Gattaca Regulatory News (GATC)

17 Mar 2008 07:01

Matchtech Group PLC17 March 2008 17 March 2008 Matchtech Group plc Interim results for the six months ended 31 January 2008 Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leadingspecialist technical recruitment companies, is pleased to announce its interimresults for the six months ended 31 January 2008. Financial Highlights • Revenue up 25% to £116.6m (2007 H1: £93.4m)* • Net fee income (Gross Profit) up 22% to £15.3m (2007 H1: £12.5m)* • Operating profit up 24% to £6.2m (2007 H1: £5.0m)* • Operating profit margin 5.3% (2007 H1: 5.4%)* • Adjusted Profit Before Tax (before non-recurring items) up 21% to £5.7m (2007 H1: £4.7m) • Reported Profit Before Tax (after non-recurring items) up 39% to £5.7m (2007 H1: £4.1m) • Cash flow from operating activities up 112% to £8.7m (2007 H1: £4.1m) • Adjusted Basic EPS (before non-recurring items) up 8% to 17.09p (2007 H1: 15.86p) • Reported Basic EPS (after non-recurring items) up 26% to 17.09p (2007 H1: 13.59p) • Interim dividend 5.0 pence per share (2007: 4.4 pence) up 14% *2007 results exclude the sales and profits from the US business sold on 31August 2006 as well as the non-recurring costs of the IPO Operating Highlights • Strong organic growth across all sectors (Engineering, Built Environment and Support Services) • 33% increase in permanent placements, 31% increase in permanent fees • 10% increase in contractor numbers, 19% increase in contract NFI • 39% increase in sales headcount to 189 from 136 Commenting on the results, George Materna, Chairman of Matchtech said: "We are very pleased with these results confirming that Matchtech has sustainedgood progress through organic growth across all three of the Group's sectors. "The sectors that we serve continue to exhibit strong structural growthcharacteristics. Moreover we have a highly diversified and expanding customerbase, which provides further opportunities for growth and adds an element ofprotection to our business. "Candidates and Contractors remain in short supply, with wage inflationcontinuing in each of the sectors in which we operate. This demonstrates thatthe market continues to be candidate driven, allowing Matchtech to utilise itssuperior service delivery capabilities to gain market share. "We believe that there are strong opportunities for continued growth, both fromthe significant investment made in our sales headcount at the start of the year,which we expect to show through in the second half, and from our existingbusiness development pipeline. The Board remains confident in the outlook forthe year and expects to be able to report sound progress in the second half." IFRS This is the first set of financial statements that the Group is required toprepare in accordance with accordance with IAS 34 "Interim Financial Reporting"and the requirements of IFRS 1 "First-time Adoption of International FinancialReporting Standards" relevant to interim reports, because they are part of theperiod covered by the Group's first IFRS financial statements for the year ended31 July 2008. They do not include all of the information required for fullannual financial statements, and should be read in conjunction with theconsolidated financial statements for the year ended 31 July 2007 which havebeen filed with the Registrar of Companies. The auditor's report on thosefinancial statements was unqualified and did not contain a statement undersection 237 (2) and (3) of the Companies Act 1985. The transition to IFRS isexplained in Note 2 to these interim financial statements. All comparatives havebeen re-stated in accordance with IFRS. For further information please contact: Matchtech Group plc 01489 898989George Materna, ChairmanAdrian Gunn, Group Managing DirectorTony Dyer, Group Finance DirectorHogarth Partnership 020 7357 9477John Olsen / James Longfield / Fiona Noblet Background on Matchtech Matchtech specialises in the provision of contract and permanent staff in theEngineering, Built Environment and Support Services sectors across the UK. It was established in 1984 and has grown organically to become the UK's 2ndlargest technical and engineering recruitment specialist and the UK's 21stlargest recruitment company (Source: Recruitment International Top 100 Report -August 2007). Operating from a single site near Southampton, Matchtech provides predominantlyprofessionally-qualified candidates to clients in a broad range of industriesincluding oil and petrochemicals, pharmaceutical, marine, aerospace, automotive,water, electronics, civil engineering, building structures and transportinfrastructure. MATCHTECH GROUP PLC Interim report for the period ended 31 January 2008 Chairman's statement Operating review The Group again saw good growth across all three of its sectors, Engineering,Built Environment and Support Services, during the first half of the financialyear. 2008 H1 2007 H1 Change £m £m %Engineering sectorNet Fee Income 7.8 6.4 22%Operating Profit 3.4 2.7 26% Built Environment sectorNet Fee Income 4.2 3.3 27%Operating Profit 1.8 1.4 29% Support Services sectorNet Fee Income 3.2 2.8 14%Operating Profit 0.9 0.8 13% The results have been achieved entirely through organic growth in the UK. Engineering, our largest sector, continues to deliver good growth. In particulardemand was strong in Oil & Gas where the current level of oil price has led toincreased capital investment. We have a strong established brand in theEngineering sector and the business pipeline looks favourable. Built Environment continues to see the strongest growth, with clients providinggenerally good visibility of projects for several years ahead. Public sectorinvestment contributes as a major driver in this market. Clients seem a littlemore flexible on choice of candidate as skill shortages continue to tighten.Contract lengths are extending and contract rates are as high as they have everbeen. Foundations continue to be laid in our newest sector Support Services, byinvestment in new staff to ensure the best possible platform for sustainablefuture growth. Cross selling opportunities, into other parts of the Group will,over time, convert into a strong revenue stream. The Group has maintained a healthy balance between contract and permanentplacements coupled with a highly diversified client and sector base providingadded protection to any market volatility. 