GSH.L Regulatory News (GSH)

17 Nov 2006 07:01

GSH Group PLC17 November 2006 GSH Group plc Final Results 2006 - First full year as a listed company Introduction GSH Group plc ("GSH"), the international provider of bespoke facilitiesmanagement and energy management solutions, announces final results for the yearended 31 July 2006. Financial Highlights: - Turnover increased to £136 million, up by 15% - Underlying profit before tax rose to £6.7 million, up 49% from £4.5 million before float costs and FRS 17 adjustments - Basic adjusted earnings per share of 27.1 pence, up 74% - Recommended final dividend of 5.3pence - Cash reserves at year end £8.2 million Operational Highlights: - Strong performance across all operating divisions - Acquisitions in UK and Netherlands - Strong order book with a number of major new contract wins and extensions to existing contracts - First full year as an AIM listed company Bob Gilbert, Chairman of GSH said "These results demonstrate another excellentperformance by the Group. The two acquisitions we made during the year wereentirely in keeping with our plans to deliver increased turnover through acombination of both acquisitive and organic growth. Our key strengths mean thatwe can benefit from the continuing growth in the market. The forward order bookand pipeline are very encouraging. The contract extensions that we have seen inthe year clearly demonstrate that client relationships are stronger than everand we expect to continue our excellent performance of recent years." For further information, please contact: GSH Group plc Tel: 01782 200455David Simons, Chief Financial Officer Bell Pottinger Corporate & Financial Tel: 020 7861 3923Sarah Hilyer KBC Peel Hunt Tel: 020 7418 8912Julian Blunt CHAIRMAN'S STATEMENT INTRODUCTION GSH has had another excellent year both operationally and financially and yetagain delivered a record set of financial results, with substantial increases inboth revenues and profitability. This has been a period of significant organic growth and also one where we madeour first acquisitions since flotation on the Alternative Investment Market in2005. Our success continues to be driven by our ability to collaborate with ourclients to drive developments in the facilities management ("FM") market place.We take tried and tested technology and through innovation create leading edgesolutions for a blue chip client base. The FM market place has evolved over recent years to become an exciting, dynamicand professional environment. We have continued to align ourselves to thisrapidly changing and developing marketplace. FINANCIAL RESULTS The results for this trading period have been excellent. Turnover has increasedyear on year by 15%, underlying profit from operations has grown by 49% and thebasic adjusted earnings per share has moved from 15.6 pence to 27.1 pence. Cashreserves at the end of the period were £8.2 million DIVIDEND Our progressive dividend policy reflects the Board's confidence in the Group'sfuture prospects and the Board is recommending a final dividend of 5.3 pencepayable on 29 January 2007 to all shareholders on the register on 29 December2006. The total dividend for the year, therefore, is 7.5 pence, an increase of15% over 2005. STRATEGY We remain focussed on the contract-out FM market both in the UK & Eire andthrough our international operations in Continental Europe and the USA. Wecontinue to capitalise on the increasing trend towards outsourcing FM in all ofthese markets. This trend is being underpinned by increasing legislation thatour clients are subject to, including more rigorous approaches to energymanagement and regulatory compliance. We intend to support our strong organic growth with strategic bolt-onacquisitions to enhance our existing service offering, as with our acquisitionsof AF Worxgroup and De Jongh Groep. We remain convinced that the USA and Continental Europe can provide furthergrowth opportunities outside of the UK & Eire, particularly in partnership withexisting clients that have corresponding expansion plans. TRADING REVIEW We continue to trade strongly. Major blue-chip contract wins in the periodincluded Vodafone, Xerox, Abbey and My Travel and have all been successfullymobilised. Overall the order book increased from £482 million to £532 million.The pipeline for new contracts is healthier than ever with long termopportunities that should lead to greater visibility of future earnings. The integration of AF Worxgroup, the fabric maintenance business acquired inFebruary 2006, has been achieved ahead of schedule and I am pleased to reportthat synergies have already been secured in the period. The acquisition of DeJongh Groep in the Netherlands is also now integrated into the Benelux businessand provides additional capacity and growth. SUSTAINABILITY GSH remains at