Interim Results
Marshalls PLC
08 September 2006
Embargoed until 7.00am on Friday 8 September 2006
INTERIM RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2006
Marshalls plc, the specialist Landscape Products Group, delivers an improved
trading performance despite mixed market conditions.
• Revenue, including acquisitions, up 6.9 per cent with like for like
revenue up 3.4 per cent
• Profit before tax up 3.7 per cent at £25.1 million (2005: £24.2 million)
• EPS on continuing operations up 3.5 per cent
• Interim dividend up 4.9 per cent at 4.30 pence per share
• Continued investment in new business initiatives to drive growth
Half year ended Half year ended Increase
30 June 2006 30 June 2005 %
Revenue £197.9m £185.2m 6.9
EBITDA £38.2m £36.9m 3.5
Operating profit £28.3m £27.6m 2.3
Profit before tax £25.1m £24.2m 3.7
Basic EPS(continuing operations) 12.21p 11.80p 3.5
Interim dividend per share 4.30p 4.10p 4.9
Commenting on these results, Graham Holden, Chief Executive, said:
'The Construction Products Association is forecasting similar demand overall in
2006 to 2005 followed by growth in 2007 and 2008. As far as the immediate
outlook for the Domestic market is concerned, consumer confidence, as measured
by the climate for major purchases, and installer order books are at a similar
level to last year. Forecasts for the Public Sector and Commercial market remain
positive.
Order intake and despatches since the end of the half year have continued to
show similar like for like growth. The continuing tight control of our cost
base, our strong balance sheet and the range of initiatives that we are pursuing
to drive future growth ensure that we are well placed to benefit from any
improvement in market conditions.'
Enquiries:
Graham Holden Chief Executive Marshalls plc 01484 438900
Ian Burrell Finance Director Marshalls plc 01484 438900
Jon Coles Brunswick Group LLP 0207 404 5959
Kate Miller Brunswick Group LLP 0207 404 5959
Chief Executive's Statement
Group Results
Marshalls' revenue from continuing operations was up 6.9 per cent, including
acquisitions, in the half year ended 30 June 2006 at £197.9 million (2005:
£185.2 million). Like for like revenue, on a day for day basis, was up 3.4 per
cent and this increases to 4.2 per cent if the additional working day in the
current period is included. Acquisitions contributed an additional £5.0 million.
Operating profit from continuing operations for the period was £28.3 million
(2005: £27.6 million) after expensing start-up and one-off costs in the period
amounting to £1.7 million (2005: £1.4 million) and relating to revenue
investment in our new Drive & Garden Transformation Centres and works closure
costs associated with previously announced site closures. Operating profit
before these costs was £30.0 million (2005: £29.0 million) which represents an
increase of 3.4 per cent.
Net financial expenses were £3.2 million (2005: £3.4 million) with the small
decrease due to a lower IAS 19 notional interest charge compared with the prior
half year period. Interest cover was 8.9 times (2005: 8.1 times).
Basic earnings per share, from continuing operations, was up 3.5 per cent at
12.21 pence (2005: 11.80 pence).
The interim dividend will be 4.30 pence per share (2005: 4.10 pence per share),
an increase of almost 5 per cent. Our dividend policy continues to be that
dividends will move in line with medium term earnings growth.
Operating Performance
Half of the revenue of the business is from the consumer driven Domestic market
and half from the Public Sector and Commercial market. This provides balance as
the performance of the two markets can be countercyclical.
In the first half of 2006, like for like sales to the Public Sector and
Commercial market were 7 per cent ahead of 2005 reflecting the relative strength
of this market. Like for like sales to the Domestic market were at a similar
level to the prior year reflecting the widely experienced slowdown in consumer
spending on home improvements, particularly for DIY.
We continue to invest in and develop the business whilst keeping tight control
of costs and production levels.
We continue to innovate in distribution and manufacturing as we build a World
Class customer service and product delivery system. We have increased the
proportion of product delivered on our own vehicles from 20 per cent to 42 per
cent over the past three years and a further 30 per cent is delivered by
directly managed hauliers. This has enabled us to improve 'on time' delivery
significantly.
In addition, we have designed and implemented sophisticated demand forecasting
and production planning software and centralised our planning function. This has
enabled us to improve significantly product availability whilst progressively
allowing us to reduce volumes of finished goods stock.
