LVD.L Regulatory News (LVD)

29 August 2014

Lavendon Group plc

Half Year Results 2014

Good performance in line with Board expectations

Lavendon Group plc ("the Group"), Europe's market leader in the rental of powered access equipment, today announces its Half Year Results for the six months ended 30June 2014.

Notes

(i) Underlying results are stated before amortisation charges and exceptional items.

(ii) Underlying and statutory measures are the same.

Highlights

· Strong growth in key UK & Middle East businesses

· Underlying operating profit increased by 7%; margins up to 12.7% (2013: 12.2%)

· Underlying PBT increased by 11% to £12.3m and underlying EPS increased by 8% to 5.63p

· Improved performance despite increased FX headwinds on overseas earnings

· ROCE increased to 10.6% (2013: 10.5%)

· Capex programme, including expansion in Middle East, being funded from annual cash flows

· Net debt at £98.2 million with year end level expected to be broadly in line with December 2013

· Debt facilities refinanced and extended at lower cost

· Interim dividend up 22% reflecting Board's confidence in Group's future prospects

Don Kenny, Chief Executive of Lavendon Group plc said:

"The Group has made good progress in the first half of the year delivering financial results in line with the Board's expectations, despite increased exchange rate headwinds on our overseas earnings which illustrates the strength of our underlying performance.

"Our financial performance is now starting to benefit from revenue growth which is driving our profitability, and our investment programme is directed towards those markets and products that offer attractive returns. Our key priority remains the delivery of increased shareholder value through the improvement of ROCE to a level above our weighted cost of capital over the business cycle; we believe we are well positioned to achieve this.

"Trading since the half year has remained in line with the Board's expectations, and, whilst recognising the continuing economic uncertainty in our Continental European markets and the strength of Sterling, the Board is confident that the Group is well positioned to deliver its expectations for 2014 and substantial shareholder value in the medium term."

For further information please contact:

Lavendon Group plc

A meeting for investors and analysts will be held today at 9.45am at FTI Consulting, 200 Aldersgate, London EC1A 4HD. A copy of the presentation and audio webcast will be available atwww.lavendongroup.com later today.

Next Trading Update

The Group's next scheduled announcement of financial information will be its third quarter Interim Management Statement in November 2014.

Notes to Editors

Lavendon Group is the European and Middle East market leader in the rental of powered access equipment. The quality and diversity of its hire fleet, coupled with the professionalism and accessibility of its depot network, provides an exceptional product range for customers.

Powered access equipment is designed to enable people to work safely, productively and comfortably at height. It can be used in a comprehensive range of applications, both inside and outside buildings and structures.

The Group has operations in the United Kingdom, Germany, Belgium, France, Bahrain, India, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The equipment fleet totals over 20,000 units and the Group employs over 1,650 people.

CHAIRMAN'S STATEMENT

The Group performed well in the first six months of 2014. The results were in line with the Board's expectations and demonstrate clear progress towards our strategic priorities of delivering growth through revenue improvement, generating cash flow to self-fund investment and improving our returns on capital employed ("ROCE").

The improved performance reflects the actions taken to re-energise our UK business towards the end of 2013, as well as our strategic decision to deploy additional capital into our Middle East operation. The strength of the improvement in these two key businesses has more than compensated for the continued weakness in some of our Continental European markets, enabling progress to be made in the Group's overall financial performance despite the increased exchange rate headwinds on our overseas earnings.

The Group's strong market positions and differentiated service offering are now starting to deliver sustainable revenue growth. This is particularly prevalent in the UK and the Middle East, where we have underpinned our capabilities to drive revenues by strengthening the breadth and depth of our management teams. The Board believes that the delivery of our revenue growth ambitions, when combined with the more efficient operational cost base established in recent years, will deliver substantial shareholder value over the medium term.

As in recent years, we are again undertaking a substantial self-funded investment programme during the year. This investment will provide additional capacity to our Middle East operation to meet growing demand as well as continuing to refresh our European rental fleet. We have also substantially completed the roll-out of our standard IT platform across the Group which, following the successful implementation in France during the second quarter, now covers 94% of Group revenues.

