Dunedin Ent.it. Regulatory News (DNE)

20 Jun 2007 07:01

Dunedin Enterprise Inv Trust PLC20 June 2007 For release 07.00am 20 June 2007 Dunedin Enterprise Investment Trust PLC Preliminary Results for the year ended 30 April 2007 Dunedin Enterprise Investment Trust PLC, the private equity investment trustwhich specialises in investing in mid-market buyouts announces its preliminaryresults for the year ended 30 April 2007. Financial Highlights: •Net asset value per share increased by 8.8% to 541.9p per share •Total net assets now £163.7 million •Final dividend of 8.6p; a full year dividend of 10.7p; a 13% increase on last year •Realisations totaling £27.6 million, generating a profit of £4.5 million over the valuation at the start of the year, an uplift of 21% •Investment of £15 million made into SWIP Private Equity Fund of Funds II PLC to increase level of diversification £€75 million commitment to new Dunedin Buyout Fund II •Total return per ordinary share 54.8p New investments of £43.3 million in seven new portfolio companies and twelveexisting portfolio companies including: £€8.3 million investment in the management buyout of Capula Group Limited £€6.4 million investment in the management buyout of WFEL Holdings Limited £€3.2 million investment in the management buyout of etc.venues Group Limited Comparative Performance Periods to 30 April 2007 1 Year 3 Year 5 Year 10 Year % % % %Net asset value per ordinary share 8.8 57.5 66.0 83.9Share price 0.9 79.1 86.7 81.5FTSE Small Cap Index 14.5 51.4 56.0 73.8FTSE All Share Index 9.2 49.4 33.9 56.2 Edward Dawnay, Chairman of Dunedin Enterprise Investment Trust PLC, commented: "I am pleased to report another year of growth in the net asset value of yourCompany. During the year under review there was some considerable activity in theportfolio; £43.3 million was invested and disposals of £27.6 million were made,at an uplift of £4.5 million, a 21% uplift over the valuation at the start ofthe year. In aggregate, there was a net investment outflow of £15.7 million inthe year." For further information please contact: Ross Marshall, Chief Executive Officer, Dunedin Capital Partners Limited 0131 225 6699 or 07768 794 180, ross.marshall@dunedin.com Jane Kirby, Director, Equity Dynamics 07825 326 441, jane@equitydynamics.co.ukCorinna Vere Nicoll, Director, Equity Dynamics 07825 326 440, corinna@equitydynamics.co.uk Notes to Editors Dunedin Enterprise Investment Trust PLC is managed by Dunedin Capital PartnersLimited. Dunedin Capital Partners Limited is an independent private equitycompany owned by its directors. The company specialises in providing equityfinance for management buyouts and management buyins with a transaction size of£10 million - £50 million. It operates throughout the United Kingdom from itsoffices in Edinburgh and London. Dunedin Capital Partners is itself the result of a management buyout which tookplace in 1996. Dunedin Enterprise's primary objective is to achieve substantial long termgrowth in its assets through capital gains from its investments. For more information on Dunedin Enterprise, its portfolio and investmentapproach, please visit the website www.dunedin.com. Investors can buy shares in the company through regular savings, PEP/ISA andpension plans. For further information, call the Aberdeen Asset Managershelpline on 0500 00 40 00 or visit the website atwww.dunedinenterprisetrust.co.uk. Chairman's Statement Overview I am pleased to report another year of growth in the net asset value of yourCompany. During the year to 30 April 2007, net assets rose to £163.7 million and netasset value per share rose to 541.9p, an increase of 8.8% over the previous year(2006: 19.7%). This compares to a rise in the FT Small Cap Index of 14.5% overthe same period (2006: 25.0%). The Board is recommending a final dividend of 8.6p making a total dividend forthe year of 10.7p, a 13% increase on last year, excluding the special dividend.The final dividend will be paid on 21 September 2007 to shareholders on theregister on 31 August 2007. New investment totalled £43.3 million (2006: £21.6 million) and realisations of£27.6 million (2006: £70.0 million) were achieved. This is the first year since2001 in which new investment has exceeded realisations. The strong continuinglevel of realisations demonstrates that the policy of investing in mid-marketbuyouts, nurturing and growing them and then selling or floating them remains asuccessful investment strategy. Following an extended run of successful realisations your Company has built up asignificant cash balance, which is essential for future investment. However,cash does not provide the high level of returns that successful private equityinvestments do and