Interim Results

Liberty PLC 25 September 2007 FOR IMMEDIATE RELEASE 25th September 2007 LIBERTY PLC: INTERIM RESULTS FOR SIX MONTHS TO 30 JUNE 2007 • New Chief Executive joined 1 July 2007 and additional appointments to executive management team: o New Human Resources and Change Director appointed from Maybourne Group o Director of Internet, Supply Chain and Retail Merchandising joins from Harrods • Further advance in total Group revenue to £20.5m - up from £20.0m in comparable period • Flagship store sales advanced 1.9% to £16.5m o Menswear increased sales by 28% to £2.1m o Accessories sales rose by 7% to £3.5m o Liberty of London luxury brand sales up 23% to £1.2m • Further strengthening of Liberty balance sheet through upward valuation of Great Marlborough Street store to £37m from £35m • Pre-tax losses of £2.2m, against £1.6m, reflecting increased brand investment of £1.6m • Independent Liberty of London shop leased in Sloane Street - anticipated Spring 2008 opening 'We believe Liberty is entering a new era where it is re-capturing the ethos and desire to provide cutting edge design in a luxury retail environment for which the Company was once synonymous. Our objective over the next 12 months is to firmly establish this framework enabling Liberty, which will be led by the Liberty of London brand, to become a byword for luxury retailing. 'I passionately believe we are establishing a great team and an increasingly recognised luxury brand with enormous potential. Therefore, I am confident that we can continue to build on our established foundations and move to the next stage in our growth strategy. With that in mind I believe the future is exciting,' Richard Balfour-Lynn, Chairman. Contact Details: Richard Balfour-Lynn, Chairman , Liberty Plc 020 7706 2121 Geoffroy de la Bourdonnaye, Chief Executive, Liberty Plc 020 7734 1234 Baron Phillips, Baron Phillips Associates 020 7920 3161 Nicola Marrin , Seymour Pierce 020 7107 8000 CHAIRMAN'S STATEMENT AND BUSINESS REVIEW for the six months ended 30th June 2007 I am pleased to report further progress at Liberty as we continue our strategy of re-positioning the business into a highly focused luxury goods retailer. Over the six months to 30 June 2007 sales have continued to grow, especially within our Liberty of London luxury brand, and we have made great strides in restructuring the management team that will help us meet our key objective of making Liberty a global brand. The increased success of our Liberty of London label, which saw its total sales within the flagship store rise by 23% to £1.2m, is extremely encouraging and is beginning to define how we believe Liberty will look and feel in the future. As part of this process we are examining every aspect of the flagship store so that all products sold will reflect the luxury goods approach that we are achieving with the Liberty of London brand. This improving product mix should be another driver to our successful transformation of the business. To help achieve this we have made, and continue to make, significant management appointments. The first has been the appointment of Geoffroy de la Bourdonnaye as Chief Executive who joined us in July from Christian Lacroix where he was instrumental in reviving and developing that established brand. Geoffroy brings a wealth of brand management and development experience to Liberty. He is already having a significant impact and is beginning to restructure Liberty's senior management to enable the business to deliver its objective of becoming a globally recognised luxury goods retailer. Earlier this month, we announced the appointment of Sara Edwards as Human Resources and Change Director. Sara is a highly regarded Senior HR Executive within the hospitality industry and understands how to refocus a team to deliver service within a luxury goods environment. This will involve major change across the whole Liberty Group to drive improved service delivery, management performance and overall financial results. We have also recently announced the appointment of Guy Hipwell as Director of Internet, Supply Chain and Retail Merchandising. Guy will develop Liberty's e-commerce offer to reflect the growing international awareness of the Liberty of London luxury brand, streamlining the supply chain and leading the merchandising function. Guy joined Liberty from Harrods where he had contributed significantly to the development of its merchandising and e-commerce offer. Retailing continues to reflect the polarisation that we have seen over the past couple of years. Successful retailers are those who focus on specific areas of the market. At Liberty we are aiming firmly at the luxury goods market and this is attracting those consumers seeking quality and good design in a retail destination environment. We continue to invest heavily in our luxury brand, Liberty of London, as we look to capitalise on the global demand for well-designed and high value products. Apart from continuing to expand the label's range of products, we are also beginning to introduce Liberty of London to a wider, more international audience. We have shown our Liberty of London menswear range at the Milan fashion week earlier in the year and later this month we are taking our Liberty of London womens' accessories and swimwear range to Paris. As a result the label will start being seen in the world's luxury stores enabling us to build a far wider platform of brand recognition and awareness. In the UK we have already taken two key steps in the development of the brand. First, we have created Liberty of London's own dedicated space within the flagship store. With specifically trained and recruited staff, this area, located in the central atrium, is already proving very popular among customers. Secondly, and perhaps more importantly, we have leased a shop in the prime Knightsbridge end of Sloane Street for no premium and at advantageous rental level to ourselves. This is planned to open in Spring 2008 and will be a stand-alone Liberty of London retail unit enabling us to showcase our product range in a prime shopping environment. It will also help us to establish a benchmark not only for how Liberty of London retail units will look and operate, but also help us establish the design and feel we believe necessary to bring the flagship store up to a similar level. Our fabrics business is also enjoying a new lease of life. As referred to in my previous statements, our 50:50 Japanese joint venture is coming to an end and therefore in the future we will be able to incorporate all of these results into a new wholly owned subsidiary. The remaining business will continue to be managed from the UK, where we are already identifying new markets for our fabric as well as diversifying into new base cloths and special designs. At the same time we are re-introducing our range of Liberty silks, for which the Company was once noted, and we see important growth potential in this area of our business. Revenue from our fabrics division improved by 4% to £6.6m, despite the impact of a weak