AIREA Regulatory News (AIEA)

18 Mar 2008 07:01

Airea PLC18 March 2008 AIREA plc (the "Company")18 March 2008 Interim results The Company is pleased to announce its interim results for the six months ended31st December 2007. For enquiries, please contact: AIREA PLC 01924 203 742Kevin Henry - Group Finance Director Brewin Dolphin Investment Banking 0845 270 8610Andrew KitchingmanSean Wyndham-Quin OPERATING REVIEW INTRODUCTION In the six months to 31st December 2007 significant progress has been made on anumber of major strategic projects. These include the sale of the specialistyarns division, the sale of surplus properties, re-engineering manufacturing ofresidential carpets and creating a single management team for both commercialand residential products. As a consequence of the disposal of the Sirdarspecialist yarns business the company changed its name to AIREA plc in December2007. The results The results are presented under International Financial Reporting Standards forthe first time. There are a number of presentational changes, the mostsignificant of which is the analysis of the results between continuingoperations and discontinued operations on the face of the consolidated incomestatement. Further details of this and the other presentational changes are setout in the notes to the accompanying financial statements. The only significant change to the results reported previously is that goodwillis no longer amortised and the amounts previously amortised since 1st July 2006have now been reinstated in the consolidated balance sheet. A provision forimpairment of the goodwill associated with the subsidiary yarn dyeing businesshas then been included in the income statement for the current period. Continuing Operations Sales of floor covering products reduced by 1% to £25.8m (2006: £26.1m) in theperiod with modest growth in commercial products being offset by a slightdecline in residential products. Operating profit was £9.0m (2006: £0.4m) butthe period to 31st December 2007 includes an exceptional profit on sale ofproperty of £9.6m (2006: £nil). After excluding this exceptional profit, aprovision for impairment of goodwill of £0.8m (2006: £nil) and other exceptionalcosts of £0.3m (2006: £0.5m), operating profit before exceptional items was£0.5m (2006: £0.9m). Earnings per share from continuing operations were 20.80p (2006: loss per share0.22p) and adjusted earnings per share, excluding the effect of the exceptionalprofit on sale of property, the related release of deferred tax, the provisionfor impairment of goodwill and the other exceptional costs, was 0.75p (2006:0.49p). Discontinued Operations The specialist yarns business was sold on 2nd November 2007. Sales to the dateof disposal were £5.7m (2006: £8.1m). The operating loss was £2.3m (2006:profit £1.1m) but this includes a loss on disposal of £2.7m (2006: £nil). Afterexcluding this item, operating profit was £0.4m (2006: £1.1m). Discontinued operations generated a loss per share of 4.98p (2006: earnings pershare 1.22p). Adjusted earnings per share, excluding the effect of the loss ondisposal, were 0.79p (2006: 1.22p). Group results Profit for the period was £7.3m (2006: £0.5m). This includes the exceptionalprofit on sale of property, the loss on sale of the specialist yarns businessand other exceptional items as detailed above. Earnings per share were 15.82p(2006: 1.00p) and adjusted earnings per share, after excluding the effect of theexceptional profit on sale of property, the related release of deferred tax, theprovision for impairment of goodwill, the loss on sale of the specialist yarnsbusiness and other exceptional costs, were 1.54p (2006: 1.71p). There was a cash outflow from operating activities of £4.3m (2006: £2.2minflow), due to a combination of an increase in working capital and increasedcontributions to the defined benefit pension scheme. As a result of theproperty disposals and the sale of the specialist yarns division, there was anincrease in cash and cash equivalents of £7.8m (2006: decrease £1.0m). Totalcash and cash equivalents at the end of the period amounted to £6.3m compared tototal net debt at the start of the period of £5.2m. The board has declared an interim dividend of 0.80p per share (2006: 0.80p).This dividend is payable on 6th