Havelock Europa Regulatory News (HVE)

5 Apr 2005 07:00

Havelock Europa PLC05 April 2005 Tuesday 5 April 2005 HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT 2004 was a year of considerable progress for Havelock. Underlying pre-tax profit(profit before exceptional items and goodwill amortisation) showed a markedincrease for a third consecutive year, to £5.0 million (2003 : £4.3 million),boosted by a first-time contribution from the two companies acquired mid-year inthe education supply sector, TeacherBoards and Clean Air. Financial Highlights •On an underlying basis, pre-tax profit increased by 16% to £5.0m and earnings per share were 10.9p, up 9%. •On a reported basis, profit before tax totalled £4.5m (2003: £4.7m) and basic earnings per share were 9.2p (2003: 11.7p). 2003 benefited from an exceptional tax free profit of £0.9m. •The Group's financial position remains strong despite the net cash outflow of £6.4m in acquisition consideration which was partially offset by the £1.7m net proceeds from a share placing in July. Net debt at the year end amounted to £14.6m (2003: £10.5m) and gearing slightly reduced to 84.7% (2003: 87.5%). Interest cover was a comfortable 4.6 times (2003: 4.8 times), before exceptionals. •Dividends per share are increased by 14% to 3.2p, covered 2.7 times, in line with the Group's progressive dividend policy. Commercial Highlights •ESA McIntosh, the UK market leader in science laboratories and fitted furniture for schools, benefited from strong direct sales to schools and Local Authorities but as announced in the Pre-Close Season Trading Update of 28 January 2005, suffered to some extent from contract delays in the PFI sector, which has resulted in a lower contribution to profits than was originally expected. •The two new businesses acquired in the summer of 2004, TeacherBoards (which designs and manufactures teaching aids and display boards) and Clean Air (which manufactures fume cupboards for industrial, university and science laboratories), performed well. •The Point of Sale Display Division had a good year, contributing substantially to profit. •The Retail Interiors Division traded better than expected, making a small but improved profit. Prospects for 2005 The Group has made an encouraging start to the year with good levels ofenquiries in each of its divisions. With much of the benefit of the high volumeof enquiries in the LEA and direct-to-schools segment of the education sectornot being converted into business until the summer holidays, the Group's resultsfor 2005 will, even more than previously, be heavily slanted towards the secondhalf of the year. The impact of the implementation of IFRS on revenuerecognition is likely to exaggerate this seasonal bias. Malcolm Gourlay, Chairman, stated "The Board believes that significant furtherprogress will be made in the current year as a whole and that Havelock remainswell placed to benefit from increasingly high levels of Government educationalexpenditure thereafter." Enquiries: Havelock Europa PLC 01383-820 044Hew Balfour (Chief Executive) 07801-683 851Graham MacSporran (Finance Director) 07801-683 803 Bankside Consultants LimitedCharles Ponsonby 020-7444 4166 CHAIRMAN'S STATEMENT 2004 was a year of considerable progress for Havelock. Underlying pre-tax profit(profit before exceptional items and goodwill amortisation) showed a markedincrease for a third successive year, to £5.0 million (2003 : £4.3 million),boosted by a first-time contribution from the two companies acquired mid-year inthe education supply sector, TeacherBoards and Clean Air. Despite some deferral in the timing of new contracts in the education PFImarket, as announced in the Pre-Close Season Trading Update of 28 January 2005,prospects for the Group remain positive for 2005 and beyond. FINANCIAL OVERVIEW The 16% increase in underlying profit was achieved despite a decrease inturnover to £87.6 million (2003 : £97.7 million), as a result of a moreselective approach to business within the Retail Interiors Division. Underlyingearnings per share were 10.9p (2003 : 10.0p), up 9%. The underlying figuresexclude goodwill amortisation charges of £0.5 million in 2004 (2003 : £0.3million) and in 2003 the exceptional profit of £0.9 million arising from thepartial disposal of the Group's share of the Middle East joint venture, HavelockAHI, along with exceptional reorganisation charges of £0.2 million. On a reported basis, profit before tax totalled £4.5 million (2003: £4.7million) and