consequently, investment returns this year are more modestthan they have been in prior years. It must be remembered that the private equity market is cyclical and a downturn,such as we saw in 2001 and 2002, can occur very quickly. Many commentatorsbelieve that we are approaching the top of the cycle in the UK which has beenfuelled by low interest rates and the ready availability of debt. Your Companyis well positioned for future growth as it has a young portfolio underpinned bysignificant cash to make new investments. The private equity sector The Private Equity sector continues to evolve in a way that was almostinconceivable ten years ago. From very modest origins, it is estimated thatprivate equity backed companies now generate sales of £424 billion, exports of£48 billion and contribute over £26 billion per year in taxes. The 2006 figuresshow that UK private equity has once more outperformed Total UK Pension FundAssets and the principal FTSE Indices over three, five and ten years. Totalfunds raised by BVCA members in 2006 amounted to £34 billion, up from £27billion the previous year. World wide investment by UK private equity firmsamounted to £21 billion, of which £10 billion was invested in the UK. Private equity-backed businesses are now a significant driver of the UK economy.It is estimated that companies that have recently received private equityfunding account for the employment of around 2.8 million people, equivalent to19% of the UK private sector workforce. Continuing success has inevitably attracted additional capital to the assetclass and has increased the price of businesses seeking private equity backing.The market has favoured sellers and increased competition for buyers. DunedinEnterprise has benefited from this trend as it has made significant profits fromrealisations over recent years. The other side of the coin is that finding newinvestment opportunities at attractive prices is a challenge. Your Manager hasmaintained its investment discipline and continues to seek out value in privatecompanies with a good track record, a defensible market position, barriers toentry and strong growth prospects. With the substantial inflows of global capital into private equity, successfulprivate equity managers like Dunedin Capital Partners ("Dunedin"), are able toattract increasing funds under management. These are typically structured as tenyear limited partnership funds with a preferred return to investors and a profitshare to the manager. In 2001, your Manager raised a £54 million buyout fund, the Dunedin Buyout FundI ("DBF I"). Since 2001, Dunedin Enterprise has invested alongside, and as apartner in, DBF I. During the year under review, DBF I became 94% invested andreached the end of its investment period. It has already returned 104% ofamounts drawn to investors and Dunedin Enterprise, as an investor in, andco-investor with the fund, has benefited from this excellent investmentperformance. Since the year end, Zenith Vehicle Holdings has been sold andPractice Plan has been recapitalised. There are seven remaining investments inDBF I. In 2006, Dunedin raised a new buyout fund, Dunedin Buyout Fund II ("DBF II").DBF II was significantly over-subscribed, has attracted 21 investors from the UKand continental Europe, and closed at £250 million. Dunedin Enterprise was ableto achieve a substantial commitment of £75 million to this fund and willtherefore have guaranteed access to Dunedin's new investment dealflow. The fundhas made its first investment of £18 million and further investments are underconsideration. In recognition of its achievements in making new investments, concludingsuccessful exits, raising its new buyout fund and growing the size of itsbusiness, Dunedin was voted the BVCA / Real Deals Private Equity House of theYear, 2007. I hope you will join me in congratulating Dunedin on thisprestigious award. Portfolio activity During the year under review there was some considerable activity in theportfolio; £43.3 million was invested and disposals of £27.6 million were made,at an uplift of £4.5 million, a 21% uplift over the valuation at the start ofthe year. In aggregate, there was a net investment outflow of £15.7 million inthe year. The principal investments included £15 million in SWIP Private Equity Fund ofFunds II PLC, a portfolio of investments in buyout and venture capital funds;£8.3 million in Capula, the UK's leading provider of real time informationsystems to the power generation and utilities sectors; and £6.4 million in WFEL,a global leading company in the manufacture and supply of mobile bridges. Theprincipal disposals were of the residual stake in Davenham (£8.1 million) and ofPortman Travel (£6.1 million). Full details are set out