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Alumasc Group Plc (ALU)

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Thursday 09 February, 2006

Alumasc Group Plc

Interim Results

Alumasc Group PLC
09 February 2006



                  THE ALUMASC GROUP PLC - INTERIM ANNOUNCEMENT


Alumasc, the premium building and engineering products group, recently
reclassified by FTSE under Construction & Materials, announces its results for
the half year ended 31 December 2005.

   • As previously indicated, pre-tax profit reduced - to £2.9m from £3.7m on
     continuing activities - due to the reduced Engineering profit.

   • Earnings per share on continuing activities reduced to 5.9p from 7.1p.

   • The interim dividend per share is maintained at 3.0p, reflecting the
     Board's confidence in the prospects for the second half-year.

   • Trading losses and redundancy costs at the discontinued activity, Copal
     Casting, cost £1.4m (before tax), as forecast in November.

   • Building Products moved strongly ahead, growing turnover by £4.0m
     (18.5%) to £25.9m and increasing profits by 5% to £2.5m.

   • Precision Engineering made considerable progress in securing new work to
     replace the business which ceased on the demise of Rover in April 2005, but
     contributed to the reduced Engineering profit.


John McCall, Chairman, stated "In recent years, the group's second half has
consistently outperformed the first half for reasons principally associated with
seasonal factors, including the incidence of holidays in our markets. The Board
has stated that it expects this bias in favour of the second half to continue,
indeed to increase in the current year. Progress with new projects and the level
of order books in those businesses where we enjoy the benefit of forward vision
lead the Board to expect an improving performance in each of our business areas
in the second half-year."


Presentation:


Today, from 09:30am to 10:30am, a presentation to broker's analysts and private
client investment advisers will be held at the offices of Bankside Consultants,
1 Frederick's Place, London EC2R 8AE.


Enquiries:

The Alumasc Group plc                                            01536 383844
Paul Hooper (Chief Executive)                              [email protected]
John McCall (Chairman)

Bankside Consultants Limited
Charles Ponsonby                                                020 7367 8851
                                                [email protected]



                              CHAIRMAN'S STATEMENT

Summary

Alumasc's profits before tax from continuing operations were £2.9 million in the
6 months to 31 December 2005. As the Board anticipated in its statements of
November and December 2005, these profits fell short of the £3.7 million earned
in the same period of the prior year, due to lower profits from the group's
Engineering activities. Profits from the group's Building Products activities,
which contributed two-thirds to the previous year's total, were slightly ahead
of the previous year.

The closure of Copal Casting, following extensive but unsuccessful efforts to
find a buyer, commenced on 18 November 2005 and is now virtually complete. This
has been a costly exercise but is consistent with the Board's strategy to focus
the group on its core premium building and engineering activities, where
know-how and service are recognised and valued by the market. The published
profit before tax of £2.9 million in the period excludes trading losses and
redundancy costs at Copal, which totalled £1.4 million, as forecast in November.

Earnings per share from continuing activities reduced from 7.1p to 5.9p.The
Board has declared an unchanged interim dividend of 3.0p per share, reflecting
its confidence in the prospects for the second half-year .

In January 2006, Alumasc was reclassified by FTSE from "Engineering and
Machinery" to "Construction and Materials", reflecting the growth achieved by
our Building Products activities in recent years.

Operations

Our Building Products activities moved strongly ahead in the six months, growing
turnover by £4.0 million (18.5%) to £25.9 million. Margins were somewhat lower
in the period due to project start-up costs and further investment in sales and
marketing, in contrast to some corresponding benefits in the prior year.
However, it is encouraging to see growth against the background of the UK
construction market, which declined in 2005 after 11 years of unbroken
expansion. Profits increased by 5% to £2.5 million.