2008 H1 2007 H1 ChangePermanent placementsNumber of permanent placements 1,356 1,022 + 33%Permanent fees £5.1m £3.9m + 31%Average permanent fees per placement £3,753 £3,855 - 3% ContractorsNumber of working contractors 4,541 4,122 + 10%Contract Net Fee Income £10.2m £8.6m + 19% Net Fee IncomeContract 67% 69%Permanent 33% 31% People Our performance reflects the strength and stability of our management team andthe quality of our staff. Expansion is being led by experienced and home grownMatchtech managers and directors. The Matchtech team has shown great unity ofpurpose, amplified by our strong internal communication and technology systemsthat enable the flow of strategic information throughout the company. Sales staff numbers increased by 39% over the year to 189 (January 2007: 136,July 2007: 170). We added 9 Support staff in the first half bringing the totalto 90 (January 2007: 75, July 2007: 81), partly reflecting the increased levelsof compliance required from regulators and clients. I would like to thank all our staff on behalf of our shareholders for theirconsistent contribution. Financial Overview The Group delivered good results across all three of its sectors. Revenue increased 25% to £116.6m (2007 H1: £93.4m, excluding £0.2m Revenuediscontinued business), with Net Fee Income up 22% to £15.3m (2007 H1: £12.5m). Underlying operating profit (excluding non-recurring items) was £6.2m, anincrease of 24% (2007 H1: £5.0m). This reflected a slight decrease in operatingmargin to 5.3% (2007 H1: 5.4%). The non-recurring items in 2007 were £0.5m. 2008: £Nil. Reported profit before tax was up 39% at £5.7m (2007 H1: £4.1m) and underlyingprofit before tax (excluding profits from the US business sold in August 2006 aswell as non-recurring items) was up 21% to £5.7m (2007 H1: £4.7m). Effective Rate of Tax The effective rate of tax for the period is 30.5% (2007 H1: 24.9% prenon-recurring items). Under IFRS 12 deferred tax is recognised to take intoaccount the fact that gains made on qualifying share options exercised duringthe period attract tax relief. The effective tax rate will be impacted by theactual timing of exercise of the options and the magnitude of the tax benefitobtained. Earnings per share Notwithstanding the higher Effective Tax Rate, the Group continued to producegood growth in earnings per share. Basic earnings per share increased by 26% to 17.09p (2007 H1: 13.59p), withadjusted earnings per share (excluding non-recurring items) increasing by 8% to17.09p (2007 H1: 15.86p). Fully diluted earnings per share increased by 30% to 16.53p (2007 H1: 12.75p),with adjusted fully diluted earnings per share (excluding non-recurring items)increasing by 9% to 16.53p (2007 H1: 15.23p). Cash flow Cash inflows from operating activities in the period were £8.7m (2007 H1: £4.1m)representing cash conversion of 140% (2007 H1: 93%) Capital expenditure was £0.7m (2007 H1: £0.5m). Net debt at 31 January 2008 was £5.4m (31 January 2007: £11.5m, 31 July 2007:£9.8m). Dividend Reflecting the performance of our business in the first half, the Board hasdeclared an interim dividend of 5.0 pence per share, an increase of 14% (2007:H1 4.4p). The interim dividend will be paid on 24 June 2008 to those shareholders on theregister at close of business on 6 June 2008. Risk The Group considers strategic, financial and operational risks and identifiesactions to mitigate those risks. Key risks and their mitigation are disclosedin the 2007 Annual Report and no significant new risks have been identified in the period. Growth strategy Our unique single site model continues to provide a stable, low cost platformfor growth. The growth strategy is being implemented by an experiencedmanagement team and is based around a balanced contract/perm mix in our targetrecruitment markets. We aim to further segment and subdivide our markets and todeepen our niche specialisations over time. Outlook General business sentiment in our markets has remained positive to date, and thesectors that we serve continue to exhibit strong structural growthcharacteristics. Moreover we have a highly diversified and expanding customerbase, which provides further opportunities for growth and adds protection to ourbusiness. Candidates and Contractors remain in short supply, with wage inflationcontinuing in each of the sectors in which we operate. This demonstrates thatthe market continues to be candidate driven, allowing Matchtech to utilise itssuperior service delivery capabilities to gain market share. We believe that there are strong opportunities for continued growth, both fromthe significant investment made in our sales headcount at the start of the yearthrough our graduate program, which is expected to show through in the secondhalf, and from our existing business development pipeline. The Board remainsconfident in its outlook for the year and expects to be able to report soundprogress in the second half. George Materna Chairman 17 March 2008 MATCHTECH GROUP PLC CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31ST JANUARY 2008 CONDENSED CONSOLIDATED INCOME STATEMENT For the period ended 31 January 2008 Note 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited UnauditedCONTINUING OPERATIONS £'000 £'000 £'000Revenue 3 116,562 93,438 202,779Cost of Sales (101,290) (80,933) (175,902) --------- -------- --------GROSS PROFIT 3 15,272 12,505 26,877 Cost of Admission to AIM 0 (572) (572)Other administrative expenses (9,119) (7,427) (15,623) --------- -------- --------Total administrative expenses (9,119) (7,999) (16,195) --------- -------- --------OPERATING PROFIT 3 6,153 4,506 10,682 Finance income 18 13 20Finance cost (500) (390) (831) --------- -------- --------PROFIT BEFORE TAX 5,671 4,129 9,871 Income tax expense 4 (1,729) (1,169) (2,356) --------- -------- --------PROFIT FROM CONTINUING OPERATIONS 3,942 2,960 7,515 DISCONTINUED OPERATIONSProfit from discontinuedoperations 5 0 67 67 --------- -------- --------PROFIT FOR THE PERIOD 3,942 3,027 7,582 ========= ======== ======== EARNINGS PER ORDINARY SHARE 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited UnauditedContinuing operations pence pence Pence - Basic 7 17.09 13.29 33.44 - Diluted 7 16.53 12.75 32.64 Total operations - Basic 7 17.09 13.59 33.74 - Diluted 7 16.53 13.04 32.93 CONDENSED CONSOLIDATED BALANCE SHEET Note 31/01/08 31/01/07 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000ASSETSNon-current assets Property, plant and equipment 2,014 1,590 1,699Intangible assets 186 113 133Deferred tax assets 502 879 529 --------- -------- -------- 2,702 2,582 2,361Current AssetsTrade and other receivables 29,039 