Final Results

RNS Number : 6137E

James Halstead PLC

30 September 2008

 



30 September 2008

JAMES HALSTEAD PLC

PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS

FOR THE YEAR ENDED 30 JUNE 2008

Key Figures

• Record revenue increased to £158.7 million (2007: £137.3 million) - up 15.7 %

• Record pre tax profit increased to £29.9 million (2007: £23.5 million) - up 27 %

• Record final dividend per ordinary share proposed of 14.50 p (2007 : 11.25p) - up 28.9 %

• Record earnings per 5p ordinary share 39.7p (2007: 31.1p) - up 27.7%

• Record cash inflow from operations of £ 27.3 million (2007: £26.3 million)

• Nil net gearing

Mr Mark Halstead, Chief Executive, commenting on the results, said:

 'I believe this is a very commendable performance as our strategy to focus on shareholder value, as delivered by solid bottom line performance, continues. Despite adverse raw material and energy cost increases we maintained the gross margin with our premium products delivering record turnover on the back of strong sales representation and initiatives.

Conditions remain challenging but notwithstanding the uncertain economic backdrop I look forward with confidence to building on this year's success.'

Enquiries:
James Halstead
Mark Halstead, Chief Executive
Gordon Oliver, Finance Director	Telephone: [phone]
Hudson Sandler
Nick Lyon	Telephone: [phone]

  CHAIRMAN`S STATEMENT

It gives me pleasure to report improved results with revenue of £158.7 million ( 2007: £137.3 million ) an increase of 15.7% and profit before taxation increased to £29.9 million ( 2007: £23.5 million ) which is 27% above last year. These are once again a record set of results and in challenging market conditions are commendable. 

Our companies have faced significant raw material and energy cost increases. However, with added sales volume, a mix towards our higher value products and a net benefit from the weakness of sterling we have more than met these challenges.

As is customary, I would draw reference to some of the many notable installations we have been associated with such as the new Istanbul Airport in Turkey, the Puma stores chain in Chile and Bank Byr Sparisjodur, on Hafnarfirdi Island, Iceland.

Our UK market set new records for sales and our achievements overseas were also creditable with the majority of territories recording record levels of revenues from Germany to Mexico and Finland to  Trinidad.

Dividend

The Board proposes to increase the final dividend to 14.50p (2007: 11.25p) an increase of 28.9%.

Acknowledgements

I extend to our customers, employees and management the congratulations of the Board for their contribution to these results.

Additionally I would like, specifically, to acknowledge the significant contribution to the business of Mr Mike Trelease who has retired as the Sales Director of Polyflor after over twenty five years' service with the company, and our Company Secretary Mr Jack Whittaker who also retires after a decade with the Group.

Outlook

Our group manufactures, sources and distributes a broad range of commercial resilient floor-coverings to the worldwide market with a significant bias to refurbishment. We are well placed for continued expansion into the future.

We are alert to the current economic conditions but the group has a solid asset base, significant cash generation and reserves, a determination to succeed and a proven track record of delivering sustained dividend growth. 

Trading in the first three months of the current financial year is in line with our expectations and at levels ahead of last year and I look forward to reporting further progress at the interim stage.

Geoffrey Halstead

Chairman

  CHIEF EXECUTIVE'S REPORT

Repeating the Chairman's comments - these are record results. The year to 30 June 2008 was our most active and successful year since our flotation 60 years ago. The revenue growth to £ 158.7 million (2007: £137.3 million) was spread across the globe with the majority of territories (and all major markets)  delivering record sales performances.

The UK market recorded turnover of £67.4 million (2007: £59 million) - up 14.2%; the European / Scandinavian markets were £57.3 million (2007: £48.8 million) - up 17.4%; Australasia £24.5 million (2007: £22 million) - up 11.2%; and the rest of the world £9.6 million (2007: £7.4 million) up 28.6%.