We also continue to invest in robotics and now have 44 active robots with a
further 20 planned. These are delivering a 5 to 10 per cent productivity gain
per machine hour. There is an added health and safety benefit from the reduction
in manual handling.
During the first half of the year, we have opened two additional Drive & Garden
Transformation Centres in Bramhall, Cheshire and Roxton, Bedfordshire. These
improve awareness of the Marshalls brand by displaying a wide range of garden
and driveway products in an aspirational setting. The original site we opened
last year in Falkirk, Scotland, is performing well with turnover in the area
increasing both in terms of volume and added value products and it is
outperforming the rest of the country. Further expansion of this initiative is
planned.
The commercial alignment in Scotland of Stonemarket and our newly acquired Paver
Systems business, based in Lanarkshire, is delivering excellent results. Further
commercial and operational benefits are expected to arise as we extend this
association into England.
We continue to develop an integrated solution for clients, architects, designers
and contractors in response to market demand. We have made a number of
acquisitions, which are explained below. These expand our portfolio of products
and widen our Public Sector and Commercial offer.
After extensive consultation with the employees affected and their
representatives, we introduced a new defined contribution section to the pension
scheme to replace the existing defined benefit section which closed to future
service accrual on 1 July 2006. This allows us to manage risk better and reduce
volatility in the future. Following this change, the Company made a special cash
contribution of £5 million to the Marshalls plc Pension Scheme in July 2006 and
a further cash contribution of £5 million will be made at the end of the year.
Corporate Activity
We are continually seeking to increase the flow of suitable acquisition
opportunities. On 4 May 2006, we completed the acquisition of Urban Engineering
based in Southport, Merseyside. The business specialises in the sale of a range
of shelters and associated products, particularly to the Education Sector, and
will form part of our Street Furniture business unit.
Since the half year we have completed the purchase of the assets of two small
businesses, being Tempakerb, a business that manufactures temporary kerbs from
recycled materials, and Decathlon, which manufactures high capacity drainage
systems and complements well our linear drainage products. Although small, these
acquisitions demonstrate our commitment to growing the Group in part through
bolt-on acquisitions and to adding value by organic growth.
It is also our intention to continue to develop the Group's Natural Stone
businesses and, to demonstrate this commitment, we have acquired the rights to
develop an aggregate reserve in North West England. Capital equipment of
approximately £2 million is being installed at present and we intend to commence
operations in mid 2007.
Balance Sheet
Net assets at 30 June 2006 were £177.2 million which represented 123.8 pence per
share.
At 30 June 2006 net debt was £47.4 million with gearing at 26.7 per cent. This
is very similar to the position at the last year end.
New bank facilities have been agreed with the Group's principal bankers. These
amount to £100 million comprising of a mixture of committed term loans and
uncommitted short term facilities plus a further £15 million seasonal working
capital facility.
The liability for defined benefit pension obligations decreased from £65.3
million at 31 December 2005 to £58.9 million at 30 June 2006. This reduction is
largely due to an increase in the AA corporate bond rate from 4.8 per cent to
5.2 per cent and partially offset by a continued strengthening of the mortality
rate. An actuarial gain of £5.7 million (net of deferred taxation) has been
recorded in the Consolidated Interim Statement of Recognised Income and
Expenses. As a consequence of the change to the actuarial assumptions following
the move to defined contribution for future service, there will be a one-off
curtailment gain which will reduce the outstanding liability in the second half.
Dividend
The Board has decided to declare an interim dividend of 4.30 pence (2005: 4.10
pence) per ordinary share, an increase of 4.9 per cent. This dividend will be
paid on 6 December 2006 to shareholders on the register at the close of business
on 3 November 2006. The ex-dividend date will be 1 November 2006.
Outlook
The Construction Products Association is forecasting similar demand overall in
2006 to 2005 followed by growth in 2007 and 2008. As far as the immediate
outlook for the Domestic market is concerned, consumer confidence, as measured
by the climate for major purchases, and installer order books are at a similar
level to last year. Forecasts for the Public Sector and Commercial market remain
positive.
Order intake and despatches since the end of the half year have continued to
show similar like for like growth. The continuing tight control of our cost
base, our strong balance sheet and the range of initiatives that we are pursuing
to drive future growth ensure that we are well placed to benefit from any
improvement in market conditions.
