CTI.L Regulatory News (CTI)

29 Apr 2008 14:47

Cathay International Holdings Ld29 April 2008 29 April 2008 CATHAY INTERNATIONAL HOLDINGS LIMITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 Chairman's Statement The Board of Directors would like to present the preliminary statement for theGroup for the financial year ended 31 December 2007. PERFORMANCE Turnover and Gross Profit Hotel Pharmaceutical Corporate Total Operations Office(Stated in USD'000) Research & Production development marketing & distribution For the year ended 31 December 2007 Turnover 7,495 - 26,684 - 34,179------------------ --------- --------- --------- -------- ------- Grossprofit/(loss) (769) - 16,833 - 16,064------------------ --------- --------- --------- -------- ------- For the year ended 31 December 2006 Turnover 1,884 - 15,778 - 17,662------------------ --------- --------- --------- -------- ------- Grossprofit/(loss) (132) - 10,510 - 10,378------------------ --------- --------- --------- -------- ------- Pharmaceutical Division Turnover increased by 69% this year to USD26,684,000 and gross profit increasedby 60% this year to USD16,833,000. Hotel Division Turnover of the hotel division increased to USD7,495,000 (2006: USD1,884,000)and the gross loss of the hotel division was USD769,000 (2006: gross loss ofUSD132,000). The official re-commencement of hotel operations was in the lastquarter of 2006. Facing strong competition from existing hotels and with more branded hotelsexpected to launch in Shenzhen, the Company, on 13 October 2007 entered into a10-year hotel management agreement with the InterContinental Hotels Group tomanage our hotel under the Crowne Plaza Hotel & Suites brand. This brand fitsthe character of the hotel, which represents an ideal upscale hotel choice forbusiness guests, with personalized service, quality fitness facilities,high-quality dining and exceptional accommodation. On 18 December 2007, thehotel was re-branded as Crowne Plaza Hotel & Suites Landmark Shenzhen. Operating Results Hotel Pharmaceutical Corporate Total Operations Office (Stated in USD'000) Research & Production development marketing & distribution For the year ended 31 December 2007 Profit/(loss) fromoperationsbeforeprovision fordoubtful depts (674) (1,213) 3,447 (1,844) (284) Provision fordoubtful debts - - (2,663) - (2,663)------------------ --------- --------- --------- -------- ------- Profit/(loss)fromoperations (674) (1,213) 784 (1,844) (2,947)------------------ --------- --------- --------- -------- ------- For the year ended 31 December 2006 Profit/(loss) fromoperationsbeforeprovision fordoubtful debts (624) (1,014) 2,038 (2,612) (2,212) Provision fordoubtful debts - - (157) - (157)------------------ --------- --------- --------- -------- ------- Profit/(loss)fromoperations (624) (1,014) 1,881 (2,612) (2,369)------------------ --------- --------- --------- -------- ------- Pharmaceutical Division The operating profit from the pharmaceutical production, marketing anddistribution division increased 69.1% to USD3,447,000. Despite the marketchallenges in 2007, this division maintained an operating profit margin of 13%,the same as in 2006. In 2007, the Group made a prudent provision for doubtful debts of USD2,663,000in the pharmaceutical division. Further details are set out in the "OperationReview" section. Hotel Division The operating loss of the hotel division was USD674,000 (2006: operating loss ofUSD624,000). As noted, the official re-commencement of hotel operations was inthe last quarter of 2006. With the re-branding of the hotel as Crowne Plaza Hotel & Suites LandmarkShenzhen in December 2007, we believe our hotel will benefit from theexperienced management and global guest booking network of the Crowne PlazaHotel & Suites brand provided by the InterContinental Hotels Group and we expectit to start contributing positively to Group profits in 2008. Corporate Office The corporate office expenses were similar to those incurred in 2006. Theapparent reduction in corporate expenses was primarily due to an exchange gainof USD1,517,000 (2006: USD183,000) from the appreciation of Renminbi against theUnited States Dollar. Loss before minority interests Hotel Pharmaceutical Corporate Total Operations Office (Stated in USD'000) Research & Production development marketing & distribution For the year ended 31 December 2007 Profit/(loss)fromoperations (674) (1,213) 784 (1,844) (2,947) Share of lossof anassociate - - (21) - (21) Finance cost (1,630) 2 (830) (2,469) (4,927)-------------------- --------- --------- --------- -------- ------- Loss beforeincome tax (2,304) (1,211) (67) (4,313) (7,895) Income taxexpense - - (370) - (370)-------------------- --------- --------- --------- -------- ------- Loss beforeminorityinterests (2,304) (1,211) (437) (4,313) (8,265)-------------------- --------- --------- --------- -------- ------- For the year ended 31 December2006 Profit/(loss)fromoperations (624) (1,014) 1,881 (2,612) (2,369) Finance cost (1,659) 23 (430) (980) (3,046)-------------------- --------- --------- --------- -------- ------- Profit/(loss)before incometax (2,283) (991) 1,451 (3,592) (5,415) Income tax expense - - - - --------------------- --------- --------- --------- -------- ------- Profit/(loss)beforeminorityinterests (2,283) (991) 1,451 (3,592) (5,415)-------------------- --------- --------- --------- -------- ------- Note: An exchange gain of USD468,000 for the year ended 31 December 2006 hasbeen reclassified from hotel operation's gross profit to corporate office'sadministrative expenses. There is no impact on the Group's loss attributable toshareholders for the period presented. The Group loss before minority interests for 2007 was USD8,265,000 (2006:USD5,415,000), which was arrived at mainly after deducting net finance coststotaling USD4,927,000 (2006: USD3,046,000). As set out in the table above thegross finance costs were as follows: - USD830,000 (2006: USD430,000) in the pharmaceutical production, marketing and distribution division; - USD1,630,000 (2006: USD1,659,000) in the hotel division; and - USD2,469,000 (2006: USD980,000) in the corporate offi ce. The increase in finance costs in the corporate office was mainly owing to anadditional loan to finance the working capital of the Group and the investmentin our new subsidiary, the Xian Haotian Group (as described below), during theyear. Net Assets and Gearing Net assets at the end of 2007 were USD75,846,000 (2006: USD89,681,000). Thedecrease was primarily owing to the loss during the year and a decrease in thevaluation of the hotel by Colliers International Limited to USD125,000,000 as atthe end of 2007 (2006: USD130,000,000). As a result, net assets per share at theend of 2007 were USD0.27 (2006: USD0.33). Gearing increased to 101.5% (2006: 57.8%), primarily as a result of theconsolidation in the Group's accounts of bank and other borrowings arising as aresult of the acquisitions of our pharmaceutical subsidiaries in 2007 andincreased borrowings for the working capital of the Group. Investment in the Xian Haotian Group On 29 October 2007, the Company announced that, through its wholly-ownedsubsidiaries, it had entered into agreements relating to initial investments andproposed further investments in Xian Haotian Bio-Engineering Technology Co.Ltd., a limited liability company established in Xian City, Shaanxi Province,China ("Xian Haotian") and its wholly owned subsidiary, Yangling HaotianBio-Engineering Technology Co. Ltd. ("Yangling Haotian") (together with XianHaotian's other subsidiaries and associated companies, "the Xian HaotianGroup"). The Xian Haotian Group is engaged in the manufacturing, marketing and sale ofplant extracts as various active ingredients for pharmaceuticals, food,beverages, cosmetics, dietary supplements and health products. As a result of the initial subscriptions of USD6.5 million into the Xian HaotianGroup, Cathay effectively owned 51% of the enlarged issued share capital of XianHaotian and 84.27% of the enlarged issued share capital of Yangling Haotian. As detailed in the further announcement made on 14 March 2008, a further initialinvestment in the Xian Haotian Group was made, comprising an equity investmentof USD2.36 million, a working capital loan of USD1.1 million and a proposedadditional working capital facility of USD2.54 million which was drawn down on 3April 2008. As announced on 28 April 2008, a circular has been posted to shareholdersdetailing the terms of proposed further investments in the Xian Haotian Group,together with a notice convening a special general meeting to be held on 30 May2008 at which a resolution to proceed with such investments will be proposed. Further details relating to the investments into the Xian Haotian Group are setout in the Operation Review. CONCLUSION Supported by China's dynamic economy and new management we believe ourpharmaceutical and related businesses will generate long-term organic growth andimproved shareholder returns in the future. We believe that the investment in the Xian Haotian Group is