GSH.L Regulatory News (GSH)

26 Oct 2007 07:01

GSH Group PLC26 October 2007 GSH Group plc PRELIMINARY RESULTS 2007 INTRODUCTION GSH Group plc ("GSH"), the international provider of bespoke facilities management and energy management solutions, announces preliminary results for the year ended 31 July 2007. FINANCIAL HIGHLIGHTS: - Underlying profit* before tax rose by 22% to £8.2 million - Revenue increased to £157 million, up by 16% - Year end cash reserves stood at £11.9 million - Operating margin increased to 5.2% (2006:4.9%) - Basic adjusted earnings per share of 30.7 pence, up by 12% - Proposed final dividend of 6.2 pence - Total dividend of 8.8 pence, up by 17% * Underlying profit is defined as profit before adjustments in respect of non-trading items. OPERATIONAL HIGHLIGHTS: - Healthy growth across all operating divisions - Order book at £609 million, up £77 million (2006: £532 million) - 2 further acquisitions - UK & US - New contracts with National Australia Group, Abbey and AstraZeneca - Extensions to contracts with IKEA, HBOS and Land Securities Trillium - Further investment in people and products Bob Gilbert, Chairman of GSH said " This has been another year of strong growth for GSH with considerable progress across all its divisions reflecting not only the strong order book pipeline and new contract wins, but also the significant contract extensions made with major clients. With two further acquisitions made during the period GSH is ideally positioned to increase its market share in the growing facilities management sector both in our core markets and internationally." For further information, please contact: GSH Group plc Tel: 01782 200455David Simons, Chief Financial Officer Bell Pottinger Corporate & Financial Tel: 020 7861 3923Ann-Marie Wilkinson/Chris Hamilton Tel: 020 7861 3867 KBC Peel Hunt Tel: 020 7418 8912Julian Blunt CHAIRMAN'S STATEMENT INTRODUCTION I am delighted to report another excellent year. We achieved strong financialresults, with yet again record levels of revenue, profit and order book. There was strong growth acrossall our divisions further demonstrating the expanding position and reputation weare building in our core markets. We made two acquisitions in the year: DeltaEnvironmental Services Limited, a specialist air conditioning business in the UKand KMH Systems LLC, a building management controls business in the US, both ofwhich have been successfully integrated into the Group and give us an evenstronger international service offering. The facilities management market continues to grow across all our geographicregions, not just in value and volume but also in improved service provision inwhat is still a relatively young market place. Increasing legislation in theproperty market and an increasing awareness of energy management issues hasresulted in the continuing expansion of the FM sector. GSH can continue toexploit this expansion with our focus on innovation, imagination and energymanagement solutions. FINANCIAL RESULTS The results for 2007 show excellent growth over last year from all ourdivisions. Revenues have grown to £157 million, an increase of 16%, underlyingprofitability was up 22% to £8.2 million and basic adjusted earnings per sharemoved from 27.5 pence to 30.7 pence. Cash reserves remain very healthy at £11.9million at the end of the year. The total shareholder return for the period was62%. Also this year we completed the successful Placing of 1,550,000 Ordinary Shares,700,000 of which were placed on behalf of the Company to raise approximately£3.1 million (£3.0 million net of expenses). Funds raised will be used tosupport the Group's plans for supplementing our continued organic growth withacquisitions. Since flotation GSH has made four acquisitions that have enhancedand strengthened the Group's service offering and the Board are committed tocontinuing this activity. There is a pipeline of potential acquisitions and thefunds raised will allow the Group to act swiftly when a suitable target companyis identified. In addition the placing meant increased liquidity in our sharesand we now have a wider spread of investors in the Group including two newinstitutional investors. DIVIDEND The Board recommends the payment of a final dividend of 6.2 pence per share anincrease of 17% over 2006 which is payable on 18 January 2008 to allshareholders on the register at 4 January 2008. This follows the interimdividend payment of 2.6 pence per share (2006: 2.2 pence) announced in March2007 and paid in May 2007. The increase in the overall dividend is in line withour stated progressive dividend policy and is an acknowledgement of ourcontinued confidence in the Group's businesses. CORPORATE RESPONSIBILITY We strongly believe that GSH is a leader in the FM sector in all aspects ofsustainable development and responsible behaviour both on a Group wide and anindividual level. One of our differentiators is how we deal with clients,employees, suppliers, our local communities and the environment. We willcontinue to comply with and set best practice standards of corporateresponsibility. BOARD CHANGES I have been delighted to welcome both John Kelly and Duncan Hall asNon-executive Directors to the Board. John, who joined the Group from CloseBrothers, has had an outstanding City career and brings with him a wealth ofskills and expertise. Duncan, who currently works within the customer servicemanagement division at Virgin Mobile, has extensive experience of the Groupworking within GSH in a variety of roles between 1994 and 2000. They both havemuch to offer to the GSH team. I would also like to thank Ian Scarr-Hall who stepped down from his role asNon-Executive Group President in November 2006. Ian joined GSH in 1954 becomingChairman and Managing Director in 1982. His contribution to the Group has beeninvaluable and I know the whole Board will join with me in wishing him well inthe future. This will be my last Annual Report to you as Chairman as I too will be steppingdown as Chairman on 31 December 2007 and will be succeeded by Stuart Grahamwhose appointment to the Board we announced on 26 October 2007. Stuart hasenjoyed a long and successful career in facilities management with extensiveoverseas and strong City experience. The Board believe he has the right mix ofskills to take the business forward to