Final Results
Mears Group PLC
21 March 2006
MEARS GROUP PLC
PRELIMINARY ANNOUNCEMENT
YEAR ENDED 31 DECEMBER 2005
Mears Group PLC is once again pleased to announce record results for the year
ended 31 December 2005.
The highlights for the year include:
• Operating result pre share option charges £10.3m (2004: £7.5m), up 37.1%
• Diluted EPS
- normalised pre share option charges 11.41p (2004: 8.45p), up 35.0%
• Dividend per share 2.6p (2004: 1.9p), up 36.8%
• Order book £1 billion (2004: £815m)
• Net cash inflow £4.1 million (2004: £0.9m)
• Margins increased across all business segments
• Market forecast turnover for 2006 is 87% secured
Bob Holt, Chairman, said:
'We're now moving into a period of particularly rapid growth. There are enormous
opportunities ahead - the greatest ever for Mears. I remain absolutely committed
to the Group and I'm looking forward to leading the team that takes Mears to the
next level.'
For further information contact
Stuart Black
07971 151320
David Robertson
07887 705357
Chairman's Statement
Mears was listed on the Alternative Investment Market of the London Stock
Exchange (AIM) in October 1996. We had 83 employees and turnover of £12 million.
Since then we have achieved an average annual compound growth rate in profits of
42%.
In 2005 our performance was recognised with the Decade of Excellence and Best
Performing Share over 5 Years awards at the AIM Awards dinner. It's taken a lot
of effort to achieve our results and the team deserves accolades like these.
We've continued our strong growth this year. In line with market expectations,
turnover was up 17.2%, operating profit before share option charges was up 37.1%
and dividend was up 36.8%. We now employ 2,300 people and we have an order book
in excess of £1 billion. It's another very strong, very consistent set of
results that stand out in our sector.
Consistent qualities
We've been through enormous changes over ten years but the same four qualities
have remained:
• We have strong financial management across the entire business.
• We have an open and honest approach to partnership - with clients, with
tenants, with suppliers and with advisers.
• We know how to work together effectively.
• We are not afraid of hard work.
The £1 billion order book is an important indicator of our strengths. Yes, the
quantity of future revenue involved is impressive, but I believe it's the
quality of those orders that's most significant. These are long-term agreements
with clients based on the right key performance indicators. We have never taken
on short-term contracts simply to create more flattering figures. We're building
a robust business here, a business based on real partnerships.
The big challenge - the right people
One of the questions I am always asked is 'Can you continue to manage growth?'
I've been asked that every year since I became Chairman. I think our figures
demonstrate we meet our challenges head on.
We're now moving into a period of particularly rapid growth and I'm sure we
will, once again, manage change successfully. The key is to recruit early and
bring in the right people before you need them. We also need to have the right
number of excellent people in place, even though there is a skills shortage.
We're developing innovative training, development and apprenticeship schemes to
meet that challenge. For example, in 2006 every tradesperson within the company
will have the opportunity to study towards a professional qualification - a
first for Mears.
Over the last 12 months Stuart Black has had an immediate effect as Chief
Operating Officer and we've recognised this by appointing him as Chief
Executive. Stuart is enhancing the professionalism of the Group and is
introducing a wide range of measures based on strong processes. It's exactly
what we need.
The finance team has continued its excellent work - how many companies can
achieve earnings growth of around the 40% mark and still generate cash? In
addition, Stuart has introduced an experienced management team across areas such
as IT, marketing and HR.
Improving communities is part of our DNA
Corporate social responsibility is not just a set of policies here - it's at the
heart of this Group. I believe our work should help to improve daily life for
people. I say our job is to make tenants smile.
That belief runs through our repairs and refurbishments work and the additional
projects we're involved in. Our 100 Days in the Community programme included 120
separate projects where Mears employees used their time, skills and energy to
make a difference. We'll do even more in 2006.
Many of our employees come from the communities they serve and through
apprenticeship schemes we're helping to increase employment and opportunity in
deprived areas. We're planning to make our workforce even more reflective of our
communities, employing more elderly people to work with elderly people.
Our community work has a real effect on people's lives. For example, Mears
employees have been helping the Whitechapel homeless mission in East London by
renovating part of the building and carrying out volunteer work. I am also
personally supporting the Clean-up London campaign against anti-social behaviour
and Mears branches are involved in everything from graffiti removal to
supporting youth sports schemes.