The group's continuing Precision Engineering activities made considerable
progress in securing new work to replace the business which ceased on the demise
of Rover in April 2005. There was, in addition, a high level of new work
replacing old with existing customers. These factors in combination resulted in
turnover of £12.8 million, 8% below the previous year, together with higher
costs associated with the introduction of so many new products. Energy costs
were £0.2 million higher in the period. Profits of £0.6 million in the period
were £0.7 million lower as a result.

Our Industrial Products activities earned profits of £0.1 million (2004:£0.7
million). Rising metal prices boosted turnover at Brock Metals, disguising weak
demand from UK customers, while low demand from UK brewers similarly affected
Alumasc Dispense. Both Brock and Alumasc Dispense have new projects in hand and
have taken actions to improve performance in the second half.

In December 2005, the group achieved a rolling key objective of no days being
lost during the month through injury to employees. I believe this reflects the
emphasis placed on best practice towards health and safety throughout the group.

Financial

The group's net borrowings rose from £3.3 million at 30 June 2005 to £4.8
million at 31 December 2005 (2004: £3.4 million), in line with our normal 
working capital cycle.

The property previously occupied by GE Bissell & Co Ltd, whose business was sold
in January 2005, was disposed of in December 2005 for £0.8 million, resulting in
a gain of £0.2 million.

International Financial Reporting Standards have been used for the first time in
preparing the December 2005 statements and prior year figures have been restated
on a similar basis. The principal change follows the inclusion of our defined
benefit pension schemes deficit as a long-term liability of the group, with a
corresponding reduction in Capital and Reserves. Details of the impact of all
IFRS adjustments on the prior year are set out in Note 9 to the Accounts.

Prospects

In recent years, the group's second half has consistently outperformed the first
half for reasons principally associated with seasonal factors, including the
incidence of holidays in our markets. The Board has stated that it expects this
bias in favour of the second half to continue, indeed to increase in the current
year. Progress with new projects and the level of order books in those
businesses where we enjoy the benefit of forward vision lead the Board to expect
an improving performance in each of our business areas in the second half-year.


John McCall

Chairman 9 February 2006



Unaudited Consolidated Income Statement
for the half year ended 31 December 2005
                                                       Half year    Half year   Year ended
                                                     31 December  31 December      30 June
                                                            2005         2004         2005
                                                                  As restated  As restated
                                          Notes             £000         £000         £000
Continuing operations
Revenue                                       2           59,380       54,333      114,869
Cost of sales                                            (44,898)     (39,919)     (83,642)
                                                      ----------  -----------   ----------
Gross profit                                              14,482       14,414       31,227
Net operating expenses                                   (11,196)      (9,990)     (21,958)
                                                      ----------  -----------   ----------
Trading profit                                2            3,286        4,424        9,269
Profit on fixed asset disposals                              242            -            -
                                                      ----------  -----------   ----------
Operating profit                                           3,528        4,424        9,269
Finance revenue                                               17           21           24
Finance costs                                               (252)        (181)        (419)
Other finance expense - pensions                            (398)        (601)      (1,201)
Share of operating profit in associates       2               30           30           24
                                                      ----------  -----------   ----------
Profit before taxation                                     2,925        3,693        7,697
Income tax expense                            4             (844)      (1,219)      (2,586)
                                                      ----------  -----------   ----------
Profit for the period from continuing 
operations                                                 2,081        2,474        5,111

Discontinued operations
Loss for the period from discontinued                     
operations                                                (1,103)      (1,154)      (2,946)
                                                      ----------  -----------   ----------
Profit for the period attributable                           
to parent company equity holders                             978        1,320        2,165
                                                      ----------  -----------   ----------
Basic earnings/(loss) per share
                 - continuing operations                     5.9p         7.1p        14.6p
               - discontinued operations                    (3.1p)       (3.3p)       (8.4p)
                                                      ----------  -----------   ----------
                                              5              2.8p         3.8p         6.2p
                                                      ----------  -----------   ----------
Diluted earnings/(loss) per share
                 - continuing operations                     5.8p         7.1p        14.5p
               - discontinued operations                    (3.1p)       (3.3p)       (8.3p)
                                                      ----------  -----------   ----------
                                              5              2.7p         3.8p         6.2p
                                                      ----------  -----------   ----------

