Replacement - INTERIM RESULTS

RNS Number : 2853O
LSL Property Services
05 August 2014
 



For immediate release

5th August 2014

 

LSL Property Services plc

("LSL")

 

Amendment to Interim Results - Dividend Record and Payment Date

 

The following amendments have been made to the 'Interim Results' announcement released today at 07:00 a.m. under RNS No 2260O.

 

Two changes have been made to the Interim dividend paragraph regarding the record date and the payment date. The record date has been amended to 15th August 2014 and the payment date to the 9th September 2014.

 

All other details remain unchanged.

 

The full amended text is shown below.

 

 

LSL Property Services plc (LSL)

 

Interim Results For the six months ended 30TH june 2014

 

LSL Property Services plc (LSL) a leading provider of residential property services incorporating estate agency and surveying businesses (Group), announces its interim results for the six months ended 30th June 2014.


2014

2013

Change

Group revenue

£139.8m

£118.8m

18%

Group Underlying Operating Profit(1)

£15.1m

£11.5m

31%

Overall operating margin

10.8%

9.7%

1.1%

Profit before tax

£31.4m

£8.4m

275%

Basic earnings per share

24.2p

6.3p

285%

Adjusted basic earnings per share

10.6p

7.6p

39%

Net Bank Debt(2) at 30th June

£18.7m

£31.7m

(41%)

Half year dividend

4.0p

3.3p

21%

Special dividend

16.5p

-

-

 

(1)      Underlying Operating Profit is before exceptional gains and costs, amortisation of intangible assets and share based payments

(2)      See Note 13 for calculation. 2014 includes proceeds of £18.9m received from Zoopla sale proceeds

 

§ Strong market growth in the first quarter followed by more modest growth in the second quarter.

§ Excellent performance from the Estate Agency Division.

§ Major contract secured in the Surveying Division and on-going investment in capacity.

§ Excellent value creation from investment in Zoopla Property Group PLC (Zoopla) investment - Total value created of £34.2m (net of tax) as at the 30th June 2014, £18.0m exceptional profit, special dividend of 16.5p per share and retention of 51% of original holding.

§ Substantial increase in interim dividend of 21% to 4.0 pence (2013: 3.3 pence).

 

Estate Agency Division Performance

§ Revenue increased by 20% to £108.6m (2013: £90.3m).

§ Underlying Operating Profit increased by 46% to £12.2m (2013: £8.4m).

§ Estate Agency Division operating margin increased to 11.3% (2013: 9.3%).

§ Residential Sales up 27% including average fee growth of 11%.

§ Lettings revenue up 12% to £27.7m and financial services revenue up 27% to £19.9m year on year.

§ Excluding Marsh & Parsons, profit per branch up 43% to £38k on rolling 12 month basis (2013: £26k).

§ Strong performance from Marsh & Parsons with revenue up 19% and operating profit increased by 20% year on year.

 

Surveying Division Performance

§ Revenue up 10% to £31.3m (2013: £28.5m).

§ Underlying Operating Profit up 5% to £5.7m (2013: £5.4m) after £1.1m cost of on-going investment in new capacity.

§ Surveying Division operating margin 18.2% (2013: 19.0%).

§ Secured multi-year contract with Barclays Bank.

 

Commenting on today's announcement, Roger Matthews, Chairman, said:

"The Group has delivered a strong first half performance. Key economic growth indicators and consumer confidence remain positive but recent changes such as the implementation of MMR and tighter lending criteria have affected mortgage approval levels and sentiment in the housing market. The outlook from lenders remains positive and as a result we expect the market to continue to grow, but at more modest levels, in the second half of the year.  The Board remains confident of delivering significant growth in 2014.

 

The business is very cash generative at the operational level and has a strong balance sheet. By focusing the strategy on driving benefit from operational gearing in the improved market, the Group is extremely well positioned to deliver increased shareholder value."

 

 

 

 

 

 

For further information, please contact:

Ian Crabb, Group Chief Executive Officer                            

Steve Cooke, Group Finance Director

LSL Property Services plc                                                                                                              0207 382 0360

 

Richard Darby, Sophie McNulty, Sophie Cowles

Buchanan                                                                                                                                         0207 466 5000

 

Notes to Editors:

LSL is a leading provider of residential property services to its key customer groups.  Services to consumers include: residential sales, lettings, surveying, and advice on mortgages and non-investment insurance products. Services to mortgage lenders include: valuations and panel management services, asset management and property management services. For further information, and for a copy of the half yearly report for the period to 30th June 2014, please visit LSL's website: www.lslps.co.uk

 

 

 

 

 

 

 

 



 

Chairman's Statement

Introduction

 

I am pleased to report an 18% increase in Group revenue to £139.8m (2013: £118.8m) and a 31% increase in Group Underlying Operating Profit(1)  to £15.1m (2013: £11.5m). This was a strong performance in a market which showed significant growth in the period despite more modest growth during the second quarter, following the implementation of changes to mortgage application processing by lenders following the  Mortgage Market Review (MMR) in April.

 

The Estate Agency Division delivered another excellent result driven by the benefit of operational gearing on all key income streams. Residential Sales increased by 27% including average fee growth of 11% while Financial Services and Lettings income grew by 27% and 12% respectively.

 

We are delighted to have secured a new multi-year valuation services contract with Barclays Bank plc (Barclays). While volume growth in the period has recently been constrained by availability of qualified surveyors we have continued to invest in new capacity through our graduate recruitment scheme and we are in a very good position to provide a high level of service to all of the Group's clients.

 

The Group is very cash generative at the operational level and maintains a strong balance sheet. However, as expected we have continued to absorb high levels of PI cash outflows.  Net Bank Debt at 30th June 2014 was £18.7m. Excluding the £17.8m net(2) benefit from the sale of Zoopla shares, Net Bank Debt increased by £4.8m to £36.5m at 30th June 2014 (30th June 2013: £31.7m).

 

The business remains extremely well placed to benefit from the higher market transaction levels in 2014 and as a result we have announced a substantial increase in our interim dividend of 21% to 4.0 pence per share (2013: 3.3 pence). As previously announced, we are also returning the net proceeds after tax of the sale of Zoopla shares of £16.8m to shareholders by way of a special dividend of 16.5 pence per share to be paid at the same time as the interim dividend payment.

 

Financial Results

 

Group revenue increased by 18% to £139.8m (2013: £118.8m). Group Underlying Operating Profit increased by 31% to £15.1m (2013: £11.5m) and Group Underlying Operating Margin increased from 9.7% to 10.8%.

 

The Estate Agency Division increased revenue by 20% to £108.6m (2013: £90.3m) and Underlying Operating Profit by 46% to £12.2m (2013: £8.4m) in a market where house purchase approvals(3)  increased by 19% in the six months to 30th June 2014 compared to 2013.

 

The Surveying Division revenue increased by 10% to £31.3m (2013: £28.5m) compared to a 10% year on year increase in total mortgage approvals(3) for the six months to 30th June 2014. Underlying Operating Profit growth was constrained to a 5% increase to £5.7m (2013: £5.4m) because of the investment of £1.1m in new graduates in the period.

 

Net interest payable was £1.2m (2013: £1.3m) and Group profit before tax, amortisation and exceptionals was £13.9m(4) (2013: £10.2m). Group profit before tax was £31.4m (2013: £8.4m) including an exceptional profit of £18.7m (2013: loss of £1.7m) of which £18.0m related to the sale of the Zoopla shares.  The effective tax rate for the period was 21%.  If the impact of exceptional costs and the prior year tax adjustments are excluded, the underlying tax rate would remain at 21%.  Group profit after tax was £24.9m (2013: £6.5m). Earnings per share was 24.2p (2013: 6.3p) and adjusted earnings per share increased by 39% to 10.6p (2013: 7.6p).

 

(1)      Underlying Operating Profit is before exceptional costs, amortisation of intangible assets and share-based payments

(2)      Net of reinvestment in additional Zoopla shares

(3)      Source: Bank of England for "House Purchase Approvals" and "Total Mortgage Approvals"

Cash generated from operations was £4.2m (2013: £3.9m). Operating cash flow included PI cash settlements of £6.5m (2013: £5.0m). Capital expenditure increased to £4.6m (2013: £3.4m) due to  investment in a number of new IT systems, including a common platform for our Financial Services businesses and the development of enhanced lettings systems in Your Move and Reeds Rains, new branches in Marsh & Parsons and the refurbishment of a number of Reeds Rains and Your Move branches.

 

Net assets at 30th June 2014 were £113.3m (2013: £77.3m) which was driven by the revaluation of the investment in Zoopla. Net Bank Debt at 30th June 2014 was £18.7m compared to £31.7m at 30th June 2013. Compared to 31st December 2013, Net Bank Debt has decreased by £7.6m driven by the proceeds from the sale of Zoopla shares offset by the normal seasonality of the Estate Agency Division cashflows, continuing high levels of PI cash outflows, the acquisition of Hawes & Co and other businesses and the payment of dividend, tax and bonuses.

