DTY.L Regulatory News (DTY)

15 Sep 2005 07:01

Dignity PLC15 September 2005 For Immediate Release 15 September 2005 Dignity plc Interim Results for the 26 week period to 1 July 2005 Dignity plc, Britain's largest single provider of funeral-related services,namely funeral services, cremations and pre-arranged funeral plans, announcesinterim results for the period to 1 July 2005. Financial highlights Underlying profit before tax* up 19.7% to £15.8 million (2004: £13.2 million) Operating profit up 11.4% to £23.4 million (2004: £21.0 million) Revenue up 8.0% to £74.6 million (2004: £69.1 million) Interim dividend per share 2.75p per share (2004: 1.875p per share) *Before non-recurring finance charges 2004 Operating highlights • Acquisition of four new funeral home locations, bringing the total to 516 homes at 1 July 2005. • Additional six new funeral homes acquired since 1 July 2005. Peter Hindley, Chief Executive of Dignity plc, commented; "We are pleased to report a strong trading performance in the first 26 weeks of2005. Underlying profits before tax increased by almost 20%, achieved onincreased revenues that were up 8%, and a 1.7% increase in the estimated numberof deaths in Great Britain, which was slightly ahead of expectations. "We continue to grow the core areas of our business organically, having acquiredten funeral locations as at the end of August. We continue to look for newopportunities. "The Group is trading well and the outlook remains positive for the rest of theyear." For more information Peter Hindley, Chief ExecutiveMike McCollum, Finance DirectorDignity plc +44 (0) 20 7466 5000 Richard OldworthMark EdwardsSuzanne BrocksBuchanan Communications +44 (0) 20 7466 5000 The interim results are available at www.dignityfuneralsplc.co.uk CHAIRMAN'S STATEMENT Introduction This Interim Report has been prepared under IFRS and includes explanations ofall adjustments arising from the change from UK GAAP to IFRS. The adoption of IFRS represents an accounting change only and does not affectthe ongoing operations or cash flows of the Group for 2005 or beyond. The Group's first Annual Report and Accounts prepared under IFRS will be for the52 week period ending 30 December 2005. Results I am pleased to report a strong trading performance in the first 26 weeks of2005. Operating profit reported under IFRS has increased by 11.4 per cent to£23.4 million (2004: £21.0 million). The Group performed 36,000 (2004: 35,100) funerals from our network of 516funeral homes around the country and 21,200 (2004: 19,800) cremations from our22 crematoria. Total estimated deaths for the 26 week period to 1 July 2005 inGreat Britain were 300,800 compared to 295,800 in the comparative 26 week periodin 2004. This is an increase of 1.7 per cent, which is marginally ahead of ourexpectations for the period. The Board's view on death rates continues to relyon government forecasts and its view on medium term death rates remainsunchanged. The number of unfulfilled pre-arranged funeral plans at 1 July 2005 was 171,500(2004: 170,200). Underlying profit before tax and dividend Underlying profit before tax in the first 26 weeks of the year was £15.8 millioncompared to £13.2 million in the previous period, an increase of 19.7 per cent.This was slightly ahead of our expectations and is stated before non-recurringfinance charges in 2004. After taking account of these items, the reportedprofit before taxation was £15.8 million (2004: loss £(2.1) million). The Board has declared an interim dividend of 2.75 pence per share (2004: 1.875pence per share) which will be paid on 28 October 2005 to shareholders on theregister at 7 October 2005. This is an increase of 10 per cent on the annualised2004 interim dividend. This is consistent with the Group's policy of progressingthe dividend based on the Group's performance. Developments As part of its stated strategy, the Group acquired four funeral home locationsin the period to 1 July 2005, funded from existing cash reserves and internallygenerated cash flows. In addition, in July, the Group acquired a further sixfuneral home locations. This brings the total investment in acquisitions in 2005to £6.9 million. The Group continues to look for further suitable opportunities. Outlook The Group has recorded a strong performance in the first 26 weeks of this year.We expect the future development of the Group to be achieved by a combination offurther