Unaudited Consolidated Statement of Recognised Income and Expense
for the half year to 31 December 2005                                                        
                                                       Half year    Half year   Year ended
                                                     31 December  31 December      30 June
                                                            2005         2004         2005
                                                                  As restated  As restated
                                                            £000         £000         £000
Income and expense recognised directly in equity
Actuarial gain /(loss) on defined benefit pensions        (3,249)         481          961
Movement in cash flow hedging position                       527            -            -
Tax on items taken directly to or transferred 
from equity                                                  727         (144)        (288)
                                                         -------  -----------   ----------
Net income / (expense) recognised directly in 
equity for the period                                     (1,995)         337          673
                                                         -------  -----------   ----------
Adoption of IAS 32 and 39                                   (148)           -            -
Profit for the year                                          978        1,320        2,165
                                                         -------  -----------   ----------
Total recognised income/(expense) for the year
attributable to parent company
equity shareholders                                       (1,165)       1,657        2,838
                                                         -------  -----------   ----------



Unaudited Consolidated Balance Sheet
at 31 December 2005
                                          31 December   31 December      30 June
                                                 2005          2004         2005
                                     Notes              As restated  As restated
                                                 £000          £000         £000
Assets
Non-current assets
Property, plant and equipment                  27,029        25,898       25,780
Goodwill                                        5,558         5,352        5,556
Other intangible assets                           332           346          319
Investments in associates                         280           278          250
Other investments                                  17           237          237
Deferred tax assets                             9,600         9,032        8,873
                                            ---------    ----------    ---------
                                               42,816        41,143       41,015
Current assets
Inventories                                    13,371        12,835       12,248
Trade and other receivables                    25,037        24,807       30,209
Derivative financial assets                       564             -            -
                                            ---------    ----------    ---------
                                               38,972        37,642       42,457
                                            ---------    ----------    ---------
Total assets                                   81,788        78,785       83,472
                                            ---------    ----------    ---------
Liabilities
Non-current liabilities
Interest bearing loans and 
borrowings                                       (288)       (1,143)        (722)
Employee benefits payable                     (29,329)      (27,928)     (27,325)
Provisions                                     (1,342)         (778)      (1,383)
Deferred tax liabilities                       (1,236)         (862)      (1,051)
                                            ---------    ----------    ---------
                                              (32,195)      (30,711)     (30,481)
Current liabilities
Bank overdraft                                 (3,694)       (1,487)      (1,780)
Interest bearing loans and
borrowings                                       (855)         (808)        (831)
Employee benefits payable                      (2,671)       (2,179)      (2,252)
Trade and other payables                      (24,261)      (22,233)     (26,422)
Income tax payable                               (257)         (807)        (704)
Derivative financial liabilities                  (37)            -            -
                                            ---------    ----------    ---------
                                              (31,775)      (27,514)     (31,989)
                                            ---------    ----------    ---------
Total liabilities                             (63,970)      (58,225)     (62,470)
                                            ---------    ----------    ---------
                                            ---------    ----------    ---------
Net assets                                     17,818        20,560       21,002
                                            ---------    ----------    ---------

Equity
Called up share capital                        4,411         4,383       4,409
Share premium                                 27,406        27,156      27,387
Other reserve                                  1,551         1,727       1,551
Capital redemption reserve                       693           693         693
Capital reserve - own shares                    (134)         (247)       (165)
Hedging reserve                                  527             -           -
Retained earnings                            (16,664)      (13,180)    (12,901)
                                            --------    ----------   ---------
Equity attributable to equity
holders of the parent                         17,790        20,532      20,974
Minority interest                                 28            28          28
                                            --------    ----------   ---------
Total equity                             8    17,818        20,560      21,002
                                            --------    ----------   ---------



