Final Results

RNS Number : 7204U

Scott Wilson Group plc

30 June 2009

 



30 June 2009

SCOTT WILSON GROUP PLC 

Preliminary Results for the 53 week period ended 3 May 2009

Further year of progress in challenging environment

Highlights

	2009	2008
Revenue, including share of joint ventures	£360.0m	£324.2m
Organic revenue growth	9.2%	10.0%
Adjusted* operating profit	£22.6m	£22.6m
Adjusted* operating margin	6.3%	7.0%
Operating profit	£10.7m	£18.6m
Total equity of the Group	£78.8m	£79.1m
Total dividend per share	4.0p	3.6p
Order book	£291m	£280m
Net debt at year end	£18.3m	£7.0m
Committed bank facility	£70.0m	£70.0m

• Revenue, including share of joint ventures, increased by 11 per cent to £360.0m, driven by strong organic growth of 9 per cent

• Solid growth sourced from the international market with revenue of £111.5m representing 31 per cent of total Group sales

• Adjusted* operating profit of £22.6m in line with the previous financial year

• As previously indicated, an exceptional charge of £7.0m due to redundancy costs and losses incurred as a result of one project in the Middle East being indefinitely postponed

• New Group structure and reorganised management team has brought renewed focus on worldwide clients and markets

• Full year dividend increased by 11 per cent to 4.0p per share

• Diversified business model, robust order book and financial strength provide confidence that the Group can continue to respond effectively to market developments

Geoff French, Chairman of Scott Wilson, commented:

"The second half of the year has seen a challenging trading environment for Scott Wilson as the deterioration in the global economy has reduced demand in some sectors. While we have downsized our business to match capacity, one-off redundancy costs have impacted our full-year performance. However, demand for infrastructure services around the world remains robust, especially in growth regions such as China and India where Scott Wilson has a strong reputation and presence. We are confident that this geographic diversity, combined with our technical and industry credentials, our strong order book and our financial strengths leave us well placed to continue to respond effectively to market developments."

For further information, please contact:

Scott Wilson Group plc Hugh Blackwood, Group Chief Executive Sean Cummins, Group Finance Director Lak Siriwardene, Head of Communications	020 7798 5187 020 7798 5245 07824 311762
Financial Dynamics Charlie Armitstead	020 7269 7215

A briefing for analysts will take place today at 9.00am BST at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB. The presentation slides used at this briefing will be posted on the Group's website (www.scottwilson.com/news) at 9.00am.

* The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted earnings per share assists with the understanding of the performance of the Group.

• Adjusted operating profit is operating profit adjusted for recurring adjustments, together with redundancy costs and an exceptional contract loss.

• Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures.

• Adjusted profit before taxation is profit before taxation adjusted for recurring adjustments, together with redundancy costs and an exceptional contract loss.

• Adjusted earnings per share is earnings per share adjusted for recurring adjustments, together with redundancy costs, an exceptional contract loss and prior year research and development tax credits.

    Reconciliations of these measures to operating profit, operating margin and earnings per share are set out in notes 16 and 41 to the Consolidated Financial Statements.

Scott Wilson Group plc

Scott Wilson Group plc is a global integrated design and engineering consultancy for the built and natural environments. With its headquarters in the UK, the Group has a worldwide network of 80 offices and over 6,000 employees. Scott Wilson offers Strategic Consultancy and multi-disciplinary professional services in the Railways, Buildings & Infrastructure, Environment & Natural Resources and Roads Sectors.

www.scottwilson.com

Chairman's Statement

Operations and Strategy

An extended period of consistent global growth in demand for engineering consultancy services came to an abrupt end in the second half of our financial year. It has been replaced by a much more variable trading environment across the Sectors of our business. In some places, such as China and India, growth has slowed but still remains significant. In a number of countries, including the UK, we have benefited from the financial stimulus packages that have been introduced. In contrast, some Sectors, especially those related to private commercial development, saw a sudden and rapid decline.  

Whilst our diversity, both geographically and across market sectors, has served us well in this time of reduced certainty, some rationalisation of our staff levels has been required to match capacity with demand. Our clients are also experiencing the effects of the global financial squeeze and as a result we have devoted extra resource to the management of our debtor book. That we have managed to improve our net debt position significantly during the last six months in such an overall climate is a great tribute to the actions of our management teams throughout the Group. 

The necessity to reflect an exceptional charge has detracted from what was otherwise one of the most successful years in our history. Our revenue is at another record level, our order book is strong as is our liquidity and we have demonstrated our ability to react effectively to rapidly changing markets. 

Dividend

The Board is pleased to recommend a final dividend of 2.67p per share, making the total dividend for the year 4.0p (2008: 3.6p), an increase of 11 per cent. We are pleased that our improved net debt position in the second half of our financial year has enabled us to increase the dividend again despite the significant change in market conditions. It remains our intention to have a progressive dividend policy balancing growth in earnings with our investment plans and dividend cover levels. However, with the period of consistent global economic growth coming to an end, dividend policy in the near future will be reviewed in the light of the Group's trading performance and the wider market and economic environment.

Board of Directors

Christopher Kemball became a Non-Executive Director with effect from 1 January 2009. Christopher has extensive investment banking experience specialising in mergers and acquisitions, capital raising and privatisations in Europe, the USA and emerging markets.  

Pelham Allen retired from the Board on 1 January 2009 after six years and the Board would like to record its thanks to Pelham for all that he has done during his time with Scott Wilson.

On 1 November 2008, in line with the Group's commitment to plan for senior executive succession and Board structure over the long term, I became Non-Executive Chairman of the Group.

Employees

At the end of April 2009 we had 6,406 staff, a broadly similar number to the figure at the end of April 2008. This has been a difficult year for our staff with the uncertainties in some of our Sectors. We are grateful for the flexibility that they have shown in helping us to adjust to the changing requirements of our markets.

Our continuing challenge is to provide our staff with the opportunity to demonstrate their ambition, passion for their work, collaboration and knowledge. Our staff remain critical to our reputation, our continuing innovation and our ability to respond to changing circumstances.

On behalf of the Board I would like to thank all our members of staff for their outstanding contributions to Scott Wilson over the last year. 

Corporate Responsibility

The fundamental importance of sustainability and integrity to our business has been reinforced by the current economic situation. We remain firmly committed to continual improvement in our social, environmental and ethical performance. This commitment is supported by having environmental, social inclusion and equality and health and safety skills in-house. Further demonstration of that commitment is provided by our support for the UN Global Compact, the world's largest CSR initiative.