May 2008 to those shareholders on the registerof members at the close of business on 4th April 2008. Management and personnel Following completion of a number of specific projects, Steve Harrison, theformer Chief Operating Officer, left the group on 29th February 2008. A processof recruitment for a managing director is underway and we have appointed anexperienced manager to lead the floor coverings business in the interim. The board would like to thank all personnel for their dedication and commitmentto the business during this period of change. Current trading and future prospects Like-for-like sales in the early part of 2008 are in line with last year withgrowth in commercial products compensating for a decline in residentialproducts. The commercial market appears to be growing but the residential market is morechallenging due to economic uncertainty and subdued consumer spending. Increased resources are being devoted to new product development and innovationand, combined with a lower cost base, we believe this will lead to improvedperformance in the future. 18th March 2008 Consolidated Income Statement6 months ended 31st December 2007 Unaudited Unaudited Unaudited 6 months 6 months year ended ended ended 31st December 31st December 30th June 2007 2006 2007 Note £000 £000 £000Continuing operationsRevenue 25,781 26,138 50,304Operating costs (26,376) (25,756) (49,672)Exceptional profit on sale of property 9,616 - -Operating profit after exceptional items 9,021 382 632Analysed between:Operating profit before exceptional items 500 850 1,379Exceptional operating costs 2 (250) (468) (747)Impairment of goodwill (845) - -Exceptional profit on sale of property 9,616 - -Net interest payable and similar charges (135) (198) (477)Other finance costs - (150) (186)Profit/(loss) before taxation 8,886 34 (31)Taxation 733 (135) (100)Profit/(loss) from continuing operations 9,619 (101) (131) Discontinued operationsRevenue 5,694 8,122 15,026Operating costs (5,322) (7,046) (14,032)Operating profit before exceptional item 372 1,076 994Loss on disposal of discontinued operation 10 (2,668) - -Operating/(loss) profit (2,296) 1,076 994Net interest receivable/(payable) and similar charges 166 (39) (50)Other finance costs - (100) (124)(Loss)/profit before taxation (2,130) 937 820Taxation (174) (373) (219)(Loss)/profit from discontinued operations (2,304) 564 601Profit for the period 7,315 463 470 Earnings per shareBasic and diluted 4 15.82p 1.00p 1.02pEarnings/(loss) per share from continuing activitiesBasic and diluted 4 20.80p (0.22)p (0.28)p(Loss)/earnings per share from discontinued activitiesBasic and diluted 4 (4.98)p 1.22p 1.30p There is no difference between the profit before taxation and the profit for the period stated above and theirhistorical cost equivalents. Consolidated Balance Sheetas at 31st December 2007 Unaudited Unaudited Unaudited 31st December 31st December 30th June 2007 2006 2007 Note £000 £000 £000Non-current assetsProperty, plant and equipment 9,828 15,226 10,086Goodwill 12,012 12,857 12,857Deferred tax asset 5 1,163 1,749 416 23,003 29,832 23,359Current assetsInventories 10,084 14,613 13,312Trade and other receivables 7,821 9,236 9,597Prepayments and accrued income 1,396 1,086 1,085Cash and cash equivalents 6,272 770 176 25,573 25,705 24,170Non-current assets classified as held for resale 140 - 5,643Total assets 48,716 55,537 53,172Current liabilitiesTrade and other payables (6,078) (7,696) (8,788)Tax liabilities - (243) -Accruals and deferred income (2,604) (3,535) (3,061)Bank overdrafts and loans - (5,705) (5,394) (8,682) (17,179) (17,243)Non-current liabilitiesPension deficit (5,930) (13,000) (8,400)Total liabilities (14,612) (30,179) (25,643) 34,104 25,358 27,529EquityCalled up share capital 11,561 11,561 11,561Share premium account 504 504 504Capital redemption reserve 2,395 2,395 2,395Profit and loss account 6 19,644 10,898 13,069 34,104 25,358 27,529 Consolidated Cash Flow Statement6 months ended 31st December 2007 Unaudited Unaudited Unaudited 6 months ended 6 months ended year ended 31st December 31st December 30th June 2007 2006 2007 Note £000 £000 £000Operating activitiesCash (used in)/from operations 8 (4,342) 3,006 4,482Interest received/(paid) 37 (224) (602)Income tax paid (9) (553) (635) (4,314) 