Half Yearly Report

RNS Number : 8301M

Severfield-Rowen PLC

23 August 2011

 



Half Year Results

for 6 Months ended 30 June 2011

ROBUST ORDER BOOK - INDIAN PROGRESS

Severfield-Rowen Plc, the market leading structural steel group, announces its half year results to 30 June 2011.

Highlights

·      Underlying Profit before Tax of £3.4m (2010: £8.2m) in line with management's expectations

·      Underlying Group Operating Profit before results of Associates of £5.7m (2010: £8.6m)

·      Net borrowings at period end of £22.8m (2010: £8.2m)

·      UK Order book at 19/08/11 £249m (May 2011: £221m) reflecting growth in UK market share

·      JSSL India order book at 19/08/11 £41m (May 2011: £36m)

·      Interim dividend of 1.50p per share (2010: 5.00p)

Financial Summary

	2011	2010	Change
Revenue	£122.0m	£126.7m	- 3.6%
Underlying* Group Operating Profit	£4.0m	£8.5m	- 53.0%
Underlying Group Operating Profit, before results of Associates	£5.7m	£8.5m	- 34.0%
Underlying Operating Margin, before results of Associates	4.6%	6.8%
Underlying Profit before Tax	£3.4m	£8.2m	- 58.5%
Underlying Net Margin	2.8%	6.5%
Retained Profit after Tax (including non-underlying items)	£1.1m	£4.3m	- 75.6%
Underlying Basic EPS	2.29p	6.58p	- 65.2%
Dividend per Share	1.50p	5.00p
Net Debt	£22.8m	£8.2m
UK Order Book	£249m	£244m

* Underlying is before the amortisation of acquired intangible assets of £1.4m (2010: £1.4m) and in 2010 pre-operating costs of JSW Severfield Structures Limited (JSSL), the Indian joint venture, of £0.5m.

A copy of the Statement is available on the Company's website:  www.sfrplc.com

Commenting, Tom Haughey, Chief Executive Officer, said:

The Company is pleased with its performance in the UK against the backdrop of a prolonged and unprecedented period of weak demand. The Company has grown its order book to £249m (May 2011: £221m) and maintained its position as market leader, winning key contracts in strategic sectors where activity levels still offer opportunity.

The financial performance of our UK operations in terms of revenues and margins is consistent with our expectations, with strong performances in all group companies and functions to deliver client value and satisfaction.

The Company has been consistently cautious about the timing and extent of recovery in the UK market, an approach which has been justified. The Company is forward planning on the basis that demand will remain subdued for the next few years, showing only marginal growth for the market as a whole but with further opportunity in the London commercial, power and industrial/distribution sectors.

A few select export projects from the UK have been engaged or are being pursued, but exports will remain a small proportion of turnover in light of the prevailing returns in many overseas markets.

India remains the focus of the Company's growth ambitions, with opportunity being translated into reality via the scale and content of JSW Severfield Structures' order book and the progress being made in achieving operational and commercial objectives.

JSSL's order book currently (19 August 2011) stands at £41m (May 2011: £36m) which provides full activity at maximum operational output levels until June 2012.

The Company and its partner, JSW Steel, are pleased with the development of the business and in the coming months look forward to the benefits of a fully commissioned operation and the associated financial contributions.

The prospects for JSSL in the Indian market are immense and both partners are seeking to further develop the business capability in line with their growth expectations.

Enquiries
Severfield-Rowen Plc	Toby Hayward Chairman	01845 577896
	Tom Haughey Chief Executive Officer	01845 577896
	Alan Dunsmore Finance Director	01845 577896
RBS Hoare Govett Ltd	John MacGowan	020 7678 8000
	Stephen Bowler	020 7678 8000
Pelham Bell Pottinger	Archie Berens	020 7861 3232
	Zoe Sanders	020 7861 3232

INTERIM STATEMENT 2011

INTRODUCTION

Notwithstanding the long and severe UK downturn, the Company is trading well.  Prospects, in our forward view, are marginally better but a full UK recovery remains some years distant.

Management actions continue to focus on strengthening the Company's market and service provision, as well as its operational performance and cost base.  Limited and selective investments have aided performance to date and will continue to support our UK business objectives.