Graham Holden
Chief Executive
Consolidated Interim Income Statement
for the half year ended 30 June 2006
Half year Year ended
ended June December
Notes 2006 2005 2005
£'000 £'000 £'000
Revenue 2 197,898 185,202 359,310
Net operating costs (169,638) (157,588) (314,885)
--------- --------- ---------
Operating profit 2 28,260 27,614 44,425
Financial expenses 3 (7,853) (7,238) (14,421)
Financial income 3 4,688 3,815 8,014
--------- --------- ---------
Profit before tax 2 25,095 24,191 38,018
Income tax expense (7,628) (7,442) (11,661)
--------- --------- ---------
Profit after tax but before gain on
sale of discontinued operation 17,467 16,749 26,357
Gain on sale of discontinued
operation 4 - 31,517 31,517
--------- --------- ---------
Profit for the financial period 17,467 48,266 57,874
--------- --------- ---------
Earnings per share (total operations
including gain on sale in 2005):
Basic 5 12.21p 34.01p 40.73p
--------- --------- ---------
Diluted 5 12.21p 33.94p 40.71p
--------- --------- ---------
Earnings per share (continuing operations):
Basic 5 12.21p 11.80p 18.55p
--------- --------- ---------
Diluted 5 12.21p 11.78p 18.54p
--------- --------- ---------
Dividend:
Pence per share 6 8.40p 8.00p 12.10p
--------- --------- ---------
Dividends paid 6 12,010 11,353 17,169
--------- --------- ---------
Consolidated Interim Balance Sheet
as at 30 June 2006
June December
2006 2005 2005
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 200,281 192,790 198,030
Intangible fixed assets 49,882 40,694 46,461
--------- --------- ---------
250,163 233,484 244,491
--------- --------- ---------
Current assets
Inventories 69,096 68,616 67,759
Trade and other receivables 64,016 67,194 36,598
Cash and cash equivalents 3,912 21 5,210
--------- --------- ---------
137,024 135,831 109,567
--------- --------- ---------
Total assets 387,187 369,315 354,058
--------- --------- ---------
Liabilities
Current liabilities
Trade and other payables 92,800 99,404 64,570
Current instalments of loans 161 - 348
--------- --------- ---------
92,961 99,404 64,918
--------- --------- ---------
Non-current liabilities
Trade and other payables - 2,000 475
Interest bearing loans and
borrowings 51,143 40,350 51,550
Employee benefits 58,877 65,118 65,264
Deferred tax 7,001 3,020 5,511
--------- --------- ---------
117,021 110,488 122,800
--------- --------- ---------
Total liabilities 209,982 209,892 187,718
--------- --------- ---------
Net assets 177,205 159,423 166,340
--------- --------- ---------
Equity
Capital and reserves attributable to equity holders
Share capital 35,777 35,482 35,772
Share premium account 2,732 320 2,694
Own shares (407) (444) (102)
Capital redemption reserve 72,986 72,138 72,573
Consolidation reserve (213,067) (213,067) (213,067)
Hedging reserve (4) (14) (2)
Retained earnings 279,188 265,008 268,472
--------- --------- ---------
Equity shareholders' funds 177,205 159,423 166,340
--------- --------- ---------
Consolidated Interim Cash Flow Statement
for the half year ended 30 June 2006
Half year Year ended
ended June December
Notes 2006 2005 2005
£'000 £'000 £'000
Net cashflow from operating
activities 7 12,154 3,049 42,750
Net cashflow from investing
activities 7 (12,597) 54,270 35,668
Net cashflow from financing
activities 7 (855) (52,414) (56,539)
--------- --------- ---------
Net (decrease)/increase in cash
and cash equivalents (1,298) 4,905 21,879
Cash and cash equivalents at
beginning of period 5,210 (16,669) (16,669)
--------- --------- ---------
Cash and cash equivalents at end
of period 3,912 (11,764) 5,210
--------- --------- ---------
The above includes the operating, investing and financing cashflows of the
discontinued operation disclosed in Note 7. The relevant cash flows of the
discontinued operation are included in Note 7.
