Interim Results

RNS Number : 4908B

W.H. Ireland Group PLC

18 August 2008

 



WHI 18 August 2008 WH IRELAND GROUP PLC ('WH Ireland or 'the Group' or 'the Company') Interim Results for the six months ended 31 May 2008 Quoted on AIM, WH Ireland is an established financial services group with four distinct activities, corporate finance, financial services, investments and stockbroking. Key Points Turnover of £16.2m (2007: £21.5m) Operating profit of £0.575m (2007: £1.1m) Pre-tax loss of £0.685 (2007: profit of £3.8m) Equity shareholders funds increased to £20.7m (2007: £18.4m) equating to 118p per share (2007: 113p) - Cash injection of £2.9m from consortium of new investors as well as employees and associates of the   Group Proposed interim dividend of 1.0p per share (2007: 2.0p)  Total funds under management and control of £2bn, up 9% from year end - WH Ireland UK Growth Trust grown to £95m, up 7.75% since year end  Commenting on results, Chairman, Rupert Lowe, said,  'After such a turbulent period in the financial markets, it is pleasing to report an operating profit for the six months ended 31 May 2008, with the balance sheet and cash position also continuing to strengthen. A great deal has happened during the period under review which has positive implications for the Company longer term, offering the potential to secure new business as well as raising our profile in the market.  Whilst the current turmoil in the financial markets may be responsible for a short term downturn in revenues, it will bring with it new opportunities for those able to take advantage of them. We continue to focus on positioning the business so that we are well placed to benefit from such opportunities.' Enquiries: Laurie Beevers WH Ireland Tel: [phone] (today) Tel: [phone] Zoë Biddick   Biddicks Tel: [phone] Tom Durie Oriel Securities Limited Tel: [phone] Chairman's Statement Results and Dividends After such a turbulent period in the financial markets and arguably the most testing in 20 years, turnover in all divisions was lower during the period giving rise to an overall decline of 25 per cent. to £16.2 million (2007: £21.5 million), and a revaluation of our investments has resulted in an overall loss before taxation of £685,000 (2007: £3.8 million profit). We are pleased to report in the six months to 31 May 2008 an operating profit of £575,000 which reflects the fact that our cost base has adapted to the decrease in turnover.  The balance sheet and cash position of the Company has, however, again improved. The injection of £2.9 million by a consortium of new investors as well as employees and associates of the Company, together with cash generated from our operating and investing activities resulted in a total increase of £4.2 million to £11.3m in cash and cash equivalents (including settlement cash) at the period end. As at 31 May 2008, the total equity shareholders' funds (excluding minority interests) of the Group stood at £20.7 million (2007: £18.4 million).  Despite the significant falls in global stockmarkets, our funds under management and control increased in both the UK and Australia. Total funds within the Group increased by an impressive 9 per cent. from the year end and now amount to just under £2 billion.  The MFM WHI UK Growth Trust, the principal objective of which is to provide long term capital growth from a concentrated portfolio of assets, out-performed both its primary peer benchmark and the FTSE 350 Index during the period and was valued at just under £95 million at the end of the period, an increase of 7.75 per cent. since the year end.  As a reflection of the strength of our balance sheet, but with an eye on current market circumstances, we are declaring an interim dividend of 1p per share (2007: 2.0p per share) to be paid on 10 October 2008 to shareholders on the register on 29 August 2008. Once again, a scrip dividend alternative will be offered.   Recent Developments & Board Changes A great deal has happened over the period under review which has positive implications for the Company longer term. A consortium of high profile individuals who have been highly successful in their chosen fields of business including Lord Marland of Odstock, David Ross, David Whelan, Roland Rudd and Theodore Agnew have made a significant purchase of a mixture of existing and new shares in WH Ireland and now have an interest totalling 27.4 per cent. Some of our staff also invested at the same time as the consortium. I believe this deal exemplifies the best principles of co-investment with Lord Marland, Roland Rudd and myself joining the Board of the Company to work alongside the people who have been responsible for building WH Ireland over the last 10 years. The consortium brings with it excellent contacts which will undoubtedly provide increased opportunities enabling us to secure new business as well as raising our profile in the market. The current dislocation in the financial markets may be responsible for a short term downturn in revenues but it will bring with it new opportunities for those able to take advantage of them. Being in an 'offer period' is often not ideal for a financial organisation with all the attendant uncertainty which unsettles both staff and clients alike. The Company had been subject to a number of approaches in the latter part of 2007 although none ultimately resulted in a formal bid. The investment by the consortium and the subsequent Board changes have enabled us to address longer term strategies for the Group with confidence and to support both the expansion of our three current primary businesses and our objective of continued growth organically, by acquisition and through strategic partnerships. These developments have afforded the newly constituted Board the opportunity of planning and recruiting for the future and I am delighted to report that Richard Ford has been appointed as our new Chief Executive with effect from 17 September. Richard has immense experience in financial services and asset management, both in the UK and overseas, enabling him to focus individuals, teams and businesses on the opportunities and risks that are prevalent in all stages of the economic cycle.  Richard is also a qualified barrister and brings with him vital qualities which, in today's regulatory environment, are essential. We all look forward to working with Richard both to improve existing structures within the Company and plan for future growth. Richard will succeed Laurie Beevers, who will assume the position of Executive Deputy Chairman with particular responsibility for our stockbroking operations. My thanks and those of the Board are due to Sir David Trippier, my predecessor as Chairman, and John Lawrence, former non-executive Director, who retired from the Board on 21 April, for their services to WH Ireland over a substantial number of years.  Trading The turmoil in world equity markets during the period under review has been well documented. Volatility has remained high and share prices have been in decline. The performances of the UK and Australian stockmarkets where our principal activities reside have been similar although, as the Australian market initially proved more resilient to sub-prime issues in 2007, the rate of decline in Australia has recently been faster than that in the UK. The decline in stockmarket activity, however, has been less well-chronicled. In the second half of 2007, activity was subdued but as 2008 progressed, the slowdown became more pronounced. In the period under review, the value of equity business transacted on the London Stock Exchange was down over 20 per cent. in volume terms compared to the same period in the previous year. This has had a pronounced impact on our stockbroking business in both the UK and in Australia. However, as stated earlier, funds under management and control in both the UK and Australia continued to record impressive growth. During the period under review, we have recruited additional personnel in our securities business, particularly in corporate broking and research, so that there are now 33 people employed. Our strength is in assisting smaller growth companies, typically in the sub-£100 million sector, in raising capital for them and ensuring an active aftermarket in the shares of our corporate clients. WH Ireland's Institutional Equities team was recently ranked 10th overall in this year's UK and Ireland Starmine broker awards, our first year of entry. Two of our analysts were also rated in the top 10 for their categories. The impact of the credit crunch on corporate transactions in the UK is evidenced by the fact that there were just 54 AIM flotations in the first 5 months of 2008 compared to 30 in the month of December 2007 alone and 284 for the whole of 2007. Nevertheless, WH Ireland completed 17 transactions in the period under review including 7 AIM IPOs and 8 secondary fundraisings, raising a total of more than £40 million for our corporate clients. Our embryonic mergers and acquisitions capability has expanded our services offering and is looking to provide opportunities for our existing client base currently comprising 74 clients, of which 71 are quoted on AIM. Our annual retainer income continues to more than cover the employment costs of our securities business. As with stockbroking, our financial services business has been impacted by the enormous volatility seen in markets worldwide but, in addition, it has also suffered from certain personnel changes. However, our Bristol IFA businesses acquired in the final weeks of our last financial year have performed broadly in line with budget, which is encouraging.  Investments During the period, a profit of £22,000 was generated by the sale of available for sale investments. However, the fall in global securities prices adversely impacted the fair value of our investments which has resulted in a net loss £655,000 compared to the previous year's gain of £1,963,000. Nevertheless, as at 31 May 2008, the total value of our investments in the Company's balance sheet exceed £4,534,000.   Outlook A definition of 'credit' is 'suspicion asleep' and there can be no disputing the fact that 'suspicion' is alive and well in the markets today. The true extent of the folly of many of the structured products created by the majority of Banks over the recent past has been exposed by and contributed to the current bear market. This not only resulted in a loss of confidence but, as there remains significant risk of bad debts as the leverage which has built up is unwound, it is difficult to see an early end to the current malaise in the Anglo-Saxon economies. From a global perspective, the bear market is now 12 months old and until confidence returns equity markets will remain enormously volatile. Growth in Russia, Eastern Europe, South America, Asia, and India is likely to continue and will in all probability provide the resolution to the current problems. We need to be in a position to help our customers take advantage of the economic upturn when it arrives. Against this backdrop conditions have remained difficult since the half year end and we are still to see a leveling out in stock exchange volumes and activity.  Our staff are our most important asset and I would like to thank them all for their loyalty, energy and commitment over what has been a difficult six months. Rupert Lowe Chairman 18 August 2008 Consolidated income statement