Unaudited Consolidated Cash Flow Statement
for the half year ended 31 December 2005

                                               Half year    Half year         Year
                                             31 December  31 December      30 June
                                                    2005         2004         2005
                                                          As restated  As restated
                                                    £000         £000         £000
Operating activities

Operating profit                                   3,528        4,424        9,269
Adjustments for:
Loss before taxation from
discontinued operations                           (1,441)      (1,573)      (4,063)
Depreciation                                       1,620        1,836        3,655
Impairments of fixed assets                            -          466        1,040
Gain on disposal of plant and equipment             (244)          (8)         (14)
Gain on sale of investments                          (79)           -            -
Increase in inventories                           (1,347)      (1,294)        (245)
Decrease/(increase) in receivables                 5,021        3,299       (4,518)
(Decrease)/increase in trade and other 
payables                                          (2,550)      (3,057)       1,088
Other items                                         (754)         371           12
                                              ----------    ---------     --------
Cash generated from operations                     3,754        4,464        6,224
Tax paid                                            (768)      (1,252)      (2,082)
Return of capital from associate                       -            -           52
                                              ----------    ---------     --------
Net cash inflow from operating
activities                                         2,986        3,212        4,194
                                              ----------    ---------     --------

Investing activities

Purchase of property, plant and equipment         (3,302)      (1,405)      (3,709)
Proceeds from sale of property, plant and 
equipment                                            789           32        2,043
Acquisition of subsidiary
undertakings net of cash acquired                    (52)      (6,486)      (6,490)
Proceeds from sale of business activities            225            -          449
Proceeds from sale of investments                    280            -            -
                                              ----------    --------      --------
Net cash outflow from investing
activities                                        (2,060)      (7,859)      (7,707)
                                              ----------    --------     --------

Financing activities

Net interest paid                                   (235)        (160)        (395)
Equity dividends paid                             (2,216)      (2,197)      (3,248)
Repayment of amounts borrowed                       (410)        (386)        (784)
Proceeds from issue of share
capital                                               21          278          535
                                              ----------    ---------     --------
Net cash outflow from financing
activities                                        (2,840)      (2,465)      (3,892)
                                              ----------    ---------     --------

Net decrease in cash and cash equivalents         (1,914)      (7,112)      (7,405)
                                              ----------    ---------     --------
                                              ----------    ---------     --------

Cash and cash equivalents at beginning of
period                                            (1,780)       5,625        5,625
                                              ----------    ---------     --------
Cash and cash equivalents at end of period        (3,694)      (1,487)      (1,780)
                                              ----------    ---------     --------



Notes on the Unaudited Accounts
for the half year to 31 December 2005

1. Basis of preparation

The interim report for the six months ended 31 December 2005 has been prepared
under the Group's anticipated International Financial Reporting Standards
("IFRS") accounting policies for the year ending 30 June 2006. It includes
comparative figures for the financial year ended 30 June 2005 which are not the
company's statutory accounts for that financial year. Those accounts, which were
prepared under UK GAAP, have been reported on by the company's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.

Comparative figures for the year ended 30 June 2005 have been extracted from a
restatement of the financial information taken from the company's statutory
accounts for that financial year, on which the auditors have issued to the
company a special purpose report.

The Group has adopted all existing relevant IFRS with the exception of IAS 34,
Interim Financial Reporting, which is not mandatory for UK groups. As permitted
by IFRS 1 (first time adoption of International Financial Reporting Standards),
the provisions of IAS 32 and IAS 39 have not been applied to the comparative
periods and are applied from 1 July 2005. Whilst the Group expects to use
consistent accounting policies for the preparation of the results for the year
ending 30 June 2006, there is the possibility that accounting policies may have
to be updated in order to reflect new standards and interpretations available at
that time.

