Christie Regulatory News (CTG)

4 Apr 2006 07:01

Christie Group PLC04 April 2006 CHRISTIE GROUP plc 4th April 2006 Audited Preliminary Results for the year ended 31 December 2005. Christie Group, a leading business services and software group, today announcesits preliminary results for the year ended December 2005 HIGHLIGHTS - Turnover up 11% to £77.5 million (2004 : £70.0 million) - Operating profit up 15% to £4.4 million (2004 : £3.8 million) - Proposed final dividend up 25% to 2.5p per share, totalling 3.5p (2004 : 3.0p) - Strategic partnership with Wincor Nixdorf - Largest year end order book for Software Solutions Division - Christie + Co open Munich office - Successful transfer to AIM - International Financial Reporting Standards adopted David Rugg, Chief Executive of Christie Group, said: "2005 was a year of continuing development for Christie Group. We trade acrossthree major sectors, and operate on a wide yet focused geographical scale,enjoying the custom of corporate and private operators. Our sources of incomeare diverse but complementary and capable of providing further sound progress in2006 and beyond." Enquiries: Christie Group 020 7227 0707 David Rugg, Chief Executive Robert Zenker, Finance DirectorBrunswick 020 7404 5959 Ash Spiegelberg Charles Stanley Securities 020 7953 2457 Philip Davies Notes to Editors Christie Group plc (CTG.L) is quoted on AIM. It is a leading business servicesand software group with three business divisions: Professional BusinessServices, Software Solutions and Stock and Inventory Services. The threecomplementary businesses focus on the leisure, retail and care markets.Christie Group has 31 offices across Europe - located in the UK as well as inBelgium, France, Germany, Italy and Spain, and 1 office in Canada. For more information, please go to: www.christiegroup.com CHAIRMAN'S STATEMENT I am pleased to report a further year of progress. Our operating profit hasincreased by 15% to £4.4 million (2004: £3.8 million) on turnover up 11% to£77.5 million (2004: £70.0 million). Our full year figures are reported forthe first time under the International Financial Reporting Standards. The Board proposes an increased final dividend of 2.5p per share (2004: 2.0p)bringing the dividend for the year to 3.5p per share (2004: 3.0p). We continue our underlying strategy of the continental expansion of our existingactivities and the development of a new generation of products for our softwarebusiness. Both of these moves we strongly believe will benefit shareholders inthe years ahead. All of this is made possible through the continuing success of our establishedoperations which generated some £7.9 million (2004: £6.6 million) of operatingprofit between them. I should like to thank all our staff who have contributed to these results. I am pleased to say that 2006 has started well in our Professional Services andStock & Inventory divisions and that the order book of our Software Solutionsdivision is at the highest level we have experienced. Philip Gwyn Chairman OPERATING REVIEW Christie Group's results for 2005 demonstrate both the flexibility and inherentstrength of our group structure. This is an encouraging performance in what wasa year of investing for growth and the integration and development of recentacquisitions. All businesses operate on a strong stand alone basis and generategood margins. Net cash increased by £3.5 million to £6.8 million. In developingthe operational plans which now guide our various activities, we made provisionfor both organic growth and growth by acquisition. Professional Business Services Our Professional Business Services Division - which includes Christie + Co,Christie First, Pinders and Pinders Caversham (formerly West London Estates) -has shown further strong growth in both revenues and profitability. The increase in the Division's development costs principally reflects the firstyear's operational costs associated with our new offices in Enfield and Epsom.We fully expect these losses to recede as 2006 progresses. At £41 million, turnover for the Division's UK operations was up by 14%year-on-year, while our non-UK operations continued their progress of the recentpast. Turnover on the Continent has increased by £1 million and losses have beenpegged, despite the cost of opening new offices in Berlin, Munich and Madrid.With a total of six operational centres on the Continent, we expect 2006 toproduce another year of revenue growth from our international business. Christie+ Co celebrated its 70th anniversary in 2005 with the launch of a new imagewhich reflects a sharpened focus on its core activity: the provision of businessintelligence for all its clients. It also saw a string of important new businesswins, notably The Priory, where Christie + Co's specialist healthcare valuationteam was asked to value The Priory Group's extensive portfolio after itsacquisition by ABN AMRO. Christie First also completed its biggest-everfunding deal when it arranged the refinancing of Marston Hotels, valued at morethan £150 million, thereby enabling the hotel group to remain independent. The division now has a wide geographical reach and is recognised as a leadingplayer in its core sectors of Hospitality, Leisure, Care and Retail. The range of assignments undertaken continues to broaden with both transactionaland advisory services now being provided on many deals worth over £100 million,with the largest in 2005 being the Punch Taverns acquisition of Spirit Group at£2.7 billion. This increased activity reflects the quality of our people andclients' appreciation of knowledgeable, accurate and consistently sound advice. Software Solutions The Software Solutions Division, VcsTimeless Group, a pan-European businessinvolved in leading edge systems and technologies in the retail and hospitalitysectors, had another important year of development. Despite the generally poortrading conditions for retailers across much of continental Europe, 2005 was agood year for VcsTimeless. Turnover increased by 6% to £13.7 million. Softwarerevenues were up by 11%. This was partly down to the internationalisation of theVcsTimeless business, with more than 70% of the company's revenue now derivedfrom countries outside the UK. The major achievement of the year has been thefinalisation of the strategic partnership with Wincor Nixdorf. With this inplace, VcsTimeless is developing BeStore, a new EPoS solution based on WincorNixdorf's flagship solution, TP.net, dedicated to tier one and tier tworetailers. By bringing together the expertise of three of the sector's leadinginnovators - Wincor Nixdorf, VcsTimeless and Microsoft - it will add a newstrand to what is already one of the best portfolios in the market. The company is now well-placed for what should be a decisive year in itsdevelopment. The launch of Colombus.next and BeStore should give VcsTimeless theproduct advantages needed for a new era of growth and prosperity in Europe. Stock and Inventory Services Our Stock and Inventory Services Division spent much of the early part of 2005planning and implementing the transfer of Venners' retail business to Orridge.This move, which is now complete, will do much to strengthen the two brands byallowing Venners to concentrate on developing its already substantial share ofthe hospitality market while Orridge builds its business on an enlarged retailbase. The value of this organisational change can be seen in the strong performancesput in by both companies during the latter part of the year. The greaterefficiencies across the Division produced improved gross margins on a sustainedturnover of £20.5 million. Venners is now totally committed to providing the UK's licensed trade withfirst-rate stock audit and stock management systems designed to delivervaluable, easy-to-access data relevant to present-day business practices,whereas Orridge's aim is to deliver high quality, customised, added-valuestocktaking solutions to clients in the retail, pharmacy and supply chainsectors. Operating from offices in both the UK and continental Europe, itsreputation for technological innovation was enhanced last year by theintroduction on the continent of its Piccolink scanning systems. The division is now well-placed to develop its business in all its chosensectors with the expectation of further long-term contracts being signed and welook forward to another year of continued progress. Strategy Overall, our results for 2005 demonstrate not only the strength of our groupstructure, but also the commercial value of our knowledge base, and the gains tobe made by targeting bigger businesses. Our aim is to continue to take advantage of every suitable opportunity forprogress and growth. Each of our three divisions has identified areas ofactivity where the prospects are good, and we have the resources needed for themto achieve their ambitions. David Rugg Chief Executive Table of Contents TOC /o "1-3" /h /z /u Consolidated income statement Company Statement of changes in Shareholders' equity Consolidated Balance sheet Company Balance sheet Consolidated Cash Flow Statement Company Cash Flow Statement Notes to the Financial Statements Five year record Consolidated income statement - Audited For the year ended 31 December 2005 Note 2005 2004 £'000 £'000 Revenue 5 77,506 69,968Employee benefit expenses 6 (43,497) (40,029) 34,009 29,939Depreciation and amortisation (1,292) (1,203)Other operating expenses (28,308) (24,892)Operating Profit 5 4,409 3,844Interest payable 7 (249) (268)Interest receivable 7 221 92Exceptional finance credit (net) 7 - 2,455Total finance (costs)/credit 7 (28) 2,279Profit before tax and exceptional finance credit 4,381 3,668Exceptional finance credit (net) - 2,455Profit before tax 8 4,381 6,123Taxation 9 (1,694) (360)Profit for the year after tax 2,687 5,763 Attributable to:Minority interest 3 10Equity Shareholders of the parent 2,684 5,753 2,687 5,763 Earnings per share -Basic 11 10.79p 23.28p* -Fully diluted 11 10.69p 22.94p* * Includes exceptional finance credit All the amounts derive from continuing activities. Consolidated Statement of changes in shareholders' equity - Audited As at 31 December 2005 Attributable to the Equity Holders of the Company Minority Total Share Fair value Cumulative Retained Interest Equity capital and other translation earnings reserves reserve (Note 20)Balance at 1 January 2004 493 4,411 (359) (2,029) 6 2,522Issue of share capital 2 46 - - - 48Currency translation adjustments - - 12 - - 12Net income recognised directly inequity 2 46 12 - - 60Profit for the year - - - 5,753 10 5,763Total recognised income for the year 2 46 12 5,753 10 5,823Movement in respect of employee share scheme - (11) - - - (11)Employee share option scheme: - value of services provided - 38 - - - 38Dividends - - - (722) - (722)Balance at 1 January 2005 495 4,484 (347) 3,002 16 7,650Issue of share capital 5 109 - - - 114Currency translation adjustments - - (40) - - (40)Net income/(expenses) recognised 