25,672 31,984Cash and cash equivalents 91 353 836 --------- -------- -------- 29,130 26,025 32,820 --------- -------- --------TOTAL ASSETS 31,832 28,607 35,181 ========= ======== ======== LIABILITIESCurrent liabilitiesTrade and other payables (11,677) (8,881) (12,617)Current tax liability (1,773) (904) (1,068)Bank loans and overdrafts - short term borrowings (2,556) (7,292) (6,924) - current portion of long term borrowings (1,666) (1,666) (1,666) --------- -------- -------- (17,672) (18,743) (22,275)Non-current liabilitiesLong term borrowings (1,251) (2,917) (2,083) --------- -------- --------TOTAL LIABILITIES (18,923) (21,660) (24,358) ========= ======== ========NET ASSETS 12,909 6,947 10,823 ========= ======== ======== EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTCalled-up equity share capital 231 225 230Share premium account 2,892 2,367 2,829Other reserves 859 685 610Retained earnings 8,927 3,670 7,154 --------- -------- --------TOTAL EQUITY 12,909 6,947 10,823 ========= ======== ======== CONDENSED CONSOLIDATED CASH FLOW STATEMENT Note 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000CASH FLOWS FROMOPERATING ACTIVITIESProfit after taxation 3,942 3,027 7,582Adjustments for: -Depreciation 306 226 499 -Profit on disposal of discontinued 5 0 (59) (59) operation -Foreign exchange gain on 0 (3) (3) disposal of discontinued operation -Profit on disposal of property, (3) 0 0 plant and equipment -Interest income (18) (13) (20) -Interest expense 500 390 831 -Taxation expense recognised in 1,729 1,172 2,359 profit and loss -Increase)/decrease in trade and 2,950 (1,240) (7,516) other receivables -Increase in trade and other (939) 473 4,118 payables -Share based payment charge 250 125 321 --------- -------- -------- Cash generated from operations 8,717 4,098 8,112Interest paid (500) (390) (831)Income taxes paid (1,024) (1,256) (2,205) --------- -------- --------NET CASH FROM OPERATING ACTIVITES 7,193 2,452 5,076 CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of Matchtech Inc 0 105 105Purchase of plant and equipment (708) (532) (960)Proceeds from sale of plant 37 0 28Interest received 18 13 20 --------- -------- --------NET CASH USED IN INVESTING ACTIVITIES (653) (414) (807) CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of share capital 64 361 829Proceeds from long-term borrowings (5,096) 1,918 699Dividends paid (2,148) (4,414) (5,428) --------- -------- --------NET CASH USED IN FINANCING ACTIVITIES (7,180) (2,135) (3,900) NET INCREASE IN CASH AND CASH EQUIVALENTS (640) (97) 369 --------- -------- -------- CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 659 290 290 --------- -------- --------CASH AND CASH EQUIVALENTS AT END OF PERIOD 19 193 659 ========= ======== ======== CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Foreign Share Share Other Share Retained Total Currency Capital Premium reserve based Earnings £'000 translation reserve £'000 £'000 £'000 payment £'000 £'000 reserve £'000Balance at1 0 221 2,009 229 338 4,884 7,681August 2006 -------- ------- -------- ------- -------- -------- ------Currencytranslation 3 0 0 0 0 0 3differences -------- ------- -------- ------- -------- -------- ------Net incomerecognised 3 0 0 0 0 0 3directly inequity -------- ------- -------- ------- -------- -------- ------Profit forthe (3) 0 0 0 0 3,027 3,024period ======== ======= ======== ======= ======== ======== ======Totalrecognisedincome 0 0 0 0 0 3,027 3,027and expensefor the ======== ======= ======== ======= ======== ======== ======period Dividends 0 0 0 0 0 (4,414) (4,414)IAS 12adjustment 0 0 0 0 0 168 168todeferredtax assetEBT reservemovement 0 0 0 (5) 0 5 0Share basedpayment 0 0 0 0 123 0 123reservemovementNew sharecapital 0 4 358 0 0 0 362 -------- ------- -------- ------- -------- -------- ------ 0 4 358 (5) 123 (4,241) (3,761) -------- ------- -------- ------- -------- -------- ------Balance at31 0 225 2,367 224 461 3,670 6,947January ======== ======= ======== ======= ======== ======== ======2007 Balance at1 0 221 2,009 229 338 4,884 7,681August 2006 -------- ------- -------- ------- -------- -------- ------Currencytranslation 3 0 0 0 0 0 3differences -------- ------- -------- ------- -------- -------- ------Net incomerecognised 3 0 0 0 0 0 3directly inequity -------- ------- -------- ------- -------- -------- ------Profit forthe (3) 0 0 0 0 7,582 7,579year ======== ======= ======== ======= ======== ======== ======Totalrecognisedincome 0 0 0 0 0 7,582 7,582and expensefor the ======== ======= ======== ======= ======== ======== ======year Dividends 0 0 0 0 0 (5,428) (5,428)IAS 12adjustment 0 0 0 0 0 111 111todeferredtax assetEBT reservemovement 0 0 0 (5) 0 5 0Share basedpayment 0 0 0 0 48 0 48reservemovementNew sharecapital 0 9 820 0 0 0 829 -------- ------- -------- ------- -------- -------- ------ 0 9 820 (5) 0 (5,312) (4,440) -------- ------- -------- ------- -------- -------- ------Balance at31 0 230 2,829 224 386 7,154 10,823July 2007 ======== ======= ======== ======= ======== ======== ====== Balance at1 0 230 2,829 224 386 7,154 10,823August 2007 -------- ------- -------- ------- -------- -------- ------Profit forthe 0 0 0 0 0 3,942 3,942period ======== ======= ======== ======= ======== ======== ======Totalrecognisedincome 0 0 0 0 0 3,942 3,942and expensefor the ======== ======= ======== ======= ======== ======== ======year Dividends 0 0 0 0 0 (2,149) (2,149)Share basedpayment 0 0 0 0 249 (20) 229reservemovementNew sharecapital 0 1 63 0 0 0 64 -------- ------- -------- ------- -------- -------- ------ 0 1 63 0 249 (2,169) (1,856) -------- ------- -------- ------- -------- -------- ------Balance 31January 0 231 2,892 224 635 8,927 12,9092008 ======== ======= ======== ======= ======== ======== ====== Notes Forming part of the financial statements 1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES i The business of the Group Matchtech Group plc is a human capital resources business dealing with contractand permanent recruitment in the Private and Public sector. The Group isorganised in three sectors, Engineering, Built Environment and Support Services,with niche activities within each sector. ii Basis of preparation of interim financial information These interim condensed consolidated financial statements are for the six monthsended 31 January 2008. They have been prepared in accordance with IAS 34"Interim Financial Reporting" and the requirements of IFRS 1 "First-timeAdoption of International Financial Reporting Standards" relevant to interimreports, because