and focusing its businesses against the backcloth of tough market conditions. Group sales were broadly similar to last year with sales growth in Continental Logistics and BPO offset by reduced levels of activity in our Personnel business, and turnover surrendered to Consignia within Mail. Earnings per share before goodwill amortisation and exceptional items decreased by 12% compared with the same period last year. This decline was as expected being driven principally by the sensitivity to the economy of Personnel and a weak performance in UK Logistics. In recent months our Personnel business has performed better than was predicted last Autumn but against this parts of our Commercial division are performing below expectation. Cash generation, a prime management focus in these poor economic conditions, has been good and has further reinforced our strong balance sheet with net debt £42 million lower than last year. Interest was covered 12 times before goodwill amortisation. Interim Dividend The interim dividend is being increased by 15% to 1.52p and will be paid on 31 May 2002 to shareholders on the register on 26 April 2002. The dividend is covered 2.6 times and reflects the Board's progressive dividend policy. Personnel Hays Personnel continues to demonstrate its resilience and ability to perform in a difficult market. Market leadership, active management of costs and our concentration on the temporary staff market has resulted in a 1% sales increase and operating profit of £62.0 million, only 12% below the same period last year with the decline largely attributable to our Australian and City of London operations. Inevitably at this stage of the cycle the proportion of lower margin temporary placements has risen resulting in a decrease in the overall margin to 12.2%. Cost management is demonstrated by the careful control of headcount down 10.5% from a peak of 4,238 to the current level of 3,791. Hays Montrose, our technical agency specialising in the construction industry, continued to grow its profit year on year by over 10%. Haysworks, (our HR Portal), is becoming an increasingly important channel to market for job seekers and client advertisers. In the last three months visitors actively using the site have risen to 60,000 per week, job searches have increased by over 50%, and on line applications have increased by over 60%. The integration of Haysworks into our business has been an outstanding success, giving us competitive advantage. Despite the market conditions we are continuing to invest in the organic development of our European specialist recruitment network with new branches opened in France, Spain and Belgium. We are also investing heavily in the provision of integrated HR Solutions and were pleased to announce a landmark contract win in this area with Liverpool & Victoria Assurance in November to provide a complete range of outsourced HR services, in addition to winning a number of comprehensive recruitment management contracts. The medium term growth prospects for our Personnel business remain highly attractive. Commercial Sales were up 8% but profit decreased by 6%. a) Business Process Outsourcing Our Business Process Outsourcing offer has been simplified during the year and the division has continued to generate strong top line growth with sales up by 16%. Profits are being held back by reduced systems project activity and by slower than expected installation of NMIS (our Business Intelligence Solution) with Police Forces across England. Our core Business Intelligence software has been developed for use in a number of sectors and we have recently signed a five-year contract to develop and operate a similar system to provide hospital performance statistics and management information for the Department of Health. The development of Hays Business Process Outsourcing across Europe is seen as a critical area to drive future profit growth. We are investing in a new web-enabled call centre facility in Chalons-sur-Saone, France, which will provide the platform to accelerate our development in the coming months. We announced last September that we would be investing in the modernisation of our Information Management and Document Storage business (Hays IMS) to substantially improve our service to customers. Whilst work to date has been cash positive the disruption to the business has been greater than anticipated and will continue to have a significant impact on sales growth as well as profits. The business will emerge stronger and fitter on completion of the project. b) Mail & Express Volumes in our core DX business grew by circa 4% on a like for like basis, but profits remain broadly similar to last year after surrendering the final elements of our Mailine business to Consignia and costs incurred as we invest to take advantage of future deregulation. The