 

Interim Dividend

 

The Board has declared an interim dividend payable of 4.0 pence per share, an increase of 21% on last year (2013: 3.3p). The dividend payment reflects our strong performance during the period, our confidence in future prospects and the strength of our cash generation and balance sheet. The ex dividend date for the interim dividend is 13th August, with a record date of 15th August 2014 and a payment date of 9th September 2014. Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in LSL through a dividend reinvestment plan.

 

Zoopla Disposal and Special Dividend

 

We were extremely pleased that the initial public offering (IPO) of Zoopla was successful and this represented a point of significant value creation for the Group. The cost of the investment was £1.9m and this increased in value to £44.0m on IPO.  As a result of the sale of part of our shareholding we have generated an £18.0m exceptional profit on disposal while still retaining a shareholding which has been revalued in the balance sheet at £27.2m. In addition we received a total dividend of £1.1m from Zoopla during the period (2013: £0.5m).

 

The Board has declared a special dividend payable of 16.5 pence per share which returns to shareholders the net after tax proceeds of £16.8m from the sale of the Zoopla shares, including the sale of shares in July. Payment of the special dividend reflects the strength of the balance sheet and the Board's confidence in the growth prospects of the Group. The special dividend has the same ex dividend and record dates as the interim dividend.  As with the interim dividend, Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in LSL through a dividend reinvestment plan.

 

Estate Agency Division

 

The Estate Agency Division capitalised on the growing market and delivered an excellent performance driven by very good growth across all Estate Agency branch income streams. Despite another market driven decline in Asset Management, the benefit of strong operational gearing increased overall the Estate Agency Division's operating margin to 11.3% (2013: 9.3%).

 

Residential Sales income increased by 27% to £44.4m (2013: £34.9m) including average fee growth of 11%. Financial Services revenue increased by 27% to £19.9m (2013: £15.7m) and in total the Group arranged mortgage lending of £5.0bn during the first half (2013: £2.9bn). We were particularly pleased that our Lettings income increased by 12% to £27.7m (2013: £24.7m) primarily driven by organic growth, despite the anticipated slowdown in the Lettings market.

 

 

 

(4)      Note 5 of the financial statements

The Estate Agency Division has continued to make very strong progress towards our branch profitability target of £50k per branch. Estate Agency Division branches, excluding Marsh & Parsons, increased profit per owned branch on a rolling 12 month basis by 43% to £38k (2013: £26k).

 

Marsh & Parsons enjoyed a strong first half with revenue increasing by 19% to £16.1m (2013: £13.5m) driven by Residential Sales and Lettings growth of 16% and 22% respectively. Operating profit increased by 20% to £3.2m (2013: £2.6m) despite the on-going costs of the new branch opening programme. One new branch was opened during the period in Askew Road, Shepherds Bush and is trading in line with expectations. We plan to open a further three new branches during the second half of the year.

 

While the market has grown strongly overall during the period, there was a significant reduction in the rate of growth during the second quarter. House purchase approvals increased by 35% in the first quarter compared to 2013 but by only 7% in the second quarter. This reduction was partly expected given the more challenging comparatives since April but also reflects the impact of changes to mortgage application processing by lenders following the MMR in April.  In prime central London, there has been evidence of a slowdown in the rate of price growth and an increase in the time taken to sell towards the end of first half of 2014.

 

Asset Management revenue declined by 10% in the period to £6.4m (2013: £7.1m). However, this reduction compares to an estimated 20% decline in the repossession market from 28,900 in 2013 to 23,000 in 2014. The business is making good progress in developing new property management contracts but lengthy tender processes mean that financial benefit will be geared to the medium term.

 

We have continued with our strategy of targeting selective acquisitions and purchased Hawes & Co, a six branch estate agency business trading in South London in addition to three separate lettings books.

 

Surveying Division

 

The Surveying Division has traded satisfactorily in the first half and increased revenue by 10% in a market which grew by 10%. We continued to build new capacity during the period with further investment in our graduate recruitment programme while maintaining a strong focus on delivery of excellent service to lender clients. A £1.1m cost of investment constrained operating profit growth to 5% but as the productivity of new capacity improves, profitability will increase at a higher rate in the second half of the year.  If this cost were excluded, operating profit growth would have been 25%.

 

As noted in the comments on our Estate Agency division, there has been a significant change in the market during the second quarter. Total mortgage approvals increased by 25% in the first quarter compared to 2013 but reduced by 1% in the second quarter.

 

We are delighted to announce that we secured a major contract in the period with Barclays.  This is a renewal following on from the previous arrangement which expired in June 2014. The new contract is non-exclusive and is for a multi-year term beginning on 1st July 2014. Contract terms reflect current improved conditions in the mortgage market.

 

Since announcing in November 2013 an increase in our PI Costs provisions for work performed in the 2004 to 2008 period, the rate of new claims and the cost per claim through to 30th June 2014 has overall been consistent with the assumptions behind the provision. Notification levels in recent months have remained at a high level but we are assuming that new notifications will reduce significantly during the second half of the year and beyond as the period for high risk lending ended in 2008.  The basis of the provisions therefore remains unchanged at the half year and represents the Group's best estimate of likely claim costs.  However the provision remains highly sensitive to the rate of new notifications and the average cost of current and future claims.

 

 

Outlook

 

Key economic growth indicators and consumer confidence remain positive but recent changes such as the implementation of MMR and tighter lending criteria have affected mortgage approval levels and sentiment in the housing market. The outlook from lenders remains positive and as a result we expect the market to continue to grow, but at more modest levels, in the second half of the year.  The Board remains confident of delivering significant growth in 2014.

 

LSL is continuing with its strategy of delivering organic growth and evaluating selective acquisitions. This has resulted in a strong first half performance and both the Estate Agency Division and the Surveying Division will continue to selectively invest in order to drive future returns.

 

The business is very cash generative at the operational level and has a strong balance sheet. By focusing the strategy on driving benefit from operational gearing in the improved market the Group is extremely well positioned to deliver increased shareholder value.

 

 

 

 

Roger Matthews

5th August 2014

 



 

Principal risks and uncertainties


There are a number of risks and uncertainties facing the LSL business in the second half of the financial year.  These risks and uncertainties and mitigating factors are described in more detail on page 27 of LSL's Annual Report and Accounts 2013, dated 6th March 2014 (a copy of which is available on LSL's website at
www.lslps.co.uk).  The Board has reviewed these risks and uncertainties, and a summary of this review is below. Following this review, the Board consider the risk and uncertainties specified in LSL's Annual Report and Accounts 2013 as updated below, to be appropriate.

 

Updated risks and uncertainties 

·     Market uncertainty most recently caused by the implementation of MMR, tightening of lending criteria and some cooling of sentiment in the housing market. In addition to these risks there is also medium term political risk around the 2015 general election.  Overall there is uncertainty over whether market improvement seen over the last 12 months will be sustained in the second half and beyond.

·     Liability for inaccurate professional services advice especially resulting in claims relating to the high risk lending period from 2004 to 2008. Notifications relating to this period are still being received. Our provision for PI costs represents the Group's best estimate of likely claim costs. It remains sensitive to the rate of new notifications and the average cost of current and future claims.

·     Loss of key Surveying or Asset Management clients or contracts.

·     Failure to effectively deliver and manage the market share initiatives for Estate Agency.

·     Change in legislation, regulation or government policy.

 

Forward-Looking Statements

This statement may contain forward-looking statements with respect to certain plans, goals and expectations relating to the future financial condition, business performance and results of LSL. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond the control of LSL, and they may cause the actual results or performance of LSL to be materially different from the results or performance implied by such statements. Any forward-looking statements will be by reference to the date of this statement only and must not be regarded as guarantees of future performance. Further, nothing in this statement should be construed as a profit forecast. Some of the factors which may affect LSL's actual future financial conditions, business performance and results are contained within the Business Review in the 'principal risks and uncertainties section' on pages 27 of LSL's Annual Report and Accounts 2013 and on this page 7 of this statement, together with information on the management of the principal risks and uncertainties faced by LSL.

 

Definitions

Definitions for words and expressions referred to and included in this statement which are not expressly defined within, can be found at page 135 to 138 of LSL's Annual Report and Accounts 2013 (a copy of which is available on LSL's website at: www.lslps.co.uk).  All references to 'note(s)' in the statement, are unless expressly stated otherwise, references to the 'Notes to the Interim Condensed Group Financial Statements'

included in this statement.