basic earnings per share were 9.2p (2003 : 11.7p). The prior yearfigure benefited from the exceptional gain arising from the Middle East, whichwas tax free. 2004 saw a strong performance from the Point of Sale Display Division; animproved contribution from Retail Interiors; a good return, despite the deferralof a number of expected contracts in the last quarter, from the Group'seducation interiors subsidiary, ESA McIntosh, and an excellent maidenperformance from each of the two newly acquired businesses, TeacherBoards andClean Air. The Group's financial position remains strong despite the net cash outflow of£6.4 million in acquisition consideration which was partially offset by the £1.7million of net proceeds from a share placing in July. Net debt at the year endamounted to £14.6 million (2003 : £10.5 million) and gearing slightly reduced to84.7% (2003 : 87.5%). Interest cover was a comfortable 4.6 times (2003 : 4.8times before exceptionals). DIVIDENDS The Board is proposing a 14% increase in the final dividend per share to 2.4p(2003 : 2.1p), in line with the Group's progressive dividend policy. If approvedat the Annual General Meeting on 24 June 2005, the dividend will be paid on 4July 2005 to shareholders on the register at close of business on 3 June 2005. Including the interim dividend per share of 0.8p (2003 : 0.7p), paid on 29December 2004, the proposed dividends per share for the year will total 3.2 p(2003 : 2.8p), which is up 14% on 2003 and covered 2.7 times. TRADING REVIEW Education Furniture ESA McIntosh is the UK market leader in the design, manufacture and installationof science laboratories and fitted furniture for schools, with facilities inKirkcaldy, Fife. Turnover increased to £22.7 million (2003 : £20.9 million) as a result of aparticularly strong showing in direct sales to schools and Local EducationAuthorities. As expected, turnover in the PFI segment fell slightly as the firstphase of school refurbishments and rebuilding in Scotland, financed through thePFI, was concluded. Towards the end of the year, contract delays in the PFIsector became more apparent, particularly in relation to work where Jarvis is,or was, originally the main contractor. As a result, ESA McIntosh's contributionto profits was at a lower level than originally expected. The 2004 resultincluded expenditure of some £0.5 million incurred in gearing up for increasedactivity in the future. Education Supply The two new businesses acquired in the summer of 2004, TeacherBoards and CleanAir, performed well. TeacherBoards, based in Skipton, North Yorkshire, designs, manufactures anddistributes teaching aids and display boards. Turnover was £5.7 million for the12 months ended 31 December 2004, with some £2.9 million falling within the sixmonths in which TeacherBoards formed part of the Group. An initial earn-outpayment of £1.15 million has been made, with a further £0.25 million to followin 2006, subject to profit before tax in the current year reaching £1.0 million.These payments reflect a performance which exceeded TeacherBoards' earnouttarget for 2004. Clean Air, based in Bolton, Lancashire, manufactures fume cupboards forindustrial, university and science laboratories. Turnover was £3.5 million inthe 12 months to 31 December 2004, of which £1.7 million related to the 51/2months under Havelock Europa's ownership. The first earn-out payment of £0.51million will be made shortly in relation to this performance, with up to afurther £1.29 million to follow, based on the profit before tax, in the currentyear, achieved in excess of £1 million. Point of Sale Display The Point of Sale Display Division prints promotional graphics and manufacturesdisplay equipment for use in retail and branded goods businesses, typically aspart of marketing rather than capital expenditure budgets, at its facilities inLetchworth and Bristol. The Division had a good year, contributing substantially to profit. Turnoverincreased to £25.5 million (2003 : £24.1 million), with a strong performance inboth printing businesses. The Division benefited from further capitalinvestment, including the introduction of a new four-colour large-format screenprinting line at Letchworth, along with new digital printing equipment and thelatest technology in direct imagery. Investment in new technology has borneconsiderable fruit in terms of enhancements to productivity throughout theDivision. Retail Interiors The Retail Interiors Division designs, manufactures and installs