potential for this division is exciting. Postcomm, the independent regulator charged with liberalising the mail market, has shown strong commitment to introducing effective competition. In September Postcomm granted three interim licences to Hays to introduce innovative new services covering the time critical premium mail market with a business to business focus. These new services are being introduced progressively and 'to the door' delivery services have been launched by Hays in Central London, Edinburgh and Manchester. We already handle more mail volume than any other private mail operator and have state of the art sortation equipment compatible with Consignia. We are now investing in our network reach and customer marketing to take advantage of the new market opportunities. Logistics Sales were up 1% and operating profit was 16% lower. This was as expected in a difficult market, particularly in the U.K. Year on year profits in our Continental European operation improved compared with the same period last year, although the division's total operating profit was held back by a decline in our UK network businesses and investment in our infrastructure to deliver Fourth Party Solutions (4PS). Our contract base remains strong and has been supported by renewals with Scottish Courage and new wins with Carrefour, Scotts and Auchan amongst others. We continue to win new business at good margins primarily due to our ability to add value to our customers via the use of our in-house IT and consulting expertise. In the first six months of this year we have implemented our Logistar supply chain management software for Auchan and Nestle (e-tracking). Our retail crates business continues to grow strongly in the UK with two new wash sites opened for Sainsbury to support the existing crate management contract. Critical for our crate development in the US is the spring growing season and we expect to receive significant contracts shortly to launch the US operations. Management The search for a new Chief Executive continues to be the priority. The Nomination Committee is not prepared to compromise on quality and high calibre people are proving very difficult to prise away from their current companies in this climate. Meanwhile our Executive team has responded to the challenge to develop the Group and is providing outstanding support for my dual role as Chairman and acting CEO. Prospects The economic outlook for the major European economies continues to be a concern and it is difficult to judge when an upturn will occur. Against this background, attempting to create temporary profit improvements by cutting the essential infrastructure of the Group or failing to invest in the development of the Group is not, we believe, in shareholders' interests. In all of our businesses the first priority is to maintain and develop existing customer relationships and to continue our organic development. We believe that our Personnel business will continue to demonstrate its resilience in a difficult market. The number of temporary workers restarting contracts in January was similar to the level working in the final quarter of last year, but permanent fees remain sensitive to the current economic weakness. Early indications for January and February suggest that our temporary fees have continued to grow by circa 3% compared to the same period last year, whilst permanent placements are down circa 21% on a like for like basis. In total the Personnel division's turnover is similar to the same periods of last year. The broad coverage and market leadership of Personnel, combined with its continuing geographic development, positions the division to continue its out-performance. Our Commercial and Logistics divisions are less affected by changes in business confidence or the economic environment. However, the logistics market remains competitive and we do not see this improving in the second half whilst Commercial's profits will continue to be impacted by the cost of the reorganisation of our Information Management business. Cash generation remains a central focus providing us with the financial strength to continue investment through the downturn. This investment will position the Group to benefit when the economies of Europe begin to improve. Bob Lawson, Chairman 5 March 2002 INDEPENDENT REVIEW REPORT TO HAYS PLC INTRODUCTION We have been instructed by the Company to review the financial information for the six months ended 31 December 2001 which comprises a consolidated profit and loss account, a consolidated summarised balance sheet, a consolidated summarised cash flow statement and related notes 1 to 12. 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. 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 for use in the United Kingdom. 