Begbies Regulatory News (BEG)

5 July 2012

Begbies Traynor Group plc

Final results

for the year ended 30 April 2012

Begbies Traynor Group plc, the UK's leading independent business recovery practice, today announces its final results for the year ended 30 April 2012.

Financial highlights

Results in line with market expectations

·; Revenue* of £57.7m (2011: £60.6m)

·; EBITA** (pre-exceptional items and acquisition-related costs) of £8.5m (2011: £9.1m)

·; Adjusted profit before tax*** of £7.4m (2011: £8.1m)

·; Profit before tax* of £5.5m (2011: £5.7m)

·; Statutory loss for the year of £5.7m (2011: profit £0.2m), including loss from discontinued operations and associated impairment charges

·; Earnings per share:

o adjusted basic and diluted EPS**** from continuing operations of 6.0p (2011: 6.4p)

o basic and fully diluted EPS from continuing operations of 4.4p (2011: 4.3p)

o basic and fully diluted EPS from continuing and discontinued operations of (6.4)p (2011: 0.2p)

·; Final dividend proposed of 1.6p (2011: 1.0p), making a total dividend for the year of 2.2p (2011: 2.2p)

·; Net debt of £20.1m (2011: £22.5m), comfortably within the banking facilities

·; Net assets per share of 65p (2011: 73p)

* From continuing operations

** Earnings before interest, tax and amortisation of intangible assets arising on acquisitions (from continuing operations)

*** Profit before tax from continuing operations of £5.5m (2011: £5.7m) plus amortisation of intangible assets arising on acquisitions of £0.4m (2011: £0.2m) plus finance charge arising from the discounting of deferred consideration of £0.1m (2011: £0.1m) plus exceptional items and acquisition-related costs of £1.4m (2011: £2.1m)

**** See reconciliation in note 7

Operational highlights

Renewed focus on insolvency and complementary activities

·; Insolvency and restructuring:

o Market-leading position maintained

o Segmental operating profits increased to £13.7m (2011: £13.6m) in spite of a slight decrease in revenue

o Benefits realised from cost saving actions over the last 18 months

·; Global risk partners:

o Reduced activity compared to a very strong comparative period and actions taken to reduce fixed costs

o Continued to invest in the UK forensic business

·; Divested of the tax, red flag and offshore businesses

·; Board changes: Mark Fry joined the board during the year; Geoff Hill has resigned today following the sale of the tax business and Graham McInnes steps down to a non-executive role

Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor Group, said:

"In a year of progress for the group, we have disposed of our tax, red flag and offshore businesses and delivered a resilient financial performance following the actions taken to reduce the group's cost base.

"Having re-focussed the business, we are now operating in a more stable environment with the benefit of a strengthened financial position and a core business which has retained its market leadership. Whilst our markets remain challenging and we do not anticipate a substantial improvement in the near term, we remain committed to maximising the performance of and growing our cash-generative and profitable business, both organically and through acquisitions."

An update on current trading will be provided at the time of the company's annual general meeting in October 2012.

A meeting for analysts will be held today at 9.30am at the offices of MHP Communications, 60 Great Portland Street, London, W1W 7RT. Please contact Giles Robinson on 020 3128 8788 if you would like to attend.

Enquiries please contact:

Information on Begbies Traynor Group can be accessed via the Group's website at www.begbies-traynorgroup.com.

Chairman's statement

INTRODUCTION

This has been a year of progress for the group, in which we have completed a number of actions to focus on our core UK insolvency and restructuring business, together with complementary service line activities. We have disposed of the group's tax, red flag and offshore businesses and we have delivered a resilient financial performance following the actions taken to reduce the group's cost base. Despite the continued subdued trading environment, we have maintained our operating margins on a reduced revenue base, reflecting the intrinsic profitability of our core insolvency business, whilst strengthening our financial position since the half year end in October 2011. The group is now much better positioned and well-placed to take advantage of future market opportunities.