We have been proud to increase significantly our support for the staff-led Scott Wilson Millennium Project, a registered charity, which this year completed the construction and establishment of a new school in Mozambique as well as supporting other good causes focusing on the relief of poverty, hardship and distress among children in developing countries.

We also continue to give corporate support as a patron of the charity RedR and its humanitarian relief efforts. 

This year the Group has prepared a stand-alone Corporate Responsibility Report, a hard copy of which is being sent to all shareholders receiving a paper copy of this Annual Report. The Corporate Responsibility Report is also available to all other shareholders and interested parties via the Group's website.

Outlook

Overall, the demand for global infrastructure remains strong as urbanisation continues around the world. The UK remains a leading global provider of engineering consultancy services and Scott Wilson's technical and industry credentials are very strong. The Group is already well established in both China and India, two major markets that continue to grow despite the recent economic difficulties. Our work in road, rail and other transport projects remains strong, together with power, water, waste and environment projects. However, there are no early signs of improvements in the property sector.

We do not expect growth in our UK business over the next year but we do see significant opportunities for further growth in our international markets.  

Our diversified business model, strong order book and financial strength give us confidence that we can continue to respond effectively to market developments as they unfold.

Geoff French

Group Chairman

30 June 2009

Business Review - Chief Executive's Report

Review by Division

During the past six months certain parts of the business have been contending with rapidly declining global demand. This has had a particular impact on the UK private sector property market as project funding was cancelled, postponed or delayed. Similar effects were also evident in the property sectors in Dubai and Bangkok.

Across the transportation elements of the organisation, performance held up very well with some benefit deriving from economic stimulus policies in some markets.  

Pressure on natural resources, energy and water continued to act as a major driver within our markets especially with growing emphasis on environmental impact and climate change.

Internally, it has been a year of substantial change as the organisation transitioned to a new sector facing management structure based on five core business sectors: Strategic Consultancy, Railways, Buildings & Infrastructure, Environment & Natural Resources and Roads.

This will be the last occasion when the organisation will report in the current format. The new structure will be client based, easier to analyse and understand and we expect will bring new efficiencies to our business.

UK & Ireland Divisions

UK Central Division managed all commissions within the Roads Sector in England and Wales and has completed another successful year exceeding budgets in both revenue and adjusted* operating profit. Prior to the change in management and reporting structure, the Division also managed some aspects of the natural resources market including the nuclear decommissioning work based in Warrington and Sellafield. Revenue in the Division for the year was £71.8m from which was delivered an adjusted* operating profit of £9.8m at a margin of 13.7 per cent.

Within the Roads Sector, collaborative working with contracting partners and the Highways Agency both on Early Contractor Involvement (ECI) projects and Managing Agent Contractor (MAC) contracts has continued to deliver successful outcomes.

Recent fiscal stimulus by the Government to infrastructure projects in the UK has benefited the Division. Specifically approximately £1 billion of construction activity involving the Group in an engineering design role was accelerated following a government statement in November 2008. These projects include the M1 motorway junctions 10 to 13 and the A46 Trunk Road dualling in Nottingham and Lincolnshire. In addition, the A421 dualling project from Bedford to the M1 has reached construction stage and been committed to site.

The Area 7 MAC in which we have a 40 per cent share has progressed well during the year and has also been the recipient of renewed government spending. Unfortunately, this contract ends in June 2009 and we are working on a pipeline of opportunities to replace it. We are currently seeking shortlisting on three similar contracts: Area 14 MAC, Sheffield Highway Maintenance PFI and Lincolnshire County Local Framework.  

UK South Division included the majority of the Buildings & Infrastructure Sector's business conducted in the UK, representing 61.0 per cent of the Division's revenue. The early signs of a slowdown in the private property sector (residential, commercial and retail) were evident during the first half of the year although financial performance held up well over this period on existing projects. The second half saw a rapid deterioration in the situation, largely as a result of the banking crisis. A number of projects were deferred, postponed or cancelled. The Division had reacted early to the developing situation but we then saw a sudden end to the development bubble in the Middle East and, despite statements to the contrary, the health and education sectors in the UK have been extremely disappointing as secured projects continue to be deferred and delayed.

The combination of these circumstances has resulted in the need to restructure the Building & Infrastructure Sector element of the Division by reducing total sector staff by around 20 per cent. Divisional revenue for the year was £107.9m heavily biased toward the first half (£60.0m versus £47.9m) with adjusted* operating profit of £4.0m (£4.9m versus a loss of £0.9m) representing margin performance of 3.7 per cent (8.2 per cent versus negative 1.9 per cent). 

The Strategic Consultancy Sector represented 23.8 per cent of Divisional revenue and has had a successful year providing high level services to clients, particularly in transportation. The maritime and aviation sub-sectors have been particularly buoyant, with an improving position achieved in the oil and gas sector.

The Environment & Natural Resources Sector represented the remaining 15.2 per cent of revenue. Within the environment sub-sector itself, the Division is providing advice on carbon trading and sustainability issues across a wide range of public and private sector clients. Our contract to manage the National Industrial Symbiosis Programme which helps drive the sustainability agenda by challenging the re-use of industrial waste products through a collaborative network was renewed in 2008 for a further three years. The Division is advising central government on the eco-towns project and has been appointed to conduct the environmental impact assessment for the Thames Tideway Tunnel.

The Division has had an extremely successful year in the waste sub-sector, an expanding area of business being driven by environmental legislation in both Europe and the UK. The Group is involved in around 40 per cent of ongoing mechanical biological treatment (MBT) household waste schemes in England and is well placed to take advantage of the ongoing investment programme.

Scotland & Ireland Division continued its long track record of good performance by once again providing strong growth for the Group resulting in revenue and adjusted* operating profit of £35.8m and £3.3m respectively (2008: £31.5m and £2.5m respectively). Margin improved during the year from 8.0 per cent to 9.2 per cent. The acquisitions of recent years continued to provide a broadly based business albeit with a significant public sector component.

The collapse of the Irish economy resulted in downsizing of resources but a small core remains in Dublin positioned to take advantage of any future upturn.

The Division's dominant Roads Sector delivered seven major schemes for national clients over the course of the year including the completion of the M6 at the Scotland/England border, the M1 Westlink in Belfast, the N8/M8 in the Republic of Ireland and a number of substantial improvement schemes.