 

Responsibility statement of the Directors in respect of the half-yearly financial report

We confirm that to the best of our knowledge:

 

·     The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;

·     The interim management report includes a fair review of the information required by:

 

(a)  DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

(b)  DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

 

 

By order of the Board

Steve Cooke

Director

Interim Group Income Statement

for the six months ended 30th June 2014



Unaudited
Six Months Ended

Audited
Year Ended



30th June
2014

30th June
2013

31st December 2013


Note

£'000

£'000

£'000






Revenue

3,4

139,838

118,767

258,603






Operating expenses:





Employee and subcontractor costs


(84,528)

(72,400)

(150,158)

Establishment costs


(10,211)

(9,264)

(19,386)

Depreciation on property, plant  and equipment


(2,346)

(1,904)

(3,977)

Other


(29,686)

(25,164)

(52,125)



(126,771)

(108,732)

(225,646)






Other operating income

3

1,613

771

2,376

Gain on sale of property, plant and equipment


13

32

38

Group's share in post tax profits of joint ventures


405

694

1,731






Group operating profit before contingent consideration, exceptional costs, amortisation and share-based payments



4

 

 

15,098

 

 

11,532

 

 

37,102






Share-based payments


(1,119)

(328)

(1,323)

Amortisation of intangible assets


(310)

(119)

(375)

Contingent consideration

6

915

(1,036)

(2,793)

Exceptional gains

6

18,111

43

134

Exceptional costs

6

(298)

(707)

(13,124)

Group operating profit

4

32,397

9,385

19,621






Finance income

3

-

10

7

Finance costs


(1,217)

(1,334)

(3,154)

Exceptional finance credit

6

230

308

606

Net finance costs


(987)

(1,016)

(2,541)






Profit before tax

4

31,410

8,369

17,080






Taxation (charge)/credit





- related to exceptional costs


(3,638)

83

2,879

- other


(2,865)

(1,985)

(5,945)


8

(6,503)

(1,902)

(3,066)






Profit for the period/year


24,907

6,467

14,014






Attributable to:




 

 

- Owners of the parent


24,887

6,471

14,001

- Non-controlling interest


20

(4)

13






Earnings per share expressed in pence per share:





Basic

5

24.2

6.3

13.6

Diluted

5

23.9

6.3

13.5

Adjusted - basic

5

10.6

7.6

25.3

Adjusted - diluted

5

10.5

7.6

25.2



 

Interim Group Statement of Comprehensive Income

for the six months ended 30th June 2014

 



Unaudited
Six Months Ended

Audited
Year Ended



30th June
2014

30th June
2013

31st December 2013



 £'000

 £'000

£'000






Profit for the period


24,907

6,467

14,014






Items to be reclassified to profit and loss in subsequent periods:





Reclassification adjustments for disposal of financial assets


 

(18,602)

 

-

 

-

Income tax effect


3,721

-

-

Revaluation of financial assets


10,597

1,175

23,806

Income tax effect


(2,120)

(201)

(4,380)

Net other comprehensive income to be reclassified to profit and loss in subsequent periods:


 

(6,404)

 

974


19,426






Total other comprehensive income, net of tax


(6,404)

974

19,426






Total comprehensive income, net of tax


18,503

7,441

33,440






Attributable to

    - Owners of the parent

    - Non-controlling interest


 

18,483

20

 

7,445

(4)

 

33,427

13

 



 

Interim Group Balance Sheet

as at 30th June 2014



Unaudited
Six Months Ended

 

Audited
Year Ended



30th June
2014

30th June
2013

31st December 2013


Note

£'000

£'000

£'000






Non-current assets





Goodwill


130,431

121,732

125,642

Other intangible assets


20,058

18,716

19,080

Property, plant and equipment


18,584

14,221

16,230

Financial assets

9

28,863

13,096

36,574

Investments in joint ventures


2,342

2,204

3,239

Total non-current assets


200,278

169,969

200,765






Current assets





Trade and other receivables


40,812

35,566

35,340

Current tax receivables


-

-

771

Cash and cash equivalents


1,025

218

469

Total current assets


41,837

35,784

36,580

Non-current assets held for sale

10

-

654

276

Total assets


242,115

206,407

237,621






Current liabilities





Financial liabilities

11

(4,218)

(1,969)

(5,113)

Trade and other payables


(53,833)

(49,226)

(54,090)

Current tax liabilities


(4,570)

(1,184)

-

Provisions for liabilities

12

(8,345)

(3,010)

(8,458)

Total current liabilities


(70,966)

(55,389)

(67,661)






Non-current liabilities





Financial liabilities

11

(37,882)

(49,542)

(43,749)

Deferred tax liability


(7,284)

(5,566)

(9,014)

Provisions for liabilities

12

(12,730)

(18,615)

(17,881)

Total non-current liabilities


(57,896)

(73,723)

(70,644)






Total Liabilities


(128,862)

(129,112)

(138,305)






Net assets


113,253

77,295

99,316






Equity





Share capital


208

208

208

Share premium account


5,629

5,629

5,629

Share-based payment reserve


3,066

1,626

2,475

Treasury shares


(2,452)

(2,689)

(4,292)

Fair value reserve


21,243

9,195

27,647

Retained earnings


85,457

63,261

67,567

Equity attributable to owners of parent


113,151

77,230

99,234

Non-controlling interests


102

65

82






Total equity


113,253

77,295

99,316

 



 

Interim Group Cash Flow Statement

for the 6 months ended 30th June 2014

 


Unaudited

30th June 2014

Unaudited

30th June 2013

Audited

31st December 2013

 


£'000

£'000

£'000

£'000

£'000

£'000

 

Cash generated from operating activities







 

Profit before tax


31,410


8,369


17,080

 




 

 

Adjustments to reconcile profit before tax to net cash from operating activities







 








 

Exceptional operating income and costs and contingent consideration (non-cash)

(18,693)


1,539


15,491


 

Amortisation of intangible assets

310


119


375


 

Finance income

-


(10)


(7)


 

Finance costs

1,217


1,538


3,580


 

Exceptional finance credit

(230)


(308)


(606)


 

Share-based payments

1,119


328


1,323


 



(16,277)


3,206


20,156

 

Group operating profit before amortisation and share-based payments


15,133


11,575


37,236

 

Depreciation

2,346


1,904


3,977


 

Dividend income

(1,160)


(489)


(1,141)


 

Share of results of joint ventures

(405)


(694)


(1,731)


 

Gain on sale of property, plant

and equipment

(48)


(75)


(172)


 



733


646


933

 

Increase in trade and other receivables

(5,358)


(5,006)


(4,656)


 

(Decrease)/increase in trade and other payables

(934)


572


4,881


 

Decrease in provisions

(5,339)


(3,917)


(11,544)


 



(11,631)


(8,351)


(11,319)

 

Cash generated from operations


4,235


3,870


26,850

 








 

Interest paid

(809)


(830)


(2,142)


 

Payment of contingent consideration relating to remuneration

(1,160)


-


-


 

Loan refinance costs paid

-


(1,128)


(1,128)


 

Tax (paid)/refund

(1,022)


1,425


(2,537)


 



(2,991)


(533)


(5,807)

 

Net cash generated from operating activities


1,244


3,337


21,043







 

 



 


Unaudited

30th June 2014

Unaudited

30th June 2013

Audited

31st December 2013


£'000

£'000

£'000

£'000

£'000

£'000

Cash flows from investing activities







Cash acquired on purchase of subsidiary undertaking

250


-


 

24


Acquisition of subsidiaries and other businesses

(3,887)


 

(1,030)


(3,515)


Payment of contingent consideration

(88)


-


(520)


Investment in financial assets

(1,155)


-


(847)


Cash received on sale of financial assets

18,850


-


-


Dividends received from joint ventures

1,302


-


805


Dividends received from financial assets

1,160


1,292


1,141


Interest received

-


10


7


Purchase of property, plant and

equipment and intangible assets

(4,576)


(3,381)


(7,859)


Proceeds from sale of property,

 plant and equipment

92


973


1,475


Net cash from/(used in) investing activities


11,948


(2,136)


(9,289)








Cash flows from financing activities







(Repayment)/drawdown of loans

(6,787)


5,345


510


Payment of deferred consideration

-


-


(494)


Purchase of LSL shares by the employee benefit trust (EBT) (Treasury Shares)

-


(626)


(2,625)


Proceeds from exercise of share options

1,557


657


1,084


Dividends paid

(7,406)


(6,584)


(9,985)


Net cash used in financing activities


(12,636)


(1,208)


(11,510)








Net increased/(decrease) in cash and cash  equivalents


556


(7)


244

Cash and cash equivalents at the beginning of the year


469


225


 

225

Cash and cash equivalents at the end of the year


1,025


218


 

469

 



 

Interim Group Statement of changes in equity

for the 6 months ended 30th June 2014

 

Unaudited six months ended 30th June 2014


 

 

Share capital

 

Share premium account

Share- based payment reserve

 

 

Treasury shares

 

 

Fair value Reserve

 

 

Retained earnings

 

 

Total equity

 

Non-controlling interest

 

 

 

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1st January 2014

208

5,629

2,475

(4,292)

27,647

67,567

99,234

82

99,316

Disposal of financial assets (net of tax)

-

-

-

-

(14,881)

-

(14,881)

-

(14,881)

Revaluation of financial assets (net of tax)

-

-

-

-

8,477

-

8,477

-

8,477

Other comprehensive income for the period

-

-

-

-

(6,404)

-

(6,404)

-

(6,404)

Profit for the period

-

-

-

-

-

24,887

24,887

20

24,907

Total comprehensive income for the period

-

-

-

-

(6,404)

24,887

18,483

20

18,503

Exercise of options

-

-

(692)

1,840

-

409

1,557

-

1,557

Share-based payments

-

-

1,119

-

-

-

1,119

-

1,119

Tax on share-based payments

-

-

164

-

-

-

164

-

164

Dividend payment

-

-

-

-

-

(7,406)

(7,406)

-

(7,406)

At 30 June 2014

208

5,629

3,066

(2,452)

21,243

85,457

113,151

102

113,253

 

In July 2014, LSL's employee benefit trust (EBT) acquired 1,485,000 shares in the Group for £5,621,000.  During the period 616,043 share options were exercised relating to LSL's various share option schemes resulting in the shares being sold by the EBT.  LSL received £1,557,000 on exercise of these options.