its next stage of development. OUTLOOK The success of our business is driven by the quality and commitment of ourpeople and I have continued to be impressed by the first class teams employedacross the Group. I would like to thank everyone across the Group for all their efforts, hard workand commitment over this last year. We have an experienced Group Board, adynamic Executive Board, strong leadership and a workforce that issecond-to-none. The FM sector remains buoyant with the market growing withincreasing sophistication and with significant higher barriers to entry. GSH isperfectly positioned to exploit the opportunities that lie ahead. I am confident that the coming year will be another year of growth. I leave theGroup in excellent health and I wish it every success in the future. Bob Gilbert Non-Executive Chairman CHIEF EXECUTIVE'S REVIEW INTRODUCTION 2007 has been a busy and successful year with another record financialperformance across the Group. The market for GSH both here in the UK and internationally continues to provideexcellent opportunities for growth. Our commitment to innovation and technologyand being at the forefront of sustainable development provides us with a strongcompetitive edge and a compelling proposition for clients. Importantly our contract retention is over 90% and during the year we have seenan increase of over 50% in contract extra works and projects, both clearlydemonstrating the strength of our client relationships and our ability todeliver a full suite of services. STRATEGY GSH has always had a clear strategy of growing our market share, bothdomestically and internationally, and maintaining profitability. This isachieved by focusing on the delivery of first class service offering usingleading edge technology and processes; continuing to grow the business bothorganically and by acquisition and reduce our impact on the environment throughbest practice business processes and to assist our customers in meeting theirenvironmental objectives. OPERATIONAL REVIEW UK & Eire Revenue in our UK & Eire business grew by 16% to £125 million (2006: £108 million) driven by a mix of new business wins and contract extensions for both our mechanical and electrical engineering services and our energyplus utility consumption reduction programme. New contracts amounted to £29 million and include Fujitsu, National Australia Bank (Clydesdale and Yorkshire) with United Group, Thames Water, AstraZeneca, Abbey and DTZ. Our record of working with clients and developing contracts is excellent and in the period under review contract extensions have been secured with IKEA, HBOS and Land SecuritiesTrillium. As part of our continuing acquisition programme to target strategic businessesthat develop our business and increase long-term shareholder value we acquiredDelta Environmental Services Limited, a specialist air conditioning business.This acquisition has further strengthened both our capability and coverage inthis area and since the successful integration of Delta we have now created anational air-conditioning division through which we are not only targeting newbusiness but we are able to offer this service to a number of our existingclients. I am pleased to report that the business has made a positivecontribution to these results in the 4 months since acquisition. INTERNATIONAL Once again we have seen good growth in our international division. Turnover grewby 16% to £32 million (2006: £28 million). In 2007 the US in particular experienced significant growth where we have won anumber of substantial new contracts including Mountain Developments, NewmarkKnight Frank and a $30 million campus management contract for the John HopkinsUniversity in Baltimore. As part of our international growth strategy we also acquired KMH Systems LLC ('KMH'), a building management controls business based in Metuchen, New Jersey, USA. KMH specialises in the installation and servicing of Andover controls equipment which is an advanced microcomputer-based building and facilities management control system and is an excellent fit for our American business. The acquisition of KMH has greatly strengthened our expertise in building energy management systems and also opened up the opportunity to sell energyplus to KMH's existing client base. We are winning a number of new energy management contracts across the Manhattan area and are confident of converting further tenders in the near future. In Continental Europe turnover has grown by more than 17%, and we have been awarded a number of major new contracts and contract extensions including; KPN, HBOS, Schiphol airport and the Radisson Group. We have established a joint venture with German-based HSG Technischer ServiceGmbH, a hard FM services business similar to our own which is located inFrankfurt. This joint venture will enable us to extend our current Continentalfootprint and establish a genuine Pan European reach, creating opportunities forboth organisations. ENERGY MANAGEMENT During the year, we have seen significant growth both in the UK and internationally of our energy management business, energyplus. In total savings for our customers to date have now exceeded 90,000 tonnes of CO2 and almost £3 million. The guaranteed significant savings offered to customers coupled with the environmental impact has secured a number of new contracts in the year. We were awarded a substantial full-service contract with National Australia Bank(Yorkshire and Clydesdale Banks). Part of that contract has been the installation throughout their UK portfolio, the first of this scale, of our Smartbox wireless environmental and energy monitoring system. This successful roll-out has led to a number of future exciting opportunities. In April this year we also announced a highly innovative joint venture with Perpetual Energy Limited, a consultancy that provides self-generating energy solutions to international and domestic businesses. The joint venture company is named GSH Perpetual Energy Limited ('GSHPE') and its objective is to meet thegrowing market demand for cost-efficient, environmentally friendly energy consumption. GSHPE will work with clients to determine ways to reduce energy consumption and replace conventional energy sources with alternatives such as combined heat and power, photovoltaic (e.g. solar panels), wind turbine and biomass. Together, we have the expertise to deliver a total energy management solution that is unrivalled in the marketplace. For a number of years now, we have been able to help our clients reduce their energy consumption with our energyplus product which provides savings in energy use rather than just negotiating on tariff. Energy reduction is just the tip of the iceberg and corporates are now seriously considering alternatives to gas and electricity. This is an opportunity for our existing and new clients to really make a difference to climate change and we look forward to making progress in this key area. ORDER BOOK The order book stood at a record £609 million (2006: £532 million) anddemonstrates the success of our bidding activity and the strength of our brand.