for the half year ended 31 May 2008

Unaudited

Half year ended  31 May 2008 Half year ended  31 May 2007 Year ended 30 November 2007 Note £'000 £'000 £'000 Revenue 2 16,155 21,543 42,727 Administrative expenses (15,580) (20,455) (41,292) Operating profit 575 1,088 1,435 Share of (loss) / profit of associates (164) 104 170 Impairment losses on goodwill 3 (350) - (100) Profit on disposal of available-for-sale investments 22 401 401 Fair value (losses) / gains on investments (630) 2,094 1,963 Income from investments 4 17 36 Impairment losses on available-for-sale investments (25) - (46) Finance income  215 363 752 Finance expense (332) (260) (596) (Loss) / profit before taxation (685) 3,807 4,015 Taxation (20) (1,019) (1,222) (Loss) / profit after taxation (705) 2,788 2,793 Attributable to: Minority interest (25) 159 114 Equity shareholders of the Parent (680) 2,629 2,679 (705) 2,788 2,793 Earnings per share 10 Basic (4.02)p 17.17p 16.85p Diluted (4.02)p 15.71p 15.35p Consolidated statement of recognised income and expense

for the half year ended 31 May 2008

Unaudited

Half year ended  31 May 2008 Half year ended  31 May 2007 Year ended 30 November 2007 £'000 £'000 £'000 Foreign exchange translation differences 433 79 164 Revaluation of freehold properties - - 1,899 Change in fair value of assets classified as available-for-sale net of tax (286) (17) (1,190) Net change in fair value of available-for-sale financial assets transferred to income statement net of tax (16) (281) (289) Net income / (expenses) recognised directly in equity 131 (219) 584 (Loss) / profit for the period / year (705) 2,788 2,793 Total recognised income and (expense) for the period (574) 2,569 3,377 Total recognised income and expense for the period is attributable to: Equity holders of the parent (602) 2,345 3,233 Minority interest 28 224 144 (574) 2,569 3,377