In looking at the UK in general, which is our main market (although at 42.5% of total sales it is not the majority), it is clear that economic conditions have been gloomy for a good proportion of the year. Having said this we have seen, to date, little evidence of a slowdown in our businesses for which we identify several factors. These follow in no particular order. Firstly, we have no UK based manufacturing competitors of substance and increased transport costs and falling sterling have given us a degree of competitive advantage. In previous recessionary periods we have noted a 'trade down' from more expensive commercial flooring ( e.g. carpets ) and can surmise this may be a factor in the prevailing conditions in the latter part of last year ( and into the current year ). Additionally, we are of the belief that refurbishment demand is unaffected by the widely reported slowdown in the commercial sector in the UK. Finally, though market information in our sector is scarce and unreliable we have no doubt that volume in the resilient sheet flooring sector has grown and that we have taken market share.  

In May 2008 the Palmer Market Research company published its report on the commercial flooring sector and noted that 'Polyflor' was the most recognised flooring brand in 2007, recognised by 93% of specifiers, 90% of architects and was the most preferred brand with contractors. The reasons for this were analysed in the report and Polyflor is rated highly for product appearance, product range, sales representation, delivery frequency and competitive pricing.  It is no coincidence that these factors have each been a key focus of our business over the years and in these challenging times will become more so.

We are increasingly conscious of specifiers and users looking for environmentally sound floorcoverings and more than 90% of our homogenous sheet vinyl ranges are, independently certified (by the British Research Establishment) in respect of their environmental profiles. In the UK, in areas where the 'pseudo-science' of the so called 'natural' alternative linoleum has in recent years made some impact on specifiers, it is interesting to note that independent research shows linoleum sales continue to decline with sales being at their lowest since 1995. As ever, solid market presence and consistently honest representation is crucial to our long term success and will continue to help our products to sell and the group to grow.

Projects like the installation of Polyflor Static Dissipative in Algeria's mobile phone relay stations and the Merchant Bank of Ghana, in Accra are important but our core markets are healthcare (public  and private), education and major institutions  with ongoing refurbishment contracts and day to day contractor loyalty.

Reviewing our worldwide operations -

Polyflor, the UK based Operation

Polyflor achieved a 14.4% increase in turnover and increased its profitability. The company continues to diversify its product offering and the launch of Polysafe Wood FX and Polysafe Mosaic were important with successful launches in the latter part of the financial year. Sales in the UK were at record levels - up 15.1%, in addition sales to Polyflor`s sister companies in the Group were at record levels - up 12% and direct export sales were increased by 15.3%. With some benefit from a weaker sterling in the latter part of the year these sales growth levels were largely related to volume growth. A good, all-round, sales performance.

The increase in basic costs was a challenge for Polyflor but with in-house recycling initiatives accelerated we now achieve on average 25% recycled content in our UK manufactured flooring and with more initiatives to use post consumer waste, this trend is set to continue. In addition, the energy used per metre of flooring produced has dropped again for the eighth successive year; in total there has been a 25% drop from the levels of 2000. Recycling of water (96% of water used on site is recycled ), wood,  cardboard, paper and plastic all reduce costs not only  in terms of land-fill but also in terms of net purchase of virgin material.

There were very significant raw material and energy cost increases during the year that the Manchester  factory could not fully offset with efficiency and volume gains and the gross margin fell 2.3% points but this was offset by largely holding fixed costs at prior year levels which gave a benefit equivalent to 1.8% of margin so that the margin erosion as a percentage was a manageable 0.5% of sales.

Large projects continue to be secured across the globe such as the American School in Doha, Qatar,  and the Kingston School in Mumbai, India but also much closer to home such as Bolton Children`s Hospital and Bury Town Market.

Self manufactured product sales grew by 12.5% in the year but the third party sourced product grew by 22.5% which gave additional operational efficiencies to the scale of our UK operations and we expect this trend to continue.

Objectflor Art & Design and Karndean International our German based businesses

The European businesses recorded another fine year with Objectflor 14.6% ahead of last year and Karndean 34% ahead in terms of sales. The general economic climate in the core German market was more positive though the companies faced increasing competitive pressure. In the area of luxury vinyl tile the number of competitors has increased to over 20 where once there were only a handful. The solid foundations and strong portfolio were more than able to withstand this pressure.