Reconciliation of Net Cash Flow to Movement in Net Debt
2006 2005 2005
£'000 £'000 £'000
Net (decrease)/increase in cash and
cash equivalents (1,298) 4,905 21,879
Cash outflow from decrease in debt
and lease financing 594 51,027 39,910
Finance leases acquired on
acquisition of subsidiary undertakings - - (238)
--------- --------- ---------
Movement in net debt in the period (704) 55,932 61,551
Net debt at beginning of the period (46,688) (108,239) (108,239)
--------- --------- ---------
Net debt at the end of the period (47,392) (52,307) (46,688)
--------- --------- ---------
Consolidated Interim Statement of Recognised Income and Expenses
2006 2005 2005
£'000 £'000 £'000
Cash flow hedges: Effective portion of
changes in fair value (2) (12) 4
Actuarial gains/(losses) (net of
deferred taxation) 5,672 (9,218) (8,563)
--------- --------- ---------
Net expense recognised directly in
equity 5,670 (9,230) (8,559)
Profit for the period 17,467 48,266 57,874
--------- --------- ---------
Total recognised income and expenses for
the period (equity) 23,137 39,036 49,315
--------- --------- ---------
Notes to the Consolidated Interim Financial Statements
1. Basis of preparation
Marshalls plc (the 'Company') is a company domiciled in the United Kingdom. The
Consolidated Interim Financial Statements of the Company for the half year ended
30 June 2006 comprise the Company and its subsidiaries (together referred to as
the 'Group').
The Consolidated Interim Financial Statements have been prepared on the basis of
the recognition and measurement requirements of IFRSs in issue and endorsed by
the EU and effective (or available for early adoption) at 30 June 2006.
The Consolidated Interim Financial Statements do not include all the information
required for full annual Financial Statements.
The Consolidated Interim Financial Statements have been prepared applying the
accounting policies and presentation that were applied in the Company's
published Consolidated Financial Statements for the year ended 31 December 2005.
The accounting policies are included on the Company's website and have been
applied consistently throughout the Group for the purposes of these Consolidated
Interim Financial Statements.
The preparation of financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported 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.
2. Segmental analysis
Revenue Operating Profit
Half year Year ended Half year Year ended
ended June December ended June December
2006 2005 2005 2006 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations 197,898 185,202 359,310 28,260 27,614 44,425
------- ------- --------
Financial income and expenses (net) (3,165) (3,423) (6,407)
------- ------- --------
Profit before tax 25,095 24,191 38,018
------- ------- --------
2006 2005 2005
£'000 £'000 £'000
Geographical destination of revenue:
United Kingdom 196,055 182,736 356,051
Rest of the world 1,843 2,466 3,259
------- ------- --------
197,898 185,202 359,310
------- ------- --------
All revenue originates in the United Kingdom from continuing operations and
there is no material inter-segmental turnover.
3. Financial expenses and income
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
(a) Financial expenses
Interest expense on bank loans,
overdrafts and loan notes 1,376 1,247 2,487
Interest on obligations under the
defined benefit pension scheme 5,278 4,769 9,505
Debenture interest expense 1,137 1,137 2,275
B share dividend expense 48 76 132
Finance lease interest expense 14 9 22
------- ------- --------
7,853 7,238 14,421
------- ------- --------
(b) Financial income
Expected return on plan assets under
the defined benefit pension scheme 4,678 3,773 7,953
Interest receivable and similar income 10 42 61
------- ------- --------
4,688 3,815 8,014
------- ------- --------
4. Assets held for sale and discontinued operations
On 4 January 2005 Marshalls Clay Products Limited (the 'Clay Products Division')
was sold to Hanson PLC for a cash consideration of £65.0 million (including the
repayment of all inter-group indebtedness) and a pre-tax gain of £31.5 million
was realised. No tax is payable on the gain due to the utilisation of capital
losses. The gain on sale has been disclosed under discontinued activities in the
Consolidated Interim Income Statement.
5. Earnings per share
Basic earnings per share on total operations of 12.21 pence (30 June 2005: 34.01
pence) (31 December 2005: 40.73 pence) is calculated by dividing the profit
attributable to ordinary shareholders from total operations of £17,467,000 (30
June 2005: £48,266,000) (31 December 2005: £57,874,000) by the weighted average
number of shares in issue during the period of 143,001,830 (30 June 2005:
141,918,011) (31 December 2005: 142,106,234).