the forefront of sustainable development in the FM sector. Allour stakeholders including our clients, employees, supply chain, investors andpotential investors expect us to comply with best practice. The way that we dobusiness, combined with our lead in this area, has enhanced our reputation anddifferentiates GSH within our market place. With strong leadership from the executive team, our people shape the GSH culture- one based on team work, integrity, respect for the environment and responsiblebehaviour. OUTLOOK Our key strengths mean that we can benefit from the continuing growth in themarket. The forward order book and pipeline are healthy. The contract extensionsthat we have seen in the year clearly demonstrate that client relationships arestronger than ever. I would like to thank the team for all their efforts over this last year andtheir continued commitment, which is reflected in these results. Growth in the FM market place is highly dependent upon businesses that havetechnology capability, strong supply chain solutions, an environmentalframework, customer focus and talented people. Over my two years as Chairman Ihave seen that GSH has all these strengths and I am confident that we willcontinue to sustain growth over this coming year. I am looking forward toleading the Board during this period of continued progress. Bob GilbertNon-Executive Chairman CHIEF EXECUTIVE'S REVIEW INTRODUCTION I am delighted to report yet another record breaking year for the Group withgrowth across all of our divisions. We have capitalised on the progress achievedduring the last few years and we are now in a stronger position bothcommercially and financially. The FM market is still highly fragmented. We have continued to differentiate ourservice offering and have invested in our brand to consolidate our position as amarket leader in the UK. In particular, our innovation and technology, alongwith our green facilities management strategies, including energyplus, areenhancing our competitive position. We have supplemented our strong organic growth with two bolt on acquisitions,both completed this financial year. STRATEGY GSH is a facilities management business focused on 'hard FM'. Key servicesinclude mechanical and electrical engineering services, property maintenance,and energy management, as well as helpdesk and other specialist services. The barriers to entry in our industry are significant and, in particular, areprotected by the skill of a specialist technical workforce working within anincreasingly legislation-led compliance environment. To ensure our customers can receive a total outsourced solution for their FMservices, we also manage third party contracts, so that we can tailor solutionsto suit clients' specific needs. Our focus upon sustainability issues within our chosen sector specialisms allowsus to provide value-added services that are environmentally-conscious and,therefore, enable us to differentiate ourselves. Sustainability reportinginitiatives are similar in nature to the trend towards statutory compliance inother areas and benefits from the technology-led initiatives we are rolling outthrough our energyplus and internet-based client services. OPERATIONS The order book and pipeline have never been stronger. There is a good mixbetween contract extensions and developments from existing clients and newclient wins. In 2006, 47% of the increase in turnover was attributable toincreased business from existing clients, additional services and/or moregeographic coverage, while 23% was driven by new work for new clients and theremaining 30% of the increase was from acquisitions. UK Our core UK business continues to perform well and ahead of expectations.Turnover grew by 8% in the period. We have seen a healthy mix of new businesswins and extensions to existing contracts as we cross-sell other complementaryservices to customers looking to simplify their FM structure. Key contract wins for the UK business include Vodafone, Xerox, Abbey and MyTravel and significant contract extensions have been secured with HBOS andT-Mobile. We continue to build our profile in the corporate market and have developed astrong nation-wide retail and high street presence. We are leading the market increating solutions for multi-site environments, serving key contracts includingIkea. We have seen synergy benefits from improved logistics and increasedefficiency from using multi-skilled engineers. As this part of the businessmatures we are able to reduce travelling time to and from sites, enabling us tooffer cost savings to potential clients while maintaining operating margins. Through our work in the telecoms field, we have become a sector specialist. Wehave tailored our services to this part of the market where we maintaincommercial buildings and retail outlets as well as remote