they are part of the period covered by the Group's first IFRSfinancial statements for the year ended 31 July 2008. They do not include all ofthe information required for full annual financial statements, and should beread in conjunction with the consolidated financial statements for the yearended 31 July 2007 which have been filed with the Registrar of Companies. Theauditor's report on those financial statements was unqualified and did notcontain a statement under section 237 (2) and (3) of the Companies Act 1985. These condensed consolidated interim financial statements (the interim financialstatements) have been prepared in accordance with the accounting policies setout below which are based on the recognition and measurement principles of IFRSin issue as adopted by the European Union (EU) and are effective at 31 July 2008or are expected to be adopted and effective at 31 July 2008, our first annualreporting date at which we are required to use IFRS accounting standards asadopted by the EU. Matchtech Group plc's consolidated financial statements were prepared inaccordance with United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice) until 31 July 2007. The date of transition to IFRSwas 1 August 2006. The comparative figures in respect of 2006 have been restatedto reflect changes in accounting policies as a result of adoption of IFRS. Thedisclosures required by IFRS 1 concerning the transition from UK GAAP to IFRSare given in the reconciliation schedules, presented and explained in note 2. These financial statements have been prepared under the historical costconvention. The accounting policies have been applied consistently throughoutthe Group for the purposes of preparation of these condensed interim financialstatements. A summary of the principal accounting policies of the group are setout below. IFRS 1 permits companies adopting IFRS for the first time to take certainexemptions from the full requirements of IFRS in the transition period. Theseinterim financial statements have been prepared on the basis of taking thefollowing exemptions: - business combinations prior to 1 August 2006, the Group's date of transitionto IFRS, have not been restated to comply with IFRS 3 "Business Combinations". - cumulative translation differences on foreign operations are deemed to be nilat 1 August 2006. Any gains and losses recognised in the consolidated incomestatement on subsequent disposal of foreign operations will exclude translationdifferences arising prior to the transition date. - the Group has not applied IFRS 2, share based payments to share options awardsgranted prior to 7 November 2002, nor to those granted subsequent to that datebut which had vested by 1 August 2006, the date of transition. iii Basis of consolidation The group financial statements consolidate those of the company and all of itssubsidiary undertakings drawn up to the balance sheet date. Subsidiaries areentities over which the group has power to control the financial and operatingpolicies so as to obtain benefits from its activities. The group obtains andexercises control through voting rights. Acquisitions of subsidiaries are dealt with by the purchase method. The purchasemethod involves the recognition at fair value of all identifiable assets andliabilities, including contingent liabilities of the subsidiary, at theacquisition date, regardless of whether or not they were recorded in thefinancial statements of the subsidiary prior to acquisition. On initialrecognition, the assets and liabilities of the subsidiary are included in theconsolidated balance sheet at their fair values, which are also used as thebases for subsequent measurement in accordance with group accounting policies. iv Revenue Revenue is measured by reference to the fair value of consideration received orreceivable by the group for services provided, excluding VAT and tradediscounts. Revenue on temporary placements is recognised upon receipt of aclient approved timesheet or equivalent. Revenue from permanent placements,which is based on a percentage of the candidate's remuneration package, isrecognised when candidates commence employment. v Property, plant and equipment Property, plant and equipment is stated at cost or valuation, net ofdepreciation and any provision for impairment. Depreciation is calculated so as to write off the cost of an asset, less itsestimated residual value, over the useful economic life of that asset asfollows: Motor Vehicles 25.00% Reducing balance Computer equipment 25.00% Straight line Equipment 12.50% Straight line Residual value estimates are updated as required, but at least annually, whetheror not the asset is revalued. vi Intangible assets Separately acquired software licences are included at cost and amortised on astraight-line basis over the useful economic life of that asset at 20%-33%.Provision is made against the carrying value of intangible assets where animpairment in value is deemed to have occurred. Amortisation is recognised inthe income statement under administrative expenses. vii Disposal of assets The gain or loss arising on the disposal of an asset is determined as thedifference between the disposal proceeds and the carrying amount of the assetand is recognised in the income statement. viii Operating lease agreements Rentals applicable to operating are charged against profits on a straight linebasis over the lease term. Lease incentives are spread over the term of thelease. ix Taxation Current tax is the tax currently payable based on taxable profit for the year. Deferred income taxes are calculated using the liability method on temporarydifferences. Deferred tax is generally provided on the difference between thecarrying amounts of assets and liabilities and their tax bases. However,deferred tax is not provided on the initial recognition of goodwill, nor on theinitial recognition of an asset or liability unless the related transaction is abusiness combination or affects tax or accounting profit. Deferred tax liabilities are provided in full, with no discounting. Deferred taxassets are recognised to the extent that it is probable that the underlyingdeductible temporary differences will be able to offset against future taxableincome. Current and deferred tax assets and liabilities are calculated at taxrates that are expected to apply to their respective period of realisation,provided they are enacted or substantively enacted at the balance sheet date. Changes in deferred tax assets or liabilities