Camellia Regulatory News (CAM)

24 Apr 2008 12:35

Camellia PLC24 April 2008 Camellia Plc Preliminary results for year ended 31 December 2007 Highlights from the results:- Year ended Year ended 31 December 31 December 2007 2006 £'000 £'000 Revenue 161,936 160,552 Profit before tax 30,651 19,982 Profit for the year 27,446 15,174 Earnings per share 910.8 p 464.2 p Dividends 92 p 90 p Chairman's statement The profit before tax for 2007 amounted to £30.65 million and compares with theprevious year of £19.98 million. The profit for 2007 includes a number ofexceptional items, the larger being the profit of £4.80 million on the disposalof our shareholding in Getaz Romang SA and the sale of a surplus London propertyresulting in a profit of £1.68 million. The profit consolidated in respect ofour interest in Siegfried Holding AG also includes exceptional items amountingto £3.68 million. The underlying trading profit of the group is less than that of the previousyear, reflecting the weakness of the US dollar and the costs of integrating newbusinesses within Duncan Lawrie. DividendThe board is recommending a final dividend of 72p per share, which, togetherwith the interim dividend already paid of 20p per share, brings the totaldistribution for the year to 92p per share compared with 90p per share inrespect of 2006. Agriculture and horticulture TeaIndiaTea production in India amounted to 33.3m kilos, an increase of nearly 9% overthe previous year. Weather conditions were reasonably favourable and prices werecomparable to the previous year. The market for orthodox tea remained firm. Theprogramme of upgrading factories continues and results have so far beenencouraging and fully justify the capital investment. Political disruption inAssam and parts of West Bengal make life difficult for management. BangladeshTea production in Bangladesh was the same as for 2006, which is disappointing,as we experienced a major drought at the beginning of that year. Tea pricesreduced during the year by 13% resulting in a reduction of profitability. Theprogramme for increasing production and quality continues. The political situation remains quiet and it is expected that elections will beheld towards the end of 2008. AfricaBoth Kenya and Malawi produced excellent crops in 2007. The previous year was,however, impacted by a serious drought in Kenya. Prices drifted downwards duringthe year but due to the increased production, profitability was satisfactory.The comparatively high cost of labour remains a concern. Tea prices increased substantially at the beginning of 2008 partly as a resultof the tense political situation in Kenya. However, an extended period of dryweather resulting in low production seems to be an equally valid reason for theincrease in prices, which have in any event recently moderated. The phased sale by Kakuzi of the Siret Tea Company to members of the localcommunity received Presidential Consent in September 2007 and the initial partof this transaction has been implemented. At the time of writing the political impasse regarding the Presidentialelections has been resolved by a power sharing agreement. It is to be hoped thatthis agreement can be fully implemented without further conflict and it isencouraging that, after prolonged negotiations, a new cabinet has beenappointed. Our tea estates are operating normally although a small number of ouremployees were evacuated at the time of the greatest tension. None of ourpersonnel were injured and damage to property was very limited. The logistical problems of moving tea from Malawi have improved. However, thereis presently heavy congestion in the Port of Mombasa mainly as a result ofdelays in moving goods through Mombasa to surrounding countries. Edible nuts2007 was an "off" year for pistachio production in California but nonethelessthe final output exceeded the budgeted expectation. Macadamia production in Malawi exceeded that in 2006 but in South Africaproduction declined. Prices continue at low levels but we remain confident ofthe long term prospects for this crop. Macadamia planting at Kakuzi in Kenyacommenced during the year. Other horticultureKakuzi's gradually maturing avocado orchards in Kenya improved their productionand prices were approximately 20% higher than in 2006 resulting in asatisfactory profit. The new packhouse continued to perform well and iscurrently being expanded to cater for the projected increase in production. Rubber production in Bangladesh increased as a result of maturing