5 109 (40) - - 74directly in equityProfit for the year - - - 2,684 3 2,687Total recognised income/(expenses) forthe year 5 109 (40) 2,684 3 2,761Movement in respect of employee sharescheme - 64 - - - 64Employee share option scheme: - value of services - 65 - - - 65providedExchange difference on repayment offoreign exchange loan - - 158 (158) - -Dividends - - - (726) - (726)Balance at 31 December 2005 500 4,722 (229) 4,802 19 9,814 Company Statement of changes in shareholders' equity - Audited As at 31 December 2005 Attributable to the Equity Holders of the Company Total equity Share capital Fair value and other Retained reserves (Note 20) earningsBalance at 1 January 2004 493 4,499 6,068 11,060Issue of share capital 2 46 - 48Net income recognised directly inequity 2 46 - 48Profit for the year - - 2,471 2,471Total recognised income for the year 2 46 2,471 2,519Movement in respect of employee share - (11) - (11)schemeEmployee share option scheme: - value of services - 1 - 1providedDividends - - (722) (722)Balance at 1 January 2005 495 4,535 7,817 12,847Issue of share capital 5 109 - 114Net income recognised directly in equity 5 109 - 114Profit for the year - - 2,417 2,417Total recognised income for the year 5 109 2,417 2,531Movement in respect of employee sharescheme - 64 - 64Dividends - - (726) (726)Balance at 31 December 2005 500 4,708 9,508 14,716 Consolidated Balance sheet - Audited As at 31 December 2005 Note 2005 2004 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 12 2,179 2,659Intangible assets - Goodwill 13 3,939 3,918Intangible assets - Other 14 2,810 1,153Deferred tax assets 15 1,977 2,327Available-for-sale financial assets 16a 300 100 11,205 10,157Current assetsInventories 17 310 355Trade and other receivables 18 14,117 13,371Available-for-sale financial assets 16a - 504Current tax assets - 413Cash and cash equivalents 6,811 3,499 21,238 18,142Total assets 32,443 28,299EquityCapital and reserves attributable to the Company's equity holdersShare capital 19 500 495Fair value and other reserves 20 4,722 4,484Cumulative translation reserve (229) (347)Retained earnings 20 4,802 3,002 9,795 7,634Minority interest 19 16Total equity 9,814 7,650LIABILITIESNon-current liabilitiesBorrowings 23 2,221 2,108Retirement benefit obligations 21 6,790 7,117 9,011 9,225Current liabilitiesTrade and other payables 22 12,748 11,150Current tax liabilities 732 -Borrowings 23 138 274 13,618 11,424Total liabilities 22,629 20,649Total equity and liabilities 32,443 28,299 These consolidated financial statements have been approved for issue by theBoard of Directors on 3 April 2006. Company Balance sheet - Audited As at 31 December 2005 Note 2005 2004 £'000 £'000ASSETSNon-current assetsDeferred tax assets 15 172 203Fixed asset investments 16 11,250 11,250Available-for-sale financial assets 16a 300 100 11,722 11,553Current assetsTrade and other receivables 18 7,932 5,131Available-for-sale financial assets 16a - 504Current tax assets - 364Cash and cash equivalents 1,445 648 9,377 6,647Total assets 21,099 18,200EquityCapital and reserves attributable to the Company's equity holdersShare capital 19 500 495Fair value and other reserves 20 4,708 4,535Retained earnings 20 9,508 7,817Total equity 14,716 12,847LIABILITIESNon-current liabilitiesBorrowings 23 2,000 2,000Retirement benefit obligations 21 613 660 2,613 2,660Current liabilitiesTrade and other payables 22 3,004 2,693Current tax liabilities 766 - 3,770 2,693Total liabilities 6,383 5,353Total equity and liabilities 21,099 18,200 These Company financial statements have been approved for issue by the Board ofDirectors on 3 April 2006. Consolidated Cash Flow Statement - Audited For the year ended 31 December 2005 2005 2004 Note £'000 £'000Cash flow from operating activitiesCash generated from operations 24a 6,772 3,689Interest paid (249) (268)Tax paid (214) (1,439)Net cash generated from operating activities 6,309 1,982Cash flow from investing activitiesAcquisition of subsidiary (net of cash acquired) 24b (79) -Purchase of property, plant and equipment (PPE) (858) (1,317)Proceeds from sale of PPE 132 29Intangible assets expenditure (1,712) (1,020)Proceeds from sale of available-for-sale asset 70 -Increased investment in available-for-sale asset (200) -Interest received 221 92Net cash used in investing activities (2,426) (2,216)Cash flow from financing activitiesProceeds from issue of share capital 114 48Proceeds from/(investment in) ESOP 64 (13)Proceeds from borrowings 510 2,121Repayment of borrowings (277) -Renegotiation of loan - (1,730)Payments of finance lease liabilities (111) (115)Dividends paid (726) (722)Exceptional gain - 277Net cash used in financing activities (426) (134)Net increase/(decrease) in net cash (including bank overdrafts) 3,457 (368)Cash and bank overdrafts at beginning of year 3,354 3,722Cash and bank overdrafts at end of year 6,811 3,354 Company Cash Flow Statement - Audited For the year ended 31 December 2005 Note 2005 2004 £'000 £'000Cash flow from operating activitiesCash used in operations 24a (2,633) (5,015)Interest paid (264) (107)Tax received 1,155 368Net cash used in operating activities (1,742) (4,754)Cash flow from investing activitiesProceeds from sale of available-for sale financial asset 70 -Investment in available-for-sale financial asset (200) -Proceeds from sale of shares in fixed asset investment - 305Investment income from fixed asset investments 2,778 2,768Interest received 439 249Net cash generated from investing activities 3,087 3,322Cash flow from financing activitiesProceeds from issue of share capital 114 48Proceeds from/(investment in) ESOP 64 (11)Proceeds from borrowings - 2,000Dividends paid (726) (722)Net cash (used in)/generated from financing activities (548) 1,315Net increase/(decrease) in net cash (including bank overdrafts) 797 (117)Cash and bank overdrafts at beginning of year 648 765Cash and bank overdrafts at end of year 1,445 648 Notes to the Consolidated Financial Statements - Audited 1. General information Christie Group plc is the parent undertaking of a group of companies covering arange of related activities. These fall into three divisions - ProfessionalBusiness Services, Software Solutions and Stock and Inventory Services.Professional Business Services principally covers business valuation and agency,mortgage and insurance services, and business appraisal. Software Solutionscovers EPoS, head office systems and supply chain management. Stock andInventory Services covers Stock and Audit inventory preparation and valuation. 2. Summary of significant accounting policies Accounting policies for the year ended 31 December 2005 The principal accounting policies adopted in the preparation of these FinancialStatements are set out below. 2.1 Basis of preparation The consolidated and Company financial statements of Christie Group plc havebeen prepared in accordance with International Financial Reporting Standards(IFRS). These consolidated and Company financial statements have been preparedunder the historic cost convention. These consolidated and Company financial statements of Christie Group plc arefor the year ended 31 December 2005 and are covered by IFRS 1, 'First-timeAdoption of International Accounting Standards'. The financial statements havebeen prepared in accordance with IFRS standards and IFRIC interpretations issuedand effective or issued and early adopted as at the time of preparing thesestatements (March 2006). The policies set out below have been consistently applied to all the periodspresented except for those relating to the classification and measurement offinancial instruments. The Group has made use of the exemption available underIFRS 1 to only apply IAS 32 and IAS 39 from 1 January 2005, although nosignificant adjustments occurred. The policies applied to financial instrumentsfor 2004 and 2005 are disclosed separately below. Christie Group plc's consolidated and Company financial statements were preparedin accordance with UK Generally Accepted Accounting Principles (GAAP) until 31December 2004. GAAP differs in some areas from IFRS. In preparing Christie Groupplc's 2005 consolidated and Company financial statements, management has amendedcertain accounting and valuation methods applied in the GAAP financialstatements to comply with IFRS. The comparative figures in respect of 2004 wererestated to reflect these adjustments, except as described in the accountingpolicies. The preparation of financial statements in accordance with IFRS requires the useof certain critical accounting estimates. It also requires management toexercise judgement in the process of applying the Company's accounting policies.The areas involving a higher degree of judgement or complexity, or areas whereassumptions and estimates are significant to the consolidated and parent companystatements are disclosed in Note 4. Interpretations and amendments to published standards effective in 2005 The following amendments and interpretations to standards are mandatory for theGroup's Accounting years beginning on or after 1 January 2005. - IFRIC 2, Members' Shares in Co-operative Entities and Similar Instruments; - SIC 12 (Amendment), Consolidation - Special Purpose Entities; and - IAS 39 (Amendment), Transition and Initial Recognition of Financial Assets and Financial Liabilities. Management assessed the relevance of these amendments and interpretations withrespect to the Group's operations and concluded that they are not relevant tothe group. Standards, interpretations and amendments to published standards that are notyet effective Certain new standards, amendments and interpretations to existing standards havebeen published that are mandatory for the Group's accounting periods beginningon or after 1 January 2006 or later periods but which the group has not earlyadopted, as follows: - IAS 19 (Amendment), Employee Benefits (effective from 1 January2006). This amendment introduces the option of an alternative recognitionapproach for actuarial gains and losses. It may impose additional recognitionrequirements for multi-employer plans where insufficient information isavailable to apply defined benefit accounting. It also adds new disclosurerequirements. As the Group does not intend to change the accounting policyadopted for recognition of actuarial gains and losses the adoption of thisamendment will only impact the format and extent of disclosures presented in thefinancial statements. - IFRIC 4, Determining whether an Arrangement contains a Lease(effective from 1 January 2006). IFRIC 4 requires the determination of whetheran arrangement is or contains a lease to be based on the substance of thearrangement. It requires an assessment of whether: (a) fulfilment of thearrangement is dependent on the use of a specific asset or assets (the asset):and (b) the arrangement conveys a right to use the asset. Management iscurrently assessing the impact of IFRIC 4 on the Group's operations. It is anticipated that new standards or interpretations not covered specificallyabove will have no impact on the Group's financial statements. 