CAMB.L Regulatory News (CAMB)

29 November 2010

CAMBRIA AUTOMOBILES PLC

FULL YEAR RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 AUGUST 2010

Cambria Automobiles Plc, the UK motor dealer group, today announces its full year results for the year to 31 August 2010. A copy of the full annual report and accounts is available to download from the Company website: www.cambriaautomobilesplc.com.

Financial Highlights

- Third successive year that the Group has doubled underlying profit before tax achieving £4.2m compared with the previous year's £2.04m

- Total revenue for the 12 months increased by 53% year on year (like-for-like revenue increase of 41%) to £392.1m from £255.5m in 2009

- Gross profit increased 29% year on year, underlying EBITDA increased to £6.1m from £4.6m

- Underlying earnings per share increased to 3.06p from 1.61p

- Group net assets at £16.0m under-pinned by £22.5m of freehold and long lease-hold property

- Robust balance sheet position with only £0.3m of goodwill

- Net debt reduced to £4.4m from £5.7m in previous year

- Net cash inflow of £3.5m after £5.1m of acquisition spend, £1.4m of capital expenditure and £1.5m of non-recurring listing and transaction costs

- Underlying return on shareholders' funds of 21.7%

Operational Highlights

- New Car Unit Volumes increased 58% year on year against a market increase of 18.1% year on year. 37% new car volume increase on a like-for-like basis

- Used Car Volumes increased 34% year on year and 19% on a like-for-like basis

- Service Hours increased 18% year on year and 4% on a like-for-like basis

- Acquisition of 7 new locations and 10 new franchised outlets

- Addition of Honda, Mazda and Triumph Motorcycles to the Group's brand partnerships

Commenting on the results, Mark Lavery, Chief Executive said:

"2010 has been an important year for Cambria with our admission to trading on AIM in April. It is the third year in succession that we have doubled underlying pre-tax profits and produced a record underlying 22% return on shareholders' funds.

 We have continued to deliver on our original "buy and build strategy" with the addition of another ten franchised outlets from seven different locations and have continued to demonstrate our ability to purchase and transform underperforming dealerships so as to generate returns for shareholders. Cambria has an extremely strong balance sheet containing minimal intangible assets, a strong freehold/long leasehold portfolio and good liquidity.

In what have been without doubt very challenging economic times, Cambria has demonstrated that it continues to drive excellent growth whilst, at the same time, integrating new businesses into the Group. Current trading is resilient and in line with the Board's expectations. The Board believes that the uncertain economic climate will continue to provide acquisition opportunities from which Cambria will benefit and the Board believes Cambria has sufficient available cash resources to take advantage of these opportunities".

For further information please contact:

Notes to editors

Cambria Automobiles plc is a franchised motor retail group that was formed in 2006 and through a buy and build strategy encompassing 7 corporate acquisitions to date, has grown to represent 13 different brands from 25 locations with 37 new car and motorcycle franchises. The Group focuses on acquiring and improving under-performing businesses where it believes the best shareholder returns can be achieved.

Cambria's brand portfolio comprises a strong mix of prestige/high luxury and volume businesses:

Chairman's Statement

I am pleased to report another record year for Cambria with the Group achieving revenues of £392 million and a profit before tax prior to the deduction of non recurring listing and transaction costs of £4.2 million. Since the formation of Cambria in 2006 when we made our first acquisition, we have built the business into a top 20 UK motor dealership Group. For a significant proportion of this period the UK economy has been in recession and it is testament to the quality of the Cambria operating team that they have not only taken advantage of opportunities to acquire businesses but have significantly improved the operational performance of those businesses acquired. Delivering operational improvement is key to the Board's objective of providing superior returns on shareholder's funds.

Cambria was established in 2006 with a plan to build a top 10 UK dealership group through the acquisition of attractive individual or groups of dealerships. The attractiveness of an underperforming business is determined partly by geography and manufacturer brand but focuses on the opportunity to fundamentally improve the operational performance of the dealership. Such improvements are delivered by our highly experienced management in combination with the implementation of our common operational approach. The Board has recruited an exceptional management team who have the skills and experience to deliver the required improvements on both a national and local level. Retaining and growing this management team is fundamental to our strategy going forward.

In the year to 31 August 2010 the Group made 3 separate acquisitions adding 10 dealerships generating £31.8 million in revenues during the year and £61 million on an annualised basis. The speed of operational transformation varies from business to business but we are confident these dealerships will contribute positively to the Group in the next financial year and help drive the financial performance of the Group in the future.