Design work continues on the M8 DBFO scheme in Scotland after some delay and the Carlisle Northern Distributor PPP Scheme. Both in Scotland and Northern Ireland there is still considerable activity in the forward planning of future projects, although the outlook for the Irish Republic is less optimistic. Also during the year, advisory framework commissions were reached with South East Scotland Transport partnership and the Strathclyde Partnership for Transport.

In the Building & Infrastructure Sector much of the business of the Division was in the public sector in education and health with work completed on three schools as part of the Borders Schools PPP programme. Work is nearing completion on the Downe Hospital in Northern Ireland while a start has been made on the Royal Victoria Hospital Critical Care Centre in Belfast. In Scotland, the Division has a strong position in the social housing arena, an area of investment currently favoured by the Scottish government.

A modest staff lift-out from a local consultancy in Middlesbrough provided additional skills in building physics and systems and this new capability is being rolled out across the internal market.

Framework agreements were a key feature of the Environment & Natural Resources Sector within the Division. Relationships with the Northern Ireland Water Services, Scottish Water and Northumbria Water have helped develop a strong position in the field of water engineering. The Division continued to lead the Group's expertise in renewable energy, particularly in wind farms and remained active in the landscape, environment and tourism market particularly in Northern Ireland.

Railways Sector

The UK Railways Division's market remained extremely turbulent during the year, circumstances which delivered two very different halves to the year's performance. The first half was beset by a number of major workstreams coming to an end with resources being retained awaiting the Crossrail start-up programme. The second half has been characterised by the securing and mobilisation of the Crossrail On-Network Contract and the Edinburgh Glasgow Improvement Project. Although challenging projects, these new commissions should help staff utilisation and margins across the key railway engineering disciplines. The Division achieved annual revenue of £43.9m (2008: £44.7m) and an adjusted* operating margin of 2.6 per cent (2008: 5.1 per cent). This represented an improvement in second half earnings which should continue into 2010.

Emerging during the year was a slowing in what has been long term growth of our UK rail market with major projects like West Coast Route Modernisation and Airdrie to Bathgate design finishing. There was also a modest reduction in Network Rail's track renewals work which was largely offset by an increase in metro work, particularly for London Underground and opportunities on the Crossrail central section. As a result, organisational restructuring has resulted in about 8 per cent of staff leaving the business on the heavy rail side, with the lost revenue being replaced by metro work.

The Division continued to grow its penetration of an increasing metro market worldwide with the acquisition during the year of Benaim and Terence Lee Partnership forming a key part of that growing capability.

Capital utilisation in the Division benefits from the almost exclusively public sector base of clients and funding. Of this current client base, Network Rail, Transport for London and Transport Scotland remain the three dominant clients and an increasing focus on client relationship management is proving beneficial with these important clients.

The order book remains strong but increased competition must be expected in the current economic climate. The medium term will offer considerable prospects in Crossrail, increased electrification, High Speed Line 2, ERTMS (advanced signalling systems) and a series of planned upgrades to the Great Western Route, all of which play to the inherent strengths of the business.

On the international front, the excellent start-up in Brisbane has been undermined by the slowdown in both public sector funded rail investment and in the mining sector but there remain good prospects in the medium term.  

The Division continues its track record of generating business for other Group businesses particularly in the planning and design of station property assets, involvement in the East London Line project being a prime example.

International Division

Despite the global economic downturn, the International Division achieved a 43.2 per cent increase in revenue to £100.5m (2008: £70.2m) with an adjusted* operating margin of 4.3 per cent (2008: 5.2 per cent). This excellent revenue growth performance resulted from a planned strategy to increase activity in our regional businesses together with some effect of the foreign exchange movement during the year. Earnings were held back in the businesses in Dubai and Bangkok due to the economic impact on private sector commercial development in these markets. However, the other regional businesses performed well. Provision has been made for emerging bad debts, particularly in the Middle East.  

China's revenue and adjusted* operating profit grew by 45.0 per cent and 30.0 per cent respectively from the previous year and delivered an improved adjusted* operating margin of 7.0 per cent. There are now over 1,100 staff based out of 10 offices in China and the recent acquisition of Benaim continues to perform ahead of expectations. Our two new joint-ventures in Chongqing and Wuxi in China are well positioned to take advantage of China's ongoing investment in infrastructure. A number of large construction projects were successfully completed during the year and at the same time the order book has been topped up by winning several important new commissions in China and Hong Kong for the public sector.  The recently announced award of the detailed design of two stations and tunnel works for the MTR South Island line will provide £8m in fees over the next two years. In Hong Kong, almost all private sector investment in buildings and infrastructure has either stopped or been delayed because of the current financial climate and this is unlikely to turn around before the end of 2009. Nonetheless, we remain cautiously optimistic that our business in China will continue to grow during 2009/10.

The Middle East saw major change during the year, starting with growing investment to cater for rapid expansion during the first half of the year, followed rapidly by a significant downturn in the second half, particularly in Dubai, which resulted in a headcount reduction of some 40 staff in the region. In addition, some 20 staff were released in the Bangkok office which was also exposed to the private sector downturn. A particular Middle East casualty has been Oqyana, part of the World Islands development where the property investors suspended the project due to the lack of funds to pay creditors. They are attempting to restructure finance and/or sell the islands but in the meantime this has resulted in an exceptional £2.7m provision booked against this project. Elsewhere in the Middle East, workload is holding up, particularly in Abu Dhabi and Bahrain, albeit with some reprogramming of projects.

Our Indian regional business has continued to grow by some 28.9 per cent in revenue terms with a 56.9 per cent increase in adjusted* operating profit and an adjusted* operating margin of 14.1 per cent. The government is continuing with its major spend on infrastructure and any changes from elections this year are not expected to compromise long term projects; the slump in the private property sector is having very little effect on our Indian business.

There is a similar story in Eastern Europe with substantial growth in revenue, but also accompanied by much strengthening of the adjusted* operating margin to 6.8 per cent up from the previous year's 6.2 per cent reflecting maturity of the business after a number of years of investment. A planned entry into the property sector has been deferred until market indicators improve.

Although mineral prices have suffered a major correction, there remains a solid demand for our global mining services and the need for renewable energy is increasing demand for our power engineering services, particularly in hydro-electric schemes.

Apart from some tempering of the Middle East market, all international areas of the business are experiencing continued growth and new orders for the year are encouraging which should serve to underpin revenue targets in 2009/10.

