Interim Results

Hunting PLC 30 August 2007 For immediate release 30 August 2007 HUNTING PLC Half year results For the six months ended 30 June 2007 Hunting PLC ('Hunting', the 'Group' or the 'Company'), the international energy services company, today announces its half year results for the six months ended 30 June 2007. â€¢ Revenue of Â£877.2m (2006: Â£885.8m) -1% â€¢ Profit from operations before exceptional items of Â£42.5m (2006: Â£38.5m) +10% â€¢ Pre-tax profit before exceptional items of Â£38.9m (2006: Â£35.3m) +10% â€¢ Basic earnings per share before exceptional items of 18.1p per share (2006: 16.6p) +9% â€¢ Interim dividend of 2.55p per share (2006: 2.3p) +11% Pre-tax profits reported in US Dollars, as opposed to Â£-Sterling, showed an increase of 21% over the prior period reflecting Hunting's strong growth and the impact of currency fluctuations on the first half results. Commenting on the outlook for the Group, Dennis Proctor, Hunting's Chief Executive, said: 'For 2007, the oil and gas industry did not expect as dramatic a growth as experienced in 2005 and 2006 due to labour constraints and project timing. We are pleased with our first half results and improvement should continue for the second half. Weather, currency fluctuations, gas prices, light and heavy crude price differentials and geopolitical dynamics can and will influence future performance. However, the fundamentals of diminishing reserves against growing demand will provide your Company with the opportunity to utilise its excellent and strategically located assets for future benefit.' For further information, please contact: Hunting PLC 020 7321 0123 Dennis Proctor, Chief Executive Dennis Clark, Finance Director Hogarth Partnership Limited 020 7357 9477 Andrew Jaques Anthony Arthur Notes to Editors: Hunting PLC is an international oil services company providing support solutions to the world's largest oil and gas companies. Hunting PLC, the international energy services company, announces its half year results for the six months to 30 June 2007. INTRODUCTION The half year results reflect excellent operational improvements due to prior year capital expenditures, productivity enhancements and cost containment. This is set against a background of a 20% reduction in drilling activity in Canada, low natural gas prices in North America, and a further weakening of the US dollar. In Â£-Sterling, pre-tax profits before exceptionals report a 10% increase over the prior period; expressing these results in US dollars shows an increase of 21%. Increased Canadian oil sands investment and global drilling activity continues to provide excellent growth opportunities for your Company's assets. RESULTS SUMMARY Revenue for the six months to 30 June 2007 decreased from Â£885.8m to Â£877.2m. Profit from operations before exceptionals increased by 10% to Â£42.5m (2006 - Â£38.5m). Pre-tax profits before exceptionals increased by 10% to Â£38.9m (2006 - Â£35.3m) and after exceptional items pre-tax profits increased by 3%. Profit for the period was Â£23.7m (2006 - Â£22.9m) after a tax charge of Â£12.7m (2006 - Â£12.4m). Basic earnings per share before exceptionals of 18.1p were 9% higher (2006 - 16.6p) and after exceptional items basic earnings per share decreased by 3%. An interim dividend of 2.55p per share (2006 - 2.3p) will be paid on 21 November 2007 to shareholders on the register at the close of business on 2 November 2007. OPERATIONAL REVIEW The revenue and operating results of each division are included in the financial analysis in Note 2 of this report. GIBSON ENERGY Gibson Energy, based in Alberta, Canada and one of Canada's premier mid-stream service companies providing marketing services, truck transportation, processing and distribution achieved a good result with profit from operations for the six months of Â£19.6m. Conventional exploration and production drilling declined approximately 20% during the period, however, heavy oil projects continue to attract further investment. Truck transportation, pipelines and terminals continue to benefit from larger production drilling volumes. Moose Jaw Refinery continues to benefit from A grade asphalt prices as well as market share improvement for wellsite fluids. Differentials between heavy/sour and light crude oil pricing, as well as diluent, enables Gibson to maximise the synergies of its terminals, pipeline and storage assets. Prior period expansion programmes coupled with growing volumes from tar