£150 million is secured for the twelve months to July 2008. Our order book reflects an impressive blue-chip client base and the currentcontract pipeline is the healthiest it has ever been. PEOPLE Being a service business with over 87% of our employees being customer facing,our people are one of our most important assets. In order to be an employer ofchoice, we have a highly structured and long-term approach to developing andretaining staff. We have an award-winning apprentice scheme which in the lastfour years has seen three of our apprentices win highly acclaimed industryawards. This financial year we also committed to substantially increase the number ofapprentices we have. We realise the importance of having skilled and committedengineers on our contracts so it is vital we employ the right people for theright jobs. By recruiting apprentices into our business we can ensure theirtraining instils these high standards into their ways of working from day one.In this way, we know our people are delivering our services as we would expect. We undertake an annual employee questionnaire and communicate feedback toemployees at our annual roadshows which take place at several locations acrossour business. Our investment in management, graduate recruitment and development programmesover recent years is already paying dividends, producing the leaders needed tosupport our future growth plans. We have further enhanced the programmes withthe introduction of cross-border assignments to provide the internationalexperience that will be required going forward. I would like to thank all our employees for their continued efforts andcommitment which has contributed to another highly successful year. OUTLOOK Our strategy of delivering innovative solutions in an increasingly regulated andenvironmentally sensitive marketplace has delivered a consistent track record ofboth revenue and earnings growth over the last 6 years. As the FM market continues to grow not just in volume but in increasingsophistication, I believe GSH is well positioned to capitalise on theopportunities for growth. We have begun the new financial year in a strong position, both financially andoperationally. We have a growing and healthy European base in Benelux, our USbusiness looks set to benefit from the ongoing success of our energy managementsolution and our strong position in the UK should ensure we continue to growmarket share. With a healthy order book and impressive pipeline I am confidentthat we will continue to deliver value for our shareholders in 2008 and beyond. Colin TennentChief Executive Officer FINANCIAL REVIEW * Total shareholder return of 62% * Revenue up 16% to £157 million * Underlying profit before tax increased by 22% to £8.2 million * Basic adjusted earnings per share of 30.7 pence * Cash reserves at year end £11.9 million * Recommended final dividend of 6.2 pence * Early adoption of IFRS INTRODUCTION The Group's revenue, profitability and operating margins all showed healthygrowth during the year and cash management continued to be very positive. Underlying profit before tax of £8.2 million was up 22% on last year (2006: £6.7million) reflecting the continuing focus on top line growth generatingconsistently high gross profits together with close management of indirect costsand overheads. The compound annual growth rate (CAGR) for the past five years isa creditable 28%. Conversion of profit to cash was also healthy with an EBITDAto operating cash ratio of 95% despite the volume growth. REVENUE In the year ended 31 July 2007 revenue increased by 16% to a record £157 million(2006: £136 million). All geographic areas of the Group recorded strong organicgrowth enhanced partially by the two acquisitions made in the second half.Organic growth accounted for 84% of the total growth achieved during the year. ACQUISITIONS Delta Environmental Services Limited and KMH Systems LLC were acquired in Marchand June respectively. Their financial impact on the year's profits, therefore,is not significant though both businesses have shown positive results duringthis initial short period of ownership and we are confident that theircontribution is and will be earnings enhancing. PROFITABILITY Underlying profit before tax for the Group in the year increased by 22% to £8.2million (2006: £6.7 million). The main part, 80% of the Group revenues andprofitability is derived from business activities in the UK & Eire whereunderlying profit before tax was up 20% to £7.1 million (2006: £5.9 million). Asregards our overseas businesses, our operations in Continental Europecontributed a profit before interest and tax of just over £1 million (2006: £0.7million), an increase of 45% over the previous year. In 2007 we invested furtherin our USA-based operations by relocating to improved accommodation, furtherstrengthening the management team and making our first acquisition. The results,while only marginally profitable for the year, were encouraging in that revenueincreased by 22% to $20.2 million (2006: $16.6 million). The trend upwards in operating margin continued with an increase of 6% to 5.2%(2006: 4.9%). There was a share based payment charge in the year of £254k which has beenignored in the calculation of underlying profit. This is expected to increase in2008. TAXATION The effective tax rate for the year was 26% (2006: 24%), marginally up on lastyear but still a considerable reduction on previous years reflecting the taxbenefits on share options exercised within an approved option scheme,proportionately higher