Consolidated balance sheet

as at 31 May 2008

Unaudited

31 May 2008 31 May 2007 30 November 2007 Note £'000 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 4 9,558 7,111 9,791 Goodwill 3,581 3,386 3,922 Intangible assets 719 100 741 Associates 847 994 974 Investments  5 4,534 8,309 5,690 Loan note receivable 315 - - Deferred tax asset 59 136 116 19,613 20,036 21,234 Current assets Trade and other receivables 84,504 213,871 99,760 Other investments 525 332 - Cash and cash equivalents 6 11,318 15,450 8,002 96,347 229,653 107,762 Total assets 115,960 249,689 128,996 LIABILITIES Current liabilities Trade and other payables (87,506) (221,327) (100,867) Bank overdraft 6 - - (948) Borrowings (916) (587) (542) Current income tax liabilities (3) (1,374) (527) Obligations under finance leases - (1) - (88,425) (223,289) (102,884) Non-current liabilities Borrowings (2,878) (3,465) (3,307) Deferred tax liability (827) (962) (977) Accruals and deferred income (2,255) (3,021) (2,405) Liability for put and call options (275) (243) (243) Provisions (190) (12) (136) (6,425) (7,703) (7,068) Total liabilities (94,850) (230,992) (109,952) Total net assets 21,110 18,697 19,044 EQUITY Share capital 7/8 1,050 824 860 Share premium 8 5,573 2,002 2,614 Available-for-sale reserve 8 331 1,798 613 Revaluation reserve 8 1,971 615 1,971 Foreign exchange reserve 8 544 80 164 Other reserves 8 1,472 1,472 1,472 Retained earnings 8 10,116 11,651 11,276 Treasury shares 8 (287) (88) (287) Total shareholders equity 20,750 18,354 18,683 Minority interest 8 360 343 361 Total equity 8 21,110 18,697 19,044

Consolidated cash flow statement

for the half year ended 31 May 2008

Unaudited

31 May 2008 31 May 2007 30 November 2007 £'000 £'000 £'000 Cash flows from operating activities (Loss) / Profit for the year (705) 2,788 2,793 Adjustments for: Depreciation, amortisation and impairment 588 185 250 Financial income (215) (363) (752) Financial expense 332 260 596 Taxation 20 1,019 1,222 Share of (loss) / profit of associates 164 (104) (170) Changes in investments 633 (2,495) (2,318) Gain on sale of property, plant and equipment (8) (17) (34) Non-cash adjustment for share option charge 61 23 40 (Increase) / decrease in trade and other receivables 15,256 (137,221) (23,140) Increase / (decrease) in trade and other payables (13,425) 139,343 18,707 Increase in current asset investments (525) (321) 11 Tax paid (502) (1,478) (2,707) Net cash from operating activities 1,674 1,619 (5,503) Cash flows from investing activities Proceeds from sale of property, plant and equipment 220 40 73 Proceeds from sale of investments 1,361 1,923 2,118 Interest received 215 363 752 Acquisition of subsidiary, net of cash acquired - (1,007) (1,008) Acquisition of associates (350) (141) (500) Acquisition of property, plant and equipment (94) (1,213) (2,222) Acquisition of investments (1,236) (592) (616) Income from investments 4 17 36 Net cash from investing activities 120 (610) (1,367) Financing activities Proceeds from issue of share capital 3,053 80 384 Dividends paid (444) (340) (633) Acquisition of treasury shares - - (200) Repayment of borrowings (55) 135 (66) Payment of finance lease obligations - (3) (4) Interest paid (178) (260) (386) Net cash from financing activities 2,376 (388) (905) Net increase (decrease) in cash and cash equivalents 4,170 621 (7,775) Cash and cash equivalents at beginning of period 7,054 14,773 14,773 Effect of foreign exchange movements 94 56 56 Cash and cash equivalents at end of period 11,318 15,450 7,054 Clients settlement cash 8,220 8,948 3,575 Firms cash 3,098 6,502 3,479 Cash and cash equivalents at end of period 11,318 15,450 7,054

Notes to the consolidated interim financial statements 

for the half year ended 31 May 2008

1. Basis of preparation    

These consolidated interim financial statements have been prepared in accordance with recognition and measurement requirements of International Financial Reporting Standards ('IFRS'), as adopted by the European Union (EU), and are the Group's first consolidated interim financial statements for part of the period covered by the first IFRS annual financial statements. IFRS 1 (First-time adoption of International Financial Reporting Standards) has been applied. 

These consolidated interim financial statements have been prepared in accordance with the disclosure requirements of AIM Rules and the recognition and measurement criteria of those adopted IFRSs in issue and that will be effective at the Group's first IFRS annual reporting date, excluding IAS 34 (Interim financial reporting). The Board of Directors have made assumptions about the accounting policies expected to be adopted when the first IFRS financial statements are prepared for the year ending 30 November 2008. The consolidated interim financial statements are condensed and do not include all of the information required for full annual financial statements.

The IFRSs that will be effective in the annual financial statements in respect of the year ending 30 November 2008 are still subject to change and therefore cannot be determined with certainty. Accordingly, the accounting policies for that annual period that are relevant to this interim financial information will be determined only when the first IFRS financial statements are prepared for the year ending 30 November 2008. 

These consolidated interim financial statements are presented in sterling and are prepared on the historical cost basis with the exception of certain financial instruments and freehold property, that are stated at their fair value.

The comparative figures for the financial year ended 30 November 2007 are not the company's statutory accounts for that financial year. Those accounts have not 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. 

First-time adoption of IFRS

IFRS 1 requires that accounting policies be adopted that comply with IFRS effective at the first reporting date, and for those policies to be applied retrospectively to all periods presented in the first IFRS financial statements. However, IFRS 1 provides a number of optional exemptions to this requirement, of which the Group have chosen to take advantage of the following:

• IFRS 3 (Business combinations) has not been applied retrospectively to business combinations that took place prior to 1 December 2006, the date of transition to IFRS;

• IFRS 2 (Share-based payment) has not been applied to equity instruments that were granted before 7 November 2002 or to those that were granted after 7 November 2002 that vested before the later of 1 January 2005. and the date of transition to IFRS;

• IAS 21 (The effects of changes in foreign exchange rates) has not been applied to foreign exchange differences at the date of transition. 

The preparation of interim financial statements in accordance with IFRS has resulted in changes to the accounting policies as compared with the most recent annual financial statements prepared under UK GAAP. The accounting policies set out in note 11 (f) have been applied consistently to all periods presented in these consolidated interim financial statements. They have also been applied in preparing an opening IFRS balance sheet at 1 December 2006 for the purposes of the transition to IFRS, as required by IFRS 1. The impact of the transition from UK GAAP to IFRS is explained in Note 11. 