sands development will provide the company with excellent growth opportunities. Marketing had an excellent result for the period. Oil prices in the 20-plus crude streams remained volatile and management expertly managed its inventories. However, profit from operations was lower than the corresponding period in 2006 by 29% at Â£5.5m (2006 - Â£7.8m). Truck Transportation had another exceptional year on year improvement due to higher activity levels, spot movements and synergies with other Gibson assets. Profit from operations increased by 32% to Â£5.4m (2006 - Â£4.1m). Terminals and Pipelines have continued to see increased overall activity in the region. Profit from operations increased 36% to Â£3.0m (2006 - Â£2.2m). Canwest Propane and Natural Gas Liquids ('NGL') benefited from a further acquisition and saw an increase of 33% in profit from operations to Â£2.4m (2006 - Â£1.8m). Moose Jaw Refinery results were slow due to delayed asphalt deliveries following adverse weather and the slump in US housing demand for roof flux. Sales for asphalt and well site fluids exceeded last year and second half deliveries should improve. Profit from operations for the period was Â£3.3m (2006 - Â£6.2m). The performance of Gibson's assets is leveraged to the continued development of oil and gas in Western Canada including the vast tar sands in Alberta and heavy oil production which is expected to triple in the next 7-10 years. Marketing will remain dependent upon crude differentials, diluent availability and blending opportunities. HUNTING ENERGY SERVICES Hunting Energy Services, with manufacturing facilities throughout the world, is a supplier of products and services to the upstream oil and gas companies. Profit from operations in the first half increased 51% from Â£15.4m to Â£23.3m. Current energy price levels are fueling drilling activity around the globe at levels not seen since the early 1980s. Recent forecasts continue to support the additional need for rigs and ancillary products to meet rising demand and severe depletion. As expected, growth in the Middle East and Asia has offset the decline in Canada and the US Gulf of Mexico. New capacity in the US Rocky Mountains, Holland and Singapore has provided excellent profit gains. Well Completion - Profit from operations increased 73% to Â£16.3m (2006 - Â£9.4m). Well Construction - Profit from operations increased 8% to Â£4.3m (2006 - Â£4.0m). Exploration and Production - 5 out of 9 wells were successfully completed during the period - 3 gas, 1 oil and gas, 1 oil. Full production was not regained from the damage of Hurricane Katrina until the second quarter, which, combined with lower gas prices, resulted in an 11% decline in profit from operations to Â£1.6m (2006 - Â£1.8m). Hunting Energy France - Profit from operations increased to Â£1.1m (2006 - Â£0.2m). OTHER Gibson Shipbrokers had a decrease in profit from operations to Â£0.7m (2006 - Â£1.0m). On 12 July 2007, Aero Sekur, our former Italian defence company, was sold for Â£2.0m resulting in an exceptional loss on sale of Â£2.5m. The loss has been recognised in the half year result. KEY FINANCIAL POINTS â€¢ EBITDA Â£55.6m (2006 - Â£51.5m). â€¢ Capital expenditure Â£32.7m (2006 - Â£25.8m) which included Â£8.6m in Gibson Energy (2006 - Â£11.1m) and Â£22.8m in Hunting Energy Services (2006 - Â£13.7m). In total, Â£17.7m was replacement expenditure (2006 - Â£10.0m) and Â£15.0m was new business expenditure (2006 - Â£15.8m). â€¢ Acquisitions Â£11.8m (2006 - Â£0.9m). â€¢ Depreciation and amortisation Â£12.8m (2006 - Â£12.5m). â€¢ Net debt Â£138.8m (2006 - Â£109.6m) with working capital increasing by Â£40.6m (2006 - Â£22.0m). OUTLOOK For 2007, the oil and gas industry did not expect as dramatic a growth as experienced in 2005 and 2006 due to labour constraints and project timing. We are pleased with the first half results and improvement should continue for the second half. Weather, currency fluctuations, gas prices, light and heavy crude price differentials and geopolitical dynamics can and will influence future performance. However, the fundamentals of diminishing reserves against growing demand will provide your Company the opportunity to utilise its excellent and strategically located assets for future benefit. Richard Hunting Dennis Proctor Chairman Chief Executive 30 August 2007 Consolidated Income Statement (Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Notes Â£m Â£m Â£m Revenue 2 877.2 885.8 1,810.4 Cost of