We have also reviewed our debt financing arrangements to ensure that they properly reflect the strengthened financial position of the Group. As a result, we have extended the maturity and reduced the cost of our bank facilities while also increasing the overall size of the facilities available to the Group through the issuance of additional notes in the US Private Placement market. These facilities provide the Group with a medium to long term diversified financing package, with significant liquidity to support the development of the Group in the coming years.

Return on capital employed

The Group's key performance metric, ROCE, improved to 10.6% at the half year (2013: 10.5%). The calculation of ROCE has been based on the Group's operating profit before exceptional items for the 12 months to 30 June 2014 and the average of the opening and closing capital employed in this period of £312.6 million (2013: £299.5 million). A further improvement is expected during the second half of the year, moving us closer to our strategic aim of improving the Group's ROCE to a level above our weighted average cost of capital of 11% across the business cycle.

Dividend

The Board is declaring an interim dividend of 1.40 pence per share, an increase of 22% over the previous year (2013: 1.15 pence per share). This will be paid on 10 October 2014 to shareholders on the register at 12 September 2014.

The increased dividend reflects the continuing improvement in the Group's profitability, the strength of its cash flows and our confidence in the Group's future prospects.

It is the Board's intention to maintain dividend distributions within a range that is covered three to four times by earnings. The actual dividend cover in any one year will be balanced against the Group's investment needs and funding requirements as we move through the business cycle.

Financial Results

The Group's total revenues for the six months to 30 June 2014 increased by 3% to £117.4 million (2013: £113.6 million), reflecting a 4% increase in rental revenues and a decline of £0.3 million in the sale of new and ex-rental fleet equipment. Using constant exchange rates with 2013, total revenues increased by 6% and rental revenues by 7%, reflecting the Group's strong performance in the period.

Underlying operating profits increased by 7% to £14.9 million (2013: £13.9 million), with margins improving to 12.7% (2013: 12.2%). At constant exchange rates, the Group's underlying operating profits increased by 12% to £15.6 million (2013: £13.9 million), with margins improving to 12.9%. The translation impact of the movement in exchange rates year on year has reduced the Group's operating profits by some £0.7 million in the period.

The increased operating profits in the period, combined with a further reduction in the Group's underlying net interest costs to £2.6 million (2013: £2.8 million), enabled the Group's underlying profit before tax to increase by 11% to £12.3 million (2013: £11.1 million). Although the Group's underlying effective tax rate increased marginally to 23% (2013: 22%), the Group's underlying profit after tax increased by 10% to £9.5 million (2013 £8.6 million) and underlying earnings per share increased by 8% to 5.63 pence (2013: 5.21 pence). At constant exchange rates, underlying profit before tax increased by 17% to £13.0 million (2013: £11.1 million), while underlying profit after tax increased by 17% to £10.1 million (2013: £8.6 million) and underlying earnings per share increased by 15% to 5.98 pence (2013: 5.21 pence).

Amortisation charges for the six months to 30 June 2014 were £1.5 million (2013: £1.7 million), and no exceptional items were incurred in the period (2013: £0.8 million). After amortisation charges (and in the prior year, exceptional items), the Group's operating profit was £13.3 million (2013: £11.4 million). The Group's profit before tax was £10.8 million (2013: £8.6 million) and profit after tax was £8.3 million (2013: £6.8 million), with Group earnings per share at 4.91 pence (2013: 4.07 pence).

Cash Flow

Underlying earnings before interest, tax, depreciation and amortisation ("EBITDA") increased to £34.9 million (2013: £34.2 million), with margins at 29.7% (2013: 30.2%). At constant exchange rates with 2013, the Group's EBITDA increased by 6% to £36.2 million, with margins at 30.0%. The Group's cash generated from operations for the first half increased to £8.4 million (2013: £4.8 million), reflecting the movements in working capital in the period and a reduced cash outflow from the purchase of equipment for the Group's rental fleet; the timing of fleet deliveries will make the related cash outflows more second half weighted. After the payment of interest and tax, net cash generated by operations was £2.0 million (2013: net cash used by operations £3.0 million).