Yen against Sterling, and contributed an operating profit of £1.5m for the period. As the changes we have implemented begin to take effect, we anticipate this division will grow markedly over the medium term, contributing an increasing level of pre-tax profits to the group. Overall total net sales at the flagship store including concessions improved to £16.5m for the six months to 30 June 2007 from £16.2m this time last year. Some of our key drivers over the period included menswear which recorded a 28% increase in sales to almost £2.1m, while accessories' sales rose by almost 7% to £3.5m. However ladieswear endured tougher trading conditions and sales dipped 4% to £3.9m while our Home department delivered sales of £4.2m, down 3% against the corresponding period ended 30th June 2006. Across the entire Liberty business, revenue for the six months to 30th June 2007 increased slightly to £20.5m, against £20.0m for the same period last year, while gross profits were £9.5m against £9.1m last time. Pre-tax losses for the half-year were £2.2m compared to a loss of £1.6m a year ago, reflecting an increased investment in the brand of £1.6m, up from £1.1m in the comparable period a year ago. As a result, the loss per share was 11.7p against 9.0p last time. Liberty's balance sheet has been further strengthened by an increase in the Red Book value of our flagship store in Great Marlborough Street. This has risen to a gross property value of £39.2m, which after assumed purchaser's costs of £2.2m, translates into a value for accounts purposes of £37m, up from £35m at 31st December 2006. As a result, Liberty's net assets are now £51.2m against £43.1m a year ago. We believe Liberty is entering a new era where it is re-capturing the ethos and desire to provide cutting edge design in a luxury retail environment for which the Company was once synonymous. Our objective over the next 12 months is to firmly establish this framework enabling Liberty, which will be led by the Liberty of London brand, to become a byword for luxury retailing. This will be reflected in not only the products we sell, but also how we present and sell them, together with the service our customers receive, whether in the store or our on-line shop. In the current market it is hard to be completely certain of the future, but I passionately believe we are establishing a great team and an increasingly recognised luxury brand with enormous potential. We are intent on achieving our goals and attracting new talent to the business. Contrary to certain press opinion, I would also like to confirm that we have held no discussions concerning the sale of the business during the period and none are currently in progress. We are committed to taking Liberty into the next stage of its development and creating a truly global luxury brand. I am confident that we can continue to build on our established foundations and to move to the next stage in our growth strategy. With that in mind I believe the future for Liberty is exciting. Richard Balfour-Lynn Chairman Liberty Plc 25th September 2007 LIBERTY PLC OPERATING REVIEW for the six months ended 30th June 2007 During the six months ended 30th June 2007, Liberty Plc has continued its transformation into a dynamic retail destination, underpinned by a strong and expanding retail brand. The historical trading and balance sheet performance of Liberty Plc are summarised below:- Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 Financial performance £'000 £'000 £'000 Total revenue 20,531 19,976 44,012 EBITDA before brand expenditure 295 202 1,311 Operating loss before brand expenditure (591) (539) (180) Brand expenditure (1,554) (1,085) (1,971) Recognised income and expense -------- -------- -------- 204 617 8,955 -------- -------- -------- 30th June 30th June 31st December 2007 2006 2006 Balance sheet composition £'000 £'000 £'000 Intangible asset - brand 18,200 18,200 18,200 Property, plant and equipment 38,811 30,082 36,587 Net debt (7,270) (882) (1,191) Net assets 51,223 43,113 51,141 Equity shareholders' funds per share -------- -------- -------- 219p 183p 219p -------- -------- -------- CONSOLIDATED INCOME STATEMENT (unaudited) for the six months ended 30th June 2007 Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 Notes £'000 £'000 £'000 ---------------------------------------------------------------------------------- Revenue 2 20,531 19,976 44,012 Cost of sales (11,052) (10,922) (24,000) ---------------------------------------------------------------------------------- Gross profit 9,479 9,054 20,012 Selling and distribution (10,600) (9,506) (19,952) Administrative expenses (1,304) (1,454) (2,784) Other operating income 280 282 573 ---------------------------------------------------------------------------------- Operating loss (2,145) (1,624) (2,151) Finance income 33 15 33 Finance expense (133) - (192) ---------------------------------------------------------------------------------- Loss before taxation (2,245) (1,609) (2,310) Taxation 3 (192) (238) (437) ---------------------------------------------------------------------------------- Loss for the period 2 (2,437) (1,847) (2,747) ================================================================================== Attributable to: Equity shareholders of the (2,655) (2,043) (3,115) Company Minority interests 218 196 368 ---------------------------------------------------------------------------------- Loss for the period (2,437) (1,847) (2,747) ================================================================================== Loss per share (basic and diluted) 4 (11.7p) (9.0p) (13.8p) ================================================================================== All results relate to continuing operations. The notes on pages 11 to 33 form part of these accounts. Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 ----------------------------------------------------------------------------------- Unrealised gains on property revaluations 1,490 1,012 7,183 net of tax Actuarial gain on defined benefit pension 1,255 1,500 4,714 schemes net of tax Effective portion of changes in fair value (46) - - of derivative financial hedges Net foreign exchange translation (58) (48) (195) differences ----------------------------------------------------------------------------------- Income and expense recognised directly to 2,641 2,464 11,702 equity Loss for the period (2,437) (1,847) (2,747) ----------------------------------------------------------------------------------- Total recognised income and expense for 204 617 8,955 the period =================================================================================== Attributable to: Equity shareholders of the Company (14) 421 8,587 Minority interests 218 196 368 ----------------------------------------------------------------------------------- Total recognised income and expense for 204 617 8,955 the period =================================================================================== Total recognised income and expense 0.0p 1.9p 38.0p attributable to