A concentrated marketing approach to safety flooring was made, and continues, and Objectflor's newly presented 'Sekura' range has been well received.

As a result of the Managing Director, Mr Eberhard Lotz', move to the main Board the management of the German operations has been restructured. Two new Directors join the local board and the sales force has been augmented with key account managers in the field for each major region of Germany. 

During the year work commenced on a 30,000 square foot extension to the warehouse facility in Cologne which when opened, in late 2008 will be one of the largest facilities of its type in Europe. This facility will increase service levels and support increased levels of turnover. In addition, the facility will house a dedicated and fully staffed training centre for the promotion of our products and their methods of installation as well as general business development training for our business partners.

Objectflor continues to act as our centre for European exports which increased 17%.

Polyflor Hong Kong, sales office for Asian and Far East Markets

The Asian and Far East markets continue to be managed from our Hong Kong office. It is a feature of these markets that specifications, although often significant in volume terms, are the subject of immense competition against both locally manufactured product and our competitors in Europe.

Many of the sales are denominated in US dollars which continued to be weak in the financial year and this made selling in these territories more difficult.

In spite of the above factors, we have seen significant growth in this region with turnover increasing by some 34%. This growth arises from a greater number of contracts being specified in our products, a greater contribution from our satellite sales offices within China itself and the benefits of having greater levels of stock on the ground in China allowing us to take advantage of day to day business.

We have seen some significant growth in the transport sector with, in particular, growing sales into the shipbuilding sector in Korea and also the transport sector in China reflecting our ability to offer a suite of products that carry the appropriate regulatory approvals for maritime use.

We have supplied a vast variety of users across Asia, including this year: the Singapore National Environmental Authority; the Canadian International School in Hong Kong; many hospitals; and the Hong Kong Bowling City.

We continue to work on selling our higher specification products as the market becomes more sophisticated and, as noted above, have had success in achieving this. However, these markets continue to be dominated in volume terms by the commodity homogenous products and accordingly we have geared our approach to the markets to take advantage of this with greater depth of local stock.

Polyflor Nordic, comprising Polyflor Norway, based in Oslo and Falck Design based in Gothenburg 

Following the growth reported in recent years, the year to June 2008 has been one of consolidation in the Scandinavian region.

Polyflor Norway has steadily grown in the Norwegian market over the last decade. The current year has consolidated the growth experienced in the previous years with the branch's strong market  position maintained. Sales were on a par with last year in contrast to the growth seen in most other markets. This was almost wholly the result of increased competition in the luxury vinyl tile market where volume and margins were eroded. The underlying day-to-day sales were good but there were noticeably fewer specifications for projects. Nevertheless, there were significant contracts in the year such as the Ä Hus hospital in Oslo which is the largest on shore project ever in Norway, and Oslo central station. The launch of the new Kudos range late in the financial year and the new Expona range in the new year are expected to refresh our presence. 

Profitability has also been reduced as a result of the mix of sales eroding margin and by investing in the sales force which, it is anticipated, will result in greater sales in the future. 

Falck Design in Sweden has continued to achieve greater representation of the group's products in a market in which they have, historically, been under-represented. This has involved holding greater amounts of stock available to the market for immediate delivery and further recruitment to the sales force and logistics support to ensure that the market is appropriately serviced. This investment supports our strategy of achieving greater market penetration in Sweden. We have won business with a number of headline private sector investments including the Arena Sør football stadium and the Lekland amusement park. A recent installation was the use of Polysafe floor coverings in theatres in Stockholm and Gothenburg for the productions of 'Singing in the Rain'.

In addition to expanding the sales force, we have appointed a new manager of the Swedish business from within the local flooring industry with the intention of increasing the company's market share.

Both Polyflor Norway and Falck Design have introduced new products into their markets, both from within the group's existing suite of products and from outside which will enhance the opportunities available to these businesses. Amongst our other third party products we now represent the Artigo rubber ranges. This has contributed to sales and profit in the year and is anticipated to bring further growth in the coming year.