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 United Kingdom 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 31 December 2001. Deloitte & Touche Hill House Chartered Accountants 1 Little New Street 5 March 2002 London EC4A 3TR RESULTS For the half year ended 31 December 2001 (In £'s million) Half year to Half year to Year to 31 December 31 December 30 June 2001 2000 2001 (Unaudited) (Unaudited and (Restated) restated) Turnover Continuing operations 1,198.5 1,172.9 2,453.3 Discontinued operations - 91.6 181.0 _____________ ____________ _________ 1,198.5 1,264.5 2,634.3 Profit from operations Continuing operations 122.8 137.8 288.4 Discontinued operations - 4.2 9.6 _____________ ____________ _________ 122.8 142.0 298.0 Exceptional operating costs - - (22.5) Goodwill amortisation (12.5) (9.0) (18.5) _____________ ____________ _________ Operating profit 110.3 133.0 257.0 Share of operating profit of associated company 2.7 - - _____________ ____________ _________ 113.0 133.0 257.0 Exceptional items 0.4 - (64.9) Net interest payable (10.4) (12.0) (26.3) _____________ ____________ _________ Profit on ordinary activities before taxation 103.0 121.0 165.8 Tax on profit on ordinary activities (35.7) (39.9) (73.5) _____________ ____________ _________ Profit on ordinary activities after taxation 67.3 81.1 92.3 Equity minority interests (0.1) (0.1) (0.2) _____________ ____________ _________ Profit for the period 67.2 81.0 92.1 Dividends (26.0) (22.2) (69.2) _____________ ____________ _________ Transferred to reserves 41.2 58.8 22.9 ============= ============ ========= Earnings per ordinary share before exceptional items and goodwill amortisation 4.65p 5.29p 11.01p Basic earnings per share 3.94p 4.76p 5.41p Diluted earnings per share 3.91p 4.71p 5.35p Dividend per share 1.52p 1.32p 4.07p Interest cover 12X 12X 11X SUMMARISED BALANCE SHEET As at 31 December 2001 (In £'s million) 31 December 31 December 30 June 2001 2000 2001 (Unaudited) (Unaudited and (Restated) Restated) Goodwill and intangible 275.5 316.5 286.7 fixed assets Tangible fixed assets 503.7 512.4 555.2 Investments 102.5 56.2 54.3 Net current 28.7 9.6 (27.4) assets/(liabilities) Other creditors due after (7.9) (29.3) (25.6) more than one year Provisions for liabilities (75.5) (52.5) (60.0) and charges ____________ ______________ _________ 827.0 812.9 783.2 ============ ============== ========= Called up share capital 17.3 17.3 17.3 Share premium account 367.5 362.4 365.5 Profit and loss account 119.8 67.8 78.7 ____________ ______________ _________ Equity shareholders' 504.6 447.5 461.5 interests Minority interests 0.9 1.5 0.8 ____________ ______________ _________ 505.5 449.0 462.3 Net debt 321.5 363.9 320.9 ____________ ______________ _________ 827.0 812.9 783.2 ============ ============== ========= Net debt as a % of shareholders' 64% 81% 69% and minority interests SUMMARISED CASH FLOW STATEMENT For the half year ended 31 December 2001 (In £'s million) Half year to Half year to Year to 31 December 31 December 30 June 2001 2000 2001 (Unaudited) (Unaudited) Operating activities Total operating profit 110.3 133.0 257.0 Depreciation and amortisation 43.7 40.0 84.0 Other operating activities 0.5 0.8 (8.1) Increase in working capital (62.9) (80.3) (31.9) ____________ ____________ _______ Net cash inflow from operating activities 91.6 93.5 301.0 Returns on investment and servicing of (10.4) (12.7) (27.0) finance Tax paid (26.7) (27.1) (83.1) Net capital expenditure (35.2) (41.7) (111.7) ____________ ____________ _______ Cash inflow before acquisitions and disposals 19.3 12.0 79.2 Net acquisitions and disposals 29.8 (34.3) (46.8) Equity dividends paid (47.5) (40.7) (63.1) ____________ ____________ _______ Cash inflow / (outflow) before financing 1.6 (63.0) (30.7) Financing (17.2) 69.8 68.4 ____________ ____________ _______ (Decrease) / increase in cash (15.6) 6.8 37.7 ============ ============ ======= Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash (15.6) 6.8 37.7 Cash flow from financing 19.7 (83.6) (77.8) ____________ ____________ _______ Change in net debt resulting from cash flows 4.1 (76.8) (40.1) Borrowings acquired with subsidiaries - - 0.1 Loan notes issued - (10.6) (13.6) Exchange adjustment and other (4.7) 0.5 9.7 ____________ ____________ _______ Movement in net debt in the period (0.6) (86.9) (43.9) Opening net debt (320.9) (277.0) (277.0) ____________ ____________ _______ Closing net debt (321.5) (363.9) (320.9) ============ ============ ======= STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the half year ended 31 December 2001 (In £'s million) Half year to Half year to Year to 31 December 31 December 30 June 2001 2000 2001 (Unaudited) (Unaudited and (Restated) restated) Profit for the period 67.2 81.0 92.1 Currency translation differences on foreign currency net investments (0.1) (0.2) (2.5) ____________ ______________ __________ 67.1 