an importantmilestone in the development and growth of the CIH Group's business by expandinginto the upstream business of the production and sale of active ingredients forpharmaceuticals, food, beverages, cosmetics, dietary supplements and healthproducts. We will continue to monitor further potential business opportunities in thehealthcare product market as a natural extension to the pharmaceutical business.This will help build and strengthen our product pipeline and enable ourhealthcare and pharmaceutical business to sustain a long-term organic growth. The Board continues to believe that there are attractive opportunities forinvestment in China, and we will explore business opportunities in China whichcould provide new sources of steady earnings and capital growth. New investmentsin China will only be made after conducting careful and professional evaluationsof the risks. On behalf of the Board, I would also like to thank our staff for their continueddedication and commitment. James BuchananChairman Enquiries:Stephen Hunt (Deputy Chairman) (via Brunswick) 020 7404 5959Patrick Sung (Director - Finance) Operation Review PHARMACEUTICAL BUSINESS China has made considerable progress towards an improved living standard for itspopulation, including better health, reduced levels of poverty and strongmacroeconomic growth. The measures taken by the Chinese government, such as theimplementation of centralized tender purchases of drugs by hospitals and otherhealth care providers to reduce medical treatment costs and the promotion ofretail pharmacies independent of hospitals, therefore diminishing drug salesthrough hospitals had posed challenges to the pharmaceutical industry in China. Despite the challenges in the industry, our pharmaceutical division achieved areasonable growth in 2007, with only a small decline in the gross profit marginfrom 67% to 63%. Turnover increased by 69% this year to USD26,684,000 and gross profit increasedby 60% this year to USD16,833,000. The operating profit from the pharmaceutical production, marketing anddistribution division increased 69.1% to USD3,447,000. This division maintainedan operating profit margin of 13%, the same as in 2006. The pharmaceutical division has experienced high organic growth in 2007. Withthe new investment in the Xian Haotian Group, the Group has taken actions tostrengthen the management and risk controls at the Group and subsidiary levels. In 2007, the Group also made a prudent provision for doubtful debts ofUSD2,663,000 in the pharmaceutical division. Liwah/Lansen has a nationwide salesnetwork. China is a large country with a rapidly changing and challengingpharmaceutical market. Credit is an essential part of a successful sales policy.As part of an intensive review of the business following the acquisition, theGroup has decided to make full provision over an amount of USD958,000 ofaccounts receivable for Liwah and Lansen that had been carried forward from theperiod prior to the Group's acquisition in August 2005. As a result of anintensive review, the Group has also made provision against all additionalreceivables over one year in age and has made reasonable provisions forreceivables less than one year in age. Starting 2008, the pharmaceuticalsubsidiaries will fully provide for any account receivables which exceed thepre-defined period. As a result of new policies and internal controls adopted atall levels, the Group does not expect to experience this level of provisionsgoing forward. The Group has also implemented a computerized Enterprise Resources PlanningSystem which enables the management to access timely accounting and managementinformation, such as inventory level, receivables, sales and costing on acontinued basis. With the introduction of our new conservative provisioning policy, thepharmaceutical subsidiaries are now prepared to adopt the Chinese AccountingStandards for Business Enterprises ("ASBE") commencing 2008. Introduced in 2006,ASBE is a new accounting standard under the PRC GAAP, which represents aconvergence of the new system of Chinese accounting standards with InternationalFinancial Reporting Standards (IFRS). Starting 2007, it is a compulsoryrequirement for listed enterprises in China to adopt ASBE; while all the otherChinese enterprises are encouraged to adopt ASBE. Investment in the Xian Haotian Group On 29 October 2007, the Company announced that, through its wholly-ownedsubsidiaries, it had entered into agreements relating to initial investments andproposed further investments in