2,229 3,245Investing activitiesPurchase of property, plant and equipment (1,603) (1,282) (2,574)Proceeds on disposal of property, plant and equipment 15,738 295 658Disposal of subsidiary undertaking 10 2,409 - - 16,544 (987) (1,916)Financing activitiesEquity dividends paid 3 (740) (740) (1,110)Redemption of loan notes (88) - (80)(Decrease)/increase in bank loans (3,652) (1,519) 86 (4,480) (2,259) (1,104)Net increase/(decrease) in cash and cash equivalents 7,750 (1,017) 225Cash and cash equivalents at start of period (1,478) (1,703) (1,703)Cash and cash equivalents at end of period 6,272 (2,720) (1,478) Statement of Recognised Income and Expense6 months ended 31st December 2007 Unaudited Unaudited Unaudited 6 months ended 6 months ended year ended 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Profit attributable to shareholders of the group 7,315 463 470Actuarial gains recognised in the pension scheme - - 2,534Total recognised income and expense relating to the 7,315 463 3,004period NOTES 1. Accounting Policies Accounting policies adopted under IFRS These interim financial statements have been prepared using the recognition andmeasurement principles of International Financial Reporting Standards as adoptedby the European Union ("IFRS"). The basis of preparation and accounting policies used in preparing the interimfinancial statements for the six months ended 31st December 2007 are set outbelow. The basis of preparation describes how IFRS have been applied under IFRS1, the assumptions made by the group about the Standards and Interpretationsexpected to be effective, and the policies expected to be adopted, when thegroup issues its first complete set of IFRS financial statements for the yearending 30th June 2008. Basis of preparation The financial information for the six months ended 31st December 2007, sixmonths ended 31st December 2006 and the year ended 30th June 2007 is unreviewedand unaudited and, within the meaning of section 240 of the Companies Act 1985,such accounts do not constitute full statutory accounts of the group. The accounting policies which follow set out those policies which are expectedto apply in preparing the financial statements for the year ending 30th June2008. These policies have been followed in producing these interim financialstatements. The comparative figures for the financial year ended 30th June 2007 are not thestatutory financial statements of AIREA plc for that financial year. Thosefinancial statements, which were prepared under UK Generally Accepted AccountingPrinciples ("UK GAAP"), have been reported on by the Company's auditors anddelivered to the registrar of companies. The report of the auditors wasunqualified and did not contain statements under section 237(2) or (3) of theCompanies Act 1985. Significant accounting judgements and estimates The preparation of these financial statements requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and reported amounts ofrevenues and expenses during the reporting period. These judgements andestimates are based on management's best knowledge of the relevant facts andcircumstances, having regard to prior experience, but actual results may differfrom the amounts included in the financial statements. Information about suchjudgements and estimates is contained in the accounting policies andaccompanying notes to the financial statements. Revenue recognition Revenue, for all classes of business, comprises the invoice value, afterdiscounts and customer credits and excluding value added tax, of goods suppliedto customers and is recognised when the risks and rewards of ownership pass tothe customer. Transactions between members of the group are excluded. Exceptional items The group seeks to highlight certain items as exceptional operating income orcosts. These are considered to be exceptional in size and/or nature rather thanindicative of the underlying trading of the group. These may include items suchas restructuring costs, material profits or losses on disposal of property,plant and equipment and profits or losses on the disposal of subsidiaries. Allof these items are charged or credited before calculating operating profit orloss. Material profits or losses on disposal of property, plant and equipmentand profits or losses on the