Outlook

Over the past six months, active and ongoing measures have been taken to combat the current economic weakness. This has been largely but not exclusively confined to the global private sector property market and the necessary restructuring initiative will result in a reduction of 650 staff across the Group. Despite this, there has been renewed focus on improved cash conversion and collection and a range of internal efficiency improvements.

Given our sector and geographic diversity and our stable financial position, the business is in good shape to face the challenges of the coming year.  Our new sector facing management structure allows us to more clearly identify and assess potential growth paths across our geographic regions.

Strategic Consultancy's key strength is linking the technical knowledge of the Group to the economic and business planning requirements of our clients. We would expect this activity to be maintained at present levels in the UK with new opportunities emerging in Asia Pacific following the establishment of a new group in Hong Kong over the past year.

Railways continues to be a potential growth sector in most geographies largely dependent on the continuing high levels of government spend. In the UK, the Crossrail development phase presents an extremely valuable addition to the UK rail market alongside the ongoing spending of Network Rail, Transport for London and Transport Scotland, all of whom have substantial long term budgets. The international metro market particularly in the developing economies offers another source of likely opportunity.

Within Buildings & Infrastructure, the private sector remains largely moribund with little sign of an early recovery particularly in the UK. Within the public sector, opportunities are slow and patchy, especially within health and education. Short term opportunities are largely confined to the waste and industrial sub sectors and in buildings assets for transportation projects where the Group has a strong position.

Environment & Natural Resources is the business sector where we bring together energy, water and mining within the umbrella of the environment. This sector is growing in importance for the Group as demands increase for security and diversity of power water and natural resources against the background of the sustainability agenda and renewable targets worldwide.

The Roads Sector represents the Group's traditional strength and we see its importance continuing both in the UK and internationally. The forward order book is extremely reassuring in Scotland, Northern Ireland and England where we have strong market positions and across our international regions with Eastern Europe and India also expecting substantial growth opportunities.

Our penetration of the North American market is currently modest and confined to our mining interests in Toronto and Vancouver and a project involvement in the United States, all of which is actively managed at present by our UK-based sector management teams. It has been a stated intention for some time to explore the market further with a view to investment and we expect to see some progress during the coming year.

Despite the ongoing challenges presented by the global economic situation, we are confident that our historic diversity and geographic spread, coupled with our strong financial status, will allow us to continue to deliver our business strategy in the year ahead.

Hugh Blackwood

Group Chief Executive

30 June 2009

Business Review - Finance Report

Income Statement

Revenue, including our share of joint ventures, increased by 11.0 per cent to £360.0m, driven by strong organic growth of 9.2 per cent.  Activity in the international market continues to increase, with revenue of £111.5m now representing 31.0 per cent of Group sales, a progression of 31.2 per cent over the prior period, with excellent development being achieved in Eastern Europe, India and China.

Adjusted* operating profit of £22.6m is in line with the previous financial year. During the third quarter, we experienced a sharply increased rate of deferral or curtailment of client commitments to projects in certain sectors, which, combined with the disruption resulting from the ensuing redundancy exercise, had a negative impact on staff utilisation. In addition, the general uncertainty in the global economy has led to an increased level of potential and actual bad debts. As a result, adjusted* operating margin in the year reduced to 6.3 per cent, as detailed in note 14.

The Directors believe that the presentation of adjusted* operating profit assists with the understanding of the results of the Group in the period. As indicated in our Interim Management Statement on 10 March 2009, the Group has incurred costs of an exceptional magnitude as a direct impact of the global financial turmoil. It has been necessary to restructure our employee base resulting in a charge of £4.3m and one sizeable project has been postponed indefinitely, causing losses of £2.7m. Recurring adjustments are of the same nature as last year. 

Global interest rates have progressively reduced during the course of the year, particularly in the second half, hence the interest cost of borrowings of £1.8m is at a reduced level compared to last year, despite average borrowings being slightly higher over the current period. The volatile nature of the notional finance income on the Group's pension schemes has been particularly pronounced this year, resulting in an adverse movement of £2.0m and this situation will persist in 2009/10 with a further deterioration in excess of £3.0m.

The adjusted* tax charge, including that relating to joint ventures, amounts to £6.9m, which represents an effective tax rate of 31.6 per cent. This is slightly higher than the UK headline rate of 28.0 per cent, principally as a result of disallowed expenses. 

The Company has purchased 3.2m shares at an average price of 67 pence, which are being held in treasury in anticipation of liabilities that will arise under various Group share option schemes and deferred consideration on prior acquisitions. This has contributed to a lower number of shares in issue and, with the reduced tax rate, has held the adjusted* diluted earnings per share at 19.8 pence, a similar level to last year.

A final dividend of 2.67 pence per share has been proposed by the Board, which would take the full year payment to 4.0 pence, an increase of 11.1 per cent. Subject to shareholder approval, this will be paid on 5 October 2009 to shareholders on the register at close of business on 11 September 2009. The dividend is covered 5 times by adjusted* diluted earnings per share.

Borrowings

Net borrowings at the year end were £18.3m, which compares to £7.0m at the last year end, a movement of £11.3m. The majority of the change in borrowings has arisen from the impact of moving our year end by one week to 3 May, resulting in an additional salary payment of £7.4m being recorded in the year.

We have seen good organic growth in revenue and within this an increased proportion of international trading which, coinciding with the global financial uncertainty, has caused upward pressure on debtors and work-in-progress.  Recording a decrease in working capital of £1.0m, excluding the additional salary payment, we therefore consider to be a creditable achievement in very difficult market conditions. Capital utilisation days, our key performance indicator for working capital, were 85 days at the year-end, which compares to 81 days last year.

The Group completed three acquisitions in the first half of the year, with £4.2m applied as initial consideration. In addition, £3.4m was paid to satisfy deferred consideration on acquisitions.

Taxation paid in the year increased to £5.0m, as we no longer benefit from the special pension payments made in 2006 and 2007.  

New long-term bank facilities were put in place in May 2008, which provide £70m of committed credit lines until April 2011. The two principal financial covenants are (i) the ratio of net borrowings to earnings before interest, tax, depreciation and amortisation (EBITDA) and (ii) interest cover. Throughout the year, we have operated comfortably within the covenant requirements in the facility agreement.

Pensions

The Group has operated two defined benefit schemes, both of which are closed to new members, and a defined contribution scheme throughout the period. The aggregate deficit on the defined benefit schemes at 3 May 2009 was £24.2m (2008: £19.9m).