sales (793.0) (801.9) (1,639.8) ----------------------------------------------------------------------------- Gross profit 84.2 83.9 170.6 Other operating income 3.8 1.6 7.5 Operating expenses* (48.0) (47.0) (91.8) ----------------------------------------------------------------------------- Profit from operations 2 40.0 38.5 86.3 Interest income 5.0 3.4 8.3 Interest expense and similar charges (8.9) (7.1) (16.4) Share of post-tax profits in associates 0.3 0.5 2.6 ----------------------------------------------------------------------------- Profit before tax 36.4 35.3 80.8 Taxation 4 (12.7) (12.4) (28.6) ----------------------------------------------------------------------------- Profit for the period 23.7 22.9 52.2 ----------------------------------------------------------------------------- Attributable to: Shareholders of the parent 21.0 21.3 48.4 Minority interests 2.7 1.6 3.8 ----------------------------------------------------------------------------- 23.7 22.9 52.2 ----------------------------------------------------------------------------- Basic earnings per 25p ordinary share 5 16.1p 16.6p 37.6p Diluted earnings per 25p ordinary share 5 15.5p 15.7p 35.7p Dividend declared per share - interim 6 2.55p 2.3p 2.3p Dividend declared per share - final 6 - - 5.2p The above results relate to continuing operations. * Operating expenses include exceptional charges of Â£2.5m (six months ended 30 June 2006 - Â£nil; year ended 31 December 2006 - Â£5.0m) as described in note 3. The earnings per share adjusted for these exceptional charges is disclosed in note 5. A 2007 interim dividend of 2.55p per share, which will absorb an estimated Â£3.3m, was approved by the Board, for payment on 21 November 2007. Consolidated Balance Sheet (Unaudited) At At At 30 June 30 June 31 December 2007 2006 2006 Notes Â£m Â£m Â£m ASSETS Non-current assets Property, plant and equipment 221.0 195.2 194.6 Goodwill 57.7 56.8 53.0 Other intangible assets 5.3 5.1 4.0 Interests in associates 8.4 6.0 8.0 Available for sale investments 0.2 0.2 0.2 Retirement benefit assets 24.1 28.6 30.1 Trade and other receivables 2.7 2.6 2.8 Deferred tax assets 9.5 11.5 12.4 ----------------------------------------------------------------------------- 328.9 306.0 305.1 ----------------------------------------------------------------------------- Current assets Inventories 131.9 121.3 120.0 Trade and other receivables 209.7 183.8 191.1 Financial assets 0.6 0.6 0.6 Cash and cash equivalents 112.9 113.6 118.5 Assets classified as held for sale 8 18.8 - - ----------------------------------------------------------------------------- 473.9 419.3 430.2 ----------------------------------------------------------------------------- LIABILITIES Current liabilities Trade and other payables 225.9 198.7 226.6 Current tax liabilities 4.1 9.1 8.8 Borrowings 150.3 131.2 108.5 Provisions 4.1 1.9 4.2 Liabilities associated with assets classified as held for sale 8 16.8 - - ----------------------------------------------------------------------------- 401.2 340.9 348.1 ----------------------------------------------------------------------------- Net current assets 72.7 78.4 82.1 ----------------------------------------------------------------------------- Non-current liabilities Borrowings 92.7 92.6 79.9 Deferred tax liabilities 76.4 70.8 76.3 Retirement benefit obligations 1.3 3.1 2.4 Other payables 2.3 4.5 1.9 Provisions 15.1 15.9 15.2 ----------------------------------------------------------------------------- 187.8 186.9 175.7 ----------------------------------------------------------------------------- Net assets 213.8 197.5 211.5 ----------------------------------------------------------------------------- Shareholders' equity Share capital 9 32.9 32.5 32.8 Share premium 9 87.2 84.7 85.6 Other reserves 9 7.7 14.4 5.6 Retained earnings 9 75.7 59.2 79.8 ----------------------------------------------------------------------------- 9 203.5 190.8 203.8 Minority interests 9 10.3 6.7 7.7 ----------------------------------------------------------------------------- Total equity 9 213.8 197.5 211.5 ----------------------------------------------------------------------------- Consolidated Statement of Recognised Income and Expense (Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m Profit for the period 23.7 22.9 52.2 ----------------------------------------------------------------------------- Exchange adjustments net of tax 3.4 (5.9) (15.8) Fair value (losses) gains net