C.H. Bailey Plc Regulatory News (BLEY)

21 Dec 2007 13:33

Bailey(C.H.) PLC21 December 2007 C.H. BAILEY PLC Chairman's Statement Six months ended 30th September 2007 Results for the 6 month period ended 30th September 2007 are disappointing and show a loss of £785,307 (2006 £552,467). Turnover has decreased by £293,737 (5.3%) with a decrease in gross profit of 4.4%. UK Operations The UK Engineering companies have reported a reduction in sales, with both Specialist Heavy Engineers Ltd and Midway Precision Ltd reporting a decrease in revenue but forecasting improved sales for the second half of the year. Modular Automation International Ltd (MAIL), has seen an increase in enquiries, but less confirmed sales and reported a loss for the period of approximately £300,000. In recent months, we have seen a substantial improvement and are confident that with an order book of over £ 4 million, this position will be reversed. MAIL is projecting a profit for the full year in excess of £200,000. Malta Our hotel in Malta has once again been profitable. Whilst we continue to speak to planners and third parties regarding the re-development, we are disappointed with the progress to date. We will be addressing this issue again in the New Year and hope to report further progress in the near future. Tanzania The new Oyster Bay Hotel was finished on time and re-opened its doors in November. The Hotel is unique for Dar es Salaam being a boutique hotel offering a different quality of accommodation and service to those that currently exist. Sales are expected to be quiet until the new tourist season begins in June 2008 when we are encouraged with the level of bookings. The office development is on target to be completed by May 2008. We can report an increase in demand and that agreements have been signed with tenants for over 50% of the office accommodation. We are confident that we shall reach 100% occupancy by the time the offices become available for occupation. Beho Beho has seen increased revenues and occupancy and has maintained its market share and reputation in the international tourist market. Mikumi WildlifeCamp has also seen improvements and continues to contribute to group. Investment This division has seen a turbulent time over the past few months with large variances in World financial markets. We are pleased to report that our fund managers are currently weathering the storm and have maintained growth of your managed investments in these difficult times. Current Trading and outlook We are naturally disappointed in the half year results however, there are encouraging signs within the group. We are conscious of the global uncertainty and are continually looking to reduce costs in order to achieve greater efficiencies and better margins. With the Hotel development now completed in Tanzania, we expect our financial reports to record further increases in revenues and we believe that these contributions will help the group move forward and improve the bottom line. Charles BaileyChairman December 21st 2007 Consolidated Income Statementfor the six months ended 30th September 2007 (unaudited) Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 £ £ £Continuing operationsRevenue 5,218,153 5,511,890 11,021,082Cost of sales (4,163,765) (4,153,357) (8,181,967) ______________________________________________________ Gross profit 1,054,388 1,358,533 2,839,115 Administrative expenses (1,777,719) (1,742,653) (3,377,842) ______________________________________________________ Trading (loss) (723,331) (384,120) (538,727) Investment activities and other income (52,357) (24,496) 387,261 ______________________________________________________ Operating (loss) (775,688) (408,616) (151,466)________________________________________________________________________________________________________________________ EBITDI (609,404) (236,411) 170,191Depreciation and impairment losses (166,284) (172,205) (317,737)Loss on the sale of property, plant and equipment - - (3,920) ______________________________________________________ Operating (loss) (775,688) (408,616) (151,466)________________________________________________________________________________________________________________________ Finance income 958 5,645 15,767Finance costs (86,464) (61,757) (120,395) ______________________________________________________ (Loss) before taxation (861,194) (464,728) (256,094) Taxation 11,635 22,704 55,456Minority interest 64,252 (17,124) (18,545) ______________________________________________________ (Loss) for the period from continuing operations (785,307) (459,148) (219,183) Discontinued operations(Loss) for the period from discontinued operations - (93,319) (472,253) ______________________________________________________ (Loss) for the financial period (785,307) (552,467) (691,436) ______________________________________________________ Earnings per share from continuing operations (9.59p) (5.60p) (2.68p) Earnings per share from total operations (9.59p) (6.74p) (8.44p) EBITDI is Earnings before interest, taxation, depreciation and impairment provisions. Consolidated Balance Sheetas at 30th September 2007 (unaudited) 30 