RESULTS

Group revenue from continuing operations in the year ended 30 April 2012 was £57.7m (2011: £60.6m), with earnings before interest, tax and amortisation (pre-exceptional items and acquisition-related costs) of £8.5m (2011: £9.1m), in line with market expectations. Adjusted profit before tax* was £7.4m (2011: £8.1m). Profit before tax was £5.5m (2011: £5.7m). Earnings per share from continuing operations**, adjusted for the net of tax impact of amortisation of intangible assets arising on acquisitions, exceptional items, acquisition-related costs and the finance charge arising from the discounting of deferred consideration liabilities, was 6.0p (2011: 6.4p). Basic and fully diluted EPS from continuing operations were 4.4p (2011: 4.3p). Exceptional items and acquisition-related costsrelating to continuing operations were £1.4m (2011: £2.1m). Statutory loss for the year was £5.7m (2011: profit £0.2m), after loss from discontinued operations and associated impairment charges.

Net borrowings at 30 April 2012 were £20.1m (2011: £22.5m), giving gearing of 34% (2011: 34%) and headroom of £15.3m in the group's principal banking facilities. Interest cover (pre-exceptional costs) was 7.2 times (2011: 8.8 times). Net assets per share were 65p (2011: 73p).

* Profit before tax from continuing operations of £5.5m (2011: £5.7m) plus amortisation of intangible assets arising on acquisitions of £0.4m (2011: £0.2m) plus finance charge arising from the discounting of deferred consideration of £0.1m (2011: £0.1m) plus exceptional items and acquisition-related costs of £1.4m (2011: £2.1m)

** See reconciliation in note 7

DIVIDEND

The board remains committed to its long-term progressive dividend policy, which takes account of the underlying growth in earnings, whilst acknowledging the requirement for continuing investment and short-term fluctuations in profit.

Having considered the results for the year, the outlook for the new financial year and the ongoing requirements of the business, the board has recommended the total dividend be maintained at 2.2p (2011: 2.2p), comprising the interim dividend paid in May 2012 of 0.6p and a final dividend of 1.6p.

The final dividend will be paid on 7 November 2012 to shareholders on the register on 12 October 2012, with an ex-dividend date of 10 October 2012.

STRATEGY

We aim to enhance our position as the UK's leading independent business recovery practice, ensuring our core division is well placed to benefit from the opportunities presented by long-term growth in the UK insolvency market; together with developing the complementary global risk partners business.

PEOPLE

We are reliant on the expertise, professionalism and commitment of our people and I thank all of them for their contribution during a challenging year.

As at 30 April 2012, the group's continuing operations employed a total of 563 people (a decrease of 6% compared with a year ago), which includes 432 direct fee earners, of whom 84 are partners, and 131 staff in support functions. We continue to invest in training and developing our people and are pleased to have promoted six fee earners to partner during the year.

BOARD CHANGES

Mark Fry joined the board as head of insolvency and restructuring in July 2011. Mark joined the group in 2005, following our acquisition of his insolvency practice. He has since been the regional managing partner for London and the South East, successfully developing a restructuring and banking practice. Mark is currently deputy vice-president of the Insolvency Practitioners Association and will take up presidency in April 2014.

Geoff Hill has today resigned from the board following the disposal of the group's tax practice earlier in the financial year. Geoff joined the board in 2006 and I would like to thank him for his contribution to the group over the last six years. In addition, Graham McInnes will take on a new role as a non-executive director with effect from today. Graham has been an executive director since 2004, initially as finance director and latterly as corporate development director. Following these changes, the board will comprise three executive directors and two non-executive directors.

OPERATIONAL REVIEW - CONTINUING OPERATIONS

Insolvency and restructuring

Begbies Traynor is the UK's leading independent business recovery practice, providing a partner-led service to stakeholders in troubled businesses.

Segmental operating profits in the year increased marginally to £13.7m (2011: £13.6m), on revenues which decreased slightly to £53.1m (2011: £53.9m). This reflected an increase in operating margins to 25.8% (2011: 25.3%).

The improved margins are as a result of actions taken to restructure the cost base over the last 18 months and reflect a decrease in the number of people employed in insolvency to 466 as at 30 April 2012 from 502 a year before. Further improvements in margin will be challenging to achieve in the current environment, as the depressed economic conditions have resulted in downward pressure on the value of asset realisations in our insolvency appointments, increasing the time and cost to complete transactions, and ultimately reducing levels of recovery on our cases. We continue to keep our cost base under close review to ensure it is aligned to current and projected activity levels.