profits in Eire where tax rates are favourable and theutilisation of losses brought forward on the AF WorxGroup Limited acquisition. EARNINGS PER SHARE Basic adjusted earnings per share at 30.7 pence (2006: 27.5 pence) increased by12% and adjusted diluted earnings per share of 30.3 pence (2006: 26.9 pence) was13% up in the year. DIVIDEND The Board believes that we should maintain the Group's progressive dividendpolicy and therefore recommends a final dividend of 6.2 pence per share (2006:5.3 pence) payable on 18 January 2008 to all shareholders on the register at 4January 2008. The interim dividend of 2.6 pence per share (2006: 2.2 pence) waspaid on 18 May 2007, making a total dividend of 8.8 pence per share (2006: 7.5pence). The dividend is covered 3.5 times by earnings (2006: 3.7 times). CASH AND CASH MANAGEMENT There were some significant cash flows during the period. Investment activities of £5.4 million includes the purchase of DeltaEnvironmental Services Limited, the first installment of KMH Systems LLC out offree cash and capital expenditure of £1.1 million. Financing activities overallgenerated £3.0 million made up predominantly of the placing but also includedthe exercise of an option granted to KBC Peel Hunt at the time of admission toAIM and the sale of some shares held by an employee benefit trust. Dividends totaling £1.6 million and corporation tax of £2.0 million were paidduring the year. Cash flow from operations in the year was again good with close control ofworking capital and the operating cash flow of £8.2 million was a healthy andsustainable 95% (2006: 106%) of EBITDA. At the end of the year the Group had £11.9 million of cash reserves, a materialproportion of which is free cash available to fund acquisitions going forward. BALANCE SHEET Net assets have increased by £11.4 million to £17.9 million (2006: £6.5million). This increase is predominantly due to retained earnings and cashraised from the placing and sale of shares mentioned above. Capital expenditure at £1.1 million was in line with previous years and relatedpredominantly to investment in ICT equipment. IFRS We have prepared our Financial Statements in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted by the EU. This is not mandatoryfor AIM listed companies until our next financial year end. However, thedecision was taken to adopt early. Implementation of IFRS had little impact onthe reported results. RE-STATEMENT OF INTERIM RESULTS Appendix 1 sets out the Groups results for the six month period ended 31 January2007 re-stated in accordance with IFRS. The implementation of IFRS has notresulted in any significant changes to the results we reported to you on 23March 2007. David Simons Chief Financial Officer CONSOLIDATED INCOME STATEMENTFor the year ended 31 July 2007 Note 2007 2006 £000 £000 REVENUE - CONTINUING OPERATIONS 1 157,401 135,756Direct costs (118,168) (100,861) GROSS PROFIT 39,233 34,895Administrative expenses (31,120) (28,088) PROFIT FROM OPERATIONS - CONTINUINGOPERATIONS 8,113 6,807Finance income 242 105Finance costs (194) (182) UNDERLYING PROFIT 8,161 6,730Pension curtailment gain 132 481Share based payment charge (254) - PROFIT BEFORE TAXATION 8,039 7,211Tax expense 2 (2,050) (1,729) PROFIT FOR THE FINANCIAL YEAR 5,989 5,482 PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THEPARENT 5,989 5,482 EARNINGS PER ORDINARY SHARE- Basic 4 29.9p 28.3p - Diluted 4 29.5p 27.7p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the year ended 31 July 2007 2007 2006 £000 £000 PROFIT FOR THE FINANCIAL YEAR 5,989 5,482Actuarial gain/(loss) on retirement benefit 121 (239)obligationsDeferred tax on actuarial gain/(loss) (36) 71Deferred tax on share awards 106 3 TOTAL RECOGNISED INCOME AND EXPENSE FOR THE YEAR 6,180 5,317 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 6,180 5,317 CONSOLIDATED BALANCE SHEETAt 31 July 2007 Note 2007 2006ASSETS £000 £000 £000 £000NON CURRENT ASSETSIntangible assets 7,029 2,966Property, plant and equipment 4,895 4,631Investments 44 43Deferred taxation 368 335 TOTAL NON CURRENT ASSETS 12,336 7,975CURRENT ASSETSInventories 3,648 6,238Trade and other receivables 32,403 20,346Short term investments 494 -Cash and cash equivalents 11,890 8,200 TOTAL CURRENT ASSETS 48,435 34,784 TOTAL ASSETS 60,771 42,759 LIABILITIESCURRENT LIABILITIESTrade and other payables (40,272) (33,712)Financial liabilities (53) (77)Current taxation 5 (1,319) (1,004) TOTAL CURRENT LIABILITIES (41,644) (34,793) NON CURRENT LIABILITIESFinancial liabilities (59) (105)Provisions (832) (783)Retirement benefit (315) (571)obligations TOTAL NON CURRENT LIABILITIES (1,206) (1,459) TOTAL LIABILITIES (42,850) (36,252) NET ASSETS 17,921 6,507 EQUITYShare capital 216 200Share premium account 5,364 89Capital redemption reserve 682 682Investment in own shares (86) (913)Share based payments reserve 254 -Translation reserve 158 73Retained earnings 11,333 6,376 EQUITY ATTRIBUTABLE TOEQUITY HOLDERS OF THEPARENT 17,921 6,507 CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 July 2007 2007 2006 £000 £000 £000 £000 CASH FLOWS FROM OPERATINGACTIVITIESProfit before taxation 8,039 7,211 Adjustments for: Depreciation 589 654Amortisation of 112 117intangiblesShare based payments charge 254 -Finance income (242) (105)Finance costs 194 182 CASH FLOWS FROMOPERATIONS BEFORE WORKINGCAPITAL AND PROVISIONS 8,946 8,059 Changes in workingcapital: Decrease/(increase) in inventories 2,779 (1,299)(Increase)/decrease in tradeand other receivables (8,820) 436Increase in trade and other payables 5,322 1,461Decrease in provisions (1) (91) CASH GENERATED FROMOPERATIONS 8,226 8,566Finance costs (194) (182)Income tax paid (2,048) (2,181) NET CASH GENERATED FROM OPERATINGACTIVITIES 5,984 6,203 CASH FLOWS FROM INVESTINGACTIVITIESFinance income received 242 105Purchase of intangible assets (63) (84)Sale of intangible assets - 13Purchase of property,plant and equipment (1,124) (757)Sale of property, plant and equipment 91 48Purchase of investments - (9)Purchase of subsidiary (5,239) (1,498)undertakingsCash acquired with subsidiary 1,159 (195)undertakingsShort term performance bonds (494) - NET CASH USED IN INVESTING (5,428) (2,377)ACTIVITIES CASH FLOWS FROM FINANCINGACTIVITIESFinance lease rental payments (70) (70)Equity dividends paid (1,560) (1,701)Issue of ordinary share