Since the last year end, we have seen the yield on AA-rated Corporate Bonds increase, whilst long term inflation assumptions have reduced, both of which have caused the liabilities to reduce. However, during the same period, we have also seen lower investment returns from volatile stock markets, with the overall value of assets in the scheme reducing to a greater extent, resulting in a slightly increased deficit.

IFRS Results

On an IFRS basis, Group revenue increased by £37.1m to £345.8m reflecting good growth in the international market. Profit before taxation at £9.4m is a reduction from the £19.7m achieved last year due to the higher value of 'adjusted' items, resulting from the restructuring initiative and contract loss in the Middle East. Fully diluted earnings per share were 10.2p.

Sean Cummins

Group Finance Director

30 June 2009

SCOTT WILSON GROUP PLC

Preliminary audited results for the 53 weeks ended 3 May 2009

CONSOLIDATED INCOME STATEMENT (AUDITED)

		53 weeks ended 3 May 2009	52 weeks ended 27 April 2008 restated note (i)
	Notes	£'000	£'000
Continuing operations
Revenue including share of joint venture revenues		360,000	324,182
Less: share of joint venture revenues		(14,211)	(15,485)
Group revenue		345,789	308,697
Cost of sales		(216,269)	(195,038)
Gross profit		129,520	113,659
Administrative expenses		(122,007)	(96,602)
Share of result of joint ventures		3,210	1,538
Operating profit		10,723	18,595
Finance income	7	14,734	14,642
Finance costs	8	(16,051)	(13,489)
Profit before taxation		9,406	19,748
Taxation	9	(1,645)	(6,346)
Profit for the period		7,761	13,402
Attributable to:
Equity holders of the Company		7,693	13,298
Minority interests		68	104
		7,761	13,402
Earnings per share:
From continuing operations - basic	10	10.27p	17.74p
From continuing operations - diluted	10	10.17p	17.09p

There were no discontinued operations in either period.

The Directors have presented a more detailed Income Statement in note 2.

Note (i): Restated for the revised presentation of changes in the fair value of exchange rate derivative financial instruments, as detailed further in note 5.

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

		53 weeks	52 weeks
		ended	ended
		3 May	27 April
		2009	2008
		£'000	£'000
Currency translation differences from translation of foreign operations		1,630	1,155
Effect of change in UK tax rate		-	(175)
Actuarial gains and losses on defined benefit pension schemes		(7,670)	(13,654)
Tax on items recognised directly in equity		2,213	3,499
Deferred tax relating to unexercised share options		(605)	(243)
Expense recognised directly in equity		(4,432)	(9,418)
Profit for the period		7,761	13,402
Total recognised income for the period		3,329	3,984
Attributable to:
Equity holders of the Company		3,261	3,880
Minority interests		68	104
		3,329	3,984

CONSOLIDATED BALANCE SHEET (AUDITED)

		3 May 2009	27 April 2008
	Notes	£'000	£'000
ASSETS
Non-current assets
Property, plant and equipment		20,250	20,157
Goodwill		42,849	37,706
Other intangible assets		14,790	14,786
Investments in joint ventures		1,328	1,113
Deferred tax assets		7,056	6,932
		86,273	80,694
Current assets
Trade and other receivables		124,607	115,858
Current tax assets		1,586	-
Cash and cash equivalents		10,382	19,233
		136,575	135,091
Total Assets		222,848	215,785
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Issued capital		99,118	98,645
Own shares		(2,116)	-
Other reserves		(3,737)	(5,310)
Retained earnings		(14,916)	(14,423)
	11	78,349	78,912
Minority interests		478	237
Total equity		78,827	79,149
Non-current liabilities
Shares to be issued		127	-
Borrowings		1,588	3,253
Derivative financial instruments		959	-
Provisions		331	982
Deferred tax liabilities		493	-
Retirement benefit obligations		24,163	19,940
		27,661	24,175
		3 May 2009	27 April 2008
	Notes	£'000	£'000
Current liabilities
Trade and other payables		78,671	79,408
Derivative financial instruments		2,107	633
Current tax liabilities		421	2,414
Borrowings		27,067	22,995
Provisions		8,094	7,011
		116,360	112,461
Total liabilities		144,021	136,636
Total Equity and Liabilities		222,848	215,785

CONSOLIDATED CASH FLOW STATEMENT

		53 weeks	52 weeks
		ended	ended
		3 May	27 April
		2009	2008
	Notes	£'000	£'000
Cash flows from operating activities
Cash generated from operations	13	15,409	30,521
Defined benefit pension plan contributions		(5,463)	(7,607)
Dividends received from joint ventures		5,327	2,736
Income tax paid		(5,026)	(1,738)
Net cash flows from operating activities		10,247	23,912
Cash flows from investing activities
Interest received		342	612
Purchase of property, plant and equipment		(5,252)	(8,349)
Purchase of intangible assets		(2,296)	(1,628)
Proceeds from sale of property, plant and equipment		58	1,909
Acquisition of subsidiaries, net of cash and cash equivalents acquired		(7,629)	(4,788)
Net cash flows from investing activities		(14,777)	(12,244)
Cash flows from financing activities
Interest and finance charges paid		(1,763)	(2,210)
Proceeds from issue of Ordinary Shares, net of issue costs of £Nil (2008: £Nil)		38	85
Purchase of Ordinary Shares		(2,116)	-
Receipt of new loans and finance lease advances		8,961	7,736
Repayment of loans and finance leases		(10,762)	(9,894)
Dividends paid to equity shareholders		(2,828)	(2,638)
Net cash flows from financing activities		(8,470)	(6,921)
Net (decrease) / increase in cash and cash equivalents		(13,000)	4,747
Cash and cash equivalents at beginning of year		18,279	12,815
Foreign exchange		(58)	717
Net cash and cash equivalents at end of year		5,221	18,279

NOTES TO THE ACCOUNTS

1. BASIS OF PREPARATION

The financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs). This announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in July 2009.

The financial information set out in the announcement does not constitute the Company's statutory accounts under the meaning of section 435 of the Companies Act 2006 for the period ended 3 May 2009 and section 240 of the Companies Act 1985 for the period ended 27 April 2008. The financial information for the period ended 27 April 2008 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the period ended 3 May 2009 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in this preliminary announcement and in the Company's full financial statements to be published in July 2009.  The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Finance Report.