and town centrecommunications masts. This was developed on the back of our contract withT-Mobile and has allowed us to retain the T-Mobile contract for a further 5years and win a new 5 year contract with Vodafone. INTERNATIONAL Both of our international businesses in Continental Europe and the USA haveperformed well. International now accounts for 20% of Group turnover, up againfrom 16% in 2005. We continue to view the US market as a major opportunity for the Group and weoperate in New Jersey and Washington DC. We have put a strong management team inplace and during the year our turnover has increased from £6.3 million in 2005to £9.3 million. We have won 26 new contracts in the period. Top line growth in Benelux has been particularly pleasing, increasing by 47%over 2005. Our contract with Schiphol airport and the acquisition of the DeJongh Groep have both contributed to this growth. We are now in a very strongposition to take advantage of the growing FM market in this part of ContinentalEurope. ACQUISITIONS 2006 marked the beginning of our acquisition programme. During the year we madetwo acquisitions, the De Jongh Groep in De Lier, in the Netherlands, and AFWorxgroup based in Rochdale, in the UK. Both acquisitions have already beenfully integrated into the GSH portfolio and we already have seen positivecontributions. This is in line with our strategy to target strategicacquisitions that develop our business to create long-term shareholder value. In February we acquired AF Worxgroup, a specialist building fabric maintenancebusiness with clients including Tesco and Morrison Supermarkets, Makro, Toys RUs and Allied Carpets. This complemented and significantly expanded our presencein this part of the market. This acquisition has transformed our fabricmaintenance offering and has enabled us to provide these services on a nationalbasis. In addition, AF Worxgroup has created further opportunities to cross-sellto our existing client base. The fabric maintenance market in the UK is heavilyfragmented and worth £5 billion. We view this as a tremendous opportunity togrow this part of the UK business. Over time, we expect fabric maintenance tobecome an increasingly larger proportion of our turnover, as we roll theseservices out to our large national contracts. De Jongh had been a supplier to our Benelux business installing air conditioningprojects. This acquisition was predominantly an expansion of our in-housecapacity to undertake project work for clients. The De Jongh business has nowbeen completely integrated within our Benelux operations. As we move forward, itstrengthens our competitive position as a provider of maintenance solutionswithin the Benelux region. In addition, incorporating what was previously asub-contracted element of the business in-house, has given us a valuable insightinto the management of our other third party relationships across the Group. We view earnings-enhancing, predominately bolt-on acquisitions as an importantpart of our growth plans and have created an in-house acquisitions team totarget and review opportunities. We have clearly defined criteria for thisprocess and are well-placed to continue making successful acquisitions in thefuture. INNOVATION One of the key reasons our customers select GSH is that our systems provide themwith real-time visibility of exactly how we and their buildings are performing. Our differentiated service is delivered through our information andcommunications technology which has its own innovations team responsible solelyfor research and development into new technologies and services. The team worksclosely with existing and potential clients identifying service delivery,monitoring and information improvements to meet increasing requirements in termsof costs, environmental impact reduction programmes and of legislation. Using our integrated facilities management system, GSH provides on-line andreal-time information through a variety of technologies and mechanisms. Thisincludes on-line reporting through web, SMS text, wireless handheld technologyand statutory certificate logbook. Our commitment to innovation and research and development ensures that wecontinually improve our internal efficiencies and evolve our service models toreduce our clients' costs, environmental impact and meet their changing needsand goals. energyplus GSH continues to be well-positioned to exploit both the trend for sustainablefacilities management and the associated growing compliance culture within ourcore markets. energyplus, our energy management solution, sits at the heart ofour environmental strategy. It is supported by our Energy Bureau which is anin-house centre of excellence devoted to reducing clients' energy consumption,helping counter price increases in gas and electricity, as well as minimisingwastage. energyplus