2.2 ConsolidationThe Group financial statements include the results of Christie Group plc and allits subsidiary undertakings on the basis of their financial statements to 31December 2005. The results of businesses acquired or disposed of are includedfrom the date of acquisition or disposal. A subsidiary is an entity controlled, directly or indirectly, by Christie Groupplc. Control is regarded as the power to govern the financial and operatingpolicies of the entity so as to obtain the benefits from its activities. 2.3 Foreign currency translation Functional and presentation currency Items included in the financial statements of each of the Group's entities aremeasured using the currency of the primary economic environment in which theentity operates ('the functional currency'). The consolidated financialstatements are presented in pounds sterling, which is the Company's functionaland presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Foreignexchange gains and losses resulting from the settlement of such transactions andfrom the translation at year-end exchange rates of monetary assets andliabilities denominated in foreign currencies are recognised in the incomestatement. Group companies The results and financial position of all the group entities (none of which hasthe currency of a hyperinflationary economy) that have a functional currencydifferent from the presentation currency are translated into the presentationcurrency as follows: a) assets and liabilities for each balance sheet presented are translated at theclosing rate at the date of that balance sheet; b) income and expenses for each income statement are translated at averageexchange rates; and c) all resulting exchange differences are recognised as a separate component ofequity, the cumulative translation reserve. On consolidation, exchange differences arising from the translation of the netinvestment in foreign entities, and of borrowings, are taken to shareholders'equity. When a foreign operation is sold, such exchange differences arerecognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreignentity are treated as assets and liabilities of the foreign entity andtranslated at the closing rate. 2.4 Revenue recognition Revenue comprises the fair value of the consideration received or receivable forthe sale of goods and services provided in the ordinary course of the Group'sactivities. Revenue derived from the Group's principal activities (which isshown exclusive of applicable sales taxes or equivalents) is recognised asfollows: Agency and valuations Net agency fees are recognised as income on exchange of contracts. In respect ofvaluations, turnover is recognised once the property or business has beeninspected. Appraisal income is recognised in the accounting period in which theservice is rendered, by reference to completion of the specific transaction,assessed on the basis of actual service provided as a proportion of the totalservices to be provided. Business mortgage broking Fee income is taken either when a loan offer is secured or when the loan isdrawn down. Insurance broking Insurance brokerage is accounted for on an accruals basis when insurancecommences. Software solutionsHardware revenues are recognised on installation or as otherwise specified inthe terms of the contract. Software revenues are recognised on the signing ofcontracts. Revenues on maintenance contracts are recognised over the period ofthe contracts. Services, such as implementation, training and consultancy, arerecognised when the services are performed. Stock and inventory servicesFees are recognised on completion of the visit to client's premises. Other income is recognised as follows: Interest income Interest income is recognised on a time-proportion basis using the effectiveinterest method. Dividend income Dividend income is recognised when the right to receive payment is established. 2.5 Segmental reporting In accordance with the Group's risks and returns, the definition of segments forprimary and secondary segment reporting reflects the internal managementreporting structure. Segment expenses consist of directly attributable costsand other costs, which are allocated based on relevant criteria. A businesssegment is a group of assets and operations engaged in providing products orservices that are subject to risks and returns that are different from those ofother business segments. A geographical segment is engaged in providing products or services within aparticular economic environment that are subject to risks and returns that aredifferent from those of components operating in other economic environments. 2.6 Intangible assets Goodwill On the acquisition of a business, fair values are attributed to the net assetsacquired. Goodwill arises on the acquisition of subsidiary undertakings,representing any excess of the fair value of the consideration given over thefair value of the identifiable assets and liabilities acquired. Goodwillarising on acquisitions is capitalised and subject to impairment review, bothannually and when there are indications that the carrying value may not berecoverable. Goodwill arising on acquisitions prior to the date of transition to IFRS hasbeen retained at previous UK GAAP amounts as permitted by IFRS 1 'First timeadoption of International Accounting Standards'. Prior to 1 January 2004,goodwill was amortised over its estimated useful life, such amortisation ceasedon 31 December 2003, subject to an impairment review at the date of transition,in which no impairment was recognised. The Group's policy for the years up to31 March 1998 was to eliminate goodwill arising on acquisitions againstreserves. Under IFRS 1 and IFRS 3, such goodwill will remain eliminated againstreserves. Research and Development Development products are capitalised when the following criteria aredemonstrated: - The technically feasibility of completing the product so that it will be available for use or sale; - The intention to complete the product and use or sell it; - The ability to use the completed product or sell it; - It is probable that the completed product will generate future economic benefits; - The availability of adequate technical, financial and other resources to complete the development and to use or sell the completed product; and - The ability to reliably measure the expenditure on the intangible asset during its development. Development costs are amortised in equal annual instalments over the expectedproduct or system life, commencing in the year when the product is completed.Development costs previously recognised as an expense are not recognised as anasset in a subsequent period. All other research and development costs arewritten off in the year in which they are incurred. Other Intangible fixed assets such as software, trademarks and patent rights arestated at cost, net of amortisation and any provision for impairment.Amortisation is calculated to write down the cost of all intangible fixed assetsto their estimated residual value by equal annual instalments over theirexpected useful economic lives. The expected useful lives are between three andten years. 2.7 Property plant and equipment Tangible fixed assets are stated at cost, net of depreciation and provision forany impairment. Depreciation is calculated to write down the cost of alltangible fixed assets to estimated residual value by equal annual instalmentsover their expected useful lives as follows: Leasehold property Lease term Fixtures, fittings and equipment 5 - 10 years Computer equipment 2 - 3 years Motor vehicles 4 years The assets' residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date. An asset's carrying amount is writtendown immediately to its recoverable amount if the asset's carrying amount isgreater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the disposal proceedswith the carrying amount and are included in the income statement. 2.8 LeasesLeases where the lessor retains a significant portion of the risks and rewardsof ownership are classified as operating leases. Rentals under operating leases(net of any incentives received) are charged to the income statement on astraight-line basis over the period of the lease. Assets, held under finance leases, which confer rights and obligations similarto those attached to owned assets, are capitalised as tangible fixed assets andare depreciated over the shorter of the lease terms and their useful lives. Thecapital elements of future lease obligations are recorded as liabilities, whilstthe interest elements are charged to the income statement over the period of theleases at a constant rate. 2.9 Impairment of assets Non-current assets are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which the asset's carrying valueexceeds its recoverable amount. The recoverable amount is the higher of anasset's fair value less costs to sell and value in use. Value in use is basedon the present value of the future cash flows relating to the asset. For thepurposes of assessing impairment, assets are grouped at the lowest levels forwhich there are separately identifiable cash flows (cash generating units). Any assessment of impairment based on value in use takes account of the timevalue of money and the uncertainty or risk inherent in the future cash flows.The discount rates applied are post-tax and reflect current market assessmentsof the time value of money and the risks specific to the asset for which thefuture cash flow estimates have not been adjusted. 2.10 Investments From 1 January 2004 to 31 December 2004 Financial fixed assets include investments in companies other than subsidiariesand associates, financial receivables held for investment purposes, treasurystock and other securities. Financial fixed assets are recorded at cost,including additional direct charges. Current assets may also include investments and securities acquired as atemporary investment, which are valued at the lower of cost and market value,cost being determined on a last-in-first-out (LIFO) basis. From 1 January 2005 The Group classifies its investments depending on the purpose for which theinvestments were acquired. Management determines the classification of itsinvestments at initial recognition and re-evaluates this designation at everyreporting date. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are eitherdesignated in this category or not classified in any of the other categories.They are included in non-current assets unless management intends to dispose ofthe investment within 12 months of the balance sheet date. Purchases and sales of investments are recognised on trade date, the date onwhich the Group commits to purchase or sell the asset. Investments are initiallyrecognised at fair value plus transaction costs for all financial assets notcarried at fair value through profit or loss. Investments are derecognised whenthe rights to receive cash flows from the investments have expired or have beentransferred and the Group has transferred substantially all risks and rewards ofownership. Available-for-sale financial assets and financial assets at fairvalue through profit or loss are subsequently carried at fair value. Loans andreceivables and held-to-maturity investments are carried at amortised cost usingthe effective interest method. Realised and unrealised gains and losses arisingfrom changes in the fair value of the 'financial assets at fair value throughprofit or loss' category are included in the income statement in the period inwhich they arise. Unrealised gains and losses arising from changes in the fairvalue of non-monetary securities classified as available-for-sale are recognisedin equity. When securities classified as available-for-sale are sold orimpaired, the accumulated fair value adjustments are included in the incomestatement as gains and losses from investment securities The fair values of quoted investments are based on current bid prices. If themarket for a financial asset is not active (and for unlisted securities), theGroup establishes fair value by using valuation techniques. These include theuse of recent arm's length transactions, reference to other instruments that aresubstantially the same, discounted cash flow analysis, and option pricing modelsrefined to reflect the issuer's specific circumstances. The Group assesses at each balance sheet date whether there is objectiveevidence that a financial asset or a group of financial assets is impaired. Inthe case of equity securities classified as available for sale, a significant orprolonged decline in the fair value of the security below its cost is consideredin determining whether the securities are impaired. If any such evidence exists for available-for-sale financial assets, thecumulative loss - measured as the difference between the acquisition cost andthe current fair value, less any impairment loss on that financial assetpreviously recognised in profit or loss - is removed from equity and recognisedin the income statement. Impairment losses recognised in the income statement onequity instruments are not reversed through the income statement. 2.11 Inventories Inventory held for resale is valued at the lower of cost and net realisablevalue. 2.12 Trade receivables Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using the effective interest method, less provisionfor impairment. A provision for impairment of trade receivables is establishedwhen there is objective evidence that the Group will not be able to collect allamounts due according to the original terms of receivables. The amount of theprovision is the difference between the asset's carrying amount and the presentvalue of estimated future cash flows, discounted at the effective interest rate.The amount of the provision is recognised in the income statement. 2.13 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. Cash andcash equivalents comprise cash in hand, deposits held at call with banks, othershort-term, highly liquid investments with original maturities of three monthsor less, and bank overdrafts. Bank overdrafts are included within borrowings incurrent liabilities on the balance sheet. 2.14 Borrowings Borrowings are recognised initially at fair value, net of transaction costsincurred. Borrowings are subsequently stated at amortised cost; any differencebetween proceeds (net of transaction costs) and the redemption value isrecognised in the income statement over the period of the borrowings using theeffective interest method. Borrowings are classified as current liabilities unless the Group has anunconditional right to defer settlement of the liability for at least 12 monthsafter the balance sheet date. 2.15 Taxation including deferred tax Tax on company profits is provided for at the current rate applicable in each ofthe relevant territories. Deferred tax is provided in full, using the liability method, on temporarydifferences arising between the tax bases of assets and liabilities and theircarrying amounts in the consolidated financial statements. However, if thedeferred tax arises from initial recognition of an asset or liability in atransaction other than a business combination that at the time of thetransaction affects neither accounting nor taxable profit or loss, it is notaccounted for. Deferred tax is determined using tax rates (and laws) that havebeen enacted or substantially enacted by the balance sheet date and are expectedto apply when the related deferred tax asset is realised or the deferred taxliability is settled. Deferred tax assets are recognised to the extent that it is probable that futuretaxable profit will be available against which the temporary differences can beutilised. This is reviewed annually. 2.16 Share capital and share premium Ordinary shares are classified as equity. Where any Group company or the Employee Share Ownership Plan (ESOP) trustpurchases the Company's equity share capital (own shares), the considerationpaid, including any directly attributable incremental costs (net of taxes), isdeducted from equity attributable to the Company's equity holders until theshares are cancelled, reissued or disposed of. Where such shares aresubsequently sold or reissued, any consideration received, net of any directlyattributable incremental transaction costs and the related tax effects, isincluded in equity attributable to the Company's equity holders. 2.17 Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liabilityin the Group's financial statements in the period in which the dividends areapproved by the Company's shareholders. In respect of interim dividends, whichare paid prior to approval by the Company's shareholders they are recognised onpayment. 2.18 Employee benefits Pension obligations The Group has both defined benefit and defined contribution schemes. A definedbenefit scheme is a pension scheme that defines the amount of pension benefitthat an employee will receive on retirement, usually dependent on one or morefactors such as age, years of service and remuneration. A defined contributionscheme is a pension scheme under which the Group pays fixed contributions into aseparate entity. The schemes are generally funded through payments to insurancecompanies or trustee-administered funds, determined by periodic actuarialcalculations. Pension obligations - Defined benefit schemes The liability recognised in the balance sheet in respect of defined benefitpension schemes is the present value of the defined benefit obligation at thebalance sheet date less the fair value of scheme assets, together withadjustments for unrecognised actuarial gains or losses and past service costs.The defined benefit obligation is calculated annually by independent actuariesusing the projected unit credit method. The present value of the defined benefitobligation is determined by discounting the estimated future cash outflows usinginterest rates of high-quality corporate bonds that are denominated in thecurrency in which the benefits will be paid, and that have terms to maturityapproximating to the terms of the related pension liability. Cumulative actuarial gains and losses arising from experience adjustments andchanges in actuarial assumptions in excess of the greater of 10% of the value ofscheme assets or 10% of the defined benefit obligation are charged or creditedto income statement over the employees' expected average remaining workinglives. Past-service costs are recognised immediately in the income statement, unlessthe changes to the pension scheme are conditional on the employees remaining inservice for a specified period of time (the vesting period). In this case, thepast-service costs are amortised on a straight-line basis over the vestingperiod. Pension obligations - Personal pension scheme Group companies contribute towards a personal pension scheme for theirparticipating employees. These employees are currently entitled to suchcontributions after a qualifying period has elapsed. Payments to the scheme arecharged as an employee benefit expense as they fall due. The Group has nofurther payment obligations once the contributions have been paid. Share based compensation The fair value of employee share option schemes, including Save As You Earn(SAYE) schemes, is measured by a Black-Scholes pricing model. Further detailsare set out in note 19a. In accordance with IFRS 2 'Share-based Payments' theresulting cost is charged to the income statement over the vesting period of theoptions. The value of the charge is adjusted to reflect expected and actuallevels of options vesting. No expense is recognised in respect of share options granted before 7 November2002 and that vested before 1 January 2005. The expense is recognised when theoptions are exercised and proceeds received allocated between share capital andshare premium. For share options granted after 7 November 2002 and vested after 1 January 2005the Group operates an equity-settled, long term incentive plan designed to alignmanagement interests with those of shareholders. The fair value of theemployee's services received in exchange for the grant of the options isrecognised as an expense. The total amount to be expensed over the vestingperiod is determined by reference to the fair value of the options granted,excluding the impact of any non-market vesting conditions (for example,profitability and sales growth targets). Non-market vesting conditions areincluded in assumptions about the number of options that are expected to becomeexercisable. At each balance sheet date, the entity revises its estimates of thenumber of options that are expected to become exercisable. It recognises theimpact of the revision of original estimates, if any, in the income statement,and a corresponding adjustment to equity. The proceeds received net of anydirectly attributable transaction costs are credited to share capital (nominalvalue) and share premium when the options are exercised. Commissions and bonus plans The Group recognises a liability and an expense for commissions and bonuses,based on formula driven calculations. The Group recognises a provision wherecontractually obliged or where there is a past practice that has created aconstructive obligation. 3. Financial risk management The Group uses a limited number of financial instruments, comprising cash,short-term deposits, bank loans and overdrafts and various items such as tradereceivables and payables, which arise directly from operations. The Group doesnot trade in financial instruments. 