acquisitions, seeking additional partners for our pre-arranged funeralplan business and from time to time, the opening of new locations. The Groupcontinues to trade well and the Board's expectations for the remainder of 2005remain positive. Finally, I would like to thank all our staff for their continued hard work anddedication to client service. Richard ConnellChairman OPERATING & FINANCIAL REVIEW Introduction The Group's operations are managed across three main areas, namely funeralservices, crematoria and pre-arranged funeral plans, which respectivelyrepresent 80 per cent, 16 per cent and 4 per cent of the Group's revenues.Funeral services relate to the provision of funerals and ancillary items such asmemorials and floral tributes. Crematoria revenues arise from cremation servicesand the sale of memorials and burial plots at the Group's crematoria andcemeteries. Pre-arranged funeral plan income represents amounts to cover thecosts of administering the sale of plans. Adoption of IFRS As the Chairman has noted in his statement, this Interim Report has beenprepared under IFRS. IFRS (as endorsed by the European Commission) are subject to amendment and/orinterpretation by the International Accounting Standards Board (IASB) (and itscommittees). Furthermore, emerging industry consensus may differ to the policiesadopted by the Board. As such, it is possible that further adjustments to theaccounting policies adopted may be necessary and consequently, the financialinformation presented in this report may differ from that subsequently shown inthe Group's Annual Report and Accounts for the 52 week period ending 30 December2005. The principal changes to the Income Statement are: • The elimination of amortisation of goodwill.• The adoption of IAS 19 in respect of pension obligations.• Changes to the charge for deferred taxation. With the exception of IAS 19, the accounting impact on profit before tax andamortisation is minimal. The principal changes that affect the Balance Sheet are: • The recognition of pension obligations under IAS 19.• The inclusion of a full provision for deferred taxation.• The recognition of separate intangible assets principally attributable to trade names.• The recognition of dividends on a liability basis. Financial highlights • Revenue has increased 8.0 per cent to £74.6 million (2004: £69.1 million).• Operating profit has increased 11.4 per cent to £23.4 million (2004: £21.0 million).• Underlying profit before tax has increased 19.7 per cent to £15.8 million (2004: £13.2 million).• Profit before tax was £15.8 million (2004: loss £(2.1) million).• Cash generated from operations has increased 1.5 per cent to £26.5 million (2004: £26.1 million).• Earnings per share were 13.8 pence (2004: loss (3.1) pence).• An interim dividend of 2.75 pence per share (2004: 1.875 pence per share). Trading overview 26 week period ended 1 Jul 2005 25 Jun 2004 £m £m RevenueFuneral services 60.0 55.3Crematoria 11.7 11.1Pre-arranged funeral plans 2.9 2.7 74.6 69.1Operating profit*Funeral services 20.2 17.7Crematoria 6.4 6.0Pre-arranged funeral plans 1.6 2.1Central overheads (4.8) (4.8) 23.4 21.0 * Operating profit includes Recoveries within pre-arranged funeral plans of £1.2million (2004: £1.2 million) and profit on sale of property, plant & equipmentof £0.5 million (2004: £0.8 million). Funeral services The Group operates a network of 516 funeral homes throughout Britain, tradingunder local established names. In the period to 1 July 2005, the Group conducted36,000 (2004: 35,100) funerals, representing 12.0 per cent (2004: 11.9 per cent)of estimated deaths in Britain. Revenue within funeral services was £60.0 million (2004: £55.3 million) andincreased in all areas of the division. Operating profits were £20.2 million(2004: £17.7 million), an increase of 14.1 per cent. Crematoria The Group operates 22 crematoria and carried out 21,200 cremations in 2005representing 7.0 per cent (2004: 6.7 per cent) of estimated deaths in Britain.The Group is the largest single operator of crematoria in Britain. Revenue within crematoria was £11.7 million (2004: £11.1 million). Operatingprofits were £6.4 million (2004: £6.0 million), an increase of 6.7 per cent. In January 2005 the Department of Environment, Food and Rural Affairs announcedthat crematoria operators should install equipment to cut mercury emissions by50 per cent by 2012 under new statutory