Interim Results H1/2008

2 September 2008


IQE plc

Strong demand for high speed wireless products drives rapid growth in
sales and profit

IQE plc  (AIM: IQE,  the  "Group"), the  leading global  supplier  of
advanced wafer  products  and  wafer services  to  the  semiconductor
industry, announces its Interim  Results for the  half year ended  30
June 2008.

FINANCIAL HIGHLIGHTS
- Sales up 27% to £30.2m (H1 2007: £23.7m)
- Gross profit up 42% to £5.5m  (H1 2007: £3.9m)
-  EBITDA  profit  up  135%  to  £3.6m  before  exceptional   one-off
relocation cost (H1 2007:  £1.5m). High operational gearing  delivers
treble digit growth in EBITDA profit before exceptional item
- The  exceptional cost  of  £1.6m (H1  2007:  £nil) relates  to  the
relocation of the Singapore facility. This relocation is  progressing
on plan and will be completed during  the second half of 2008, at  an
estimated additional cost of £0.8m
- Operating profit of £1.6m before exceptional item (H1 2007:  profit
£0.1m), and £11,000 after exceptional item
- Cash inflow from operating  activities of £3.4m before  exceptional
item (H1 2007: inflow £0.4m), and £2.8m after exceptional item
- Retained profit of £0.9m before exceptional item (H1 2007: retained
loss £0.5m), and £0.7m retained loss after exceptional item
- Earnings per share of 0.19 pence before exceptional items (H1 2007:
0.12 pence  loss per  share), and  0.16 pence  loss per  share  after
exceptional item

BUSINESS HIGHLIGHTS
- Rapid sales  growth  driven  by  continuing  focus  on  high  speed
wireless communications.
- Wireless sales growth continues to outstrip growth in mobile device
sales due  to increasing  Gallium Arsenide  ('GaAs') content  in  3G,
smartphone and other high speed wireless systems.
- Singapore  relocation  on  track, majority  of  the  tools  already
transferred and in production at new facility.  Successfully achieved
without disruption to customers, during a period of strong growth  in
demand.
- Independent industry analyst, Strategy Analytics, identifies IQE as
the leading global supplier of GaAs epitaxial wafers.

TRADING OUTLOOK
- Trading in Q3 2008 continues in line with expectations. Increasing
demand for GaAs based products across a range of technologies,
including communications, office, solar and solid state lighting.
- Market conditions continuing to show robust demand for GaAs based
products for mobile devices, driven principally by 3G and other high
speed wireless applications that require a greater density of GaAs
components per handset. Consequently, growth in GaAs demand is
significantly outstripping growth in the overall handset and wireless
communication markets.
- IQE bringing new products to market including advanced laser
products, solar cells for efficient energy generation and solid state
lighting devices.


Dr Drew Nelson, IQE Chief Executive, commenting on the results said:

"Our strong performance during  the first half  of 2008 reflects  our
robust strategy  and focus  on high  growth high  volume markets.  In
particular  the  wireless   communications  market,   where  3G   and
"smartphone" technology is being rapidly adopted to meet the  growing
demand from  users  for  advanced  mobile  features  such  as  email,
internet browsing and video streaming.

"The relentless drive for higher performance mobile devices and lower
power consumption is only made possible through the increasing use of
GaAs based products. This  is driving a  significant increase in  the
GaAs content  of mobile  devices, and  hence the  rapidly  increasing
demand for our products.

"In addition  we  have  a  range of  new  technologies  that  we  are
currently in  the  process  of bringing  to  market,  including  high
efficiency solar cells,  ultra high brightness  LEDs for solid  state
lighting, advanced laser  products, and  advanced microprocessor  and
memory products.

"The Board remains confident that the strong markets for our products
as well as our high operational gearing will ensure that we remain on
course to deliver  strong growth in  sales and profits  for the  full
year."