shareholders of Liberty Plc in pence per share (note 4) =================================================================================== CONSOLIDATED BALANCE SHEET (unaudited) at 30th June 2007 30th June 30th June 31st December 2007 2006 2006 Notes £'000 £'000 £'000 ----------------------------------------------------------------------------------- Non-current assets Intangible asset 18,200 18,200 18,200 Property, plant and equipment 6 38,811 30,082 36,587 ----------------------------------------------------------------------------------- 57,011 48,282 54,787 ----------------------------------------------------------------------------------- Current assets Inventories 7,232 7,073 7,489 Trade and other receivables 6,696 6,928 5,997 Cash and cash equivalents 1,171 - 1,020 ----------------------------------------------------------------------------------- 15,099 14,001 14,506 ----------------------------------------------------------------------------------- Total assets 72,110 62,283 69,293 ----------------------------------------------------------------------------------- Current liabilities Trade and other payables 8 (10,439) (11,298) (12,562) Tax payable 9 (184) (356) (135) Overdrafts 10 (8,441) (882) (2,211) Derivative financial instruments (46) - - ----------------------------------------------------------------------------------- (19,110) (12,536) (14,908) ----------------------------------------------------------------------------------- Non-current liabilities Employee benefits 5 (97) (4,938) (1,548) Other provisions 11 (1,680) (1,696) (1,696) ----------------------------------------------------------------------------------- (1,777) (6,634) (3,244) ----------------------------------------------------------------------------------- Total liabilities (20,877) (19,170) (18,152) ================================================================================== Net assets 51,223 43,113 51,141 ================================================================================== Equity Called up share capital 6,036 6,036 6,036 Revaluation reserve 12 14,090 6,430 12,600 Hedging reserve 12 (46) - - Translation reserve 12 (96) 90 (38) Merger reserve 12 61,503 61,503 61,503 Retained earnings 12 (31,939) (32,783) (30,601) ----------------------------------------------------------------------------------- Equity attributable to 49,548 41,276 49,500 shareholders of the Company Minority interests 1,675 1,837 1,641 ----------------------------------------------------------------------------------- Total equity 51,223 43,113 51,141 ================================================================================== The notes on pages 11 to 33 form part of these accounts. CONSOLIDATED CASH FLOW STATEMENT (unaudited) for the six months ended 30th June 2007 Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 ----------------------------------------------------------------------------------- Loss for the period (2,437) (1,847) (2,747) Adjustments for non-cash items Taxation 192 238 437 Finance cost 133 - 192 Finance income (33) (15) (33) Depreciation and amortisation 939 741 1,491 Currency translation differences (73) (88) (172) ----------------------------------------------------------------------------------- Cash flows from operations before changes in (1,279) (971) (832) working capital Change in inventories 258 (241) (653) Change in trade and other receivables 193 56 999 Change in trade and other payables (3,299) (2,553) (1,680) Change in provisions and employee benefits 62 49 104 ----------------------------------------------------------------------------------- Cash generated from operations (4,065) (3,660) (2,062) Interest paid (277) - (195) Tax paid (143) 49 (370) ----------------------------------------------------------------------------------- Net cash from operating activities (4,485) (3,611) (2,627) ----------------------------------------------------------------------------------- Cash flows from investing activities Interest received 174 39 33 Purchase of property, plant and equipment (1,673) (1,202) (2,287) ----------------------------------------------------------------------------------- Net cash from investing activities (1,499) (1,163) (2,254) ----------------------------------------------------------------------------------- Cash flows from financing activities Payments to minority interests (95) - (202) ----------------------------------------------------------------------------------- Net cash used in financing activities (95) - (202) ----------------------------------------------------------------------------------- Net decrease in cash and cash equivalents (6,079) (4,774) (5,083) Opening cash and cash equivalents (1,191) 3,892 3,892 ----------------------------------------------------------------------------------- Closing cash and cash equivalents (7,270) (882) (1,191) ================================================================================= 1. ACCOUNTING POLICIES Basis of preparation The Group accounts for the six months ended 30th June 2007 have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRS'). These are the first set of audited consolidated accounts of Liberty Plc to be presented under Adopted IFRS. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these Group accounts and in preparing an opening IFRS balance sheet at 1st July 2005 for the purposes of the transition to Adopted IFRS. The adoption of IFRS has no effect on the underlying operations of the Group, its strategy and management, nor on the cash flows derived from the Group's business operations. These standards do, however, affect the way in which such activities are presented in the Group accounts. IFRIC 8: Scope of IFRS 2 Share-based Payment. This standard addresses the accounting for share-based payment transactions in which some or all of goods or services received cannot be specifically identified. For the six months ended 30th June 2007 there is no material impact on the Group accounts. The most significant impact on the Liberty Group accounts have been set out in detail in note 14 to the accounts. The accounts are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: • Investment and operational properties; • Derivative financial instruments. The comparative figures for the financial year ended 31 December 2006 are not the company's statutory accounts for that financial year. Those accounts, which were prepared under UK GAAP, have been reported on by the company's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985. Transition to Adopted IFRS An explanation of how the transition to Adopted IFRS has affected the reported financial performance, positions and cash flows of the Group is set out in detail in note 14 to the accounts. The Group is preparing its accounts in accordance with Adopted IFRS for the first time in the accounts for the six months ended 30th June 2007 and has applied IFRS 1 - 'First Time Adoption of International Financial Reporting Standards'. In accordance with IFRS 1, the Group has taken advantage of the following exemptions at 1st