are recognised as a component oftax expense in the income statement, except where they relate to items that arecharged or credited directly to equity (such as the revaluation of land) inwhich case the related deferred tax is also charged or credited directly toequity. x Pension costs The company operates a defined contribution pension scheme for employees. Theassets of the scheme are held separately from those of the company. The annualcontributions payable are charged to the income statement as they accrue. xi Share based payment All share-based remuneration is ultimately recognised as an expense in theincome statement with a corresponding credit to "share-based payment reserve".All goods and services received in exchange for the grant of any share-basedremuneration are measured at their fair values. Fair values of employee servicesare indirectly determined by reference to the fair value of the share optionsawarded. Their value is appraised at the grant date and excludes the impact ofnon-market vesting conditions (for example, profitability and sales growthtargets). If vesting periods or other non-market vesting conditions apply, the expense isallocated over the vesting period, based on the best available estimate of thenumber of share options expected to vest. Estimates are subsequently revised ifthere is any indication that the number of share options expected to vestdiffers from previous estimates. Any cumulative adjustment prior to vesting isrecognised in the current period. No adjustment is made to any expenserecognised in prior periods if share options ultimately exercised are differentto that estimated on vesting. Upon exercise of share options, proceeds receivednet of attributable transaction costs are credited to share capital and sharepremium. xii Exceptional items Non-recurring items which are sufficiently material are presented separatelywithin their relevant consolidated income statement category. This helps toprovide a better understanding of the group's financial performance. xiii Business combinations completed prior to date of transition to IFRS The group has elected not to apply IFRS 3 Business Combinations retrospectivelyto business combinations prior to 1 August 2006. Accordingly the classification of the combination (merger) remains unchangedfrom that used under UK GAAP. Assets and liabilities are recognised at date oftransition if they would be recognised under IFRS, and are measured using theirUK GAAP carrying amount immediately post-acquisition as deemed cost under IFRS,unless IFRS requires fair value measurement. Deferred tax is adjusted for theimpact of any consequential adjustments after taking advantage of thetransitional provisions. xiv Discontinued operations A discontinued operation is a cash-generating unit, or a group ofcash-generating units, that either has been disposed of, or is classified asheld for sale, and: - represents a separate line of business or geographic area of operations - is part of a single co-ordinated plan to dispose of a separate major line ofbusiness or geographical area of operations or - is a subsidiary acquired exclusively with a view to resale. The disclosures for discontinued operations in the prior period relate to alloperations that have been discontinued by the balance sheets date for the latestperiod presented. xv Financial assets All financial assets are recognised when the group becomes a party to thecontractual provisions of the instrument. Financial assets are recognised atfair value plus transaction costs. Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. Trade receivablesare classified as loans and receivables. Loans and receivables are measuredsubsequent to initial recognition at amortised cost using effective interestmethod, less provision for impairment. Any change in their value throughimpairment or reversal of impairment is recognised in the income statement. Provision against trade receivables is made when there is objective evidencethat the group will not be able to collect all amounts due to it in accordancewith the original terms of those receivables. The amount of the write-down isdetermined as the difference between the asset's carrying amount and the presentvalue of estimated future cash flows. A financial asset is derecognised only where the contractual rights to cashflows from the asset expire or the financial asset is transferred and thattransfer qualifies for derecognition. A financial asset is transferred if thecontractual rights to receive the cash flows of the asset have been transferredor the group retains the contractual rights to receive the cash flows of theasset but assumes a contractual obligation to pay the cash flows to one or morerecipients. A financial asset that is transferred qualifies for derecognition ifthe group transfers substantially all the risks and rewards of ownership of theasset, or if the group neither retains nor transfers substantially all the risksand rewards of ownership but does transfer control of that asset. xvi Financial liabilities Financial liabilities are obligations to pay cash or other financial assets andare recognised when the group becomes a party to the contractual provisions ofthe instrument and comprise trade and other payables and bank loans. Financialliabilities are recorded initially at fair value, net of direct issue costs andare subsequently measured at amortised cost using the effective interest ratemethod. A financial liability is derecognised only when the obligation is extinguished,that is, when the obligation is discharged or cancelled or expires. xvii Cash and cash equivalents Cash and cash equivalents comprise cash on hand, on demand deposits and bankoverdrafts. xviii Dividends Dividend distributions payable to equity shareholders are included in "othershort term financial liabilities" when the dividends are approved in generalmeeting prior to the balance sheet date. xix Equity Equity comprises the following: - "Share capital" represents the nominal value of equity shares. - "Share premium" represents the excess over nominal value of the fair value ofconsideration received for equity shares, net of expenses of the share issue. - "Share based payment reserve" represents equity-settled share-based employeeremuneration until such share options are exercised. - "Other reserve" represents the equity balance arising on the merger ofMatchtech Engineering and Matchmaker Personnel. - "Profit and loss reserve" represents retained