disposal of subsidiaries are shown as separateitems in arriving at operating profit or loss whereas other exceptional itemsare charged or credited within operating costs and highlighted by analysis. TheDirectors apply judgement in assessing the particular items, which by virtue oftheir size and nature are disclosed separately in the income statement and thenotes to the financial statements as exceptional items. The Directors believethat the separate disclosure of these items is relevant to understanding thegroup's financial performance. Basis of Consolidation The consolidated financial statements comprise the financial statements of AIREAplc and its subsidiaries. Acquisitions of subsidiaries are dealt with by theacquisition method of accounting. The results of subsidiaries are included fromthe effective date of their acquisition to the effective date of their sale.Any difference between the fair value of assets acquired and the considerationpaid is treated as goodwill in the consolidated balance sheet. Goodwill and business combinations Goodwill results from the acquisition of subsidiary and associated undertakingsand equates to the amount by which the consideration for the subsidiary orassociated undertaking differs from the fair value of net assets acquired.Goodwill written off to reserves prior to the date of transition to IFRS has notbeen reinstated on the balance sheet. This goodwill is not written back toprofit or loss on disposal. Impairment testing of goodwill and property, plant and equipment For the purposes of assessing impairment, assets are grouped at the lowestlevels for which there are separately identifiable cash flows (cash-generatingunits). As a result, some assets are tested individually for impairment andsome are tested at cash-generating unit level. Goodwill is allocated to thosecash-generating units that are expected to benefit from synergies of the relatedbusiness combination and represent the lowest level within the group at whichmanagement monitors the related cash flows. Goodwill is not amortised but is tested for impairment at least annually. Allother individual assets or cash-generating units are tested for impairmentwhenever events or changes in circumstances indicate that the carrying amountmay not be recoverable. An impairment loss is recognised for the amount by which the asset's orcash-generating unit's carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of fair value, reflecting market conditionsless costs to sell, and value in use based on an internal discounted cash flowevaluation. With the exception of goodwill, all assets are subsequentlyreassessed for indications that an impairment loss previously recognised may nolonger exist. Foreign currency Transactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Assets and liabilities denominated in foreigncurrencies are translated at rates of exchange ruling at the balance sheet date.Exchange differences of a trading nature are dealt with in the incomestatement. Financial instruments The group uses derivative financial instruments to manage its exposures tofluctuations in foreign currency exchange rates. Derivative instrumentsutilised are forward currency contracts. The fair value of forward currencycontracts is assessed at the balance sheet date and any profit or loss isrecognised in the income statement. Financial assets Trade and other receivables are recognised initially at fair value andsubsequently measured at amortised cost using the effective interest method,less any required allowances for uncollectible amounts. Financial liabilities Trade and other receivables are recognised initially at fair value andsubsequently measured at amortised cost using the effective interest method. Taxation Current tax payable is provided on taxable profits at prevailing rates for theperiod. Deferred income tax is calculated using the liability method on temporarydifferences arising between the carrying value of assets and liabilities andtheir tax bases. However, deferred tax is not provided on the initialrecognition of goodwill. Deferred tax liabilities are provided in full with nodiscounting. A deferred income tax asset is recognised only to the extent that it is probablethat there will be future taxable profits on which this asset can