Basic earnings per share on continuing operations of 12.21 pence (30 June 2005:
11.80 pence) (31 December 2005: 18.55 pence) is calculated by dividing the
profit attributable to ordinary shareholders from continuing operations of
£17,467,000 (30 June 2005: £16,749,000) (31 December 2005: £26,357,000) by the
weighted average number of shares in issue during the period of 143,001,830 (30
June 2005: 141,918,011) (31 December 2005: 142,106,234).
Basic earnings per share on discontinued operations of nil pence (30 June 2005:
22.21 pence) (31 December 2005: 22.18 pence) is calculated by dividing the
profit attributable to ordinary shareholders from discontinued operations of
£Nil (30 June 2005: £31,517,000) (31 December 2005: £31,517,000) by the weighted
average number of shares in issue during the period of 143,001,830 (30 June
2005: 141,918,011) (31 December 2005: 142,106,234).
Profit attributable to ordinary shareholders
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
Profit attributable to ordinary shareholders
- Continuing operations 17,467 16,749 26,357
- Discontinued operations - 31,517 31,517
------- ------- --------
Total 17,467 48,266 57,874
------- ------- --------
Weighted average number of ordinary shares
Half year Year ended
ended June December
2006 2005 2005
Number Number Number
Issued ordinary shares at
beginning of period 143,087,712 141,913,313 141,913,313
Effect of share transactions
in the period (85,882) 4,698 192,921
----------- ----------- -----------
Weighted average number of
ordinary shares at end of period 143,001,830 141,918,011 142,106,234
----------- ----------- -----------
Diluted earnings per share on total operations of 12.21 pence (30 June 2005:
33.94 pence) (31 December 2005: 40.71 pence) is calculated by dividing the
profit attributable to ordinary shares and potentially dilutive ordinary shares
from total operations of £17,467,000 (30 June 2005: £48,266,000) (31 December
2005: £57,874,000) by the weighted average number of shares in issue during the
period of 143,001,830 (30 June 2005: 141,918,011) (31 December 2005:
142,106,234) plus dilutive shares of 96,345 (30 June 2005: 303,107) (31 December
2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31 December
2005: 142,150,537).
Diluted earnings per share on continuing operations of 12.21 pence (30 June
2005: 11.78 pence) (31 December 2005: 18.54 pence) is calculated by dividing
profit attributable to ordinary shares, and potentially ordinary dilutive
shares, from continuing operations of £17,467,000 (30 June 2005: £16,749,000)
(31 December 2005: £26,357,000) by the weighted average number of shares in
issue during the period of 143,001,830 (30 June 2005: 141,918,011) (31 December
2005: 142,106,234), plus dilutive shares of 96,345 (30 June 2005: 303,107) (31
December 2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31
December 2005: 142,150,537).
Diluted earnings per share on discontinued operations of nil pence (30 June
2005: 22.16 pence) (31 December 2005: 22.17 pence) is calculated by dividing
profit attributable to ordinary shares, and potentially ordinary dilutive
shares, from discontinued operations of £Nil (30 June 2005: £31,517,000) (31
December 2005: £31,517,000) by the weighted average number of shares in issue
during the period of 143,001,830 (30 June 2005: 141,918,011) (31 December 2005:
142,106,234), plus dilutive shares of 96,345 (30 June 2005: 303,107) (31
December 2005: 44,303) which totals 143,098,175 (30 June 2005: 142,221,118) (31
December 2005: 142,150,537).
Weighted average number of ordinary shares (diluted)
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
Weighted average number of
ordinary shares 143,001,830 141,918,011 142,106,234
Effect of share options 96,345 303,107 44,303
----------- ----------- -----------
Weighted average number of
ordinary shares (diluted) 143,098,175 142,221,118 142,150,537
----------- ----------- -----------
6. Dividends
The following dividends were approved by the shareholders in the period.
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
8.40 pence per qualifying ordinary share
(30 June 2005: 8.00 pence) (31 December
2005: 12.10 pence) 12,010 11,353 17,169
------- ------- -------
After the balance sheet date, the following dividends were proposed by the
Directors. The dividends have not been provided and there were no income tax
consequences.