As discussed in the Business Review, during the year, certain of the business sectors in which the Group operates became more challenging as a result of the financial situation in the UK and overseas.  The current economic conditions create some uncertainty particularly over the future demand for the Group's services and the recoverability of debtors and WIP from customers subsequently impacted by market conditions. 

The Group has taken actions to restructure its business to meet expected demand and opportunities in each sector, and demand for the Group's services overall has remained strong. The Group has continued to trade profitably and at increased revenue levels and the Group order book at the balance sheet date stands at £291m (2008: £280m).  

The Group's £70m bank facility is committed until April 2011, subject to compliance with covenants which require the Group to maintain certain financial ratios (net debt to EBITDA, interest cover and debtor days). Based on the budget for the current financial year and forecasts thereafter, the Group has adequate headroom in relation to its facility level and its financial covenant compliance.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this announcement.

This preliminary announcement was approved by the Board of Directors on 30 June 2009.  

2. DETAILED CONSOLIDATED INCOME STATEMENT

		53 weeks ended 3 May 2009				52 weeks ended 27 April 2008
		Adjusted*	Recurring Adjustments Note (i)	Other Adjustments Note (ii)	Total	Adjusted*	Recurring Adjustments Note(i)	Other Adjustments Note (ii)	Total Restated Note (iii)
Continuing operations	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue including share of joint venture revenues		360,000	-	-	360,000	324,182	-	-	324,182
Less: share of joint venture revenues		(14,211)	`	-	(14,211)	(15,485)	-	-	(15,485)
Group revenue		345,789	-	-	345,789	308,697	-	-	308,697
Cost of sales		(213,544)	-	(2,725)	(216,269)	(194,653)	(385)	-	(195,038)
Gross profit		132,245	-	(2,725)	129,520	114,044	(385)	-	113,659
Administrative expenses		(114,123)	(3,622)	(4,262)	(122,007)	(93,570)	(3,032)	-	(96,602)
Share of result of joint ventures		4,480	(1,270)	-	3,210	2,116	(578)	-	1,538
Operating profit		22,602	(4,892)	(6,987)	10,723	22,590	(3,995)	-	18,595
Finance income	7	14,734	-	-	14,734	14,642	-	-	14,642
Finance costs	8	(15,376)	(675)	-	(16,051)	(13,380)	(109)	-	(13,489)
Profit before taxation		21,960	(5,567)	(6,987)	9,406	23,852	(4,104)	-	19,748
Taxation	9	(6,945)	2,474	2,826	(1,645)	(7,982)	1,636	-	(6,346)
Profit for the period		15,015	(3,093)	(4,161)	7,761	15,870	(2,468)	-	13,402
Attributable to:
Equity holders of the Company		14,947	(3,093)	(4,161)	7,693	15,766	(2,468)	-	13,298
Minority interests		68	-	-	68	104	-	-	104
		15,015	(3,093)	(4,161)	7,761	15,870	(2,468)	-	13,402
Earnings per share:
From continuing operations - basic	10	19.95p	(4.13)p	(5.55)p	10.27p	21.03p	(3.29)p	-	17.74p
From continuing operations - diluted	10	19.76p	(4.09)p	(5.50)p	10.17p	20.26p	(3.17)p	-	17.09p

There were no discontinued operations in either year.

* Before items described in note (i) and note (ii) below.

Note (i): Recurring adjustments - Amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions and the Group's share of taxation in relation to joint ventures, as detailed further in note 3. 

Note (ii): Other adjustments - Redundancy costs, an exceptional contract loss and prior year research and development tax credits, as detailed further in note 4.

Note (iii): Restated for the revised presentation of changes in the fair value of exchange rate derivative financial instruments, as detailed further in note 5.

3. RECURRING ADJUSTMENTS - amortisation of BUSINESS Combination INTANGIBLES, CHANGES IN THE FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS, RETENTION BONUSES ARISING FROM ACQUISITIONS and the group's share of taxation in relation to joint ventures

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Amortisation of business combination intangibles	(2,785)	(2,455)
Changes in the fair value of derivative financial instruments	(1,487)	(633)
Retention bonuses arising from acquisitions	(25)	(438)
Group's share of taxation relating to joint ventures	(1,270)	(578)
	(5,567)	(4,104)
Taxation	2,474	1,636
Total	(3,093)	(2,468)

Changes in the fair value of derivative financial instrument

The Group has entered into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange risk, which do not qualify for hedge accounting under IAS 39. When the commercial transaction to which they relate is reflected in the Income Statement, the financial impact of the associated instruments is reflected in the adjusted results. The timing impact of the requirement to mark-to-market derivatives relating to future transactions, not yet reflected in the Income Statement, is captioned as 'Changes in the fair value of derivative financial instruments' and not reflected in the adjusted results. Amounts relating to the revaluation of exchange rate derivative financial instruments are included in administrative expenses, amounts relating to the revaluation of interest rate derivative financial instruments are included in finance income or costs.  

Retention bonuses arising from acquisitions

The amounts recorded reflect retention bonuses arising from acquisitions, which management consider an integral cost of making the acquisition. 

Group's share of taxation relating to joint ventures

The Group's share of tax in relation to joint ventures has been included as an adjustment in order to present operating profit before tax (which would have been arrived at under UK GAAP equity accounting), a measure which Scott Wilson management uses for internal performance analysis.

4.  OTHER ADJUSTMENTS - REDUNDANCY COSTS, CONTRACT LOSS AND PRIOR YEAR RESEARCH AND DEVELOPMENT TAX CREDITS 

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Redundancy costs	(4,262)	-
Contract loss	(2,725)	-
	(6,987)	-
Taxation	2,826	-
Total	(4,161)	-

Redundancy costs

Redundancy costs relate to costs incurred as a result of the Group's restructuring to re-align its resource requirements to market demand.

Contract loss

Contract loss relates to an exceptional loss incurred on an overseas contract, which has been postponed indefinitely.

Taxation

The exceptional taxation credit relates to the redundancy costs and contract loss (£1,956,000) together with the benefit of research and development tax credits relating to prior periods (£870,000). The research and development tax credits reflected here represent the benefit of a retrospective claim covering five financial years. The Group anticipates benefitting from research and development tax credits on an ongoing basis and an additional year's benefit is reflected in the adjusted tax charge. 