A strong position in a great market
I see excellent prospects in social housing. We're continuing to see a trend for
larger, longer-term contracts and that plays to our strengths as the leader in
our market. We can maximise our advantages in terms of quality of service,
scale, innovation and our proven commitment to working in partnership.
I see no signs that change in the political climate will affect our market
significantly. The Decent Homes initiative was scheduled to end in 2010 - though
we expect that to stretch to 2015. We are very strong in the buoyant repairs and
maintenance market and see no difficulty in continuing to build the emphasis of
our business as Decent Homes ends.
I've been in support services for 25 years and it has always surprised me that
there has been relatively little consolidation in social housing. It remains a
relatively fragmented sector, with competitors and potential entrants showing no
real appetite for merger so far. Mears is in a good position in terms of any
future consolidation. We have robust organic growth, but we are also well placed
to make acquisitions if and when the right opportunities emerge.
Looking ahead
I would like to thank everyone at Mears for their commitment and hard work in
2005. My hope for 2006 is that the excellent team here will raise their game
once again. I want everyone within this Group to get the most from the career
opportunities they have and to be ambitious for themselves and the business.
There are enormous opportunities ahead - the greatest ever for Mears. I remain
absolutely committed to this Group and I'm looking forward to leading the team
that takes Mears to the next level.
Bob Holt
bob.holt@mearsgroup.co.uk
Chairman
20 March 2006
Operating and Financial Review
We describe ourselves as the leader in the social housing market. What defines
leadership for us?
• We continually demonstrate thought leadership and innovation.
• We have the most repair and maintenance contracts in our sector.
• We have the best margins in our sector.
• We have the strongest cash generation in our sector.
We believe our strong financial performance in 2005 underlines our strengths and
demonstrates once again that we are able to deliver impressive and sustainable
growth.
Before we review our performance we would like to note that we now prepare
accounts in accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU. The comparatives in the results below have been restated
to reflect this change. The details of these restatements are disclosed within
the Group's website at www.mearsgroup.co.uk.
Turnover
In 2005 we grew turnover to £203.5m (2004: £173.7m), an increase of 17.2%.
Within this overall figure social housing turnover was up 38.4%, reflecting a
strong performance in winning new business.
Operating result
We achieved an operating result before share option charges of £10.3m (2004:
£7.5m) - a 37.1% increase. We increased operating margins in our social housing
activities to 5.5% (2004: 5.2%) despite major increases in the operational
demands placed on us by new work from contracts secured in late 2004 and 2005.
Our Mechanical and Electrical division also achieved an improvement in margins
at 3.8% (2004: 2.8%). United Fleet Distribution (UFD) increased its operating
margin to 4.8% (2004: 4.2%). Our ongoing investment in Group infrastructure
provides scope for better margins and even greater customer satisfaction.
Share option charges
The share option charge for 2005 was £0.5m, up from £0.3m in 2004. There is no
cash impact from this new expense which arises from the adoption of IFRS.
Finance
The Group again maintained its broadly neutral cash position throughout 2005 and
incurred a net finance charge of £0.02m (2004: £0.07m). Tight working capital
control remains paramount given the tremendous scale of growth we're generating.
Tax expense
£2.5m has been provided for corporation tax (2004: £1.8m). The effective rate in
2005 of 26.1% (2004: 24.7%) is low due to the impact of a corporation tax
deduction received on the exercise of share options and the utilisation of tax
losses.
Earnings per share
Normalised diluted earnings per share (EPS) before share option charges
increased 35.0% to 11.41p (2004: 8.45p). This is calculated after applying a
full tax. We consider this to be the fairest method of consistently evaluating
the performance of Mears management.
Dividend
The dividend increase is in line with our earnings growth. A final dividend of
1.9p per share is proposed which combined with the 0.7p interim dividend gives a
total dividend of 2.6p per share (2004: 1.9p). In accordance with IFRS, the
final dividend has not been recognised within the preliminary announcement as it
did not represent an obligation at the balance sheet date.
The dividend is payable on 3 July 2006 to shareholders on the register on 16
June 2006.
Cash flow
The cash flow position continues to underline our strength as a business. A net
cash inflow of £4.1m was achieved in the year (2004: £0.9m inflow). The Group
converted 90.8% of EBITDA into operating cash flow (2004: 77.6%). A net £2.8m
was invested in new technology and operational bases, with 10 new sites opened
in the year. The settlement of deferred consideration on previous acquisitions
absorbed £0.8m of cash. Our net cash position at 31 December 2005 was £6.9m, up
from £2.8m a year ago.