be charged.Deferred income tax assets are reduced to the extent that it is no longer likelythat a sufficient taxable benefit will arise. Deferred taxation is shown on the balance sheet separately from current taxassets and liabilities and is categorised among non-current items. Changes indeferred tax balances are recognised as a component of the tax expense in theincome statement. Pensions The current service cost of providing retirement pensions and related benefitsunder the group defined benefit scheme is charged against operating profit aspart of operating costs and the expected return on pension scheme assets and theinterest on pension scheme liabilities is included in other finance costs.Actuarial gains and losses, net of the related deferred taxation, are recognisedin the statement of total income and expense. Other amounts paid to definedcontribution schemes are charged against operating profit as part of operatingcosts as incurred. Scheme assets are measured at fair values. Scheme liabilities are measured onan actuarial basis using the projected unit method and are discounted atappropriate high quality corporate bond rates that have terms to maturityapproximating to the terms of the related liability. The surplus or deficit ascalculated by the scheme's actuary is presented separately on the balance sheet.The related deferred tax is shown with other deferred tax balances. A surplusis recognised only to the extent that it is recoverable by the group. Discontinued operations A discontinued operation is a cash-generating unit, or a group ofcash-generating units, that either has been disposed of, or is classified asheld for sale, and represents a separate major line of business or geographicalarea of operations or is part of a single co-ordinated plan to dispose of aseparate major line of business or geographical area of operations. Thedisclosures for discontinued operations in prior periods relate to alloperations that have been discontinued by the balance sheet date for the latestperiod presented. Leased assets In accordance with IAS 17, the economic ownership of a leased asset istransferred to the lessee if the lessee bears substantially all the risks andrewards related to the ownership of the leased asset. The related asset isrecognised at the time of inception of the lease at the fair value of the leasedasset or, if lower, the present value of the minimum lease payments plusincidental payments, if any, to be borne by the lessee. A corresponding amountis recognised as a finance leasing liability. Leases of land and buildings aresplit into land and buildings elements according to the relative fair values ofthe leasehold interests at the date the asset is initially recognised. The interest element of leasing payments represents a constant proportion of thecapital balance outstanding and is charged to the income statement over theperiod of the lease. All other leases are regarded as operating leases and the payments made underthem are charged to the income statement on a straight line basis over the leaseterm. Lease incentives are spread over the term of the lease. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and on short term deposit,together with other short-term, highly liquid, investments that are readilyconvertible into known amounts of cash and which are subject to an insignificantrisk of changes in value. 2. EXCEPTIONAL OPERATING COSTS 6 months ended 6 months ended Year ended 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Severance payments and incentives 215 315 746Relocation costs 12 68 191Loss/(profit) on disposal of plant and equipment - 85 (190)Legal and professional expenses 23 - - 250 468 747 The severance payments and incentives, relocation costs and the loss/(profit) on disposal of plant andequipment relate to the reorganisation of the residential floor coverings operation. The legal andprofessional expenses in the period relate to the change of name of the company. 