plantationsand prices increased by approximately 8%. New areas of rubber are beingestablished and the prospects for this crop remain encouraging. In Brazil we benefited from good maize and soya crops with firm prices. Ourtimber operations also showed good results although we are now entering a periodof three years when no timber will be harvested. Our citrus operations in California produced good results with higher productionand firm prices. We were unaffected by inclement weather in early 2008 and theprospects for this crop remain encouraging. In South Africa our wine grape harvest was below the previous year due to theremoval of vines that had come to the end of their useful productive life.Replanting of these and additional areas has commenced. Table grape production in Chile improved and prices in dollar terms also showedan increase. However, the Chilean currency has appreciated substantially againstthe US dollar and this gives cause for concern. Food storage and distributionOur food storage and distribution operations in the UK continue to show animproving trend. Substantial reorganisation costs were incurred in 2007 and thisshould hopefully put the company in a position to make profits from 2008. Thecold storage and transport market remains very competitive and increased energycosts remain a concern. The progress made by our two food distribution companies in The Netherlands in2006 continued into 2007. EngineeringIt is pleasing to report that our engineering subsidiaries again increased theiroverall profitability in 2007. Our operations remain busy particularly in the North Sea oil and gas sectors andin the aerospace markets. There remains a distinct shortage of skilledoperatives in the engineering sector and this is causing particular problems forour operations both in Aberdeen and Lowestoft. The local cost of labour inAberdeen continues to escalate and some projects are being diverted to otherproduction areas as Aberdeen has become just too expensive. After many false starts we have at last received planning consent for the development of our galvanising operation at Great Yarmouth. It is hoped that this plant will be operational towards the latter part of 2008. Banking and financial servicesDuncan Lawrie's profits for 2007 were below those for the previous year. This isprincipally as a result of additional expenditure in anticipation of theproposed integration of the three operating companies in 2008. The consolidationof the operating subsidiaries will continue throughout 2008 and furtherexpenditure will have to be incurred particularly in respect of premises and ITcosts. Duncan Lawrie has no exposure to sub-prime mortgages but the fall instock market values will have an adverse impact on its investment managementfees. PharmaceuticalsThe Siegfried Group's primary focus for 2007 was in the development, scale-upand production of active pharmaceutical ingredients and the development andproduction of complex generics, including those based on inhalation technologyin the field of asthma. During the year Siegfried disposed of its SidrogaDivision and also its Biologics subsidiary based in Germany. Work has commencedin Zofingen on a new laboratory building which will greatly assist Siegfried inincreasing its capability in the pharmaceutical research industry. Other associated undertakings and investmentsThe profitability of United Leasing in Bangladesh was comparable to the previousyear. Also in Bangladesh, the profit of United Insurance was reduced on accountof a lower contribution from its subsidiary, Surmah Valley Tea Company due toreduced tea prices. The share capital of United Insurance has been increased tocomply with government requirements and further increases may be required in duecourse. BF&M Limited, a Bermudian insurance company, is now treated as an associatecompany and has recently announced net earnings for the year of 27.3 millionBermudian dollars, a record for the company. All insurance and non insurancelines of business recorded excellent results. The diversification into othercountries in lines of business in which they have expertise has opened up newavenues for profitability in future years. Our other investments in Bermuda generally enjoyed another successful year. DevelopmentThe tea factory development programme in India will continue over the next fewyears. Kakuzi in Kenya is presently finalising a new development plan which willencompass all the land originally planted to coffee. Our farm in Brazil isexpanding