July 2005, the date of transition to IFRS: • Business combinations occurring prior to transition have not been restated; • Share options granted before 7th November 2002 or vested prior to 1st January 2005 have not been recognised in accordance with IFRS 2; • Cumulative translation differences for all foreign operations have been set to zero at 1st July 2005. The Group has applied IAS 32 and 39 retrospectively to the comparative information in the accounts, refer to note 14 for further details. Where necessary, adjustments are made to the information included in the accounts of subsidiaries to bring their accounting policies in line with those used by the Group and so reflect that information on a consistent basis with the rest of the Group. Use of estimates and judgements The preparation of accounts requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes: • Note 5 - pensions • Note 6 - property, plant and equipment Basis of consolidation Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The accounts of subsidiaries are included in the consolidated accounts from the date that control commences until the date that control ceases. Minority interests Dilution gains and losses on increases in minority interest, where no change of control results, are recognised directly in equity. Brands In accordance with IFRS 3, brands acquired by the Group are initially included in the accounts at their fair value. The Directors consider that the Group's brands have indefinite lives due to the durability of their underlying businesses which has been demonstrated over many years. Accordingly, the brands have not been amortised but have instead been subject to an impairment assessment conducted at each financial year end. Where this reveals a surplus, the value of the brand is retained, where it reveals a deficit, the brand is written down and the deficit is charged to the income statement. Subsequent expenditure on brands is recognised in the income statement when incurred. Under IFRS, from December 2007 the Group's brand will be valued and held at amortised cost. Property, plant and equipment Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at their revalued amounts, being the fair value, determined from market-based evidence and appraisals undertaken by professional valuers at the balance sheet date. Any revaluation increase arising on the revaluation of such land and buildings is credited to the revaluation reserve within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is credited to the income statement to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such land and buildings is charged as an expense in the income statement to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to previous revaluations of that asset. Depreciation on revalued buildings is charged as an operating expense to the income statement. On a subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining in the revaluation reserve is transferred directly to accumulated profits. Leasehold improvements relating to operating leases are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Depreciation of properties in the course of construction is provided on the same basis as other property assets, in that it commences when the assets are ready for their intended use. Depreciation is charged so as to write off the cost or valuation of property, plant and equipment, other than land and property under construction, over their estimated useful lives, using the straight line method, over the following periods:- Freehold operational property 100 years Air conditioning and lifts or plant forming part of 5 to 10 years the property Fixtures and equipment 5 to 10 years IT equipment 3 to 7 years The gain or loss on the disposal or retirement of a property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset at the date of disposal or retirement, and is recognised in income. Impairment The carrying amounts of the Group's assets other than inventories and deferred tax assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. Specifically, an impairment test is undertaken on the Group's intangible asset, its brand which has an indefinite useful life. If any such indication exists, the asset's recoverable amount is estimated. For goodwill, assets that have an indefinite useful life, and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of other assets in the unit on a pro-rata basis. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Leases Operating leases are not recognised in the Group balance sheet, except that r entals payable and incentive fees received under operating leases are charged/ amortised to income on a straight-line basis over the entire term of the relevant lease. Investment in subsidiary companies The Company is a holding company, which holds shares in its subsidiaries at cost less any impairment. The subsidiary undertakings of the Company are all engaged in retail activities, wholesaling activities, property and related activities, or act as intermediary holding companies for such operations. Inventories Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the statement of cash flows. Debt and financial instruments Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. Under IFRS, our policy with regard to subsequent measurement of our financial instruments is that they will be valued and held at amortised cost. Trade receivables Trade receivables do not carry any interest and are stated at their fair value as reduced by appropriate allowances for estimated irrecoverable amounts. Trade payables Trade payables do not carry any interest and are stated at their fair value. Derivative financial instruments and hedge accounting The Group's activities expose it primarily to the financial risk of changes in exchange rates. The Group uses derivative financial instruments in order to hedge these exposures. These instruments provide an enhanced foreign exchange rate and allow participation in favourable movements in the US dollar and the Euro exchange rates. However, the Group is obligated to purchase currency at a lower rate should rates rise above a predetermined upper barrier. The Group does not use derivative instruments for speculative purposes. Changes in the fair values of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised immediately in the income statement. If the cash flow hedge of a firm commitment or a forecast transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the income statement in the same period in which the hedged item affects net income. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the period. Provisions A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Foreign currency Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on transactions are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at a foreign exchange rates ruling at the dates the fair value was determined. The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions. Exchange differences arising from the translation of foreign operations, and of related qualifying hedges, are taken directly to the translation reserve. They are released into the income statement upon disposal. Revenue Revenue is measured at the fair value of the consideration received or receivable and represents, the amounts charged to customers for goods and services provided by the Group, net of discounts and VAT. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Retirement benefit costs Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. For defined benefit retirement benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations conducted every three years. Actuarial gains and losses are recognised in full in the period in which they occur. They are recognised outside the income statement and presented in the statement of recognised income and expense. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the plan. Share-based payment transactions The Company's share option programme allows certain employees to acquire shares in the Company. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is due only to share prices not achieving the threshold for vesting Corporation tax and deferred taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expense that are taxable in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax that is expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the accounts and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Corporation tax and deferred taxation (continued) Deferred tax liabilities are recognised for temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Dividends Dividends that have been approved by shareholders at previous Annual General Meetings are included within liabilities. Dividends proposed at the balance sheet date that are subject to approval by shareholders at the annual general meeting are not included as a liability in the current period's accounts. New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are not yet effective for the six months to 30th June 2007, and have not been applied in preparing these consolidated accounts. The principal standards that may effect the future presentation of these accounts are as follows:- IFRS 7: Financial Instruments: Disclosures and the Amendment to IAS 1 Presentation of Financial Statements: Capital Disclosures. This standard requires disclosures about the significance of financial instruments for an entity's financial position and performance, and qualitative and quantitative disclosures on the nature and extent of risks. IFRS 7 and amended IAS 1, which become mandatory for the Group's accounts for the year ended 31st December 2007, will require additional disclosures with respect to Group's financial instruments and share capital. The Board has not yet determined the full effect of the interpretation of this standard but it does not expect it to result in any material adjustment. IFRIC 11: Scope of IFRS 2 Group and Treasury Share transactions. This standard provides guidance on applying IFRS 2 in three circumstances: when share-based payments involve an entity's own equity instruments, where a parent grants rights to its equity instruments or where a subsidiary grants rights to equity instruments of its parent to employees. The board does not consider application of this standard to have a material impact on these accounts. The standard will be implemented in the accounts for the year ended 31st December 2008. 2. SEGMENTAL REPORTING - BUSINESS DIVISIONS Segmental information is presented in respect of the Group's businesses and geographical segments. The primary format is based on the Group's management and internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Inter-segment pricing is determined on an arm's length basis. Unallocated items comprise mainly central loans and borrowings and related expenses, corporate assets (primarily the Company's head office operations) and tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment. The segmental analysis of operations reflects the structure of the Group. Retail includes the UK retail operations at Regent Street and Heathrow but does not include Liberty of London branded product which is detailed separately. Fabric includes the results of the UK and Japanese fabric businesses. Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 Total external revenue £'000 £'000 £'000 --------------------------------------------------------------------------------- By class of business: Retail 13,870 13,606 32,025 Fabric 6,649 6,370 11,974 Brand 12 - 13 --------------------------------------------------------------------------------- 20,531 19,976 44,012 ================================================================================= By geographical origin: United Kingdom 17,925 16,905 39,036 Japan 2,606 3,071 4,976 --------------------------------------------------------------------------------- 20,531 19,976 44,012 ================================================================================= By geographical destination: United Kingdom 14,307 14,164 33,367 Japan 2,735 3,077 4,976 Other 3,489 2,735 5,669 --------------------------------------------------------------------------------- 20,531 19,976 44,012 ================================================================================= Loss for the period --------------------------------------------------------------------------------- By class of business: Retail (1,914) (1,991) (2,884) Fabric 1,477 1,452 2,704 Brand (1,708) (1,085) (1,971) --------------------------------------------------------------------------------- Operating loss (2,145) (1,624) (2,151) Net finance costs (100) 15 (159) Income tax expense (192) (238) (437) --------------------------------------------------------------------------------- (2,437) (1,847) (2,747) ================================================================================= By geographical origin: United Kingdom (2,718) (2,321) (3,228) Japan 573 697 1,077 --------------------------------------------------------------------------------- Operating loss (2,145) (1,624) (2,151) Net finance costs (100) 15 (159) Income tax expense (192) (238) (437) --------------------------------------------------------------------------------- (2,437) (1,847) (2,747) ================================================================================= 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 Net assets --------------------------------------------------------------------------------- By class of business: Retail 42,792 34,936 42,494 Fabric 9,601 8,177 8,647 Brand (1,170) - - --------------------------------------------------------------------------------- 51,223 43,113 51,141 ================================================================================= By geographical origin: United Kingdom 49,002 40,542 48,973 Japan 2,221 2,571 2,168 --------------------------------------------------------------------------------- 51,223 43,113 51,141 ================================================================================= Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 Capital expenditure By class of business: Retail 924 1,202 