capital 3,971 87Receipts from exercised share options 33 69Payments to acquire own shares (12) (250)Sale of treasury shares 867 - NET CASH GENERATED/(USED) INFINANCING ACTIVITIES 3,229 (1,865) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,785 1,961Cash and cash equivalentsat start of year 8,200 6,314Effect of exchange rateson cash and cashequivalents (95) (75) CASH AND CASH EQUIVALENTS AT END OF YEAR 11,890 8,200 1 SEGMENTAL REPORT For management purposes, the Group's primary segments are analysed bygeographical markets in which the business operates. The Group's risks and ratesof return are affected predominantly by the countries in which it operates. As aresult the group's primary reporting format is geographical segments. TheGroup's turnover, profit before taxation and net assets were all derived fromits principal activities. Segmental information is presented using Grouppolicies. Primary UK and Eire Continental USA Totalreporting Europeformat:GeographicalSegments 2007 £000 £000 £000 £000 EXTERNAL REVENUE 125,334 21,656 10,411 157,401 PROFIT FROM OPERATIONS 7,041 1,051 21 8,113Finance income 197 7 38 242Finance costs (159) (20) (15) (194) UNDERLYING PROFIT 7,079 1,038 44 8,161Pension curtailment gain 132 - - 132Share based payment charge (218) (21) (15) (254) PROFIT BEFORE TAXATION 6,993 1,017 29 8,039 TOTAL ASSETS 49,603 7,369 3,799 60,771 TOTAL LIABILITIES (31,980) (5,808) (5,062) (42,850) Other segmentitemsCapital expenditure 835 240 49 1,124Depreciation expense 409 160 20 589Amortisation expense 35 77 - 112 Primary UK and Eire Continental USA Totalreporting Europeformat:GeographicalSegments 2006 £000 £000 £000 £000 EXTERNAL REVENUE 108,003 18,416 9,337 135,756 PROFIT FROM OPERATIONS 6,008 712 87 6,807Finance income 72 14 19 105Finance costs (155) (24) (3) (182) UNDERLYING PROFIT 5,925 702 103 6,730Pension curtailment gain 481 - - 481Share based payment charge - - - - PROFIT BEFORE TAXATION 6,406 702 103 7,211 TOTAL ASSETS 33,472 6,251 3,036 42,759 TOTAL LIABILITIES (26,408) (5,465) (4,379) (36,252) Other segmentitemsCapital expenditure 421 245 226 892Depreciation expense 440 149 65 654Amortisation expense 67 50 - 117 2 TAXATION 2007 2006 £000 £000 £000 £000 Current tax: UK corporation tax on profits of the year 1,920 1,408 Foreign tax 286 382 Adjustments in respect of previous periods (187) 123 Total current tax 2,019 1,913 Deferred tax: Origination and reversal of timing differences 74 (133) Adjustments in respect of previous periods (86) (198) Pension scheme 43 147 Total deferred tax 31 (184) Tax on profit 2,050 1,729 Factors affecting tax charge for the year: 2007 2006 £000 £000 The tax assessed for the year is lower than the standard rate of corporation tax in the UK (30%). The differences are explained below: Profit before tax 8,039 7,211 Profit multiplied by standard rate of corporation tax in the UK 30% (2006: 30%) 2,412 2,163 Effects of: Expenses not deductible for tax purposes 77 (40) Adjustments in respect of previous periods (273) (75) Pension scheme 43 147 Tax losses utilised - (318) Difference in tax rates in foreign (209) (148) subsidiaries Total tax charge for the year 2,050 1,729 3 DIVIDENDS 2007 2006 £000 £000 Equity: Ordinary shares - 2005 final - 1,259 - 2006 interim - 442 - 2006 final 1,032 - - 2007 interim 528 - 1,560 1,701 4 EARNINGS PER ORDINARY SHARE The calculations of earnings per share are based on the following profits andnumber of shares: Basic Basic Diluted Basic Basic Diluted adjusted adjusted 2007 2007 2007 2006 2006 2006 £000 £000 £000 £000 £000 £000 Profit for the financial year 5,989 5,989 5,989 5,482 5,482 5,482 Pension adjustment - (132) - - (481) - Share based payments - 254 - - - - Adjusted profit for financial year 5,989 6,111 5,989 5,482 5,001 5,482 Weighted average number of shares 2007 2006 Number of Number of shares shares For basic earnings per share 20,019,549 19,386,320 Unexercised share options 307,010 387,444 For diluted earnings per share 20,326,559 19,773,764 2007 2006 The Group's earnings per share are as follows: - Basic 29.9p 28.3p - Diluted 29.5p 27.7p - Basic adjusted 30.7p 27.5p - Diluted adjusted 30.3p 26.9p 5 CURRENT TAXATION The current tax payable of £1,319,000 (2006: £1,004,000) represents the amountof income taxes payable in respect of current and prior year periods. 6 EXPLANATION OF TRANSITION TO IFRS As stated in the accounting policies, these are the Group's first financialstatements prepared in accordance with Adopted IFRSs. The accounting policies have been applied in preparing the financial statementsfor the year ended 31 July 2007, the comparative information presented in thesefinancial statements for the year ended 31 July 2006 and in the preparation ofan opening IFRS balance sheet at 1 August 2005 (the Group's date of transition). In preparing its opening IFRS balance sheet, the Group has adjusted amountsreported previously in financial statements prepared in accordance with its oldbasis of accounting (UK GAAP). An explanation of how the transition from UK GAAPto Adopted IFRSs has affected the company's financial position, financialperformance and cash flows is set out in the following tables and the notes thataccompany the tables. UK GAAP as IFRS 1 IAS 12 Restated under As at 1 August 2005 previously adjustment adjustment IFRS reported, presented in IFRS format ASSETS £000 £000 £000 £000NON CURRENT ASSETSIntangible assets 457 - - 457Property, plant and equipment 4,269 - - 4,269Investments 43 - - 43Deferred taxation 120 - 15 135 TOTAL NON CURRENT ASSETS 4,889 - 15 4,904 CURRENT ASSETSInventories 4,275 - - 4,275Trade and other receivables 17,987 - - 17,987 Cash and cash equivalents 6,314 - - 6,314 TOTAL CURRENT ASSETS 28,576 - - 28,576 TOTAL ASSETS 33,465 - 15 33,480 LIABILITIESCURRENT LIABILITIESTrade and other payables (27,945) - - (27,945)Financial liabilities (42) - - (42)Current taxation (1,261) - - (1,261) TOTAL CURRENT LIABILITIES (29,248) - - (29,248) NON CURRENT LIABILITIESFinancial liabilities (65) - - (65)Provisions (366) - - (366)Retirement benefit obligations (575) - (246) (821) TOTAL NON CURRENTLIABILITIES (1,006) - (246) (1,252) TOTAL LIABILITIES (30,254) - (246) (30,500) NET ASSETS 3,211 - (231) 2,980 EQUITYShare capital 200 - - 200Share premium account 2 - - 2Capital redemption reserve 682 - - 682Revaluation reserve 1,211 (1,211) - -Investment in own shares (1,470) - - (1,470)Translation reserve - - - -Retained earnings 2,577 1,211 (231) 3,557 ISSUED CAPITAL & RESERVESATTRIBUTABLE TO EQUITYHOLDERS 3,202 - (231) 2,971Minority interest 9 - - 9 TOTAL EQUITY 3,211 - (231) 2,980 As at 31 UK GAAP as IFRS 1 IFRS 3 IAS 12 IAS 21 Restated underJuly 2006 previously adjustment adjustment adjustment adjustment IFRS reported, presented in IFRS format £000 £000 £000 £000 £000 £000 NON CURRENTASSETSIntangible assets 2,909 - 59 - (2) 2,966Property,plant andequipment 4,631 - - - - 4,631Investments 43 - - - - 43Deferred taxation 451 - - (116) - 335 TOTAL NONCURRENTASSETS 8,034 - 59 (116) (2) 7,975 CURRENT ASSETSInventories 6,238 - - - - 6,238Trade andotherreceivables 20,346 - - - - 20,346Cash andcashequivalents 8,200 - - - - 8,200 TOTALCURRENTASSETS 34,784 - - - - 34,784 TOTAL 42,818 - 59 (116) (2) 42,759ASSETS LIABILITIESCURRENTLIABILITIESTrade andotherpayables (33,712) - - - - (33,712)Financial (77) - - - - (77)liabilitiesCurrent taxation (1,004) - - - - (1,004) TOTALCURRENTLIABILITIES ( 34,793) - - - - (34,793) NON CURRENTLIABILITIESFinancial liabilities (105) - - - - (105)Provisions (783) - - - - (783)Retirementbenefitobligations (400) - - (171) - (571) TOTAL NONCURRENTLIABILITIES (1,288) - - (171) - (1,459) TOTAL LIABILITIES (36,081) - - (171) - (36,252) NET ASSETS 6,737 - 59 (287) (2) 6,507 EQUITYShare capital 200 - - - - 200Share premiumaccount 89 - - - - 89Capital redemptionreserve 682 - - - - 682Revaluation reserve 1,211 (1,211) - - - -Investmentin ownshares (913) - - - - (913)Translation reserve - - - - 73 73Retained earnings 5,468 1,211 59 (287) (75) 6,376 EQUITYATTRIBUTABLETO EQUITYHOLDERS OFTHE PARENT 6,737 - 59 (287) (2) 6,507 For the year ended 31 July 2006 UK GAAP as IFRS 3 Restated under previously adjustment IFRS reported, presented in IFRS format £000 £000 £000 REVENUE - CONTINUING OPERATIONS 135,756 - 135,756Direct costs (100,861) - (100,861) GROSS PROFIT 34,895 - 34,895Administrative expenses (27,666) 59 (28,088) PROFIT FROM OPERATIONS - CONTINUINGOPERATIONS 7,229 59 6,807Finance income 105 - 105Finance costs (182) - (182) UNDERLYING PROFIT 7,152 59 6,730Pension curtailment gain 481 - 481Share based payment charge - - - PROFIT BEFORE TAXATION 7,152 59 7,211Tax expense (1,729) - (1,729) PROFIT FOR THE FINANCIAL YEAR 5,423 59 5,482 ATTRIBUTABLE TO EQUITY HOLDERS OFTHE PARENT 5,423 59 5,482 RECONCILIATION OF CASH FLOW With the exception of reclassification, there are no material differencesbetween the cash flow statement presented under IFRS and the cash flow statementpresented under UK GAAP. A summary of the significant differences between UK GAAP and IFRS and the impactto the company is as follows: IAS 1 'Presentation of financial statements' Presentation of financial results and information The format of the IFRS financial statements has been prepared in accordance withIAS 1 "Presentation of financial statements", which differs from its UKequivalent. In particular there is greater flexibility on the presentation ofinformation in the primary statements. Certain headings are mandatory but IFRSallows companies to adopt other headings in accordance with the nature of theirbusiness. IFRS 1 'First time adoption of International Financial Reporting Standards' Revaluation as deemed cost The Group has chosen to take the exemption allowed under IFRS 1 in respect ofrevalued properties and has chosen to adopt the revalued amount on 1 August 2005as the deemed cost of the property. As a result at the date of transition therevaluation reserve has been transferred to retained earnings. IFRS 3 'Business combinations' Goodwill amortisation IFRS 3 prohibits the amortisation of goodwill. The standard requires an annualimpairment test to be performed. As a consequence the value of goodwill at thedate of transition has been frozen and the amortisation charges since that datehave been reversed. Annual impairment tests have been performed and have notgiven rise to an impairment since the date of transition. IAS 12 'Income taxes' Income taxes IAS 12 requires a deferred tax asset to be recognised in respect of thecumulative charge on share based payments which are deemed to have been chargedto the income statement or reserves. IAS 12 also requires a deferred liability to be recognised on any revaluedamount in respect of freehold property. Under FRS 17 deferred tax is committed to be netted off the pension schemesurplus or deficit. IAS 19 does not permit this. Therefore the deferred taxrelating to pension schemes has been re-classified on the face of the balancesheet. IAS 21 'Business combinations' Goodwill on acquisition of a foreign operation Under IAS 21 the goodwill arising on the acquisition of a foreign operation andany fair value adjustments to the carrying amounts of assets and liabilitiesarising on the acquisition of that foreign operation shall be treated as assetsand liabilities of the foreign operation. As a result of translation differencesthe goodwill relating to the Europe sub-group is reduced by £2,000 and thedifference is taken to the translation reserve. IAS 21 'The effects of changes in foreign exchange rates' Translation reserve At the date of transition the cumulative translation differences have beenassumed to be zero. This IAS requires all translation differences to berecognised in a separate reserve within equity. Under UK GAAP, these werepreviously held within the retained earnings reserve. ANNUAL REPORT AND FINANCIAL STATEMENTS The Annual Report and Financial Statements will be posted to shareholdersshortly. Copies of the Annual Report and of this announcement will be availableat the Company's registered office: GSH House, Forge Lane, Stoke on Trent, ST15PZ and on the company's website http://www.gshgroup.com. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held at GSH House, Forge Lane,Stoke on Trent, ST1 5PZ on Wednesday 19th December at 2.30 p.m. APPENDIX 1 CONSOLIDATED INCOME STATEMENT For the six month period ended 31 January 2007 6 months 6 months 12 months to 31 January to 31 January to 31 July 2007 2006 2006 £000 £000 £000 REVENUE - CONTINUING OPERATIONS 70,168 63,044 135,756Direct Costs (51,525) (47,250) (100,861) GROSS PROFIT 18,643 15,794 34,895Administrative expenses (15,111) (13,637) (28,088) PROFIT FROM OPERATIONS -CONTINUING OPERATIONS 3,532 2,157 6,807Finance income 80 81 105Finance costs (67) (29) (182) UNDERLYING PROFIT 3,545 2,209 6,730Pension curtailment gain - - 481 PROFIT BEFORE TAXATION 3,545 2,209 7,211Tax expense (1,180) (775) (1,729) PROFIT FOR THE FINANCIAL YEAR 2,365 1,434 5,482 PROFIT ATTRIBUTABLE TOEQUITY HOLDERS OF THE PARENT 2,365 1,434 5,482 EARNINGS PER ORDINARY SHARE- Basic 12.8p 7.3p 28.3p- Diluted 11.0p 7.2p 27.7p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEFor the six month period ended 31 January 2007 6 months to 31 6 months to 31 12 Months to 31 January 2007 January 2006 July 2006 £000 £000 £000 PROFIT FOR THEFINANCIALYEAR 2,365 1,434 5,482Actuarial gain onretirementbenefitobligations - - (239)Deferred tax on actuarial loss - - 71Deferred tax on share awards - - 3 TOTALRECOGNISEDINCOME AND EXPENSE FORTHE YEAR 2,365 1,434 5,317 ATTRIBUTABLETO EQUITYHOLDERS OF THE PARENT 2,365 1,434 5,317 CONSOLIDATED BALANCE SHEETAt 31 January 2007 31 January 2007 31 January 2006 31 July 2006ASSETS £000 £000 £000 £000 £000 £000NON CURRENTASSETSIntangible assets 2,903 846 2,966Property, plant andequipment 4,743 4,144 4,631Investments 43 43 43Deferred taxation 359 230 335 TOTAL NON CURRENTASSETS 8,048 5,263 7,975 CURRENTASSETSInventories 7,355 5,071 6,238Trade and other receivables 24,241 19,428 20,346Cash and cashequivalents 5,393 2,905 8,200 TOTAL CURRENTASSETS 36,989 27,404 34,784 TOTAL ASSETS 45,037 32,667 42,759 LIABILITIESCURRENTLIABILITIESTrade and otherpayables (34,491) (26,965) (33,712)Financial liabilities (50) (79) (77)Current taxation (1,414) (1,157) (1,004) TOTAL CURRENTLIABILITIES (35,955) (28,201) (34,793) NON CURRENTLIABILITIESFinancial liabilities (83) (7) (105)Provisions (535) (351) (783)Retirement benefitobligations (571) (1,174) (571) TOTAL NON CURRENTLIABILITIES (1,189) (1,532) (1,459) TOTAL LIABILITIES (37,144) (29,733) (36,252) NET ASSETS 7,893 2,934 6,507 EQUITYShare capital 200 200 200Share premium account 89 89 89Capital redemption reserve 682 682 682Investment in own shares (707) (1,250) (913)Translation reserve 79 6 73Retained earnings 7,550 3,207 6,376 EQUITYATTRIBUTABLETO EQUITY HOLDERS OFTHE PARENT 7,893 2,934 6,507 CONSOLIDATED CASH FLOW STATEMENTFor the six month period ended 31 January 2007 6 months to 6 months to 12 months to 31 January 2007 31 January 2006 31 July 2006 £000 £000 £000 £000 £000 £000CASH FLOWSFROM OPERATINGACTIVITIESProfit beforetaxation 3,545 2,209 7,211 Adjustmentsfor: Depreciation 341 374 654Amortisation of intangibles 48 106 117Finance income (80) (81) (105)Finance costs 67 29 182 CASH FLOWSFROM OPERATIONS BEFORE WORKINGCAPITAL ANDPROVISIONS 3,921 2,637 8,059 Changes inworkingcapital: Increase in inventories (1,117) (321) (1,299)(Increase)/decrease intrade and otherreceivables (3,892) (620) 436Increase(decrease)in trade and otherpayables 839 (1,621) 1,461Decrease in provisions (239) (15) (91) (4,409) (2,577) 507 CASH (USEDIN)/GENERATED FROMOPERATIONS (488) 60 8,566Finance costs (67) (29) (182)Income tax paid (772) (875) (2,181) NET CASH(USED IN)/GENERATED FROMOPERATINGACTIVITIES (1,327) (844) 6,203 CASH FLOWSFROMINVESTINGACTIVITIESFinance incomereceived 80 81 105Interestelement offinance lease rentalpayments (5) - (10)Purchase of intangibleassets (14) (71) (84)Sale of intangibleassets - - 13Purchase of property,plant andequipment (493) (213) (757)Sale of property,plant andequipment 20 53 48Purchase of investments - - (9)Purchase of subsidiaryundertakings - (816) (1,498)Cash acquiredwithsubsidiaryundertakings - (339) (195)Purchase of minorityinterestshares - (9) - NET CASH USED ININVESTINGACTIVITIES (412) (1,314) (2,387) CASH FLOWSFROMFINANCINGACTIVITIESCapitalelement offinance lease rentalpayments (49) (21) (60)Equity dividendspaid (1,030) (1,260) (1,701)Issue of ordinarysharecapital - - 87Receipts fromexercisedshareoptions 22 107 69Payments to acquire ownshares (11) (77) (250) NET CASH USED INFINANCINGACTIVITIES (1,068) (1,251) (1,855) NET(DECREASE)/INCREASE IN CASH ANDCASHEQUIVALENTS (2,807) (3,409) 1,961Cash and cashequivalentsat start ofyear 8,200 6,314 6,314Effect ofexchangerates on cash andcashequivalents - - (75) CASH ANDCASHEQUIVALENTS AT END OFYEAR 5,393 2,905 8,200 The calculations of earnings per share are based on the following profits andnumber of shares: 31 January 2007 31 January 2006 31 July 2006 Basic Basic Diluted Basic Basic Diluted Basic Basic Diluted adjusted adjusted adjusted £000 £000 £000 £000 £000 £000 £000 £000 £000Profit forthefinancialperiod 2,365 2,365 2,365 1,434 1,434 1,434 5,482 5,482 5,482 Pensionadjustment - - - - - - - (481) - Adjustedprofit forfinancialperiod 2,365 2,365 2,365 1,434 1,434 1,434 5,482 5,001 5,482 Weighted average number of shares 31 January 31 January 31 July 2007 2006 2006 Number of Number of Number of shares shares shares For basic earnings per share 19,663,672 19,301,349 19,386,320Exercise of share options 360,721 598,189 387,444 For diluted earnings per share 20,024,393 19,899,538 19,773,764 31 January 31 January 31 JulyThe Group's earnings per share are as 2007 2006 2006follows: - Basic 12.0p 7.3p 28.3p- Diluted 11.8p 7.2p 27.7p- Basic adjusted 12.0p 7.3p 27.5p- Diluted adjusted 11.8p 7.2p 26.9p EXPLANATION OF TRANSITION TO IFRS As stated in the accounting policies, these are the Group's first financialstatements prepared in accordance with Adopted IFRSs. The accounting policies have been applied in preparing the financial statementsfor the period ended 31 January 2007. The comparative information presented inthese financial statements is the period ended 31 January 2006. In preparing its opening IFRS balance sheet, the Group has adjusted amountsreported previously in financial statements prepared in accordance with its oldbasis of accounting (UK GAAP). An explanation of how the transition from UK GAAPto Adopted IFRSs has affected the company's financial position, financialperformance and cash flows is set out in the following tables and the notes thataccompany the tables. UK GAAP as IFRS 1 IFRS 3 IAS 12 IAS 21 Restated under As at 31 previously adjustment adjustment adjustment Adjustment IFRSJanuary 2006 reported, presented in IFRS format £000 £000 £000 £000 £000 £000ASSETSNON CURRENTASSETSIntangible assets 839 - 7 - - 846Property, plant andequipment 4,144 - - - - 4,144Investments 43 - - - - 43Deferred taxation 