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
4.30 pence (30 June 2005: 4.10 pence) (31
December 2005: 8.40 pence) 6,154 5,816 12,010
------- ------- -------
7. Notes to the cash flow statement
Half year Year ended
ended June December
2006 2005 2005
£'000 £'000 £'000
Cashflows from operating activities
Profit before tax 25,095 24,191 38,018
Adjustments for:
Depreciation 9,750 9,155 18,716
Amortisation 160 111 259
Gain on sale of property, plant and equipment (39) 4 (1,545)
Loss in hedging instrument (2) - -
Financial income and expenses (net) 3,165 3,423 6,407
------- ------- -------
Operating cashflow before changes in
working capital and provisions 38,129 36,884 61,855
(Increase) in trade and other receivables (26,940) (29,613) (533)
(Increase) in inventories (1,039) (7,995) (6,805)
Increase in trade and other payables 8,745 11,102 3,336
Increase in provisions and employee
benefits 1,117 704 1,225
------- ------- -------
Cash generated from the operations 20,012 11,082 59,078
Financial expenses paid (2,338) (2,902) (4,969)
Non equity dividends paid (105) (76) (75)
Income tax paid (5,415) (5,055) (11,284)
------- ------- -------
Net cash flow from operating activities 12,154 3,049 42,750
------- ------- -------
Cash flows from investing activities
Proceeds from sale of property, plant and
equipment (net of costs) 125 274 3,172
Financial income received 4 40 61
Disposal of subsidiary, net of cash disposed
of - 65,000 65,000
Acquisition of subsidiaries (1,000) (291) (9,406)
Bank balance acquired with subsidiaries - - 664
Acquisition of property, plant and
equipment (11,726) (10,753) (23,823)
------- ------- -------
Net cash flow from investing activities (12,597) 54,270 35,668
------- ------- -------
Cash flows from financing activities
Proceeds from issue of share capital 43 37 2,701
Increase in other debt and lease financing (181) - (293)
Redemption of B shares (687) (764) (1,102)
Repayment of borrowings - (50,126) (38,281)
Payment of transaction costs (30) (1,561) (2,395)
Equity dividends paid - - (17,169)
------- ------- -------
Net cash flow from financing activities (855) (52,414) (56,539)
------- ------- -------
Analysis of continuing operations and discontinued items
Half year Half year
ended June 2006 ended June 2005
Continuing Discontinued Group Continuing Discontinued Group
operations operations operations operations
£'000 £'000 £'000 £'000 £'000 £'000
Net cash flow
from operating
activities 12,154 - 12,154 3,049 - 3,049
------- ------ ------ ------- ------- -------
Net cash flow
from investing
activities (12,597) - (12,597) (10,730) 65,000 54,270
------- ------ ------ ------- ------- -------
Net cash flow
from financing
activities (830) (25) (855) (50,920) (1,494)(52,414)
------- ------ ------ ------- ------- -------
Year ended
December 2005
Continuing Discontinued Group
operations operations
£'000 £'000 £'000
Net cash flow from operating activities 42,750 - 42,750
------- ------- -------
Net cash flow from investing activities (29,332) 65,000 35,668
------- ------- -------
Net cash flow from financing activities (54,262) (2,277) (56,539)
------- ------- -------
8. Borrowing facilities
New bank facilities have been agreed with the Group's principal bankers. Total
bank borrowing facilities are now £100 million analysed as follows:
£'000
Committed - expiry in more than two years but not more than five years 30,000
Uncommitted - expiry in one year or less
(with option to convert to committed) 30,000
Uncommitted - expiry in one year or less 40,000
-------
100,000
-------
9. Comparative information
The comparative figures for the financial year ended 31 December 2005 are not
the Company's statutory financial statements for that financial year. Those
financial statements have been reported on by the Company's auditors and
delivered to the Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
Independent Review Report to Marshalls plc
Introduction
We have been instructed by the Company to review the Financial Information for
the six months ended 30 June 2006 which comprises Income Statement, Balance
Sheet, Cash Flow Statement and the related notes. We have read the other
information contained in the Interim Report and considered whether it contains
any apparent misstatements or material inconsistencies with the Financial
Information.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the Company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The Interim Report, including the Financial Information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual financial statements except
where any changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the UK. A review consists
principally of making enquiries of management and applying analytical procedures
to the Financial Information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with International Statements on Auditing (UK and Ireland) and
therefore provides a lower level of assurance than an audit. Accordingly, we do
not express an audit opinion on the Financial Information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the Financial Information as presented for the six months
ended 30 June 2006.
KPMG Audit Plc
Chartered Accountants
Leeds
8 September 2006
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