the Xian Haotian Group. The Xian Haotian Group is engaged in the manufacturing, marketing and sale ofplant extracts as various active ingredients for pharmaceuticals, food,beverages, cosmetics, dietary supplements and health products. Currently,approximately 85% of the sales of the Xian Haotian Group are export sales to theUnited States, Europe and Japan, with the remainder to China. Xian Haotian alsoowns a number of subsidiaries, including Yangling Haotian, which together form avertically integrated operation in the plant extract business. Yangling Haotianhouses the main production facilities of the Xian Haotian Group and produces theplant extracts via extraction, refining and purification. The senior management team of Xian Haotian has extensive experience, expertiseand market knowledge in the plant extract business in China and in overseasmarkets. Xian Haotian also has a strong technology team of 42 professionalsresearching and developing advanced plant extraction techniques, chemicalsynthesis and fermentation technologies that brings higher profit margin to thecompany and makes it stand out from other plant extract companies in China. As a result of the initial subscriptions of USD6.5 million into the Xian HaotianGroup, Cathay effectively owned 51% of the enlarged issued share capital of XianHaotian and 84.27% of the enlarged issued share capital of Yangling Haotian. The Xian Haotian Group applied approximately USD3.68 million of the initialsubscription proceeds to commence at the minimum starting production scale, ontwo of the new products, namely Inostiol and HPMC, and the remaining USD2.82million of the initial subscription proceeds to repay part of the existing loansof the Xian Haotian Group. A further announcement was made on 14 March 2008 regarding the further initialinvestments in the Xian Haotian Group comprising an equity investment of USD2.36million, a working capital loan of USD1.1 million and a proposed additionalworking capital facility of USD2.54 million which was drawn down on 3 April2008. As announced on 28 April 2008, a circular has been posted to shareholdersdetailing the terms of proposed further investments in the Xian Haotian Group,together with a notice convening a special general meeting to be held on 30 May2008 at which a resolution to proceed with such investments will be proposed. The Haotian Group should play an important part in our pharmaceutical divisionin the coming years. HOTEL OPERATIONS In 2007, the hotel achieved an average occupancy of 37.67% and an average roomrate of USD118. Although the occupancy level was lower than our target, westrategically chose to hold room rates firm while attempting to increase theoccupancy level. The Shenzhen hotel industry, however, continues to be highly competitive. It isexpected that three new international branded high-end hotels will be openedbetween now and the year ending 2009. In the face of strong competition fromexisting branded hotels and anticipating even more from the new competitors, theBoard decided to identify suitable international hotel chains to manage ourHotel. On 13 October 2007, we entered into a 10-year hotel management agreement withthe InterContinental Hotels Group to manage our hotel under the Crowne PlazaHotel & Suites brand. Thanks to the intensive effort by our hotel staff workingtogether with a re-branding team from the InterContinental Hotels Group, on 18December 2007, the Hotel was re-branded as Crowne Plaza Hotel & Suites LandmarkShenzhen. With the re-branding of the hotel as Crowne Plaza Hotel & Suites LandmarkShenzhen in December 2007, we believe our hotel will benefit from theexperienced management, the global guest booking network and the Priority Clubprogrammes of the Crowne Plaza Hotel & Suites brand provided by theInterContinental Hotels Group. We expect it to start contributing positively tothe Group in 2008. GROUP INCOME STATEMENT Note Year ended Year ended 31 December 31 December 2007 2006 USD'000 USD'000 REVENUE 2 34,179 17,662COST OF SALES (18,115) (7,284) --------- ----------GROSS PROFIT 16,064 10,378SELLING AND DISTRIBUTION EXPENSES (10,323) (6,447)ADMINISTRATIVE EXPENSES (6,025) (5,628)PRE-OPERATING EXPENSES - (515)PROVISION FOR DOUBTFUL DEBTS (2,663) (157) --------- ----------LOSS FROM OPERATIONS 2 (2,947) (2,369)SHARE OF LOSS OF AN ASSOCIATE (21) -FINANCE COSTS - NET (4,927) (3,046) --------- ----------LOSS BEFORE INCOME TAX 2 (7,895) (5,415)INCOME TAX EXPENSE 4 (370) - --------- ----------LOSS FOR THE YEAR (8,265) (5,415) --------- ----------ATTRIBUTABLE