80.8 89.6 Prior period adjustment in respect of FRS 19 (23.0) - - ____________ ______________ __________ Total recognised gains and losses 44.1 80.8 89.6 ============ ============== ========== RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' INTERESTS For the half year ended 31 December 2001 Profit for the period 67.2 81.0 92.1 Dividends (26.0) (22.2) (69.2) _________ ________ ______ 41.2 58.8 22.9 Exchange differences on translation (0.1) (0.2) (2.5) New share capital subscribed 2.0 3.2 6.3 Goodwill written back - - 49.1 _________ ________ ______ Net increase in shareholders' interests 43.1 61.8 75.8 Opening shareholders' interests as previously reported 484.5 407.3 407.3 Prior period adjustment (23.0) (21.6) (21.6) _________ ________ ______ Closing shareholders' interests as restated 504.6 447.5 461.5 ========= ======== ====== The results, summarised balance sheet, statement of total recognised gains and losses and movement in equity shareholders' interests for the periods ended 31st December 2000 and 30th June 2001 have been restated as a result of the adoption of FRS 19 'Deferred Tax'. NOTES 1 STATEMENT UNDER S240 - PUBLICATION OF NON STATUTORY ACCOUNTS The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act1985. The financial information for the full preceding year is based on the statutory accounts for the financial year ended 30th June 2001 as restated following adoption of FRS 19. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. 2 BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION 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 30 June 2001, except that the Group has now adopted FRS 19. Following the adoption of FRS 19, the Group now provides for deferred tax in respect of assets and liabilities arising from timing differences between the recognition of gains and losses in the financial statements and their recognition in a tax computation. 3 SEGMENTAL INFORMATION Half year to Half year to Year to (In £'s 31 December 2001 31 December 2000 30 June 2001 million) Turnover Operating Turnover Operating Turnover Operating Profit Profit Profit (Unaudited) (Unaudited) (Unaudited) (Unaudited) BEFORE GOODWILL AMORTISATION AND EXCEPTIONAL OPERATING COSTS BY BUSINESS SECTOR __________________ Continuing Operations Commercial 243.0 37.6 224.9 40.0 476.3 89.0 Personnel 506.9 62.0 502.3 70.1 1,084.0 146.0 Logistics 448.6 23.2 445.7 27.7 893.0 53.4 _______________________ _____________________ ___________________ 1,198.5 122.8 1,172.9 137.8 2,453.3 288.4 Discontinued Operations - - 91.6 4.2 181.0 9.6 _______________________ _____________________ ___________________ 1,198.5 122.8 1,264.5 142.0 2,634.3 298.0 ======================= ===================== =================== BY GEOGRAPHIC AREA Continuing Operations United Kingdom 789.1 98.9 775.2 110.2 1,617.4 232.4 Other Europe 345.6 18.2 325.0 17.5 686.9 37.1 Rest of the 63.8 5.7 72.7 10.1 149.0 18.9 World _______________________ _____________________ ___________________ 1,198.5 122.8 1,172.9 137.8 2,453.3 288.4 Discontinued - - 91.6 4.2 181.0 9.6 Operations _______________________ _____________________ ___________________ 1,198.5 122.8 1,264.5 142.0 2,634.3 298.0 ======================= ===================== =================== AFTER GOODWILL AMORTISATION AND EXCEPTIONAL OPERATING COSTS BY BUSINESS SECTOR __________________ Continuing Operations Commercial 243.0 31.4 224.9 36.6 476.3 67.4 Personnel 506.9 59.1 502.3 67.7 1,084.0 138.3 Logistics 448.6 19.8 445.7 24.7 893.0 42.1 _______________________ _____________________ ___________________ 1,198.5 110.3 1,172.9 129.0 2,453.3 247.8 Discontinued - - 91.6 4.0 181.0 9.2 Operations _______________________ _____________________ ___________________ 1,198.5 110.3 1,264.5 133.0 2,634.3 257.0 ======================= ===================== =================== BY GEOGRAPHIC AREA Continuing Operations United Kingdom 789.1 90.4 775.2 104.2 1,617.4 203.2 Other Europe 345.6 14.2 325.0 14.7 686.9 25.7 Rest of the 63.8 5.7 72.7 10.1 149.0 18.9 World _______________________ _____________________ ___________________ 1,198.5 110.3 1,172.9 129.0 2,453.3 247.8 Discontinued - - 91.6 4.0 181.0 9.2 Operations _______________________ _____________________ ___________________ 1,198.5 110.3 1,264.5 133.0 2,634.3 257.0 ======================= ===================== =================== 4 EXCEPTIONAL ITEMS The Group disposed of its non-core chemicals activities on 27th July 2001. The goodwill attributable to the business was written off in the year ended 30th June 2001 as described in the notes to the financial statements for that period. After providing for disposal costs and certain retained liabilities, the disposal gave rise to a gain of £0.4 million. 