The Group has not early adopted the following amendments to existing standards that will become effective in future periods:

• IAS 1 (Presentation of financial statements). Effective from 1 January 2009. Requires the separate presentation of changes in equity arising from transactions with owners and non-owner changes and introduces new titles for primary financial statements.
• IAS 23 (Borrowing costs).  Effective from 1 January 2009. The amendment to the standard is still subject to endorsement by the EU. It requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. This standard is currently not applicable to the group as there are no qualifying assets.

• IAS 27 (Consolidated and separate financial statements).  Effective from 1 July 2009. Requires the effects of all transactions with non-controlling interests (previously 'minority interests') to be recorded in equity if there is no change in control. They will no longer result in goodwill or gains and losses. The impact of the amendment on future transactions is not readily determinable.

• IAS 32 (Financial instruments: Presentation).  Effective from 1 January 2009. Introduces changes to the classification of puttable financial instruments as a liability or equity. The impact of the amendment on future transactions is not readily determinable.

• IFRS 2 (Share-based payment). Effective from 1 January 2009. Clarifies the treatment of 'vesting conditions' and 'cancellations' as they relate to features of a share-based payment transaction. The impact of the standard on future transactions is not readily determinable.

• IFRS 3 (Business combinations). Effective from 1 July 2009. Introduces changes for acquisition accounting which impact on the initial and subsequent valuation of the purchase consideration, the calculation of goodwill and the treatment of transaction costs. The impact of the standard on future acquisitions is not readily determinable.

• IFRS 8 (Operating segments). Effective from 1 January 2009 and supersedes IAS 14 (Segment reporting). Requires segment information to be presented on the same basis as that used for internal reporting purposes. Some amendments to the disclosures made for segmental performance are likely. 

• Annual improvements process. Effective from 1 January 2009. The International Accounting Standards Board (IASB) issued its latest standard on 22 May 2008. This is the first standard to be published under the IASB's annual improvements process, dealing with non-urgent, minor amendments to standards and includes 35 amendments.

2. Segment reporting

The following tables provide analyses of Group revenues by geographical location and by activity:

By geographical location - Revenue

	Half year ended  31 May 2008	Half year ended  31 May 2007	Year ended 30 November 2007
	£'000	£'000	£'000
United Kingdom	12,658	17,446	32,655
Australia	3,497	4,097	10,072
	16,155	21,543	42,727

By geographical location - (Loss) / Profit before Interest and Tax

	Half year ended  31 May 2008	Half year ended  31 May 2007	Year ended 30 November 2007
	£'000	£'000	£'000
United Kingdom	(272)	3,008	2,444
Australia	(296)	696	1,415
	(568)	3,704	3,859

By activity - Revenue

	Half year ended  31 May 2008	Half year ended  31 May 2007	Year ended 30 November 2007
	£'000	£'000	£'000
Stockbroking	11,296	14,787	29,019
Corporate finance	3,659	5,739	11,810
Financial services and other	1,200	1,017	1,898
	16,155	21,543	42,727
No analysis of profit has been given by activity as all expenses, assets and liabilities relate jointly to these segments. Any allocations of these items would be arbitrary.

3. Goodwill impairment 

As a result of current trading conditions, the Directors have undertaken an impairment review of the carrying value of the goodwill and an impairment provision has been made. 

4. Property, plant and equipment

Property, plant and equipment includes freehold property with a carrying value, at 31 May 2008, of £8,493,921 (31 May 2007 £5,960,334 and 30 November 2007 £8,506,000).  

The freehold property in Manchester was valued at £8,250,000 on 10 October 2007 by Lambert Smith Hampton, Chartered Surveyors, at which date the property had a historical cost of £5,342,200. The freehold property in Lancaster was valued at £256,000 on 19 October 2007 by Mortimers, Chartered Surveyors, at which date the property had a historical cost of £148,385.

No significant expenditure relating to property, plant and equipment has been incurred in the half year ended 31 May 2008.

5. Investments

			Half year ended 31 May 2008	Half year ended 31 May 2007	Year ended 30 November 2007
			£’000	£’000	£’000
Available-for-sale investments
Fair value:	quoted		473	1,027	800
	unquoted		967	2,695	1,199
			1,440	3,722	1,999
Investments at fair value through the income statement
Fair value:		quoted	1,558	1,084	1,271
		warrants	1,536	3,503	2,420
			3,094	4,587	3,691
Total investments			4,534	8,309	5,690
In the case of quoted investments, fair value represents the quoted bid price at the balance sheet date. The fair value of unquoted investments is estimated by reference to recent arm’s length transactions. In the case of warrants, fair value is estimated using established valuation models.

6. Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances, bank overdrafts repayable on demand and short term highly liquid investments with a maturity of three months or less. 

Cash and cash equivalents represents the Group's own money and money held for settlement of outstanding transactions and excludes free money held on trust on behalf of clients. Free money at 31 May 2008 was £93.7m (31 May 2007 £66.8m; 30 November 2007 £ 70.9m.)

Cash and cash equivalents appearing in the balance sheet include a restricted cash balance of £8.2m (31 May 2007 £8.9m; 30 November 2007 £3.5m) which relates to client settlement cash and is not available for use in day-to-day operations.

7. Share capital

85,002 new ordinary shares of 5 pence each were issued on the 24 April 2008 at a price of 114 pence per share in satisfaction of the final dividend for the year ended 30 November 2007.

On 14 May 2008, the Company issued 2,300,000 ordinary shares of 5 pence each at a price of 100 pence per share to members of a consortium led by Lord Jonathon Marland, Rupert Lowe and Roland Rudd.

On 30 May 2008, the Company issued 590,000 ordinary shares of 5 pence each at a price of 100 pence per share to employees of the Company and self employed associates working for the Company.

During the period, the company issued 830,667 ordinary shares following the exercise of options relating to the Group's Executive Share Option Scheme. The nominal value of the shares issued was 5 pence and the total consideration was £263,000.  