TO: (8,026) (5,315)EQUITY SHAREHOLDERS OF THE PARENT (239) (100)MINORITY INTERESTS --------- ---------- (8,265) (5,415) --------- ----------LOSS PER SHARE ATTRIBUTABLE TO EQUITYSHAREHOLDERS OF THE PARENT 5BASIC (2.91 cents) (1.96 cents) --------- ----------DILUTED N/A N/A --------- ---------- GROUP BALANCE SHEET As at As at 31 December 31 December 2007 2006 USD'000 USD'000ASSETS NON-CURRENT ASSETSProperty, plant and equipment 147,843 144,699Land use rights 2,953 1,355Investment property 1,464 1,365Intangible assets 1,299 521Goodwill 8,702 7,781Interest in an associate 804 -Loans to minority shareholders 645 1,087 --------- --------- 163,710 156,808 --------- ---------CURRENT ASSETSInventories 8,559 2,186Trade and other receivables 24,421 10,680Land use rights 63 30Pledged bank deposits 5,466 -Cash and cash equivalents 11,247 1,983 --------- --------- 49,756 14,879 --------- --------- TOTAL ASSETS 213,466 171,687 --------- ---------EQUITY AND LIABILITIES CAPITAL AND RESERVESCalled up share capital 13,793 13,793Share premium 10,216 10,216Capital and special reserve 42,923 42,923Revaluation reserve 63,429 64,176Exchange equalisation reserve (21,692) (14,529)Statutory reserve 1,849 1,143Profit and loss account (44,456) (35,830) --------- ---------EQUITY ATTRIBUTABLE TO EQUITY 66,062 81,892HOLDERS OF THE PARENTMINORITY INTERESTS 9,784 7,789 --------- ---------TOTAL EQUITY 75,846 89,681 --------- ---------NON-CURRENT LIABILITIESBorrowings 41,410 22,838Deferred tax liabilities 16,992 16,820 --------- --------- 58,402 39,658 --------- ---------CURRENT LIABILITIESBorrowings 36,823 9,451Current tax liabilities 671 447Trade and other payables 41,724 32,450 --------- --------- 79,218 42,348 --------- --------- TOTAL LIABILITIES 137,620 82,006 --------- ---------TOTAL EQUITY AND LIABILITIES 213,466 171,687 --------- --------- GROUP CASH FLOW STATEMENT Year ended Year ended 31 December 31 December 2007 2006 USD'000 USD'000Cash flows from operating activities Loss before income tax (7,895) (5,415)Adjustments for:Finance costs recognised in the income statement 4,927 3,046Provision for doubtful debts 2,663 157Depreciation 1,052 858Amortisation of land use rights 29 23Amortisation of intangible assets - 73Write off of intangible assets 42 -Share of loss of an associate 21 -Loss on disposal of property plant and equipment 39 -Loss on deemed disposal of subsidiaries 260 - --------- ---------Operating cash flows before movements in workingcapital 1,138 (1,258)(Increase)/decrease in inventories (703) 334Increase in trade and other receivables (8,934) (1,372)(Decrease)/increase in trade and other payables (179) 3,634 --------- ---------Cash (used in)/generated from operations (8,678) 1,338Interest paid (5,093) (3,151)Income tax paid (155) - --------- ---------Net cash used in operating activities (13,926) (1,813) --------- ---------Cash flows from investing activities Purchase of property, plant and equipment (5,816) (8,146)Purchase of land use rights (716) (8)Purchase of intangible assets (495) -Investment in an associate (616) -Acquisition of subsidiaries (1,916) -Interest received 166 105 --------- ---------Net cash used in investing activities (9,393) (8,049) --------- ---------Cash flows from financing activities Capital element of finance lease payment (12) (11)Proceeds from/(repayments of) borrowings 33,384 (630)Proceeds from issue of shares, net of expenses - 2,611Loans to minority shareholders (395) (961)Dividends paid to minority interests - (693)Capital injection from minority interests - 1,102 --------- ---------Net cash generated from financing activities 32,977 1,418 --------- ---------Net increase/(decrease) in cash and cashequivalents 9,658 (8,444)Cash and cash equivalents at beginning of year 1,723 10,020Effects of exchange rate changes (256) 147 --------- ---------Cash and cash equivalents at end of year 11,125 1,723 --------- ---------Analysis of cash and cash equivalentsCash and bank balances 11,247 1,983Bank overdrafts (122) (260) --------- --------- 11,125 1,723 --------- ---------NOTES 1. BASIS OF PREPARATION AND ACCOUNTING This preliminary results statement and the consolidated financial statements ofthe Group have been prepared in accordance with International FinancialReporting Standards (IFRS) as adopted by the European Union, including all newand revised standard effective for the period commencing 1 January 2007. The preparation of financial statements in accordance with IFRS requires the useof estimates and assumptions that affect the reported amounts of assets andliabilities, and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period. Although these estimates are based on management'sbest knowledge of current events and actions, actual results may ultimatelydiffer from those estimates. These consolidated financial statements have been prepared under the historicalcost convention as modified by the revaluation of hotel properties andinvestment property. 