The Board has always been mindful of the need to manage Cambria's finances prudently. We have refrained from paying excessive goodwill on the acquisitions we have made and total equity raised and invested to date amounts to only £10.8 million. The Group has a strong balance sheet which is underpinned by the ownership of freehold properties at a number of the dealerships we operate, together with an overall prudent level of debt. We have over the last two very challenging years maintained a high degree of liquidity both through our banking facilities with Lloyds Banking Group and our stock finance facilities. This liquidity has enabled us to take advantage of acquisition opportunities as they have arisen, as well as make operational decisions to maximise profitability. This dynamic management approach is a key element to ensuring the returns we have been able to achieve.

In 2010 Cambria achieved a key milestone when its shares were admitted to trading on AIM in April. The decision was taken by the Board to secure admission to AIM in order to raise the public profile of the Company, facilitate access to development capital in the future (should the need arise) and to attract over time a wider shareholder base. We did not raise new funds at the time of admission as the Board believes it has sufficient capital to continue to expand the Group for the foreseeable future in a manner which enhances shareholder value. Clearly our admission to AIM gives us the option of raising share capital to finance further acquisitions but the Board will seek only to do this if it believes such opportunities are in the best interest of shareholders, and where the transaction transforms the scale of the business. We recognise the challenges of having a relatively limited free float and the impact of the 2 year lock in period for many existing shareholders. The Board is working on broadening the institutional shareholder base and attracting shareholders who will support the Group in its future development. However, the primary goal of the Board is to deliver strong future financial performance based on our business model. We believe this will deliver the best shareholder returns.

The UK new car market increased by 18.1% in the year compared to the previous year. However, the outlook for the next 12 months in the UK is at best uncertain. The general concern that the UK economy may suffer a double dip recession over the coming 12 months as Government spending cuts take effect has created a very challenging background for the UK dealership sector. The specific sector challenges such as the expiry of the scrappage scheme, the introduction of a new show room car tax and the impending second increase in VAT in 12 months will challenge all operators in the UK. The British consumer is also faced with higher general inflation in addition to these effective price increases on new cars. The Board is cognisant of the impact these factors will have and as part of the 2010/2011 budget process implemented a cost review programme to ensure the Group is appropriately shaped to continue to grow profits. We anticipate more difficult trading conditions but believe we are well prepared for this environment. Most importantly the Board believes our business model will enable us to continue to be successful notwithstanding these operating challenges. The real opportunity for Cambria in such market conditions will be a growing number of attractive acquisition opportunities which will arise as other operators struggle with these challenges. The Board is already in discussion with a number of parties which may generate appropriate add-on acquisitions and believes that the continuing economic difficulties may help accelerate the growth of Cambria.

The Board recognises the importance of our different stakeholders beyond the Group's shareholders. Our lending bank Lloyds Banking Group and our other credit institutions have continued to support the Group and in particular have been responsive to our continued acquisition programme recognising our strategy of prudent financial management. This continued strong support will be important in capitalising on future opportunities.

Our relationship with the manufacturers that we represent is a core pillar of our business approach. The management team is committed to developing and maintaining a strong working relationship where Cambria is seen as an effective and valued business partner. We were pleased to add Mazda, Honda and Triumph as brand partners in the financial year and are currently in discussion with a number of other manufactures with a view to representing them in the future.

Finally the Board would like to thank the Cambria associates for their energy and commitment to the Group over the last 12 months. Acquiring and integrating businesses generates significant challenges and our associates regularly make exceptional commitments to achieve success for the Group. In the last year we welcomed 188 additional personnel and we extend a warm welcome to these new Cambria associates. An important goal of the Board is to create a challenging and enjoyable environment where our associates have the opportunity to develop rewarding careers. We are confident our new associates will embrace this differentiated approach within the auto dealership sector and together with our existing team help us deliver the Cambria strategy in the future.

Warren Scott

Non-executive Chairman

Chief Executive's Review

I am pleased to announce that for the third year in succession we have doubled our underlying pre tax profits (before non-recurring listing and transaction costs). 2010 has produced an underlying pre tax profit of £4.2m against a previous year of £2m. These results have been achieved in a period of significant economic uncertainty.