profits. xx Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Monetary assets and liabilities in foreigncurrencies are translated at the rates of exchange ruling at the balance sheetdate. Non-monetary items that are measured at historical cost in a foreigncurrency are translated at the exchange rate at the date of the transaction.Non-monetary items that are measured at fair value in a foreign currency aretranslated using the exchange rates at the date when the fair value wasdetermined. Any exchange differences arising on the settlement of monetary items or ontranslating monetary items at rates different from those at which they wereinitially recorded are recognised in the profit or loss in the period in whichthey arise. Exchange differences on non-monetary items are recognised in equityto the extent that they relate to a gain or loss on that non-monetary item takento equity, otherwise such gains and losses are recognised in the incomestatement. The assets and liabilities in the financial statements of foreign subsidiariesare translated at the rate of exchange ruling at the balance sheet date. Incomeand expenses are translated at the actual rate. The exchange differences arisingfrom the retranslation of the opening net investment in subsidiaries are takendirectly to the "Foreign currency reserve" in equity. On disposal of a foreignoperation the cumulative translation differences (including, if applicable,gains and losses on related hedges) are transferred to the income statement aspart of the gain or loss on disposal. As permitted by IFRS 1, the balance on the cumulative translation adjustment onretranslation of subsidiaries' net assets has been set to zero at the date oftransition to IFRS. xxi Employee benefit trust The assets and liabilities of the Employee Benefit Trust (EBT) have beenincluded in the group accounts. Any assets held by the EBT cease to berecognised on the group balance sheet when the assets vest unconditionally inidentified beneficiaries. The costs of purchasing own shares held by the EBT are shown as a deductionagainst equity. The proceeds from the sale of own shares held increase equity.Neither the purchase nor sale of own shares leads to a gain or loss beingrecognised in the group income statement. 2 TRANSITIONAL ARRANGEMENTS These are the Group's first condensed consolidated interim financial statementsfor part of the period covered by the first annual consolidated financialstatements prepared in accordance with IFRS. An explanation of how the transition from UK GAAP to IFRS has affected theGroup's financial position, financial performance and cash flows is set outbelow. Reconciliation of equity at 1 August 2006 UK GAAP IAS 12 IAS 17 IAS 19 IFRS £'000 Income Leases Employee as Taxes £'000 Benefits restated £'000 £'000 £'000EQUITYCalled-up equity share 221 0 0 0 221capitalShare premium account 2,009 0 0 0 2,009Other reserves 567 0 0 0 567Retained earnings 4,454 566 (64) (72) 4,884 ---------- --------- -------- --------- --------TOTAL EQUITY 7,251 566 (64) (72) 7,681 ========== ========= ======== ========= ======== Reconciliation of consolidated balance sheet and equity at 31 January 2007 UK GAAP IAS 1 IAS 12 IAS 17 IAS 19 IFRS £'000 Presentation Income Leases Employee as of financial Taxes £'000 Benefits restated statements £'000 £'000 £'000 £'000NON-CURRENTASSETSIntangible 113 0 0 0 0 113assetsProperty, plantand 1,590 0 0 0 0 1,590equipmentDeferred tax 0 879 0 0 0 879assets CURRENT ASSETSTrade and otherreceivables 25,819 (879) 732 0 0 25,672Cash and cashequivalents 353 0 0 0 0 353 CURRENTLIABILITIESTrade and otherpayables (8,793) 0 0 (57) (31) (8,881)Tax liability (904) 0 0 0 0 (904)Bank loans andoverdrafts (8,958) 0 0 0 0 (8,958) NON-CURRENTLIABILITIESBank loan (2,917) 0 0 0 0 (2,917) -------- ----------- -------- -------- -------- --------NET ASSETS 6,303 0 732 (57) (31) 6,947 ======== ========== ======== ======== ======== ======== EQUITYCalled-up equitysharecapital 225 0 0 0 0 225Share premiumaccount 2,367 0 0 0 0 2,367Other reserves 685 0 0 0 0 685Retained earnings 3,026 0 732 (57) (31) 3,670 -------- ----------- -------- -------- -------- --------TOTAL EQUITY 6,303 0 732 (57) (31) 6,947 ======== ========== ======== ======== ======== ======== Reconciliation of consolidated balance sheet and equity at 31 July 2007 UK GAAP IAS 1 IAS 12 IAS 17 IAS 19 IFRS £'000 Presentation Income Leases Employee as of financial Taxes £'000 Benefits restated statements £'000 £'000 £'000 £'000NON-CURRENTASSETSIntangible 133 0 0 0 0 133assetsProperty,plant and 1,699 0 0 0 0 1,699equipmentDeferred tax 0 529 0 0 0 529assets CURRENT ASSETSTrade andother 32,108 (529) 405 0 0 31,984receivablesCash and cashequivalents 836 0 0 0 0 836 CURRENTLIABILITIESTrade andother (12,474) 0 0 (67) (76) (12,617)payablesTax liability (1,068) 0 0 0 0 (1,068)Bank loans andoverdrafts (8,590) 0 0 0 0 (8,590) NON-CURRENTLIABILITIESBank loan (2,083) 0 0 0 0 (2,083) --------- --------- -------- -------- -------- --------NET ASSETS 10,561 0 405 (67) (76) 10,823 ========= ========= ======== ======== ======== ======== EQUITYCalled-upequity share 230 0 0 0 0 230capitalShare premium 2,829 0 0 0 0 2,829accountOther reserves 610 0 0 0 0 610Retained 6,892 0 405 (67) (76) 7,154earnings --------- --------- -------- -------- -------- --------TOTAL EQUITY 10,561 0 405 (67) (76) 10,823 ========= ========= ======== ======== ======== ======== Reconciliation of consolidated income statement for the period ended 31 January2007 UK GAAP IAS 1 IAS 17 IAS 19 IAS 21 IFRS £'000 Presentation Leases Employee Foreign as restated of financial £'000 Benefits Exchange £'000 statements £'000 Rates £'000 £'000Revenue 93,573 (135) 0 0 0 93,438Cost of sales (81,050) 117 0 0 0 (80,933) -------- --------- -------- --------- --------- ---------Gross profit 12,523 (18) 0 0 0 12,505 AdministrationCosts (7,485) 10 7 41 0 (7,427)Cost ofadmission toAIM (572) 0 0 0 0 (572)Profit on saleof 59 (59) 0 0 0 0discontinuedoperationFinance Income 13 0 0 0 0 13Finance Cost (390) 0 0 0 0 (390) -------- --------- -------- --------- --------- ---------Profit beforetax 4,148 (67) 7 41 0 4,129 -------- --------- -------- --------- --------- --------- Taxation (1,172) 3 0 0 (1,169) -------- --------- -------- --------- --------- ---------Profit for theperiod 2,976 (64) 7 41 0 2,960 -------- --------- -------- --------- --------- --------- -------- --------- -------- --------- --------- ---------Profit fromdiscontinued 0 64 0 0 3 67operations ======== ========= ======== ========= ========= =========Profit