 

Unaudited six months ended 30th June 2013


 

 

Share capital

 

Share premium account

Share- based payment reserve

 

 

Treasury Shares

 

 

Fair value Reserve

 

 

Retained earnings

 

 

Total equity

 

Non-controlling interest

 

 

 

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1st January 2013

208

5,629

1,526

(2,691)

8,221

63,117

76,010

69

76,079

Revaluation of financial assets (net of tax)

-

-

-

-

974

-

974

-

974

Other comprehensive income for the period

-

-

-

-

974

-

974

-

974

Profit for the period

-

-

-

-

-

6,471

6,471

(4)

6,467

Total comprehensive income for the period

-

-

-

-

974

6,471

7,445

(4)

7,441

Investment in Treasury Shares

-

-

-

(626)

-

-

(626)

-

(626)

Exercise of options

-

-

(228)

628

-

257

657

-

657

Share-based payments

-

-

328

-

-

-

328

-

328

Dividend payment

-

-

-

-

-

(6,584)

(6,584)

-

(6,584)

At 30th June 2013

208

5,629

1,626

(2,689)

9,195

63,261

77,230

65

77,295

 

During the six month period ended 30th June 2013, the EBT acquired 185,000 shares in the Group for £626,000.  In addition, during the period 271,156 share options were exercised relating to LSL's various share option schemes resulting in the shares being sold by the EBT.  LSL received £657,000 on exercise of these options.



 

Audited year ended 31st December 2013


 

 

Share capital

 

Share premium account

Share- based payment reserve

 

 

Treasury Shares

 

 

Fair value Reserve

 

 

Retained earnings

 

 

Total equity

 

Non-controlling interest

 

 

 

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1st January 2013

208

5,629

1,526

(2,691)

8,221

63,117

76,010

69

76,079

Revaluation of financial assets (net of tax)

-

-

-

-

19,426

-

19,426

-

19,426

Other comprehensive income for the year

-

-

-

-

19,426

-

19,426

-

19,426

Profit for the year

-

-

-

-

-

14,001

14,001

13

14,014

Total comprehensive income for the year

-

-

-

-

19,426

14,001

33,427

13

33,440

Investment in Treasury Shares

-

-

-

(2,625)

-

-

(2,625)

-

(2,625)

Exercise of options

-

-

(374)

1,024

-

1,084

-

1,084

Share-based payments

-

-

1,323

-

-

-

1,323

-

1,323

Dividend payment

-

-

-

-

-

(9,985)

(9,985)

-

(9,985)

At 31st December 2013

208

5,629

2,475

(4,292)

27,647

67,567

99,234

82

99,316

 

During the year ended 31st December 2013, the EBT acquired 640,485 shares in the Group for £2,625,000.  In addition, during the period 442,625 share options were exercised relating to LSL's various share option schemes resulting in the shares being sold by the EBT.  LSL received £1,084,000 on exercise of these options.



 

Notes to the Interim Condensed Group Financial Statements

 

The interim condensed group financial statements for the period ended 30th June 2014 were approved by the LSL Board on 4th August 2014. The interim financial statements are not the statutory accounts. The financial information for the year ended 31st December 2013 is extracted from the audited statutory accounts for the year ended 31st December 2013, which have been filed with the Registrar of Companies. The auditor's report was unqualified and did not contain an emphasis of matter paragraph, and did not make a statement under section 498 (2) or (3) of the Companies Act 2006.

 

1              Basis of preparation

 

The interim condensed group financial statements for the period ended 30th June 2014 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and IAS 34 Interim Financial Reporting (as adopted by the EU).  The interim condensed group financial statements have been prepared on a going concern basis.

 

The interim condensed group financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31st December 2013.

 

There have been no significant related party transactions in the period to 30th June 2014.

 

Significant accounting policies

 

The accounting policies adopted in the preparation of the interim condensed group financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31st December 2013.

 

Judgements and estimates

 

The preparation of financial information in conformity with IFRS as adopted by European Union requires management to make judgements, estimates and assumptions that affect the application of policies and reporting amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next six months are largely the same as those as at 31st December 2013. These assumptions are discussed in detail on pages 79 and 80 and in notes 7, 14, 16, 21 and 22 of the Group's annual financial statements for the year ended 31st December 2013. The assumptions discussed are as follows:

 

·    Valuation in acquisitions

·    Impairment of intangible assets

·    Assessment of the useful life of an intangible asset

·    Professional indemnity claims

·    Contingent consideration

·    Valuation of financial assets

 



 

1.      Basis of preparation (continued)

 

Significant accounting policies (continued)

 

New standards and interpretations

The following new standards, new interpretations and amendments to standards and interpretations have been issued and were effective from 1st January 2014.

International Accounting Standards (IAS/IFRSs)

Effective date

IFRS 10

Consolidated Financial Statements

1stJanuary 2014

IFRS 11

Joint Arrangements

1stJanuary 2014

IFRS 12

Disclosure of Interests in Other Entities

1stJanuary 2014

IAS 27 (Revised)

Separate Financial Statements

1stJanuary 2014

IAS 28 (Revised)

Investments in Associates and Joint Ventures

1stJanuary 2014

IFRIC Interpretation 21

Levies

1stJanuary 2014

Amendments to IAS 32

Offsetting Financial Assets and Financial Liabilities

1stJanuary 2014

 

The adoption of the above standards and interpretations did not have a material impact on the Group's Financial Statements, other than additional disclosures, in the period of initial application.

Going concern

 

The Group has a £100m banking facility which expires in August 2017.  These facilities are subject to financial performance covenants. The Board has prepared a working capital forecast based upon assumptions as to trading and has concluded that the Group has adequate working capital, will meet the financial performance covenants and that therefore it is appropriate to use the going concern basis of preparation for this financial information.

 

2.      Seasonality of operations

 

Due to the seasonal nature of the residential property market turnover is normally higher in the second half of the year.

 

3.      Revenue

 

                                                   Six months ended             Year Ended


30th June

2014

£'000

30th June

2013

£'000

31st December

2013

£'000

Revenue from services

139,838

118,767

258,603

Operating revenue

139,838

118,767

258,603

Rental income

453

282

1,235

Dividend income

1,160

489

1,141

Other operating income

1,613

771

2,376

Finance income

-

10

7

Total revenue

141,451

119,548

260,986

 

 



 

4.      Segment analysis of revenue and operating profit

For management purposes, the Group is organised into business units based on their products and services and has two reportable operating segments as follows:

 

·      The Estate Agency and Related Services segment provides services related to the sale and letting of residential properties.  It operates a network of high street branches. As part of this process, the Estate Agency Division also provides marketing and arranges conveyancing services.  In addition, it provides repossession asset management services to a range of lenders. It also arranges mortgages for a number of lenders and arranges pure protection and general insurance policies for a panel of insurance companies via the estate agency branches, Pink Homes Loans, First Complete and Linear Mortgage Network.  The financial services segment included within the Estate Agency division includes two mortgage and insurance distribution networks providing products and services for sale via financial intermediaries. The results of this financial services segment, does not meet the quantitative criteria for separate reporting under IFRS and has therefore been aggregated with those of Estate Agency and Related Services.

·      The Surveying and Valuation Services segment provides a valuations and professional survey service of residential properties to various lenders and individual customers.

 

Each segment has various products and services and the revenue from these products and services are disclosed in the LSL's Annual Report and Accounts 2013 within the Business Review section of the Strategic Report. 

 

The Management Team monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the Group Financial Statements. Head office costs, Group financing (including finance costs and finance incomes) and income taxes are managed on a Group basis and are not allocated to operating segments.