2. SEGMENTAL INFORMATION 2.1 Business Segments For management purposes the Group is currently organised into business segmentsas reported below: Hotel Corporate Operations Pharmaceutical Office Total Production Research & Marketing & Development Distribution USD'000 USD'000 USD'000 USD'000 USD'000For the year ended31 December 2007 Revenue 7,495 - 26,684 - 34,179 Profit/(loss) (674) (1,213) 3,447 (1,844) (284) from operations before provision for doubtful debts Less: provision - - (2,663) - (2,663) for doubtful --------- --------- --------- ------- ------- debts Profit/(loss) (674) (1,213) 784 (1,844) (2,947) from operations Share of loss of - - (21) - (21) an associate Finance cost (1,630) 2 (830) (2,469) (4,927) --------- --------- --------- ------- ------- Loss before (2,304) (1,211) (67) (4,313) (7,895) income tax --------- --------- --------- ------- ------- Segment assets 139,832 3,872 68,423 1,339 213,466 Segment 40,571 150 32,823 64,076 137,620 liabilities Capital 1,319 92 5,610 6 7,027 expenditures Depreciation 189 340 508 15 1,052 Amortisation - 6 23 - 29 --------- --------- --------- ------- ------- For the year ended 31December 2006 Revenue 1,884 - 15,778 - 17,662 Profit/(loss) from (624) (1,014) 2,038 (2,612) (2,212) operations before provision for doubtful debts Less: provision for - - (157) - (157) doubtful debts --------- --------- --------- ------- ------- Profit/(loss) from (624) (1,014) 1,881 (2,612) (2,369) operations Finance cost (1,659) 23 (430) (980) (3,046) --------- --------- --------- ------- ------- Profit/(loss) before (2,283) (991) 1,451 (3,592) (5,415) income tax --------- --------- --------- ------- ------- Segment assets 135,993 3,762 31,313 619 171,687 Segment liabilities 40,934 158 12,576 28,338 82,006 Capital expenditures 4,830 54 3,262 8 8,154 Depreciation 295 185 362 16 858 Amortisation - 6 90 - 96 --------- --------- --------- ------- ------- 2.2 Geographical Segments Asia Europe America Total USD'000 USD'000 USD'000 USD'000For the year ended 31 December 2007 Revenue 34,050 13 116 34,179 Segment assets 211,414 142 1,910 213,466 Capital expenditures 7,027 - - 7,027 --------- --------- ------- ------- For the year ended 31 December 2006 Revenue 17,662 - - 17,662 Segment assets 171,513 174 - 171,687 Capital expenditures 8,154 - - 8,154 --------- --------- ------- ------- In respect of geographical segment reporting, revenue and segment assets arebased on the location of the customers and capital expenditures relate to wherethe assets are located. 3. DIRECTORS' EMOLUMENTS The Directors at 31 December 2007 were as follows: J.R.H. BuchananWu Zhen TaoS. B. HuntJ.H. CossonP. Sung Their aggregate emoluments for the year ended 31 December 2007 were USD415,000(2006: USD631,000). 4. INCOME TAX EXPENSE Year ended Year ended 31 December 31 December 2007 2006 USD'000 USD'000 Current tax - PRC Enterprise Income Tax 370 - --------- --------- 5. LOSS PER SHARE ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE PARENT Basic loss per share is based upon the loss after tax attributable to equityholders of the parent of USD8,026,000 (2006: loss of USD5,315,000) and theweighted average number of A Shares and Common Shares in issue during the yearof 11,813,634 and 264,046,471 respectively (2006: A Shares, Common Shares:11,851,433 and 258,008,671). No diluted earnings per share is presented, as the Company did not have anypotential ordinary shares outstanding. 6. FINANCIAL INFORMATION This preliminary results statement was approved by the Board of Directors on 29April 2008. The above results for the year ended 31 December 2007 have beenabridged from the full Group accounts for that year, which received anunqualified auditors' report and which will be delivered to the Registrar ofCompanies shortly. The Annual Report and Financial Statements will be posted to shareholders assoon as practicable. Further copies will be available from the company'sregistered office at Canon Court, 22 Victoria Street, Hamilton HM12, Bermuda. This information is provided by RNS The company news service from the London Stock Exchange