Acquisitions
The painting businesses we have acquired are now integrated into our social
housing division and are focused on developing the significant growth
opportunities in this sector.
Excellent market opportunities in social housing mean that organic growth is
likely to fuel our momentum, but we continue to seek out quality businesses with
the potential to help us further our strategic objectives and improve or broaden
our services.
Order book
The visibility of our earnings continues to improve. £315m of new work was
secured in the year from 14 customers. Our order book now stands at £1 billion
(2004: £815m). The element of market forecast turnover secured for 2006 is 87%.
We continue to place great emphasis on winning good quality contracts that can
provide clear and sustainable margins. We also hold a healthy mix of Decent
Homes and repairs and maintenance work, giving us a balanced position in the
social housing market that is not reliant on clients' future discretionary
spending.
Total equity
Total shareholders' equity value rose by £8.2m in the year rose from £19.9m to
£28.1m at 31 December 2005. Within this overall increase, £1.4m is due to the
recognition under IFRS of the deferred tax asset in relation to share options.
Major contract wins
We achieved a number of major successes, winning contracts valued at £315m in
total. Highlights included:
• Brighton & Hove City Council
Five year gas servicing and repair contract.
• London Borough of Greenwich
Five year Decent Homes contract.
• Kensington Housing Trust
Five year responsive repair and voids contract.
• London Borough of Kingston upon Thames
Seven year response and voids maintenance contract.
• Leeds City Homes
Five year Decent Homes contract.
• Nottingham City Homes
Five year Decent Homes contract.
• Portsmouth City Council
Three year response and maintenance contract.
• Shoreline Housing Partnership
Five year Decent Homes contract.
• Thames Valley Housing Trust
Five year responsive repair and voids contract.
• Wakefield & District Housing
Five year Decent Homes contract.
Risks
The two most significant risks we face are damage to our reputation as a result
of a service failure and a shortage of appropriately skilled employees placing
limits on our growth. In response, we have upgraded our risk practices in line
with the growth of the business and invested significant time and resources in
strengthening our approach to risk.
Of course, the risk of service failure is best mitigated through a very strong
focus on service delivery and innovation and this is embedded in our operational
approach - the One Mears Way. A skills shortage is best addressed through
innovative recruitment and development programmes and an excellent working
environment with great rewards and opportunities.
Our market
We address two main market areas within social housing: ongoing repairs and
maintenance contracts with Local Authorities and contracts for capital
programmes generated by the Decent Homes Standard.
Central Government is committing at least £3.5bn per annum to achieve the Decent
Homes Standard and we believe this commitment is likely to last until 2015. More
than one million homes do not yet meet the standard. 58 of the scheduled 192
local authorities missed the Government's deadline of July 2005 to start the
process by submitting options appraisals. Clearly, there is still plenty of
opportunity, including long-term partnership agreements involving joint venture
agreements or TUPE transfer.
The repair and maintenance market is thriving and we have identified an
addressable market opportunity of around £5bn a year. The trend is for larger
and longer-term contracts with clients looking to form partnerships with
suppliers able to provide innovative business and service models. Everything
from full-scale outsourcing to joint ventures is on the agenda. We believe these
contracts play to our strengths as a market leader with a flexible and
innovative approach.
Authorities in some of the larger conurbations in the North of England and the
Midlands are now considering the option of joint working arrangements with the
private sector for repair and maintenance work. We are also seeing interest in
our repair and maintenance services from clients in Scotland and Wales - two
relatively early-stage markets with great potential.
Local Authorities are experiencing greater scrutiny from Central Government with
the audit commission paying particular attention to the delivery of repair and
maintenance services. A new key line of enquiry has been introduced focusing on
the value for money and efficiency of maintenance services. In response we're
helping individuals within the sector to share their insight and experiences
through our Thought Leader conferences, the first of which looked at the
Efficiency Agenda.
Our strategy
Social housing continues to offer the biggest and best long-term growth
opportunities. Our focus is firmly on this sector, with particular emphasis on
larger, longer-term contracts and other forms of innovative partnerships.
Our specific strategic priorities are:
• To recruit, retain and develop excellent people.
• To develop close partnerships with clients and communities.
• To constantly search for new and better ways to support clients and help
tenants.
In 2005 we strengthened our approach across all areas of the business in line
with our strategy. Here are some examples.
• We established a Group Executive
Set up in March, the Group Executive is responsible for all day-to-day
operations. The members of this team are drawn from our key operational units
and our support functions. The team is responsible to the PLC board for
delivering the Group's strategic business objectives and reports every month.