 

4.      Segment analysis of revenue and operating profit (continued)

 

Operating segments

 

The following tables presents revenue and profit information regarding the Group's operating segments for the six months ended 30th June 2014, for the six months ended 30th June 2013 and for the year ended 31st December 2013.

 

Six months ended 30th June 2014

Income statement  information

Estate agency and related services

£'000

Surveying and valuation services

£'000

 

 

 

Unallocated £'000

 

 

 

Total

£'000






Segmental revenue

108,568

31,270

-

139,838






Segmental result:





 - before exceptional costs, contingent

consideration, amortisation and

    share-based payments

12,235

5,685

(2,822)

15,098

 - after exceptional costs, contingent





consideration, amortisation and

    share-based payments

30,976

5,365

(3,944)

32,397






Finance income




-

Finance costs




(1,217)

Exceptional finance credit




230






Profit before tax




31,410

Taxation




(6,503)

Profit for the period




24,907

 

In the period ended 30th June 2014, there is no revenue from one customer that accounts for 10% or more of the Group's total revenue (2013 - none).  The Estate Agency and Related Services segment result includes a gain of £17,989,000 relating to sale of Zoopla shares (see note 9)

 

 

Balance sheet information





Segment assets - intangible

139,602

10,887

-

150,489

Segment assets - other

79,097

10,569

1,960

91,626

Total Segment assets

218,699

21,456

1,960

242,115

Total Segment liabilities

(61,681)

(34,229)

(32,952)

(128,862)






Net assets/(liabilities)

157,018

(12,773)

(30,992)

113,253






 

All of the joint venture interests of the Group are recorded in the Estate Agency and Related Services segment.  Unallocated net liabilities comprise certain property, plant and equipment (£29,000), cash and bank balances (£1,025,000), other assets (£906,000), other taxes and liabilities (£217,000), accruals (£1,120,000), financial liabilities (£19,761,000) and deferred and current tax liabilities (£11,854,000).

 

 



 

4.      Segment analysis of revenue and operating profit (continued)

 

Operating segments

 

Six months ended 30th June 2013

Income statement information

Estate agency and related services

£'000

Surveying and valuation services

£'000

 

 

 

Unallocated £'000

 

 

 

Total

£'000






Segmental revenue

90,297

28,470

-

118,767






Segmental result:





 - before exceptional costs, contingent

consideration, amortisation and

    share-based payments

 

 

8,374

 

 

5,425

 

 

(2,267)

 

 

11,532

 - after exceptional costs, contingent





consideration, amortisation and

    share-based payments

 

7,862

 

4,619

 

(3,096)

 

9,385






Finance income




10

Finance costs




(1,334)

Exceptional finance credit




308






Profit before tax




8,369

Taxation




(1,902)

Profit for the period




6,467

 

Balance sheet information





Segment assets - intangible

129,668

10,780

-

140,448

Segment assets - other

56,306

8,131

1,522

65,959

Total Segment assets

185,974

18,911

1,522

206,407

Total Segment liabilities

(57,309)

(31,635)

(40,168)

(129,112)






Net assets/(liabilities)

128,665

(12,724)

(38,646)

77,295






All of the joint venture interests of the Group are recorded in the Estate Agency and Related Services segment.  Unallocated net liabilities comprise certain property, plant and equipment (£30,000), cash and bank balances (£218,000), other assets (£1,274,000), other taxes and liabilities (£219,000), accruals (£1,288,000), financial liabilities (£31,382,000), deferred and current tax liabilities (£6,750,000), interest rate swap (£528,000).



 

4.      Segment analysis of revenue and operating profit (continued)

 

Operating segments

 

Year ended 31st December 2013

Income statement  information

Estate agency and related services

£'000

Surveying and valuation services

£'000

 

 

 

Unallocated £'000

 

 

 

Total

£'000






Segmental revenue

198,170

60,433

-

258,603






Segmental result:





 - before exceptional costs, contingent

consideration, amortisation and

    share-based payments

29,116

13,096

(5,110)

37,102

 - after exceptional costs, contingent





consideration, amortisation and

    share-based payments

25,540

204

(6,123)

19,621






Finance income




7

Finance costs




(3,154)

Exceptional finance credit




606






Profit before tax




17,080

Taxation




(3,066)

Profit for the year




14,014

 


Estate

agency and

related

 activities

£'000

Surveying and valuation

services

£'000

 

 

 

Unallocated

£'000

 

 

 

Total

£'000

Balance sheet information










Segment assets - intangible

133,840

10,882

-

144,722

Segment assets - other

79,907

10,640

2,352

92,899

Total Segment assets

213,747

21,522

2,352

237,621

Total Segment liabilities

(61,209)

(39,444)

(37,652)

(138,305)






Net assets/(liabilities)

152,538

(17,922)

(35,300)

99,316






All of the joint venture interests of the Group are recorded in the Estate Agency and Related Services segment.  Unallocated net liabilities comprise certain property, plant and equipment (£28,000), cash and bank balances (£469,000), other assets (£1,084,000), other taxes and liabilities (£219,000), accruals (£1,642,000) financial liabilities (£26,548,000), deferred and current tax liabilities (£8,243,000), interest rate swap (£230,000).

 



 

5.      Earnings per share (EPS)

 

Basic EPS amounts are calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted average number of Ordinary Shares outstanding during the period.

Diluted EPS amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

Six months ended 30th June


 

Profit

after tax

£'000

Weighted average number of shares

2014

Per share amount

Pence

 

Profit after tax

£'000

Weighted average number of shares

2013

Per share amount

Pence

 








Basic EPS

24,887

102,993,275

24.2

6,471

103,016,142

6.3

 

Effect of dilutive share options

-

1,031,362

-

-

426,217

-

 

Diluted EPS

24,887

104,024,637

23.9

6,471

103,442,359

6.3

 

 

 

Year ended 31st December 2013




 

Profit

after tax

£'000

 

Weighted average number of shares

2013

Per share

amount

Pence 








Basic EPS




14,001

102,955,662

13.6

Effect of dilutive share options




-

410,999

-

Diluted EPS




14,001

103,366,661

13.5

 

Adjusted basic and diluted EPS

The Directors consider that the adjusted earnings shown below give a better and more consistent indication of the Group's underlying performance:


Six months ended

 

Year Ended


30th June

2014

£'000

30th June

2013

£'000

31st  December

2013

£'000

Group operating profit before contingent consideration in acquisitions linked to employment, exceptional costs, share-based payments and amortisation (excluding non-controlling interest)

15,078

11,536



 

37,089

Net finance costs (excluding exceptional costs and unwinding of discount on contingent consideration)

(1,217)

(1,324)

(3,147)

Normalised taxation

(2,980)

(2,374)

(7,892)

Adjusted profit after tax(1) before exceptional costs, share-based payments and amortisation

10,881

7,838

 

26,050

 



 

5.      EPS (continued)

 

Six months ended 30th June

 

 

 

 

Adjusted profit after tax1

£'000

Weighted average number of shares

2014

Per share amount
Pence

Adjusted

profit after tax1

£'000


Weighted average number of shares

2013

Per share amount

Pence








Adjusted basic EPS

10,881

102,993,275

10.6

7,838

103,016,142

7.6

 

Effect of dilutive share options

-

1,031,362

-

-

426,217

-

 

Adjusted diluted EPS

10,881

104,024,637

10.5

7,838

103,442,359

7.6

 

 

 

Year ended 31st December 2013

 

 




 

Adjusted

profit after tax1

£'000


Weighted average number of shares

2013

Per share amount

Pence








Adjusted basic EPS




26,050

102,955,662

25.3

Effect of dilutive share options




-

410,999

-

Adjusted diluted EPS




26,050

103,366,661

25.2

 

 

(1)   This represents adjusted profit after tax attributable to equity holders of the parent. Tax has been adjusted to exclude the prior year tax adjustments, and the tax impact of exceptional items, amortisation and share-based payments. The effective tax rate used is 21.5% (30th June 2013: 23.25%; 31st December 2013: 23.25%).

 

6.      Exceptional items


Six Months Ended

Year Ended


30th June 2014

30th

 June 2013

31st  December 2013

Exceptional costs:

£'000

£'000

£'000

Provision for professional indemnity claims/notifications

-

-

(12,000)

Branch closure costs including redundancy costs

(170)

(672)

(924)

Acquisition related costs

(128)

(35)

(200)

Total operating exceptional costs

(298)

(707)

(13,124)

Contingent consideration on acquisitions

915

(1,036)

(2,793)


915

(1,036)

(2,793)

Exceptional gains




Gain on disposal of freehold properties

35

43

134

Settlement of legal dispute

87

-

-

Sale of Zoopla shares

17,989

-

-


18,111

43

134

Finance costs




Movement in fair value of interest rate swap

230

308

606


230

308

606

Net exceptional gain/(cost)

18,958

(1,392)

(15,177)

6.    Exceptional items (continued)

Provision for professional indemnity (PI) claims/notifications

Since early 2012 the Group has experienced a high level of claims relating to the 2004 to 2008 period, which was a period of relatively high risk lending characterised by higher house prices, high loan-to-value ratios and considerable levels of buy-to-let and sub-prime lending. As a result the provision for PI Costs was increased by £17.3m in June 2012 and again by £12.0m in November 2013.