Contacts:


IQE plc                     ([phone])
Drew Nelson
Phil Rasmussen
Chris Meadows

 College Hill               ([phone])
Adrian Duffield
Jon Davies

Noble & Company Limited     ([phone])
John Llewellyn-Lloyd
Sam Reynolds

Panmure Gordon (UK) Limited ([phone])
Aubrey Powell
Ashton Clanfield





NOTE TO EDITORS

IQE plc is  this year  celebrating its twentieth  anniversary as  the
leading  global  supplier  of  advanced  semiconductor  wafers   with
products that cover a  diverse range of applications.  It is able  to
provide a 'one stop shop' for the wafer needs of the world's  leading
compound semiconductor manufacturers, who in turn use these wafers to
make the chips which form the key components of virtually every  high
technology system. IQE  has particular  focus on  the growing  global
wireless sector for applications including; mobile handsets, wireless
infrastructure,  Wi-Fi,  WiMAX,  base  stations,  GPS  and  satellite
communications; as  well  as  for the  optical  communication  sector
including; optical  storage  (CD,  DVD), laser  optical  mice,  laser
printers  &  photocopiers,  thermal  imagers,  leading-edge   medical
products, bar-coding, high efficiency LEDs and advanced solar cells.

The  manufacturers  of  these  chips  are  increasingly  seeking   to
outsource wafer production  to specialist  foundries such  as IQE  in
order to reduce overall  wafer costs and  accelerate time to  market.
IQE is unique in being able to supply wafers using all of the leading
crystal growth technology  platforms including  Metal Organic  Vapour
Phase Epitaxy (MOVPE) and Molecular Beam Epitaxy (MBE) and the  Group
is able to leverage its global purchasing volumes to reduce the  cost
of raw materials.

IQE  also  provides  bespoke  R&D  services  to  deliver   customized
materials for specific applications  and offers specialist  technical
staff to manufacture to specification either at its own facilities or
on the  customer's  own  sites.  This is  backed  by  a  strategy  of
duplicating each key product processes over multiple sites to  assure
customers of  security  of  supply  as  well  as  provide  compelling
customer benefits in terms of flexibility and predictability of cost,
thereby significantly reducing operating risk.

IQE operates six manufacturing facilities; two in Cardiff and one  in
Milton Keynes  in the  UK; two  more in  Bethlehem, Pennsylvania  and
Somerset, New Jersey in the USA;  and its most recent acquisition  in
Singapore. The  Group also  has  11 sales  offices located  in  major
economic centres worldwide.

INTERIM RESULTS 2008

1. OVERVIEW

IQE celebrates its twentieth  anniversary during 2008,  demonstrating
the Group's ability  to withstand difficult  economic cycles.   IQE's
robust strategy and sound execution is now delivering continued rapid
growth in  sales and  profits,  and positions  the business  well  to
continue this trend.
During the first half of 2008  IQE delivered rapid sales growth,  and
treble digit growth in EBITDA,  before the one off exceptional  costs
relating to the Singapore relocation.  The powerful leverage of sales
growth into EBITDA growth  clearly demonstrates the high  operational
gearing developed by the Group.
The Singapore relocation is progressing according to plan and without
any disruption to customers.  The relocation will be completed during
the second half of 2008 at a total expected cost of £2.4m.
IQE's strategy is to focus on high growth, high volume markets.   The
mobile communications market, which in  the past proved resilient  to
global economic slowdown, continues to drive strong demand for  IQE's
products. The reliance on GaAs  devices for advanced mobile  features
means that the growth rate  for IQE's high speed wireless  components
continues to exceed the growth in demand for mobile handsets.
IQE has  also developed  a unique  set of  competitive advantages  to
ensure that  it  provides a  world  leading epitaxial  wafer  foundry
service to its customers.  By delivering against these advantages and
through strong  operational performance,  IQE has  achieved a  market
leading position.  This was  independently corroborated  by  Strategy
Analytics in its research published  in August 2008 which  identifies
IQE as the global market leader by a considerable margin.

2. RESULTS

Strong growth in the wireless market contributed to the 27%  increase
in sales to £30.2m (H1 2007: £23.7m), representing sequential  growth
of 14% compared to the previous six months.

Gross profit increased by 42% to £5.5m reflecting the strong dynamics
within the business  and the  tight control  of costs  in this  rapid
growth environment.

Selling, general and  administrative expenses  ("SG&A") were  tightly
controlled and, despite the jump in sales, increased only  marginally
to £3.9m before exceptional costs (H1 2007: £3.8m), equivalent to 13%
of sales (H1  2007: 16%).  The exceptional costs,  which amounted  to
£1.6m in the half year (H1  2007: £nil), relate to the one-off  costs
incurred  in   relocating   the   Singapore  operation   to   a   new
state-of-the-art  facility.   This  project  remains  on  track   for
completion during  the second  half of  2008. The  new facility  will
provide considerable  room  for future  expansion  in a  highly  cost
effective manner.