New orders in 2011, which include The Leadenhall Building ("The Cheesegrater") and Chichester Place commercial offices in London, Philharmonie de Paris, Sellafield SDP, BMW manufacturing facility at Cowley and Birmingham New Street Station, are representative of the most active sectors in the market.  The Company's domestic share is estimated to remain around 20% and its order book value of £249m (at 19 August 2011) illustrates the strength of the Group's core competencies and market leading position.

The joint venture in India is rapidly approaching the successful achievement of its first stage milestones in terms of financial, operational and commercial performance.

FINANCIALS

The weak UK construction market continues to impact the Group results.  Revenue of £122.0 million (2010: £126.7 million) is 4% lower than the previous year.  Underlying Operating Profit before results of Associates, of £5.7 million (2010: £8.5 million) has reduced by 34% which reflects further pressure on underlying operating margins. This decline from 6.8% to 4.6% year on year is a reflection of order mix change over the period.  The share of results of Associates from the India Joint Venture is a loss of £1.6 million in the period (2010: £nil).  While the Indian order book has built up to a good level, contract timing has resulted in the factory production build up running about three months behind schedule, resulting in this loss for the period.

The Group Underlying Operating Profit after share of results of Associates is £4.0 million (2010: £8.5 million), a 53% reduction on the previous year.  Underlying profit before tax for the period is £3.4 million (2010: £8.2 million) representing a 59% decline on the previous year.

Underlying profit is before the amortisation of acquired intangible assets of £1.4 million (2010: £1.4 million, plus £0.5 million of pre-operating losses from Indian Joint Venture).  The underlying tax charge of £1.4 million represents an effective tax rate of 27.0% on the applicable profit, which excludes the share of results of Associates (2010: 29.0%).

Underlying basic earnings per share is 2.29p (2010: 6.58p).  This calculation is based on the underlying profit after tax of £2.05m and 89,251,076 shares, being the weighted average number of shares in issue during the period.  Basic earnings per share, based on profit after tax after non-underlying items, is 1.18p (2010: 4.87p).

There are no contingent shares outstanding under share based payment schemes and accordingly there is no difference between basic and diluted earnings per share.

Retained profit after tax of £1.1 million (2010: £4.3 million) has been transferred to reserves.

During the first six months of the year capital expenditure amounted to £0.6 million (2010: £0.4 million).

There was a net cash outflow from operating activities in the first six months of £4.5 million (2010: outflow of £12.4 million).  This reflects an expected increase in working capital, and Corporation Tax payments of £4.3 million.

The outflow, combined with capital expenditure, interest payments, and dividends resulted in net borrowings of £22.8 million at the end of the period (31 December 2010: £15.0 million), in line with management expectations.

The Group has a revolving credit facility of £40.0 million with RBS and National Australia Bank as joint lender, maturing in March 2013.

DIVIDEND

An interim dividend of 1.50p per share is declared today and will be paid on 28 October 2011 to shareholders on the register on 7 October 2011.

INDIA

Since the opening of the fabrication facility 12 months ago, the business has now built up a very strong order book of £41m (19 August 2011) and is progressively increasing operational outputs to our target levels, which will be achieved in the coming months.

JSW Severfield Structures is now producing quality product and service speeds, which are the basis of its differentiated advantages in the Indian market. 

Market demand is strong, with opportunities in all sectors, including infrastructure, industrial, power, retail, commercial offices and transport.  The business is now firmly demonstrating the value of its "new service offerings" to the market.

The challenges of establishing and building this new business in India are very substantial, but our objectives are steadily being achieved and the success to date bodes well for the next stage of development.

OPERATIONS

Group Review

The main business of the Group is the design, fabrication and erection of structural steelwork for construction projects of varying types, including warehouses, commercial offices, retail centres, industrial buildings and power stations.

The Group's main subsidiary companies are all involved in the principal business of structural steelwork.   Activities across the Group are co-ordinated to optimise value. However, all of the individual companies retain their own market identity and specialist capabilities.