During the period we acquired a portfolio of Scottish insolvency appointments, together with three employees, for a total consideration of £0.4m. This has been successfully integrated into our existing operations.

The UK insolvency market has stabilised over the last twelve months, after the decreases seen in 2009 and 2010, and we have retained our market-leading position.

Despite the return of the UK economy into recession, base rates of 0.5% (since May 2009) continue to provide a very benign financing environment for otherwise weak companies, that in previous recessions would almost certainly have gone into an insolvency process.

We remain the market leader in UK mid-market insolvency and believe that the combination of our full national coverage, strong relationships with all major UK banks and excellent referral networks from other professional services organisations leaves the business well placed to take full advantage of its market.

We will continue to develop this core division through a combination of senior recruitment, selective acquisitions and staff development, with the intention of progressively increasing our market share. Further development will come from winning higher value, more complex instructions from existing clients and prospects, by demonstrating our growing capabilities and credentials.

Global risk partners

Global risk partners is a specialist risk consulting and forensic investigation consultancy. Its services include forensic technology and accountancy; risk and security consultancy; and corporate intelligence and investigations.

This segment broke even (2011: segmental profit of £1.4m) on revenues which decreased to £4.6m (2011: £6.7m).

As previously reported, activity levels in the prior year benefited from several large and profitable engagements, which were completed at the start of this financial year and were not subsequently repeated. Consequently, we have taken action to reduce the fixed costs associated with business activities with a more unpredictable earnings profile. The board believes that this will mitigate the impact of future revenue volatility.

We have continued to invest in the UK forensic accounting and forensic technology businesses through senior recruitment, the cost of which has a short-term impact on profitability.

Overall, this division has grown through organic investment to date, has low working capital requirements and has good future growth prospects.

The number of people employed in global risk partners was 34 on 30 April 2012, unchanged from a year before.

Exceptional costs

As a result of the market conditions outlined above we have restructured the cost base of the continuing operations, which resulted in exceptional costs of £1.4m, principally relating to staff reductions. 

INSOLVENCY MARKET

Trends in Government insolvency data reflect a small increase in corporate insolvencies in the UK over the course of the last financial year.

Insolvency statistics

Government insolvency statistics for the twelve months ended 31 March 2012 showed a 5% increase in the number of UK corporate insolvencies compared to the same period in the prior year. This contrasts with a 13% decrease in the preceding year.

The statistics for the first quarter of calendar year 2012 indicated that the market had remained stable with a 3% increase on the comparable quarter of 2011. However, there are currently no signs of a material increase in volumes, in spite of the many indicators of financial stress. The board's view is that this is due to the on-going high level of monetary support, principally low interest rates, combined with lenient attitudes by creditors towards financially stressed companies.

The board's expectations are that this trend will continue in the current financial year.

Red Flag Alert

'Begbies Traynor Red Flag Alert' statistics, which we publish quarterly, monitor adverse actions and other corporate distress signals, such as the issue of county court judgments and winding-up petitions, which are early warning signs of potential insolvency activity.

The most recent survey, published in April 2012, revealed that the number of UK companies experiencing critical problems in the first calendar quarter of 2012 has increased by 7% over the same period in 2011. We believe that this demonstrates the underlying financial stress in the UK. However, whilst record low interest rates and other support factors remain in place, it is uncertain when this stress will materially increase the level of insolvencies.

Our next survey will be published later in July 2012.

OUTLOOK

Having re-focussed the business, we are now operating in a more stable environment with the benefit of a strengthened financial position and a core business which has retained its market leadership. Whilst our markets remain challenging and we do not anticipate a substantial improvement in the near term, we remain committed to maximising the performance of and growing our cash-generative and profitable business, both organically and through acquisitions.

An update on current trading will be provided at the time of the company's annual general meeting in October 2012.

Ric Traynor

Executive Chairman

5 July 2012

Financial review

FINANCIAL HIGHLIGHTS - CONTINUING OPERATIONS

The group's revenue from continuing operations in the year was £57.7m (2011: £60.6m), with insolvency revenue having decreased by £0.7m or 1% and global risk partners revenue decreased by £2.1m or 31%.