guidance. The Group is confident that itcan meet all the new emissions legislation in the required timescales. We expectfunding for these changes to be via an industry wide environmental levy. Pre-arranged funeral plans Pre-arranged funeral plans allow people to plan and pay for their funeral inadvance. The Group is the market leader in the provision of pre-arranged funeralplans. Unfulfilled pre-arranged funeral plans increased to 171,500 from 170,200during the period. The Group received Recoveries of £1.2 million (2004:£1.2 million) during theperiod. Operating profit was lower in 2005 as a result of the sales mix. Underlying profit before tax Last year witnessed a significant reorganisation of the Group's capitalstructure, with the listing of its shares and redemption of expensive debtassociated with the management buyout in 2002 and the subsequent whole businesssecuritisation in 2003. Therefore, comparison with the prior period is notstraightforward. The Directors are of the opinion that the following providesadditional indicative information regarding the underlying profits of the Group: 26 week period ended 1 Jul 2005 25 Jun 2004 £m £m Profit/(loss) before tax for the period as reported 15.8 (2.1)Add the effects of:Exceptional interest expense - 10.1Interest expense of Mezzanine Loan and Loan Notes 2013 - 4.7Amortisation of debt issues costs of Mezzanine Loan and Loan Notes2013 - 0.5 Underlying profit before tax 15.8 13.2 Cash flow and cash balances Operating cash flow was £26.5 million in the period (2004: £26.1 million).Expenditure on funeral home acquisitions amounted to £4.3 million (2004: £1.5million). A further £3.4 million (2004: £1.9 million) was spent on capitalexpenditure, the majority of which was spent on replacing or enhancing existingassets. Cash balances at the end of the financial period amounted to £33.5 millionalthough under the terms of the Group's secured borrowing, there are certainrestrictions on elements of this balance as described further in note 7 of thisreport. The Group's operations continue to be significantly cash generative. Capital structure and financing The Group's only material external debt financing is the Class A and B securednotes, rated A and BBB respectively, of which £204.0 million (2004: £207.7million) was outstanding as at 1 July 2005. Both tranches of debt were issued atfixed rates of interest and will be progressively repaid over the next 25 years. 1 Jul 2005 25 Jun 2004 £m £m Class A and B secured notes (204.0) (207.7)Accrued interest on Class A and B secured notes - (7.3)Loan Notes 2006 (0.1) (0.1)Cash balances 33.5 42.5Economic Net Debt 170.6 172.6 Going forward, the Group's finance expense will substantially consist of theinterest on the Class A and B secured notes and the related ancillaryinstruments that were issued in April 2003. The finance charge in the period was£8.5 million, including the amortisation of debt issue costs of £0.5 million,unwinding of discounts of £0.3 million and pension charges of £0.2 million. Taxation The overall effective tax rate on earnings before exceptional items isapproximately 31.0 per cent (2004: 31.0 per cent). This tax rate is higher than the standard UK tax rate of 30 per cent due to theimpact of disallowable trading expenses and expenditure on the Group's premisesthat does not attract any deductions for corporation tax purposes. The latterwill also cause the effective tax rate to increase slightly in the future. Pensions The Group operates two principal defined benefit pension schemes. Under IAS 19,the pension deficit has decreased by £0.3 million with a period end deficit(before deferred tax) of £13.5 million. Earnings per share The basic earnings per share were 13.8 pence per share for the period (2004:loss (3.1) pence per share). See note 5 for further information. CONSOLIDATED INCOME STATEMENT (UNAUDITED)for the 26 week period ended 1 July 2005 53 week 26 week period ended period ended 1 Jul 25 Jun 31 Dec 2005 2004 2004 Note £m £m £mRevenue 2 74.6 69.1 135.7Gross profit 38.6 34.7 67.7Trading expenses (16.4) (14.9) (29.7)Other operating income 1.2 1.2 1.2Operating profit 2 23.4 21.0 39.2Interest payable before exceptionalcharges (8.5) (13.8) (22.6)Exceptional interest payable onredemption of debt - (10.1) (10.1)Interest payable and similar charges 3 (8.5) (23.9) (32.7)Interest receivable 3 0.9 0.8 1.5Profit/(loss) before tax 2 15.8 (2.1) 8.0Taxation 4 (4.8) 0.5 (2.5)Profit/(loss) for the period 11.0 (1.6) 5.5Profit/(loss) attributable tominority interest - - -Profit/(loss) attributable to equityshareholders 6 11.0 (1.6) 5.5 11.0 (1.6) 5.5Earnings/(loss) per shareattributable toequity shareholders (pence) 5- Basic 13.8p (3.1)p 8.5p- Diluted 13.7p (3.1)p 8.5p CONSOLIDATED STATEMENT OF RECOGNISED INCOME & EXPENSE (UNAUDITED)for the 26 week period ended 1 July 2005 53 week period ended 26 week period ended 1 Jul 25 Jun 31 Dec 2005 2004 2004 £m £m £mProfit/(loss) for the period 11.0 (1.6) 5.5Actuarial gains/(losses) on retirementbenefit obligations 0.4 (2.1) (0.7)Employee share options 0.2 0.1 0.2Deferred tax (0.1) 0.6 0.3Net income/(expense) notrecognised in income statement 0.5 (1.4) (0.2)Total recognised income/(expense)for the period 11.5 (3.0) 5.3 CONSOLIDATED BALANCE SHEET (UNAUDITED)as at 1 July 2005 1 Jul 25 Jun 31 Dec 2004 2005 2004 Note £m £m £mNon-current assetsGoodwill 108.9 107.1 107.8Intangible assets 7.8 2.9 5.2Property, plant & equipment 84.0 79.5 84.0Financial assets 5.5 4.9 5.4Assets held for sale 0.8 0.8 0.8Deferred tax assets - 1.6 - 207.0 196.8 203.2Current assetsInventories 3.3 3.1 3.4Trade and other receivables 19.1 20.0 19.7Cash and cash equivalents (a) 33.5 42.5 24.9 55.9 65.6 48.0Current liabilitiesFinancial liabilities (2.1) (10.7) (2.0)Trade and other payables (17.0) (26.5) (17.6)Current tax (3.4) (0.1) (0.1)Provisions (1.0) (1.2) (1.0) (23.5) (38.5) (20.7)Net current assets 32.4 27.1 27.3Non-current liabilitiesFinancial liabilities (193.0) (194.9) (193.9)Deferred tax liabilities (3.3) - (1.6)Retirement benefit obligations (13.5) (15.0) (13.8)Other non-current liabilities (2.7) (2.5) (2.7)Provisions (2.2) (2.1) (2.3) (214.7) (214.5) (214.3)Net assets 24.7 9.4 16.2Shareholders' equityOrdinary shares 8 5.6 5.6 5.6Share premium account 8 111.6 111.6 111.6Other reserves 8 (12.0) (13.7) (12.5)Retained earnings 8 (79.3) (92.9) (87.3)Total shareholders' equity 8 25.9 10.6 17.4Minority interest in equity (1.2) (1.2) (1.2)Total equity 24.7 9.4 16.2 (a) Certain cash balances are subject to restrictions. See note 7. CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)for the 26 week period ended 1 July 2005 53 week 26 week period ended period e ended 1 Jul 2005 25 Jun 2004 31 Dec 2004 Note £m £m £mCash flows from operating activitiesCash generated from operations 9 26.5 26.1 44.2Interest received 0.9 0.8 1.6Interest paid (7.8) (23.5) (39.4)Tax paid - (0.1) (0.1)Net cash from operating activities 19.6 3.3 6.3Cash flows from investing activitiesAcquisition of subsidiaries (4.3) (1.5) (5.3)Purchase of property, plant & equipment (3.4) (1.9) (8.5)Proceeds from sale of property, plant &equipment 0.9 1.1 2.3Transfers from restricted bank accounts 7 - 15.9 18.3Net cash (used in)/from investing activities (6.8) 13.6 6.8 Cash flows from financing activitiesNet proceeds from issue of ordinary share - 115.2 115.2capitalFinance lease principal repayments - - -Repayment of borrowings (1.2) (115.6) (125.5)Dividends paid to shareholders (3.0) - (1.5)Net cash used in financing activities (4.2) (0.4) (11.8)Net increase in cash and cash equivalents 7 8.6 16.5 1.3Cash and cash equivalents atbeginning of the period 23.7 22.4 22.4Cash and cash equivalents at theend of the period 7 32.3 38.9 23.7 NOTES TO THE INTERIM REPORT 2005for the 26 week period ended 1 July 2005 1 Basis of preparation Historically, the Group prepared its consolidated financial statements under UKGenerally Accepted Accounting Principles ('UK GAAP'). Following Regulation No.1606/2002 passed by the European Parliament in 2002, the Group is required toprepare its consolidated financial statements for the 52 week period ending 30December 2005 in accordance with all applicable International FinancialReporting Standards ('IFRS'), including International Accounting Standards ('IAS') and related interpretations issued by the International AccountingStandards Board ('IASB') and its committees, as endorsed by the EuropeanCommission. These interim financial statements have been prepared in accordance with IFRSand in accordance with the Listing Rules of the Financial Services Authoritycovering interim reports. IFRS (as endorsed by the European Commission) are subject to amendment and/orinterpretation by the IASB (and its committees). Furthermore, emerging industryconsensus may differ to the policies adopted by the Board. As such, it