EBITDA before exceptional costs increased  by 135% to £3.6m  compared
with the  first  half of  2007,  clearly demonstrating  the  powerful
operational gearing of the business model and the benefit of improved
efficiencies.

Operating profit  before exceptional  item jumped  to £1.6m  compared
with £0.1m in the first half  of 2007, continuing the clear trend  of
increasingly profitable trading.

Retained profit before  exceptional item was  £0.9m (H1 2007:   £0.5m
retained loss).  This  represents 0.19 pence  earnings per share  (H1
2007: 0.12  pence  loss  per share).   After  exceptional  items  the
retained loss was £0.7m, representing 0.17 pence loss per share.
The Group has  not suffered  a tax  charge during  the period,  which
reflects the benefit of the substantial tax losses at its  disposal.
These tax losses will enable the  Group to shelter up to £90  million
of future taxable profits.

The cash inflow from operations  before exceptional items was  £3.4m,
compared with £0.4m inflow in the first half of 2007.  This  powerful
conversion of EBITDA  into cash  reflects the  careful management  of
working capital  in  a  high  growth  environment.   Overall  working
capital was reduced by a £0.6m on a sales increase of £6.5m.

As planned,  capital  expenditure  of  £3.4m  (H1  2007:  £4.0m)  was
directed at bringing additional  capacity on-line to address  growing
customer demand.   The Group also invested £0.8m (H1 2007: £0.7m)  in
developing and bringing to market new customer products.

The Group negotiated new  significantly increased banking  facilities
with Lloyds  TSB  Corporate  Markets for  the  purpose  of  financing
continued growth.   With its  current facilities  the Group  now  has
£9.0m of working capital  facilities available. Cash  on hand at  the
half year was £1.6m (H1 2007: £1.3m).

Net debt of  £15.7m (H1 2007:  £10.4m) was lower  than expected as  a
result of  strong working  capital  management. With  the  additional
capacity that is being brought on-line in 2008, and the completion of
the Singapore relocation in the  second half, the Group is  expecting
strong free cash  flow generation and  the reduction of  net debt  in
2009.

3. STRATEGY

IQE continues to  focus on fast  growing, large volume  technologies,
and in particular,  high speed wireless  communications and  advanced
opto electronics.  In this respect, the Group is  actively engaged in
developing advanced  solar  cell technology,  high  efficiency  solid
state  light   sources,  advanced   lasers  and   ultra  high   speed
microprocessor and memory  chip materials technology  for these  fast
growing, large volume emerging markets.

In order to  provide customers  with the  most competitive  outsource
wafer service globally, IQE has developed a unique set of advantages,
including:

*          offering a complete range of products covering all major
  applications;
*          offering global multi-site production capabilities in the
  primary manufacturing platforms to allow efficient capacity
  planning and for disaster scenario contingency;
*          maintaining a broad contact base and global presence with
  access to all the key global markets;
*          delivering benefits from economies of scale including
  purchasing power and research and development efficiencies;
*          promoting the sharing of best practices and innovation
  across the group to deliver improved operating and cost
  efficiencies; and
*          providing surge capacity to meet the expected growth in
  demand in the mobile device sector and other high volume
  activities.
This  strategy  has  delivered   tangible  results  in  the   current
generation of  wireless products  that  have dominated  IQE's  output
during 2008  and  will  continue  to  deliver  on  current  and  next
generation products. In addition,  IQE is also  able to leverage  its
large manufacturing capacity in order to deliver tangible benefits to
customers, shareholders and other stakeholders.

4. PRODUCTS AND MARKETS

IQE's product roadmap and strategy continues to be driven by four key
market  dynamics,  all  of  which  have  high  growth,  high   volume
prospects:

*          The increasing adoption of high speed mobile
  communications, including 3G, WiFi, WiMAX, WiBro, GPS and other
  wireless technologies .  As mobile technologies continue to advance
  at an enormous pace with new features constantly emerging, the role
  of advanced compound semiconductor materials such as GaAs has
  become critical in enabling high speed data processing whilst
  maintaining low levels of power consumption. IQE's products are
  absolutely critical in the drive to 3G and beyond, along with the
  need for backward compatibility and the speed and power to
  accommodate features such as high resolution imaging, video, high
  speed wireless data access, VoIP and satellite navigation. Each
  high speed communication device now contains multiple numbers of
  GaAs components compared with earlier generations, creating a
  powerful demand driver for GaAs components and wafers which far
  outstrips the growth of the overall communications market which is
  in excess of 10% pa.