Investment

During the first half, a total of £21.4 million (2013: £27.4 million) was invested in the Group's rental fleet and operational infrastructure, partly financed by the disposal of retired assets that generated £4.4 million (2013: £4.9 million). After reflecting movements in amounts owed to equipment suppliers at the beginning and end of the period, this investment resulted in a net cash outflow relating to capital expenditure for the first half of £19.7 million (2013: £24.6 million).

Our 2014 planned investment programme of c.£55 million will continue through the second half of the year as we expand our Middle East rental fleet, proceed with a substantial refreshment of our European rental fleet (almost 1,600 machines will be replaced in 2014) and further develop our BlueSky range of machine attachments. The overall impact of our investment and disposal programme will be a marginal increase in the size of the Group's rental fleet, reflecting the continued removal of under-utilised machines and their replacement with higher revenue-generating assets.

Net Debt

The Group's net debt at 30 June 2014 was £98.8 million (31 December 2013: £97.7 million) and reflects the strong cash flows generated in the period, the timing of our investment programme and a favourable foreign exchange movement of £3.0 million. After adjusting for the un-amortised costs relating to the Group's US Private Placement of £0.6 million, the Group's reported net debt position at 30 June 2014 was £98.2 million (31 December 2013: £97.0 million).

The debt to equity ratio was stable at 46%, with a net debt to pre-exceptional EBITDA ratio (calculated on a rolling 12 month basis) of 1.32 times (1.27 times at the end of 2013). The Group continues to operate well within its banking covenants and based on our investment plans, and subject to foreign exchange movements, we expect our net debt position at the end of this financial year to be broadly in line with that at 31 December 2013.

Refinancing

We have announced today that the Group's existing £50 million and €60 million revolving bank facilities, originally scheduled to be renewed in July 2016, have been extended to July 2019 at a lower margin cost. In addition, the Group is issuing two new loan notes on the US Private Placement market with a total value of €35 million. The first loan note of €17.5 million will mature in August 2021 and the second loan note also of €17.5 million will mature in August 2024. Following this refinancing exercise, the Group's debt facilities total c.£175 million and comprise revolving bank facilities of £50 million and €60 million together with US Private Placements with a combined value of €95 million (being loan notes of €60 million, €17.5 million and €17.5 million maturing in July 2019, August 2021 and August 2024 respectively). The available headroom within this new financing package is c.£61 million, an increase of c.£28 million over the Group's previous funding structure.

Review of business operations

Where revenues and revenue growth percentages are given in the "Review of business operations", they relate to rental revenues only and exclude revenues derived from the sale of new and ex-rental fleet equipment. The split of revenues by country between rental revenues and revenues from the sale of new and ex-rental fleet equipment is given in the segmental analysis note to the interim financial information.

UK (48% of Group rental revenues)

The UK's rental revenue increased by 11% in the first half to £54.4 million (2013: £49.1 million), a rate of growth not seen in the business since 2009. This strong revenue growth has increased underlying operating profits by 23% to £7.5 million (2013: £6.1 million), with margins improving to 13.0% (2013: 11.8%).

The revenue growth in the period reflected a combination of increased volumes, a more favourable fleet mix and a further improvement in pricing. Pricing levels improved by almost 5% over those achieved in the first half of 2013, whilst the mix of fleet on hire reversed the trend seen in the prior year (where volumes moved towards smaller units) and reverted back towards larger construction-orientated machines that generate better revenue per hire.

Through the use of our BlueSky products and Managed Services, we have continued to differentiate ourselves from the market, securing increasing levels of revenue from our major customers as their markets recover and return to growth. Our fleet investment for the UK has been targeted to support this improving demand environment and increase the revenue generating capacity of the business.

As previously reported, the UK business was restructured in the second half of 2013 to improve its sales processes and we strengthened its management team as we moved into 2014. The benefits of these actions will continue to flow through across the second half of the year as the business seeks to use its well-invested fleet and differentiated service offering to further strengthen its position in a market where a cyclical recovery is under way.