September 2007 30 September 2006 31 March 2007 £ £ £Non-current assetsProperty, plant and equipment 8,834,687 7,343,691 7,738,117Goodwill 629,387 717,050 672,781Lease prepayments 47,996 54,344 51,170Deferred tax asset 774,593 670,150 708,444 ______________________________________________________ 10,286,663 8,785,235 9,170,512 ______________________________________________________Current AssetsStocks 225,594 350,195 180,584Trade and other receivables 3,625,771 3,204,292 4,406,904Other current asset investments 1,840,638 2,387,186 1,865,615Cash and cash equivalents 226,336 294,329 244,047 ______________________________________________________ 5,918,339 6,236,002 6,697,150 ______________________________________________________Current liabilitiesBank loans and overdrafts (824,946) (846,775) (576,186)Trade and other payables (4,326,110) (3,864,449) (4,579,337)Current tax liabilities (205,609) (209,751) (294,703)Other loans (653,459) (739,219) (647,335)Obligations under finance leases (59,599) (41,448) (59,599)Provisions (217,235) (137,582) (135,505) ______________________________________________________ (6,286,958) (5,839,224) (6,292,665) ______________________________________________________ Net current assets (368,619) 396,778 404,485 ______________________________________________________ Total assets less current liabilities 9,918,044 9,182,013 9,574,997 Non-current liabilitiesBank loans (1,759,857) (353,603) (724,691)Obligations under finance leases (53,339) (64,894) (82,721)Cumulative preference shares (530,180) (530,180) (530,180)Deferred tax liabilities (713,636) (659,122) (659,122) ______________________________________________________ 6,861,032 7,574,214 7,578,283 ______________________________________________________EquityShare capital 833,541 833,541 833,541Share premium account 609,690 609,690 609,690Capital redemption reserve 5,163,332 5,163,332 5,163,332Investment in own shares (187,528) (187,528) (187,528)Foreign currency translation reserve 1,371,718 1,201,818 1,257,185Retained earnings (766,812) 46,047 (6,816) ______________________________________________________ Surplus attributable to the parent's shareholders 7,023,941 7,666,900 7,669,404Minority interest (162,909) (92,686) (91,121) ______________________________________________________ Total equity 6,861,032 7,574,214 7,578,283 ______________________________________________________ Consolidated Cash Flow Statement for the six months ended 30th September 2007 (unaudited) Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 £ £ £Cash flows from operating activitiesCash flow from operations (72,345) 54,498 (728,876)Interest paid (86,464) (61,757) (120,395)Overseas tax paid - - (5,542) ______________________________________________________ Net cash flow from operating activities (158,809) (7,259) (854,813) ______________________________________________________ Investing activitiesSale of property, plant and equipment - - 600Purchase of property, plant and equipment (1,089,736) (245,068) (724,843)Investment in associated undertaking - - (100,000)Sale of investments 43,737 234,322 1,803,375Purchase of investments (103,222) (305,118) (600,430)Interest received 958 5,645 15,767 ______________________________________________________ Net cash flow from investing activities (1,148,263) (310,219) 394,469 ______________________________________________________ Financing activitiesMovement in bank loans 1,041,505 50,929 420,961Movement in directors' loans 29,837 (276,250) (201,571)Movement in other loans 6,124 9,565 (82,319)Movement in capital element of finance leases (29,382) 11,442 47,420 ______________________________________________________Net cash flow from financing activities 1,048,084 (204,314) 184,491 ______________________________________________________ Net decrease in cash and cash equivalents (258,988) (521,792) (275,853)Cash and cash equivalents at beginning of period (332,139) 11,226 11,226Effect of foreign exchange rate changes (7,483) (41,880) (67,512) ______________________________________________________ Cash and cash equivalents at end of period (598,610) (552,446) (332,139) ______________________________________________________ Reconciliation of net cash flow to movement in net debt in the period Net decrease in cash and cash equivalents (258,988) (521,792) (275,853)Cash inflow from the increase in debt (1,018,247) (71,936) (386,062) ______________________________________________________ Movement in net debt during the period (1,277,235) (593,728) (661,915)Net debt at the beginning of period (1,846,485) (1,123,140) (1,123,140)Effect of foreign exchange rate changes (1,144) (34,742) (61,430) ______________________________________________________ Net debt at the end of the period (3,124,864) (1,751,610) (1,846,485) ______________________________________________________ Consolidated Statement of Recognised Income and Expensefor the six months ended 30th September 2007 (unaudited) Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 £ £ £ Currency translation differences 139,844 63,202 204,675 ______________________________________________________ Net income recognised directly in equity 139,844 63,202 204,675Loss