interiors forretailers, banks, hotels and healthcare facilities. It has a factory co-locatedwith the Group's Head Office in Fife and a sales office in Derbyshire. The Division traded better than expected, making a small but improved profit. Amore selective approach to business resulted in a lower level of turnover at£34.8 million (2003 : £52.3 million) which, coupled with a modest amount ofinvestment in new machinery, served to raise gross margins, improve productivityand increase the Division's overall contribution. Useful progress was made inwidening the customer base in the financial services sector. Middle East Interiors Havelock AHI, in which the Group owns a 17% stake, manufactures and installsretail and hotel interiors from its base in Bahrain. A profit attributable tothe Group of £0.1 million was recorded. INTERNATIONAL FINANCIAL REPORTING STANDARDS In accordance with European Union Legislation, all listed companies in theEuropean Union are required to adopt International Financial Reporting Standards(IFRS) for their consolidated financial statements from 2005. The Group is undertaking an impact analysis of the effect of implementing IFRSwhich is nearing completion. The first annual report and accounts prepared underIFRS will be for the year ending 31 December 2005. The interim accounts for thehalf year ending 30 June 2005 will also be prepared under IFRS and theseaccounts will include re-stated annual and interim comparative financialinformation together with information on the effects of the implementation ofIFRS. STRATEGY Havelock's strategy is to concentrate on UK markets offering significantopportunities for profitable growth. In this context, a programme of expansionin healthcare and education is already underway. At the same time, as detailed in the Interim Announcement of 28 September 2004,the role of the Retail Interiors Division in Group activities continues toevolve. While the Division is committed to remaining a market leader in itssector, it intends to concentrate on UK retailers, banks and hotels whichrequire and value a consistency of quality in manufacturing and servicedelivery. In addition, the Division is now devoting a proportion of itsresources to support the supply of equipment and services for other parts of theGroup, notably ESA McIntosh and the Point of Sale Display Division. Further,with effect from the last quarter of 2004, the Division assumed responsibilityfor the Group's developing activities in the healthcare furniture market, whereprogress is already being made. CURRENT TRADING AND PROSPECTS The Group has had an encouraging start to the year. The level of ESA McIntosh's enquiries from Local Education Authorities issizeably up on previous years. There is, however, clear evidence that a smallernumber of PFI projects reached financial close in the final quarter of 2004 thanwas originally anticipated. As was announced in the Pre-Close Season TradingUpdate of 28 January 2005, this will constrain ESA McIntosh's growth in 2005, ascompared with earlier expectations. Nevertheless, there is firm evidence thatgrowth in the volume of business to be derived from the PFI sector will continuein 2006. Within the education supply sector, order books at both TeacherBoards and CleanAir remain solid. The Point of Sale Display Division has had another strong start to the year,with business in the first quarter at robust levels. Whilst turnover for the Retail Interiors Division will, as usual, be biasedtowards the second half, a further year of progress, bolstered by a growingvolume of work in the healthcare market, is anticipated. With much of the benefit of the high volume of enquiries in the LEA anddirect-to-schools segment of the education sector not being converted intobusiness until the summer holidays, the Group's results for 2005 will, even morethan previously, be heavily slanted towards the second half of the year. Theimpact of the implementation of IFRS on revenue recognition is likely toexaggerate this seasonal bias. Nevertheless, the Board believes that significantfurther progress will be made in the current year as a whole and that Havelockremains well placed to benefit from increasingly high levels of Governmenteducational expenditure thereafter. Malcolm Gourlay 5 April 2005Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2004 2004 2004 2004 2003 Existing Acquisitions Total Notes £000 £000 £000 £000 Turnover Group and 83,066 4,580 87,646 97,742share ofjointventure Less: shareof joint - - - (502)venture'sturnover _______ _______ _______ ______ Group 83,066 4,580 87,646 97,240turnover Operatingprofitbeforeexceptionalitems Group 4,580 1,061 5,641 4,979 Exceptional - - - (226)costs _____ _____ _____ ______ Operatingprofit 4,580 1,061 5,641 4,753afterexceptionalitems Share ofassociated 104 - 104 47company'soperatingprofit Share ofjoint - - - (24)venture'soperatingloss ______ ______ ______ _____ Total 4,684 1,061 5,745 4,776operatingprofit Gain onsale of - - - 935interest injointventure ______ ______ ______ ______ Profit onordinary 4,684 1,061 5,745 5,711activitiesbeforeinterest Netinterestpayable andothersimilaritems Group (1,242) (981) Associated (17) (19)company Joint - (2)venture ______ ______ Profit on ordinaryactivities before 4,486 4,709taxation Tax chargeon profit 3 (1,569) (1,249)on ordinaryactivities ______ ______ Profit for 2,917 3,460thefinancialyear Dividend - (1,098) (871)equity ______ ______ Retained 1,819 2,589profit forthe year ______ ______ Basic 4 9.2p 11.7pearningsper share Basic 4 10.9p 10.0padjustedearningsper share Diluted 4 8.8p 11.3pearningsper share Dividends 3.2p 2.8pper share All operations are continuing. GROUP BALANCE SHEET as at 31 December 2004 Group Company 2004 2003 2004 2003 (restated) (restated) Notes £000 £000 £000 £000 Fixed assets Intangible assets - goodwill 14,196 3,825 - 38 Tangible assets 13,888 12,786 10,348 9,413 Investment in associatedcompany 575 533 567 567 Investment in subsidiaryundertakings - - 21,526 8,645 ______ ______ ______ ______ 28,659 17,144 32,441 18,663 ______ ______ ______ ______ Current assets Stocks 5 7,730 5,616 5,620 4,586 Debtors 6 20,861 17,951 17,275 17,458 Cash at bank and in hand 627 1,348 - 899 ______ ______ ______ ______ 29,218 24,915 22,895 22,943 Creditors: Amounts fallingdue within one year 7 (24,048) (18,768) (20,175) (16,126) ______ ______ ______ ______ Net current assets 5,170 6,147 2,720 6,817 ______ ______ ______ ______ Total assets less currentliabilities 33,829 23,291 35,161 25,480 Creditors: amounts fallingdue 8 (15,392) (10,505) (15,392) (10,505)after more than one year Provision for liabilitiesand (1,164) (791) (1,064) (714)charges ______ ______ ______ ______ Net assets 17,273 11,995 18,705 14,261 ______ ______ ______ ______ Capital and reserves Called up share capital 3,430 3,107 3,430 3,107 Share premium account 9 2,410 909 2,410 909 Merger reserve 9 1,582 - 1,582 - Revaluation reserve 9 1,318 1,318 1,318 1,318 Profit and loss account 9 8,533 6,661 9,965 8,927 ______ ______ ______ ______ Equity shareholders' funds 17,273 11,995 18,705 14,261 ______ ______ ______ ______ STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31 December 2004 2004 2003 £000 £000 Profit for the year 2,917 3,460 Exchange loss on overseas investments (42) (56) Movement in Long Term Incentive Plan shares held 95 - ______ ______ Total recognised gains relating to the year 2,970 3,404 Prior year adjustment - UITF 38 (228) - _____ _____ Total gains recognised since last annual report 2,742 3,404 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 December 2004 2004 2003 £000 £000 Opening shareholders' funds - as previously stated 12,223 9,650 Prior year adjustment - UITF 38 (228) (23) ______ ______ Opening shareholders' funds - restated 11,995 9,627 ______ ______ Profit for the year 2,917 3,460 Dividends (1,098) (871) ______ ______ Retained profit for the year 1,819 2,589 Exchange loss on overseas investment (42) (56) Movement in Long Term Incentive Plan shares held 95 (205) New share capital issued 3,406 40 ______ ______ Net increase in shareholders' funds 5,278 2,368 ______ ______ Closing shareholders' funds 17,273 11,995 ______ ______ STATEMENT OF HISTORICAL COST PROFITS AND LOSSES 2004 2003 £000 £000 Reported profit on ordinary activities before taxation 4,486 4,709Difference between a historical cost depreciation charge andthe actual depreciation charge of the year calculated on therevalued amount 4 4 _____ _____Historical cost profit on ordinary activities before 4,490 4,713taxation ______ ______Historical cost retained profit after taxation and dividends 1,823 2,593 ______ ______ CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2004 Notes 2004 2003 £000 £000 Cash inflow from operating activities 10(a) 6,727 5,399 Return on investment and servicing of finance Interest received 4 1 Interest paid (1,209) (958) ______ _______ Net outflow from investment and servicing of finance (1,205) (957) ______ ______ Taxation (1,244) (107) ______ ______ Capital expenditure and financial investments Purchases of tangible fixed assets (2,907) (2,052) Proceeds from sale of tangible fixed assets 84 6 Loan to ESOP trust - (250) ______ ______ Net cash outflow from capital expenditure andfinancial (2,823) (2,296)investments ______ ______ Acquisitions and disposals Net cash outflow in connection with acquisition ofsubsidiary undertakings (6,356) - Deferred consideration and fees - (45) Cost of investment in associated company - (567) Proceeds from disposal of interest in joint venture - 2,567 ______ ______ Net cash (outflow)/inflow from acquisitions and disposals (6,356) 1,955 Equity dividends paid (928) (775) ______ ______ Cash (outflow)/inflow before financing (5,829) 3,219 ______ ______ Financing Repayment of loan notes issued on acquisition ofsubsidiaries - (3,765)Capital element of finance lease rental payments (103) (253)Repayment of long term loan (1,250) (1,250)Bank loan and other advances 4,750 2,455 Issue of new shares 1,656 40 Proceeds of exercise of share options 55 - ______ ______ Net cash inflow/(outflow) from financing 5,108 (2,773) ______ ______ (Decrease)/increase in cash for the year 10(b) (721) 446 ______ ______ NOTES TO THE STATEMENT 1. The profit and loss account, balance sheet and abridged cash flowstatement do not constitute the Company's statutory accounts for 2004 or 2003but are derived from those accounts. The statutory accounts for 2003, on whichthe auditors have given an unqualified report, have been delivered to theRegistrar of Companies. Those for 2004 will be delivered following the AnnualGeneral Meeting. The auditors have reported on those accounts which wereunqualified and did not contain a statement under Section 237(2) of theCompanies Act 1985. 2. Basis of consolidation The consolidated profit and loss account and balance sheet include the financialstatements of the Company, its subsidiaries and its interest in an associatedcompany made up to 31 December 2004. The Group's share of the profits of theassociated company is included in the consolidated profit and loss account andits interest in its net assets is included in the balance sheet. 3. Tax charge on profit on ordinary activities 2004 2003 £ 000 £ 000 UK corporation tax - current year at 30% (1,181) (510) - prior year (13) (27) Deferred tax - current year (310) (749) - prior year (65) 37 ______ ______ (1,569) (1,249) ______ ______ The current tax charge for the year differs from 30% of the pre-tax profitbecause certain expenses are not deductible for tax. 4. Earnings per share Based on a profit after adjusting for goodwill amortisation and tax of£3,464,000 (2003:£2,973,000) and 31,638,007 (2003: 29,612,442) shares, being theweighted average number of shares in issue during the year, the adjusted basicearnings per share were 10.9p (2003: 10.0p).The weighted average number ofshares excludes the shares held by the ESOP Trust. Based on a profit after taxof £2,917,000 (2003: £3,460,000) and 31,638,007 shares (2003: 29,612,442), thebasic earnings per share were 9.2p (2003: 11.7p). 2004 2003 2004 2003 £000 £000 Earnings Earnings Earnings Earnings pence per pence per share share Basic 2,917 3,460 9.2 11.7Adjusted for:Gain on sale of investments - (935) - (3.2)Exceptional costs - 226 - 0.8Tax relief on exceptional costs - (68) - (0.3)Goodwill amortisation 547 290 1.7 1.0 _______ ______ ______ ______ Adjusted basic 3,464 2,973 10.9 10.0 ______ ______ ______ ______ Diluted 2,917 3,460 8.8 11.3 ______ ______ ______ ______ The weighted average number of shares used in each calculation is as follows: 2004 2003 Number Number of shares of shares 000s 000s For basic and adjusted earningsper share 31,638 29,612Effect of exercise of shareoptions 1,540 1,023 _______ _______ For diluted earnings per share 33,178 30,635 ________ ________ Earnings per share are calculated for the issued shares excluding those held bythe Employee Share Scheme in accordance with UITF 13. 