Middle East (20% of Group rental revenues)

We again saw strong growth in our Middle East business, with local currency rental revenues increasing by 13%. Once translated to Sterling, rental revenues increased by 4% to £22.7 million (2013: £21.8 million), reflecting the year on year strengthening of Sterling against the US Dollar, to which most local currencies in the region are pegged. The strong revenue growth increased the local currency underlying operating profit by 15% and once translated to Sterling, the underlying operating profit increased by 6% to £6.8 million (2013: £6.5 million) with margins improving to 30.0% (2013: 29.2%).

The revenue performance was driven by continued volume growth and further price improvement across the region compared to the prior year. Our main market of Saudi Arabia has continued to out-perform our other markets in the region, and this remains our principal driver of growth. The previously reported issues relating to the availability of construction labour in Saudi Arabia, and its consequential impact on project development, appears to be now diminishing and we expect its influence on our demand levels over the balance of the year to be minimal.

The outlook for the market in the region remains encouraging, and as planned we will deploy further capital into our business in the coming months. To date we have invested c.£10 million in additional fleet for the region, of which some 200 units had arrived by the half year with the balance of the investment scheduled to be brought into the business during the third quarter. During the first half, we have also strengthened the management team across the region, to ensure we remain well placed to secure the attractive returns available from this market.

Continental Europe (32% of Group rental revenues)

The overall Euro rental revenues from the Group's Continental European operations (Germany, France and Belgium) declined by 2% in the first half which, once converted to Sterling, showed a 5% decline to £35.3 million (2013: £37.3 million). Underlying operating profits declined to £3.1 million (2013: £3.6 million).

Germany (17% of Group rental revenues)

German Euro rental revenues declined 7% in the first half and after conversion to Sterling, showed a decline of 10% to £18.8 million (2013: £20.8 million).

This revenue performance reflects a relatively subdued demand environment which resulted in weaker volumes, particularly in the second quarter where they were below prior year levels, together with a c.5% reduction in pricing as we sought to maintain market share. In response the business has continued to tightly manage its cost base to improve efficiency in order to mitigate this revenue decline, and consequently, despite a decline of £2.0 million in revenue, underlying operating profits reduced by only £0.4 million to £0.9 million (2013: £1.3 million).

The business is now moving into its traditionally stronger trading period where we expect to see a normal seasonal upturn in demand, in contrast to that seen in 2013 where our revenues in the final quarter of the year were disrupted by the previously reported IT implementation issues. As we moved into the second half of the year we restructured the business into regional reporting units so that a more localised approach to the management of customer relationships and asset utilisation could be adopted. We believe that this change will provide a more effective organisational structure and facilitate increased market penetration for the business, thereby improving our capability to drive future revenues and gain leverage from our more efficient cost base.

France (9% of Group rental revenues)

Our French business has continued to perform well in the first half, with Euro rental revenues increasing by 8% and, after conversion to Sterling, increasing by 4% to £10.4 million (2013: £10.0 million). Underlying operating profits increased to £1.1 million (2013: £1.0 million), with margins improving to 10.1% (2013: 10.0%).

The management team has driven this revenue increase through volume growth on fairly stable pricing, during a period in which they also successfully managed the implementation of the Group's standard IT platform. We believe that this revenue growth is derived from further market share gains as the overall demand environment within France is showing little sign of recovery.

As in 2013, additional resource has been invested in the business in the first half to support the increased customer demand and enlarged fleet. This investment has constrained margins in the short term; however, as the business moves through the second half, we expect this effect to unwind and for any revenue growth to generate higher incremental profits for the business.

Belgium (6% of Group rental revenues)

Euro rental revenues in our Belgian business declined by 3% during the first half, which, after conversion to Sterling, showed a decline of 6% to £6.1 million (2013: £6.5 million). Underlying operating profits declined in the first half to £1.1 million (2013: £1.2 million), although margins remain very healthy at 16.3% (2013: 16.2%).

After reporting a return to revenue growth at the start of the year, the second quarter proved more challenging with weaker volumes and increased pricing pressure. Trading conditions remain difficult in the market and our management team is continuing to manage the cost base of the business accordingly.