for the period attributable to equity shareholders (785,307) (552,467) (691,436) ______________________________________________________Total recognised expense for the period attributable to equity shareholders (645,463) (489,265) (486,761) ______________________________________________________ Notes to the Consolidated Interim Financial Statements For the six months ended 30th September 2007 (unaudited) 1. General Information Basis of preparation These interim financial statements have been prepared in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and with the Companies Act 1985. They comply with the requirements of IAS 34 - Interim Financial Reporting. The information for the year ended 31 March 2007 does not constitute the group'sstatutory accounts for 2007 as defined in Section 240 of the Companies Act 1985.Statutory accounts for 2007 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. The interim financial statements have been prepared using the historical cost basis of accounting except for: i) Properties held at the date of transition to IFRS which are stated at deemed cost;ii) Assets held for sale which are stated at the lower of fair value less anticipated disposal costs and carrying value. Functional and presentational currency The financial statements are presented in pounds sterling because that is the functional currency of the primary economic environment in which the group operates. First time adoption of International Financial Reporting Standards This is the group's first interim statement that has been prepared in accordancewith IFRS. The group's transition date for adoption of IFRS is 1st April 2006. An explanation of how the transition to IFRS has affected the group's financial position at the date of the last interim report prepared in accordance with UK GAAP and the last reporting date under UK GAAP together with a reconciliation of the results under UK GAAP to IFRS are given in note 9. The group has revised its accounting policies where applicable to conform with IFRS and the significant policies having an effect on the interim statement are set out below. These policies have been applied consistently to all the periodspresented across all group companies and in preparing the opening balance sheet at 1st April 2006 for the purpose of transition to IFRS. The group has taken advantage of the following exemptions on transition to IFRS as permitted by paragraph 13 of IFRS 1: • The requirements of IFRS 3 - Business Combinations - have not applied to business combinations that occurred before the date of transition to IFRS.• The carrying value of freehold and leasehold properties are based on previously adopted UK GAAP valuations and these are now taken as deemed cost on transition to IFRS. 2. Significant accounting policies Basis of consolidation The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries) made up to 30th September 2007. Minority interests in the net assets of consolidated subsidiaries are identifiedseparately from the group's equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Business combinations and goodwill Goodwill arising on consolidation represents the excess of consideration over the group's interest in the fair value of assets acquired. Goodwill is recognised as an asset and is not amortised. It is reviewed for impairment at each reporting date as detailed in "impairment of non-financial assets" below. In accordance with the options that are available under IFRS 1, the group has elected not to apply IFRS 3 retrospectively to past business combinations that occurred before the date of transition to IFRS. Accordingly goodwill that had previously been offset against reserves under UK GAAP has not been recognised in the opening IFRS balance sheet. Trade investments The results of entities over which the group is not in a position to be able to exercise significant influence despite holding a significant shareholding are not accounted for as associates and therefore are not equity accounted. The companies are classified as trade investments and are carried at cost within non-current assets as they are held as a long term investments. Dividend incomeis recognised in the income statement on a cash basis when received. Property, plant and equipment Property is carried at deemed cost at the date of transition to IFRS based on the previous UK GAAP valuations. Plant and equipment held at the date of transition and subsequent additions to property, plant and equipment are stated at purchase cost including directly attributable costs. The group does not havea revaluation policy. Freehold land is not depreciated. Depreciation of other property, plant and equipment is provided on a straight line basis using rates calculated to write down the cost of each asset over its estimated useful life as follows: Property:Freehold buildings and long leasehold property 1%Short leasehold buildings Period of the leasePlant and equipment Between 5% and 50% Annual reviews are made of estimated useful lives and material residual values. Leased assets Lessee accounting Property leases are split into two elements, land and buildings and each