Polyflor Pacific, encompassing our businesses in Australia and New Zealand

The general economic background in the two main territories of Australia and New Zealand were quite different, with the Australian market continuing to be buoyant but New Zealand showing signs of a 'credit-crunch' general slowdown. Having said this, the reorganisation of the Australian and New Zealand businesses has continued and this is the first full year the territories have been managed together. There has been a focus in the current year on ensuring processes in both markets are as common as possible, while supporting the different needs of each business given the different product offering.

Looking at Australia first, the business recorded a 9% increase in turnover over the previous year with growth in all states. This, coupled with improved margins and tight cost controls ensured that profits were well ahead of the corresponding period.

The company's profile has been significantly raised by some strategic marketing initiatives and positive editorial comment in a number of well-respected architectural magazines linked with pictorial advertising showing commercial installations. The company's newly designed stand for commercial exhibitions was well received by end users. 

There has also been a concerted campaign to raise the issue of slip resistance standards and many presentations have been made to architects and specifiers highlighting this issue and appropriate solutions. As a leader in slip resistant innovation this has re-enforced our reputation as a market leader.

The introduction of the Kiesel range of screeds and adhesives reported last year has been further enhanced this year with the appointment of a Product Manager-Screeds and Adhesives. This segment of our business is now in excess of 5% of turnover. 

Increasingly architects and specifiers for commercial projects are focusing on sustainable products  enviromentally. The business will advance the environmental credentials of its product offering, utilising positive life cycle ratings the products have received and, as in Europe, we expect these credentials to stand up very well to scrutiny.

Specifically, this year, our products have been used for the rollout of 150 Specsavers stores and can be found in retail outlets in the Telstra stadium in Melbourne's Olympic park and the recent installation at Munchkinland, Highpoint Shopping Centre in Victoria which features some very vivid designs.

The New Zealand business continued to rationalise its product range and to focus on its core product lines. In particular, the decision to withdraw from the commercial carpet sector has led to a fall in turnover but allows greater sales focus on the core Forbo and Polyflor ranges. The result of this was an overall reduction in turnover of 14% compared to last year, but with the introduction of new, more profitable products and ranges going forward it is expected that this will be reversed in the current financial year.

We have invested in the future of this business. The Christchurch warehouse operation was relocated to new larger premises and a new warehouse facility is currently being constructed in Auckland which is scheduled to be ready in October 2008. Both these changes will give us larger premises that are more appropriate to our business needs in the next few years.

Phoenix Distribution, based in Stoke-on-Trent, distributor of motorcycle accessories

This was another highly successful year for Phoenix with sales ahead in what was expected to be a difficult retail market with all brands performing well. Overall sales growth at 4.5% was more modest than in the flooring operations but margins were improved.

Aspirational brands Arai, Abus, Yoshimura and Kappa (made by Givi) form the foundation of the  Phoenix collection with complementary ancillary brands Fog City, Pinlock, and Shift It. Phoenix's latest acquisition, VentureShield is an almost invisible protective film that prevents stone chips and other road debris from damaging a helmet. This product is proving highly popular and is now expanding into Europe and the USA.

Arai has performed strongly in the year with its race led pedigree and a celebrity client base ranging from Brad Pitt and Orlando Bloom through to Simon King and Dave Myers (the two 'hairy bikers').  Phoenix now sells more Arai helmets in the UK than are sold in any other country in the world; including the USA and the brand's domestic market, Japan. Car helmet sales for Arai continue to make good progress. 

The bottom line performance in terms of profit was very healthily improved.

Sponsorship continues to be a central focus of ensuring brand awareness in a knowledgeable customer base. This year there is extended activity supporting the Ron Haslam Race School, based at Donington, the British Superbike series Audi pace car drivers, Buell pace riders, the BSB taxi bikes and the Government backed Think campaign, along with our 30 plus racers in the British Superbike series, TT, Northwest and various car drivers including British Touring car stars, Mat Jackson, Tom Onslow-Cole and Gordon Shedden. 