5 INTEREST PAYABLE AND SIMILAR CHARGES (In £'s million) Half year to Half year to Year to 31 December 2001 31 December 2000 30 June 2001 (Unaudited) (Unaudited) Interest payable and similar charges Bank overdrafts and other loans (11.6) (12.0) (26.1) Finance leases (1.4) (0.8) (2.2) Share of interest payable of associate (1.7) - - ____________ ____________ ____________ (14.7) (12.8) (28.3) Interest receivable and similar income Deposits 2.5 0.8 2.0 Interest receivable on loan to associate 1.8 - - ____________ ____________ ____________ 4.3 0.8 2.0 ____________ ____________ ____________ (10.4) (12.0) (26.3) ============ ============ ============ 6 TAX ON PROFIT ON ORDINARY ACTIVITIES The tax charge for the six months to 31st December 2001 is based on the estimated effective rate for the full year before goodwill amortisation and exceptional items of 31.0%. Following adoption of FRS 19 the comparative figures have been restated. A tax credit of £10.6 million was attributable to exceptional items in the period ended 30th June 2001. 7 EARNINGS PER SHARE Earnings per share (EPS) is based on profits from ordinary activities after taxation and minority interests of £67.2 million and a weighted average of 1,705.8 million shares. To enable comparisons with previous periods, EPS has also been calculated before goodwill and exceptional items using earnings of £79.3 million. The weighted average number of shares in issue excludes shares held by the Hays Employee Share Trust Ltd and the Hays plc Qualifying Employee Share Ownership Trust. The dilution effect of share options issued to employees but not yet exercised is 11.6 million shares and diluted EPS is 3.91p. 8 DIVIDENDS (pence) Half year to Half year to Year to 31 December 2001 31 December 2000 30 June 2001 (Unaudited) (Unaudited) Interim - pence per ordinary share 1.52 1.32 1.32 Final - pence per - ordinary share - 2.75 ____________ ____________ ____________ 1.52 1.32 4.07 ============ ============ ============ (In £'s million) Interim 26.0 22.2 22.2 Final - - 47.0 ____________ ____________ ____________ 26.0 22.2 69.2 ============ ============ ============ 9 INVESTMENTS (In £'s million) 31 December 2001 31 December 2000 30 June 2001 (Unaudited) (Unaudited) Associated companies 51.6 2.2 2.1 Own shares 50.8 52.7 51.2 Other investments 0.1 1.3 1.0 ____________ ____________ ___________ 102.5 56.2 54.3 ============ ============ =========== Investments in associated companies include £49.8 million in relation to Albion Chemicals Ltd including principal and accrued interest on the loan made on disposal of £48.5 million, as described in note 11. 10 PROVISIONS FOR LIABILITIES AND CHARGES (In £'s million) Pensions Deferred Property Deferred Other Total taxation employee benefits At 1 July 2001 as reported 5.8 0.8 3.6 11.6 15.2 37.0 Prior period adjustment - 23.0 - - - 23.0 ______ ______ ______ ______ ______ ______ At 1 July 2001 as restated 5.8 23.8 3.6 11.6 15.2 60.0 Exchange retranslation - - - 0.1 - 0.1 Charged to P&L account 0.6 4.7 - 0.6 14.3 20.2 Utilised (0.1) - (0.6) (1.0) (3.1) (4.8) ______ ______ ______ ______ ______ ______ At 31 December 2001 (unaudited) 6.3 28.5 3.0 11.3 26.4 75.5 ====== ====== ====== ====== ====== ====== Other provisions include £13.9 million of potential liabilities retained following the disposal of Hays Chemicals Ltd and its subsidiaries in the period and £8.3 million in respect of the reorganisation of the Information Management business. 11 ACQUISITIONS AND DISPOSALS No acquisitions were completed in the period. On 27th July 2001 the Group completed the disposal of its non-core chemical activities for a consideration of £106.8 million. £60.1 million of the sale price was paid in cash at completion, with the balance of £46.7 million being settled by a loan carrying a coupon of 9% for the first three years rising to 15% by year five. Net assets disposed, plus transaction costs, totalled £92.5 million, including £17.9 million of cash. After providing for retained liabilities, the disposal gave rise to a gain on disposal of £0.4 million. As part of the transaction, the Group invested £0.7 million in a 49% stake in Albion Chemicals Ltd, the purchase vehicle. On 29th August 2001 the Group disposed of its retail installation services business for a net consideration of £0.7 million. The transaction gave rise to no gain or loss on disposal in the period. 12 MOVEMENT IN NET DEBT (In £'s million) Cash Debt Net debt At 1 July 2001 130.4 (451.3) (320.9) Foreign exchange movements 0.7 (5.4) (4.7) Movement during period (15.6) - (15.6) Borrowings repaid - 19.7 19.7 _______ ________ _________ At 31 December 2001 (unaudited) 115.5 (437.0) (321.5) ======= ======== ========= Cash comprises cash at bank and in hand, less overdrafts. Debt includes borrowings and finance lease liabilities. This information is provided by RNS The company news service from the London Stock Exchange

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