UK

All of the Group companies have contributed positively to the results.  During the first half of 2011 the companies were engaged in the successful supply of services to a large number of projects, including:

The Shard of Glass Commercial Office, London	Amex House Commercial Office, Brighton
Heathrow Terminal 2A	Pinewood Studios, Buckinghamshire
Blackfriars Bridge & Thameslink Station, London	Premier Inn, Stratford, London
2012 Olympic Basketball Arena	Sellafield Separation Area Ventilation
Southmead Hospital, Bristol	Amazon Distribution Warehouse, Dunfermline
Thameslink Viaduct Borough Market, London	ArcelorMittal Orbit, London 2012
2-14 Baker Street Commercial Office, London	Manchester Metropolitan University
Sirius Academy, Hull	Greater Manchester Police Headquarters
Aquatics Centre Temporary Stands, London 2012	Park House Commercial Office, London
Tottenham Hotspur Training Facility, London	Distribution Centres in Essex, Stratford and Birmingham
Morrison's Distribution Centre, Bridgwater	Tesco Store, Llandrindod
Howick Place Commercial Office, London	Manchester Co-op Retail Outlet
Nobel School, Stevenage	INEOS, Runcorn
Marriott & Lonsdale Schools, Hertfordshire

India

JSW Severfield Structures Ltd in India commenced production in August 2010 and was formally opened in November 2010.

The Company is modelled on the UK blueprint, providing enhanced design, fabrication and erection services to the Indian construction market.

The operational development of the business is approaching the targets set by JSSL, having successfully executed projects in the commercial, power and industrial sectors, which are proving the value of the speed and quality advantages inherent in our process which is new in India.

OUTLOOK

The Company's success in the UK and India is attributable to the contributions and support of all of its employees, who continue to extend their efforts to meet the (different) challenges faced at home and abroad.

The Board remains confident that its full year performance will be in line with its expectations, notwithstanding the weakness of the UK economy.

The Company's strong domestic market position, combined with growing contribution from its presence in India, leave it well positioned to take advantage of opportunities for further progress in the medium term.

TOM HAUGHEY

CHIEF EXECUTIVE OFFICER

23 August 2011

Condensed Consolidated Income Statement

	Six months ended 30 June 2011 (unaudited)				Six months ended 30 June 2010 (unaudited)				Year ended 31 December 2010 (audited)
	Before Other Items £000	Other Items1 £000	Total £000		Before Other Items £000	Other Items1 £000	Total £000		Before Other Items £000	Other Items1 £000	Total £000
Revenue	122,041	-	122,041		126,662	-	126,662		266,692	-	266,692
Cost of sales	(114,094)	-	(114,094)		(116,643)	-	(116,643)		(242,568)	2,000	(240,568)
Gross profit	7,947	-	7,947		10,019	-	10,019		24,124	2,000	26,124
Other operating income	164	-	164		226	-	226		510	-	510
Distribution costs	(978)	-	(978)		(390)	-	(390)		(1,937)	-	(1,937)
Administrative expenses	(1,479)	(1,374)	(2,853)		(1,292)	(1,374)	(2,666)		(6,127)	(4,821)	(10,948)
Unrealised gains on  derivative financial instruments	-	18	18		-	34	34		-	39	39
Operating profit before share of results of associates	5,654	(1,356)	4,298		8,563	(1,340)	7,223		16,570	(2,782)	13,788
Share of results of associates	(1,632)	-	(1,632)		(9)	(553)	(562)		(366)	(1,394)	(1,760)
Operating profit after share of results of associates	4,022	(1,356)	2,666		8,554	(1,893)	6,661		16,204	(4,176)	12,028
Investment revenue - interest	42	-	42		34	-	34		55	-	55
Finance costs - interest	(656)	-	(656)		(370)	-	(370)		(976)	-	(976)
Profit before tax	3,408	(1,356)	2,052		8,218	(1,893)	6,325		15,283	(4,176)	11,107
Tax	(1,361)	366	(995)		(2,373)	375	(1,998)		(4,160)	686	(3,474)
Profit for the period	2,047	(990)	1,057		5,845	(1,518)	4,327		11,123	(3,490)	7,633
Earnings per share:
Basic	2.29p	(1.11p)	1.18p		6.58p	(1.71p)	4.87p		12.50p	(3.92p)	8.58p
Diluted	2.29p	(1.11p)	1.18p		6.58p	(1.71p)	4.87p		12.50p	(3.92p)	8.58p

¹    Other items in 2011 relate to the amortisation of acquired intangibles and movements in the valuation of derivative financial instruments and the associated tax effect of these items.  Other items in 2010 relate to the amortisation of acquired intangibles, pre-operating costs of JSW Severfield Structures Limited, the Group's Indian Joint Venture company, movements in the valuation of derivative financial instruments, partial release of a legal provision, the impairment of investment property and the associated tax impact of these items.  Other items have been disclosed separately in order to give an indication of the underlying earnings of the Group. 