• We enhanced our operating units
Our operating units are three regional social housing operating units covering
the North and Scotland, the Midlands and Wales, and the South; Haydon, our
Mechanical and Electrical business; and United Fleet Distribution. Each
operating unit now has its own dedicated managing director who is part of the
Group Executive. This integrated management structure has created opportunities
for cross-selling Haydon's services within social housing, generating excellent
new business for Haydon outside its established London market.
• We further strengthened the senior team
We made senior appointments in Marketing and Sales, HR, IT, Procurement and
Operations. This has increased the breadth of our management team and is a major
step forward in terms of introducing experienced management and robust processes
across all areas of the business.
• We linked incentives to performance
The rewards for our management teams are based on a clear set of performance
criteria. These include progress against the achievement of defined financial
and strategic objectives, including customer and employee satisfaction levels.
• We integrated our acquisitions
We are very pleased with the progress of recently acquired businesses. We have
now integrated Scion and the smaller painting companies into our core
activities. Scion operates as part of Haydon and the painting companies are now
part of our social housing team.
• We improved our support infrastructure
We introduced a number of new systems and processes in HR, Finance, Sales and IT
helping us to manage and support growth and generate more effective and
efficient ways of working.
People - our most valuable differentiator
We said this last year and we will say it again: what really sets us apart as a
business is the quality and spirit of our people.
This is extremely important for two key reasons. First, Mears people are
face-to-face with clients, tenants and the wider community each day, so our work
makes an immediate and lasting impression. Second, there is a skills shortage
and it is vital that we can attract new people, retain good people and have the
training and development programmes in place to turn good people into great
people.
In 2005 we started an initiative whereby our 1,500 trades people can all now
train for a professional qualification. We also launched a national programme of
employee development, together with structured work experience and training for
prospective employees.
Most of our employees live in the community they support. Recruiting locally
enables us to grow quickly, to attract people with local understanding and to
give something back to our communities, many of which have profound unemployment
problems. Our belief that community should be at the heart of Mears is stronger
than ever. You can see it in the way we recruit, the way we carry out work and
the time we all give to supporting community projects.
Outlook
The social housing market is robust. The forward order book is extremely
healthy, both in terms of quantity and quality of future work. Our relationships
with clients are excellent. We are a powerful competitor for all new contracts,
especially those based on scale, quality and innovation. We have a well-balanced
business involved in Decent Homes and repairs and maintenance work. We have
opportunities for strong organic growth and growth through acquisition. The
Mears appetite for hard work is as strong as ever.
We believe we are in good shape and we are looking forward to another year of
Improving Homes, Improving Neighbourhoods, Improving Lives.
Stuart Black David Robertson
stuart.black@mearsgroup.co.uk david.robertson@mearsgroup.co.uk
Chief Executive Finance Director
20 March 2006 20 March 2006
Consolidated Income Statement
for the year ended 31 December 2005
2005 2005 2004 2004
Note £'000 £'000 £'000 £'000
------------------------- ---- -------- -------- -------- --------
Sales revenue 2 203,543 173,685
Cost of sales (144,954) (128,766)
------------------------- ---- -------- -------- -------- --------
Gross profit 58,589 44,919
Other administrative expenses (48,302) (37,417)
Operating result before
share-based payments 2 10,287 7,502
Share option charges (515) (315)
------------------------- ---- -------- -------- -------- --------
Total administrative costs (48,817) (37,732)
------------------------- ---- -------- -------- -------- --------
Operating result 9,772 7,187
Share of operating result in
associate - 4
Finance income 70 16
Finance costs (92) (84)
------------------------- ---- -------- -------- -------- --------
Result for the year before tax 9,750 7,123
Tax expense 3 (2,540) (1,760)
------------------------- ---- -------- -------- -------- --------
Net result for the year 7,210 5,363
------------------------- ---- -------- -------- -------- --------
Attributable to minority
interests - 5
Attributable to shareholders
of Mears Group PLC 7,210 5,358
------------------------- ---- -------- -------- -------- --------
7,210 5,363
------------------------- ---- -------- -------- -------- --------
Earnings per share Pence Pence
Basic 5 12.40 9.32
------------------------- ---- -------- -------- -------- --------
Diluted 5 11.45 8.71
------------------------- ---- -------- -------- -------- --------
All activities are continuing.