8. Reconciliation of changes in shareholders' equity

	Share capital	Share premium	Available for-sale-reserve	Revaluation reserve	Foreign exchange reserve	Other reserves	Retained earnings	Treasury shares	Total share-holders equity	Minority interest	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 December 2007	860	2,614	613	1,971	164	1,472	11,276	(287)	18,683	361	19,044
Loss for the period	-	-	-	-	-	-	(705)	-	(705)	-	(705)
Shares issued	186	2,867	-	-	-	-	65	-	3,118	-	3,118
Employee share option scheme	-	-	-	-	-	-	(4)	-	(4)	-	(4)
Shares issued on scrip dividends	4	-	-	-	-	-	-	-	4	-	4
Share premium on scrip dividends	-	92	-	-	-	-	-	-	92	-	92
Payment of prior year dividends	-	-	-	-	-	-	(516)	-	(516)	-	(516)
IFRS Deferred tax adjustment	-	-	118	-	-	-	-	-	118	-	118
Investment revaluation	-	-	(420)	-	-	-	-	-	(420)	-	(420)
Exchange rate adjustments	-	-	-	-	380	-	-		380	53	433
Dividends paid to minority interests	-	-	-	-	-	-	-	-	-	(29)	(29)
Share of retained loss after tax	-	-	-	-		-	-	-	-	(25)	(25)
Balance at 31 May 2008	1,050	5,573	311	1,971	544	1,472	10,116	(287)	20,750	360	21,110

9. Dividend

The interim dividend declared for the half year ended 31 May 2008 of 1 pence per share is payable on 10 October 2008 to shareholders on the register as at the close of business on 29 August 2008. In accordance with the Group's accounting policies, this interim dividend is not recognised as a liability at 31 May 2008.

10. Earnings per share 

Basic earnings per share is calculated with reference to earnings attributable to ordinary shareholders and the weighted average number of shares in issue during the period.

Diluted earnings per share is the basic earnings per share, adjusted for the effect of conversion into fully paid shares of the weighted average number of all employee share options outstanding during the period.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

	Half year ended  31 May 2008	Half year ended  31 May 2007	Year ended 30 November 2007
Weighted average number of shares in issue during the period	17,538,485	16,240,966	16,573,548
Effect of share options	1,050,330	1,509,712	1,619,354
	18,588,815	17,750,678	18,192,902
	£'000	£'000	£'000
Earnings attributable to ordinary shareholders	(705)	2,788	2,793
Earnings per share - basic	(4.02)p	17.17p	16.85p
Earnings per share - diluted	(4.02)p	15.71p	15.35p

The loss during the current period ended 31 May 2008 can not be diluted.

11. Explanation of transition to IFRS 

The Group's consolidated financial statements for the year ending 30 November 2008 will be the first annual financial statements to comply with International Financial Reporting Standards (IFRS), as adopted by the EU. These consolidated interim financial statements have been prepared in accordance with IFRS, as adopted by the EU, as part of the period covered by those first IFRS consolidated annual financial statements.  

In accordance with IFRS 1 (First-time adoption of International Financial Reporting Standards), the Group's accounting policies under IFRS have been applied retrospectively at 1 December 2006, the date of transition to IFRS. In preparing the opening IFRS balance sheet and the comparative information for the half year ended 31 May 2007 and for the year ended 30 November 2007, the Group has adjusted amounts previously reported in financial statements prepared in accordance with UK GAAP.

An explanation of how the transition from UK GAAP to IFRS has affected the Group's financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables. The principal accounting policies applied in the preparation of these interim financial statements are presented after these tables. These policies have been applied to all periods presented in these interim financial statements.

a. Reconciliation of equity at 1 December 2006 (Date of transition to IFRS)

	UK GAAP (reformatted)		Effect of transition to IFRS			IFRS
	£'000		£'000	Note		£'000
ASSETS
Non-current assets
Property, plant and equipment	6,106					6,106
Goodwill	3,409					3,409
Intangible assets	100					100
Negative goodwill	(143)		143	a		-
Associates	837		7	a		844
Investments	6,913					6,913
Deferred tax asset	59					59
	17,281		150			17,431
Current assets
Trade and other receivables	76,329					76,329
Other investments	11					11
Cash and cash equivalents	14,819					14,819
	91,159					91,159
Total assets	108,440		150			108,590
LIABILITIES
Current liabilities
Trade and other payables	(83,120)					(83,120)
Bank overdraft	(46)					(46)
Borrowings	(315)					(315)
Current income tax liabilities	(1,828)					(1,828)
Obligations under finance leases	(4)					(4)
	(85,313)					(85,313)
Non-current liabilities
Borrowings	(3,595)					(3,595)
Deferred tax liability	(24)		(1,280)	b		(1,304)
Accruals and deferred income	(1,600)					(1,600)
Liability for put and call options	(379)					(379)
Provisions	(17)					(17)
	(5,615)		(1,280)			(6,895)
Total liabilities	(90,928)		(1,280)			(92,208)
Total net assets	17,512		(1,130)			16,382
EQUITY
Share capital	812					812
Share premium	1,786					1,786
Available-for-sale reserve	2,989		(897)	b		2,092
Revaluation reserve	667		(239)	b		428
Foreign exchange reserve	-		-			-
Other reserves	1,472					1,472
Retained earnings	9,377		6			9,383
Treasury shares	(86)					(86)
Total shareholder's equity	17,017		(1,130)			15,887
Minority interest	495					495
Total equity	17,512		(1,130)			16,382

Notes
Elimination of negative goodwill £143k and £7k in associates Deferred tax relating to available-for-sale investments, goodwill and revaluation reserve

b.  Reconciliation of profit for the half year ended 31 May 2007 

	UK GAAP (reformatted)		Effect of transition to IFRS			IFRS
	£'000		£'000	Note		£'000
Revenue	21,543					21,543
Administrative expenses	(20,568)		113	a		(20,455)
Operating profit	975		113			1,088
Share of profit of associates	104					104
Profit on disposal of available-for-sale investments	401					401
Fair value gains on investments	2,094					2,904
Income from investments	17					17
Finance income	363					363
Finance expense	(260)					(260)
Profit before taxation	3,694		113			3,807
Taxation	(1,019)					(1,019)
Profit for the period	2,675		113			2,788