The PI Costs provision at 30th June 2014 was made up of a 'Specific Provision' and 'Incurred But Not Reported' (IBNR).  The Specific Provision was based on the Group's review of any notifications or claims which had been made against the Group as at 30th June 2014.  The main factors considered in quantifying the Specific Provision were the likelihood that a claim would be successful, an assessment of the likely cost for each claim, including any associated legal costs, and whether any reduction in the claim is considered likely due to contributory negligence of the lender.

The IBNR provision was based on the Directors estimates of the number of claims which would be received in the future with regard to work completed before 30th June 2014.  The Directors have then applied an average cost per case, based on historical averages, to estimate the IBNR provision.

In June 2012, it was assumed that the run rate of new claims would reduce significantly from July 2013 following the change in legislation governing civil litigation taking effect in April 2013 (the Jackson Reforms). This reduction has not yet materialised and the run rate of new cases has remained at the level established in June 2012. In addition, the cost per claim has increased and in most recent months has been running higher than assumed in 2012. The increasing trend in cost per claim has been driven by a relatively small number of high value claims and by increases in legal costs.  An additional exceptional charge of £12.0m (c£9.2m after tax) was made in the year ending 31st December 2013 in order to increase the PI Costs provision. Since December 2013, the rate of new claims and cost per claim has overall been consistent with the assumptions behind the provision. This provision represents our current best estimate of likely claims costs but the process of resolving open claims and estimating future claims is on-going.

A number of risks and uncertainties remain, in particular the actual monthly run rate of new claims, the date at which the high rate of claims will significantly reduce, and the average cost per case both for existing open claims and for claims yet to be received. The cost of these factors could differ materially from the Directors' estimates, which could result in a further provision being required.

At 30th June 2014 the total provision for PI Costs was £20.8m. The Directors have considered sensitivity analysis on the key risks and uncertainties discussed which is set out in note 12. The Group has continued to build a provision for estimated PI Costs relating to valuations completed since 2009, and an income statement charge has been made in these results, which has been considered as an operating expense rather than as an exceptional cost.

Sale of Zoopla shares

On 18th June 2014, Zoopla underwent an IPO and successfully completed a listing on the London Stock Exchange.  As part of the IPO, LSL sold 8,889,317 Zoopla shares at an average price of £2.19 per share.  The total gain on sale of the shares was £17,989,000 net of associated costs.  LSL estimates that it will pay tax of £3,626,000 on sale of these shares.  Further details on the transaction are disclosed in note 9.

Freehold properties

During the period, freehold properties with a book value totalling £29,000 (31st December 2013: £1,227,000 and 30th June 2013: £846,000) were sold for net proceeds of £64,000 (31st December 2013: £1,361,000 and 30th June 2013: £889,000) resulting in a gain on disposal of £35,000 (31st December 2013: £134,000 and 30th June 2013: £43,000). 

Contingent consideration on acquisitions

The expense for contingent consideration on the acquisition of Marsh & Parsons (in 2011) amounted to £731,000 (Dec 2013: £352,000 and June 2013: £610,000). The exceptional contingent consideration credit recognised in the year relating to other acquisitions, all by LSLi, is £1,646,000 (31st December 2013: £2,441,000 expense and 30th June 2013: £426,000 expense).

 



 

7.      Dividends paid and proposed

 


Six Months Ended

Year Ended


30th June

2014

£'000

30th June

2013

£'000

31st December

2013

£'000

 

Declared and paid during the period



Equity dividends on ordinary shares:



Interim dividend for 2013: 3.3 pence

-

3,401

Final dividend for full year 2013: 7.2 pence (full year 2012: 6.4 pence)

7,406

6,584

6,584

Dividends on ordinary shares proposed (not recognised as a liability as at 30th June):




Interim dividend for 2014: 4.0 pence per share (201: 3.3 pence)

4,074

3,401

7,406

Special dividend for 2014: 16.5 pence per share (2013: nil pence)

16,805

-

-

 

8.      Taxation

The major components of income tax charge in the interim Group income statements are:


Six Months Ended

Year Ended


30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000

UK corporation tax:




- current year

6,305

2,058

4,474

- adjustment in respect of prior years

(10)

(56)

(574)


6,295

2,002

3,900

Deferred tax:




Origination and reversal of temporary differences

74

(93)

(814)

Adjustment in respect of prior year

134

(7)

(20)


208

(100)

(834)

Total tax charge in the income statement

6,503

1,902

3,066

 

Income tax charged directly to other comprehensive income is £2,120,000 (30th June 2013: £201,000 and 31st December 2013: £4,380,000) and relates to the revaluation of financial assets. Income tax credited directly to the share based payment reserve is £164,000 (30th June 2013 and 31st December 2013: £ nil).

In March 2013, the UK government announced additional proposals to reduce the main rate of corporation tax to 20% from 1st April 2015.  As of 30thJune 2014 reductions to the main rate of corporation tax to 20% had been enacted.  Accordingly this is the rate at which deferred tax has been provided.

9.      Financial assets


Six Months Ended

Year Ended

Available-for-sale financial assets

 

30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000





Unquoted shares at fair value

1,687

13,096

36,574

Quoted shares at fair value

27,176

-

-


28,863

13,096

36,574





Opening balance

36,574

11,921

11,921

Acquisitions

1,155

-

847

Disposals

(19,463)

-

-

Fair value adjustment recorded through other comprehensive income

10,597

1,175

 

23,806

Closing balance

28,863

13,096

36,574

 



 

9.      Financial assets (continued)

The financial assets include unlisted equity instruments which are carried at fair value.  Fair value is judgemental given the assumptions required and have been valued using a level 3 valuation techniques (see note 15).  Financial assets also include shares Zoopla which are listed on the London Stock Exchange and again are carried at fair value.  These shares are valued using a level 1 valuation technique.

Zoopla

On 18th June 2014, Zoopla underwent an IPO.  Prior to the IPO, LSL owned 4.91% of Zoopla which was valued at £17.50 per share, £35.1m  As part of the IPO, LSL received 10 shares in the new company for each share it owned reducing the value to £1.75 per new share.  The IPO price was £2.20 per share so revaluing LSL's investment prior to the IPO at £44,039,000. 

LSL sold 44.3% of its stake in Zoopla for £18,850,000, net of associated costs, £15,224,000 net of tax.  The gain on the disposal of the shares recognised in the income statement was £17,989,000 gross, £14,363,000 net of tax.  As part of the IPO, LSL was invited to acquire an additional 619,318 shares for £1,090,000, which was at a 20% discount to the IPO price due to its existing customer relationship with Zoopla.  A gain of £273,000 was recorded through other comprehensive income to revalue these shares back to the IPO price. 

Following the above transactions, the Group continues to own 2.82% of Zoopla.  Under the terms of the IPO, the Group is unable to sell any additional shares in Zoopla until 18th December 2014 (6 months from the IPO date). 

Zoopla's share price at 30th June 2014 was £2.305 per share.  The Directors consider this to be the best estimate of the fair value of LSL's investment in Zoopla to be the current share price which values the Group's stake in Zoopla at £27,176,000.  An additional valuation uplift of £1,237,000 has been recorded through other comprehensive income to reflect the change in share price since the IPO.

The total revaluation amount of £10,597,000 comprises of:




£'000

Revaluation of Zoopla shares up to IPO price of £2.20 per share



8,933

Revaluation of Zoopla shares bought at a discount on IPO up to IPO price of £2.20

273

Revaluation of Zoopla shares from £2.20 to £2.305 per share post IPO

1,237

Revaluation movements of other investments



154

Closing balance



10,597

 

On 3rd July 2014, the Group sold a further 926,813 shares as part of the IPO over allotment and received proceeds of £1,978,000, £1,589,000 net of tax.  To date the Group has received proceeds net of associated tax costs of £16,814,000.  The Directors have decided that a special distribution of 16.5 pence per share be declared to return this exceptional gain to Shareholders.

Other investments

The Group acquired additional shares in Vibrant Energy Matters Limited (VEM) during the period, increasing its stake to 16.5%.  The price paid for the VEM shares has been deemed by the Directors to be a good approximation of fair value as at 30th June 2014 and the Group's entire stake has been revalued upwards to £824,000 with the movement recorded through other comprehensive income.

Due to the issue of additional shares to management, the Group's stake in GPEA Limited (GPEA) was reduced to 16.8% during the period.  This resulted in a small decrease in the fair value of the investment which has been recorded through other comprehensive income.  The carrying value of the investment at 30th June 2014 has been assessed as £862,000. 