considered in isolation and each element is reviewed to determine if it is operating or finance in nature. Initial rental payments in respect of operatingleases are included in current and non-current assets as appropriate and amortised to the income statement over the period of the lease. Ongoing rental payments are charged as an expense in the income statement on a straight line basis until the date of the rent review. Finance leases are capitalised and depreciated in accordance with the accounting policy for property, plant and equipment. As permitted by IFRS 1 at the date of transition to IFRS, the carrying value of long leasehold properties are based on the previous UK GAAP valuations and this has been taken as deemed cost. Rental costs arising from operating leases are charged as an expense in the income statement on a straight line basis over the period of the lease. Non-current assets held for sale Non-current assets are reclassified as assets held for sale if their carrying value will be recovered through a sale transaction which is highly probable to be completed within 12 months of the initial classification. Assets held for sale are valued at the lower of carrying amount at the date of initial classification and fair value less costs to sell. Impairment of non-financial assets Goodwill is tested annually for impairment, or more frequently if there are any changes in circumstances or events that indicate that a potential impairment may exist. Goodwill impairments cannot be reversed. Property, plant and equipment are reviewed for indications of impairment when events or changes in circumstances indicate that the carrying amount may not be recovered. If there are indications then a test is performed on the asset affected to assess its recoverable amount against carrying value. An asset impaired is written down to the higher of value in use or its fair value less cost to sell. Deferred and current taxation The charge for taxation is based on the taxable profit or loss for the period and takes into account taxation deferred because of differences between the treatment of certain items for taxation and for accounting purposes. Full provision is made for the tax effects of these differences. Deferred tax is provided on unremitted earnings from overseas subsidiaries where it is probable that these earnings will be remitted to the UK in the foreseeable future. Deferred tax is measured using tax rates that have been enacted, or substantively enacted, by the period end balance sheet date. Deferred tax assets and liabilities are not discounted. The carrying amount of the deferred tax assets is reviewed at each reporting balance sheet date to ensure that it is probable that sufficient taxable profitswill be available to allow the asset to be recovered. Assets and liabilities, in respect of both deferred and current tax, are only offset when there is a legally enforceable right to offset and the assets and liabilities relate to taxes levied by the same taxation authority. Deferred and current tax are charged or credited in the income statement except when they relate to items charged directly to equity in which case the associated tax is also dealt with in equity. Stocks Stocks are valued at the lower of cost of purchase and net realisable value. Cost comprises actual purchase price and where applicable associated direct costs incurred bringing the stock to its present location and condition. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow moving or defective items where appropriate. Financial instruments Financial assets and financial liabilities are recognised on the consolidated balance sheet when the group becomes a party to the contractual provisions of the instrument. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. Trade and other receivables Trade and other receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. Allowances for irrecoverable amounts, which are dealt with in the income statement, are calculated based on the difference between the assets' carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Cash and cash equivalents Cash and cash equivalents includes cash-in-hand, cash at bank and short term highly liquid investments that are readily convertible into known amounts of cash within three months from the date of initial acquisition with an insignificant risk of a change in value. Trade and other payables Trade and other payables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective rate method. Bank loans Interest bearing bank loans are recorded at the proceeds received less capital repayments made. Finance charges are accounted for on an accruals basis in the income statement using the effective interest rate method. They are included within accruals to the extent that they are not settled in the period in which they arise. Provisions Provisions are created where the group has a present obligation (legal or constructive) as a result of a past event where it is probable that the group will be required to settle that obligation at the balance sheet date. Provisions are only discounted to present value where the effect is material. Net debt