EBITA (pre-exceptional and acquisition-related costs) decreased to £8.5m (2011: £9.1m), due to the lower activity levels in the year. However, margins remained unchanged at 15% due to cost savings from the restructuring programme which commenced in the prior year.

During the year, the group incurred exceptional restructuring costs of £1.4m (2011: £2.0m) to rationalise the cost base, which includes £0.1m (2011: £0.7m) of non-cash asset write downs. Costs of £nil (2011: £0.1m) associated with acquisitions were incurred in the year and have been expensed in the income statement in accordance with IFRS 3 (revised).

Amortisation of intangible assets arising on acquisitions increased to £0.4m (2011: £0.2m).

Finance costs increased to £1.2m (2011: £1.0m), due to higher average levels of net debt over the year.

Adjusted profit before tax was £7.4m (2011: £8.1m). Profit before tax was £5.5m (2011: £5.7m). The reconciliation between these profit measures is as follows:

The tax charge arising on pre-exceptional profits was £1.8m (2011: £2.3m). This represents an effective rate of 27% (2011: 29%); the reduction resulting from a change in tax rate from 26% to 24% applied to the group's deferred tax liabilities. The tax charge for the year from continuing operations was £1.5m (2011: £1.9m), which represents an effective rate of 27% (2011: 32%).

Profit for the year from continuing operations was £4.0m (2011: £3.9m).

EARNINGS PER SHARE ('EPS')

EPS from continuing operations*, adjusted for the net of tax impact of the amortisation of intangible assets arising on acquisitions, exceptional and acquisition-related costs and the finance charge arising from the discounting of deferred consideration liabilities, was 6.0p (2011: 6.4p). Basic and fully diluted EPS from continuing operations was 4.4p (2011: 4.3p).

* See reconciliation in note 7

CASH FLOWS

Net cash flows from operating activities (after interest and tax) in the year were £2.4m (2011: £6.3m). The core business continues to be cash-generative with underlying operating cash flows of £9.1m (2011: £10.1m) in the year, with the reduction resulting principally from the decrease in operating profits.

Tax payments in the year were £0.8m (2011: £1.7m), a reduction due to the lower level of taxable profits. Interest payments were £0.7m (2011: £0.9m).

Cash flows from investing activities were an inflow of £1.9m (2011: outflow of £7.0m). Proceeds from the disposal of property, plant and equipment were £3.8m (2011: £0.6m). During the year, the board resolved to outsource the provision of the group's company car fleet to a leading fleet management company, which resulted in the sale and leaseback of the existing fleet. This resulted in proceeds from disposal of £3.3m and a repayment of hire purchase obligations of £1.7m. Capital expenditure reduced to £1.2m (2011: £3.2m), principally due to lower levels of car purchases (due to the board's decision above) and reduced spend on IT and leasehold improvements. The disposal of businesses (after transaction costs) generated cash of £2.5m (2011: £nil). Deferred payments relating to prior year acquisitions were £2.8m (2011: £2.6m) with in year acquisition payments of £0.4m (2011: £1.8m).

Financing cash flows were an outflow of £4.3m (2011: inflow £1.9m). During the year there was a net repayment of asset finance obligations of £3.4m (2011: £0.6m), which includes the car hire purchase obligations noted above. Dividend payments were £2.0m (2011: £1.7m). There was a net drawdown on the group's principal bank facilities of £1.0m (2011: £4.0m).

FINANCING

Net borrowings at 30 April 2012 were £20.1m (2011: £22.5m), representing a significant reduction from the position at 31 October 2011 of £27.3m, giving gearing of 34% (2011: 34%). Interest cover (pre-exceptional costs) was a very comfortable 7.2 times (2011: 8.8 times).

At 30 April 2012, the group had utilised £19.7m (2011: £18.7m) of its principal bank facilities, giving significant headroom within the total facilities of £35m. During the year all bank covenants were met and the group remains in a robust financial position.

The group continues to use other sources of finance as appropriate. At 30 April 2012, the group had asset-related finance of £0.4m (2011: £3.8m).

NET ASSETS

At 30 April 2012 net assets were £58.5m (2011: £65.9m), equivalent to net assets per share of 65p (2011: 73p).