its centre pivot irrigation operations and in Chile we have recentlyopened a new winery for the processing of our own grapes. The success of thesedevelopments and indeed our operations generally are being considerably affectedby the declining value of the US dollar. Whilst the value of our exports in USdollar is reducing when translated into local currency, the cost of labour,power and fertilisers continues to increase. PensionsDuring 2007 a number of changes were made to the three UK final salary schemes,including the closure of one scheme to future accrual. Each of these schemes hasbeen closed to new entrants since November 2006. Alternative definedcontribution arrangements have been put into place. Management of theliabilities of these schemes will remain a concern particularly against thebackground of the recent volatility in stock market values and bond pricing. StaffMy thanks are due to our staff throughout all the countries in which we operatefor their invaluable contribution to another successful year. For those that may not have had the opportunity to read my 2007 interimstatement, I repeat with great sadness that our Chairman Emeritus, Mr KeithFitzGerald passed away in September last year. Keith's contribution to thesuccess of the Camellia Group was immeasurable and he will be greatly missed byall his friends and colleagues. M C PerkinsChairman24 April 2008 Consolidated income statementfor the year ended 31 December 2007 2007 2006 Notes £'000 £'000 Revenue 2 161,936 160,552Cost of sales (107,497) (106,239) ----------- -----------Gross profit 54,439 54,313 Other operating income 1,631 1,657Distribution costs (9,665) (8,987)Administrative expenses (37,261) (36,141) ----------- -----------Trading profit 2 9,144 10,842 Share of associates' results 3 10,568 4,932 Profit on disposal of non-current assets 4 2,029 929 Profit on disposal of non-current assets held for sale 5 327 952 Profit on disposal of available-for-sale investments 6 5,259 364 Profit on part disposal of a subsidiary 7 170 - Gain arising from changes in fair value of biological assets 2,770 1,176 ----------- -----------Profit from operations 30,267 19,195 Investment income 867 1,606 Finance income 8 701 709Finance costs 8 (1,921) (2,544)Pension schemes' net financing income 8 737 1,016 ----------- -----------Net finance costs 8 (483) (819) ----------- -----------Profit before tax 30,651 19,982 Taxation 9 (3,205) (4,808) ----------- -----------Profit for the year 27,446 15,174 =========== =========== Profit attributable to minority interests 2,129 2,271Profit attributable to equity shareholders 25,317 12,903 ----------- ----------- 27,446 15,174 =========== =========== Earnings per share - basic and diluted 11 910.8 p 464.2 p Consolidated balance sheetat 31 December 2007 2007 2006 £'000 £'000 Non-current assetsIntangible assets 8,246 7,865Property, plant and equipment 76,233 76,257Biological assets 80,633 75,553Prepaid operating leases 982 969Investments in associates 90,367 63,672Deferred tax assets 1,356 1,344Other investments 41,186 55,466Retirement benefit surplus 5,766 3,585Trade and other receivables 634 526 ----------- -----------Total non-current assets 305,403 285,237 ----------- ----------- Current assetsInventories 20,137 19,067Trade and other receivables 67,893 52,416Current income tax assets 1,616 1,786Cash and cash equivalents 235,612 210,560 ----------- ----------- 325,258 283,829Non-current assets classified as held for sale - 167 ----------- -----------Total current assets 325,258 283,996 ----------- ----------- Current liabilitiesBorrowings (14,771) (16,688)Trade and other payables (275,913) (235,008)Current income tax liabilities (1,786) (2,488)Other employee benefit obligations (169) (142)Provisions (123) (58) ----------- -----------Total current liabilities (292,762) (254,384) ----------- -----------Net current assets 32,496 29,612 ----------- -----------Total assets less current liabilities 337,899 314,849 ----------- ----------- Non-current liabilitiesBorrowings (11,797) (14,951)Deferred tax liabilities (26,719) (25,161)Retirement benefit obligations (10,608) (17,781)Other employee benefit obligations (1,293) (1,163)Other non-current liabilities (341) (417)Provisions - (112) ----------- -----------Total non-current liabilities (50,758) (59,585) ----------- -----------Net assets 287,141 255,264 =========== =========== EquityCalled up share capital 284 284Reserves 265,987 235,677 ----------- -----------Shareholders' funds 266,271 235,961 Minority