Consolidated Balance Sheet
at 31 December 2005
2005 2004
£'000 £'000
------------------------------- ------ ------
Assets
Non-current
Goodwill 10,647 11,069
Property, plant and equipment 5,827 4,450
Equity accounted investments - 49
Deferred tax asset 3,500 2,100
------------------------------- ------ ------
19,974 17,668
Current
Inventories 5,363 4,628
Trade and other receivables 29,511 28,996
Construction contracts 2,341 1,414
Cash at bank and in hand 9,774 8,078
------------------------------ ------ ------
46,989 43,116
------------------------------- ------ ------
Total assets 66,963 60,784
------------------------------- ------ ------
Equity
Equity attributable to the shareholders of Mears Group PLC
Called up share capital 588 579
Share premium account 3,960 3,362
Share-based payment reserve 1,040 525
Retained earnings 22,466 15,312
------------------------------- ------ ------
28,054 19,778
Minority interests - 95
------------------------------- ------ ------
Total equity 28,054 19,873
------------------------------- ------ ------
2005 2004
£'000 £'000
------------------------------- ------ ------
Liabilities
Non-current
Long term financial liabilities - 7
Other liabilities 855 2,953
------------------------------- ------ ------
855 2,960
Current
Short term borrowings and overdrafts 2,832 5,260
Trade and other payables 33,215 31,184
Current tax liabilities 1,764 1,365
Pension and other employee benefits 243 142
------------------------------- ------ ------
Current liabilities 38,054 37,951
------------------------------- ------ ------
Total liabilities 38,909 40,911
------------------------------- ------ ------
------------------------------- ------ ------
Total equity and liabilities 66,963 60,784
------------------------------- ------ ------
Consolidated Statement of Recognised Income and Expense
for the year ended 31 December 2005
2005 2004
£'000 £'000
----------------------------------- -------- --------
Actuarial losses on defined benefit pension scheme (101) (54)
Increase in deferred tax asset 1,270 1,105
----------------------------------- -------- --------
Net income recognised directly to equity 1,169 1,051
Profit for the financial period 7,210 5,363
----------------------------------- -------- --------
Total recognised income and expense for the period 8,379 6,414
----------------------------------- -------- --------
Attributable to:
----------------------------------- -------- --------
Equity shareholders 8,379 6,409
Minority interests - 5
----------------------------------- -------- --------
8,379 6,414
----------------------------------- -------- --------
Consolidated Statement of Cash Flows
for the year ended 31 December 2005
note 2005 2004
£'000 £'000
----------------------------------- ------ -------- --------
Operating activities
Result for the year before tax 9,750 7,123
Adjustments 6 1,974 1,494
Change in inventories (735) (2,043)
Change in operating receivables (1,442) (5,235)
Change in operating payables 1,120 5,322
----------------------------------- ------ -------- --------
Cash inflow from operating activities
before taxes paid 10,667 6,661
Taxes paid (2,271) (1,312)
----------------------------------- ------ -------- --------
8,396 5,349
Investing activities
Additions to property, plant and equipment (3,125) (2,540)
Proceeds from disposals of property, plant and
equipment 330 11
Acquisition of subsidiary undertaking, net of cash (755) (1,088)
Interest received 67 16
----------------------------------- ------ -------- --------
(3,483) (3,601)
Financing activities
Proceeds from share issue 607 330
Discharge of finance lease liability (75) (210)
Interest paid (96) (87)
Dividends paid (1,225) (864)
----------------------------------- ------ -------- --------
(789) (831)
Cash and cash equivalents, beginning of year 2,818 1,901
Net increase in cash and cash equivalents 4,124 917
----------------------------------- ------ -------- --------
Cash and cash equivalents, end of year 6,942 2,818
----------------------------------- ------ -------- --------
Cash and cash equivalents is comprised as follows:
Cash at bank and in hand 9,774 8,078
Short term borrowings and overdrafts (2,832) (5,260)
----------------------------------- ------ -------- --------
Cash and cash equivalents 6,942 2,818
----------------------------------- ------ -------- --------
Notes to the preliminary announcement
for the year ended 31 December 2005
1. Basis of preparation and transition to International Financial Reporting
Standards
The preliminary announcement contains extracts from the full financial
statements.
The full financial statements have been prepared in accordance with applicable
International Financial Reporting Standards and as adopted by the EU and under
the historical cost convention.
The principal accounting polices of the Group have changed due to the adoption
of International Financial Reporting Standards (IFRS). The accounting policies
of the Group under IFRS are disclosed within the Group's website at
www.mearsgroup.co.uk.