Copies of the reconciliation statements and of the Group's IFRS accounting
policies, along with further information on the transition to IFRS, are
available on the website, www.alumasc.co.uk. This information can also be
obtained by writing to the Company Secretary. To assist shareholders in
understanding the impact of IFRS, note 9 provides a summary overview of the
adjustments from the previously published UK GAAP statements at 30 June 2005.

The disclosures of continuing operations and discontinued operations for
comparative periods have been restated in these interim financial statements to
reflect all operations treated as discontinued at 31 December 2005.


The interim financial statements for the half year ended 31 December 2005 are
not statutory accounts; they have been neither audited nor reviewed by the
Group's auditors.

2. Analysis of revenue and trading profit including associates

                                                                                Restated
                                      Half year                                 Half year
                                  31 December 2005                          31 December 2004
                                 Total   Continuing activities             Total   Continuing activities
                       Revenue   Profit    Revenue     Profit    Revenue   Profit    Revenue     Profit
                         £000     £000        £000       £000      £000     £000        £000       £000

Building
Products               25,898    2,541      25,898      2,541    21,853    2,428      21,853      2,428

Engineering Products
          - Precision
           Components  14,163     (796)     12,783        645    16,410    1,131      13,821      1,357
         - Industrial
             Products  20,699      130      20,699        130    20,015      451      18,659        669
                      -------   ------     -------    -------  --------   ------    --------     ------
                       60,760    1,875      59,380      3,316    58,278    4,010      54,333      4,454
                      -------   ------     -------    -------  --------   ------    --------     ------

3. Activities discontinued

Discontinued activities in the period comprise the closure of Copal Castings, a
gravity aluminium diecasting manufacturer. The loss on closure comprises
redundancy and other closure costs. Discontinued activities in the prior year
also include G E Bissell & Co., a manufacturer and supplier of spring pins and
disc springs, sold on 14 January 2005.

The results of the discontinued operations that have been included in the
consolidated income statement are as follows:

                                Half year        Half year                Year
                              31 December      31 December        30 June 2005
                                     2005             2004
                                     £000             £000                £000

Revenue                             1,380            3,945               6,728
Cost of sales                      (1,995)          (3,561)             (6,244)
                              -----------       ----------            --------
Gross profit                         (615)             384                 484
Net operating expenses               (826)            (828)             (3,723)
                              -----------       ----------            --------
Operating loss                     (1,441)            (444)             (3,239)
Loss on sale                            -           (1,129)               (824)
                              -----------       ----------            --------
Loss before tax                    (1,441)          (1,573)             (4,063)
Income tax expense                    338              419               1,117
                              -----------       ----------            --------
Loss after taxation                (1,103)          (1,154)             (2,946)
                              -----------       ----------            --------


The net cash flows attributable to discontinued operations are as follows:

                              Half year         Half year                 Year
                            31 December       31 December         30 June 2005
                                   2005              2004
                                   £000              £000                 £000

Operating cash flows             (1,193)             (143)              (1,989)
Investing cash flows                (10)             (234)                (288)
                            -----------        ----------             --------
Net cash outflow                 (1,203)             (377)              (2,277)
                            -----------        ----------             --------

4. Taxation

                                       Half year      Half year          Year
                                     31 December    31 December  30 June 2005
                                            2005           2004
                                            £000           £000          £000

Current tax - UK Corporation Tax
            - continuing operations          735            974         2,365
          - discontinued operations         (415)          (364)       (1,117)
                                      ----------     ----------      --------
                                             320            610         1,248
Deferred tax - continuing
operations                                   109            245           221
          - discontinued operations           77            (55)            -
                                      ----------     ----------      --------
                                             186            190           221
                                      ----------     ----------      --------
Tax charge in the income
statement                                    506            800         1,469
                                      ----------     ----------      --------

The tax charge in the income 
statement is disclosed as follows:

Income tax expense on
continuing operations                        844          1,219         2,586
Income tax credit on
discontinued operations                     (338)          (419)       (1,117)
                                      ----------     ----------      --------
                                             506            800         1,469
                                      ----------     ----------      --------

5. Earnings per share

Basic earnings per share is calculated by dividing the net profit for the period
attributable to ordinary equity shareholders of the parent by the weighted
average number of ordinary shares in issue during the year.