ispossible that further adjustments to the accounting policies adopted may benecessary and consequently, the financial information presented in this reportmay differ from that shown in the Group's Annual Report and Accounts for the 52week period ending 30 December 2005. Full details of the changes in accounting policies, which have been consistentlyapplied to all periods, and the reconciliations between IFRS and UK GAAP are setout in Appendix 1 to this report. The statements were approved by the Board of Directors on 14 September 2005 andare unaudited. The Group's auditors have carried out a review of the statementsand their report is set out on page 16. The figures for all periods presented have been extracted from the underlyingaccounting records. 2 Revenue and segmental analysis The revenue and operating profit*, by segment, were as follows: 26 week period ended 26 week period ended 53 week period ended 1 Jul 2005 25 Jun 2004 31 Dec 2004 Operating Operating Operating profit/ profit/ profit/ Revenue (loss) Revenue (loss) Revenue (loss) £m £m £m £m £m £mFuneral services 60.0 20.2 55.3 17.7 108.8 33.9Crematoria 11.7 6.4 11.1 6.0 21.6 11.8Pre-arrangedfuneral plans 2.9 1.6 2.7 2.1 5.3 2.5Central overheads - (4.8) - (4.8) - (9.0) 74.6 23.4 69.1 21.0 135.7 39.2Net interestexpense (7.6) (23.1) (31.2) Profit/(loss)before tax 15.8 (2.1) 8.0 *Operating profit includes Recoveries within pre-arranged funeral plans of £1.2million (2004: £1.2 million; December 2004: £1.2 million) and profit on sale ofproperty, plant & equipment of £0.5 million (2004: £0.8 million; December 2004:£1.2 million). 3 Net interest payable 53 week 26 week period ended period ended 1 Jul 25 Jun 31 Dec 2005 2004 2004 £m £m £mInterest payable and similar chargesClass A and B secured notes 7.4 7.5 15.1Mezzanine Loan - 2.1 2.1Loan Notes - 2.6 2.6Amortisation of issue costs 0.5 1.0 1.6Other loans 0.1 0.1 0.1Interest payable on finance leases - - 0.1Net finance expense of retirement obligations 0.2 0.1 0.3Unwinding of discount 0.3 0.4 0.7Interest payable and similar charges beforeexceptional items 8.5 13.8 22.6Exceptional interest payable and similar chargesPremium on early redemption of Mezzanine Loan - 4.0 4.0Write-off deferred debt issue costs - 6.1 6.1Exceptional interest payable and similar charges - 10.1 10.1Total interest payable and similar charges 8.5 23.9 32.7Interest receivable and similar incomeBank deposits (0.8) (0.7) (1.3)Debenture loan (0.1) (0.1) (0.2)Interest receivable and similar income (0.9) (0.8) (1.5)Net interest payable and similar charges 7.6 23.1 31.2 4 Taxation The taxation charge in the period is based on an estimated effective tax rate of31.0 per cent on profit before tax for the 52 week period ending 30 December2005. 5 Earnings/(loss) per share The calculation of basic earnings/(loss) per Ordinary Share has been based onthe profit/(loss) for the relevant period. For diluted earnings/(loss) per Ordinary Share, the weighted average number ofOrdinary Shares in issue is adjusted to assume conversion of all potentiallydilutive Ordinary Shares. The Group has two classes of potentially dilutiveOrdinary Shares being those share options granted to employees under the Group'sSAYE scheme and the contingently issueable shares under the Group's LTIPschemes. At the balance sheet date, the performance criteria for the vesting of theawards under the LTIP schemes had not been met. Consequently, these contingentlyissueable shares have been excluded from the diluted EPS calculations. Weighted average no Per share Earnings/ of shares amount (loss) £m £m pence26 week period ended 1 July 2005 - basic 11.0 80.0 13.826 week period ended 1 July 2005 - diluted 11.0 80.2 13.726 week period ended 25 June 2004 - basic and diluted (1.6) 51.5 (3.1)53 week period ended 31December 2004 -basic and diluted 5.5 65.0 8.5 6 Dividends On 14 September 2005, the Directors approved an interim dividend of 2.75 penceper share (2004: 1.875 pence per share) totalling £2.2 million (2004: £1.5million), which will be paid on 28 October 2005 to those shareholders on theregister at the close of business on 7 October 2005. The amount recognised inthe period of £3.0 million (2004: £nil) relates to the final dividend of 3.75pence per share in respect of the 2004 results approved by shareholders on 20May 2005. 