Condensed Consolidated Statement of Comprehensive Income

	Six months ended 30 June 2011 (unaudited) £000	Six months ended 30 June 2010 (unaudited) £000	Year ended 31 December 2010 (audited) £000
Actuarial loss on defined benefit pension scheme	-	-	(440)
Tax relating to components of other comprehensive income	-	-	123
Other comprehensive income for the period	-	-	(317)
Profit for the period from continuing operations	1,057	4,327	7,633
Total comprehensive income for the period attributable to equity shareholders	1,057	4,327	7,316

Condensed Consolidated Statement of Changes in Equity

	Share Capital £000	Share Premium £000	Other Reserves £000	Retained Earnings £000	Total Equity £000
At 1 January 2011	2,231	46,152	169	82,391	130,943
Profit for the period (attributable to equity holders of the parent)	-	-	-	1,057	1,057
Dividends paid	-	-	-	(2,231)	(2,231)
Equity settled share based payments	-	-	187	-	187
At 30 June 2011 (unaudited)	2,231	46,152	356	81,217	129,956

	Share Capital £000	Share Premium £000	Other Reserves £000	Retained Earnings £000	Total Equity £000
At 1 January 2010	2,215	46,152	1,065	83,043	132,475
Profit for the period (attributable to equity holders of the parent)	-	-	-	7,633	7,633
Dividends paid	-	-	-	(8,883)	(8,883)
Share based payments	16	-	(896)	915	35
Actuarial loss on defined benefit pension scheme	-	-	-	(440)	(440)
Deferred income taxes on defined pension benefit scheme	-	-	-	123	123
At 31 December 2010 (audited)	2,231	46,152	169	82,391	130,943

	Share Capital £000	Share Premium £000	Other Reserves £000	Retained Earnings £000	Total Equity £000
At 1 January 2010	2,215	46,152	1,065	83,043	132,475
Profit for the period (attributable to equity holders of the parent)	-	-	-	4,327	4,327
Dividends paid	-	-	-	(4,430)	(4,430)
Equity settled share-based payments	11	915	(926)	-	-
At 30 June 2010 (unaudited)	2,226	47,067	139	82,940	132,372

Condensed Consolidated Balance Sheet

	At 30 June 2011 (unaudited) £000	At 30 June 2010 (unaudited) £000	At 31 December 2010 (audited) £000
ASSETS
Non-current assets
Goodwill	54,712	54,712	54,712
Other intangible assets	19,121	21,870	20,495
Property, plant and equipment	81,403	83,055	82,949
Investment property	3,980	6,104	4,000
Interests in associates	1,225	3,621	2,857
	160,441	169,362	165,013
Current assets
Inventories	11,202	7,145	12,633
Trade and other receivables	68,773	63,352	71,861
Cash and cash equivalents	10,136	1,141	3,589
	90,111	71,638	88,083
Total assets	250,552	241,000	253,096
LIABILITIES
Current liabilities
Trade and other payables	(62,984)	(68,763)	(75,868)
Financial liabilities - borrowings	(32,894)	(9,383)	(18,629)
Financial liabilities - derivative financial instruments	(90)	(113)	(108)
Obligations under finance leases	(101)	-	-
Tax liabilities	(2,258)	(5,221)	(5,217)
	(98,327)	(83,480)	(99,822)
Non-current liabilities
Retirement benefit obligations	(8,532)	(8,407)	(8,532)
Obligations under finance leases	(304)	-	-
Deferred tax liabilities	(12,833)	(14,141)	(13,199)
Provisions	(600)	(2,600)	(600)
	(22,269)	(25,148)	(22,331)
Total liabilities	(120,596)	(108,628)	(122,153)
NET ASSETS	129,956	132,372	130,943
EQUITY
Share capital	2,231	2,226	2,231
Share premium	46,152	47,067	46,152
Other reserves	356	139	169
Retained earnings	81,217	82,940	82,391
TOTAL EQUITY	129,956	132,372	130,943