10.    Assets held for sale

During the period the Group classified £nil (31st December 2013: £276,000 and 30th June 2013: £654,000) as assets held for sale.   These assets were part of the Estate Agency and Related Services segment. 

 



 

11.    Financial liabilities


Six Months Ended

Year Ended


30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000

Current




Overdraft

261

882

2,548

Contingent consideration

3,957

559

2,335

Derivatives carried at fair value

-

528

230


4,218

1,969

5,113

Non-current




Bank loans - revolving credit facility(RCF)

19,500

30,500

24,000

12% unsecured loan notes

9,507

9,172

9,339

Deferred consideration

446

401

446

Contingent consideration

8,429

9,469

9,964


37,882

49,542

43,749

 

Bank loans - RCF and overdraft

A £100m loan facility which expires in August 2017 was arranged in June 2013.  Loan refinance costs of £1,128,000 were incurred in June 2013 which have been capitalised and are being amortised over the life of the loan facility.

The bank loan totalling £19.5m (31st December 2012: £24.0m and 30th June 2013: £30.5m) and overdraft totalling £0.3m (31st December 2013: £2.5m and 30th June 2013: £0.9m) are secured via cross guarantees issued from all of the Group's subsidiaries excluding the following subsidiaries, Lending Solutions, Homefast Property Services, Linear Mortgage Network, Linear Financial Services, Templeton LPA, property-careers.com, Chancellors Associates and LSLi and the LSLi subsidiaries.

The utilisation of the revolving credit facility may vary each month as long as this does not exceed the maximum
£100m facility (31st December and 30th June 2013: £100m).  The Group's overdraft is also secured on the same facility but cannot exceed £5m and the combined overdraft and revolving credit facility cannot exceed £100m (Dec and June 2013: £100m).  The banking facility is repayable when funds permit on or by August 2017.

Interest and fees payable on the RCF facility amounted to £1.0m (31st December 2013: £2.1m and 30th 30th June 2013: £0.8m). The interest rate applicable to the facility is LIBOR plus a margin rate of 1.50% (31st December and 30th June 2013: LIBOR plus 1.50%). The margin rate is linked to the leverage ratio of the Group and the margin rate is reviewed at six monthly intervals.  An additional fee is charged if the facility is more than 33% drawn with a further fee due if the facility is more than 67% drawn.

12% unsecured loan notes

12% unsecured loan notes with a face value of £6,146,000 and a fair value of £8,660,000 were issued as part satisfaction of the consideration for acquisition of Marsh & Parsons in November 2011.  These loan notes carry a coupon of 12% which is compounded every year on 1st January and rolled up to redemption.  The loan notes are redeemable at par value plus rolled up interest at any time after 31st March 2016 at the option of the loan note holder.  However, if that option is not exercised by the loan note holder they are redeemable on 31st March 2020.  The amounts shown in the table above include accrued interest of £847,000 (31st December 2013: £679,000 and 30th June 2013: £512,000).



 

11.    Financial liabilities (continued)

Contingent consideration


Six Months Ended

Year Ended


30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000





Marsh & Parsons Growth Shares

2,951

2,478

2,220

LSLi contingent consideration

8,599

6,575

9,206

Other

836

975

873


12,386

10,028

12,299





Opening balance

12,299

8,088

8,088

Cash paid

(1,248)

(12)

(520)

Acquisition

2,250

987

1,997

Fair value adjustment recorded against goodwill

-

(71)

(58)

Amounts recorded though income statement

(915)

1,036

2,792

Closing balance

12,386

10,028

12,299

 

£2,951,000 (31st December 2013: £2,220,000 and 30th June 2013: £2,478,000) of contingent consideration relates to the Growth Shares acquired by to the management of Marsh & Parsons subsequent to acquisition as an incentive to grow the Marsh & Parsons business.  Holders of Growth Shares will have the option to require LSL to buy their Growth Shares at any time between 31st March 2016 and 1st April 2020, at their discretion, at a price determined by a multiple of EBITDA in the previous financial year. The payment of the consideration is contingent on the holder of the Growth Shares being continuously employed by the relevant company and consequently the expected value of the Growth Shares is charged to the income statement over the earn-out period.

£8,599,000 (31st December 2013: £9,206,000 and 30th June 2013: £6,575,000) of contingent consideration relates to payments to third parties in relation to the acquisition of LSLi and certain of its subsidiaries between 2007 and 2014. This is payable between three and five years after the acquisition dates depending on the profitability of those subsidiaries in the relevant years. In 2014, the contingent consideration has been recalculated based on the Directors' latest expectation using a discount rate of 6.5% (31st December 2013 and 30th June 2013: 6.5%).

The table below shows the allocation of the contingent consideration balance and income charge between the various categories:


Six Months Ended

Year Ended

Contingent consideration balances relating to amounts accounted for as:

30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000





Remuneration

4,806

4,754

5,624

Put options over non-controlling interests

3,062

3,524

4,371

Arrangement under IFRS 3

4,518

1,750

2,304

Closing balance

12,386

10,028

12,299





Contingent consideration profit and loss impact in the period relating to amounts accounted for as:








Remuneration

343

636

1,506

Put options over non-controlling interests

(1,310)

375

1,223

Arrangement under IFRS 3

52

25

63

(Credit)/charge

(915)

1,036

2,792

 

Deferred consideration

During the prior period the Group paid £438,000 with regard to deferred consideration.  Deferred consideration totalling £446,000 is payable at any time between 31st March 2016 and 31st March 2020 at the option of the management shareholders. 

Derivatives carried at fair value -interest rate swap

See note 14 below.

12.    Provisions for liabilities

Six months ended 30th June:


2014

2013


Professional indemnity claim provision

 

Onerous

leases

 

 

Total

Professional indemnity claim provision

Onerous

leases

 

Total


£'000

£'000

£'000

£'000

£'000

£'000








Balance at 1st January

25,864

475

26,339

24,163

1,037

25,200

Amount utilised

(6,469)

(65)

(6,534)

(4,990)

(236)

(5,226)

Unwinding of discount

75

-

75

342

-

342

Provided in the period (including exceptional costs)

1,292

(97)

1,195

1,309

-

1,309

Balance at 30th June

20,762

313

21,075

20,824

801

21,625








Current

8,032

313

8,345

2,528

482

3,010

Non-current

12,730

-

12,730

18,296

319

18,615


20,762

313

21,075

20,824

801

21,625

 

Year ended 31st December 2013


Professional indemnity claim provision

 

Onerous

leases

 

 

Total


£'000

£'000

£'000





Balance at 1st January

24,163

1,037

25,200

Amount utilised

(14,445)

(506)

(14,951)

Amount released

-

(90)

(90)

Unwinding of discount

683

-

683

Provided in the period (including exceptional costs)

15,463

34

15,497

Balance at 31st December

25,864

475

26,339





Current

8,378

80

8,458

Non-current

17,486

395

17,881


25,864

475

26,339

 

The PI Cost provision is to cover the costs of claims relating to valuation services for clients which are not covered by PI insurance. The PI Cost provision includes amounts for claims already received from clients, claims yet to be received and any other amounts which may be payable as a result of legal disputes associated with provision of valuation services.

The provision is the Directors' best estimate of the likely outcome of such claims, taking account of the incidence of claims and the size of the loss that may be borne by the claimant, after taking account of actions that can be taken to mitigate losses. The provision will be utilised as individual claims are settled and the settlement amount may vary from the amount provided depending on the outcome of each claim. It is not possible to estimate the timing of payment of all claims and therefore a significant portion of the provision has been classified as non-current. 

An additional exceptional charge of £12.0m (c£9.2m after tax) was made in the year ending 31st December 2013 in order to increase the PI Cost provision. Since December 2013, the rate of new claims and cost per claim has overall been consistent with the assumptions behind the provision. This additional provision represents the Directors' current best estimate of likely claims costs but the process of resolving open claims and estimating future claims is on-going. A number of risks and uncertainties remain, in particular the actual monthly run rate of new claims, the date at which the high rate of claims will significantly reduce, and the average cost per case both for existing open claims and for claims yet to be received. The cost of these factors could differ materially from the Directors' estimates, which could result in a further provision being required.



 

12.    Provisions for liabilities (continued)

At 30th June 2014 the total provision for PI Costs was £20.8m. The Directors have considered sensitivity analysis on the key risks and uncertainties discussed above. If the rate of new claims relating to the 2004 to 2008 high risk lending period experienced during the second quarter of 2014 were to continue through to June 2015 (rather than reduce during the second half of 2014 and then fall to zero in 2015) an additional provision of £2.4m would be required. If the average cost per case for both existing open claims and for claims yet to be received was 10% higher or lower than assumed in the year end provision of £20.8m, an additional or lower provision of £3.2m would be required.