The transition from United Kingdom GAAP to IFRS has been made in accordance with
IFRS1, First-time Adoption of International Financial Reporting Standards.
The Group's consolidated financial statements for 2005 and the comparatives
presented for 2004 comply with all presentation and disclosure requirements of
IFRS applicable for accounting periods commencing on or after 1 January 2005.
The remeasurement of the consolidated balance sheet items at the IFRS opening
balance sheet date and at 31 December 2004, together with the reconciliation of
the Group's equity reported under previous GAAP to its equity under IFRS as at 1
January 2004 and 31 December 2004 is disclosed within the Group's website at
www.mearsgroup.co.uk.
2. Segment reporting
The Group operates three business segments: the social housing segment, the
mechanical and electrical (M&E) segment and the vehicle distribution segment.
All of the Group's activities are carried out within the United Kingdom.
The table below forms an extract of that to be included within the Group's
statutory accounts:
2005
Business Social M&E Vehicle Total
segments housing distribution
-------- ------- ------- ------------ -------
Revenue 144,086 50,820 8,637 203,543
-------- ------- ------- ------------ -------
Operating result pre
share based payments 7,964 1,908 415 10,287
-------- ------- ------- ------------ -------
2004
Business Social M&E Vehicle Total
segments housing distribution
-------- ------- ------- ------------ -------
Revenue 104,086 58,684 10,915 173,685
-------- ------- ------- ------------ -------
Operating result pre
share based payments 5,395 1,653 458 7,506
-------- ------- ------- ------------ -------
3. Tax expense
The tax charge represents:
2005 2004
£'000 £'000
--------------------------------------- ------- -------
Total current tax 2,670 1,855
Reversal of deferred tax timing differences (130) (95)
--------------------------------------- ------- -------
Tax expense 2,540 1,760
--------------------------------------- ------- -------
4. Dividends
The following dividends were declared on ordinary shares in the year.
2005 2004
£'000 £'000
--------------------------------------- ------- -------
- final 2004 dividend of 1.40p (2004: final 2003
dividend of 1.00p) per share 815 573
- interim dividend of 0.70p (2004: 0.50p) per share 410 290
--------------------------------------- ------- -------
1,225 863
--------------------------------------- ------- -------
The proposed final dividend of 1.9p per share has not been included within the
Group preliminary results as no obligation existed at 31 December 2005.
5. Earnings per share
Basic earnings per share is based on equity earnings of £7.21m (2004: £5.36m)
and 58.16m (2004: 57.57m) ordinary shares at 1p each, being the average number
of shares in issue during the year.
For diluted earnings per share the average number of shares in issue is
increased to 62.97m (2004: 61.56m) to reflect the potential dilution effect of
employee share schemes.
A normalised pre share-based payments earnings per share is disclosed in order
to show performance undistorted by share based payments and the tax effect of
share options. The normalised pre share-based payments earnings per share is
based on equity earnings of £7.19m (2004: £5.20m).
Basic Diluted
--------- ---------
2005 2004 2005 2004
p p p P
----------------------------- ------ -------- ------- --------
Earnings per share 12.40 9.32 11.45 8.71
Effect of eliminating share-based payments 0.66 0.38 0.61 0.36
Effect of full tax adjustment (0.70) (0.66) (0.65) (0.62)
---------------------------- ------ ------- -------- -------
Normalised pre share-based payments
earnings per share 12.36 9.04 11.41 8.45
---------------------------- ------ ------- -------- -------
6. Notes to Consolidated Cash Flow Statement
The following non operating adjustments have been made to the pre-tax result for
the year:
2005 2004
£'000 £'000
--------------------------------------- -------- --------
Depreciation 1,458 1,082
(Profit)/loss on disposal of fixed assets (21) 33
Share option charges 515 315
Result from equity accounted investments - (4)
Finance income (70) (16)
Finance cost 92 84
--------------------------------------- -------- --------
1,974 1,494
--------------------------------------- -------- --------
7. Publication of Non-Statutory Accounts
The financial information set out in the announcement does not constitute the
Group's statutory accounts for the years ended 31 December 2005 or 2004. The
financial information for the year ended 31 December 2004 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies, as subsequently restated under IFRS. A summary of restatements is
published on the Group's website. The auditors reported on those accounts; their
report was unqualified and did not contain a statement under s.237(2) or (3)
Companies Act 1985. The statutory accounts for the year ended 31 December 2005
will be finalised on the basis of the financial information presented by the
directors in this preliminary announcement and will be delivered to the
Registrar of Companies.
This information is provided by RNS
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