of tax: - on cash flow hedges - (0.2) 0.4 Impairment of revalued assets held for sale net of tax (1.0) - - Actuarial (losses) gains on defined benefit pension schemes net of tax (8.7) 0.9 2.0 Tax on the discharge of share options 2.3 - 1.9 ----------------------------------------------------------------------------- Net expense recognised directly in equity (4.0) (5.2) (11.5) ----------------------------------------------------------------------------- Total recognised income and expense for the period 19.7 17.7 40.7 ----------------------------------------------------------------------------- Attributable to: Shareholders of the parent 17.1 16.2 37.3 Minority interests 2.6 1.5 3.4 ----------------------------------------------------------------------------- 19.7 17.7 40.7 ----------------------------------------------------------------------------- Consolidated Cash Flow Statement (Unaudited) Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m Operating activities Profit from operations 40.0 38.5 86.3 Exceptional charges 2.5 - 5.0 Depreciation and amortisation 12.8 12.5 28.3 (Profit) loss on disposal of property, plant and equipment (0.5) (0.4) 2.9 Increase in inventories (16.6) (16.9) (25.3) (Increase) decrease in receivables (18.8) 8.1 (11.9) (Decrease) increase in payables (5.2) (13.2) 25.0 Taxation paid (12.1) (7.2) (11.2) UK pension scheme contribution (5.6) (5.6) (5.6) Other non cash flow items (0.5) 0.7 (0.2) ----------------------------------------------------------------------------- Net cash (outflow) inflow from operating activities (4.0) 16.5 93.3 ----------------------------------------------------------------------------- Investing activities Dividends received from associates 0.1 - 0.2 Purchase of subsidiaries net of cash and overdrafts acquired (11.8) (0.9) (0.9) Closure of a subsidiary - - (1.0) Purchase of associates (0.1) - (0.2) Loans to associates (2.0) - (0.6) Loans from associates 0.3 3.3 2.9 Proceeds from disposal of property, plant and equipment 2.6 0.5 1.1 Purchase of property, plant and equipment (32.7) (25.8) (54.2) Purchase of intangible assets (0.1) (0.4) (0.7) ----------------------------------------------------------------------------- Net cash outflow from investing activities (43.7) (23.3) (53.4) ----------------------------------------------------------------------------- Financing activities Interest received 4.1 2.7 6.4 Interest paid (8.6 ) (7.5) (14.5) Equity dividends paid - (5.2) (8.2) Minority interest dividend paid - - (0.9) Share capital issued 0.1 2.3 3.3 Purchase of treasury shares (16.8) (4.3) (12.4) Disposal of treasury shares 4.2 1.0 4.0 Proceeds from new borrowings 54.9 23.7 11.9 Repayment of borrowings (4.9) (1.2) (14.6) Purchase of deposits - (0.6) (0.6) Capital element of finance leases (0.2) (0.3) (0.6) ----------------------------------------------------------------------------- Net cash inflow (outflow) from financing activities 32.8 10.6 (26.2) ----------------------------------------------------------------------------- Net cash (outflow) inflow in cash and cash equivalents (14.9) 3.8 13.7 Cash and cash equivalents at beginning of period 16.9 4.5 4.5 Effect of foreign exchange rates (0.1) (0.3) (1.3) Re-classified as held for sale 3.2 - - ----------------------------------------------------------------------------- Cash and cash equivalents at end of period 5.1 8.0 16.9 ----------------------------------------------------------------------------- Cash and cash equivalents and bank overdrafts at the end of the period comprise: Cash and cash equivalents 112.9 113.6 118.5 Bank overdrafts included in borrowings (107.8) (105.6) (101.6) ----------------------------------------------------------------------------- 5.1 8.0 16.9 ----------------------------------------------------------------------------- Notes to the Half Year Report 1. BASIS OF ACCOUNTING The financial information contained in this half year report complies with IAS 34 Interim Financial Reporting, as adopted by the European Union, and with the Listing Rules of the Financial Services Authority. It has been prepared on the basis of the accounting policies set out in the Group's 2006 Annual Report and Accounts with the exception that IFRIC 10 Interim Financial Reporting and Impairment was adopted for the six months ended 30 June 2007. Although the adoption represents a change in accounting policy, comparative figures for 2006 have not been restated as it does not impact the results or