3.1 Financial risk factors The Group's activities expose it to a variety of financial risks: market risk(including currency risk, and interest rate risk), credit risk, liquidity riskand cash flow interest rate risk. The Group's overall risk management programmefocuses on the unpredictability of financial markets and seeks to minimisepotential adverse effects on the Group's financial performance. a) Market risk (i) Foreign exchange risk The Group operates internationally and is exposed to foreign exchange riskarising from various currency exposures, primarily with respect to the UK poundand the Euro. Foreign exchange risk arises from future commercial transactions,recognised assets and liabilities and net investments in foreign operations. Foreign exchange risk arises when future commercial transactions or recognisedassets or liabilities are denominated in a currency that is that is not theentity's functional currency. The Group has certain investments in foreign operations, whose net assets areexposed to foreign currency translation risk. b) Credit risk The Group has no significant concentrations of credit risk and has policies inplace to ensure that sales are made to customers with an appropriate credithistory. A number of subsidiaries utilise credit insurance to mitigate creditrisk. c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash andavailable funding through an adequate amount of committed credit facilities.The Group ensures it has adequate cover through the availability of bankoverdraft and loan facilities. d) Cash flow and interest rate risk The Group finances its operations through a mix of cash flow from currentoperations together with cash on deposit and bank and other borrowings.Borrowings are generally at floating rates of interest and no use of interestrate swaps has been made. Overall the Group's trading operations are normallycash generative. 3.2 Fair value estimation The nominal value less impairment provision of trade receivables and payablesare assumed to approximate their fair values. The fair value of financialliabilities for disclosure purposes is estimated by discounting the futurecontractual cash flows at the current market interest rate that is available tothe Group for similar financial instruments. 4. Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that arebelieved to be reasonable under the circumstances. 4.1 Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resultingaccounting estimates will by definition, seldom equal the related actualresults. The estimates and assumptions that have a significant risk of causinga material adjustment to the carrying amounts of assets and liabilities withinthe next financial year are discussed below. (a) Estimated impairment of goodwill Goodwill is subject to an impairment review both annually and when there areindications that the carrying value may not be recoverable, in accordance withthe accounting policy stated in note 2.6. The recoverable amounts ofcash-generating units have been determined based on value-in-use calculations.These calculations require the use of estimates (Note 13). (b) Retirement benefit obligations The assumptions used to measure the expense and liabilities related to thegroup's two defined benefit pension plans are reviewed annually byprofessionally qualified, independent actuaries, trustees and management asappropriate. The measurement of the expense for a period requires judgementwith respect to the following matters, among others: - the probable long-term rate of increase in pensionable pay; - the discount rate - the expected return on plan assets - the estimated life expectancy of participating members The assumptions used by the Group may differ materially from actual results, andthese differences may result in a significant impact on the amount of pensionexpense recorded in future periods. In accordance with IAS 19, the groupamortises actuarial gains and losses outside the 10% corridor, over the averagefuture service lives of employees. Under this method, major changes inassumptions, and variances between assumptions and actual results, may affectretained earnings over several future periods rather than one period, while moreminor variances and assumption changes may be offset by other changes and haveno direct effect on retained earnings. 5. Segment information a. Primary reporting format - business segments The Group is organised into three main business segments: Professional BusinessServices, Software Solutions and Stock and Inventory Services. The segment results for the year ended 31 December 2005 are as follows: Stock and Professional Business Software Inventory Services Solutions Services Other Group £'000 £'000 £'000 £'000 £'000 Continuing OperationsTotal gross segment sales 43,289 13,714 20,536 2,554 80,093Inter-segment sales (33) - - (2,554) (2,587)Revenue 43,256 13,714 20,536 - 77,506Operating profit 4,519 (1,268) 1,356 (198) 4,409Net finance costs (28)Profit before tax 4,381Taxation (1,694)Profit for the year after tax 2,687 The segment results for the year ended 31 December 2004 are as follows: Professional Business Software Stock and Services Solutions Inventory £'000 £'000 Services Other Group £'000 £'000 £'000Continuing OperationsTotal gross segment sales 37,289 12,976 19,723 2,452 72,440Inter-segment sales (20) - - (2,452) (2,472)Revenue 37,269 12,976 19,723 - 69,968Operating profit 4,055 (1,145) 996 (62) 3,844Net finance costs (176)Exceptional finance credit 2,455Profit before tax 6,123Taxation (360)Profit for the year after tax 5,763 Other segment items included in the income statements for the years ended 31December 2005 and 2004 are as follows: Professional Stock and Business Software Inventory Services Solutions Services Other Group £'000 £'000 £'000 £'000 £'00031 December 2005Depreciation and amortisation 673 304 269 46 1,292Impairment of trade receivables 644 166 2 - 81231 December 2004Depreciation and amortisation 647 247 248 61 1,203Impairment of trade receivables 430 115 21 - 566 The segment assets and liabilities at 31 December 2005 and capital expenditurefor the year then ended are as follows: Stock and Professional Software Inventory Business Services Solutions Services Other Group £'000 £'000 £'000 £'000 £'000 £'000 £'000Assets 14,589 9,984 4,707 1,186 30,466Deferred tax assets 1,977 32,443Liabilities 10,066 3,507 4,006 2,024 19,603Current tax liabilities 732Borrowings (excluding finance leases) 2,294 22,629 Capital expenditure 1,130 1,224 187 29 2,570 The segment assets and liabilities at 31 December 2004 and capital expenditurefor the year are as follows; Stock and Professional Software Inventory Business Services Solutions Services Other Group £'000 £'000 £'000 £'000 £'000 Assets 10,678 8,960 3,928 1,993 25,559Deferred tax assets 2,327Current tax 413 28,299Liabilities 9,001 3,968 3,366 2,108 18,443Borrowings (excluding finance leases) 2,206 20,649 Capital expenditure 1,283 826 306 10 2,425 Segment assets consist primarily of property, plant and equipment, intangibleassets, inventories, receivables and operating cash. They exclude deferredtaxation. Segment liabilities comprise operating liabilities. They exclude items such astaxation and corporate borrowings. Capital expenditure comprises additions to property, plant and equipment andintangible assets. b. Secondary format - geographical segments The Group manages its business segments on a global basis. The UK is the homecountry of the parent. The operations are based in two main geographical areas.The main operations in the principal territories are as follows: - Europe - Rest of the World (primarily North America) The Group's sales are mainly in Europe. Sales are allocated based on thecountry in which the customer is located. 2005 2004 £'000 £'000SalesEurope 77,080 69,428Rest of the World 426 540 77,506 69,968 Total segment assetsEurope 30,169 25,431Rest of the World 297 128 30,466 25,559 Capital expenditure is allocated based on where the assets are located. 2005 2004 £'000 £'000Capital expenditureEurope 2,570 2,400Rest of the World - 25 2,570 2,425 2005 2004 £'000 £'000Analysis of sales by categorySales of goods 2,568 2,681Revenue from services 74,938 67,287 77,506 69,968 6. Employee benefit expenses 2005 2004 Staff costs for the Group during the year £'000 £'000Wages and salaries 36,588 33,633Social security costs 5,387 5,094Pension costs - defined benefit schemes (note 21) 1,169 1,038Pension costs - defined contribution scheme 288 226Cost of employee share scheme 65 38 43,497 40,029 Average number of people (including executive directors) employed by the Group 2005 2004during the year wasOperational 1,025 900Administration and support staff 305 322 1,330 1,222 7. Finance costs / (credits) 2005 2004 £'000 £'000Interest payable on bank loans and overdrafts 242 259Interest payable on finance leases 7 9Total interest and similar charges payable 249 268Bank interest receivable (126) (92)Other interest receivable (95) -Exceptional finance credit (net) - (2,455)Total interest receivable (221) (2,547)Net finance costs / (credits) 28 (2,279) 8. Profit before tax Group 2005 2004 £'000 £'000Profit before tax is stated after charging/(crediting):Depreciation of property, plant and equipment - owned assets 1,125 1,054 - under finance leases 126 121Amortisation of intangible fixed assets 41 28(Profit)/loss on sale of property, plant and equipment (20) 16Loss on sale of intangible fixed asset - 31Profit on sale of current available for sale financial assets (including Company (176) -£176,000 (2004: £nil))Operating lease charges - buildings 1,412 1,293 - other 752 1,492Repairs and maintenance expenditure on property, plant and equipment. 397 265Research and development 1,308 1,519Loss on foreign exchange (including Company £31,000 (2004: £nil)) 28 40Inventories- cost of inventories recognised as an expense (included in other operating expenses) 41 (34)- write down of inventories 1 - Services provided by the group's auditor and network firms During the year the group (including its overseas subsidiaries) obtained thefollowing services from the group's auditor or a related company of the group'sauditor as detailed below: Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Audit services- statutory audit 113 88 5 11Tax services 130 129 23 10Other services not covered above 45 6 - - In addition to the above services, the group's auditor acted as auditor to theChristie Group plc Pension & Assurance Scheme and the VennersRetirement Benefit Scheme. The appointment of auditors to the group's pensionschemes and the fees paid in respect of those audits are agreed by thetrustees of each scheme, who act independently from the management ofthe group. The aggregate fees paid to the group's auditor for audit servicesto the pension schemes during the year were £9,000 (2004: £9,000) 9. Taxation 2005 2004 £'000 £'000Current taxUK Corporation tax at 30% (2004: 30%) 1,324 897Foreign tax 57 75Adjustment in respect of prior period (37) (970)Total current tax 1,344 2Deferred taxOrigination and reversal of timing differences 350 358Total deferred tax 350 358Tax on profit on ordinary activities 1,694 360 The tax for the year is higher (2004: lower) than the standard rate ofcorporation tax in the UK (30%). The differences are explained below: Tax on profit on ordinary activities 2005 2004 £'000 £'000Profit before tax and exceptional finance credit 4,381 3,668Exceptional finance credit (net) - 2,455Profit on ordinary activities before tax 4,381 6,123Profit on ordinary activities at standard rate of UK corporation tax 1,837 of 30% (2004: 30%) 1,314Effects of: - foreign tax losses not yet utilised 236 238 - expenses not deductible for tax purposes 105 28 - adjustment to tax charge in respect of previous periods (37) 47 - depreciation in excess of capital allowances (15) (81) - other timing differences (259) (241) - benefit prior year dual residence tax losses - (1,017) - exceptional non-taxable finance credit - (800) - rate differential on certain tax losses - (9)Total current tax 1,344 2 10. Dividends 2005 2004Group and Company £'000 £'000Final dividend paid, relating to the years ending 31 December 2004 and 2003: 2.0p (2004: 2.0p) 481 480per 2p shareInterim dividend paid, relating to the years ending 31 December 2005 and 2004: 1.0p (2004: 1.0p) 245 242per 2p share 726 722 A dividend in respect of the year ended 31 December 2005 of 2.5p per share,amounting to a total dividend of £608,000, is to be proposed at the AnnualGeneral Meeting on 28 June 2006. These financial statements do not reflect thisproposed dividend. 