Diluted earnings per share is calculated by dividing the net profit attributable
to ordinary equity shareholders of the parent by the weighted average number of
ordinary shares in issue during the year, after allowing for the exercise of
outstanding share options.

The following sets out the income and share data used in the basic and diluted
earnings per share calculations:

                                Half year        Half year                Year
                              31 December      31 December        30 June 2005
                                     2005             2004
                                     £000             £000                £000

Net profit attributable
to equity holders of the
parent - continuing
operations                          2,081            2,474               5,111
Loss attributable to
equity holders of the
parent - discontinued
operations                         (1,103)          (1,154)             (2,946)
                              -----------       ----------            --------
Net profit attributable
to equity holders of the
parent                                978            1,320               2,165
                              -----------       ----------            --------

                                     000s             000s                000s

Basic weighted average
number of shares                   35,483           34,924              35,040
Dilutive potential
ordinary shares -
employee share options                140              170                 146
                              -----------       ----------            --------
Diluted weighted average
number of shares                   35,623           35,094              35,186
                              -----------       ----------            --------

6. Dividends

The directors approved an interim dividend per share of 3.0p (2004: 3.0p) after
the balance sheet date which will be paid on 6 April 2006 to shareholders on the
register at the close of business on 10 March 2006. In accordance with IFRS
accounting requirements, the dividend has not been accrued in the interim
consolidated financial statements.

7. Reconciliation of net cash flow to movement in net (debt)/ cash

                                       Half year      Half year           Year
                                     31 December    31 December        30 June
                                            2005           2004           2005
                                                      As restated    As restated
                                            £000           £000           £000

Decrease in cash in the period            (1,914)        (7,112)        (7,405)
Repayment of net debt                        410            386            784
                                      ----------      ---------       --------
Change in net debt from cash
flows in the period                       (1,504)        (6,726)        (6,621)
Net (debt)/cash and cash
equivalents at start of period            (3,333)         3,288          3,288
                                      ----------      ---------       --------
Net (debt)/cash and cash
equivalents at end of period              (4,837)        (3,438)        (3,333)
                                      ----------      ---------       --------




8. Reconciliation of Changes in Equity
                                                                                     
                           
                                                        Capital     Capital
                          Share     Share     Other  redemption     reserve   Hedging  Retained   Minority    Total 
                        capital   premium   reserve     reserve  own shares   reserve  earnings  interests   equity
                           £000      £000      £000        £000        £000      £000      £000       £000     £000

As at 1 July
2005 -
previously
stated                    4,409    27,387     1,551         693        (165)        -   (12,901)        28   21,002
Adoption of
IAS 32 and IAS
39                                                                                          148                148
                        -------   -------   -------     -------     -------   -------   -------    ------- -------
As at 1 July
2005 -
restated                  4,409    27,387     1,551         693        (165)        -   (12,753)        28  21,150
Shares issued                 2        19                                                                       21
Vesting of own
shares                                                                   31                                     31
Net gains/
(losses) on
cash flow
hedges                                                                            527      (148)               379
Actuarial
gain/(loss) on
defined
benefit
pensions net
of tax                                                                                   (2,522)            (2,522)
Dividends                                                                                (2,219)            (2,219)
Profit for the
period                                                                                      978                978
                        -------   -------   -------     -------     -------   -------   -------    ------- -------
As at 31
December 2005             4,411    27,406     1,551         693        (134)      527   (16,664)        28  17,818
                        -------   -------   -------     -------     -------   -------   -------    ------- -------
As at 1 July
2004                      4,352    26,909     1,727         693        (164)        -   (12,654)        28  20,891
Shares issued                31       247                                                                      278
Increase in
capital
reserve - own
shares                                                                  (83)                                   (83)
Actuarial
gain/(loss) on
defined
benefit
pensions net
of tax                                                                                      337                337
Dividends                                                                                (2,200)            (2,200)
Profit for the
period                                                                                    1,320              1,320
Share based
payments                                                                                     17                 17
                        -------   -------   -------     -------     -------   -------   -------    ------- -------
As at 31
December 2004             4,383    27,156     1,727         693        (247)        -   (13,180)        28  20,560
                        -------   -------   -------     -------     -------   -------   -------    ------- -------