offers the full range of energy management services covering areassuch as monitoring and targeting, electronic bill validation/processing,consumption reduction and utilities management. It continues to be a majorgrowth area for the Group. Since energyplus was launched we have seen a compound annual growth rate (CAGR)of 53% in turnover, have helped our clients save nearly £2.3 million in energycosts and have prevented around 70,000 tonnes of CO2 emissions. We expectfurther healthy growth in the future as energy costs and carbon emissions remainhigh on the business agenda. In addition, we envisage increasing governmentalcommitment to energy efficiency. PEOPLE GSH has a long-standing policy of promoting people from within and advancingpersonnel development. We continue to encourage and support individuals andteams in their career development. We run apprentice schemes, fast-trackgraduate management development and mentoring programmes. We are proud of ourInvestors in People accreditation. In addition to these progressive policies and, recognising that skills shortageand development of a sustainable talent pool will continue to be issues in thefuture, we are piloting an in-house training school in the Netherlands. Oncethis has been developed we intend to replicate it across the Group. All our employees at all levels of the business have to undergo a complete andthorough health and safety training programme that starts with the inductionprocess and continues throughout their employment. Opportunities are alsoprovided for our employees to continuously improve their job-related skills. OUTLOOK We are well-positioned to deliver innovative solutions, tailored to meet therequirements of clients operating in a business environment that increasinglydemands compliance with legislation, annual cost savings and very high customerservice levels. This year's results demonstrate our ability to captialise on the opportunitiesavailable to us as we take advantage of the growing market of customers seekingto simplify and outsource all their FM requirements. At the year end our contracted order book stood at £532m. We intend to build ourmarket share and evolve our business through both organic growth and theacquisition of businesses that complement our existing activities. At GSH we areconfident that we will deliver further growth and progress in 2006 and beyond. Colin TennentChief Executive Officer FINANCIAL REVIEW The financial performance of the Group during the period continued to be verystrong. Year on year profit growth, operating margins and cash generation haveall been very positive. Operating profit was up 70% to £7.2 million. This has been the highest increaseto date in terms of the Group's profit growth and reflects the impact of topline growth with tight direct cost and overhead controls across the Group. TheCAGR for the last 4 years is 32%. TURNOVER In the year ended 31 July 2006 revenue increased by 15% to £135.8 million (2005:£118.6 million). Strong organic growth was achieved in all geographic divisionsof the Group and this was enhanced by the part year impact of the twoacquisitions - De Jongh Groep in November 2005 and AF Worxgroup in February2006. ACQUISITIONS The results of the acquired subsidiaries are not material to the Group resultsand, therefore, their results have been included within continuing operations inthe profit and loss account. PROFITABILITY In 2006, EBITDA was £8.1 million up 56% on the previous year (2005: £5.2million). EBITDA operating margins for the Group have again increased and were5.9% (2005: 4.4%), an increase in the year of 1.5 percentage points. Profit before tax increased by 67% to £7.2 million (2005: £4.3 million). Theyear benefited from a credit on a defined benefit pension fund valuation of £0.5million, PBT excluding FRS 17 adjustment was £6.7 million, an increase of 49% onthe previous year. TAXATION The effective tax rate for the year was 24% (2005: 35%), a considerablereduction on the previous year reflecting the tax benefits on share optionsexercised within an approved option scheme, proportionately higher profits inIreland where tax rates are favourable and the utilisation of losses broughtforward on the AF WorxGroup acquisition. EARNING PER SHARE Basic adjusted earnings per share at 27.1 pence (2005: 15.6 pence) increased by74% and adjusted diluted earnings per share of 26.6 pence (2005: 15.1 pence) was76% up in the year. DIVIDEND In keeping with the Group's progressive dividend policy, the Board hasrecommended a final dividend of 5.3 pence per share (2005: 6.5 pence) payable on29 January 2007 to all shareholders on the register at 29 December 2006. Theinterim dividend of 2.2 pence per share (2005: nil) was paid on 12th May 2006,making a total dividend of 7.5 pence per share (2005: 6.5 pence). The dividendis