11. Earnings per share Basic earnings per share is calculated by dividing the profit attributable toequity holders of the Company by the weighted average number of ordinary sharesin issue during the year. 2005 2004 Profit attributable to equity holders of the Company (£'000) 2,684 5,753 24,866 24,709Weighted average number of ordinary shares in issue (thousands)Basic earnings per share (pence) 10.79 23.28 Diluted earnings per share is calculated adjusting the weighted average numberof ordinary shares outstanding to assume conversion of all dilutive potentialordinary shares. The Company has only one category of dilutive potentialordinary shares: share options. The calculation is performed for the share options to determine the number ofshares that could have been acquired at fair value (determined as the averageannual market share price of the Company's shares) based on the monetary valueof the subscription rights attached to outstanding share options. The number ofshares calculated as above is compared with the number of shares that would havebeen issued assuming the exercise of the share options. 2005 2004 Profit attributable to equity holders of the Company (£'000) 2,684 5,753Weighted average number of ordinary shares in issue (thousands) 24,866 24,709Adjustment for share options (thousands) 249 368Weighted average number of ordinary shares for diluted earnings per share (thousands) 25,115 25,077 Diluted earnings per share (pence) 10.69 22.94 12. Property, plant and equipment Fixtures, Fittings, Computer Equipment and Short Leasehold Property Motor Vehicles Total £'000 £'000 £'000GroupCostAt 1 January 2005 517 6,827 7,344Exchange adjustments - (22) (22)Additions at cost 14 844 858Acquisitions - 32 32Disposals - (502) (502)At 31 December 2005 531 7,179 7,710Accumulated depreciationAt 1 January 2005 245 4,440 4,685Exchange adjustments - (15) (15)Charge for the year 96 1,155 1,251Reclassification 7 (7) -Disposals - (390) (390)At 31 December 2005 348 5,183 5,531Net book amount at 31 December 2005 183 1,996 2,179 Fixtures, Fittings, Computer Equipment and Short Leasehold Property Motor Vehicles Total £'000 £'000 £'000GroupCostAt 1 January 2004 309 8,135 8,444Exchange adjustments - 1 1Additions at cost 208 1,187 1,395Disposals - (2,496) (2,496)At 31 December 2004 517 6,827 7,344Accumulated depreciationAt 1 January 2004 180 5,777 5,957Charge for the year 65 1,110 1,175Disposals - (2,447) (2,447)At 31 December 2004 245 4,440 4,685Net book amount at 31 December 2004 272 2,387 2,659 Depreciation in the year on fixtures, fittings, computer equipment and motorvehicles includes £126,000 (2004: £121,000) on assets held under finance leaseor hire purchase agreements which have a net book value at 31 December 2005 of£62,000 (2004: £189,000). At 31 December 2005 and 2004 the Company held Fixtures, Fittings, ComputerEquipment and Motor Vehicles with a cost of £9,000 and accumulated depreciationof £9,000. 13. Intangible assets - GoodwillGroup Total £'000CostAt 1 January 2005 3,918Acquisitions 21At 31 December 2005 3,939 Group Total £'000CostAt 1 January 2004 and 31 December 2004 3,918 Goodwill is allocated to the Group's cash-generating units (CGUs) identifiedaccording to country of operation and business segment. The carrying amounts ofgoodwill by segment as at 31 December 2005 are as follows: Goodwill Professional Business Stock and Inventory Services Software Solutions Services £'000 £'000 £'000 UK 21 - 833Continental Europe - 3,085 - During the year, the acquired goodwill in respect of Timeless Groupe SA, Orridge& Co Ltd and West London Estates was tested for impairment in accordance withIAS 36 on the basis of the relevant CGUs. Following the impairment tests therehas been no change to the carrying values. The recoverable amount of a CGU is determined based on value-in-usecalculations. These calculations use cash flow projections based on currentbusiness plans. The key assumptions for the value-in-use calculations arethose regarding revenue growth rates, discount rates and long-term growth rates.Management determined budgeted revenue growth based on past performance andits expectations for the market development. Discount rates were determinedusing post-tax rates that reflect current market assessments of the time valueof money and the risks specific to the CGUs. Cash flows beyond the five-yearperiod are extrapolated using estimated long term growth rates. The growth ratedoes not exceed the long-term average growth rate for the businesses in whichthe CGUs operate. 14. Intangible assets - Other Group Software Software Total £'000 Development £'000 £'000CostAt 1 January 2005 103 1,122 1,225Exchange adjustments (2) (14) (16)Additions 101 1,611 1,712At 31 December 2005 202 2,719 2,921Accumulated amortisationAt 1 January 2005 72 - 72Exchange adjustments (2) - (2)Charge for the year 41 - 41At 31 December 2005 111 - 111Net book amount at 31 December 2005 91 2,719 2,810 The expected useful lives are as follows: Software 3 - 10 years Software development 5 - 10 years The investment in software development relates to the following: - Development of products for resale in the Software Solutions division; and - An operational support system in the Professional Business Services division. Costs relating to the Christie + Co operational support system at 31 December2005 totalled £1,193,000. The subsidiary is in dispute with a substantial thirdparty software house which is contracted to provide the system. Resulting fromthe software house's admitted failure regarding aspects of the system, Christie+ Co has commenced legal proceedings against it. Group Software Software Total £'000 Development £'000 £'000CostAt 1 January 2004 171 106 277Additions 14 1,016 1,030Disposals (82) - (82)At 31 December 2004 103 1,122 1,225Accumulated amortisationAt 1 January 2004 98 - 98Charge for the year 28 - 28Disposals (54) - (54)At 31 December 2004 72 - 72Net book amount at 31 December 2004 31 1,122 1,153 15. Deferred tax Deferred tax assets have been recognised in respect of tax losses and othertemporary differences giving rise to deferred tax assets where it is probablethat these assets will be recovered. The movements in deferred tax assets and liabilities (prior to the offsetting ofbalances within the same jurisdiction as permitted by IAS 12) during the yearare shown below. Deferred tax assets and liabilities are only offset wherethere is a legally enforceable right of offset and there is an intention tosettle the balances net. Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Deferred income tax assets/(liabilities) comprises:Accelerated capital allowances 109 209 2 (22)Short-term timing differences (152) (2) (13) 27Deferred tax (liability) / asset (43) 207 (11) 5Deferred tax asset on pension 2,020 2,120 183 198At 31 December 2005 1,977 2,327 172 203 Movements in the deferred tax asset: Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000At 1 January 2,327 2,685 203 211Transfer to the income statement (350) (358) (31) (8)At 31 December 1,977 2,327 172 203 Deferred tax assets are recognised for tax losses carried forward to the extentthat the realisation of the related tax benefit through future taxable profitsis probable. The Group did not recognise deferred tax assets of £307,000 (2004:£78,000) in respect of losses that can be carried forward against future taxableincome. 16. Fixed Asset Investments Shares in Loans to subsidiary subsidiary undertakings undertakings Total £'000 £'000 £'000CompanyCostAt 1 January 2005 and at 31 December 2005 5,559 6,301 11,860ProvisionsAt 1 January 2005 and at 31 December 2005 610 - 610Net book amount at 31 December 2005 4,949 6,301 11,250Net book amount at 31 December 2004 4,949 6,301 11,250 Subsidiary undertakings At 31 December 2005 the principal subsidiaries were as follows: Company Country of Nature of business incorporationChristie, Owen & Davies plc (trading as Christie + UK Business valuers, surveyors and agentsCo)*Christie + Co SARL* France Business valuers, surveyors and agentsChristie + Co GmbH* Germany Business valuers, surveyors and agentsChristie, Owen & Davies SL* Spain Business valuers, surveyors and agentsPinders Professional & Consultancy Services Ltd UK Business appraisersWest London Estates Ltd* (trading as Pinders UK Building surveyorsCaversham)RCC Business Mortgage Brokers plc (trading as UK Business mortgage brokersChristie First)RCC Insurance Brokers plc* (trading as Christie UK Insurance brokersFirst)Orridge & Co Ltd UK Stocktaking and inventory management servicesOrridge SA** Belgium Stocktaking and inventory management servicesVenners plc UK Licensed stock and inventory auditors and valuersVcsTimeless Ltd* UK EPoS, head office systems and merchandise controlVenners Computer Systems Corporation* Canada EPoS, head office systems and merchandise controlTimeless SA* France EPoS, head office systems and merchandise controlTimeless Premier SL* Spain EPoS, head office systems and merchandise controlTimeless Italia Srl* Italy EPoS, head office systems and merchandise control The company directly or indirectly* owns 100% of the ordinary share capital ofeach of the above companies. The company indirectly** owns 90% of Orridge SA. 16a. Available-for-sale financial assets Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000At 1 January 2005 604 604 604 604Additions 200 - 200 -Disposals (504) - (504) -At 31 December 2005 300 604 300 604 Current assets - 504 - 504Non-current assets 300 100 300 100At 31 December 2005 300 604 300 604 The available-for-sale financial assets represent an unquoted investment held atcost. The fair value of the unquoted investment at 31 December 2005approximates to cost. 17. Inventories Group 2005 2004 £'000 £'000Finished goods and goods for resale 310 355 A provision of £21,000 (2004: £nil) is held against goods for resale to reflectthe net realisable value of the inventory. 