3. DIVIDENDS 6 months 6 months Year ended ended ended 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Paid during the period:Final dividend for the year ended 30th June 2007- 1.60p per share 740 - -Interim dividend for the year ended 30th June 2007- 0.80p per share - - 370Final dividend for the year ended 30th June 2006- 1.60p per share - 740 740 740 740 1,110Proposed after the period end (notrecognised as a liability):Interim dividend for the year ending 30th June 2008- 0.80p per share 370 - -Final dividend for the year ended 30th June 2007- 1.60p per share - - 740Interim dividend for the year ended 30th June 2007- 0.80p per share - 370 - 370 370 740 The interim dividend will be paid on 6th May 2008 to members registered at the close ofbusiness on 4th April 2008. 4. EARNINGS PER SHARE The calculation of basic earnings per share is based on earnings of £7,315,000 (31st December 2006:£463,000, 30th June 2007: £470,000) and on 46,242,455 (31st December 2006: 46,242,455, 30th June 2007:46,242,455) ordinary shares, being the number in issue during the period. Adjusted earnings per share iscalculated after excluding exceptional profit on sale of property, the related release of deferred tax,exceptional operating costs, impairment of goodwill and the loss on disposal of discontinued operations asset out below. 6 months 6 months Year ended ended ended 31st December 31st December 30th June 2007 2006 2007 £000 pence £000 pence £000 penceEarnings and basic earnings per share 7,315 15.82 463 1.00 470 1.02Exceptional profit on sale of property (net of tax) (8,982) (19.42) - - - -Release of deferred tax provision on sale of property (1,310) (2.83) - - - -Exceptional operating costs (net of tax) 175 0.38 328 0.71 523 1.13Impairment of goodwill 845 1.82 - - - -Loss on disposal of discontinued operations 2,668 5.77 - - - -Adjusted earnings and basic earnings per share 711 1.54 791 1.71 993 2.15 Continuing operationsThe calculation of basic earnings per share from continuing operations is based on earnings of £9,619,000(31st December 2006: loss £101,000, 30th June 2007: loss £131,000) and on 46,242,455 (31st December 2006:46,242,455, 30th June 2007: 46,242,455) ordinary shares, being the number in issue during the period.Adjusted earnings per share from continuing operations is calculated after excluding the exceptional profiton sale of property, the related release of deferred tax, exceptional operating costs and impairment ofgoodwill as set out below. 6 months 6 months Year ended ended ended 31st December 31st December 30th June 2007 2006 2007 £000 pence £000 pence £000 penceEarnings/(loss) and basic earnings/(loss) per share 9,619 20.80 (101) (0.22) (131) (0.28)Exceptional profit on sale of property (net of tax) (8,982) (19.42) - - - -Release of deferred tax provision on sale of property (1,310) (2.83) - - - -Exceptional operating costs (net of tax) 175 0.38 328 0.71 523 1.13Impairment of goodwill 845 1.82 - - - -Adjusted earnings and basic earnings per share 347 0.75 227 0.49 392 0.85 Discontinued operationsThe calculation of basic earnings per share from discontinued operations is based on a loss of £2,304,000(31st December 2006: earnings £564,000, 30th June 2007: earnings £601,000) and on 46,242,455 (31st December2006: 46,242,455, 30th June 2007: 46,242,455) ordinary shares, being the number in issue during the period.Adjusted earnings per share from discontinued operations is calculated after excluding the loss ondisposal of discontinued operations as set out below. 6 months 6 months Year ended ended ended 31st December 31st December 30th June 2007 2006 2007 £000 pence £000 pence £000 pence(Loss)/earnings and basic (loss)/earnings per share (2,304) (4.98) 564 1.22 601 1.30Loss on disposal of discontinued operations 2,668 5.77 - - - -Adjusted earnings and basic earnings per share 364 0.79 564 1.22 601 1.30 5. DEFERRED TAX 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Deferred tax asset brought forward 416 2,039 2,039Profit and loss account 1,387 (80) (33)Movement on deferred tax on pension (740) (210) (1,590)deficitDisposal of subsidiary undertaking 100 - -Deferred tax asset carried forward 1,163 1,749 416 6. PROFIT AND LOSS ACCOUNT 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Brought forward 13,069 11,175 11,175Profit for the period 7,315 463 470Other recognised gains - - 2,534Equity dividends paid (740) (740) (1,110)Carried forward 19,644 10,898 13,069 7. STATEMENT OF CHANGE IN EQUITY 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Equity brought forward 27,529 25,635 25,635Profit for the period 7,315 463 