Non-current assets decreased to £53.6m (2011: £58.2m) due to the disposal of the company car fleet, low levels of capital investment in the year and depreciation costs.

Current assets (excluding assets held for sale) were broadly unchanged at £48.1m (2011: £47.6m). Assets held for sale decreased to £0.2m (2011: £9.5m) following the disposal of the tax division in the year.

Gross borrowings reduced to £24.4m (2011: £26.6m).

Trade and other payables, which reduced to £10.4m (2011: £14.1m), includes trade creditors and accruals £7.6m (2011: £7.2m), deferred consideration liabilities £0.9m (2011: £3.5m) and tax and social security creditors £1.9m (2011: £3.5m). Provisions for restructuring costs and post-disposal obligations total £3.5m (2011: £0.4m) of which £2.0m is payable within one year. Current tax liabilities reduced to £nil (2011: £0.8m). Deferred tax liabilities are £5.0m (2011: £5.0m).

Liabilities directly associated with assets classified as held for sale, decreased from £2.6m to £0.1m, following the divestments in the year. Other liabilities include £0.9m of deferred consideration payments, of which £0.8m is payable within one year.

DISCONTINUED OPERATIONS

The group completed a number of disposals in the year, in line with its previously announced strategy to focus on its core division of UK insolvency and restructuring and developing its complementary global risk partners business. The remaining transaction, relating to the disposal of the Kenyan insolvency operations, is at an advanced stage.

IFRS 5 'Non Current Assets Held for Sale and Discontinued Operations' requires the financial results for these activities to be disclosed as discontinued operations in the income statement and the carrying value of net assets to be written down to the fair value of the assets less costs to sell.

Discontinued operations generated a post-tax loss for the year (before exceptional and acquisition-related costs) of £2.6m (2011: £1.1m). The post-tax cost of exceptional and acquisition-related costs was £7.1m (2011: £2.6m), resulting in a post-tax loss of £9.7m (2011: £3.7m).

Tax

On 26 November 2011, we completed the sale of the tax division to Smith and Williamson Holdings Ltd for an initial consideration of £2.9m paid in cash on completion, subject to completion account adjustments. In addition, the group may be entitled to a deferred consideration payment, dependent on the success of certain specified client engagements in the period to 30 April 2013.

The sale of the business resulted in exceptional costs of £7.3m in the year relating to goodwill impairment of £4.4m, disposal provisions of £2.4m and a loss on disposal of £0.5m.

The division generated revenue of £2.8m (2011: £7.0m) and an operating loss of £1.5m (2011: profit £0.1m).

Red Flag Alert

On 10 April 2012, we completed the sale of Red Flag A!ert LLP. Ric Traynor, the group's executive chairman, acquired the controlling interest in the LLP, with the group retaining a minority interest in the partnership. This follows a disposal process, during which feedback from third parties was that the business was not yet sufficiently established for consideration as a standalone acquisition opportunity.

The agreement allows for a return of up to £1.5m of the investment made by the group in the business to date, together with a future share of any trading profits of the LLP, with a de-minimis obligation for future investment. Ric Traynor will act as chairman of the Red Flag business, which will be managed by the current management team who transferred with the business.

The group has agreed to continue to provide shared accommodation, IT, HR, marketing, administrative and accounting services to Red Flag on a similar basis to current intra-group arrangements. The group has negotiated an agreement to retain full access to the database and joint marketing rights for the publication of Red Flag Alert quarterly statistics.

The sale of the business resulted in exceptional costs of £0.2m in the year relating to transaction costs of £0.1m and disposal provisions of £0.1m.

Revenue in the period was £0.5m (2011: £0.2m) with losses of £0.9m (2011: loss of £0.7m).

Offshore insolvency

On 11 January 2012, we completed the sale of the Channel Islands insolvency and restructuring business to Grant Thornton Limited for consideration of £0.2m. The sale of the business resulted in exceptional costs of £0.3m in the year relating to disposal provisions of £0.2m and a loss on disposal of £0.1m. In addition, during the year we closed our Cayman Islands operations.