*          The ubiquity of applications for high volume semiconductor
  lasers, including HD DVD, laser mouse, laser projection, gaming and
  office and industrial applications. In particular, laser projection
  is viewed as one of the most exciting applications of this
  technology, eventually being incorporated into mobile handsets.

*          The accelerating drive for clean, efficient and
  sustainable energy sources (solar cells), and highly efficient
  light sources (LEDs) in order to reduce the impact on global
  warming, reliance on fossil fuels and provide a much cleaner
  environment.  Compound semiconductors are playing a critical role,
  and IQE is involved in leading edge development for these
  applications, having achieved world leading results through its
  partners for solar cell efficiencies.

*          The continuing need for higher speed, more powerful
  microprocessors and higher speed, ultra high density memories. This
  is driving the demand for new materials solutions based on silicon
  substrates including the incorporation of compound semiconductors
  directly onto silicon substrates.  IQE has established powerful
  positions in both technologies, working with some of the biggest
  names in the industry.

Each of  these  markets  has very  powerful  growth  potential,  with
wireless being the current key driver.

5. TRADING OUTLOOK

IQE's markets  continue to  prove resilient  to the  global  economic
slowdown, as demonstrated  by strong  customer demand  and echoed  by
recent market comments on the  strength of 3G handset and  smartphone
sales. The  growth in  demand  for IQE's  products is  largely  being
driven by the increasing content of GaAs within mobile devices, which
reflects the rapid adoption of 3G and "smartphone" technology to meet
the growing demand from  users for advanced  mobile features such  as
email, internet  browsing  and  video  streaming.  3G  handset  sales
currently represent around 12% of the general market but are forecast
to grow 52% in 2008 (Gartner; August 2008).

In addition, IQE continues to innovate  and is working with a  number
of customers in developing cutting edge technologies in key  emerging
fast growing, large volume markets, including solar power generation,
high efficiency  solid  state  light sources,  advanced  lasers,  and
advanced micro processor and memory products.  The Group continues to
make good progress in these areas  and is on track in bringing  these
products to market in the near term.

The Group's diverse customer  base and multi-channel supply  strategy
ensure a high level of resilience to changes in the market  landscape
within its supply chain.

The successful implementation of the Group's strategy, combined  with
a strong operational gearing  give the Board  confidence in both  the
short term and long term growth prospects of the business. The  Group
remains on course to deliver strong growth in both sales and  profits
for the full year.

Dr Drew Nelson
President and CEO
2nd September 2008.




                                 6 months to 6 months to 12 months to
CONSOLIDATED INCOME              30 Jun 2008 30 Jun 2007  31 Dec 2007
STATEMENT

(All figures GBP000s)       Note   Unaudited   Unaudited      Audited


Revenue from continuing               30,178      23,680       50,065
operations
Cost of sales                       (24,675)    (19,808)     (41,838)

Gross profit                           5,503       3,872        8,227
Gross profit %                          18.2        16.4         16.4

Selling, general and
administrative expenses      3       (5,492)     (3,808)      (8,053)
(including exceptional
items)

Operating profit                          11          64          174
Operating profit %                       0.0         0.3          0.3


Operating profit before                1,579          64          613
exceptional items
Exceptional items            3       (1,568)           0        (439)

Operating profit                          11          64          174
Operating profit % before                5.2         0.3          1.2
exceptional items


Finance income                            20           5           58
Finance costs                          (740)       (572)      (1,094)

Loss for the period attributable
to equity shareholders                 (709)       (503)        (862)



Loss pence per ordinary 1p   4        (0.16)      (0.12)       (0.20)
share
Diluted loss pence per       4        (0.16)      (0.12)       (0.20)
ordinary 1p share

EBITDA before exceptionals
is calculated as follows:

Loss for the period attributable       (709)       (503)        (862)
to equity shareholders
Share based payments                     434         198          571
Exceptional items                      1,568           0          439
Net interest payable                     720         567        1,036
Depreciation of tangible               1,382       1,111        2,400
fixed assets
Amortisation of intangible fixed         205         157          307
assets

Earnings before interest, taxes,
depreciation, amortisation and         3,600       1,530        3,891
exceptionals












CONSOLIDATED STATEMENT OF        6 months to 6 months to 12 months to
RECOGNISED
INCOME AND EXPENSE               30 Jun 2008 30 Jun 2007  31 Dec 2007