The Arai 5 star dealer network continues to be the backbone of distribution to the UK marketplace all offering a premier service with at least one fully trained Arai technician in each shop.  Phoenix's great reputation within the industry, and one they are very proud of, is for customer service. During the year, Phoenix won the J D Power survey, with Arai, for the 10th year in succession, a remarkable achievement. The J D Power study examines 11 key areas of owner satisfaction.  

Looking Forward

Looking ahead to the next year, I can only be confident that further progress will be made.

Mark Halstead

Chief Executive

  FINANCIAL DIRECTORS REPORT

The group has adopted International Financial Reporting Standards ('IFRS') for the first time for this year, ended 30 June 2008. The notes to the accounts detail the adjustments made in converting from UK GAAP. In summary these are:

• Intangible assets where goodwill is no longer amortised over its useful life;

• Hedge accounting where derivative financial instruments are recorded at fair value in the balance sheet  with the restatement of certain assets and liabilities previously recorded at the hedged rate;

• Exchange translation differences are now recorded in a separate reserve;

• Revenue is altered slightly as settlement discounts and rebates are netted from revenue where previously included in selling and distribution costs

The effects will be reported in the notes to the full published accounts but in summary are not material when compared to UK GAAP.

These accounts have been prepared, as usual, in accordance with the fundamental principles of going concern, matching of costs and revenues, consistency and prudence, as the basis for our accounting policies.

Profit before tax at £29.9 million (2007: £23.5 million) shows an increase of 27% despite high raw material and energy costs. The gross margin was reduced overall by 1%, but would have increased but for hedging of export cash flows delaying the benefit from the fall in sterling. Some of the key statistics are:

• Group turnover at £158.7 million (2007: £137.3 million) - up 15.7% of which around 2.7% is the effect of foreign exchange translation changes

• Underlying earnings per share at 39.7p (2007: 31.1p) - up 27.7%

• Dividends at 20.75p (2007: 16.5p) - up 25.8%, being interim paid May 2008 and final proposed December 2008

• Trade debtors at £21 million (2007: £18.7 million) - up 12%

• Cash (net of borrowings) at £29.3 million (2007: £19.9 million) - up 47.2%

Defined Benefit Pension Scheme

The full accounts will detail the IAS 19 analysis of the scheme and whilst this seems to be the main focus of attention for analysts and shareholders, it gives only a snapshot of the scheme and the creditor in the balance sheet is very fluid. It is sensitive to gilt yields and other assumptions and is at best a rough guide to the ongoing liability. Certainly it falls well short of a 'buy-out' figure. In summary, the deficit net of deferred taxation has risen to £9 million (2007: £4.5million). This deficit is of course variable according to market experience on the assets, actuarial changes to assumed lives and the discount rate. In the latter case just 0.1% variation in the discount rate has a £ 1 million effect on the liabilities and in these times of an inverse yield curve (where long term rates are below short term) this can have a significant effect.

It is important to appreciate that whilst the scheme is closed to new members and future accrual rates for benefits have been reduced, the liabilities of the scheme are not capped but will continue to be determined not just by investment returns but also by longevity of pensioners. Consequently, the defined benefit scheme remains an area of risk and uncertainty for the group. 

Cash Inflow

Cash inflow from operating activities remained strong at £27.3 million (2007: £26.3 million).The overall increase in cash of £6.3 million is after net capital expenditure of £3.2 million and payment of taxation and dividends of £ 17 million. The net funds at £29.3 million (2007: £19.9 million) show a healthy un-geared position.

The overall increase in net assets is £9.6 million and net assets per ordinary share have increased to 95.8p (2007: 77.6p). 

Treasury

The group operates internationally and is exposed to foreign exchange risk on sales and purchases that are denominated in currencies other than sterling. There are a range of currencies giving rise to this risk but most significant are the US Dollar, the Euro and the Australian Dollar. To mitigate risks associated with future exchange rate fluctuations the group's policy is to use forward exchange contracts to hedge its known and certain forecast transaction exposures based principally on historical experience and projections. The group hedges at least 25% and on occasion more than 100% of the next twelve months anticipated exposure.