The business has shown significant growth in turnover in all departments from continuing operations. The acquisitions have also added incremental turnover during the course of the year.

Group Strategy

Since our incorporation in March 2006, we have continued to apply our focused buy and build strategy acquiring under-performing motor dealership assets. Following any acquisition, the Cambria management team implement new financial, operational controls and processes in order to rationalise, restructure and develop each individual dealership. This tailored approach ensures the changes made to each dealership are sustainable and create shareholder value through achieving an appropriate contribution for the level of investment. We have completed 7 separate transactions since our incorporation, 3 of which were in the period under review.

The 3 corporate acquisitions in the period have added 4 Mazda, 2 Honda, 3 Triumph motorcycle and 1 Fiat dealerships to the Cambria portfolio, the new dealerships operate from 7 different geographical locations. Pursuant to one of these acquisitions, Cambria acquired 2 further freehold properties resulting in Cambria now owning 11 freehold or long leasehold properties out of our total of 25 locations.

We have a 3 step approach to purchasing a new business - acquisition, integration, operation.

Acquisition

When acquiring new businesses we are diligent in ensuring that none of the contractual obligations that are taken on pursuant to the acquisition upset the integrity of our balance sheet, this includes ensuring that leases reflect market value and that any unusual contractual obligations are addressed prior to acquisition. Our Group balance sheet shows that on consolidation we have only £0.3m of goodwill which has been generated across the 7 acquisitions. None of our lease arrangements have any fixed compound rent reviews, and we do not have any defined benefit pension schemes.

Integration

The integration process starts with an Associate engagement evening where our senior management present the Cambria "Four Pillar" culture change programme. After this meeting, the Group integration team implement systems, processes and procedures to improve legislator compliance i.e. FSA, Health & Safety etc. Newly acquired Associates are transferred to Cambria employment contracts with the compensation and benefits commensurate of the particular business. A training needs analysis is conducted followed by the implementation of training programmes for all relevant Associates in the new business.

Operation

With any new acquisition, the standard financial controls are implemented immediately ranging from individual cheque signatories to daily reporting of vehicle sales and aftersales revenues, margins and other performance figures. We then implement our two growth strategies which are Cambria Digital which is our internet social networking strategy for vehicle sales. Then in aftersales we implement the "Duty of Care Gearbox" which is designed to supply our guests with a one stop solution for all their vehicle maintenance needs.

We believe our 3 step approach gives us a significant advantage particularly in difficult economic times.

Brand Partnerships

In line with our buy and build strategy, we have exercised 3 corporate acquisitions adding 7 locations and 10 franchises during the reporting period. Our Invicta business in Kent has seen the addition of a Honda and Mazda dual franchise site in Maidstone and likewise a Honda and Mazda dual franchise site in Tunbridge Wells. We have also added the iconic Triumph motorcycle brand and in doing so have become the single biggest Triumph motorcycle dealer in the world. Pure Triumph Birmingham is the single biggest Triumph motorcycle dealership in the world. Triumph fits extremely well with our Grange British prestige and high luxury businesses. A significant number of our Aston Martin, Jaguar and Lotus guests are also motorcycle enthusiasts.

As part of the same transaction that added the Pure Triumph businesses, we also added Northampton Motors Mazda which establishes representation in the Midlands for the Cambria Group.

Bolton Motor Park was a perfect strategic fit for our North West businesses adding the dual franchised Fiat and Mazda dealership on Manchester Road in Bolton.

Cambria has enjoyed the benefits of a strategically balanced brand portfolio with a strong mix of prestige/high luxury and volume businesses.

Cambria's balanced brand portfolio has seen us benefit from the rebound of the prestige/high luxury market. The government's scrappage scheme has finished and this has certainly had an impact on volume operations in both vehicle volumes and retained margins with a reduction in potential target related bonuses.

When making acquisitions, the Board understands that the integration and maturing of the dealerships takes time and management investment. Where we acquire businesses from distressed sales, the integration process typically takes longer.

We continue to promote the philosophy of stand alone autonomous business units where a local management team are empowered via our "four pillar strategy" to run a local business unit. Cambria dealerships do not trade under the "Cambria" name but prefer to focus on local branding. Cambria's dealerships trade as "Grange", "Doves", "Dees", "Invicta Motors", "Pure Triumph" or "Motorparks" depending on the franchise and the name in the local area. When acquiring a business, the Board consider the geographical location of the franchise and then chooses to either adopt a new trading style or retain the existing business name.