in the Manager's Review. Portfolio development One of Dunedin Enterprise's features over the years has been its ability toinvest in a range of investments and investment vehicles. As the Company hasgrown, the nature of its investments has evolved. Up to a decade ago, DunedinEnterprise mainly participated in syndications of transactions led by otherprivate equity houses. In the past decade, it has principally invested in smalland mid-market UK buyouts led by Dunedin but has also made commitments topartnership funds managed by other private equity managers. In this way, it hasobtained a degree of diversification. The principal investment activity is now through the £250 million Dunedin BuyoutFund II, which is focused exclusively on UK mid-market buyouts, and in whichDunedin Enterprise has the largest commitment amounting to £75 million. Drawdownon DBF II has begun with the investment in WFEL and this process is expected totake three to four years to complete. As discussed above, some market commentators are concerned that we may beapproaching the top of another private equity market cycle in the UK. Inaddition, there has been a great deal of media comment about the tax treatmentthat private equity enjoys in the UK and there are a number of reviews underwayto examine this. With these factors in mind, your Board believes that it wouldbe prudent to increase the level of diversification in the portfolio whilststill focusing on private equity in general and buyouts in particular. Consequently, an investment of £15 million was made in SWIP Private Equity Fundof Funds II PLC, a portfolio of buyout and venture capital funds managed byScottish Widows Investment Management. This portfolio comprises 40 fundinvestments made since 2000. It gives Dunedin Enterprise exposure to adiversified portfolio of mature funds managed by established private equitymanagers. In addition, the Board has approved investments in a small number of listedEuropean private equity companies with a similar investment strategy to DunedinEnterprise. This will give all shareholders, and smaller shareholders inparticular, access to a broader range of private equity backed businesses inmarkets where Dunedin does not make direct investments. As at 30 April 2007,£4.3 million had been invested in listed private equity companies and this hasrisen to £16.6 million by 19 June 2007. In addition to the above, the Board will make a small number of commitments eachyear to private equity funds which have an investment strategy which complementsDunedin Enterprise's objective of achieving substantial long term capital growthin its assets through capital gains from its investments. This is a continuationof what has occurred over recent years where the Board has made commitments of£37 million to a number of buyout and venture capital funds managed by privateequity houses other than Dunedin and there is currently £15 million ofinvestment in, or outstanding commitments to, such funds. Board appointment Brian Finlayson was appointed to the Board on 1 January 2007. Until 2002 Brianwas Deputy Chairman of Dunedin. His knowledge and experience of private equitywill be invaluable to the further development of the Company. Accounting year end As previously notified in the Interim Report, the accounting year end of thecompany will change from 30 April to 31 December. This change will take effectfrom 31 December 2007. It is the intention of the Board to pay a pro-ratainterim dividend in December 2007 and a pro-rata final dividend in April 2008.Thereafter an interim dividend will typically be paid in August with a finaldividend in the following April. Annual General Meeting The AGM will be held, as last year, at the Merchants Hall in Hanover Street,Edinburgh on 19 September 2007 and I look forward to welcoming shareholders. TheAGM will be followed by a presentation by the Manager, reviewing the year andcommenting on the outlook. Edward Dawnay,Chairman19 June 2007 Manager's Review Overview Net asset value per share increased by 8.8% in the year from 498.2p to 541.9p(2006: 19.7%) and the net asset value total return per share over the year was11.4% (2006: 22.3%). The Company's share price rose by 0.9% (2006: 32.3%) from 457.75p to 462p at 30April 2007. As at 19 June 2007, the share price is 487.5p and the discount tonet asset value stands at 10% per share. The growth in net asset value has been driven by the following factors:- £'m Net asset value at 30 April 2006 151.3Unrealised value increases 17.1Unrealised value decreases (9.3)Realised profit over opening valuation 4.5Profit attributable to shareholders less expenses charged to capital 3.6Dividends paid to shareholders (3.5) ------- Net assets at 30 April 2007 163.7 ------- Realisations The Company received £27.6 million during the year from the sale of fiveportfolio companies, from the sale of companies in Legal & General limitedpartnership funds and from the redemption of loan stock by portfolio companies.This generated a profit of £4.5 million over the valuation at the start of theyear, representing an uplift of 21%. AIM, the legal software design company, was sold to Computer Software Group inMay 2006. The realisation generated proceeds of £1.7 million, producing a 19%IRR and a money multiple of 1.8 times. Portman was sold in January 2007 to a secondary buyout led by Vision Capitalgenerating proceeds of £6.1 million. Portman is the UK's largest independenttravel management network, operating in the UK from over 30 offices. DunedinEnterprise received capital and income of £9.0 million from the investment, amoney multiple of four times and an IRR of 16% over the ten years of ownership. The remaining quoted holding in Davenham was realised in February 2007generating proceeds of £8.1 million. Davenham provides niche short-term lendingproducts to growing businesses throughout the UK. Dunedin Enterprise hasreceived capital and income of £22.1 million from the investment, a moneymultiple of four times original investment and an IRR of 31% over the six yearsof ownership. There were three significant realisations from within the Legal & Generallimited partnership funds in which Dunedin Enterprise is invested. The ClubCompany, one of the UK's leading golf and country club operators, was sold in asecondary buyout to Boundary Capital in June 2006. Vue Cinemas, the cinema chainoperator in the UK and Ireland, was sold in a secondary buyout to Bank ofScotland in June 2006. Tragus, the operator of the Cafe Rouge and Bella Pastarestaurant chains, was sold in a secondary buyout to Blackstone Group inDecember 2006. In total Dunedin Enterprise received £6.9 million from the saleof these three investments compared to an original cost of £2.1 million. Dunedin Enterprise's investments in Travel & General and Blaze Signs were soldduring the year realising £2.6 million and £1 million respectively. It is worthnoting that Dunedin Enterprise first invested £250,000 in Travel & General, thespecialist insurance company, when it was a start up in 1983. A good example ofthe long-term support that private equity can give to growing businesses.Proceeds from the redemption of loan stock and sundry other investmentsgenerated £1.2 million. New Investments In the year to 30 April 2007, the Company invested £43.3 million (2006: £21.6million) in seven new portfolio companies and twelve existing portfoliocompanies. In June 2006, Dunedin Enterprise invested £3.2 million in the management buyoutof etc.venues Group Limited. etc.venues is a leading independent provider ofmeeting, training and event space. The company has six training and conferencevenues in London. All venues are purpose designed and renowned for their wellresourced facilities. The company has plans to develop further venues in Londonand other cities throughout the UK. In August 2006, Dunedin Enterprise invested £8.3 million in the managementbuyout of Capula Group Limited. Capula provides real time automation systems tothe nuclear, power generation and utilities industries. This is a specialisedbusiness which involves complex software programming and systems engineering.Capula has a strong market position in its core markets, providing IT systemswhich control much of the electricity and water distributed throughout the UKand at a number of plants at the Sellafield nuclear facility. In December 2006, Dunedin Enterprise invested £6.4 million in the managementbuyout of WFEL Holdings Limited. WFEL is a world leading manufacturer of mobilebridges. The company provides high specification, high functionality and complexbridging systems predominantly to the US Department of Defence and also to theUK Ministry of Defence. In addition, WFEL is the sole supplier of specialistconsumable steel rods used in the reactors in fourteen of the UK's nuclear powerstations. As described in the Chairman's Statement, in April 2007, Dunedin Enterpriseinvested £15.0 million in SWIP Private Equity Fund of Funds II PLC ("SWIP II").SWIP II is a portfolio of 40 private equity fund investments in large Europeanbuyout funds, mid-market European buyout funds, European and US venture funds, amezzanine and a secondaries fund. The funds have vintage years 2000 to 2007. In April 2007, Dunedin Enterprise invested a total of £4.3 million in threequoted European Private Equity companies. CapMan PLC is a pan-Nordic privateequity company based in Helsinki and listed on the Helsinki Stock Exchange. Itinvests in mid-market