for theperiod 2,976 0 7 41 3 3,027from totaloperations ======== ========= ======== ========= ========= ========= Reconciliation of consolidated income statement for year ended 31 July 2007 UK GAAP IAS 1 IAS 17 IAS 19 IAS 21 IFRS £'000 Presentation of Leases Employee Foreign as financial Benefits Exchange Rates statements £'000 £'000 £'000 £'000 restated £'000Revenue 202,914 (135) 0 0 0 202,779Cost of sales (176,019) 117 0 0 0 (175,902) -------- --------- -------- --------- --------- ---------Gross profit 26,895 (18) 0 0 0 26,877 AdministrationCosts (15,627) 10 (2) (4) 0 (15,623)Cost ofadmission toAIM (572) 0 0 0 0 (572)Profit on saleofdiscontinuedoperation 59 (59) 0 0 0 0Finance Income 19 0 0 0 0 19Finance Cost (830) 0 0 0 0 (830) -------- --------- -------- --------- --------- ---------Profit beforetax 9,944 (67) (2) (4) 0 9,871 -------- --------- -------- --------- --------- --------- Taxation (2,359) 3 0 0 0 (2,356) -------- --------- -------- --------- --------- ---------Profit for theperiod 7,585 (64) (2) (4) 0 7,515 -------- --------- -------- --------- --------- --------- -------- --------- -------- --------- --------- ---------Profit fromdiscontinued 0 64 0 0 3 67operations -------- --------- -------- --------- --------- ---------Profit for theperiod fromtotaloperations 7,585 0 (2) (4) 3 7,582 ======== ========= ======== ========= ========= ========= Notes to the reconciliations IAS 1 Presentation of financial statements Under UK GAAP, the deferred tax asset was classified as a current asset. UnderIFRS the deferred tax asset is classified as a non-current asset. Under UK GAAP, the income statement provided full disclosure of each line itemrelating to discontinued operations. Under IFRS, only the profit from thediscontinued operation is disclosed on the income statement. IAS 12 Income Taxes Under FRS 19, deferred tax was recognised only on timing differences; incontrast IAS 12 "Income Taxes" requires the recognition of deferred tax on alltemporary differences which specifically impacts the recognition of deferred taxin relation to share based payments. Under FRS 19, the deferred tax asset on the cost of options recognised wasrestricted to the amount calculated by applying the prevailing corporation taxrate to the total cost in the year calculated under FRS20. Under IFRS thedeferred tax asset recognised is the cost of options outstanding based on thefair value at the period end date multiplied by the prevailing rate ofcorporation tax. The deferred tax asset has been adjusted in line with IFRSrequirements. IAS 17 Leases Under UK GAAP, the rent-free period lease incentive was spread over the periodfrom the start of the lease to the first break clause. Under IFRS, the leaseincentive is spread over the full lease term. IAS 19 Employee benefits Under UK GAAP, the company chose not to accrue for outstanding staff holiday payat the balance sheet date. IFRS requires that the accrual be calculated at eachbalance sheet date. IAS 21 The Effects of Changes in Foreign Exchange Rates On the disposal of Matchtech Inc the cumulative translation differences aretransferred to the income statement as part of the gain or loss on disposal.Under UK GAAP the difference was shown as a movement in reserves. Cash Flow statement Application of IFRS has resulted in reclassification of certain items in thecash flow statement as follows: Profit after taxation has been adjusted as per the reconciliation above.(Operating profit was used in the Interim and Annual Reports for 2007 in thereconciliation to net cash inflow from operating activities) Movements in trade and other receivables and trade and other payables have beenadjusted to account for the IFRS adjustments to the provisions on the balancesheet as shown in the reconciliations of consolidated balance sheets and incomestatements above. These relate to the reclassification of the deferred tax assetbetween trade and other receivables and non current assets and the adjustmentsto the rent free period and staff holiday reserves. 3 SEGMENTAL INFORMATION The revenue and profit before tax are attributable to the one principal activityof the company. (i) Segmental A segmental analysis of revenue is given 6 months 6 months 12 monthsbelow: to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000 Engineering 67,276 59,990 129,299Built Environment 31,463 18,629 40,046Support Services 17,823 14,819 33,434 -------- -------- --------Continuing operations 116,562 93,438 202,779 Discontinued Operations 0 135 135 -------- -------- -------- Total 116,562 93,573 202,914 ======== ======== ======== A segmental analysis of gross profit isgiven below: Engineering 7,803 6,394 14,833Built Environment 4,226 3,274 6,000Support Services 3,243 2,837 6,044 -------- -------- --------Continuing operations 15,272 12,505 26,877 Discontinued Operations 0 18 18 -------- -------- -------- Total 15,272 12,523 26,895 ======== ======== ======== A segmental analysis of operating profitis given below: Engineering 3,468 2,563 5,896Built Environment 1,820 1,118 2,384Support Services 865 825 2,402 -------- -------- --------Continuing operations 6,153 4,506 10,682 Discontinued Operations 0 8 8 -------- -------- -------- Total 6,153 4,514 10,690 ======== ======== ======== (iI) Seasonality With the first half of the financial year including holiday seasons in Augustand at Christmas when recruitment activity is quieter than normal, the secondhalf of the year generally produces stronger results. Revenue in the 6 months to31 January 2007 excluding discontinued operations represented 46% of the annualtotal. 