New Car Sales

The new car market in the period was increased by 18.1% assisted significantly by the government's scrappage scheme. Our new car volumes for the period were 9,163 units against a previous year of 5,805 units, an increase of 58% year on year. On a like-for-like basis, 7,972 against a previous year of 5,805, an increase of 37% year on year. Gross margins for new cars reduced from 7.7% to 6.9% following prices increases on new vehicles enforced by the respective brands following currency fluctuations and dilution of margins on vehicles sold under the scrappage scheme.

Used Car Sales

2010 saw Cambria grow used car volumes to 14,034 units against a previous year of 10,465 an increase of 34%. On a like-for-like basis, 12,466 against a previous year of 10,465, an increase of 19%. Gross margins on used cars reduced from 9.4% to 8.1%, reflecting a return to a more normal used car market. Our used car strategy continues to be a core part of Cambria's activity and with the continued success of the Cambria Digital strategy we believe this is an area where Cambria can continue to improve performance.

We continue to pay particular attention to stock profile, price alignment and brand offerings in all our retail outlets. We have a small central buying team and continue to work with our re-marketing partner and local management to increase their knowledge and understanding of local market conditions. We continue to demonstrate that local management should purchase stock profiled by price and model for their local market.

Aftersales

Notwithstanding the decrease in the one to three year car parc, we saw our aftersales revenue increase by 23%, and on a like-for-like basis by 10%. Gross margins in the period showed a minor reduction from 43.2% to 42.3% in the current year. The Aftersales departments contributed £21.8m of gross profit which represents 45.3% of total gross profit for the year.

We continue with our "Duty of Care Gearbox" that is intended to provide all guests with a one stop maintenance solution for their vehicle.

Outlook

The Board is pleased to report that September trading has been strong, with profits ahead of the Board's business plan and ahead of the previous year's trading. The Group is well placed to take advantage of opportunities afforded in these difficult economic times. In the last 12 months, we have acquired 10 new franchises operating from 7 different geographical locations, admitted the business to AIM whilst at the same time reducing our net debt position. The Group continues to be cash generative and the costs of admission are non-recurring, accordingly the Board anticipate an even stronger financial position will be attained next year.

We are in discussions with a number of vendors which have the potential to lead to a positive outcome. We hope to be able to make announcements in due course. We have continued to invest in our premises, and a full redevelopment of our Maidstone Honda and Mazda dealerships began in October.

Whilst these economic times remain uncertain and UK consumer confidence remains fragile, the Board is pleased with the start to the current financial year. There are still opportunities to improve performance in our existing and newly acquired businesses. The Guest Connect Programme encompassing Cambria Digital and Service & MOT Reminder, Electronic Vehicle Health Check and Service Plans launched this year and we believe it has the potential to be an industry leading GRM process (Guest Relationship Management). We continue to strive to provide world class service within our individual business units and continue the progress made in improving customer satisfaction scores.

In summary, we have started the financial year well and we are in a strong position to take advantage of what is still a very fragmented franchised dealer market.

Mark Lavery

Chief Executive

Finance Director's Review

Overview

Total revenues in the period increased 53% to £392.1m from £255.5m in the prior year. The new acquisitions accounted for £31.8m of the increased revenue. The Group achieved an organic increase in revenue of 41% which was shared across all areas of the business.

Gross profit increased by £11m (29.4%) from £37.1m to £48.1m in the year reflecting a significant increase in revenue from each of the departments. Gross profit margin across the Group declined from 14.5% to 12.3% reflecting the change in revenue mix with the increase in new car sales at lower margins. The aftersales operations contributed 45% of the total gross profit for the Group compared to 48% in the previous period, again reflecting the significant increases in Gross profit contribution from the new and used car departments.

In April 2010 the Company was admitted to AIM, the one off expenses associated with admission were £1.47m, and the transaction costs associated to the acquisition of new businesses were £0.07m resulting in a total of £1.54m of non recurring costs.

The underlying EBITDA in the period rose to £6.1m from £4.6m in the previous year. Underlying operating profit was £4.7m compared to £3.4m in the previous year, resulting in an operating margin of 1.2% (2009: 1.3%). Following the conversion to IFRS there are no amortisation charges relating to goodwill in the year or prior year.

Underlying operating expenses rose in line with the increased Gross Profit, increasing 29% to £43.3m from £33.8m.