As at 1 July
2004                      4,352    26,909     1,727         693        (164)        -   (12,654)        28  20,891
Shares issued                57       478                                                                      535
Excess
depreciation
on revalued
assets                                         (150)                                        150                  -
Released on
disposal of
property                                        (26)                                         26                  -
Vesting of own
shares                                                                   82                 (82)                 -
Increase in
capital
reserve - own
shares                                                                  (83)                                   (83)
Actuarial
gain/ (loss)
on defined
benefit                                                                                     673                673
pensions net
of tax
Dividends                                                                                (3,248)            (3,248)
Profit for the
period                                                                                    2,165              2,165
Share based
payments                                                                                     69                 69
                        -------   -------   -------     -------     -------   -------   -------    ------- -------
As at 30 June
2005                      4,409    27,387     1,551         693        (165)        -   (12,901)        28  21,002
                        -------   -------   -------     -------     -------   -------   -------    ------- -------

9. Restatement of financial statements at 30 June 2005

The published accounts contain comparative figures restated from those published
last year to reflect the adoption of IFRS. Full details of the changes are
available on the Group's website (www.alumasc.co.uk) or from the Company
Secretary at the Registered Office. The following sets out a summary of the
changes made:


Analysis of IFRS adjustments to the Consolidated Income Statement for the year
ended 30 June 2005
                                                                                             Discontinued
                          UK GAAP                               Reclass-        Other            activity       
                          in IFRS           Pension  Recycled  ification  adjustments                 re-        As
                           format  Goodwill   costs  goodwill     of tax         (net)    IFRS   statement  published
                             £000      £000    £000      £000       £000         £000     £000        £000       £000
                   Notes                 (i)    (ii)     (iii)       (iv)                               (v)
Continuing 
operations
Revenue                   120,103                                                      120,103      (5,234)   114,869
Cost of sales             (88,924)               286                              (43) (88,681)      5,039    (83,642)
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Gross profit               31,179         -      286         -                    (43)  31,422        (195)    31,227
Selling and
distribution
costs                     (10,828)                91                                   (10,737)        122    (10,615)
Administrative
expenses                  (14,280)               328                              (55) (14,007)      2,664    (11,343)
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Operating
profit before
goodwill                    6,071         -      705         -                    (98)   6,678       2,591      9,269
amortisation
Goodwill
amortisation                 (256)      256                                                  -           -          -
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Operating
profit                      5,815       256      705         -                    (98)   6,678       2,591      9,269

Finance revenue                24                                                           24           -         24
Finance costs                (419)            (1,201)                                   (1,620)          -     (1,620)
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Share of post
tax profit in                  55                                     (31)                  24           -         24
associates
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Profit before
taxation                    5,475       256     (496)        -        (31)        (98)   5,106       2,591      7,697
Taxation                   (1,470)               (30)                (368)              (1,868)       (718)    (2,586)
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
Profit for the
year from                   4,005       256     (526)        -       (399)        (98)   3,238       1,873      5,111
continuing operations

Discontinued operations
Loss for the
year from                  (4,732)                       3,260        399               (1,073)     (1,873)    (2,946)
discontinued operations
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------
(Loss)/ profit
for the year                 (727)      256     (526)    3,260          -         (98)   2,165           -      2,165
                          -------   -------  -------   -------  ---------    --------  -------    --------   --------