4 INCOME TAX EXPENSE Analysis of charge in the year 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000Total income tax expense 1,729 1,169 2,356 The total tax charge is lower than the standard rate of corporation tax. Thedifferences are detailed below: Profit before tax 5,671 4,129 9,871 Corporation Tax at current rate of30% 1,701 1,239 2,961 Deferred tax on timing differences 7 (38) (16)Expenses not deductible for taxpurposes 88 50 114Exceptional items not deductible fortax purposes 0 172 172Difference between depreciation andcapital allowances for the period 10 8 3Under provision for previous years 0 0 1Tax loss on EBT loss/profit 0 3 4Tax relief on cost of optionsexercised in year (77) (251) (902)Tax effect of IFRS transitionalarrangements 0 (14) 19 -------- -------- --------Total UK tax charge 1,729 1,169 2,356 5 DISCONTINUED OPERATIONS On 31st August 2006 Matchtech Group UK Ltd sold the shares of Matchtech Inc forconsideration of £105,000, giving a profit on disposal of £59,000. The profitfrom Matchtech Inc has been included under discontinued operations in thecondensed consolidated income statement. The income statement of Matchtech Incis set out below. DISCONTINUED OPERATIONS 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000Revenue 0 135 135Cost of Sales 0 (117) (117) ----------- ---------- ---------GROSS PROFIT 0 18 18 Administrative expenses 0 (10) (10) ----------- ---------- ---------OPERATING PROFIT 0 8 8 Finance income 0 0 0Finance cost 0 0 0 ----------- ---------- ---------PROFIT BEFORE TAX 0 8 8 Income tax expense 0 (3) (3)Foreign exchange gain 0 3 3 ----------- ---------- ---------PROFIT FROM DISCONTINUED OPERATIONS 0 8 8 =========== ========== ========= 6 DIVIDENDS Dividends on shares classed as equity 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000 Paid during the periodEquity dividends on ordinary shares 2,148 4,414 4,124 7 EARNINGS PER SHARE Earnings per share has been calculated by dividing the consolidated profit aftertaxation attributable to ordinary shareholders by the weighted average number ofordinary shares in issue during the period. Diluted earnings per share has been calculated, on the same basis as above,except that the weighted average number of ordinary shares that would be issuedon the conversion of all the dilutive potential ordinary shares (arising fromthe Group's share option schemes) into ordinary shares has been added to thedenominator. There are no changes to the profit (numerator) as a result of thedilutive calculation. The earnings per share information has been calculated as follows: Earnings Per Share 6 months 6 months 12 months to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000ProfitsProfit from continuing operations 3,942 2,960 7,515Profit from discontinued operations 0 67 67 -------- -------- --------Profit for the period 3,942 3,027 7,582 Number of shares 000's 000's 000'sWeighted average number of ordinaryshares in issue 23,070 22,277 22,470Effect of dilutive potentialordinary shares under option 777 939 556 -------- -------- -------- 23,847 23,216 23,026 Earnings per share pence pence pence Earnings per share from continuingoperations - Basic 17.09 13.29 33.44 - Diluted 16.53 12.75 32.64 Earnings per share from discontinuedoperations - Basic 0.00 0.30 0.30 - Diluted 0.00 0.29 0.29 Earnings per share from total operations - Basic 17.09 13.59 33.74 - Diluted 16.53 13.04 32.93 Earnings Per Share for the purpose of a performance measure for the LTIPs iscalculated excluding the non-recurring items of the sales and profits of the USbusiness sold on 31st August 2006 as well as the non-recurring costs of theflotation as calculated below. 6 months 6 months 12 monthsAdjusted Earnings Per Share to 31/01/08 to 31/01/07 to 31/07/07 Unaudited Unaudited Unaudited £'000 £'000 £'000ProfitsProfit for the period 3,942 3,027 7,582 -------- -------- --------Costs of Admission to AIM 0 572 572Profit after tax from discontinuedoperations 0 (5) (5)Profit on sale of discontinuedoperations 0 (59) (59) -------- -------- --------Profit on ordinary activities aftertaxation but before non-recurringitems 3,942 3,535 8,090 Number of shares 000's 000's 000'sWeighted average number of ordinaryshares in issue 23,070 22,277 22,470Effect of dilutive potentialordinary shares under option 777 939 556 -------- -------- -------- 23,847 23,216 23,026 Earnings per share pence pence Pence Earnings per share from total operations - Basic 17.09 15.86 36.00 - Diluted 16.53 15.23 35.13 8 SHARE CAPITAL 31/01/08 31/01/07 31/07/07 £'000 £'000 £'000Authorised share capital40,000,000 Ordinary shares of £0.01 each 400 400 400 Allotted, called up and fully paidOrdinary shares of £0.01 each 231 225 230 The company issued the following shares Ordinary Share Considerationin the periods: shares of premium Received £0.01 issued received £ £'000 pence per share 6 months to 31/01/0727/10/2006 348,254 69.0 243,77827/11/2006 31,955 365.5 117,11527/11/2006 31,955 nil 32022/12/2006 767 nil 830/01/2006 736 nil 7 6 months to 31/07/0726/02/2006 658 nil 730/03/2007 668 nil 727/04/2007 573 nil 625/05/2007 485 nil 501/06/2007 539,140 85.6 466,70511/06/2007 947 87.6 83925/06/2007 1,447 nil 14 6 months to 31/01/0830/08/2007 436 nil 428/09/2007 447 nil 426/10/2007 454 nil 505/11/2007 70,872 89.0 63,78130/11/2007 17,131 nil 171 INDEPENDENT REVIEW REPORT TO MATCHTECH GROUP PLC We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31January 2008 which comprise the condensed consolidated income statement, thecondensed consolidated balance sheet, the condensed consolidated cash flowstatement, the condensed consolidated statement of changes in equity and notes 1to 8. We have read the other information contained in the interim report whichcomprises only the Chairman's Statement and considered whether it contains anyapparent misstatements or material inconsistencies with the financialinformation. This report is made solely to the company in accordance with guidance containedin ISRE (UK and Ireland) 2410, "Review of Interim Financial Informationperformed by the Independent Auditor of the Entity". Our review work has beenundertaken so that we might state to the company those matters we are requiredto state to them in a review report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company, for our review work, for this report, or for theconclusion we have formed. Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report. As disclosed in note 2, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards asadopted by the European Union. This interim report has been prepared inaccordance with International Accounting Standard 34 "Interim FinancialReporting" and the requirements of IFRS 1 "First-time Adoption of InternationalFinancial Reporting Standards" relevant to interim reports. The accounting policies are consistent with those that the directors intend touse in the next annual financial statements. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half yearly financial report based on ourreview. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Review Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 January 2008 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union. GRANT THORNTON UK LLP Chartered Accountants & Registered Auditors No. 1 Dorset Street Southampton SO15 2DP March 2008 This information is provided by RNS The company news service from the London Stock Exchange