Net finance expenses reduced to £0.6m from £1.3m in the previous year for two main reasons: firstly, mortgage interest reduced to £0.3m in comparison with £0.5m in the previous year as a consequence of the fall in Bank base rate and LIBOR; secondly (due to a much stronger new vehicle market in the year) there was a reduction in net consignment stock charges and credits of £0.5m.

The Group's underlying profit before tax was £4.2m in comparison with £2.0m in the previous year. Continuing operations contributed £4.4m of underlying profit before tax compared with £2.0m in the previous year. The Group's acquisitions made a loss before tax of £0.3m which was in line with the Board's expectation at the time of acquisition.

The underlying earnings per share were 3.06p (2009: 1.61p).

Taxation

The Group tax charge was £0.66m in the period (2009: £0.4m) representing an effective rate of tax of 25% on the profit before tax of £2.6m. The reduced tax rate was aided by the utilisation of some brought forward tax losses and the reversal of an over accrual in the prior year.

Financial Position

The Group has a robust balance sheet with a net asset position of £16.0m under-pinned by £22.5m of freehold and long leasehold property. Reflecting our prudent approach to financial management the Group has only £0.3m of goodwill within the balance sheet. Secured against the freehold and long leasehold property are mortgages amounting to £13.7m, each of the loans have different repayment profiles between 7 and 10 years, and bear interest at between base plus 1.25% and for those loans taken out more recently, LIBOR plus 3%. During the financial year the Group comfortably met the bank covenants attaching to these borrowings.

The net debt of the Group as at 31 August 2010 was £4.4m (2009: £5.7m), reflecting the Group's cash position of £9.3m (2009: £5.8m). The Group's gearing at 31 August 2010 was 27.5%, reduced from 40% in 2009.

The Group uses term loan facilities to fund the purchase of freehold and long leasehold properties, it utilises stocking loans to fund the acquisition of consignment, demonstrator and used vehicles and has a £7.75m overdraft facility which is used to manage seasonal fluctuations in working capital. The overdraft facilities are renewable annually and are next due in February 2011.

Cashflow and Capital Expenditure

The Group generated an operating cash inflow of £8.1m after paying the £1.544m of flotation expenses and transaction fees. The Group reduced working capital by £3.8m in the year due mainly to stock funding efficiencies. The Group invested £5.1m in acquisitions and related property and £1.4m in capital expenditure.

Other capital expenditure included a significant refurbishment of our Preston dealership which represents Fiat Volvo and Lotus, minor corporate identity refurbishments at some of our other dealerships and further investment in our IT infrastructure.

To finance the purchase of the Maidstone and Tunbridge Wells freehold premises which cost £3.7m, the Group raised a term loan of £2.7m at LIBOR plus 3%. During the year capital repayments of £0.4m were made against the total term loans outstanding. The capital repayments due in the financial year to 31 August 2011 are £1.0m. As a result of the net cash increase of £3.5m to £9.3m and gross debt increasing by £2.3m to £13.7m, overall net debt reduced from £5.7m to £4.4m.

Shareholders' Funds

Prior to admission to AIM, and in order to standardise the share capital of the Company, the share capital and share premium accounts were restructured to convert the historic A,B,C,D and E shares (with different nominal values) and the share premium account into a single class of ordinary share with a nominal value of 10p each. There are now 100,000,000 ordinary shares of 10p each in issue with a resulting share premium of £0.8m. There were no new funds raised at the point of admission to AIM so the share capital and share premium account remain at £10.8m consistent with prior year. All shares rank pari passu for both voting and dividend rights.

Pension Schemes

The Group does not operate any defined benefit pension schemes, and has no liability arising from a scheme. The group made contributions amounting to £0.2m to defined contributions schemes for certain employees.

Financial Instruments

The Group does not have any contractual obligation under any financial instruments for the management of interest rate risk.

Dividends

In the admission document the Company stated that it did not intend to pay a dividend in respect of the year ended 31 August 2010. Should the strong performance of the business experienced in the last year, be repeated in the coming year, the Board would consider a first dividend in respect of the financial year ending 31 August 2011.