109 - - 121 - 230 TOTAL NONCURRENTASSETS 5,135 - 7 121 - 5,263 ASSETSInventories 5,071 - - - - 5,071Trade and otherreceivables 19,428 - - - - 19,428Cash and cashequivalents 2,905 - - - - 2,905 TOTAL CURRENTASSETS 27,404 - - - - 27,404 TOTAL ASSETS 32,539 - 7 121 - 32,667 LIABILITIESCURRENTLIABILITIESTrade and otherpayables (26,965) - - - - (26,965)Financial liabilities (79) - - - - (79)Current taxation (1,157) - - - - (1,157) TOTALCURRENTLIABILITIES (28,201) - - - - (28,201) NON CURRENTLIABILITIESFinancial liabilities (7) - - - - (7)Provisions (351) - - - - (351)Retirement benefitobligations (822) - - (352) - (1,174) TOTAL NONCURRENTLIABILITIES (1,180) - - (352) - (1,532)TOTAL LIABILITIES (29,381) - - (352) - (29,733) NET ASSETS 3,158 - 7 (231) - 2,934 EQUITYShare capital 200 - - - - 200Share premium account 89 - - - - 89Capital redemptionreserve 682 - - - - 682Investment in own shares (1,250) - - - - (1,250)Revaluation reserve 1,211 (1,211) - - - -Translation reserve - - - - 6 6Retained earnings 2,226 1,211 7 (231) (6) 3,207 EQUITYATTRIBUTABLETO EQUITYHOLDERS OFPARENT 3,158 - 7 (231) - 2,934 As at 31 UK GAAP as IFRS 1 IFRS 3 IAS 12 IAS 21 Restated underJanuary previously adjustment adjustment adjustment adjustment IFRS2007 reported, presented in IFRS format £000 £000 £000 £000 £000 £000ASSETSNON CURRENTASSETSIntangible assets 2,795 - 110 - (2) 2,903Property, plant andequipment 4,743 - - - - 4,743Investments 43 - - - - 43Deferred taxation 442 - - (83) - 359 TOTAL NON CURRENTASSETS 8,023 - 110 (83) (2) 8,048 CURRENTASSETSInventories 7,355 - - - - 7,355Trade and otherreceivables 24,241 - - - - 24,241Cash and cash equivalents 5,393 - - - - 5,393 TOTAL CURRENTASSETS 36,989 - - - - 36,989 TOTAL ASSETS 45,012 - 110 (83) (2) 45,037 LIABILITIESCURRENTLIABILITIESTrade and otherpayables (34,491) - - - - (34,491)Financial liabilities (50) - - - - (50)Current taxation (1,414) - - - - (1,414) TOTAL CURRENTLIABILITIES (35,955) - - - - (35,955) NON CURRENTLIABILITIESFinancial liabilities (83) - - - - (83)Provisions (535) - - - - (535)Retirement benefitobligations (400) - - (171) - (571) TOTAL NONCURRENTLIABILITIES (1,018) - - (171) - (1,189) TOTAL LIABILITIES (36,973) - - (171) - (37,144) NET ASSETS 8,039 - 110 (254) (2) 7,893 EQUITYShare capital 200 - - - - 200Share premiumaccount 89 - - - - 89Capital redemptionreserve 682 - - - - 682Investment in ownshares (707) - - - - (707)Revaluation reserve 1,211 (1,211) - - - -Translation reserve - - - - 79 79Retained earnings 6,564 1,211 110 (254) (81) 7,550 EQUITYATTRIBUTABLETO EQUITY HOLDERS OFPARENT 8,039 - 110 (254) (2) 7,893 For the period ended 31 January 2007 UK GAAP as IFRS 3 Restated under previously adjustment IFRS reported, presented in IFRS format £000 £000 £000 REVENUE - CONTINUING OPERATINGS 70,168 - 70,168Direct costs (51,525) - (51,525)GROSS PROFIT 18,643 - 18,643Administrative expenses (15,162) 51 (15,111) PROFIT FROM OPERATIONS - CONTINUING OPERATINGS 3,481 51 3,532 Finance income 80 - 80Finance costs (67) - (67) PROFIT BEFORE TAXATION 3,494 51 3,545Tax expense (1,180) - (1,180) PROFIT FOR THE FINANCIAL PERIOD 2,314 51 2,365 ATTRIBUTABLE TO EQUITY HOLDERS OFTHE PARENT 2,314 51 2,365 RECONCILIATION OF CASH FLOW With the exception of reclassification, there are no material differencesbetween the cash flow statement presented under IFRS and the cash flow statementpresented under UK GAAP. A summary of the significant differences between UK GAAP and IFRS and the impactto the company is as follows: IAS 1 'Presentation of financial statements' Presentation of financial results and information The format of the IFRS financial statements has been prepared in accordance withIAS 1 "Presentation of financial statements", which differs from its UKequivalent. In particular there is greater flexibility on the presentation ofinformation in the primary statements. Certain headings are mandatory but IFRSallows companies to adopt other headings in accordance with the nature of theirbusiness. IFRS 1 'First time adoption of International Financial Reporting Standards' Revaluation as deemed cost The Group has chosen to take the exemption allowed under IFRS 1 in respect ofrevalued properties and has chosen to adopt the revalued amount on 1 August 2005as the deemed cost of the property. As a result at the date of transition therevaluation reserve has been transferred to retained earnings. IFRS 3 'Business combinations' Goodwill amortisation IFRS 3 prohibits the amortisation of goodwill. The standard requires an annualimpairment test to be performed. As a consequence the value of goodwill at thedate of transition has been frozen and the amortisation charges since that datehave been reversed. Annual impairment tests have been performed and have notgiven rise to an impairment since the date of transition. IAS 12 'Income taxes' Income taxes IAS 12 requires a deferred tax asset to be recognised in respect of thecumulative charge on share based payments which are deemed to have been chargedto the income statement or reserves. IAS 12 also requires a deferred liability to be recognised on any revaluedamount in respect of freehold property. Under FRS 17 deferred tax is committed to be netted off the pension schemesurplus or deficit. IAS 19 does not permit this. Therefore the deferred taxrelating to pension schemes has been re-classified on the face of the balancesheet. IAS 21 'Business combinations' Goodwill on acquisition of a foreign operation Under IAS 21 the goodwill arising on the acquisition of a foreign operation andany fair value adjustments to the carrying amounts of assets and liabilitiesarising on the acquisition of that foreign operation shall be treated as assetsand liabilities of the foreign operation. As a result of translation differencesthe goodwill relating to the Europe sub-group is reduced by £2,000 and thedifference is taken to the translation reserve. IAS 21 'The effects of changes in foreign exchange rates' Translation reserve At the date of transition the cumulative translation differences have beenassumed to be zero. This IAS requires all translation differences to berecognised in a separate reserve within equity. Under UK GAAP, these werepreviously held within the retained earnings reserve. This information is provided by RNS The company news service from the London Stock Exchange