Notes

a.	Write back goodwill amortisation £103k and elimination of negative goodwill £10k

c. Reconciliation of equity at 31 May 2007 

	UK GAAP (reformatted)		Effect of transition to IFRS			IFRS
	£'000		£'000	Note		£'000
ASSETS
Non-current assets
Property, plant and equipment	7,111					7,111
Goodwill	3,283		103	a		3,386
Intangible assets	100					100
Negative goodwill	(153)		153	b		-
Associates	987		7	b		994
Investments	8,309					8,309
Deferred tax asset	136					136
	19,773		263			20,036
Current assets
Trade and other receivables	213,871					213,871
Other investments	332					332
Cash and cash equivalents	15,450					15,450
	229,653					229,653
Total assets	249,426		263			249,689
LIABILITIES
Current liabilities
Trade and other payables	(221,327)					(221,327)
Borrowings	(587)					(587)
Current income tax liabilities	(1,374)					(1,374)
Obligations under finance leases	(1)					(1)
	(223,289)					(223,289)
Non-current liabilities
Borrowings	(3,465)					(3,465)
Deferred tax liability	-		(962)	d		(962)
Accruals and deferred income	(3,021)					(3,021)
Liability for put and call options	(243)					(243)
Provisions	(12)					(12)
	(6,741)		(962)			(7,703)
Total liabilities	(230,030)		(962)			(230,992)
Total net assets	19,396		(699)			18,697
EQUITY
Share capital	824					824
Share premium	2,002					2,002
Available-for-sale reserve	2,564		(766)	d		1,798
Revaluation reserve	667		(52)	d		615
Foreign exchange reserve	-		80	c		80
Other reserves	1,472					1,472
Retained earnings	11,612		39			11,651
Treasury shares	(88)					(88)
Total shareholder's equity	19,053		(699)			18,354
Minority interest	343					343
Total equity	19,396		263			18,697

Notes
a.	Write back goodwill amortisation £103k
b.	Elimination of negative goodwill £153k and £7k in associates
c. d.	Foreign exchange movement since IFRS transition £80k Deferred tax relating to available-for-sale investments, goodwill and revaluation reserve

d. Reconciliation of profit for the year ended 30 November 2007 

	UK GAAP (reformatted)		Effect of transition to IFRS			IFRS
	£'000		£'000	Note		£'000
Revenue	42,727					42,727
Administrative expenses	(41,491)		199	a		(41,292)
Operating profit	1,236		199			1,435
Share of profit of associates	158		12	b		170
Impairment losses on goodwill	(100)					(100)
Profit on disposal of available-for-sale investments	401					401
Fair value gains on investments	1,963					1,963
Income from investments	36					36
Impairment losses on financial assets	(46)					(46)
Finance income	752					752
Finance expense	(596)					(596)
Profit before taxation	3,804		211			4,015
Taxation	(1,222)					(1,222)
Profit for the period	2,582		211			2,793

Notes

a.	Write back goodwill amortisation £198k and elimination of negative goodwill £46k and write back of negative goodwill amortisation £45k (net effect £1k)
b.	Write back negative goodwill amortisation (£2k) and elimination of negative goodwill £14k

e. Reconciliation of equity at 30 November 2007 

	UK GAAP (reformatted)		Effect of transition to IFRS			IFRS
	£'000		£'000	Note		£'000
ASSETS
Non-current assets
Property, plant and equipment	9,791					9,791
Goodwill	3,733		189	a		3,922
Intangible assets	741					741
Negative goodwill	(144)		144	b		-
Associates	946		28	a / b		974
Investments	5,690					5,690
Deferred tax asset	116					116
	20,873		361			21,234
Current assets
Trade and other receivables	99,760					99,760
Cash and cash equivalents	8,002					8,002
	107,762					107,762
Total assets	128,635		361			128,996
LIABILITIES
Current liabilities
Trade and other payables	(100,867)					(100,867)
Bank overdraft	(948)					(948)
Borrowings	(542)					(542)
Current income tax liabilities	(527)					(527)
	(102,884)					(102,884)
Non-current liabilities
Borrowings	(3,307)					(3,307)
Deferred tax liability	-		(977)	d		(977)
Accruals and deferred income	(2,405)					(2,405)
Liability for put and call options	(243)					(243)
Provisions	(136)					(136)
	(6,091)		(977)			(7,068)
Total liabilities	(108,975)		(977)			(109,952)
Total net assets	19,660		616			19,044
EQUITY
Share capital	860					860
Share premium	2,614					2,614
Available-for-sale reserve	851		(238)	d		613
Revaluation reserve	2,566		(595)	d		1,971
Foreign exchange reserve	-		164	c		164
Other reserves	1,472					1,472
Retained earnings	11,223		53			11,276
Treasury shares	(287)					(287)
Total shareholder's equity	19,299		(616)			18,863
Minority interest	361					361
Total equity	19,660		(616)			19,044

Notes

a.	Write back goodwill amortisation £189k and £9k in associates
b.	Elimination of negative goodwill £144k and £19k in associates
c. d.	Foreign exchange movement since IFRS transition £164k Deferred tax relating to available-for sale investments, goodwill and revaluation reserve

f. Principal accounting policies  

Basis of consolidation

The consolidated financial statements incorporate the financial statements of WH Ireland Group plc and all its subsidiary undertakings. Subsidiaries are all entities in which the Group has a controlling interest, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are deconsolidated from the date control ceases. Intragroup balances and any unrealised gains or income and expenses arising from intragroup transactions are eliminated on consolidation. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment. For the purposes of the consolidated financial statements, uniform accounting policies have been followed by the Group.

In the company's accounts, investments in subsidiary undertakings are stated at cost less any provision for impairment.