5. Stocks 2004 2003 £000 £000 Raw materials and consumables 3,312 2,380Work in progress 1,454 1,439Less: Payments to account (562) (677)Finished goods 3,526 2,474 _____ _____ 7,730 5,616 _____ ______ 6. Debtors 2004 2003 £000 £000 Trade debtors 17,873 15,702Other debtors 340 333Prepayments 2,648 1,916 ______ ______ 20,861 17,951 ______ ______ 7. Creditors: amounts falling due within one year 2004 2003 £000 £000 Bank loans (secured) 1,250 1,250Trade creditors 13,563 11,731Corporation tax 954 510Other taxes and social security 2,856 2,370Accruals 2,180 2,155Dividend proposed 823 653Obligations under hire purchase contracts and finance leases 72 99Provision for deferred consideration 2,350 - ______ ______ 24,048 18,768 ______ ______ 8. Creditors: amounts falling due after more than one year 2004 2003 £000 £000 Bank loans (secured) 13,892 10,392Obligations under hire purchase contracts and finance leases 50 113Deferred consideration 1,450 - ______ ______ 15,392 10,505 ______ ______ 9. Reserves Group and Company Group Company Share premium Merger Revaluation Profit and Profit and reserve reserve loss account loss account £000 £000 £000 £000 £000At 1 January2004 aspreviouslystated 909 - 1,318 6,889 9,155Prior yearadjustment -reclassification ofinvestment inown shares - - - (228) (228) ______ ______ ______ ______ ______At 1 January2004 asrestated 909 - 1,318 6,661 8,927 Retainedprofit for theyear - - - 1,819 943Exchange losson overseasinvestments - - - (42) -Shares issuedpursuant toacquisitions 1,501 1,582 - - -Movement inLong TermIncentive Planshares held - - - 95 95 ______ ______ ______ ______ ______At 31 December2004 2,410 1,582 1,318 8,533 9,965 ______ ______ ______ ______ ______ Total goodwill written off directly to reserves in previous yearsin respect of subsidiary undertakings at 31 December 2004 amountsto £16,234,000 (2003:£16,234,000).The profit after tax for the financial year attributable to theCompany was £2,041,000 (2003: £5,318,000) 10. Cash Flow Statement 2004 2003 £000 £000(a) Reconciliation of operating profit to net cash inflow from operatingactivities Operating profit after exceptional items 5,641 4,753Depreciation 1,933 1,918Amortisation of goodwill 547 290Gain on disposal of tangible fixed assets (30) (6)(Increase)/decrease in stocks (1,149) 1,701Increase in debtors (1,190) (1,226)Increase/(decrease) in creditors 975 (2,031) ______ ______Net cash inflow from operating activities 6,727 5,399 ______ ______(b) Reconciliation of net cash flow to movement in net debt (Decrease)/Increase in cash for the year (721) 446Finance lease payments 103 253Finance lease creditor acquired with acquisition (13) -Loan notes issued in the year - (2,455)Loan notes repaid - 3,765Bank loan repaid 1,250 1,250New bank loan (4,750) (2,455) ______ ______Movement in net debt in the year (4,131) 804Opening net debt (10,506) (11,310) ______ ______Closing net debt (14,637) (10,506) ______ ______ (c) Analysis of net debt At 1 Cash Other Acquisition At 31 January flow non-cash (excluding December 2004 changes cash) 2004 £000 £000 £000 £000 £000 Cash at bankand in hand 1,348 (721) - - 627 ______ ______ ______ ______ ______Debt due within oneyearBank loans (1,250) 1,250 (1,250) - (1,250)Finance leasecreditor (99) 103 (63) (13) (72) ______ ______ ______ ______ ______ (1,349) 1,353 (1,313) (13) (1,322) ______ ______ ______ ______ ______ Debt due after oneyearFinance leasecreditor (113) - 63 - (50)Bank loans (10,392) (4,750) 1,250 - (13,892) ______ ______ ______ ______ ______ (10,505) (4,750) 1,313 - (13,942) ______ ______ ______ ______ ______Total net debt (10,506) (4,118) - (13) (14,637) ______ ______ ______ ______ ______ 11. Pension Costs Pension costs SSAP24 basis The most recent actuarial valuation of the defined benefit section was at 31October 2003. At the valuation date, the defined benefit section had assets witha total market value of £15.1m, which represented approximately 74% of the valueof the benefits that had accrued to members, after allowing for expected futureincreases in pensionable pay for defined benefit members. Pension costs FRS17 basisThe last full valuation of 31 October 2003 has been updated to 31 December 2004by qualified independent actuaries, using revised assumptions that areconsistent with the requirements of the accounting standard, FRS17. The standardrequires certain disclosures this year under the transitional arrangements. Insummary, the UK defined benefits pension scheme has assets at a current marketvalue of £17.8m (2003: £16.4m) and liabilities, discounted at the AA bond yield,of £26.4m (2003: £24.3m). Using this valuation method, there is a deficit of£8.6m (2003: £7.9m) which is partially offset by deferred tax of £2.6m (2003:£2.4m) giving a net deficit of £6.0m (2003: £5.5m). The defined benefit section has been closed to new entrants. 12. The accounts for the year ended 31 December 2004 were approved by theDirectors on 5 April 2005. This information is provided by RNS The company news service from the London Stock Exchange