interests 20,870 19,303 ----------- -----------Total equity 287,141 255,264 =========== =========== Consolidated cash flow statementfor the year ended 31 December 2007 2007 2006 Notes £'000 £'000 Cash generated from operationsCash flows from operating activities 14 14,171 9,235Interest paid (2,271) (2,857)Income taxes paid (3,442) (3,416)Interest received 697 665Dividends received from associates 2,252 1,835 ----------- -----------Net cash flow from operating activities 11,407 5,462 Cash flows from investing activitiesPurchase of intangible assets (208) (237)Purchase of property, plant and equipment (6,953) (8,657)Proceeds from sale of non-current assets 2,948 2,564Proceeds from sale of non-current assets held for sale 489 1,634Part disposal of a subsidiary 400 -Acquisition of subsidiary (net of cash acquired) (549) (3,670)Purchase of minority interests (193) -Minority share subscription - 541Purchase of shares in associate (2) (23)Proceeds from sale of investments 8,235 9,596Purchase of investments (7,915) (4,378)Income from investments 867 1,606 ----------- -----------Net cash flow from investing activities (2,881) (1,024) Cash flows from financing activitiesEquity dividends paid (2,502) (2,474)Dividends paid to minority interests (1,132) (1,055)Net (repayment of)/increase in debt (3,625) 4,971Purchase of own shares - (31) ----------- -----------Net cash flow from financing activities (7,259) 1,411 ----------- -----------Net increase in cash and cash equivalents 1,267 5,849 Cash and cash equivalents at beginning of year 13 (542) (6,435)Exchange gains on cash 33 44 ----------- -----------Cash and cash equivalents at end of year 758 (542) =========== =========== For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts repayable on demand. These overdrafts are excluded from the definition of cash and cash equivalents disclosed on the balance sheet. Statement of recognised income and expensefor the year ended 31 December 2007 2007 2006 £'000 £'000 Foreign exchange translation differences 5,407 (26,348)Actuarial movement on defined benefit pension schemes 6,030 3,540Movement on deferred tax relating to defined benefit pension schemes (639) (1,185)Available-for-sale investments: Valuation gains taken to equity 2,044 4,401 Transferred to profit or loss on sale (3,630) (124)Other fair value adjustment - 69Share of associate's net movement in defined benefit pension schemes 372 257Share of associates' fair value adjustments 932 (73)Share of associate's (loss)/profit on cash flow hedges (115) 378Share of associate's income taxes on items recorded in equity (29) (27) ----------- -----------Net income/(expense) recognised directly in equity 10,372 (19,112) Profit for the year 27,446 15,174 ----------- -----------Total recognised income and expense for the year 37,818 (3,938) =========== =========== Attributable to:Minority interests 2,505 (1,109)Equity shareholders 35,313 (2,829) ----------- ----------- 37,818 (3,938) =========== =========== 1 General information The consolidated income statement, consolidated balance sheet, consolidated cashflow statement, consolidated statement of recognised income and expense andextracts from the notes to the accounts for 31 December 2007 and 31 December2006 do not constitute the group's annual report and accounts. The auditors havereported on the group's statutory accounts for each of the years 2007 and 2006under section 235 of the Companies Act 1985, which do not contain statementsunder sections 237 (2) or (3) of the Companies Act and are unqualified. Thestatutory accounts for 2006, which were prepared under International FinancialReporting Standards adopted for use in the EU, have been delivered to theRegistrar of Companies. The statutory accounts for 2007, prepared under International FinancialReporting Standards adopted for use in the EU, will be filed with the Registrarin due course. Copies of the annual report and accounts will be posted toshareholders on 1 May 2008. From that date copies will be available from theregistered office, Linton Park, Linton, Near Maidstone, Kent ME17 4AB. 2 Business and geographical segments The principal activities of the group are as follows: Agriculture and horticultureEngineeringFood storage and distributionBanking and financial services For management reporting purposes these activities form the basis on which the group reports its primary divisions. Segment information about these businesses is presented below: 2007 Agriculture and Engineering Food storage Banking