Condensed Consolidated Cash Flow Statement

	Six months ended 30 June 2011 (unaudited) £000	Six months ended 30 June 2010 (unaudited) £000	Year ended 31 December 2010 (audited) £000
Net cash from operating activities	(4,521)	(12,377)	(11,203)
Investing activities
Interest received	44	42	61
Proceeds on disposal of property, plant and equipment	224	184	225
Purchases of property, plant and equipment	(632)	(445)	(3,025)
Purchases of shares of associates	-	(2,450)	(2,884)
Net cash (used in) investing activities	(364)	(2,669)	(5,623)
Financing activities
Interest paid	(551)	(314)	(879)
Dividends paid	(2,231)	(4,430)	(8,883)
Repayment of obligations under finance leases	(51)	-	-
Borrowings taken out	14,265	9,383	18,629
Net cash from financing activities	11,432	4,639	8,867
Net increase/(decrease) in cash and cash equivalents	6,547	(10,407)	(7,959)
Cash and cash equivalents at beginning of period	3,589	11,548	11,548
Cash and cash equivalents at end of period	10,136	1,141	3,589

Notes to the Condensed Consolidated Financial Statements

1)         General information

The interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The interim results to 30 June 2011 and 2010 are neither audited nor reviewed in accordance with International Standard on Review Engagements 2410 issued by the Auditing Practices Board.  The financial information of the full preceding year is based on the statutory accounts for the financial year ended 31 December 2010.  Those accounts have been delivered to the Registrar of Companies.  The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2)         Basis of preparation

The interim financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") and in accordance with IAS 34 "Interim Financial Reporting" as adopted for use in the European Union and in accordance with the accounting policies included in the Company's Annual Report for the year ended 31 December 2010 which have been applied consistently throughout the current and preceding periods.

In 2011, a number of new standards and interpretations have become effective as noted in the Annual Report 2010 (page 98).  The adoption of these standards and interpretations has not had a material impact on the financial statements of the Group.  Since the Annual Report was published the following significant new standards and interpretations which have not been applied in these condensed consolidated financial statements, have been issued but are not yet effective:

·      IFRS 10 "Consolidated Financial Statements" - effective for accounting periods beginning on or after 1 January 2013.

·      IFRS 11 "Joint Arrangements" effective for accounting periods beginning on or after 1 January 2013.

·      IFRS 12 "Disclosure of Interests in Other Entities" - effective for accounting periods beginning on or after 1 January 2013.

·      IFRS 13 "Fair Value Measurement" - effective for accounting periods beginning on or after 1 January 2013.

The adoption of these standards in future periods is not expected to have a material impact on the financial statements of the Group.

3)         Going concern

The Group has access to a £40 million revolving credit facility to meet day-to-day working capital requirements.  As at 30 June 2011 the Group had comfortable headroom on this facility and on the bank financial covenants in place and this position is forecast to continue for the foreseeable future.  The bank facility is available to March 2013. 

Through its various business activities the Group is exposed to a number of risks and uncertainties (see Note 4), which could affect the Group's ability to meet these forecasts and hence its ability to meet its banking covenants.  As part of the review of forecasts noted above the Directors have considered its order book, the challenging economic environment, the commercial environment, and its supplier and customer base, together with the potential mitigating actions that can be taken to protect operating profits and cash flows.  The Directors believe the Group is well placed to manage these business risks despite the current uncertain economic environment. 

Accordingly after making enquiries, the Directors have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. For this reason, the going concern basis has been adopted in preparing this Interim Report.  

4)         Risks and uncertainties

The principal risks and uncertainties which could have a material impact upon the Group's performance over the remaining six months of the 2011 financial year have not changed significantly from those noted or referenced on pages 34-35 of the Directors' Report and pages 22-24 of the Financial Review included in the Annual Report 2010. These risks and uncertainties include, but are not limited to:

·      The commercial and market environment which the Group operates

·      Possible steel price movements

·      Reliance on key skills and personnel within our workforce

·      Health and safety

·      Credit, interest rate and foreign exchange risks

5)         Segmental analysis

Revenue, profit before tax, and net assets all relate to the design, fabrication, and erection of structural steelwork and related activities.  All of the Group's subsidiary businesses have similar products and services, production processes, types of customer, methods of distribution, regulatory environments, and economic characteristics.

Revenue, which relates wholly to construction contracts and related assets in both years originated from the United Kingdom.