18. Trade and other receivables Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Amounts falling due within one year:Trade receivables 10,621 10,648 - -Less: Provision for impairment of receivables (1,778) (1,090) - -Amounts owed by group undertakings - - 6,761 4,841Other debtors 2,273 1,169 1,151 273Prepayments and accrued income 3,001 2,644 20 17 14,117 13,371 7,932 5,131 The fair values of trade and other receivables approximates to the cost asdetailed above. Concentrations of credit risk with respect to trade receivables are limited dueto the Group's customer base being large and diverse. Due to this, managementbelieve there is no further credit risk provision required in excess of thenormal provision for doubtful receivables. 19. Share capital Ordinary shares of 2p each Number 2005 Number 2004 £'000 £'000Authorised: 30,000,000 600 30,000,000 600 At 1 January 2005 and 31 December 2005Allotted and fully paid:At 1 January 2005 24,747,496 495 24,638,495 493Issued during the year 256,056 5 109,001 2At 31 December 2005 25,003,552 500 24,747,496 495 The consideration received for the shares issued in the year was £114,000 (2004:£48,000). The Company has one class of ordinary shares which carry no right to fixedincome. At 31 December 2005 the outstanding loan by the company to the ESOP to financethe purchase of ordinary shares was £641,000 (2004: £341,000). The market valueat 31 December 2005 of the ordinary shares held in the ESOP was £768,000 (2004:£690,000). The investment in own shares represents 665,000 shares (2004:700,000) with a nominal value of 2p each 19a Share based payments Certain employees hold options to subscribe for shares in the Company at pricesranging from 35.70p to 145.00p under share option schemes for the period fromAugust 1996 to October 2005. The remaining options outstanding under approved schemes (unapproved optionsmarked*) at 31 December are shown below: Number of Shares Option exercise price Date granted Option exercise period 2005 2004 27,000 43,000 35.70p Aug 1996 Aug 1999 - Aug 2006 65,833 133,333 48.00p Dec 1997 Dec 2000 - Dec 2007 6,000 9,000 47.50p Aug 1998 Aug 2001 - Aug 2008 40,667 73,001 41.50p Dec 1998 Dec 2001 - Dec 2008 15,000 34,000 81.00p Sep 1999 Sep 2002 - Sep 2009 - 46,000* 81.00p Sep 1999 Sep 2002 - Sep 2006 34,333 37,333 145.00p May 2000 May 2003 - May 2010 21,000 24,000 81.50p Oct 2000 Oct 2003 - Oct 2010 43,333 58,333 53.50p May 2001 May 2004 - May 2011 9,000 22,000 40.00p Oct 2001 Oct 2004 - Oct 2011 26,333 116,555 36.00p May 2002 May 2005 - May 2012 25,000 25,000 45.50p Sep 2002 Sep 2005 - Sep 2012 - 3,000 44.50p Oct 2002 Oct 2005 - Oct 2012 81,000 87,000 47.50p Apr 2003 Apr 2006 - Apr 2013 57,000 60,000 46.50p Jun 2003 Jun 2006 - Jun 2013 103,000 113,000 94.00p May 2004 May 2007 - May 2014 41,000 41,000 111.50p Jun 2004 Jun 2007 - Jun 2014 52,000 52,000 98.50p Oct 2004 Oct 2007 - Oct 2014 175,000 - 100.00p Apr 2005 Apr 2008 - Apr 2015 44,000 - 101.50p Oct 2005 Oct 2008 - Oct 2015 866,499 977,555 Under the Share Option Scheme the Remuneration Committee can grant options overshares to employees of the company. Options are granted with a fixed exerciseprice equal to the market price of the shares under option at the date of grant.The contractual life of an option is 10 years. Awards under the Share OptionScheme are generally reserved for employees at senior management level and 88employees are currently participating in this group. The company has madegrants at least annually. Options granted under the Share Option Scheme willbecome exercisable on the third anniversary of the date of grant. Exercise ofan option is subject to continued employment. The Group also operates a Save As You Earn (SAYE) scheme which was introduced in2002. Under the SAYE scheme eligible employees can save up to £250 per monthover a three or five year period and use the savings to exercise options grantedbetween 67.5p to 111.5p. There were 814,000 (2004: 855,000) remaining optionsoutstanding under the SAYE scheme at 31 December 2005. Share options (including SAYE schemes) were valued using the Black-Scholesoption-pricing model. No performance conditions were included in the fair valuecalculations. The key assumptions used in the calculations are as follows: 2005 2004Share price at grant date 47.50p - 111.50p 47.50p - 111.50pExercise price 47.50p - 111.50p 47.50p - 111.50pExpected volatility 36.3% - 52.6% 43.1% - 52.6%Expected life (years) 3 - 5 years 3 - 5 yearsRisk free rate 4.40% 4.40%Dividend yield 2.7% 2.7%Fair value per option 19.04p - 45.63p 19.04p - 45.63p The expected volatility is based on historical volatility over the last 7 years.The expected life is the average expected period to exercise. The risk freerate of return is the yield on zero-coupon UK government bonds of a termconsistent with the assumed option life. A reconciliation of share option movements (excluding SAYE schemes) over theyear to 31 December 2005 is shown below: 2005 2004 Weighted average Weighted exercise price average Number Number exercise priceOutstanding at 1 January 977,555 63.37p 919,556 52.93pGranted 226,000 100.29p 215,000 98.43pForfeited / Lapsed (81,000) 81.36p (48,000) 65.09pExercised (256,056) 44.59p (109,001) 40.56pOutstanding at 31 December 866,499 76.87p 977,555 63.37pExercisable at 31 December 313,499 59.86p 480,000 60.92p The weighted average share price for options exercised over the year was 102.16p(2004: 107.73p). The total charge for the year relating to employee share basedpayment plans was £65,000 (2004: £38,000), all of which related toequity-settled share based payment transactions. The weighted average remainingcontractual life of share options outstanding at 31 December 2005 was 6.8 years(2004: 6.3 years). 20. Reserves Share Merger Share based Own Capital Fair value Profit and premium reserve payments shares redemption and other loss account reserve reservesGroup £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2005 3,826 945 38 (335) 10 4,484 3,002Share issues 109 - - - - 109 -Movement in respect of - - 64 - 129 -employee share scheme 65Exchange difference on - - - - - (158)repayment of foreign exchangeloan -Retained profit for the year - - - - - - 1,958 31 December 2005 3,935 945 103 (271) 10 4,722 4,802 Share Merger Share based Own Capital Fair value Profit and premium reserve payments shares redemption and other loss account reserve reservesGroup £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2004 3,780 945 - (324) 10 4,411 (2,029)Share issues 46 - - - - 46 -Movement in respect of - - (11) - 27 -employee share scheme 38Retained profit for the year - - - - - - 5,031At 31 December 2004 3,826 945 38 (335) 10 4,484 3,002 Own shares Capital Other Fair value Profit and Share Merger redemption reserves and other loss premium reserve reserve reserves account £'000 £'000 £'000 £'000 £'000 £'000 £'000CompanyAt 1 January 2005 3,826 945 (335) 10 89 4,535 7,817Share issues 109 - - - - 109 -Movement in respect of 64employee share scheme - - 64 - - -Retained profit for the year - - - - - - 1,691At 31 December 2005 3,935 945 (271) 10 89 4,708 9,508 Own shares Capital Other Fair value Profit and Share Merger redemption reserves and other loss premium reserve reserve reserves account £'000 £'000 £'000 £'000 £'000 £'000 £'000CompanyAt 1 January 2004 3,780 945 (324) 10 88 4,499 6,068Share issues 46 - - - - 46 -Movement in respect of (10)employee share scheme - - (11) - 1 -Retained profit for the year - - - - - - 1,749At 31 December 2004 3,826 945 (335) 10 89 4,535 7,817 21. Retirement benefit obligations The amounts recognised in the balance sheet are determined as follows: 2005 2004 £'000 £'000United Kingdom 6,732 7,067Overseas 58 50 6,790 7,117 United Kingdom The Group operates two defined benefit schemes, providing benefits on finalpensionable pay. The contributions are determined by qualified actuaries on thebasis of triennial valuations using the projected unit method. When a member retires, the pension and any spouse's pension is either secured byan annuity contract or paid from the managed fund. Assets of the schemes arereduced by the purchase price of any annuity purchase and the benefits no longerregarded as liabilities of the scheme. The amounts recognised in the balance sheet are determined as follows: 2005 2004 £'000 £'000Present value of obligations 30,527 28,556Fair value of plan assets (22,054) (18,325) 8,473 10,231Unrecognised actuarial losses (1,741) (3,164)Liability in the balance sheet 6,732 7,067 The amounts recognised in the income statement are as follows: 2005 2004 £'000 £'000Current service cost (897) (885)Interest cost (1,515) (1,351)Expected return on plan assets 1,269 1,198Net actuarial loss recognised in the year (26) -Total included in employee benefit expenses (note 6) (1,169) (1,038) The actual return on plan assets was £2,718,000 (2004: £1,250,000). The movement in the liability recognised in the balance sheet is as follows: 2005 2004 £'000 £'000Beginning of the year 7,067 7,466Expenses included in employee benefit expenses 1,169 1,038Contributions paid (including employee contributions) (1,504) (1,437)End of the year 6,732 7,067 The principal actuarial assumptions used were as follows: 2005 2004 % %Discount rate 4.70 - 4.80 5.20 - 5.25Inflation rate 2.75 2.75 - 3.00Expected return on plan assets 6.00 - 6.25 5.20 - 9.20Future salary increases 2.75 - 3.10 3.00 - 4.50Future pension increases 3.00 - 3.60 3.00 - 3.25 Assumptions regarding future mortality experience are set based on advice frompublished statistics and experience. The average life expectancy in years of apensioner retiring at age 65 is as follows: 2005 2004 Years YearsMale 19.8 19.9Female 22.8 22.8 The income statement charge of £108,000 (2004: £92,000) and balance sheetliability £613,000 (2004: £660,000) recognised by the Company in relation to theChristie Group defined benefit scheme has been allocated on the basis ofcontributions to the scheme. For the year ended 31 December 2005 contributionspaid by the Company amounted to £155,000 (2004: £136,000) Overseas In accordance with French law a retirement indemnity provision is held. Rightsto these benefits accrue on the condition that the employee will be with theemployer at retirement date. The movement in the liability recognised in the balance sheet is as follows: 2005 2004 £'000 £'000Beginning of the year 50 45Expenses included in employee benefit expenses 8 5End of the year 58 50 The principal assumptions used were as follows: 2005 2004 % %Discount rate 2.50% 1.60%Future salary increases 3.00% 1.60%Employee turnover 12.00% 8.00% Assumptions regarding future mortality experience are set based on advice frompublished statistics and experience with mortality table INSEE statistic ref:TD-TV 00-02 being used. 22. Trade and other payables Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Trade payables 2,565 3,566 - -Amounts owed to group undertakings - - 1,856 1,642Other taxes and social security 3,332 3,223 856 782Other creditors 898 719 139 13Accruals and deferred income 5,953 3,642 153 256 12,748 11,150 3,004 2,693 23. Borrowings Group Company 2005 2004 2005 2004Non-current £'000 £'000 £'000 £'000Bank and other borrowings (unsecured) 2,212 2,040 2,000 2,000Finance lease obligations 9 68 - - 2,221 2,108 2,000 2,000 Group CompanyCurrent 2005 2004 2005 2004 £'000 £'000 £'000 £'000Bank loans:Unsecured 82 166 - -Finance lease obligations 56 108 - - 138 274 - - Total borrowings 2,359 2,382 2,000 2,000 The Group is not subject to any contractual repricing. The financial liabilities comprise: Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Floating interest rate loans 2,294 2,061 2,000 2,000Invoice discounting - 145 - -Finance lease liabilities 65 176 - - 2,359 2,382 2,000 2,000 The maturity of non-current borrowings is as follows: Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Bank loans repayable between one and two years 477 22 400 -Bank loans repayable between two and five years 1,735 2,018 1,600 2,000Obligation under finance leases:-between one and two years 9 68 - - 2,221 2,108 2,000 2,000 Interest on the Group's borrowings is as follows: - Floating interest rate loans - 1.25% to 1.37% above LIBOR; - Invoice discounting -1.75% above base rate; and - Finance lease liabilities - variable. The carrying amounts of short-term and non current borrowings approximate totheir fair value. 