Net debt is defined as cash and cash equivalents, bank and other loans includingfinance lease obligations and derivative financial instruments stated at currentfair value. Revenue recognition Revenue Revenue represents the fair value of the consideration received and receivable for services provided and goods supplied to third party customers. In respect of long term contracts and contracts for on-going services, revenue is recognised as the contract progresses on the basis of work completed. Revenue excludes value added tax. Investment and interest income Dividend income is recognised in the income statement when the shareholder's right to receive payment has been established. Interest income from bank deposit accounts is accrued on a time basis calculatedby reference to the principal on deposit and effective interest rate applicable. Foreign Currencies Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into pounds sterling at the financial reporting period end rates. The results of overseas subsidiary undertakings, associates and trade investments are translated into pounds sterling at average rates for the period unless exchange rates fluctuate significantly during that period in which case exchange rates at the date of transactions are used. The closing balance sheets are translated at the period end rates and the exchange differences arising are transferred to the group's translation reserve as a separate component of equityand are reported within the Statement of Recognised Income and Expense. All other exchange differences are included within the Income Statement in the period. Operating profit Operating profit is defined as the profit for the period from continuing operating costs and income but before income from other participating interests, finance income, finance costs, other gains and losses and taxation. Operating profit is disclosed as a separate line on the face of the income statement. Finance costs Finance costs are recognised in the income statement on the accruals basis in the period in which they occurred. 3. Segmental information Turnover Operating (loss) Operating (loss) Continuing continuing discontinued Operations operations operations Net assetsClasses of business £ £ £ £ Industrial:Six months to 30th September 20073,596,443 (341,535) - 469,822Six months to 30th September 20064,024,780 29,376 (93,319) 702,528Year to 31st March 20078,614,953 295,661 (472,253) 1,027,424 Leisure:Six months to 30th September 20071,610,210 46,245 - 5,572,552Six months to 30th September 20061,477,931 73,746 - 5,489,175Year to 31st March 2007 2,387,627 (76,549) - 5,459,064 Agents, managers, consultants and investors:Six months to 30th September 2007 11,500 (480,398) - 818,658Six months to 30th September 2006 9,179 (511,738) - 1,382,511Year to 31st March 2007 18,502 (370,578) - 1,091,795 Total:Six months to 30th September 2007 5,218,153 (775,688) - 6,861,032Six months to 30th September 20065,511,890 (408,616) (93,319) 7,574,214Year to 31st March 2007 11,021,082 (151,466) (472,253) 7,578,283 Geographical segments United Kingdom:Six months to 30th September 20073,507,316 (680,012) - 925,189Six months to 30th September 2006 3,699,148 (224,834) (93,319) 1,618,439Year to 31st March 20077,929,503 (302,307) (472,253) 1,320,881 Malta, Tanzania and Rest of the World:Six months to 30th September 2007 1,710,837 (95,676) - 5,935,843Six months to 30th September 2006 1,812,742 (183,782) - 5,955,775Year to 31st March 2007 3,091,579 150,841 - 6,257,402 Total:Six months to 30th September 2007 5,218,153 (775,688) - 6,861,032Six months to 30th September 2006 5,511,890 (408,616) (93,319) 7,574,214Year to 31st March 2007 11,021,082 (151,466) (472,253) 7,578,283 4. Discontinued activities During the year ended 31st March 2007, the group disposed of the subsidiary undertaking P&D Electrical Services Limited. 5. Earnings per share The calculation of earnings per share is based on the loss for the period divided by the weighted average number of ordinary shares excluding own shares held. This is 8,192,980 shares for the periods to 30th September 2006 and 2007 and for the year ended 31st March 2007. 6. Share capital 30 September 2007 30 September 2006 31 March 2007 £ £ £Authorised: 60,000,000 ordinary shares of 10p each 6,000,000 6,000,000 6,000,000 ______________________________________________________Issued and fully paid: 8,335,414 ordinary shares of 10p each 833,541 833,541 833,541 ______________________________________________________ The company retains as treasury shares 142,434 ordinary shares. 