buyouts, technology, life sciences and real estate.Deutsche Beteiligungs AG is the oldest German private equity company, based inFrankfurt and listed on the Frankfurt Stock Exchange. It invests in mid-marketbuyouts in Germany. GIMV is the largest Belgian private equity company, is basedin Antwerp and listed on Euronext Brussels. It invests in mid-market buyouts,technology and life sciences in Belgium, Holland and Germany. Unrealised Movements The table below summaries the main components of unrealised valuation movementsin the year to 30 April 2007. £'m £'mValue increases •Imminent realisations 3.4 •Move from cost to earnings valuation 8.3 •Trading performance 2.7 •Debt reduction 1.2 •Price earnings movements 1.4 •Other 0.1 -------- 17.1Value decreases •Trading performance (7.3) •Other (2.0) -------- (9.3) -------- Net unrealised value movements 7.8 -------- Two portfolio companies, Zenith and Practice Plan have contributed £11.7 millionto unrealised valuation increases. Dunedin led the £27 million secondary buyout of Zenith, the provider of carfleet management services, in June 2005. The company has grown strongly over thepast two years and, in a £40 million tertiary buyout in June 2007, Dunedinrealised its investment. Dunedin Enterprise invested £7.5 million in 2005 andhas received a total of £12.5 million from this investment in capital andincome. The investment has returned a money multiple of 1.7 times whichrepresents an IRR of 33% over two years. We have valued the investment at 30April 2007 at a 10% discount to the ordinary share value received on exit. Dunedin led the buyout of Practice Plan, the UK's second largest dental paymentsbusiness, in August 2005. In May 2007, the company undertook a £26 millionrecapitalisation. Dunedin Enterprise realised £6.7 million on therecapitalisation and re-invested £9.3 million. The investment has returned amoney multiple of 1.7 times on the original investment which represents an IRRof 37% in under two years. We have valued the investment at 30 April 2007 at a10% discount to the ordinary share value received on exit. Two further portfolio companies, CGI and ABI, have contributed £5.4 million tounrealised valuation increases. CGI, the specialised fire glass manufacturer,grew profits strongly in the year to 31 December 2006 and has paid off buyoutdebt ahead of schedule. ABI, a leading manufacturer of leisure homes, has alsoseen strong profit growth in the current year. The valuation of Dunedin Enterprise's investments in New Horizons and RSLSteeper have been written down by £5.3 million in the year. Challenging marketconditions and a reduction in local and national government spending haveadversely affected trading at both companies. Five other portfolio investmentsaccounted for £3.0 million and management fees on DBFII have contributed afurther £1.6 million of the unrealised valuation decreases. Valuation basis 2007 2006 £'m % £'m %Cost 32.6 34 30.1 45Earnings multiple 30.7 32 23.0 35Imminent transaction 12.0 13 2.5 4Net asset value - - 2.3 3Quoted bid price 19.3 21 8.7 13 -------- -------- -------- -------- 94.6 100 66.6 100 -------- -------- -------- -------- Portfolio analysis 2007 2006 £'m No. £'m No.Unquoted companies 66.2 18 46.9 19Listed private equity 19.3 4 8.7 1Buyout funds 5.5 5 7.8 5Technology funds 3.6 4 3.2 4 -------- -------- -------- -------- 94.6 31 66.6 29 -------- -------- -------- -------- Investment Category 2007 2006 £'m % £'m %Management buyouts/buyins 65.6 69 52.7 79Buyout funds 5.5 6 7.8 12Technology funds 3.6 4 3.2 5Listed private equity 19.3 21 - -Other 0.6 - 2.9 4 -------- -------- -------- -------- 94.6 100 66.6 100 -------- -------- -------- -------- Portfolio analysed by industry sector 2007 2006 % %Construction and building materials 14 17Financial services 1 17Healthcare 7 19Leisure and hotels 6 7Specialist manufacturing 8 2Support services 43 38Listed private equity 21 - -------- -------- 100 100 -------- -------- Portfolio analysed by age 2007 2006 % %Less than 1 year 39 251-3 years 35 203-5 years 6 5More than 5 years 20 50 -------- -------- 100 100 -------- -------- Dunedin Capital Partners Limited 19 June 2007 DUNEDIN ENTERPRISE INVESTMENT TRUST PLC PRELIMINARY RESULTS FOR YEAR ENDED 30 APRIL 2007 Ten Largest Investments The ten largest investments account for 48.4% of the net assets of DunedinEnterprise as listed below: Company Fully diluted Cost of Directors' Percentage of equity investment valuation net assets percentage % £'m £'m % SWIP Private Equity Fund of Funds II Plc 9.0 15.0 15.0 9.2CGI Group Limited 37.9 5.9 13.7 8.4Practice Plan Group(Holdings) Limited 26.2 4.3 12.5 7.7 ZVC Group Limited 20.8 7.0 10.4 6.4 Capula Group Limited 35.5 8.3 8.3 5.1WFEL Holdings