There has been no change in the basis of segmentation or in the basis of measurement of segment profit or loss in the period.

6)         Seasonality

There are no particular seasonal variations which impact the split of turnover between the first and second half of the financial year.  Underlying movements in contract timing and phasing, which are an ongoing feature of the business, will continue to drive moderate fluctuations in half yearly revenues.

7)         Taxation

The income tax expense reflects the estimated effective rate on profit before taxation for the Group for the year ending 31 December 2010.

8)         Dividends payable to equity shareholders

	Six months ended 30 June 2011 £000	Six months ended 30 June 2010 £000	Year ended 31 December 2010 £000
Ordinary dividend paid	2,231 ______	4,430 ______	8,883 ______

9)         Earnings per share

Earnings per share is calculated as follows:

	Six months ended 30 June 2011 £000	Six months ended 30 June 2010 £000	Year ended 31 December 2010 £000
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent company	1,057 ______	4,327 ______	7,633 ______
Earnings for the purposes of underlying basic earnings per share being underlying net profit attributable to equity holders of the parent company	2,047 ______	5,845 ______	11,123 ______
Number of shares	Number	Number	Number
Weighted average number of ordinary shares for the purposes of basic earnings per share	89,251,076	88,829,502	88,973,821
Effect of dilutive potential ordinary shares and under share plans	-	-	-
	_________	_________	_________
Weighted average number of ordinary shares for the purposes of diluted earnings per share	89,251,076	88,829,502	88,973,821
	_________	_________	_________
Basic earnings per share	1.18p	4.87p	8.58p
Underlying basic earnings per share	2.29p	6.58p	12.50p
Diluted earnings per share	1.18p	4.87p	8.58p
Underlying diluted earnings per share	2.29p	6.58p	12.50p

10)        Property, plant and equipment

During the period fixed asset additions totalled £879,000.  The Group also disposed of certain fixed assets with carrying amounts of £200,000 for proceeds of £224,000.

11)        Net Debt

The Group's net debt is as follows:

	Six months ended 30 June 2011 £000	Six months ended 30 June 2010 £000	Year ended 31 December 2010 £000
Cash and cash equivalents	10,136	1,141	3,589
Financial Liabilities - borrowings	(32,894)	(9,383)	(18,629)
Net debt	(22,758)	(8,242)	(15,040)

12)        Reconciliation of group profit from operations to cash generated from operations

	Six months ended 30 June 2010 (unaudited) £000	Six months ended 30 June 2009 (unaudited) £000	Year ended 31 December 2010 (audited) £000
Operating profit for the period	2,666	6,661	12,028
Adjustments for:
Provision release	-	-	(2,000)
Share of results of associated companies	1,632	562	1,760
Depreciation of property, plant and equipment	2,245	2,115	4,503
Amortisation of intangible assets	1,374	1,374	2,749
Impairment of investment property	-	-	2,135
(Gain)/loss on disposal of property, plant and equipment	(24)	29	165
Share based payment expense	187	-	35
Movements in pension scheme	-	-	(317)
Unrealised gains on derivative financial instruments	(18)	(34)	(39)
Operating cash flows before movement in working capital	8,062	10,707	21,019
Movements in working capital
Decrease/(increase) in inventories	1,431	2,665	(2,823)
(Increase)/decrease in receivables	3,086	(8,705)	(17,212)
(Decrease)/increase in payables	(12,780)	(13,858)	(6,794)
Cash generated from operations	(201)	(9,191)	(5,810)
Tax paid	(4,320)	(3,186)	(5,393)
Net cash from operating activities	(4,521)	(12,377)	(11,203)

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.

13)        Related party transactions

Certain Related Party Transactions, as described in Note 31 on page 97 of the 2010 Annual Report, continued in the current period.  None of these transactions materially affected the financial position or performance of the Group during the period.

14)        Cautionary statement

The Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.

            The IMR contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

15)        Responsibility statement

We confirm that to the best of our knowledge:

(a)        the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";

(b)        the Interim Report includes a fair review of the information required by DTR4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

(c)        the Interim Report includes a fair review of the information required by DTR 4.2.8R (disclosure of the related party transactions and changes therein).

By order of the Board

Tom Haughey	Alan Dunsmore
Director	Director
23 August 2011	23 August 2011

 

END

 

 

IR PGUPARUPGGRP