5. PRESENTATION CHANGES IN THE FAIR VALUE OF EXCHANGE RATE DERIVATIVE FINANCIAL INSTRUMENTS

In the current period the Group has changed its presentation of the amount relating to changes in the fair value of exchange rate derivative financial instruments so that these are now reflected as administrative expenses rather than as other gains and losses. The charge for the 53 weeks ended 3 May 2009 is £1,695,000. Comparative figures have been restated accordingly, the effect of which is to increase administrative expenses and reduce operating profit by £524,000 in the 52 weeks ended 27 April 2008.

6.SEGMENT ANALYSIS

The Group is an international consultancy offering integrated professional services and the Directors consider that the Group operates in this single business segment. The trading activities and performance of the Group are managed through five geographical divisions, UK Central, UK South, Scotland & Ireland, UK Railways and International. 

UK Central:	consultancy services on projects in the Midlands and Northern regions of England and also the Group's pavement engineering consultancy business, which operates worldwide
UK South:	consultancy services on property and transportation projects principally in London and the South of England
Scotland & Ireland:	consultancy services on projects in Scotland, Northern Ireland, Republic of Ireland and the North East of England
UK Railways:	railway-related consultancy services to infrastructure owners and train operators, principally in the UK
International:	consultancy services on projects undertaken outside the UK, throughout the world, including both projects undertaken from the UK and those undertaken by the Group's overseas operations
Core:	revenues, costs, assets and liabilities not allocated to any of the other segments

Segment results for the 53 weeks ended 3 May 2009:

	UK Central	UK South	Scotland & Ireland	UK Railways	International	Core	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue including share of joint ventures	71,787	107,974	35,817	43,936	100,486	-	360,000
Sales to external customers	56,219	97,460	33,272	57,208	101,630	-	345,789
Sales to other segments	10,262	21,211	4,002	525	9,881	-	45,881
Revenue from all sales	66,481	118,671	37,274	57,733	111,511	-	391,670
Sales on behalf of other segments	(5,241)	(10,694)	(1,456)	(13,796)	(14,694)	-	(45,881)
Group revenue	61,240	107,977	35,818	43,937	96,817	-	345,789
Operating profit before items set out below	9,834	3,997	3,305	1,131	4,335	-	22,602
Redundancy costs	(205)	(2,916)	(146)	(725)	(270)	-	(4,262)
Contract loss	-	-	-	-	(2,725)	-	(2,725)
Amortisation of business combination intangibles	(761)	(739)	(924)	(181)	(180)	-	(2,785)
Changes in fair value of forward foreign exchange contracts	-	(340)	-	-	(472)	-	(812)
Retention bonuses arising from acquisitions	(8)	-	(17)	-	-	-	(25)
Group's share of taxation relating to joint ventures	(1,112)	-	-	-	(158)	-	(1,270)
Operating profit - segment result	7,748	2	2,218	225	530	-	10,723
Finance income							14,734
Finance costs							(16,051)
Profit before taxation							9,406
Taxation							(1,645)
Profit for the year							7,761

Share of result of joint ventures before taxation of £3,972,000 and £508,000 is included in UK Central and International respectively.

Segment results for the 52 weeks ended 27 April 2008 (restated):

	UK	UK	Scotland	UK
	Central	South	& Ireland	Railways	International	Core	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue including share of joint ventures	92,644	85,101	31,549	44,693	70,195	-	324,182
Sales to external customers	73,645	73,958	29,295	61,748	70,051	-	308,697
Sales to other segments	11,691	18,106	3,754	450	8,178	-	42,179
Revenue from all sales	85,336	92,064	33,049	62,198	78,229	-	350,876
Sales on behalf of other segments	(5,240)	(6,963)	(1,500)	(17,505)	(10,971)	-	(42,179)
Group revenue	80,096	85,101	31,549	44,693	67,258	-	308,697
Operating profit before items set out below	7,919	6,273	2,513	2,264	3,621	-	22,590
Amortisation of business combination intangibles	(759)	(717)	(862)	-	(117)	-	(2,455)
Changes in fair value of forward foreign exchange contracts	-	(219)	-	-	(305)	-	(524)
Retention bonuses arising from acquisitions	(221)	(99)	(118)	-	-	-	(438)
Group's share of taxation relating to joint ventures	(494)	-	-	-	(84)	-	(578)
Operating profit - segment result	6,445	5,238	1,533	2,264	3,115	-	18,595
Finance income							14,642
Finance costs							(13,489)
Profit before taxation							19,748
Taxation							(6,346)
Profit for the year							13,402

The figures above have been restated for the revised presentation of changes in the fair value of exchange rate derivative financial instruments, as detailed further in note 5.

Share of result of joint ventures before taxation of £1,645,000 and £471,000 is included in UK Central and International respectively.

7. Finance income

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Interest income on bank deposits	349	762
Expected return on pension plan assets	14,385	13,880
	14,734	14,642

8. Finance costs

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Interest on bank loans and overdrafts	1,228	1,627
Interest on other loans	131	210
Finance lease charges	407	447
Unwind of discount on deferred consideration	155	168
Loss on interest rate derivative financial instruments	675	109
Interest on retirement benefit obligations	13,455	10,928
	16,051	13,489

9. Taxation 

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Current tax - current year	2,601	4,804
- prior year	(2,401)	(167)
Deferred tax - current year	(340)	828
- prior year	1,785	881
	1,645	6,346
Tax reconciliation
Profit before taxation	9,406	19,748
Taxation at the standard rate of tax in the UK (28% / 30%)	2,634	5,924
Tax effects of:
Income not included for tax purposes	114	(67)
Expenses not deductible for tax purposes	528	335
Trading losses utilised	(474)	(94)
Trading losses not utilised	153	128
Effect of tax included within joint venture profit	(915)	(405)
Rate adjustment relating to overseas earnings	5	(239)
Overseas tax not relieved	-	190
Effect of corporation tax rate change	-	37
Changes in recognition of deferred tax	216	-
Adjustment in respect of prior periods	(616)	537
Total tax charge	1,645	6,346

The standard rate of tax in the UK for the 53 weeks ended 3 May 2009 was 28 per cent (2008: 30 per cent up to 31 March 2008 and 28 per cent from 1 April 2008). The reconciliation set out above is based on a rate of 28 per cent (2008: 30%). There were no material changes during the 53 weeks ended 3 May 2009 in the tax rates applicable to profits taxed in countries other than the UK.