The Kenyan insolvency business is in the advanced stage of a sales process and has consequently been classified as held for sale in the balance sheet. IFRS 5 requires that the carrying value of the net assets be written down to the fair value of the assets less costs to sell. This has resulted in a non-cash charge to profit of £0.4m which has been disclosed within exceptional costs.

Revenue in the period from the offshore insolvency operations was £0.5m (2011: £0.9m) with losses of £0.3m (2011: loss of £0.6m).

GOING CONCERN

The directors have reviewed the financial resources available to the group and have concluded that the group will be able to operate within the level of its borrowing facilities and have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. This conclusion is based, amongst other matters, on the group's existing borrowing facilities and a review of financial forecasts for a period exceeding twelve months from the date of this announcement. Accordingly, the financial information in this announcement is prepared on the going concern basis.

Nick Taylor

Group Finance Director

5 July 2012

Consolidated income statement

for the year ended 30 April 2012

Consolidated statement of changes in equity

for the year ended 30 April 2012

The merger reserve arose on the formation of the group in 2004.

Consolidated balance sheet

at 30 April 2012

Consolidated cash flow statement

for the year ended 30 April 2012

1. Basis of preparation

The results for the year ended 30 April 2012 have been prepared on the basis of accounting policies consistent with those set out in the annual report to shareholders of Begbies Traynor Group plc for the year ended 30 April 2011.

The group's financial statements for the year ended 30 April 2012 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU. Whilst the financial information included in this announcement has been prepared in accordance with IFRS, this announcement itself does not contain sufficient information to comply with IFRS.

This financial information does not include all of the information and disclosures required for full annual financial statements and does not comprise statutory accounts within the meaning of section 435 of the Companies Act 2006.

The comparative figures for the year ended 30 April 2011 do not comprise the group's statutory accounts for that financial year. Those accounts have been reported upon by the group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

Statutory accounts for Begbies Traynor Group plc for 2012 will be delivered to the Registrar of Companies following the company's annual general meeting. The auditors have reported on these accounts; their report is unqualified and does not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under either section 498 (2) or (3) of the Companies Act 2006. The 2012 annual report will be available on the group's website: www.begbies-traynorgroup.com.

Going concern

In carrying out their duties in respect of going concern, the directors have completed a review of the group's current financial position and cash flow forecasts for a period exceeding 12 months from the date of this announcement. This review included sensitivity analysis to determine the potential impact on the group of reasonably possible downside scenarios. Under all modelled scenarios, the group's banking facilities were sufficient and all associated covenant measures were forecast to be met.

After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, this financial information is prepared on the going concern basis.

2. Segmental analysis by class of business

The continuing group is managed as two operating segments: insolvency and restructuring and global risk partners. The tax, red flag and insolvency offshore businesses are classified as discontinued. The prior year information has been represented to reflect the classification of the insolvency offshore businesses as discontinued.

Selected segmental information about the continuing group is presented below.

3. Finance costs

4. Exceptional and acquisition-related costs

During the year, the group incurred exceptional and other acquisition-related costs as detailed below:

5. Tax

6. Discontinued operations

The group has completed a number of disposals in the year. On 26 November 2011, the group disposed of its tax business to Smith & Williamson Holdings Limited; and on 10 April 2012, the group disposed of Red Flag A!ert LLP to Ric Traynor, the group's executive chairman. The group has also substantially divested its insolvency offshore business. The Channel Islands business was sold to Grant Thornton Limited on 11 January 2012, the Cayman Islands business has been closed and the Kenyan business is in the advanced stage of a sales process and has consequently been classified as held for sale in the balance sheet.

Tax, red flag and insolvency offshore have been presented as discontinued operations. The results of the discontinued operations which have been included in the consolidated income statement were as follows:

7. Earnings (loss) per share

The calculation of the basic and diluted earnings (loss) per share is based on the following data:

All potential ordinary shares under option were anti-dilutive at 30 April 2012 and 30 April 2011.

The following additional earnings per share figures are presented as the directors believe they provide a better understanding of the trading position of the group:

8. Dividends

The proposed final dividend is subject to approval by shareholders at the AGM. The interim dividend for 2012 was not paid until8 May 2012 and, accordingly, neither has been included as a liability in these financial statements nor as a distribution to equity shareholders.

9. Reconciliation to the cash flow statement

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.