(All figures GBP000s)              Unaudited   Unaudited      Audited

Loss for the period                    (709)       (503)        (862)
Currency translation differences
on foreign currency net                  241       (234)        (743)
investments

Total recognised expense for the       (468)       (737)      (1,605)
period






                                   As At         As At        As At
CONSOLIDATED BALANCE         30 Jun 2008   30 Jun 2007  31 Dec 2007
SHEET

(All figures                          Unaudited     Unaudited Audited
GBP000s)

Non-current assets :
Intangible assets                 12,856        11,643       12,110
Property, plant and               19,703        14,510       17,243
equipment

Total non-current assets          32,559        26,153       29,353


Current assets :
Inventories                        8,829         8,094        7,643
Trade and other                   12,534         8,540       10,599
receivables
Cash and cash                      1,646         1,263           11
equivalents

Total current assets              23,009        17,897       18,253


Total assets                      55,568        44,050       47,606


Current liabilities :
Borrowings                       (6,254)       (3,584)      (5,911)
Trade and other payables        (14,208)       (8,851)     (10,354)

Total current                   (20,462)      (12,435)     (16,265)
liabilities


Non-current liabilities
:
Borrowings                      (11,142)       (8,046)      (8,259)
Long term creditors                (829)             0            0
Deferred income                    (102)         (141)        (122)

Total non-current               (12,073)       (8,187)      (8,381)
liabilities


Total liabilities               (32,535)      (20,622)     (24,646)


Net assets                        23,033        23,428       22,960


Shareholders' equity :
Ordinary shares                    4,324         4,308        4,310
Share premium                    172,281       172,154      172,183
Other reserves                     (422)         (952)      (1,092)
Profit and loss account        (153,150)     (152,082)    (152,441)

Total shareholders'               23,033        23,428       22,960
equity








                             6 months to  6 months to 12 months to
CONSOLIDATED CASH FLOW       30 Jun 2008  30 Jun 2007  31 Dec 2007
STATEMENT

(All figures                         Unaudited     Unaudited  Audited
GBP000s)

Cash flows from
operating activities :
Cash inflow from         6         2,758          393        1,827
operations
Interest received                     20            5           58
Interest paid                      (475)        (427)        (762)

Net cash inflow/(outflow)
from operating activities          2,303         (29)        1,123


Cash flows from
investing activities :
Development expenditure            (786)        (730)      (1,372)
Investment in other                (100)            0         (20)
intangible fixed assets
Purchase of property,            (2,605)      (3,974)      (7,814)
plant and equipment
Proceeds from sale of                  0            0           97
tangible fixed assets

Net cash used in                 (3,491)      (4,704)      (9,109)
investing activities


Cash flows from
financing activities :
Issues of ordinary share             107          127          154
capital
Loans and leases                   3,738        1,798        2,750
received/(repaid)

Net cash generated from            3,845        1,925        2,904
financing activities


Net increase/(decrease)
in cash and cash                   2,657      (2,808)      (5,082)
equivalents

Cash and cash equivalents
at the beginning                 (1,011)        4,071        4,071
of the period


Cash and cash            7
equivalents at the end             1,646        1,263      (1,011)
of the period











1 BASIS OF PREPARATION

These interim results  have been prepared  under the historical  cost
convention and in accordance  with International Financial  Reporting
Standards ("IFRS") and interpretations in issue at 30 June 2008.

The interim results were approved by  the Board of Directors and  the
Audit Committee  on 01  September 2008.  The interim  results do  not
constitute statutory accounts within the meaning of the Companies Act
1985 and have not been  audited.  Comparative figures in the  interim
results for the year ended 31 December 2007 have been taken from  the
published audited statutory financial statements.   All other periods
presented are unaudited.