covered 3.7 times by earnings (2005: 2.2 times). BALANCE SHEET Net assets have increased by £3.5 million to £6.7 million (2005: £3.2 million).This increase reflects mainly an increase in goodwill arising from theacquisitions. CASH AND CASH MANAGEMENT Cash flow in the year was again good with close control of working capital and,in keeping with the trend of previous years, without any material bid andmobilisation costs. During the year there was a net cash inflow in the year of£2.0 million (2005: £0.7 million). This equated to a 106% conversion of EBITDAinto operating cash flow (2005: 118% conversion). IFRS The Group continues with its preparation for the conversion of UK accountingstandards to IFRS and expects to adopt IFRS within its financial statements forthe year ending 31 July 2008. Note: All 2005 numbers are before the costs of the flotation unless otherwisestated David SimonsChief Financial Officer CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31 July 2006 Note 2006 2005 (As restated) £000 £000 TURNOVER - CONTINUING OPERATIONS 1 135,756 118,555Cost of sales (100,861) (86,466) ----------------------------- GROSS PROFIT 34,895 32,089Administrative expenses (27,666) (28,853) ----------------------------- OPERATING PROFIT - CONTINUING OPERATIONS 7,229 3,236Other interest receivable 105 105Interest payable and similar charges (182) (82) -----------------------------PROFIT ON ORDINARY ACTIVITIES BEFORETAXATION 2 7,152 3,259Taxation (1,729) (1,382) -----------------------------PROFIT ON ORDINARY ACTIVITIES AFTERTAXATION 5,423 1,877Equity minority interests - 1 ----------------------------- PROFIT FOR THE FINANCIAL YEAR 5,423 1,878 ============================= EARNINGS PER ORDINARY SHARE 4- Basic 28.0p 9.5p ============================= - Diluted 27.4p 9.2p ============================= CONSOLIDATED BALANCE SHEETAt 31 July 2006 Note 2006 2005 (As restated) £000 £000 £000 £000 FIXED ASSETSIntangible assets 2,909 457Tangible assets 4,631 4,269Investments 43 43 ------- ------- 7,583 4,769CURRENT ASSETSStocks 6,238 4,275Debtors 20,797 18,107Cash at bank and in hand 8,200 6,314 -------- -------- 35,235 28,696CREDITORS: Amounts falling duewithin one year 5 (34,793) (29,248) -------- -------- NET CURRENT ASSETS/(LIABILITIES) 442 (552) ------- ------- TOTAL ASSETS LESS CURRENT LIABILITIES 8,025 4,217CREDITORS: Amounts falling duein more than one year 6 (105) (65) PROVISIONS FOR LIABILITIES ANDCHARGES (783) (366) ------- ------- NET ASSETS EXCLUDING PENSION LIABILITY 7,137 3,786 PENSION LIABILITY (400) (575) ------- ------- NET ASSETS INCLUDING PENSION LIABILITY 6,737 3,211 ======= ======= CAPITAL AND RESERVESCalled up share capital 200 200Share premium account 89 2Capital redemption reserve 682 682Revaluation reserve 1,211 1,211Investment in own shares (913) (1,470)Profit and loss account 5,468 2,577 ------- ------- EQUITY SHAREHOLDERS' FUNDS 6,737 3,202Equity minority interests - 9 ------- -------TOTAL CAPITAL EMPLOYED 6,737 3,211 ======= ======= CONSOLIDATED CASH FLOW STATEMENTFor the year ended 31 July 2006 Note 2006 2005 (As restated) £000 £000 £000 £000 CASH FLOW FROM OPERATING ACTIVITIES 7 8,557 6,098 RETURNS ON INVESTMENTS AND SERVICING OFFINANCEInterest received 105 104Interest paid (172) (42)Interest element of finance lease rentalpayments (10) (33) ------- ------- NET CASH (OUTFLOW)/INFLOW FOR RETURNS ONINVESTMENTS AND SERVICING OF FINANCE (77) 29 TAXATION (2,182) (1,686) CAPITAL EXPENDITUREPurchase of investments (9) -Purchase of intangible fixed assets (84) (113)Purchase of tangible fixed assets (757) (548)Sale of intangible fixed assets 13 -Sale of tangible fixed assets 48 61 -------- ------- NET CASH OUTFLOW FOR CAPITAL EXPENDITURE (789) (600) ACQUISITIONS AND DISPOSALSPurchase of subsidiary undertakings (1,498) -Net overdrafts acquired with subsidiaryundertakings (195) - --------- -------- NET CASH OUTFLOW FOR ACQUISITIONS ANDDISPOSALS (1,693) - EQUITY DIVIDENDS PAID 3 (1,701) (1,200) -------- -------- CASH INFLOW BEFORE FINANCING 2,115 2,641 FINANCINGIssue of ordinary share capital 87 -Investment in own shares (250) (1,850)Capital element of finance lease rental payments (60) (101)Exercising of share options 69 30 --------- -------- NET CASH OUTFLOW FROM FINANCING (154) (1,921) -------- --------INCREASE IN CASH IN THE YEAR 8 1,961 720 ======== ======== 1 SEGMENTAL REPORT The group's turnover, profit before taxation and net assets were all derivedfrom its principal activities. The group operates in the following geographical markets: Net assets Turnover Profit before taxation 2006 2005 2006 2005 2006 2005 (As restated) (As restated) £000 £000 £000 £000 £000 £000 Pre-exceptional UK and Eire 7,294 5,415 108,003 99,760 6,347 3,263 Continental Europe 786 273 18,416 12,492 702 727 United States of America (1,343) (1,466) 9,337 