and Other Consolidated horticulture and financial operations distribution services £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 89,004 20,109 38,561 13,949 313 161,936 =========== =========== =========== =========== =========== =========== Trading profitSegment profit 9,072 2,124 (133) 1,431 (113) 12,381 ----------- ----------- ----------- ----------- ----------- Unallocated corporate expenses (3,237) -----------Trading profit 9,144 Share of associates' results (6) 3,882 6,692 10,568Profit on disposal of non-current assets 2,029Profit on disposal of assets held for resale 327Profit on disposal of available-for-sale investments 5,259Profit on part dispoal of a subsidiary 170Gain arising from changes in fair value of biological assets 2,770 2,770Investment income 867Net finance costs (483) -----------Profit before tax 30,651Taxation (3,205) -----------Profit after tax 27,446 =========== Other informationSegment assets 152,009 15,197 26,975 282,259 3,440 479,880Investments in associates 935 20,721 68,711 90,367Unallocated assets 60,414 -----------Consolidated total assets 630,661 =========== Segment liabilities (23,001) (2,828) (7,006) (253,203) (268) (286,306)Unallocated liabilities (57,214) -----------Consolidated total liabilities (343,520) =========== Capital expenditure 4,189 1,152 1,095 425Depreciation (3,084) (834) (3,111) (264) (14)Amortisation (31) (4) (348) 2006 Agriculture and Engineering Food storage Banking and Other Consolidated horticulture and financial operations distribution services £'000 £'000 £'000 £'000 £'000 £'000 RevenueExternal sales 88,549 20,255 39,266 11,096 1,386 160,552 =========== =========== =========== =========== =========== ===========Trading profitSegment profit 12,682 1,744 (512) 1,766 (9) 15,671 ----------- ----------- ----------- ----------- ----------- Unallocated corporate expenses (4,829) -----------Trading profit 10,842 Share of associates' results 18 395 4,519 4,932Profit on disposal of non-current assets 929Profit on disposal of assets held for resale 952Profit on disposal of available-for-sale investments 364Profit on part dispoal of a subsidiary -Gain arising from changes in fair value of biological assets 1,176 1,176Investment income 1,606Net finance costs (819) -----------Profit before tax 19,982Taxation (4,808) -----------Profit after tax 15,174 =========== Other informationSegment assets 144,721 14,347 29,622 241,774 2,686 433,150Investments in associates 920 2,566 60,186 63,672Unallocated assets 72,411 -----------Consolidated total assets 569,233 =========== Segment liabilities (23,284) (2,813) (7,683) (212,355) (151) (246,286)Unallocated liabilities (67,683) -----------Consolidated total liabilities (313,969) =========== Capital expenditure 3,809 904 1,981 137 102Depreciation (3,161) (830) (2,997) (214) (16)Amortisation (16) (6) (243) Segment assets consist primarily of intangible assets, property, plant andequipment, biological assets, prepaid operating leases, inventories, trade andother receivables and cash and cash equivalents. Receivables for tax have been excluded. Investments in associates, valued using the equity method, have beenshown separately in the segment information. Segment liabilities are primarilythose relating to the operating activities and generally exclude liabilitiesfor taxes, short-term loans, finance leases and non-current liabilities. Geographical segments The group operations are based in nine main geographical areas. The United Kingdom is the home country of the parent. The principal geographical areas in which the group operates are as follows: United KingdomContinental EuropeIndiaKenyaMalawiBangladeshNorth America and BermudaSouth AfricaSouth America The following table provides an analysis of the group's sales by geographicalmarket, irrespective of the origin of the goods/services: 2007 2006 £'000 £'000 United Kingdom 71,682 66,908Continental Europe 18,174 19,055India 37,802 35,241Kenya 11,876 12,908Malawi 3,120 4,485Bangladesh 7,057 7,944North America and Bermuda 1,951 3,390 South Africa 1,718 2,512South America 3,400 3,184Other 5,156 4,925 ----------- ----------- 161,936 160,552 =========== =========== The following is an analysis of the carrying amount of segment assets, andadditions to property, plant and equipment, analysed by the geographical area inwhich the assets are located: Carrying amount of Additions to property, segment assets plant and equipment 2007 2006 2007 2006 £'000 £'000 £'000 £'000 United Kingdom 320,463 280,918 2,550 