The provision for lease obligations relates to obligations under leases on vacant properties. The provision is expected to be fully utilised by June 2020. The final outcome depends upon the ability of the Group to sublet or assign the lease over the related properties.

13.    Analysis of Net Bank Debt


Six Months Ended

Year Ended


30th June

2014

30th June

2013

31st December 2013


£'000

£'000

£'000

Interest bearing loans and borrowings




-       Current

4,218

1,969

5,113

-       Non-current

37,882

49,542

43,749


42,100

51,511

48,862

Less: 12% unsecured loan notes

(9,507)

(9,172)

(9,339)

Add: cash and short-term deposits

(1,025)

(218)

(469)

Less: deferred and contingent consideration

(12,832)

(10,429)

(12,745)

Net Bank Debt at the end of the year

18,736

31,692

26,309

 

Net Bank Debt excluding the net sale proceeds from the sale of Zoopla shares and reinvestment into Zoopla totalling of £17.8m was £36.5m.

 

14.    Financial instruments - risk management

The financial risks the Group faces and the methods used to manage these risks have not changed since 31st December 2013.  Further details of the risk management policies of the Group are disclosed in Note 29 of the Group's Financial Statements for the year ended 31st December 2013.

In 2009 the Group entered into interest rate swap agreements to fix interest rates on £25m of the Group's bank borrowings. The interest rate swap agreements fix LIBOR to approximately 2.9% until April / May 2014 and so have expired at 30th June 2014. At 30th June 2014, after taking into account the effect of interest rate swaps, none of the Group's RCF is at a fixed rate of interest ( 31st December 2013: 94% and 30th June 2013: 80%).

The Group has a current ratio of Net Bank Debt (excluding loan notes) to EBITDA of 0.41 (31st December 2013: 0.63 and 30th June 2013: 0.87). The business is cash generative with a low capital expenditure requirement.  The Group remains committed to its stated dividend policy of 30% to 40% of Underlying Operating Profit after interest and tax. In addition, the Group's other main priority is to generate cash to support its operations and to fund any strategic acquisitions.



 

15.    Fair values of financial assets and financial liabilities

Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments that are carried in these financial statements:


June 2014

June 2013

Dec 2013


Book and Fair value

Book and Fair value

Book and Fair value


£'000

£'000

£'000

Financial assets




Cash and cash equivalents

1,025

218

469

Available-for-sale financial assets

28,863

13,096

36,574





Financial liabilities




Interest-bearing loans and borrowings:




    Floating rate borrowings

(19,761)

(31,382)

(26,548)

    Fixed rate borrowings

-

-

-

Derivative financial liabilities - interest rate swaps

-

(528)

(230)

Contingent consideration

(12,386)

(10,028)

(12,299)

Deferred consideration

(446)

(401)

(446)

12% unsecured loan notes

(9,507)

(9,172)

(9,339)

 

The fair value of the Zoopla investment is made with reference to the latest share price as this is a listed investment (listed on the London Stock Exchange).  The fair value of the remaining available for sale financial assets have been calculated with reference to the last trades in these assets. The fair values of the interest rate swaps were determined by reference to market values for similar instruments. The fair values for the remaining financial instruments have been calculated by discounting the expected future cash flows at interest rates prevailing for a comparable maturity period for each instrument

Fair value hierarchy

As at 30th June 2014, the Group held the following financial instruments measured at fair value. The Group uses the following hierarchy for determining and disclosing the fair value of the financial instruments by valuation technique:

·    Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

·    Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and

·    Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

·     

June 2014

Level 1

Level 2

Level 3


£'000

£'000

£'000

£'000

Assets measured at fair value





Financial assets

28,863

27,176

-

1,687

Liabilities measured at fair value





Contingent consideration

12,386

-

-

12,386

Liabilities for which fair values are disclosed





Interest-bearing loans and borrowings:

Floating rate borrowings

 

19,761

 

-

 

19,761

 

-

12% unsecured loan notes

9,507

-

9,507

-

 

·     

June 2013

Level 1

Level 2

Level 3


£'000

£'000

£'000

£'000

Assets measured at fair value





Financial assets

13,096

-

-

13,096

Liabilities measured at fair value





Interest rate swaps

528

-

528

-

Contingent consideration

10,028

-

-

10,028

Liabilities for which fair values are disclosed





Interest-bearing loans and borrowings:

Floating rate borrowings

 

31,382

 

-

 

31,382

 

-

12% unsecured loan notes

9,172

-

9,172

-

 

15.    Fair values of financial assets and financial liabilities (continued)

 

·     

Dec 2013

Level 1

Level 2

Level 3


£'000

£'000

£'000

£'000

Assets measured at fair value





Financial assets

36,574

-

-

36,574

Liabilities measured at fair value





Interest rate swaps

230

-

230

-

Contingent consideration

12,299

-

-

12,299

Liabilities for which fair values are disclosed





Interest-bearing loans and borrowings:

Floating rate borrowings

 

26,548

 

-

 

26,548

 

-

12% unsecured loan notes

9,339

-

9,339

-

 

As disclosed in note 9, Zoopla completed an IPO on 18th June 2014.  Immediately prior to IPO, the fair value of the investment in Zoopla was revalued to £44,039,000.  These financial assets are now valued based on a price in an active market, representing a transfer from a Level 3 to a Level 1 valuation technique. At 30th June 2014, the remaining stake in Zoopla was revalued to £27,176,000 based on the Zoopla share price at that date of £2.305 per share.

The other investments totalling £1,687,000 are still valued using Level 3 valuation techniques. The Directors reviewed the fair value of the financial assets at 30th June 2014.  The methods used to determine the fair value are disclosed in more detail in note 9.  The underlying value of the business will be driven by the profitability of these businesses.  If this was to drop by 10%, the implied valuation is likely to also drop by around 10%, £0.2 million.

The contingent consideration relates to amounts payable in the future on acquisitions.  The amounts payable are based on the amounts agreed in the contracts and based on the future profitability of each entity acquired.  In valuing each provision, estimates have been made as to when the options are likely to be exercised and the future profitability of the entity at this date.  Further details of these provisions are shown in note 11.  If the future profitability of the entities was to decline by 10%, the size of the contingent consideration would decrease by approximately £1.2 million.

Fair values of the Group's interest-bearing borrowings and loans are determined by using DCF methodology using a discount rate that reflects the issuer's borrowing rate as at the end of the reporting period. The own non-performance risk as at 30th June 2014 was assessed to be insignificant.

 



 

16.    Acquisitions

During the period the Group acquired three lettings businesses for a total consideration of £695,000. The entire purchase price for the acquisitions has been assumed to be goodwill except £180,000 assigned to fixed assets.

 

In March 2014, the Group acquired 65% of Hawes & Co, a 6 branch estate agency chain based in Wimbledon for an initial consideration of £3.2m. The remaining 35% is subject to put and call options which are exercisable between 2016 and 2019 dependent on profit performance. Due to the nature of the payment terms, the contingent consideration is considered to be a capital payment for accounting purposes.

The fair value of the identifiable assets, except for cash and cash equivalents, and liabilities of Hawes & Co as at the date of acquisition have been determined as below:


Fair value recognised on acquisition


£'000

Intangible assets

942

Property, plant and equipment

58

Trade and other receivables

384

Cash and cash equivalents

250

Trade and other payables

(466)

Current tax liabilities

-

Total identifiable net assets acquired

1,168

Purchase consideration

5,442

Goodwill

4,274

 

Purchase consideration discharged by:

Cash

3,192

Contingent consideration

2,250


5,442

 

The acquisition accounting above is considered provisional as LSL is still reviewing our estimates of the likely payments under the contract, but the calculation above represents our best estimate at 30th June 2014.

 

The goodwill of Hawes & Co comprises certain intangible assets that cannot be individually separated and reliably measured from the acquiree due to their nature.  These items include an experienced management team with a good record of delivering a quality service to customers against the backdrop of challenging market conditions, the expected value of synergies and the potential to significantly grow the business. No determination has been made yet as to what proportion, if any, of the goodwill will be tax deductible.

 

From the date of acquisition to 30th June 2014, the acquisitions in aggregate have contributed to £1.3m of revenue and £0.2m profit before tax of the Group, excluding the impact of movements in the contingent consideration recorded through the profit and loss.  If all of these combinations had taken place at the beginning of the year, the consolidated revenue would have been higher by £1.2m and the consolidated profit before tax would have been higher by £0.2m. 

Transaction costs have been expensed and are included under exceptional costs (see note 6)



 

INDEPENDENT REVIEW REPORT LSL PROPERTY SERVICES PLC (Company)

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2014 which comprises the Interim Group Income Statement, the Interim Group Statement of Comprehensive Income, the Interim Group Balance Sheet, the Interim Group Cash Flow Statement, the Interim Group Statement of Changes in Equity and the related notes 1 to 16. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

 

 

 

Ernst & Young LLP

Leeds

4thAugust 2014

 

 


This information is provided by RNS
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