7. Cash flows from operations Six months ended Six months ended Year ended 30 September 2007 30 September 2006 31 March 2007 £ £ £ Operating loss - continuing operations (775,688) (408,616) (151,466)Operating loss - discontinuing operations - (93,319) (472,253)Depreciation 166,284 172,205 317,737Loss on sale of tangible fixed assets - - 3,920(Profit) on sale of investments (11,984) (34,541) (754,232)Movement in fair value of investments 28,551 104,611 71,502(Profit) on sale of subsidiary undertaking - - (10,032)Provision against cost of investments 67,895 16,290 16,920Exchange rate adjustments 6,902 328,421 479,466(Increase) decrease in stock and work in progress (45,010) 51,959 221,570(Increase) decrease in debtors 781,133 700,474 (502,138)(Decrease) in creditors (290,428) (782,986) (59,902)Working capital transferred on sales of subsidiary undertaking - - 110,032 ______________________________________________________ Cash flow from operations (72,345) 54,498 (728,876) ______________________________________________________ 8. Cash and cash equivalents Exchange Rate 30th September 1st April 2007 Cash Flow adjustments 2007 £ £ £ £Cash and bank overdrafts (335,096) (259,081) (7,375) (601,552)Liquid resources 2,957 93 (108) 2,942 ______________________________________________________________ (332,139) (258,988) (7,483) (598,610)Other loans due within one year (647,335) (6,124) - (653,459)Finance leases (142,320) 29,382 - (112,938)Bank loans due after more than one year (724,691) (1,041,505) 6,339 (1,759,857) ______________________________________________________________ Net funds/(debt) (1,846,485) (1,277,235) (1,144) (3,124,864) ______________________________________________________________ Liquid resources comprise short-term bank and money market deposits. 9. Explanation of transition to IFRS The following disclosures are required to explain the financial impact of adopting IFRS on the group. Reconciliation of equity as at 1st April 2006 (date of transition to IFRS) IRFS 1 First time UK GAAP Reclassications adoption IAS 17 Leases IFRS £ £ £ £ £Non-current assetsGoodwill 761,319 - - - 761,319Property, plant and equipment 7,512,405 - - (57,518) 7,454,887Lease prepayments - - - 57,518 57,518Deferred tax asset - 647,446 - - 647,446 ______________________________________________________________________________ 8,273,724 647,446 - - 8,921,170 ______________________________________________________________________________Current assetsStocks 402,154 - - - 402,154Trade and other receivables 4,552,212 (647,446) - - 3,904,766Other currents assets investments 2,402,750 - - - 2,402,750Cash and cash equivalents 279,552 - - - 279,552 _______________________________________________________________________________ 7,636,668 (647,446) - - 6,989,222 _______________________________________________________________________________ Current liabilitiesBank loans and overdrafts - (268,326) - - (268,326)Trade and other payables (6,064,838)1,396,356 - - (4,668,482)Current tax liabilities - (356,928) - - (356,928)Other loans - (729,654) - - (729,654)Obligations under finance leases - (41,448) - - (41,448)Provisions - (245,608) - - (245,608) _______________________________________________________________________________ (6,064,838) (245,608) - - (6,310,446) _______________________________________________________________________________ Net current assets 1,571,830 (893,054) - - 678,776 _______________________________________________________________________________ Total assets less current liabilities 9,845,554 (245,608) - - 9,599,946 _______________________________________________________________________________Non-current liabilitiesBank loans (893,444) 583,632 - - (309,812)Obligations under finance leases - (53,452) - - (53,452)Cumulative preference shares - (530,180) - - (530,180)Deferred tax liabilities - - (659,122) - (659,122)Provisions (245,608) 245,608 - - - ______________________________________________________________________________ (1,139,052) 245,608 (659,122) - (1,552,566) ___________________________________________________________________________ Net assets 8,706,502 - (659,122) - 8,047,380 ___________________________________________________________________________ EquityShare capital 833,541 - - - 833,541Share premium account 609,690 - - - 609,690Capital redemption reserve 5,163,332 - - - 5,163,332Investment in own shares (187,528) - - - (187,528)Foreign currency translation reserve - - 1,283,365 - 1,283,365Retained earnings (771,780) - 1,225,545 - 453,765Revaluation reserve 1,717,035 - (1,717,035) - -Other reserves 743,143 - (743,143) - -Investment revaluation reserve 707,854 - (707,854) - - _______________________________________________________________________________ Surplus attributable to parent's shareholders 8,815,287 - (659,122) - 8,156,165Minority interest (108,785) - - - (108,785) _______________________________________________________________________________ Total equity 8,706,502 - (659,122) - 8,047,380 _______________________________________________________________________________ Reconciliation of equity as at 30th September 2006 (date of last UK GAAP Interim Statement) IRFS 1 First time UK GAAP Reclassications adoption IAS 17 Leases IFRS £ £ £ £ £Non-current assetsGoodwill 717,050 - - - 717,050Property, plant and equipment 7,398,035 - - (54,344) 7,343,691Lease prepayments - - - 53,344 53,344Deferred tax assets - 670,150 - - 670,150 ________________________________________________________________________________ 8,115,085 670,150 - - 8,785,235 ________________________________________________________________________________Current assetsStocks 350,195 - - - 350,195Trade and other receivables 3,874,442 (670,150) - - 3,204,292Other currents assets investments 2,387,186 - - - 2,387,186Cash and cash equivalents 294,329 - - - 294,329 ________________________________________________________________________________ 6,906,152 (670,150) - - 6,236,002 ________________________________________________________________________________Current liabilitiesBank loans and overdrafts - (846,775) - - (846,775)Trade and other payables (5,701,642)1,837,193 - - (3,864,449)Current tax liabilities - (209,751) - - (209,751)Other loans - (739,219) - - (739,219)Obligations under finance leases - (41,448) - - (41,448)Provisions - (137,582) - - (137,582) ________________________________________________________________________________ (5,701,642) (137,582) - - (5,839,224) ________________________________________________________________________________ Net current assets 1,204,510 (807,732) - - 396,778 ________________________________________________________________________________ Total assets less current liabilities 9,319,595 (137,582) - - 9,182,013 ________________________________________________________________________________Non-current liabilitiesBank loans (948,677) 595,074 - - (353,603)Obligations under finance leases - (64,894) - - (64,894)Cumulative preference shares - (530,180) - - (530,180)Deferred tax liabilities - - (659,122) - (659,122)Provisions (137,582) 137,582 - - - ________________________________________________________________________________ (1,086,259) 137,582 (659,122) - (1,607,799) ________________________________________________________________________________ Net assets 8,233,336 - (659,122) - 7,574,214 ________________________________________________________________________________EquityShare capital 833,541 - - - 833,541Share premium account 609,690 - - - 609,690Capital redemption reserve 5,163,332 - - - 5,163,332Investment in own shares (187,528) - - - (187,528)Foreign currency translation reserve - - 1,201,818 - 1,201,818Retained earnings (1,039,826) - 1,085,873 - 46,047Revaluation reserve 1,682,274 - (1,682,274) - -Other reserves 661,296 - (661,296) - -Investment revaluation reserve 603,243 - (603,243) - - _______________________________________________________________________________ Surplus attributable to parent's shareholders 8,326,022 - (659,122) - 7,666,900Minority interest (92,686) - - - (92,686) _______________________________________________________________________________ Total equity 8,233,336 - (659,122) - 7,574,214 _______________________________________________________________________________ Reconciliation of equity as at 31st March 2007 (date of last UK GAAP Financial Statements) IRFS 1 First time UK GAAP Reclassications adoption IAS 17 Leases IFRS £ £ £ £ £Non-current assetsGoodwill 672,781 - - - 672,781Property, plant and equipment 7,789,287 - - (51,170) 7,738,117Lease prepayments - - - 51,170 51,170Deferred tax assets - 708,444 - - 708,444 ___________________________________________________________________________ 8,462,068 708,444 - - 9,170,512 ___________________________________________________________________________Current assetsStocks 180,584 - - - 180,584Trade and other receivables 5,115,348 (708,444) - - 4,406,904Other currents assets investments 1,865,615 - - - 1,865,615Cash and cash equivalents 244,047 - - - 244,047 ___________________________________________________________________________ 7,405,594 (708,444) - - 6,697,150 ___________________________________________________________________________ Current liabilitiesBank loans and overdrafts - (576,186) - - (576,186)Trade and other payables (6,157,160)1,577,823 - - (4,579,337)Current tax liabilities - (294,703) - - (294,703)Other loans - (647,335) - - (647,335)Obligations under finance leases - (59,599) - - (59,599)Provisions - (135,505) - - (135,505) ___________________________________________________________________________ (6,157,160) (135,505) - - (6,292,665) ___________________________________________________________________________Net current assets 1,248,434 (843,949) - - 404,485 ___________________________________________________________________________Total assets less current liabilities 9,170,502 (135,505) - - 9,574,997 ___________________________________________________________________________Non-current liabilitiesBank loans (1,337,592) 612,901 - - (724,691)Obligations under finance leases - (82,721) - - (82,721)Cumulative preference shares - (530,180) - - (530,180)Deferred tax liabilities - - (659,122) - (659,122)Provisions (135,505) 135,505 - - - ___________________________________________________________________________ 1,473,097 135,505 (659,122) - (1,996,714) ___________________________________________________________________________Net assets 8,237,405 - (659,122) - 7,578,283 ___________________________________________________________________________EquityShare capital 833,541 - - - 833,541Share premium account 609,690 - - - 609,690Capital redemption reserve 5,163,332 - - - 5,163,332Investment in own shares (187,528) - - - (187,528)Foreign currency translation reserve - - 1,257,185 - 1,257,185Retained earnings (1,112,051) - 1,105,235 - (6,816)Revaluation reserve 1,668,527 - (1,668,527) - -Other reserves 716,663 - (716,663) - -Investment