Included in the total tax charge for the year is a credit of £4,030,000 (2008: £1,058,000) relating to amortisation of intangible assets acquired in business combinations, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, restructuring costs, an exceptional contract loss and prior year research and development tax credits.

10. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares held in treasury or by the Scott Wilson Holdings Ltd Employee Share Ownership Trust.

	53 weeks ended 3 May 2009				52 weeks ended 27 April 2009
	Adjusted *	Recurring Adjustments Note (i)	Other Adjustments Note (ii)	Total	Adjusted *	Recurring Adjustments Note (i)	Other Adjustments Note (ii)	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Profit attributable to equity holders of the Company	14,947	(3,093)	(4,161)	7,693	15,766	(2,468)	-	13,298
Weighted average number of Ordinary Shares in issue (thousands)	74,918	74,918	74,918	74,918	74,969	74,969	74,969	74,969
Basic earnings per share (p)	19.95	(4.13)	(5.55)	10.27	21.03	(3.29)	-	17.74
Weighted average number of Ordinary Shares in issue (thousands)	74,918	74,918	74,918	74,918	74,969	74,969	74,969	74,969
Dilutive effect of share options	451	451	451	451	2,604	2,604	2,604	2,604
Dilutive effect of business combination deferred consideration shares	254	254	254	254	235	235	235	235
Diluted weighted average number of Ordinary Shares in issue (thousands)	75,623	75,623	75,623	75,623	77,808	77,808	77,808	77,808
Diluted earnings per share (p)	19.76	(4.09)	(5.50)	10.17	20.26	(3.17)	-	17.09

* Before items described in note (i) and note (ii) below.

Note (i): Recurring adjustments - Amortisation of business combination intangibles, changes in the fair value of derivative financial instruments and retention bonuses arising from acquisitions, as detailed further in note 3. 

Note (ii): Other adjustments - Redundancy costs, an exceptional contract loss and prior year research and development tax credits, as detailed further in note 4.

Adjusted earnings per share

The Directors believe that the presentation of adjusted earnings per share assists with the understanding of the results of the Group. Adjusted earnings per share is earnings per share adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, redundancy costs, an exceptional contract loss and prior year research and development tax credits.

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
	£'000	£'000
Profit attributable to equity holders of the Company	7,693	13,298
Amortisation of business combination intangibles	2,785	2,455
Retention bonuses arising from acquisitions	25	438
Changes in the fair value of derivative financial instruments	1,487	633
Redundancy costs	4,262	-
Contract loss	2,725	-
Tax relating to amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, redundancy costs and an exceptional contract loss, and prior year research and development tax credits	(4,030)	(1,058)
Adjusted profit attributable to equity holders of the Company	14,947	15,766
Weighted average number of Ordinary Shares in issue (thousands)	74,918	74,969
Adjusted basic earnings per share (p)	19.95	21.03
Weighted average number of Ordinary Shares in issue (thousands)	74,918	74,969
Dilutive effect of share options	451	2,604
Dilutive effect of business combination deferred consideration shares	254	235
Diluted weighted average number of Ordinary Shares in issue (thousands)	75,623	77,808
Adjusted diluted earnings per share (p)	19.76	20.26

No options over the Ordinary Shares of the Company have been awarded since 3 May 2009.

11. RECONCILIATION OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

	Total £'000
At 27 April 2008	78,912
Changes in equity in 2009:
New shares issued net of issue costs	473
Purchase of Ordinary shares	(2,116)
Expense recognised directly in equity	(4,432)
Profit for the period attributable to equity holders of the Company	7,693
Dividends declared on Ordinary shares	(2,828)
Other movements	647
At 3 May 2009	78,349

12. Dividends

A dividend equivalent to 2.4p per Ordinary Share in relation to the 52 weeks ended 27 April 2008, totalling £1,828,000, was declared in September 2008 and paid in October 2008.

An interim dividend for the 53 weeks ended 3 May 2009 of 1.33p per Ordinary Share, totalling £1,328,000, was declared and paid in February 2009.

The total cost of the dividends stated above is net of the amounts paid to the Scott Wilson Holdings Ltd Employee Share Ownership Trust.

No dividends have been declared by the Company subsequent to 3 May 2009.

The Directors are proposing a final dividend for the 53 weeks ended 3 May 2009 of 2.67p per Ordinary Share. As this dividend is subject to approval by shareholders at the Annual General Meeting, it is not reflected as a liability at 3 May 2009.

13. Cash generated from operations

	53 weeks ended	52 weeks ended
	3 May 2009	27 April 2008
		Restated (i)
	£'000	£'000
Operating profit	10,723	18,595
Share of result of joint ventures	(3,210)	(1,538)
Loss / (profit) on sale of tangible fixed assets	49	(930)
Defined benefit pension plan current service cost	2,946	4,396
Depreciation	5,388	4,631
Amortisation	4,634	3,872
Increase in receivables and prepayments	(5,927)	(15,475)
(Decrease) / increase in payables and accruals	(522)	16,104
Increase in provisions	573	244
Share-based compensation expense	755	622
Cash generated from operations	15,409	30,521

Note (i): Restated for the presentation of changes in the fair value of exchange rate derivative financial instruments as detailed further in note 5.

14. Reconciliation of adjusted Group results

The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted profit before taxation assist with the understanding of the results of the Group. 

Adjusted operating profit is operating profit adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, the Group's share of taxation in relation to joint ventures, redundancy costs and an exceptional contract loss.

Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures.

Adjusted profit before taxation is profit before taxation adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, the Group's share of taxation in relation to joint ventures, redundancy costs and an exceptional contract loss.

A reconciliation of these measures to Group operating profit is given below.

	53 weeks	52 weeks
	ended	ended
	3 May 2009	27 April 2008
		Note (i)
	£'000	£'000
Statutory operating profit	10,723	18,595
Amortisation of intangible assets acquired in business combinations	2,785	2,455
Retention bonuses arising from acquisitions	25	438
Group's share of taxation relating to joint ventures	1,270	578
Changes in fair value of forward foreign exchange contracts	812	524
Redundancy costs	4,262	-
Exceptional contract loss	2,725	-
Adjusted operating profit	22,602	22,590
Net finance (costs) / income	(642)	1,262
Adjusted profit before taxation	21,960	23,852
Adjusted operating margin	6.3%	7.0%

Note (i): Restated for the presentation of changes in the fair value of exchange rate derivative financial instruments, as detailed further in note 5.

 

END

 

 

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