2,815Continental Europe 4,219 4,179 111 192India 46,851 40,495 1,804 825Kenya 36,788 37,603 661 699Malawi 26,778 24,955 688 659Bangladesh 20,170 19,743 229 826North America and Bermuda 3,924 4,148 8 305South Africa 7,360 9,495 179 273South America 13,327 11,614 631 339 ----------- ----------- ----------- ----------- 479,880 433,150 6,861 6,933 =========== =========== =========== =========== 3 Share of associates' results The group's share of the results of associates is analysed below: 2007 2006 £'000 £'000 Operating profit 8,561 6,570Net finance costs (650) (780) ----------- -----------Profit before tax 7,911 5,790Taxation (1,026) (858) ----------- -----------Profit after tax 6,885 4,932Net profit from discontinued operations 3,683 - ----------- ----------- 10,568 4,932 =========== =========== The net profit from discontinued operations relates to the disposal by the Siegfried Group of its Sidroga division and its biologics business unit. The profit resulting from the disposal of the Sidroga division of £4,804,000, included in net profit from discontinued operations, is provisional due to an arbitration procedure being initiated by the purchaser. The results include the group's share of the profits of BF&M Limited, a Bermudian based insurance company, which became an associate with effect from 1 January 2007. 4 Profit on disposal of non-current assets 2007 2006 £'000 £'000 Profit on disposal of property 2,029 929 =========== =========== 5 Profit on disposal of non-current assets held for sale A profit of £327,000 (2006: £952,000) was realised in relation to property, plant and equipment of Eastern Produce South Africa (Pty) Limited which had previously been used in the group's production of tea in South Africa and were reclassified as being held for sale in 2005. 6 Profit on disposal of available-for-sale investments The profit of £5,259,000 includes a profit of £4,801,000 relating to the disposal of the group's entire shareholding in Getaz Romang Holding SA, a public quoted company on the SWX Swiss Exchange. 7 Profit on part disposal of a subsidiary A profit of £170,000 was realised in relation to the disposal by Kakuzi Limited of 14 per cent. of its interest in Siret Tea Company Limited to EPK Outgrowers Empowerment Project Company Limited, a company mainly owned by smallholders in Kenya. 8 Finance income and costs 2007 2006 £'000 £'000 Interest payable on loans and bank overdrafts (2,141) (2,341)Interest payable on obligations under finance leases (180) (144) ----------- -----------Total borrowing costs (2,321) (2,485)Net exchange gain/(loss) on foreign currency borrowings 400 (59) ----------- -----------Finance costs (1,921) (2,544)Finance income - interest income on short-term bank deposits 701 709Pension schemes net financing income 737 1,016 ----------- -----------Net finance costs (483) (819) =========== =========== The above figures do not include any amounts relating to the banking subsidiaries. 9 Taxation on profit on ordinary activities Analysis of charge in the year 2007 2006 £'000 £'000 £'000 Current taxUK corporation taxUK corporation tax at 30.0 per cent. (2006:30.0 per cent.) 1,681 2,004Adjustment in respect of prior years (14) (152)Double tax relief (1,560) (1,709) ---------- ---------- 107 143Foreign taxCorporation tax 2,936 3,789Adjustment in respect of prior years (1) 263 ---------- ---------- 2,935 4,052 ---------- ----------Total current tax 3,042 4,195 Deferred taxOrigination and reversal of timing differencesUnited Kingdom (483) (486)Overseas 646 1,099 ---------- ----------Total deferred tax 163 613 ---------- ----------Tax on profit on ordinary activities 3,205 4,808 ---------- ---------- Factors affecting tax charge for the yearProfit on ordinary activities before tax 30,651 19,982Less: share of associated undertakings profit 10,568 4,932 ---------- ----------Group profit on ordinary activities before tax 20,083 15,050 ---------- ---------- Tax on ordinary activities at the standard rate of corporation tax in the UK of 30.0 per cent. (2006: 30.0 per cent.) 6,025 4,515Effects of:Adjustment to tax in respect of prior years (15) 111Expenses not deductible for tax purposes 479 256Adjustment in respect of foreign tax rates 251 460Additional tax arising on dividends from overseas companies 316 353Profit on disposal of non taxable assets (2,173) (702)Other income not charged to tax (1,168) (246)Increase in tax losses carried forward 400 635Decrease in tax losses carried forward (226) (462)Effect of abolition of