                                      6 months to 6 months  12 months
                                                        to         to
2 SEGMENTAL INFORMATION               30 Jun 2008   30 Jun     31 Dec
                                                      2007       2007

        (All figures GBP000s)      Unaudited   Unaudited      Audited

Revenue by business segment :
Wireless                                   23,646   17,327     38,088
Optoelectronics                             5,278    5,097      9,212
Electronics                                 1,254    1,256      2,765

Total revenue                              30,178   23,680     50,065


Operating profit by business
segment :
Wireless (including exceptional items
£1,568,000; 2007 £nil)                      1,523    1,260      3,583
Optoelectronics                             (893)    (938)    (2,840)
Electronics                                 (619)    (258)      (569)

Total operating profit                         11       64        174





                              6 months to 6 months to 12 months to
3 EXCEPTIONAL ITEMS           30 Jun 2008 30 Jun 2007  31 Dec 2007

(All figures GBP000s)           Unaudited   Unaudited      Audited

Exceptional items comprise :
Relocation costs                    1,568           0          439





The exceptional charge of £1,568,000 (2007- £nil)  relates to the
one-off costs incurred in relocating the Singapore operation to a new
state-of-the-art facility.  The relocation is progressing according
to plan and will be completed during the second half of 2008.





4 LOSS PER SHARE                 6 months to 6 months to 12 months to
                                 30 Jun 2008 30 Jun 2007  31 Dec 2007

                                   Unaudited   Unaudited      Audited

Profit/(loss) for the period
(before exceptional                      859       (503)        (423)
items) GBP 000s
Loss for the period GBP 000s           (709)       (503)        (862)



Weighted average number of       431,500,695 430,362,629  430,601,406
ordinary shares
Dilutive share options            12,451,008   6,931,004   14,883,360

Adjusted weighted average number 443,951,703 437,293,633  445,484,766
of ordinary shares


Profit/(loss) pence per share           0.19      (0.12)       (0.09)
(before exceptional items)
Loss pence per share                  (0.16)      (0.12)       (0.20)
Diluted loss pence per share          (0.16)      (0.12)       (0.20)




Profit/(loss) per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average number
of ordinary shares during the period.  Diluted loss per share is
calculated by adjusting the weighted average number of ordinary
shares in issue on the assumption of conversion of all dilutive
potential ordinary shares.

IAS 33 requires the presentation of diluted loss pence per share when
a company could be called upon to issue shares that would decrease
net profit or increase net loss per share. For a loss-making company
with outstanding share options, net loss per share would only be
increased by the exercise of the out of the money options. Since it
seems inappropriate to assume that option holders would act
irrationally, no adjustment has been made to diluted loss per share
for out of the money share options.

5 STATEMENT OF CHANGES IN         6 months to 6 months to   12 months
                                                                   to
   SHAREHOLDERS' EQUITY           30 Jun 2008 30 Jun 2007 31 Dec 2007

(All figures GBP000s)               Unaudited   Unaudited     Audited

At the beginning of the period         22,960      23,840      23,840

Loss for the period attributable
to equity shareholders                  (709)       (503)       (862)
Share option costs credited to            434         198         571
reserves
Shares issued net of issue costs          107         127         154
Net exchange differences offset           241       (234)       (743)
in reserves

At the end of the period               23,033      23,428      22,960










                                    6 months to 6 months to 12 months
                                                                   to
6 CASH GENERATED FROM OPERATIONS    30 Jun 2008 30 Jun 2007    31 Dec
                                                                 2007

(All figures GBP000s)                 Unaudited   Unaudited   Audited

Operating profit                             11          64       174

Depreciation of tangible assets           1,382       1,111     2,400
Amortisation of intangible assets           205         157       307
Loss/(gain) on sale of tangible               0           0       (5)
assets
Government grants released                 (19)        (19)      (39)
Non cash exceptional costs                  961           0         0
Non cash share option costs                 434         198       571

Operating profit before changes in
working capital                           2,974       1,511     3,408

(Increase)/decrease in inventories      (1,186)         487       937
(Increase) in trade and other           (1,935)     (2,060)   (4,119)
receivables
Increase in trade and other               2,905         455     1,601
payables

Cash inflow generated from                2,758         393     1,827
operations





                                        As At       As At       As At
7 ANALYSIS OF NET DEBT            30 Jun 2008 30 Jun 2007 31 Dec 2007

(All figures GBP000s)               Unaudited   Unaudited     Audited

Cash at bank and in hand                1,646       1,252           0
Highly liquid investments                   0          11          11

Total cash and cash equivalents         1,646       1,263          11


Overdraft                                   0           0     (1,022)
Loans due after one year             (11,073)     (8,040)     (8,170)
Loans due within one year             (6,211)     (3,583)     (4,844)
Finance leases due after one year        (69)         (6)        (89)
Finance leases due within one            (43)         (1)        (45)
year

Total borrowings                     (17,396)    (11,630)    (14,170)


Net debt                             (15,750)    (10,367)    (14,159)

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