24. Notes to the cash flow statement a) Cash generated from / (used in) operations 2005 Group Company £'000 2004 2005 2004 £'000 £'000 £'000Profit for the year 2,687 5,763 2,416 2,471Adjustments for: - Taxation 1,694 360 (49) (159) - Finance costs / (credits) 28 176 (2,953) (2,910) - Exceptional finance credit - (2,455) - - - Depreciation 1,251 1,175 - - - Amortisation of intangible assets 41 28 - - - (Profit)/loss on sale of property, plant and equipment (20) 16 - - - Profit on sale of current available for sale financial (176) - (176) - assets - Loss on sale of intangible assets - 31 - - - Foreign currency translation (19) (9) - -Changes in working capital (excluding the effects ofacquisition and exchange differences on consolidation): - Movement in share option charge 65 38 - 1 - Movement in retirement benefit obligation (327) (399) (47) (44) - Decrease/(increase) in inventories 45 (43) - - - Increase in trade and other receivables (515) (733) (2,695) (3,557) - Decrease in current available for sale financial 504 - - assets 504 - Increase/(decrease) in trade and other payables 1,514 (259) 367 (817)Cash generated from/(used in) operations 6,772 3,689 (2,633) (5,015) b) Acquisition of subsidiary On 18 January 2005 the Group purchased West London Estates Limited. The cashoutflow as a result of the acquisition is detailed below: 2005 £'000Property, plant and equipment 32Net current assets 270Assets acquired 302Goodwill on acquisition 21Consideration paid 323Cash acquired (244)Net cash outflow (79) 25. Reconciliation of movement in net debt As at 31 Dec 1 Jan Acquisition (excluding As at 2005 Cash flow cash and overdrafts) 2005 £'000 £'000 £'000 £'000Cash in hand and at bank 3,499 3,635 (323) 6,811Overdrafts (145) 145 - -Debt due after one year (2,040) (172) - (2,212)Debt due within one year (21) (61) - (82)Finance leases due after one year (68) 59 - (9)Finance leases due within one year (108) 52 - (56) 1,117 3,658 (323) 4,452 Movement in borrowings £'000Debt due within one year:Repayment of part of bank loan (254)New unsecured bank loan 315 61Debt due after one year:Repayment of part of bank loan (23) New unsecured bank loan 195 172 26. Operating lease commitments At 31 December 2005 the group has lease agreements in respect of properties,vehicles, plant and equipment, for which the payments extend over a number ofyears. Property 2005 Vehicles Property 2004 and equipment Vehicles and equipmentCommitments under non-cancellable operating leases due:Within one year 1,379 552 1,066 550Within two to five years 3,914 1,431 4,316 1,536After five years 3,579 - 4,183 - 8,872 1,983 9,565 2,086 Operating lease payments represent: - rentals payable by the group for certain of its office properties. The leases have varying terms, break clauses and renewal rights. - rentals for vehicles and equipment under non-cancellable operating lease agreements - The Group also sub-lets an element of office space in respect of certain property lease agreements. 27. Contingent liabilitiesIn the ordinary course of business, claims arise in Group companies. In theopinion of the directors, appropriate amounts have been set aside in respect ofliabilities which individual companies within the Group may suffer as a resultof the resolution of these claims. 28. Capital commitmentsThe Group has contracted but not provided for capital commitments for £298,000(2004: £554,000) of intangible asset expenditure. FIVE YEAR RECORD In 2005 the Group has adopted IFRS for the first time and in accordance with therequirements of IFRS, 2004 figures have been restated. Restatement of earlieryears is not required under IFRS and accordingly the information presented belowfor 2003 and earlier years in respect of the income statement is prepared underUK GAAP. The main adjustments that would be required to comply with IFRS arethe recognition of the defined benefit pension funds liabilities on the balancesheet in accordance with IAS 19 and the reversal of goodwill amortisation (IFRS3). Consolidated income statements IFRS UK GAAP 2005 2004 2003 2002 2001 £'000 £'000 £'000 £'000 £'000Revenue 77,506 69,968 62,457 46,473 43,833 Operating profit before goodwill amortisation 4,409 3,844 3,245 2,614 2,318Goodwill amortisation - - (551) (497) (566)Exceptional item - 2,455 - - (262)Finance charges net (28) (176) (206) (164) (244)Profit on ordinary activities before taxation 4,381 6,123 2,488 1,953 1,246Taxation (1,694) (360) (1,469) (1,182) (891)Profit on ordinary activities after taxation 2,687 5,763 1,019 771 355Minority interest (3) (10) - - -Dividends (726) (722) (722) (625) (637)Retained profit/(loss) for the year 1,958 5,031 297 146 (282) Earnings per share- basic 10.79p 23.28p 4.15p 3.06p 1.39p- basic before exceptional items (net of tax)* 10.79p 9.23p 4.15p 3.06p 2.11p- basic before goodwill amortisation and exceptional 10.79p 9.23p 6.39p 5.03p 4.34pitems (net of tax)*Dividends per ordinary share (payable in respect of 3.5p 3.0p 3.0p 2.5p 2.5pthe year) *Exceptional items include credit for the prior year dual residence tax losses and the exceptional finance credit of£2,455,000 in 2004. Consolidated balance sheets 2005 2004 £'000 £'000Non-current assets 11,205 10,157Current assets 21,238 18,142Current liabilities (13,618) (11,424) 18,825 16,875Non-current borrowings (2,221) (2,108)Retirement benefit obligations (6,790) (7,117)Net assets 9,814 7,650 Shareholders' funds - equity interests 9,795 7,634Minority interest 19 16 9,814 7,650 Financial information The financial information does not constitute the statutory financial statementsof the Company as defined by Section 240 of the Companies Act 1985. It is anextract from the financial statements for the year ended 31 December 2005, whichhave not yet been filed with the Registrar of Companies. The auditors' reportwas unqualified. The auditors' report does not contain a statement under eitherSection 237(2) or (3) of the Companies Act 1985. The group's auditors havereported on the financial statements as required by Section 235 of the CompaniesAct 1985. Key dates The Annual Report and Financial Statements are scheduled to be posted toshareholders in early May. The Annual General Meeting of the Company isscheduled to take place at 10am on Wednesday 28 June 2006 at 39 Victoria Street,London, SW1H 0EU. Dividends, the ex-dividend date is 31 May 2006, the record date 2 June 2006 andthe date payable is 30 June 2006. GROUP COMPANIES PROFESSIONAL BUSINESS SERVICES SOFTWARE SOLUTIONS STOCK AND INVENTORY SERVICESBusiness Sales and Valuations, EPoS and Head Office Systems. Stock and Inventory ControlConsultancy, Financial Services Christie + Co VcsTimeless Orridge www.christie.com and www.vcstimeless.com www.orridge.co.ukwww.christiecorporate.com Retail Europe's longest establishedThe leading specialist firm stocktaking business, specialisingproviding business intelligence in The VcsTimeless retail applications in all fields of retailthe hospitality, leisure, retail and address such sectors as fashion, stocktaking including high street,care sectors. International accessories, luggage, leather goods, warehousing and factory. Inoperations are based in Barcelona, sport, footwear, home furnishings, addition, it has a specialisedBerlin, Frankfurt, London, Madrid, DIY, perfumery and toys. Solutions pharmacy division providingMunich and Paris. Its 16 offices include head office, back office, valuation and stocktakingacross the UK are focused on agency, EPoS, CRM, supply chain optimisation services. A full range ofvaluation services, investment and and business intelligence stocktaking and inventoryconsultancy activity in its key applications. The Colombus Enterprise management solutions is providedsectors - hotels, public houses, Suite is a comprehensive retail for a wide range of clients in therestaurants, leisure, care and management software suite, proven to UK and Europe.retail. meet the specific needs of single and multi-channel retailers. Christie First www.christiefirst.com Leisure and cinemas Venners VcsTimeless' VENPoS and Vista-branded www.venners.comThe market leader in finance and leisure, hospitality and cinemainsurance for the leisure, retail management software comprise Leading supplier of stocktaking,and care sectors. Services include admissions, head office, back office, inventory, control audit andfinance for business purchase or and online ticketing modules. related stock management servicesre-financing arranged in conjunction to the hospitality sector. Bespokewith major financial institutions, software and systems enables realand the provision of tailored time management reporting to itsinsurance schemes. customer base using the most up-to-date technology. Pinders www.pinders.co.uk andwww.pinderpack.com The UK's leading specialist businessappraisal, valuation and consultancycompany, principally providingprofessional services to thelicensed leisure, retail and caresectors, and increasingly within thecommercial and corporate businesssectors, especially in relation toprofessional practices and servicebusinesses. Pinders also has an expandingBuilding Consultancy Division thatoffers a full range of projectmanagement, building monitoring andbuilding surveying services.Instructions are undertaken for abroad cross section of corporate,charity, private and public sectorclients. This information is provided by RNS The company news service from the London Stock Exchange