6,303 103 280 ------------------------------------------------------------- 6,737 4,222 135,756 118,555 7,152 4,270 Exceptional Flotation costs - worldwide - (1,011) - - - (1,011) ------------------------------------------------------------- 6,737 3,211 135,756 118,555 7,152 3,259 ============================================================= 2 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2006 2005 £000 £000Profit on ordinary activities before taxationis stated after charging/(crediting): Depreciation and amounts written off tangiblefixed assets:Charge for the yearOwned assets 626 660Leased assets 28 30Amortisation of computer licences 117 214Amortisation of goodwill arising on 60 15consolidationOperating lease rentals:Plant and machinery 2,525 1,935Auditors' remuneration:Audit services Group 113 93Other services Group 116 356Exceptional items:Flotation costs - 1,011Curtailment gain on pension scheme (481) - ============= Amounts payable to Baker Tilly and their associates in respect of both audit andnon-audit services: 2006 2005 £000 £000Audit services- Statutory audit 113 93 Tax services- Advisory services 23 43 Other services- Other costs 93 70- Flotation costs - 243 --------------------- 229 449 ===================== 3 DIVIDENDS 2006 2005 (As restated) £000 £000 Equity:Ordinary shares - 2004 final - 1,200- 2005 final 1,259 -- 2006 interim 442 --------------------- 1,701 1,200 ===================== 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 2006 2005 2006 £000 2006 2005 £000 2005 £000 £000 £000 £000 Profit for the financial year 5,423 5,423 5,423 1,878 1,878 1,878 Flotation costs (net of tax) - - - - 837 -Amortisation ofintangible fixedassets - 177 - - 229 -Pension adjustment - (343) - - 139 - -----------------------------------------------------------------Adjusted profitfor financialyear 5,423 5,257 5,423 1,878 3,083 1,878 ================================================================= Weighted average number of shares 2006 2005 Number of Number of shares shares For basic earnings per share 19,386,320 19,727,559Exercise of share options 387,444 629,249 -------------------------For diluted earnings per share 19,773,764 20,356,808 ========================= 2006 2005The group's earnings per share are as follows: (As restated) £ £ - Basic 28.0p 9.5p ====================== - Diluted 27.4p 9.2p ====================== - Basic adjusted 27.1p 15.6p ====================== - Diluted adjusted 26.6p 15.1p ====================== 5 CREDITORS: Amounts falling due within one year Group Company 2006 2005 2006 2005 £000 £000 £000 £000 Bank loans and overdrafts - - 6,508 6,112Obligations under finance leases 77 42 14 14Trade creditors 20,531 17,043 158 113Amounts owed to group undertakings - - 1,856 7,205Corporation tax 1,004 1,261 - -Other taxation and social security costs 4,292 2,480 - -Other creditors 34 3,870 - 36Accruals and deferred income 8,855 4,552 683 285 ------------------------------------ 34,793 29,248 9,219 13,765 ==================================== 6 CREDITORS: Amounts falling due in more than one year Group Company 2006 2005 2006 2005 £000 £000 £000 £000 Obligations under finance leases 105 65 - 14 ==================================== OBLIGATIONS UNDER FINANCE LEASESAND HIRE PURCHASE CONTRACTS: Group Company 2006 2005 2006 2005 £000 £000 £000 £000Amounts payable:Within one year 77 42 14 14Within two to five years 105 65 - 14 ------------------------------------- 182 107 14 28 ===================================== 7 RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES 2006 2005 £000 £000 Operating profit 7,229 3,236Depreciation 654 690Amortisation 177 229Increase in stocks (1,299) (1,126)Increase in debtors 436 (1,989)Increase in creditors 1,451 4,999(Decrease)/increase in provisions (91) 59 ---------------------- CASH FLOW FROM OPERATING ACTIVITES 8,557 6,098 ====================== 8 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS £000 Increase in cash in the year 1,961Cash inflow from decrease in debt and lease financing 60 --------- 2,021Other non cash changes (135)Translation difference (75) --------- MOVEMENT IN NET FUNDS IN THE YEAR 1,811NET FUNDS AT 31 JULY 2005 6,207 --------- NET FUNDS AT 31 JULY 2006 8,018 ========= 9 PRIOR YEAR ADJUSTMENT The Group has adopted a number of new Financial Reporting Standards (FRS) inthese accounts. The following have required prior year adjustments to be booked: FRS 17 Retirement benefits FRS 21 Events after the balance sheet date FRS 25 Financial instruments: disclosure and presentation 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. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held at GSH House, Forge Lane,Stoke on Trent, ST1 5PZ on Thursday 25th January at 2.30pm. This information is provided by RNS The company news service from the London Stock Exchange