financial position of the Group. The following Standards, Interpretations and Amendments, which are effective for annual periods ending after 30 June 2007, have not been adopted early for these interim financial statements: IFRS 7 Financial Instruments: Disclosures, IFRS 8 Operating Segments, Amendment to IAS 1 Presentation of Financial Statements, Amendment to IAS 23 Borrowing Costs, IFRIC 7 Applying the Restatement Approach under IAS 29, IFRIC 8 Scope of IFRS 2, IFRIC 9 Re-assessment of Embedded Derivatives, IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions and IFRIC 12 Service Concession Arrangements. This half year report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 31 December 2006 has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified. 2. SEGMENTAL REPORTING Business Segments Results from operations Six months ended 30 June 2007 Inter- Total gross segmental Total Profit from revenue revenue revenue operations Â£m Â£m Â£m Â£m Gibson Energy Marketing 599.4 (68.2) 531.2 5.5 Truck Transportation 57.1 (5.0) 52.1 5.4 Terminals and Pipelines 9.9 (2.3) 7.6 3.0 Canwest Propane and Natural Gas Liquids 75.5 (41.1) 34.4 2.4 Moose Jaw Refinery 58.7 (21.3) 37.4 3.3 ------------------------------------------------------------------------------ 800.6 (137.9) 662.7 19.6 ------------------------------------------------------------------------------ Hunting Energy Services Well Completion 122.9 (11.7) 111.2 16.3 Well Construction 38.7 (2.8) 35.9 4.3 Exploration and Production 5.3 - 5.3 1.6 Hunting Energy France 12.9 - 12.9 1.1 ------------------------------------------------------------------------------ 179.8 (14.5) 165.3 23.3 ------------------------------------------------------------------------------ Other operating divisions 49.2 - 49.2 (2.9) ------------------------------------------------------------------------------ Total 1,029.6 (152.4) 877.2 40.0 ------------------------------------------------------------------------------ The other operating divisions segment includes an exceptional charge of Â£2.5m for the six months ended 30 June 2007 (see note 3). Six months ended 30 June 2006 Inter- Total gross segmental Total Profit from revenue revenue revenue operations Â£m Â£m Â£m Â£m Gibson Energy Marketing 632.0 (70.2) 561.8 7.8 Truck Transportation 54.9 (4.4) 50.5 4.1 Terminals and Pipelines 9.3 (2.0) 7.3 2.2 Canwest Propane and Natural Gas Liquids 67.0 (35.0) 32.0 1.8 Moose Jaw Refinery 73.0 (30.1) 42.9 6.2 ------------------------------------------------------------------------------ 836.2 (141.7) 694.5 22.1 ------------------------------------------------------------------------------ Hunting Energy Services Well Completion 103.0 (9.9) 93.1 9.4 Well Construction 40.1 (2.8) 37.3 4.0 Exploration and Production 5.1 - 5.1 1.8 Hunting Energy France 7.6 - 7.6 0.2 ------------------------------------------------------------------------------ 155.8 (12.7) 143.1 15.4 ------------------------------------------------------------------------------ Other operating divisions 48.2 - 48.2 1.0 ------------------------------------------------------------------------------ Total 1,040.2 (154.4) 885.8 38.5 ------------------------------------------------------------------------------ Year ended 31 December 2006 Inter- Total gross segmental Total Profit from revenue revenue revenue operations Â£m Â£m Â£m Â£m Gibson Energy Marketing 1,294.9 (147.0) 1,147.9 13.0 Truck Transportation 113.1 (9.3) 103.8 9.6 Terminals and Pipelines 19.5 (3.9) 15.6 5.3 Canwest Propane and Natural Gas 149.5 (80.3) 69.2 5.2 Liquids Moose Jaw Refinery 167.4 (74.9) 92.5 14.2 ------------------------------------------------------------------------------ 1,744.4 (315.4) 1,429.0 47.3 ------------------------------------------------------------------------------ Hunting Energy Services Well Completion 213.4 (25.0) 188.4 24.9 Well Construction 80.6 (7.1) 73.5 8.8 Exploration and Production 10.0 - 10.0 2.0 Hunting Energy France 16.0 - 16.0 1.2 ------------------------------------------------------------------------------ 320.0 (32.1) 287.9 36.9 ------------------------------------------------------------------------------ Other operating divisions 93.5 - 93.5 7.1 ------------------------------------------------------------------------------ Total 2,157.9 (347.5) 1,810.4 91.3 ------------------------------------------------------------------- Exceptional charges not apportioned to business segments (5.0) --------- Profit from operations 86.3 --------- Operating expenses include an exceptional charge of Â£5.0m in the second half of the year ended 31 December 2006 (see note 3). 