revaluation reserve 636,352 - (636,352) - - ___________________________________________________________________________Surplus attributable to parent's shareholders 8,328,526 - (659,122) - 7,669,404Minority interest (91,121) - - - (91,121) ___________________________________________________________________________Total equity 8,237,405 - (659,122) - 7,578,283 ___________________________________________________________________________ Reconciliation of profit for the six months ended 30th September 2006 IAS 39 Fair value UK GAAP Reclassification adjustments IFRS £ £ £ £ Revenue 6,196,338 (684,448) - 5,511,890Cost of sales (4,789,916) 636,559 - (4,153,357) _______________________________________________________________ Gross Profit 1,406,422 (47,889) - 1,358,533Administrative expenses (1,883,861) 141,208 - (1,742,653)Investment activities and other income 80,115 - (104,611) (24,496) _______________________________________________________________ Operating loss (397,324) 93,319 (104,611) (408,616)Finance income 5,645 - - 5,645Finance costs (61,757) - - (61,757) _______________________________________________________________ Loss before taxation (453,436) 93,319 (104,611) (464,728)Taxation 22,704 - - 22,704Minority interest (17,124) - - (17,124) _______________________________________________________________ Loss for the period from continuing operations (447,856) 93,319 (104,611) (459,148)Loss for the period from discontinued operations - (93,319) - (93,319) _______________________________________________________________ Loss for the financial period (447,856) - (104,611) (552,467) _______________________________________________________________ Reconciliation of profit for the year ended 31st March 2007 IAS 39 Fair value UK GAAP Reclassification adjustments IFRS £ £ £ £ Revenue 12,736,589 (1,715,507) - 11,021,082Cost of sales (10,071,143) 1,889,176 - (8,181,967) _______________________________________________________________ Gross Profit 2,665,446 173,669 - 2,839,115Administrative expenses (3,686,458) 308,616 - (3,377,842)Investment activities and other income 468,795 (10,032)(71,502) 387,261 _______________________________________________________________ Operating loss (552,217) 472,253(71,502) (151,466)Finance income 15,767 - - 15,767Finance costs (120,395) - - (120,395) _______________________________________________________________ Loss before taxation (656,845) 472,253(71,502) (256,094)Taxation 55,456 - - 55,456Minority interest (18,545) - - (18,545) _______________________________________________________________ Loss for the period from continuing operations (619,934) 472,253(71,502) (219,183)Loss for the period from discontinued operations - (472,253) (472,253) _______________________________________________________________ Loss for the financial period (619,934) -(71,502) (691,436) _______________________________________________________________ Notes to the reconciliations of equity and profit 1 Reclassifications are required as certain items are shown differently under IFRS compared with UK GAAP. Reclassifications relate to (i) the disclosure of current tax liabilities and financial liabilities as separate items on the face of the balance sheet under IFRS, (ii) the split of provisions for liabilities between current and long term creditors under IFRS, and (iii) the disclosure of loss on disposal of business as a discontinued operation. In addition the foreign exchange translation adjustments are disclosed as a separate reserve under IFRS from the date of transition. 2 As permitted by IFRS 1 - First time adoption of IFRS, the group has elected to treat the revaluation reserve of the UK freehold and longstanding leasehold properties as deemed cost at that date. Although no adjustment is required to the carrying value of the property, plant and equipment, the revaluation reserve carried under UK GAAP has been transferred to retained earnings as a consequence of this election. 3 As required by IFRS 3 - Business Combinations, purchased goodwill is not amortised and is stated at the carrying value at the date of transition to IFRS. 4 IFRS requires property leases to be split into two elements, land and buildings. Each element is then considered independently and treated as a finance or operating lease as appropriate. This treatment differs to UK GAAP which requires the whole property lease to be considered in its entirety. Consequently certain leasehold land, that was previously treated as a finance lease under UK GAAP, has been reclassified as an off balance sheet operating lease. Lease premiums relating to land have been reclassified as prepayments. Other than presentational differences, there are no material adjustments to the previous cash flow statements presented under UK GAAP. 10. Distribution of interim financial statements A copy of these interim financial statements is available from the company's registered office. and is also available on the company's website. Enquiries: Charles BaileyCH Bailey plc 01633 262961 Richard Day 020 7398 1632Colin Smith 0121 423 8940Arden Partners plc This information is provided by RNS The company news service from the London Stock Exchange