industrial buildings allowance on deferred tax (732) -Movement in other timing differences 48 (112) ---------- ----------Current tax charge for the year 3,205 4,808 ========== ========== 10 Equity dividends 2007 2006 £'000 £'000 Amounts recognised as distributions to equity holders in the period: Final dividend for the year ended 31 December 2006 of 70.00p (2005: 69.00p) per share 1,946 1,918Interim dividend for the year ended 31 December 2007 of 20.00p (2006: 20.00p) per share 556 556 ----------- ----------- 2,502 2,474 =========== =========== Dividends amounting to £56,000 (2006: £56,000) have not been included as group companies hold 62,500 issued shares in the company. These are classified as treasury shares. Proposed final dividend for the year ended 31 December 2007 of 72.00p (2006: 70.00p) per share 2,046 1,989 ========== =========== The proposed final dividend is subject to approval by the shareholders at the annual general meeting and has not been included as a liability in these financial statements and will be payable on 3 July 2008 to shareholders on the register of members at the close of business on 13 June 2008. 11 Earnings per share (EPS) 2007 2006 Weighted Weighted average average number of number of Earnings shares EPS Earnings shares EPS £'000 Number Pence £'000 Number Pence Basic and diluted EPSAttributable to ordinary shareholders 25,317 2,779,500 910.8 12,903 2,779,784 464.2 ========= ========= ========= ========= ========= ========= Basic and diluted earnings per share are calculated by dividing the earningsattributable to ordinary shareholders by the weighted average number ofordinary shares in issue during the period, excluding 62,500 held by the groupas treasury shares. 12 Investments in associates and other investments With effect from 1 January 2007, the group has representation on the board of BF&M Limited and is in a position to exert significant influence. As a result theinvestment in this company has been reclassified from other investments to aninvestment in associate. The result of this reclassification is that investmentsin associates increase by £14,449,000, being the equity value and otherinvestments decline by £17,231,000, being the market value. The difference of£2,782,000 has been transferred to reserves. 13 Cash and cash equivalents 2007 2006 £'000 £'000 Cash at bank and in hand 203,786 179,318Short-term bank deposits 3,944 6,696Short-term liquid investments 27,882 24,546 ----------- ----------- 235,612 210,560 =========== =========== Included in the amounts above are cash and short-term funds, time depositswith banks and building societies and certificates of deposit amounting to£223,849,000 (2006: £198,422,000) which are held by the group's bankingsubsidiaries and which are an integral part of the banking operations. Cash, cash equivalents and bank overdrafts include the following for thepurposes of the cash flow statement: 2007 2006 £'000 £'000 Cash and cash equivalents (excluding banking operations) 11,763 12,138Bank overdrafts (11,005) (12,680) ----------- ----------- 758 (542) =========== =========== 14 Reconciliation of profit from operations to cash flow 2007 2006 £'000 £'000 Profit from operations 30,267 19,195Share of associates' results (10,568) (4,932)Depreciation and amortisation 7,868 7,673Impairment of non-current assets - 117Gain arising from changes in fair value of biological assets (2,770) (1,176)Profit on disposal of non-current assets (2,029) (929)Profit on disposal of non-current assets held for sale (327) (952)Profit on part disposal of a subsidiary (170) -Profit on disposal of investments (5,259) (364)Increase in working capital (7,949) (2,743)Net decrease/(increase) in funds of banking subsidiaries 5,108 (6,654) ----------- ----------- 14,171 9,235 =========== =========== 15 Reconciliation of net cash flow to movement in net debt 2007 2006 £'000 £'000 Increase in cash and cash equivalents in the year 1,266 5,849Cash outflow/(inflow) from decrease/(increase) in debt 4,310 (3,486) ----------- -----------Decrease in net debt resulting from cash flows 5,576 2,363 New finance leases (685) (1,734)Exchange rate movements (196) 881 ----------- -----------Decrease in net debt in the year 4,695 1,510Net debt at beginning of year (19,500) (21,010) ----------- -----------Net debt at end of year (14,805) (19,500) =========== =========== Press Enquiries: Malcolm Perkins, Chairman Tel: 01622 746655 This information is provided by RNS The company news service from the London Stock Exchange