Limited 24.2 6.4 6.4 3.9ABI (UK) Group Limited 21.1 0.2 3.9 2.4 etc.venues Group Limited 28.0 3.2 3.2 1.9 LGV4 Private Equity Fund 2.7 2.2 2.9 1.7 RSL Steeper HoldingsLimited 28.9 4.0 2.9 1.7 ------ ------ ------ 56.5 79.2 48.4 ------ ------ ------ DUNEDIN ENTERPRISE INVESTMENT TRUST PLCPRELIMINARY RESULTS FOR YEAR ENDED 30 APRIL 2007 BALANCE SHEET At 30 April Unaudited Audited 2007 2006 £'000 £'000 £'000 £'000 Investments at fair value 133,222 144,847 Current assetsDebtors 772 196Cash at bank 34,282 6,371 ------ ------- 35,054 6,567Current liabilitiesCreditors: amounts falling due withinone year (4,559) (110) ------ -------Net current assets 30,495 6,457 --------- --------- Net assets 163,717 151,304 --------- --------- Capital and reservesCalled up share capital 7,552 7,592Share premium account 47,600 47,600Capital reserves:Capital redemption reserve 374 334Capital reserve - realised 104,274 87,978Capital reserve - unrealised (2,517) 1,598Revenue reserve 6,434 6,202 --------- --------- Total equity shareholders' funds 163,717 151,304 --------- --------- Net asset value per share 541.9p 498.2p DUNEDIN ENTERPRISE INVESTMENT TRUST PLCPRELIMINARY RESULTS FOR YEAR ENDED 30 APRIL 2007 INCOME STATEMENT For the year ended Revenue Capital Unaudited Revenue Capital Audited30 April £'000 £'000 2007 £'000 £'000 2006 Total Total £'000 £'000Gains on investments - 12,337 12,337 - 24,982 24,982Income 6,036 - 6,036 6,200 - 6,200Investmentmanagement fee (461) (1,263) (1,724) (743) (2,022) (2,765)Other expenses (536) - (536) (558) - (558) ------- ------- ------- ------- ------- -------Net return before finance costs and tax 5,039 11,074 16,113 4,899 22,960 27,859Interest payableand similar charges (54) (164) (218) (54) (161) (215) ------- ------- ------- ------- ------- -------Return on ordinaryactivities before tax 4,985 10,910 15,895 4,845 22,799 27,644Tax on ordinaryactivities (1,258) 1,946 688 (609) 609 - ------- ------- ------- ------- ------- -------Return attributable to equity shareholders 3,727 12,856 16,583 4,236 23,408 27,644 ------- ------- ------- ------- ------- ------- Basic return per ordinary share 12.3p 42.5p 54.8p 13.9p 77.1p 91.0p DUNEDIN ENTERPRISE INVESTMENT TRUST PLCPRELIMINARY RESULTS FOR YEAR ENDED 30 APRIL 2007 CASH FLOW STATEMENT For the year ended 30 April £'000 Unaudited £'000 Audited 2007 2006 £'000 £'000Net cash inflow from operatingactivities 4,055 3,824Financial InvestmentPurchase of investments (39,057) (21,645)Purchase of 'AAA' rated money marketfunds (25,252) (57,518)Sale of investments 27,625 70,015Sale of 'AAA' rated money market funds 64,928 10,600 ------- -------Net cash inflow from financialinvestment 28,244 1,452 Equity dividends paid (3,495) (2,763) ------- -------Net cash inflow before financing 28,804 2,513FinancingInterest paid (218) (215)Purchase of ordinary shares (675) - ------- ------- (893) (215) Cash assumed on liquidation ofsubsidiary - 2,926 ------- ------- Increase in cash for the period 27,911 5,224 ------- ------- Reconciliation of net cash flow tomovement in net fundsIncrease in cash as above 27,911 5,224Cash at bank and in hand at 1 May 6,371 1,147 ------- ------- Cash at bank and in hand at 30 April 34,282 6,371 ------- ------- Notes 1.The Directors recommend a final dividend of 8.6p per sharefor the year to 30 April 2007. If approved, the dividend will be paid on 21September 2007 to shareholders on the register at close of business on 31 August2007. The ex-dividend date is 29 August 2007. An interim dividend of 2.1p pershare was paid on 31 January 2007. 2. The company's Annual General Meeting which will take place at 12 noon onWednesday 19 September 2007 at The Merchants' Hall, 22 Hanover Street, EdinburghEH2 2EP. 3. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 30 April 2007 or 2006. The financialinformation for 2006 is derived from the statutory accounts for 2006 which havebeen delivered to the registrar of companies. The auditors have reported on the2006 accounts; their report was (i) unqualified, (ii) did not include areference to any matters to which the auditors drew attention by way of emphasiswithout qualifying their report and (iii) did not contain a statement undersection 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2007will be finalised on the basis of the financial information presented by thedirectors in this preliminary announcement and will be delivered to the registerof companies in due course. 4. The annual report will be posted to shareholders in August 2007 and copieswill be available to members of the public at the Company's Registered Office,10 George Street, Edinburgh, EH2 2DW. This information is provided by RNS The company news service from the London Stock Exchange