3. EXCEPTIONAL CHARGES Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m Exceptional charges comprise the following: Impairment of assets classified as held for sale 2.5 - - Onerous leases - - 3.1 Closure of a subsidiary - - 1.9 ----------------------------------------------------------------------------- 2.5 - 5.0 ----------------------------------------------------------------------------- 4. TAXATION The taxation charge for the six months ended 30 June 2007 is calculated by applying the best estimate of the 2007 annual effective rate of tax to the profit for the period. The tax expense comprises the following: Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m UK 3.4 2.0 5.7 Non-UK 9.3 10.4 22.9 ----------------------------------------------------------------------------- 12.7 12.4 28.6 ----------------------------------------------------------------------------- Included in the tax charge is a credit of Â£0.1m in respect of exceptional charges (six months ended 30 June 2006 - Â£nil; year ended 31 December 2006 - Â£1.4m credit). The tax recognised within the share of post-tax profits in associates, was a charge of Â£0.1m (six months ended 30 June 2006 - Â£0.1m; year ended 31 December 2006 - Â£0.3m). 5. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. For diluted earnings per share, the weighted average number of outstanding ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares are those options where the exercise price is less than the average market price of the Company's ordinary shares during the period. These options do not impact the basic earnings attributable to ordinary shares. Reconciliations of the earnings and weighted average number of ordinary shares used in the calculations are set out below: Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m Basic and diluted earnings attributable to ordinary shareholders 21.0 21.3 48.4 ----------------------------------------------------------------------------- millions millions millions Basic weighted average number of ordinary shares 130.3 128.4 128.9 Dilutive outstanding share options 5.2 6.6 6.4 Long term incentive plans 0.3 0.4 0.5 ----------------------------------------------------------------------------- Adjusted weighted average number of ordinary shares 135.8 135.4 135.8 ----------------------------------------------------------------------------- pence pence pence Basic EPS 16.1 16.6 37.6 Diluted EPS 15.5 15.7 35.7 ----------------------------------------------------------------------------- EPS adjusted for exceptional items is as follows: pence pence pence Basic EPS 16.1 16.6 37.6 Add: exceptional charges after taxation 2.0 - 2.8 ----------------------------------------------------------------------------- Basic EPS before exceptional items 18.1 16.6 40.4 ----------------------------------------------------------------------------- Diluted EPS 15.5 15.7 35.7 Add: exceptional charges after taxation 1.8 - 2.7 ----------------------------------------------------------------------------- Diluted EPS before exceptional items 17.3 15.7 38.4 ----------------------------------------------------------------------------- The weighted average number of ordinary shares is unaffected by the adjustment for exceptional items. 6. DIVIDENDS Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 Â£m Â£m Â£m Ordinary dividends: 2006 final - 5.2p 6.8 - - 2006 interim - 2.3p - - 3.0 2005 final - 4.0p - 5.2 5.2 ----------------------------------------------------------------------------- 6.8 5.2 8.2 ----------------------------------------------------------------------------- 7. CHANGES IN NET DEBT Fair value Re- At At and classification 30 1 January Cash similar Exchange as held June 2007 flow movements movements for sale 2007 Â£m Â£m Â£m Â£m Â£m Â£m Cash and cash equivalents 118.5 (3.9) - (0.5) (1.2) 112.9 Bank overdrafts (101.6) (11.0) - 0.4 4.4 (107.8) ------------------------------------------------------------------------------------------ 16.9 (14.9) - (0.1) 3.2 5.1 Investments 0.6 - - - - 0.6 Current borrowings (6.6) (35.0) - (1.8) 1.1 (42.3) Non-current borrowings (79.8) (15.0) 0.1 (2.9) 5.0 (92.6) Finance leases (0.4) 0.2 - (0.1) - (0.3) Net debt classified as held for sale - - - - (9.3) (9.3) ------------------------------------------------------------------------------------------ Total net