7 Cash and cash equivalents 1 Jul 25 Jun 31 Dec 2005 2004 2004 Note £m £m £mCash and cash equivalents 33.5 42.5 24.9Represented by:Operating cash 10.2 11.6 12.4Cash for acquisitions (a) 7.3 11.3 7.2Cash collateralised for Loan Notes 2012 (b) - 1.4 -Amounts set aside for intercompany loan (c) 16.0 9.2 5.3Amounts set aside for Class A and Bsecured notes (d) - 9.0 - 33.5 42.5 24.9 (a) Under the terms of the Group's secured borrowings, this amount is requiredto be retained in a separate account. This account may, in normal circumstances,only be used for acquiring tangible fixed assets and businesses (either tradeand assets or share purchases). Included in this amount is £1.2 million (2004:£2.2 million; December 2004: £1.2 million) relating to Recoveries, which may notbe used for one year following receipt and hence does not meet the definition ofcash and cash equivalents in IAS 7, 'Cash Flow Statements'. (b) This amount was subject to a charge in favour of the Loan Notes 2012. Thisamount did not meet the definition of cash and cash equivalents in IAS 7. (c) This amount (save for circumstances where the Directors believe there may bea risk of defaulting on the Class A and B secured notes) may only be used inpaying the interest and principal due on a loan between Dignity (2002) Limitedand Dignity Mezzco Limited, both of whom are wholly owned subsidiaries of theCompany. (d) This amount was required under the terms of the Group's secured borrowingsto be used to pay interest and principal on 30 June 2004. Movements in the amounts described in notes (a) as Recoveries, together with theamounts described in note (b), have been treated as 'transfers from /(to)restricted bank accounts' in the cash flow statement and are reported within 'Cash flows from investing activities' as they do not meet the definition of cashand cash equivalents in IAS 7. Movements in the amounts described in note (c) have been treated as cashequivalents in the cash flow statement as they will become available for theGroup's use once the intercompany payment has been made. 8 Statement of changes in shareholders' equity Share Profit Share premium Other & loss capital account reserves account Total £m £m £m £m £mShareholders' equity as at 26 December2003 2.0 - (12.3) (91.3) (101.6)Share issue 3.6 111.6 - - 115.2Actuarial gains and losses on definedbenefit plans (net of deferred tax) - - (1.5) - (1.5)Effects of employee share options (net of deferred tax) - - 0.1 - 0.1Loss for the 26 weeks ended 25 June 2004 - - - (1.6) (1.6)Shareholders' equity as at 25 June 2004 5.6 111.6 (13.7) (92.9) 10.6Profit for the 27 weeks ended 31 December - - - 7.1 7.12004Actuarial gains and losses on defined - - 1.0 - 1.0benefit plans (net of deferred tax)Effects of employee share options (net of - - 0.2 - 0.2deferred tax)Dividends - - - (1.5) (1.5)Shareholders' equity as at 31 December 5.6 111.6 (12.5) (87.3) 17.42004Profit for the 26 weeks ended 1 July 2005 - - - 11.0 11.0Actuarial gains and losses on defined - - 0.2 - 0.2benefit plans (net of deferred tax)Effects of employee share options (net of - - 0.3 - 0.3deferred tax)Dividends - - - (3.0) (3.0)Shareholders' equity as at 1 July 2005 5.6 111.6 (12.0) (79.3) 25.9 9 Cash generated from operations 26 week period ended 53 week period ended 1 Jul 2005 25 Jun2004 31 Dec 2004 £m £m £mNet profit/(loss) for the period 11.0 (1.6) 5.5Adjustments for:Taxation 4.8 (0.5) 2.5Net interest payable 7.6 23.1 31.2Profit on disposal of property, plant &equipment (0.5) (0.8) (1.2)Depreciation charges 3.7 3.7 7.2Changes in working capital (excludingacquisitions) (0.3) 2.1 (1.2)Employee share options 0.2 0.1 0.2Cash generated from operations 26.5 26.1 44.2 10 Interim statement Copies of the Interim Report are available from the registered office,Plantsbrook House, 94 The Parade, Sutton Coldfield, West Midlands, B72 1PH andat the Group's website www.dignityfuneralsplc.co.uk 11 Securitisation In accordance with the terms of the securitisation carried out in April 2003,Dignity (2002) Limited (the holding company of those companies subject to thesecuritisation) has today issued reports to the Rating Agencies (Fitch Ratingsand Standard & Poor's), the Security Trustee and the holders of the notes issuedin connection with the securitisation confirming compliance with the covenantsestablished under the securitisation. Copies of these reports are available at www.dignityfuneralsplc.co.uk This information is provided by RNS The company news service from the London Stock Exchange