470Other recognised gains - - 2,534Equity dividends paid (740) (740) (1,110)Equity carried forward 34,104 25,358 27,529 8. RECONCILIATION OF OPERATING PROFIT TO NET CASH (USED IN)/FROM OPERATIONS 6 months 6 months Year ended ended ended 31st December 31st December 30th June 2007 2006 2007 £000 £000 £000Operating profit 6,725 1,458 1,626Depreciation 749 877 1,720Impairment of goodwill 845 - -(Profit)/loss on disposal of property, plant and (9,632) 71 (245)equipmentLoss on disposal of discontinued operation 2,668 - -Current service pension cost 130 130 180Decrease in inventories 153 1,904 3,205(Increase)/decrease in receivables (2,289) (23) 26(Decrease)/increase in payables (1,091) (331) 140Contributions to defined benefit pension scheme (2,600) (1,080) (2,170)Net cash (used in)/from operations (4,342) 3,006 4,482 9. TRANSITION TO IFRS Restatement of Income Statement for the 6 months ended 31st December 2006 UK GAAP Reversal of IFRS goodwill amortisation 6 months ended 6 months ended 6 months ended 31st December 31st December 31st December 2006 2006 2006 £000 £000 £000 Revenue 34,260 - 34,260Operating costs (32,774) 440 (32,334)Exceptional costs (468) - (468)Total operating costs (33,242) 440 (32,802)Operating profit 1,018 440 1,458Net interest payable and similar charges (237) - (237)Other finance costs (250) - (250)Profit before taxation 531 440 971Taxation (508) - (508)Profit for the period 23 440 463 Earnings per share (basic and diluted) 0.05p 0.95p 1.00pIn addition to the above adjustment, the results have been analysed between continuing operations anddiscontinued operations on the face of the consolidated income statement. Restatement of Statement of Recognised Income and Expense for the 6 months ended 31st December 2006 UK GAAP Reversal of IFRS goodwill amortisation 6 months ended 6 months ended 6 months ended 31st December 31st December 31st December 2006 2006 2006 £000 £000 £000Profit attributable to shareholders of the 23 440 463groupActuarial gains recognised in the pension - - -schemeTotal recognised gains relating to the 23 440 463period Restatement of Income Statement for the year ended 30th June 2007 UK GAAP Reversal of Reclassification IFRS goodwill of profit on sale amortisation of property year ended year ended year ended year ended 30th June 2007 30th June 2007 30th June 2007 30th June 2007 £000 £000 £000 £000 Revenue 65,330 - - 65,330Operating costs (63,838) 881 - (62,957)Exceptional costs (937) - 190 (747)Total operating costs (64,775) 881 190 (63,704)Operating profit 555 881 190 1,626Exceptional profit on sale of property 190 - (190) -Net interest payable and similar charges (527) - - (527)Other finance costs (310) - - (310)(Loss)/profit before taxation (92) 881 - 789Taxation (319) - - (319)(Loss)/profit for the period (411) 881 - 470 (Loss)/earnings per share (basic and diluted) (0.89)p 1.91p 0.00p 1.02pIn addition to the above adjustments, the results have been analysed between continuing operationsand discontinued operations on the face of the consolidated income statement. Restatement of Statement of Recognised Income and Expense for the year ended 30th June 2007 UK GAAP Reversal of Reclassification IFRS goodwill of profit on sale amortisation of property year ended year ended year ended year ended 30th June 2007 30th June 2007 30th June 2007 30th June 2007 £000 £000 £000 £000(Loss)/profit attributable to shareholders of (411) 881 - 470the groupActuarial gains recognised in the pension 2,534 - - 2,534schemeTotal recognised gains relating to the period 2,123 881 - 3,004 Restatement of Balance Sheet as at 31st December 2006 UK GAAP Reversal of Reclassification IFRS goodwill of deferred tax amortisation 31st December 31st December 31st December 2006 31st December 2006 2006 2006 £000 £000 £000 £000Non-current assetsProperty, plant and equipment 15,226 - - 15,226Goodwill 12,417 440 - 12,857Deferred tax asset - - 1,749 1,749 27,643 440 1,749 29,832Current assetsInventories 14,613 - - 14,613Trade and other receivables 9,236 - - 9,236Prepayments and accrued income 1,086 - - 1,086Cash and cash equivalents 770 - - 770 25,705 - - 25,705Total assets 53,348 440 1,749 55,537Current liabilitiesTrade and other payables (7,696) - - (7,696)Tax liabilities (243) - - (243)Accruals and deferred income (3,535) - - (3,535)Bank overdrafts and loans (5,705) - - (5,705) (17,179) - - (17,179)Non-current liabilitiesDeferred taxation (2,151) - 2,151 -Pension deficit (9,100) - (3,900) (13,000) (11,251) - (1,749) (13,000)Total liabilities (28,430) - (1,749) (30,179) 24,918 440 - 25,358EquityCalled up share capital 11,561 - - 11,561Share premium account 504 - - 504Capital redemption reserve 2,395 - - 2,395Profit and loss account 10,458 440 - 10,898 24,918 440 - 25,358 Restatement of Balance Sheet as at 30th June 2007 UK GAAP Reversal of Reclassification Reclassification IFRS goodwill of deferred tax of assets held amortisation for resale 30th June 30th June 30th June 2007 30th June 2007 30th June 2007 2007 2007 £000 £000 £000 £000 £000Non-current assetsProperty, plant and equipment 15,729 - - (5,643) 10,086Goodwill 11,976 881 - - 12,857Deferred tax asset - - 416 - 416 27,705 881 416 (5,643) 23,359Current assetsInventories 13,312 - - - 13,312Trade and other receivables 9,597 - - - 9,597Prepayments and accrued income 1,085 - - - 1,085Cash and cash equivalents 176 - - - 176 24,170 - - - 24,170Non-current assets classified as held - - - 5,643 5,643for resaleTotal assets 51,875 881 416 - 53,172Current liabilitiesTrade and other payables (8,788) - - - (8,788)Tax liabilities - - - - -Accruals and deferred income (3,061) - - - (3,061)Bank overdrafts and loans (5,394) - - - (5,394) (17,243) - - - (17,243)Non-current liabilitiesDeferred taxation (2,104) - 2,104 - -Pension deficit (5,880) - (2,520) - (8,400) (7,984) - (416) - (8,400)Total liabilities (25,227) - (416) - (25,643) 26,648 881 - - 27,529EquityCalled up share capital 11,561 - - - 11,561Share premium account 504 - - - 504Capital redemption reserve 2,395 - - - 2,395Profit and loss account 12,188 881 - - 13,069 26,648 881 - - 27,529 Restatement of Balance Sheet as at 30th June 2006 UK GAAP Reclassification IFRS of deferred tax 30th June 2006 30th June 2006 30th June 2006 £000 £000 £000Non-current assetsProperty, plant and equipment 15,107 - 15,107Goodwill 12,857 - 12,857Deferred tax asset - 2,039 2,039 27,964 2,039 30,003Current assetsInventories 16,517 - 16,517Trade and other receivables 9,150 - 9,150Prepayments and accrued income 1,266 - 1,266Cash and cash equivalents 537 - 537 27,470 - 27,470Total assets 55,434 2,039 57,473Current liabilitiesTrade and other payables (7,945) - (7,945)Tax liabilities (570) - (570)Accruals and deferred income (3,649) - (3,649)Bank overdrafts and loans (5,235) - (5,235) (17,399) - (17,399)Non-current liabilitiesBank loans and loan notes (739) - (739)Deferred taxation (2,071) 2,071 -Pension deficit (9,590) (4,110) (13,700) (12,400) (2,039) (14,439)Total liabilities (29,799) (2,039) (31,838) 25,635 - 25,635EquityCalled up share capital 11,561 - 11,561Share premium account 504 - 504Capital redemption reserve 2,395 - 2,395Profit and loss account 11,175 - 11,175 25,635 - 25,635 10. DISPOSAL OF SUBSIDIARY UNDERTAKING On 2nd November 2007 the group disposed of its interest in the entireissued share capital of Sirdar Spinning Limited which comprised the wholeof the group's specialist yarns division. Net assets disposed ofcomprised: £000Plant and equipment 721Inventories 3,075Receivables 3,871Cash and cash equivalents 150Payables (2,152)Corporation tax (188)Deferred tax (100) 5,377Loss on disposal (2,668)Proceeds of disposal (net of expenses of £91,000) 2,709 The disposal proceeds consisted of £2,500,000 paid in cash at completionplus £300,000 of loan notes.In the consolidated balance sheet these loan notes are included in tradeand other receivables. The results of the subsidiary disposed of are presented as discontinuedactivities in the income statement.Operations of discontinued activities used cash of £3,145,000 in theperiod (31st December 2006: generated £527,000, 30th June 2007: generated£1,086,000) and investing activities of discontinued activities used cashof £3,000 in the period (31st December 2006: £435,000, 30th June 2007:£624,000). OTHER INFORMATIONThe interim results are unaudited.Further copies of this report are available from the Company Secretary atthe registered office at Victoria Mills, The Green, Ossett, Wakefield, WestYorkshire WF5 0AN. ENDS This information is provided by RNS The company news service from the London Stock Exchange