Associates are those entities in which the Group has significant influence, but not control over their financial and operating policies. The consolidated interim financial statements include the Group's share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases.

Business combinations 

All business combinations are accounted for by applying the purchase method. The purchase method involves recognition, at fair value, of all identifiable assets and liabilities, including contingent liabilities, of the subsidiary at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. The cost of business combinations is measured based on the fair value of the equity or debt instruments issued and cash or other consideration paid, plus any directly attributable costs.

Goodwill arising on a business combination represents the excess of cost over the fair value of the Group's share of the identifiable net assets acquired and is stated at cost less any accumulated impairment losses. Goodwill is no longer amortised but is tested annually for impairment. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Negative goodwill arising on an acquisition is recognised immediately in the income statement. On disposal of a subsidiary the attributable amount of goodwill that has not been subject to impairment is included in the determination of the profit or loss on disposal.

In respect of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associate.

Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

Property, plant and equipment

Freehold land and buildings are stated in the balance sheet at their revalued amounts, being fair value at the date of revaluation, determined from market-based evidence by appraisal undertaken by professional valuers, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the balance sheet date. An increase arising on the revaluation of freehold land and buildings is credited to the revaluation reserve. A decrease arising on the revaluation of freehold land and buildings is charged as an expense to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation.

Plant and equipment is stated at cost less accumulated depreciation.

Depreciation is calculated, using the straight-line method, to write down the cost or revalued amount of property, plant and equipment over the assets' expected useful lives, to their residual values, as follows:

Computers, fixtures and fittings 4 to 7 years

Motor vehicles 4 years

The Group's freehold land and buildings are considered to have residual values of amounts equal to or greater than their carrying amounts. The current depreciation charge in respect of freehold land and buildings is therefore zero.

Intangible assets

Intangible assets acquired separately are measured, on initial recognition, at cost. Following initial recognition, intangible assets acquired separately are carried at cost less accumulated amortisation and any accumulated impairment. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. 

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite useful lives are amortised over their useful economic lives. The amortisation period and method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method and treated as changes in accounting estimates. Amortisation is calculated on a straight line basis to write down the cost of intangible assets to their residual values over four years. 

Associates

Associates are those entities in which the Group has significant influence but not control over their financial and operating polices. The consolidated interim financial statements include the Group's share of the total recognised gains and losses of associates, on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. Any goodwill shown as part of the carrying amount of the investment in an associate is no longer amortised but instead tested annually for impairment. Where the Group's share of losses exceeds its interest in an associate, the Group's carrying amount is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of an associate.

Financial assets

Initial recognition

The classification of financial assets at initial recognition depends upon the purpose for which they are acquired and their characteristics. Financial assets are measured initially at their fair value. Financial assets not at fair value through the income statement include any directly attributable incremental costs of acquisition or issue.

Financial assets classified as available-for-sale

Available-for-sale financial assets are financial assets designated as such on initial recognition or those that do not qualify to be classified in another category. They include equity investments, other than those in subsidiary undertakings and those equities which form part of the Carried Interest Bonus Scheme that are held for an indefinite period of time.

After initial measurement, available-for-sale financial assets are subsequently measured at fair value. In the case of listed investments, the fair value represents the quoted bid price of the investment at the balance sheet date. The fair value of unlisted investments is estimated by reference to recent arm's length transactions.

Unrealised gains and losses are recognised directly in equity in the 'available-for sale reserve'. When an available-for-sale financial asset is disposed of, the cumulative gain or loss previously recognised in equity is recognised in the income statement in 'profit on disposal of available-for-sale investments'. Losses arising from impairment are recognised in the income statement in 'impairment losses on available-for-sale investments' and removed from the available-for-sale reserve.

Financial assets classified as fair value through profit or loss 

In certain circumstances, financial assets may, on initial recognition, be designated to be measured at fair value with fair value changes through the income statement. They include warrants and those equity investments which form part of the Carried Interest Bonus Scheme. In the case of listed investments, the fair value represents the quoted bid price of the investment at the balance sheet date. The fair value of unlisted investments is estimated by reference to recent arms length transactions. In the case of warrants, the fair value is estimated using established valuation models. In the case of put and call options, the fair value is formula driven.

Gains or losses on financial assets classified as fair value through profit or loss are recognised in the income statement. 

Impairment of financial assets

The Group assesses, at each balance sheet date, whether there is objective evidence that a financial asset or a group of financial assets are impaired. In the case of financial assets classified as available-for-sale, a significant or prolonged decline in the fair value of the asset is considered in determining whether the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, less any impairment loss previously recognised is removed from equity and recognised in the income statement.

If, in a subsequent period, the fair value of an asset classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the income statement, the impairment loss is reversed through the income statement. 

Loan notes receivable

The loan notes were issued on 28 February 2008 by JBCM Holdings Limited in the form of £315,000 Unsecured Convertible Loan Notes 2008 - 2013. The notes will be redeemed as follows:

27 February 2011 £100,000

27 February 2012 £100,000

27 February 2013 £115,000

Loan notes are initially recognised as a financial asset at the fair value of the amount paid. Subsequent to initial recognition, loan notes (excluding embedded derivatives) are measured at amortised cost using the effective interest method.

Trade receivables

Trade receivables are measured on initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is objective evidence that the asset is impaired.

Other investments

Other investments, which relate to short term principal positions taken on behalf of clients on a matched basis, are recognised and derecognised on trade date. Other investments are measured at fair value which is determined directly by reference to published prices in an active market where available. Gains or losses arising from changes in fair value or disposal of other investments are recognised through the income statement.

Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances, short term highly liquid investments with a maturity of three months or less and bank overdrafts repayable on demand. Client settlement balances are included in cash but are separately disclosed in the Notes to the financial statements.

Trade payables

Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The directors consider that the carrying amount of trade payables approximates to their fair value.