debt (69.3) (64.7) 0.1 (4.9) - (138.8) ------------------------------------------------------------------------------------------ 8. ASSETS HELD FOR SALE The Group has classified the Aero Sekur business as held for sale at the period end due to sale negotiations being at an advanced stage on 29 June 2007. The business was subsequently sold on 12 July 2007 to Aero Sekur Ltd for a gross cash consideration of Â£2.0m. As a result, the net assets have been written down by Â£3.5m to their fair value less costs to sell, of which Â£2.5m has been charged to operating expenses (note 3) and Â£1.0m directly to the Consolidated Statement of Recognised Income and Expense. The fair value of the net assets held for sale at 30 June 2007 was as follows: At 30 June 2007 Â£m Assets classified as held for sale Property, plant and equipment 2.3 Inventories 6.8 Trade and other receivables 8.5 Cash and cash equivalents 1.2 -------------------------------------------------------------------------- 18.8 -------------------------------------------------------------------------- Liabilities associated with the assets classified as held for sale Trade and other payables 4.9 Current tax liabilities 0.3 Bank overdrafts 4.4 Other current borrowings 1.1 Non-current borrowings 5.0 Retirement benefit obligations 1.1 -------------------------------------------------------------------------- 16.8 -------------------------------------------------------------------------- Selling costs are provided for separately and included within the Group's current liabilities. The impairment of assets comprised the following: Â£m Property, plant and equipment 1.5 Inventories 0.8 Trade and other receivables 0.7 Deferred taxation (0.5) -------------------------------------------------------------------------- 2.5 -------------------------------------------------------------------------- Aero Sekur had been previously recognised within the other operating divisions business segment. 9. STATEMENT OF CHANGES IN EQUITY Six months ended 30 June 2007 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity Â£m Â£m Â£m Â£m Â£m Â£m Â£m At 1 January 2007 32.8 85.6 5.6 79.8 203.8 7.7 211.5 ------------------------------------------------------------------------------------------------ Exchange adjustments - - 3.5 - 3.5 (0.1) 3.4 Depreciation transfer for land and buildings - - (0.4) 0.4 - - - Actuarial losses on defined benefit pension schemes - - - (12.5) (12.5) - (12.5) Impairment of revalued assets held for sale - - (1.5) - (1.5) - (1.5) Tax on items taken directly to equity - - 0.6 6.0 6.6 - 6.6 ------------------------------------------------------------------------------------------------ Net income recognised directly in equity - - 2.2 (6.1) (3.9) (0.1) (4.0) Profit for the period - - - 21.0 21.0 2.7 23.7 ------------------------------------------------------------------------------------------------ Total net income for the period - - 2.2 14.9 17.1 2.6 19.7 ------------------------------------------------------------------------------------------------ Dividends - - - (6.8) (6.8) - (6.8) Shares issued - share option schemes - 0.1 - - 0.1 - 0.1 - LTIP awards 0.1 1.4 - - 1.5 - 1.5 Purchase of Treasury shares - - - (17.2) (17.2) - (17.2) Disposal of Treasury shares - - - 4.3 4.3 - 4.3 Share options - value of employee services - - 0.6 - 0.6 - 0.6 - discharge - 0.1 - - 0.1 - 0.1 Transfer between reserves - - (0.7) 0.7 - - - ------------------------------------------------------------------------------------------------ At 30 June 2007 32.9 87.2 7.7 75.7 203.5 10.3 213.8 ------------------------------------------------------------------------------------------------ Six months ended 30 June 2006 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity Â£m Â£m Â£m Â£m Â£m Â£m Â£m At 1 January 2006 32.2 82.7 21.7 41.8 178.4 5.2 183.6 ------------------------------------------------------------------------------------------------ Exchange adjustments - - (5.8) - (5.8) (0.1) (5.9) Depreciation transfer for land and buildings - - (0.5) 0.5 - - - Actuarial gains on defined benefit pension schemes - - - 1.3 1.3 - 1.3 Net losses on cash flow hedges - - (0.2) - (0.2) - (0.2) Tax on items taken directly to equity - - 0.2 (0.6) (0.4) - (0.4) ------------------------------------------------------------------------------------------------ Net income recognised directly in equity - - (6.3) 1.2 (5.1) (0.1) (5.2) Profit for the period - - - 21.3 21.3 1.6 22.9 ------------------------------------------------------------------------------------------------ Total net income for the period - - (6.3) 22.5 16.2 1.5 17.7 ------------------------------------------------------------------------------------------------ Dividends - - - (5.2) (5.2) - (5.2) Shares issued - share option schemes 0.3 2.0 - - 2.3 - 2.3 Purchase of Treasury shares - - - (4.3) (4.3) - (4.3) Disposal of Treasury shares - - - 5.1 5.1 - 5.1 Share options - value of employee services - - 0.7 - 0.7 - 0.7 - discharge - - (0.2) (2.2) (2.4) - (2.4) Transfer between reserves - - (1.5) 1.5 - - - ------------------------------------------------------------------------------------------------ At 30 June 2006 32.5 84.7 14.4 59.2 190.8 6.7 197.5 ------------------------------------------------------------------------------------------------ Year ended 31 December 2006 Share Share Other Retained Minority Total capital premium reserves earnings Total interests equity Â£m Â£m Â£m Â£m Â£m Â£m Â£m At 1 January 2006 32.2 82.7 21.7 41.8 178.4 5.2 183.6 ------------------------------------------------------------------------------------------------ Exchange adjustments - - (16.0) - (16.0) (0.4) (16.4) Depreciation transfer for land and buildings - - (0.2) 0.2 - - - Actuarial gains on defined benefit pension schemes - - - 2.6 2.6 - 2.6 Net gains on cash flow hedges - - 0.6 - 0.6 - 0.6 Tax on items taken directly to equity - - 0.6 1.1 1.7 - 1.7 ------------------------------------------------------------------------------------------------ Net income recognised directly in equity - - (15.0) 3.9 (11.1) (0.4) (11.5) Profit for the year - - - 48.4 48.4 3.8 52.2 ------------------------------------------------------------------------------------------------ Total net income for the year - - (15.0) 52.3 37.3 3.4 40.7 ------------------------------------------------------------------------------------------------ Dividends - - - (8.2) (8.2) (0.9) (9.1) Shares issued - share option schemes 0.6 2.7 - - 3.3 - 3.3 Purchase of Treasury shares - - - (12.4) (12.4) - (12.4) Disposal of Treasury shares - - - 4.0 4.0 - 4.0 Share options - value of employee services - - 1.4 - 1.4 - 1.4 - discharge - 0.2 (0.8) 0.6 - - - Transfer between reserves - - (1.7) 1.7 - - - ------------------------------------------------------------------------------------------------ At 31 December 2006 32.8 85.6 5.6 79.8 203.8 7.7 211.5 ------------------------------------------------------------------------------------------------ 10. ACQUISITIONS During the six months ended 30 June 2007, the Group acquired 100% of the share capital of three companies in Canada: Boychuk Energy Inc. on 1 June for a gross consideration of Â£6.1m; Del's Propane Ltd on 1 February for a gross consideration of Â£2.7m and Western Propane & Gas Services Ltd on 31 May for a gross consideration of Â£1.3m. Combined details of these acquisitions are set out below: Pre-acquisition Provisional carrying values fair values Â£m Â£m Property, plant and equipment 2.6 6.8 Intangible assets - 1.3 Trade and other receivables 1.1 1.1 Trade and other payables (0.3) (0.3) Bank overdrafts (0.2) (0.2) Deferred taxation (0.1) (1.8) -------------------------------------------------------------- Net assets acquired 3.1 6.9 ------------------------------------------------ Goodwill 3.2 --------- Consideration 10.1 --------- The consideration for all three acquisitions was in cash. In addition, Â£1.5m of deferred consideration was paid in respect of the 2005 acquisition of Cromar Ltd. 11. DEFINED BENEFIT PENSION SCHEME During the six months ended 30 June 2007, the Group's UK pension scheme purchased annuity policies to match a substantial part of the scheme's pension liabilities. The impact of this, together with other actuarial gains and losses, has been to reduce the carrying value of the retirement benefit asset by Â£12.5m, which after deferred tax of Â£3.8m, reduces Group net assets by Â£8.7m. This reduction has been recognised in the Consolidated Statement of Recognised Income and Expense with no impact on the Consolidated Income Statement. 12. CAPITAL COMMITMENTS Group capital expenditure committed, for the purchase of property, plant and equipment, but not provided for in these financial statements amounted to Â£9.7m (at 30 June 2006 - Â£7.0m; at 31 December 2006 - Â£4.0m). This information is provided by RNS The company news service from the London Stock Exchange

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