The group's UK cash and bank balances are managed centrally at the group's head office. 

Where appropriate overseas subsidiaries have local borrowing facilities. At 30 June 2008 all overseas subsidiaries had positive bank balances. 

The group has significant transactional exposures relating to both sales and purchases denominated in foreign currencies. In particular, it is the group's stated policy to undertake much of its export trade in local currency. This works to our advantage by ensuring the sales volume does not fluctuate as a result of exchange rate movements and removes risks from our trading partners.

The level of forward cover in place is reported to the group board on a regular basis. 

Overall, our approach to treasury management is to identify appropriate instruments to facilitate the group's trading activities, and to be risk averse. There is no intention to trade in financial instruments or for the group treasury department to act as a profit centre in its own right and, consequently, 'speculative' instruments and practices are avoided.

  Key Performance Indicators

The group's subsidiaries are measured against detailed budgets and prior year comparatives. Monthly reports to the group executive directors and senior management are required from their function directors. 

In terms of key performance indicators for the group as a whole the board considers growth in profit before tax and growth in dividend levels to be of most importance. 

Levels of stock, debtors and creditors are collated and reported to the board on a monthly basis. Our focus is on stock availability, stock turn and appropriate credit being given to and received from our customers and suppliers respectively, rather than performance indicators associated with cash flow directly. However, since dividend payments require sales to be translated into cash, control of working capital is closely monitored.

No individual key performance indicator is regarded so highly that it can replace the informed background knowledge, at board level, of our individual businesses, which underpins the way our group is managed.

Principal Business Risks and Uncertainties

The board constantly assesses risks. To the extent risk is insurable the board is risk averse and is widely insured. A comprehensive insurance appraisal takes place annually to mitigate risk exposures to business interruption, fire, etc. but obviously key risks such as escalating raw material prices and energy costs fall outside any insurable event.

The risks identified, beyond insured events include -

Foreign exchange risk, credit risk, liquidity risk and key management. There are, additionally, key customers and key suppliers which create dependencies. Sales and purchasing policies are under regular review to assess these dependencies. In the main risk and control are measured and assessed from a financial prospective, but this is not to the exclusion of non-financial risks and uncertainties and it is clear that scenarios can be envisaged where the group's activities may be disrupted and little could be done to mitigate the negative effects

In Conclusion

With the adoption of IFRS there has been an significant increase in prescribed disclosure and a lengthening of the annual report which has the potential to detract from the core objectives: profit, dividend and growth.  The results for the year are very good by any standard and the balance sheet is in a strong position to cope with the current effects of the 'credit crunch'.

Gordon Oliver

Finance Director

  Audited Consolidated Income Statement

for the year ended 30 June 2008

	Year  ended 30.06.08 £'000		Year  ended 30.06.07 £'000
Revenue	158,740		137,252
Cost of sales	(90,110)		(76,557)
Gross profit	68,630		60,695
Selling and distribution expenses	(29,798)		(26,257)
Administration expenses	(9,744)		(11,795)
Operating profit	29,088		22,643
Finance income	769		856
Profit before income tax	29,857		23,499
Income tax expense	(9,502)		(7,657)
Profit for the period attributable to equity shareholders	20,355		15,842
Earnings per ordinary share of 5p :
-basic	39.7p		31.1p
-diluted	39.5p		30.9p

All the above figures relate to continuing operations.

  Audited Consolidated Balance Sheet

as at 30 June 2008

	As at 30.06.08 £'000		As at 30.06.07 £'000
Non-current assets
Property, plant and equipment	19,671		18,334
Intangible assets	3,232		3,232
Deferred tax assets	5,737		3,497
	28,640		25,063
Current assets
Inventories	30,641		23,899
Trade and other receivables	23,034		20,839
Derivative financial instruments	149		54
Cash and cash equivalents	29,521		22,756
	83,345		67,548
Current liabilities
Trade and other payables	40,064		36,672
Derivative financial instruments	1,153		582
Current income tax liabilities	7,414		5,024
Borrowings	-		2,653
	48,631		44,931
Net current assets	34,714		22,617
Non-current liabilities
Retirement benefit obligations	12,505		6,431
Deferred tax liabilities	992		1,063
Borrowings	200		200
Other payables	350		306
	14,047		8,000
Net Assets	49,307		39,680
Equity
Equity share capital	2,574		2,555
Equity share capital (B shares)	160		160
	2,734		2,715
Share premium account	1,708		803
Retained earnings	36,455		32,289
Other reserves	8,410		3,873
Total equity attributable to shareholders of the parent	49,307		39,680