Financial liabilities

Bank loans and loan notes are initially recognised as financial liabilities at the fair value of the consideration received. Subsequent to initial recognition, bank loans and loan notes are measured at amortised cost using the effective interest method.

Income taxes

Income tax on the profit or loss for the periods presented, comprising current tax and deferred tax, is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantively enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.

Deferred tax is provided for temporary differences, at the balance sheet date, between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The following temporary differences are not provided for:

• Goodwill not deductible for tax purposes;

• The initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and

• Temporary differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.

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 or substantively enacted at the balance sheet date.

A deferred tax asset is recognised for all deductible temporary differences and unused tax losses only to the extent that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Put call options

As part of the Group's acquisition of a majority stake in DJ Carmichael (part of WHI Australia), 51% interest being acquired in June 2005, there is an option for minority shareholders to put a proportion of their shares to the Group in a future period (31 March 2009 to 30 September 2009). The amounts which can be put to the Group under these options vary depending on other purchases of shares made by the Group but at 30 November 2007 represent 12% of the share capital of DJ Carmichael (2006: 23%). Additionally, the Group has a call option over the full minority interest. In combination with the put options, the call option has the effect of creating a forward purchase agreement over the element of shares covered by the put options.  The consideration payable under these options is formula driven but considered by the Directors as equating to market value of those shares at the point of exercise. 

The resulting obligation to the minority shareholders is accounted for as contingent consideration from the date of the original acquisition, with corresponding adjustments to goodwill.

The Group consolidates a higher proportion of the results of DJ Carmichael to reflect the higher ownership which would arise if, as is considered likely by the Directors, these put-options are exercised.  Consequently, the minority interest reserve has been reduced. 

Provisions

A provision is recognised when a present legal or constructive obligation has arisen as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Impairment of non-financial assets

The carrying amounts of the Group's non-financial assets are reviewed at each reporting date when events or circumstances indicate that the assets may be impaired. If any such indication exists or, as in the case of goodwill, when annual impairment testing is required, the asset's recoverable amount is estimated. 

The recoverable amount is the higher of the asset's fair value less costs to sell (or net selling price) and its value in use. Value in use is the discounted present value of estimated future cash inflows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. 

Impairment is identified at the individual asset level where possible. Where the recoverable amount of an individual asset cannot be identified, it is calculated for the smallest cash-generating unit ('CGU') to which the asset belongs. A CGU is the smallest identifiable group of assets that generates cash inflows independently. 

When the carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered to be impaired and is written down to its recoverable amount. An impairment loss is immediately recognised as an expense, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus.

Revenue

Revenue comprises brokerage commission, investment management fees, corporate finance fees, commission earned from the provision of independent financial advice and interest receivable in the course of ordinary investment management business and is stated net of VAT and foreign sales tax.

Commissions receivable are recognised when client instructions have been met in full. Fees receivable are recognised in the period in which the related service is provided. Interest receivable is recognised in the period in which it is earned. Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.

Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

Leases

Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in the income statement, on a straight line basis over the lease term.

Segment reporting

A segment is a distinguishable component of the Group that is engaged either in the provision of products or services (business segment) or in the provision of products or services within a particular economic environment (geographical segment), which are subject to risks and rewards that are different from those of other segments.

Foreign currencies

The Group's functional and presentation currency is sterling.

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate ruling at the balance sheet date. Exchange differences arising are included in the income statement.

Assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated at exchange rates ruling at the balance sheet date. Income and expense items are translated at the average exchange rate for the period. Exchange differences arising are recognised in a separate component of equity.

Employee benefits 

The Group contributes to employees' individual money purchase personal pension schemes. The assets of the schemes are held separately from those of the Group in independently administered funds. The amount charged to the income statement represents the contributions payable to the schemes in respect of the period to which they relate.

Short term employee benefits are those that fall due for payment within twelve months of the end of the period in which employees render the related service. The cost of short term benefits is not discounted and is recognised in the period in which the related service is rendered. Short term employee benefits include cash-based incentive schemes and annual bonuses.

Share-based payments

The share option programme allows Group employees to receive remuneration in the form of equity-settled share-based payments granted by the Parent company.

The Group has taken advantage of the transitional provisions of IFRS 2 (Share-based payment) in respect of equity-settled awards and has applied IFRS 2 only to awards granted after 7 November 2002 that had not vested before 1 December 2006.

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value of the options granted is measured using an option valuation model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance or service conditions are fulfilled (the 'vesting period'), ending on the date on which the relevant employees become fully entitled to the award (the 'vesting date'). The cumulative expense recognised for equity-settled transactions, at each reporting date until vesting date, reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of that period. 

Where the terms of an equity-settled award are modified, an incremental value is calculated as the difference between the fair value of the re-priced option and the fair value of the original option at the date of re-pricing. This incremental value is then recognised as an expense over the remaining vesting period in addition to the amount recognised in respect of the original option grant.

Where an equity-settled award is cancelled or settled (that is, cancelled with some form of compensation) it is treated as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and is designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. Any compensation paid up to the fair value of the award is accounted for as a deduction from equity. Where an award is cancelled by forfeiture, when the vesting conditions are not satisfied, any costs already recognised are reversed (subject to exceptions for market conditions).

INDEPENDENT REVIEW REPORT TO WH IRELAND GROUP PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 May 2008 which comprises: the consolidated income statement, consolidated statement of recognised income and expense, consolidated balance sheet, consolidated cash flow and the related explanatory notes. We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

As disclosed in note 11, the annual financial statements of the group will be prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU.

The accounting policies that have been adopted in preparing the condensed set of financial statements are consistent with those that the directors currently intend to use in the next annual financial statements. There is, however, a possibility that the directors may determine that some changes to these policies are necessary when preparing the full annual financial statements for the first time in accordance with IFRSs as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 31 May 2008 is not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRSs as adopted by the EU and the AIM Rules.

KPMG Audit Plc
Chartered Accountants 
Registered Accountant

15 August 2008

 

END

 

 

IR SFWFIWSASELA