Notes

(i)    Elimination of goodwill amortisation charge (IFRS 3)
(ii)   Additional pension charge arising from the replacement of UK
       GAAP charge based on SSAP 24, with a charge based on IAS 19.
(iii)  Elimination of the goodwill relating to the Bissell business
       sold in January 2005 previously written off and recycled under
       UK GAAP (No balance sheet impact).
(iv)   Reclassification of tax credits and charges to restate share of
       post tax profits in associates and the loss on sale of Bissell
       net of tax.
(v)    Restatement of Copal's result as a discontinued activity





Analysis of IFRS adjustments to the Consolidated Balance Sheet at 30 June 2005

                                 UK GAAP                                                   Software
                                (in IFRS              Pension                   Other          cost
                                 format)  Goodwill      costs  Dividends  adjustments  reclassified       IFRS
                                   £000       £000       £000       £000         £000          £000       £000
                     Notes                      (i)       (ii)      (iii)         (iv)           (v)
Assets
Non-current assets
Property, plant and
equipment                        26,138                                           (39)         (319)    25,780
Goodwill                          5,324        256                                (24)                   5,556
Other intangible
assets                                                                                          319        319
Investments                         487                                                                    487
Deferred tax assets                                     8,873                                            8,873
                               --------  ---------    -------    -------     --------      --------   --------
                                 31,949        256      8,873          -          (63)            -     41,015
                               --------  ---------    -------    -------     --------      --------   --------
Current assets                   42,457                                                                 42,457
                               --------  ---------    -------    -------     --------      --------   --------
Total assets                     74,406        256      8,873          -          (63)            -     83,472
                               --------  ---------    -------    -------     --------      --------   --------

Liabilities
Non-current liabilities
Interest bearing loans
and borrowings                     (722)                                                                  (722)
Employee benefits
payable                               -               (27,325)                                         (27,325)
Provisions & deferred 
tax liabilities                  (2,434)                                                                (2,434)
                               --------  ---------    -------    -------     --------      --------   --------
                                 (3,156)         -    (27,325)         -            -             -    (30,481)
                               --------  ---------    -------    -------     --------      --------   --------
Current liabilities
Bank overdraft                   (1,780)                                                                (1,780)
Interest bearing loans
and borrowings                     (831)                                                                  (831)
Employee benefits
payable                            (230)               (2,022)                                          (2,252)
Trade and
other payables                  (28,503)                           2,219         (138)                 (26,422)
Income tax payable                 (704)                                                                  (704)
                               --------  ---------    -------    -------     --------      --------   --------
                                (32,048)         -     (2,022)     2,219         (138)            -    (31,989)
                               --------  ---------    -------    -------     --------      --------   --------
Total liabilities               (35,204)              (29,347)     2,219         (138)            -    (62,470)
                               --------  ---------    -------    -------     --------      --------   --------
Net assets                       39,202        256    (20,474)     2,219         (201)            -     21,002
                               --------  ---------    -------    -------     --------      --------   --------

Equity 
Group shareholders'              
equity                           39,174        256    (20,474)     2,219         (201)                  20,974
Minority interest                   28                                                           28
                              --------   ---------   --------    -------     --------      --------   --------
Total equity                    39,202         256    (20,474)     2,219         (201)            -     21,002
                              --------   ---------   --------    -------     --------      --------   --------



Notes

   (i) Elimination of goodwill amortisation charged in the year to 30 June 2005
       (IFRS 3)
  (ii) Pension fund deficit recognised (IAS 19)
       Deferred tax asset arising on the recognition of the pension fund deficit
 (iii) Elimination of provision for proposed dividends not approved by
       shareholders until after the year end (IAS 10)
  (iv) Other adjustments
   (v) Reclassification of IT software to other intangible assets (IAS 38)




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