  Audited Consolidated Cash Flow Statement

for the year ended 30 June 2008

	Year  ended 30.06.08 £'000		Year  ended 30.06.07 £'000
Cash inflow from operations	27,298		26,309
Interest received	1,261		1,303
Interest paid	(243)		(215)
Taxation paid	(8,081)		(8,182)
Cash inflow from operating activities	20,235		19,215
Purchase of property, plant and equipment	(3,370)		(3,489)
Proceeds from disposal of property, plant and equipment	205		200
Cash outflow from investing activities	(3,165)		(3,289)
Equity dividends paid	(8,946)		(22,013)
Shares issued	924		494
Interest paid	(117)		(143)
Repayment of debt	(2,653)		(1,539)
Cash outflow from financing activities	(10,792)		(23,201)
Net increase / (decrease) in cash and cash equivalents	6,278		(7,275)
Effect of exchange differences	487		(19)
Cash and cash equivalents at start of period	22,756		30,050
Cash and cash equivalents at end of period	29,521		22,756

  Audited Consolidated Statement of Recognised Income and Expense

for the year ended 30 June 2008

	Year  ended 30.06.08 £'000		Year  ended 30.06.07 £'000
Net of tax
Foreign currency translation differences	2,053		284
Actuarial (loss)/gain on the pension scheme	(4,683)		4,160
Fair value movements on hedged items	(169)		(37)
Net (expenses)/income recognised directly in equity	(2,799)		4,407
Profit for the year	20,355		15,842
Total recognised income for the period	17,556		20,249
Attributable to :
Equity holders of the company	17,556		20,249

  NOTES

1.    The group's first reporting date under International Financial Reporting Standards ('IFRS') is 30 June 2008 and hence the group's financial statements for the year ended 30 June 2008 are prepared in accordance with IFRS for the first time. The group's date of transition to accounting under IFRS is 1 July 2006 and its date of adoption of IFRS is 1 July 2007. Comparative figures for the year ended 30 June 2007 have been adjusted from those previously published to reflect the group's adoption of IFRS. Details of the effects of the adoption of IFRS on previously published figures were included in the group's interim report dated 31 March 2008.

2.    The final dividend of 14.5p per ordinary share will be paid on 12 December 2008 to shareholders on the register as at 7 November 2008. The full report and accounts will be posted to shareholders on 27 October 2008.

3    The financial information on pages 12 to 16 does not represent the statutory accounts of the Group. Statutory accounts for the year ended 30 June 2007 have been delivered to the Registrar of Companies, carrying an unqualified audit report and no statement under section 237 (2) or (3) of the Companies Act 1985.

4.    Statutory accounts for the year ended 30 June 2008 have not yet been delivered to the Registrar of Companies. They will carry an unqualified audit report and no statement under section 237 (2) or (3) of the Companies Act 1985.

5.    Earnings per ordinary share

	2008		2007
	Pence per share		Pence per share
Basic earnings per ordinary share	39.7		31.1
Diluted earnings per ordinary share	39.5		30.9

Basic earnings per share is calculated by dividing the profit for the year attributable to equity shareholders of £20,355,000 (2007: £15,842,000) by 51,305,038 (2007: 50,897,640) shares, being the weighted average number of shares in issue throughout the year.

Diluted earning per share is calculated by dividing the profit for the year attributable to equity shareholders of £20,355,000 (2007: £15,842,000) by 51,519,840 (2007: 51,273,344) shares, being the weighted average number of shares in issue throughout the year, adjusted for the effect of all potentially dilutive shares.

 

END

 

 

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