2,227 Fabric 719 - 60 Brand 30 - - --------------------------------------------------------------------------------- 1,673 1,202 2,287 ================================================================================= Depreciation and amortisation --------------------------------------------------------------------------------- By class of business: Retail (883) (737) (1,525) Fabric (3) (4) 34 Brand (53) - - --------------------------------------------------------------------------------- (939) (741) (1,491) ================================================================================= Cash balances and bank loans are allocated to Retail as this division utilises the cash balances and buildings against which debt is secured. Concession revenue Sales from concession departments are shown on a commission only basis. Gross revenue of concession departments was as follows: Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 Gross revenue of concession departments 3,371 3,569 7,589 --------------------------------------------------------------------------------- 3. TAXATION Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- The current taxation for the period arose as follows:- UK Corporation tax Adjustment in respect of prior periods - - - following agreement of tax liabilities Foreign tax Withholding tax written off - (13) (36) Adjustment in respect of prior year - - (51) periods Japanese tax on Japanese profits (192) (225) (350) --------------------------------------------------------------------------------- Taxation (192) (238) (437) =============================================================================== No deferred tax was required to be recognised in the Consolidated Income Statement during the six months ended 30th June 2007. The taxation has been reduced from the amount that would arise from applying the prevailing corporation tax rate to the profit/(loss) before taxation in the consolidated income statement as follows:- Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- UK corporation tax credit at 30% for each 674 483 693 period on the loss before taxation in consolidated income statement Excess of capital allowances claimed over (282) (222) (447) depreciation charged Expenditure permanently disallowed for (564) (470) (570) taxation purposes and unrelieved tax losses Taxation on overseas earnings at higher (20) (16) (26) rate than UK corporation tax --------------------------------------------------------------------------------- Total corporation tax and similar taxes (192) (225) (350) charge for the period Withholding tax written off - (13) (36) Adjustment in respect of prior periods - - (51) following agreement of tax liabilities --------------------------------------------------------------------------------- Taxation (192) (238) (437) ================================================================================ After deducting all deferred tax liabilities, the Group had unrelieved capital expenditure and interest payments from current and prior periods of approximately £28m at 30th June 2007. At the same date, it had net trading losses carried forward in certain parts of the Group of approximately £34m. 4. LOSS PER SHARE AND RECOGNISED INCOME AND EXPENSE PER SHARE Loss per share The loss per share figures are calculated by dividing the loss attributable to equity shareholders of the Company for the period, by the weighted average number of ordinary shares in issue during the period, as follows:- Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Loss for the period attributable to (2,655) (2,043) (3,115) equity shareholders of the Company £'000 Weighted average number of ordinary 22,603 22,603 22,603 shares in issue during the period '000 Loss per share (basic and diluted) Pence (11.7p) (9.0p) (13.8p) Recognised income and expense per share The figures for recognised income and expense attributable to shareholders of the Company in pence per share are calculated by dividing the recognised income and expense attributable to equity shareholders of the Company for the period, by the weighted average number of shares in issue during the period, as follows:- Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Recognised income and expense for (14) 421 8,587 the period attributable to equity shareholders of the Company £'000 Weighted average number of ordinary 22,603 22,603 22,603 shares in issue during the period '000 Recognised income and expense attributable to equity Shareholders of the Company, in pence per share Pence 0.0p 1.9p 38.0p 5. PENSIONS Overall summary Liberty operates a defined contribution pension scheme and two defined benefit pension schemes. One of the defined benefit schemes is for certain UK employees of its wholly owned subsidiary Liberty Retail Plc. This scheme has been closed to new entrants since February 2001 and was closed to future benefit accrual with effect from 1st January 2007. The other scheme is a minor pension arrangement for the Japanese subsidiary of Liberty Retail Plc. The assets of all pension schemes of the Group are held in separate trust administered funds. The total pension charge of the Group for the six months ended 30th June 2007 was £68,000. At 30th June 2007, £30,000 was due by the Group to the UK pension scheme, which was paid shortly after the period end. Defined benefit pension schemes The contribution rate to the defined benefit schemes is determined by an independent qualified actuary, using the projected unit method, on the basis of triennial valuations. A full actuarial valuation was carried out at 2nd June 2006 by the scheme's actuary. For the UK defined benefit scheme, which is closed to new entrants, the current service cost is expected to increase as members of the scheme approach retirement. As the scheme is closed to future benefit accrual, there is no expected contribution rate for future years calculated by reference to contribution earnings of participating earnings. The contribution for future years for the UK Scheme, payable by Liberty Plc, is expected to be approximately £360,000 per annum. Six months Six months Year ended ended ended 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Summary Cumulative net (liability) of UK Scheme (124) (4,993) (1,593) Cumulative net asset/(liability) of Japanese Scheme 27 55 45 --------------------------------------------------------------------------------- Total present value of employee benefits (97) (4,938) (1,548) ================================================================================ 6. PROPERTY, PLANT AND EQUIPMENT Freehold Property Fixtures & equipment Total £'000 £'000 £'000 --------------------------------------------------------------------------------- Cost or valuation At 1st January 2007 32,148 11,345 43,493 Additions - 1,673 1,673 Revaluation 1,309 - 1,309 --------------------------------------------------------------------------------- At 30th June 2007 33,457 13,018 46,475 ================================================================================ Depreciation At 1st January 2006 - (6,906) (6,906) Charge for period (181) (758) (939) Revaluation 181 - 181 --------------------------------------------------------------------------------- At 30th June 2007 - (7,664) (7,664) --------------------------------------------------------------------------------- Net Book Value at 30th June 2007 33,457 5,354 38,811 ================================================================================ Freehold Property Fixtures & equipment Total £'000 £'000 £'000 --------------------------------------------------------------------------------- Cost or valuation At 1st January 2006 25,356 9,030 34,386 Additions 172 1,030 1,202 Revaluation 832 - 832 --------------------------------------------------------------------------------- At 30th June 2006 26,360 10,060 36,420 ================================================================================= Depreciation At 1st January 2006 - (5,777) (5,777) Charge for period (180) (561) (741) Revaluation 180 - 180 --------------------------------------------------------------------------------- At 30th June 2006 - (6,338) (6,338) --------------------------------------------------------------------------------- Net book value at 30th June 2006 26,360 3,722 30,082 ================================================================================= Freehold Property Fixtures & equipment Total £'000 £'000 £'000 --------------------------------------------------------------------------------- Cost or valuation At 1st July 2005 24,608 8,516 33,124 Additions 11 2,829 2,840 Revaluation 7,529 - 7,529 --------------------------------------------------------------------------------- At 31st December 2006 32,148 11,345 43,493 ================================================================================ Depreciation At 1st July 2005 - (5,215) (5,215) Charge for the period (543) (1,691) (2,234) Revaluation 543 - 543 --------------------------------------------------------------------------------- At 31st December 2006 - (6,906) (6,906) ================================================================================ Net book value at 31st December 2006 32,148 4,439 36,587 ================================================================================ Valuation The Group's property, plant and equipment is all located in the United Kingdom. The Group's Operational property was valued at 30th June 2007 by qualified professional valuers working for the company of DTZ Debenham Tie Leung, Chartered Surveyors, ('DTZ'), acting in the capacity of External Valuers. All such valuers are Chartered Surveyors, being members of the Royal Institution of Chartered Surveyors ('RICS'). The valuation was carried out in accordance with the RICS Appraisal and Valuation Standards 5th Edition ('the Manual') and the property was valued on the basis of Market Value of the Properties. Market Value is defined in the Manual as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing, where the parties had each acted knowledgeably, prudently and without compulsion. The DTZ valuation is not qualified by any reference to existing or alternative use and implies the value to which a property will derive, having regard to its most valuable use. The valuation includes the land and buildings; the trade fixtures, fittings, furniture, furnishings and equipment; the market's perception of the trading potential excluding personal goodwill; and an assumed ability to renew existing licences, consents, certificates and permits. The value excludes consumables and stock in trade. The valuation excludes any goodwill associated with the management by the Company or its subsidiaries. The valuation of the property totalled £37m. This includes fixtures and equipment with a net book value of £3.5m at 30th June 2007 which are carried at the lower of cost and realisable value in the table above. 7. DEFERRED TAXATION The deferred taxation liabilities/(assets) at 30th June 2007 and at the previous period ends arose as follows:- 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Provided Short term timing differences 62 62 62 Accelerated capital allowances (62) (62) (62) --------------------------------------------------------------------------------- Deferred tax liability provided at period end - - - --------------------------------------------------------------------------------- Unprovided Short term timing differences - - - Accelerated capital allowances (6,630) (6,803) (6,653) Trading tax losses (10,057) (8,165) (10,728) Potential tax on property surplus 330 - - --------------------------------------------------------------------------------- Deferred tax liability unprovided at period end (16,357) (14,968) (17,381) =============================================================================== After deducting all deferred tax liabilities, the Group had unrelieved capital expenditure from current and prior periods of approximately £21m at 30 June 2007. At the same date, it had net trading losses carried forwards of approximately £34m. These gross tax assets totalling £55m are reflected at the current rate of 30% in the deferred tax asset of £16m referred to above. Due to the uncertainty as to the timing and use of these net tax assets, they have not been recognised as an asset in the consolidated balance sheet at 30 June 2007 or 31 December 2006. No charges or credits were made in the Consolidated Income Statement in respect of deferred taxation during the periods referred to above. 8. TRADE AND OTHER PAYABLES 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Trade payables 6,609 6,360 7,851 Amounts due to related parties 140 145 - Other payables 391 503 981 Accruals 2,569 3,483 2,539 PAYE, NIC and VAT 620 752 1,109 Non-equity dividend payable 110 55 82 --------------------------------------------------------------------------------- 10,439 11,298 12,562 ================================================================================= The amounts due to related parties are transactions between the Group and its immediate parent, MWB Retail Stores Shareholder Limited, which owns 68.3% of the Group's issued ordinary share capital. 9. TAX PAYABLE 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Corporation tax 184 356 135 ================================================================================ 10. CURRENT LIABILITIES - OVERDRAFT 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Bank overdraft 8,441 882 2,211 ================================================================================ 11. NON - CURRENT LIABILITIES 30th June 30th June 31st December 2007 2006 2006 £'000 £'000 £'000 --------------------------------------------------------------------------------- Other provisions 1,680 1,696 1,696 ================================================================================ 12. MOVEMENT ON RESERVES Revaluation Hedging Translation Merger Retained reserve reserve reserve reserve earnings £'000 £'000 £'000 £'000 £'000 At 1st January 2007 12,600 - (38) 61,503 (30,601) Movements during period: Retained loss for the - - - - (2,655) period Write back of option cost - - - - 62 through equity Revaluation surplus 1,490 - - - - Actuarial gain on defined - - - - 1,255 benefit pension scheme Change in fair value of - (46) - - - financial derivatives Currency translation and other differences - - (58) - - -------------------------------------------------------------------------------- At 30th June 2007 14,090 (46) (96) 61,503 (31,939) ================================================================================ There was no movement in the merger reserve during the six months ended 30th June 2007. 13. EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF LIBERTY PLC IN PENCE PER SHARE The Equity attributable to shareholders of Liberty Plc in pence per share is calculated by dividing the Equity attributable to shareholders of Liberty Plc at each period end by the number of ordinary shares in issue at such period end. The relevant figures are as follows:- 30th June 30th June 31st December 2007 2006 2006 Equity attributable to shareholders of Liberty Plc per consolidated balance sheet on page 9 of the accounts £'000 49,548 41,276 49,500 Number of ordinary shares in issue at '000 22,603 22,603 22,603 period end Equity attributable to shareholders of Liberty Plc in pence per share Pence 219p 183p 219p 14. EXPLANATION OF TRANSITION TO IFRS As stated in Note 1, these accounts are the first consolidated accounts of the Group that have been presented under Adopted IFRS. The accounting policies in Note 1 have been applied consistently in preparing the consolidated accounts for the six months ended 30th June 2007, together with the comparative information for the six months ended 30th June 2006 and year ended 31st December 2006 which are set out in this document. The same policies have also been applied in the preparation of an opening IFRS balance sheet at 1st July 2005, the Group's date of transition. In preparing the opening IFRS balance sheet and the comparative information for the year ended 31st December 2006, the Board has adjusted amounts reported previously in its accounts for the periods then ended which had been prepared in accordance with UK GAAP. An explanation of how the transition from previous UK GAAP to IFRS has affected the Group's reported financial position and its reported financial performance is set out in the following tables and the notes that accompany these tables. (i) IAS 39 - Financial Instruments. This Standard requires exchange rate hedges to be recorded at fair value in the accounts. This is in contrast to UK GAAP which generally only required these items to be recorded at cost, with the fair value disclosed by way of note. Under IFRS, to the extent that such derivatives are effective hedges, changes in fair value are recognised through equity reserves. To the extent that such derivatives are ineffective hedges, changes in fair value are recognised in the income statement. The adoption increase retained earnings and reduced hedging reserve by £46,000, £nil, and £nil at 30th June 2007, 30th June 2006, and 31st December 2006 respectively. There is no impact on total equity at any of these dates. (ii) IFRS 2 - Share Based Payments. This Standard requires the fair value of share options at the date of grant to be charged over the vesting period of the grant; this affects the recording of options. Implementation of this Standard resulted in a charge of £62,000, £49,000, and £104,000 at 30th June 2007, 30th June 2006, and 31st December 2006 respectively. There is no impact on equity at any of these dates. (iii) IAS 39 - Employee Benefits. Under UK GAAP, the Group measured pension commitments and other related benefits in accordance with FRS 17 - Retirement Benefits. Under IFRS, the Group measures pension commitments in accordance with the amended IAS 19. IAS 19 is similar to FRS 17 in that it adopts a balance sheet approach, bringing the surplus/deficit of the pension scheme onto the balance sheet. However, FRS 17 dictates that all actuarial gains and losses are to be recognised directly in reserves, whereas IAS 19 includes an alternative option allowing actuarial against and losses to be held on the balance sheet and released to the income statement over a period of time. Liberty plc has elected not to adopt this alternative option. As there is no impact on equity only reconciliations of consolidated income statements have been given in this note. Reconciliation of consolidated income Previously IFRS 2 Restated statement for the year ended 31st reported Share based under IFRS December 2006 (unaudited) under payments UK GAAP £'000 £'000 £'000 ------------------------------------------------------------------------------------ Revenue 44,012 - 44,012 Cost of sales (24,000) - (24,000) Gross profit 20,012 - 20,012 Selling and Distribution costs (19,952) - (19,952) Administration expenses (2,680) (104) (2,784) Other operating income 573 - 573 Operating loss (2,047) (104) (2,151) Finance income 33 - 33 Finance expense (192) - (192) Loss before tax (2,206) (104) (2,310) Taxation (437) - (437) ------------------------------------------------------------------------------------ Loss for the year (2,643) (104) (2,747) ==================================================================================== Attributable to: Equity shareholders of the Company (3,011) (104) (3,115) Minority interests 368 - 368 Loss for the year (2,643) (104) (2,747) Basic and diluted loss per share - pence (13.3p) (0.5p) (13.8p) Reconciliation of consolidated income Previously IFRS 2 Restated statement for the six months ended 30th reported Share based under IFRS June 2006 (unaudited) under payments UK GAAP £'000 £'000 £'000 ------------------------------------------------------------------------------------ Revenue 19,976 - 19,976 Cost of sales (10,922) - (10,922) Gross profit 9,054 - 9,054 Selling and Distribution costs (9,506) - (9,506) Administration expenses (1,405) (49) (1,454) Other operating income 282 - 282 Operating loss (1,575) (49) (1,624) Finance income 15 - 15 Finance expense - - - Loss before tax (1,560) (49) (1,609) Taxation (238) - (238) ------------------------------------------------------------------------------------ Loss for the period (1,798) (49) (1,847) ==================================================================================== Attributable to: Equity shareholders of the Company (1,994) (49) (2,043) Minority interests 196 - 196 Loss for the period (1,798) (49) (1,847) Basic and diluted loss per share - pence (8.8p) (0.2p) (9.0p) 15. ACCOUNTS AND INTERIM REPORT These unaudited interim accounts of Liberty PLC for the six months ended 30th June 2007, the unaudited interim accounts of the Group for the six months ended 30th June 2006, and the audited accounts of the Group for the eighteen months ended 31st December 2006, are available from the Company Secretary, Filex Services Limited at the Company's registered office of 179 Great Portland Street, London W1W 5LS. This information is provided by RNS The company news service from the London Stock Exchange

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