James Mullins

Finance Director

Consolidated Statement of comprehensive income

for year ended 31 August 2010

All comprehensive income is attributable to owners of the parent company

Consolidated Statement of changes in equity

for year ended 31 August 2010

Consolidated Statement of financial position

at 31 August 2010

These summary accounts were approved by the board of directors on 26 November 2010 and were signed on its behalf by:

M J J Lavery

Director

Company registered number: 05754547

Consolidated Cash Flow Statement

for year ended 31 August 2010

Notes

(forming part of the summary accounts)

1 Accounting policies

Cambria Automobiles plc is a company which is quoted on the AIM Market and is incorporated and domiciled in the United Kingdom. The address of the registered office is Swindon Motor Park, Dorcan Way, Swindon, SN3 3RA. The registered number of the company is 05754547.

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 August 2010 or 2009 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the registrar of companies, and those for 2010 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These summary accounts as at 31 August 2010 consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The parent company summary accounts present information about the Company as a separate entity and not about its group.

The Group summary accounts have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRS"). These are available in full at the Company's website: www.cambriaautomobilesplc.com. The financial information set out above is the Group's second consolidated summary accounts prepared in accordance with Adopted IFRS. The first set of consolidated financial information was the admission document, also available at the Company website.

2 Acquisition of subsidiaries

Effect of acquisitions in 2009

There were no acquisitions in 2009.

Effect of acquisitions 2010

On 31 October 2009 the Group acquired the trade and assets of certain dealerships from the Administrators of Autohaus Limited for a cash consideration of £369,000. Transaction fees of £30,000 have been charged to operating expenses in the year. No goodwill arose on this transaction. In the 10 months to 31 August 2010 the businesses contributed a net loss of £161,000 to the consolidated net profit for the year. No further disclosures have been made in respect of this acquisition as the directors consider the amounts to be immaterial.

On 4 January 2010 the Group began trading as a Fiat and Mazda dealer in Bolton following the acquisition of certain assets from the Administrator of Lythgoe Motors Limited for £22,500 on 23 December 2009. No goodwill arose on this transaction. In the 8 months to 31 August 2010 the business contributed a net loss of £170,000 to the consolidated net profit for the year. No further disclosures have been made in respect of this acquisition as the directors consider the amounts to be immaterial.

On 25 February 2010, the Group acquired all of the ordinary shares in D & F Trading Limited (renamed Invicta Motors (Maidstone) Limited post acquisition) and two freehold properties from Drake and Fletcher Limited. The company was a motor dealership group based in Kent. In the 6 months to 31 August 2010 the subsidiary contributed net profit of £65,000 to the consolidated net profit for the year. If the acquisition had occurred on 1 September 2009, it would have contributed a further £17 million to Group revenue however we do not expect that it would have added further profitability to the Group.

The reason for the acquisition was to expand the Group's representation in the Kent area with Mazda and the addition of the Honda franchise to the Group.

The acquisition had the following effect on the Group's assets and liabilities.

3 Segmental reporting

The Group has adopted IFRS 8 'Operating Segments' which determines and presents operating segments based on information presented to the Groups Chief Operating Decision Maker ("CODM"), the Chief Executive Officer. The Group is operated and managed on a Dealership by Dealership basis. The CODM receives information both on a dealership basis and by revenue stream (New, Used, Aftersales). Given the number of dealerships, it was deemed most appropriate to present the information by revenue stream for the purposes of segmental analysis.

The Board reviews the performance of the business in terms of both net profit before tax and EBITDA, as such the Board has included a reconciliation of EBITDA to the profit before tax.

4 Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to equity shareholders by the number of ordinary shares in issue in the year. Prior to admission to AIM on 1 April 2010 the shareholder structure of the Group's parent company was composed of five different share classes with varying rights attributing to them. The share structure was reorganised prior to admission to AIM resulting in the conversion of the various classes of share into one class of ordinary share with 100,000,000 shares in issue. The analysis of earnings per share has been prepared on the basis of the revised ordinary share structure, not on the basis of the shares at the balance sheet date.

There are no dilutive share options in issue.

5 Taxation

Recognised in the income statement

Reconciliation of total tax

6 Illustrative explanation of differences between UK GAAP and Adopted IFRS

These are the Group's second consolidated summary accounts prepared in accordance with Adopted IFRS.

The Group has adjusted amounts reported previously in summary accounts prepared in accordance with its old basis of accounting (UK GAAP). An illustration of the differences between UK GAAP to Adopted IFRS in respect of the Group's financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Notes to the reconciliation of equity

a) Goodwill and intangibles