Board Changes

As previously reported, Jan Åstrand, who had been the Group's Senior Independent Director and Chairman of our Remuneration Committee since 2010, resigned from the Board with effect from 26 February 2014. Andrew Wood became the Group's Senior Independent Director with effect from the same date.

With effect from 1 March 2014, we appointed John Coghlan and John Wyatt to the Board as Non-Executive Directors, with John Coghlan becoming Chairman of the Group's Remuneration Committee.

Summary and outlook

The Group has made good progress in the first half of 2014, with our key UK and Middle East businesses driving growth in the Group's revenues, profits, margins and ROCE. This progress has been delivered despite increased exchange rate headwinds on our overseas earnings, which absorbed some £0.7 million of our operating profit improvement during the first half, and clearly illustrates the underlying strength of the Group's overall financial performance during the period.

Our investment programme for 2014 is principally directed towards the continued refreshment of our European fleet, maintaining its competitive edge and increasing its revenue generating capacity. At the same time, our Middle East fleet is being expanded to ensure the necessary capacity is in place to support the expected growth in customer demand over the balance of this year. As in recent years, this overall level of investment is being funded from our annual cash flows, thereby maintaining the Group's comfortable level of net debt and healthy capital structure.

Refinancing our debt facilities has reduced the future cost of our banking arrangements, increased the funding headroom available and extended the maturity profile of the Group's debt financing structure. The ability to access funding on the terms agreed reflects the strength of our financial position, and provides robust financing capable of supporting the future development of the Group.

The Board's over-riding objective remains the delivery of increased shareholder returns through the improvement of ROCE to a level above our weighted average cost of capital across the business cycle. The Group's financial performance is now starting to benefit from revenue growth which, given our efficient cost base, is driving our improving profitability. Our focus now is to ensure that this revenue improvement continues, by supporting our growth opportunities with investment while positioning our businesses to benefit from improvements in market conditions.

Trading since the half year has remained in line with the Board's expectations and, whilst recognising the continuing economic uncertainty within our Continental European markets and the strength of Sterling, the Board is confident that the Group is well positioned to deliver its expectations for 2014 and substantial shareholder value over the medium term.

Group income statement

 (i) Non-underlying is defined as amortisation charges and exceptional items.

Group statement of comprehensive income

Group balance sheet

Group statement of cash flows

Group statement of changes in equity

For the six months ended 30 June 2014 (unaudited)

During the period £6,000 (June 2013: £27,000; December 2013: £27,000) was debited from retained earnings, representing the nominal value of shares issued following the vesting of Long Term Incentive Plans in the period.

For the six months ended 30 June 2013 (unaudited)

Group statement of changes in equity

For the year ended 31 December 2013 (audited)

Notes to the interim financial information (unaudited)

1. This condensed consolidated interim financial information has been prepared in accordance with the Disclosure and Transparency Rules and with IAS 34 'Interim Financial Reporting' as adopted by the European Union. The same accounting policies, presentation, methods of computation, significant judgements and the key sources of estimation of uncertainties have been followed in the condensed consolidated interim financial information were applied in the Group's audited financial statements for the year ended 31 December 2013 which were prepared in accordance with IFRS's as adopted by the European Union, with the exception of new standards and interpretations that were only applicable from the beginning of the current financial year and taxes on income in the interim period which are accrued using the tax rates that would be applicable to total expected annual profit or loss.

The group has included the disclosures required by these standards and amendments in the interim financial information.

The following standards are also effective for the period ended 30 June 2014, however have no material impact on the interim financial information:

- Amendments to IAS32, 'Financial instruments: Presentation' on financial instrument asset and liability offsetting

- IFRS 10 'Consolidated financial statements'

- IFRS 11 'Joint arrangements'

- IFRS12 'Disclosure of interests in other entities'

- Amendment to IAS36 'Impairment of assets' on recoverable amount disclosures

- Amendment to IAS39 'Financial instruments: Recognition and measurement', on novation of derivatives and hedge accounting

As of the date of authorisation of these interim financial information, the following standards were in issue but not yet endorsed by the EU. These standards were available for early adoption but the Group has not applied these standards in the preparation of the financial statements. Adoption of these standards is not expected to have a material impact on the Group:

- Amendment to IAS19 'Employee benefits' on defined benefit plans

- Annual improvements 2012

- Annual improvements 2013

New or revised accounting standards and interpretations issued by 30 June 2014 but not yet effective are listed below:

- IFRS9 'Financial instruments' - classification and measurement

- Amendment to IFRS9 'Financial instruments' regarding general hedge accounting

- Amendment to IAS16 'Property plant and equipment' and IAS38 'Intangible assets', on depreciation and amortisation

- IFRS15 'Revenue from contracts with customers'

2. Segmental analysis

The internal reporting arrangements for Lavendon Group plc comprises of five operating segments based on the geographical locations of UK, Germany, Belgium, France and Middle East and one non operating Corporate cost centre. The Corporate cost centre comprises the Group directorate, statutory compliance and Group functions and holds the Group's bank borrowing facilities.

The Group's chief operating decision maker ("CODM") is the Group Board. The Group Board reviews the Group's internal reporting in order to monitor and assess performance of the operating segments for the purpose of making decisions about allocation of resources. Performance is evaluated based on actual results compared to agreed targets and performance in prior periods.

Six months ended 30 June 2014 (unaudited)

Note

Inter segment trading has been eliminated in the analysis presented above, so that only trading between the Group and external third parties is represented.

Six months ended 30 June 2013 (unaudited)

Note

Inter segment trading has been eliminated in the analysis presented above, so that only trading between the Group and external third parties is represented.

Year ended 31 December 2013 (audited)

Note

Inter segment trading has been eliminated in the analysis presented above, so that only trading between the Group and external third parties is represented.

3. Exceptional items and amortisation

Exceptional items and amortisation incurred during the period are set out below:

Note

(i) Relates to restructuring costs during the previous periods. Costs incurred in the previous periods principally related to the restructuring exercise in Germany, involving depot closure and redundancy costs.

4. Net finance expense

5. Taxation on profit/(loss)

Analysis of charge for the period:

The tax charge on underlying profits is based on the expected effective tax rate for the year.

The UK's main rate of corporation tax reduced from 23% to 21% with effect from 1 April 2014, and will be further reduced to 20% with effect from 1 April 2015. The impact of these changes have been incorporated into these financial statements.

6. Earnings per share

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

Earnings per share is calculated on the 168,286,987 ordinary shares in issue for the six months ended 30 June 2014 being the weighted average number of ordinary shares in issue (six months ended 30 June 2013: 166,002,985; year ended 31 December 2013: 167,014,501).

Diluted underlying earnings per share assumes conversion of all potential dilutive ordinary shares which arise from share incentive scheme awards granted to employees where the performance criteria has been met as at the end of the period and where the exercise price is less than the average market price of the Company's ordinary share capital during the period. The effect of this dilution is to increase the weighted average number of ordinary shares to 170,378,524 (six months ended 30 June 2013: 167,618,584; year ended 31 December 2013: 168,158,046).

Underlying earnings per share is presented to exclude the impact of exceptional items and amortisation charges in the period and their associated tax effect. The directors believe that underlying earnings per share provides additional relevant information about underlying business performance.

7. Dividends

The directors are declaring an interim dividend of 1.40 pence per ordinary share which will distribute an estimated £2,362,000 of shareholders' funds. It will be paid on 10 October 2014 to shareholders who are on the register at 12 September 2014.

8. Intangible assets

Included within other intangible additions is £641,000 (June 2013: £650,000, December 2013: £1,585,000) of internal labour costs. The carrying value of internally generated computer software is £3,573,000 (June 2013: £1,871,000, December 2013: £3,492,000). All other intangible assets related to acquired intangible assets.

Goodwill acquired in a business combination was allocated, at date of acquisition, to the cash generating unit that benefited from that business combination. The directors consider that a cash generating unit is generally an individual country of operation.

Where there is a change in the way the Group manages and operates, the goodwill allocation to individual cash generating units is reviewed and reallocated where appropriate.

The allocation of the goodwill by operating segment is shown in the table below:

Goodwill is tested annually for impairment or more frequently if there are indications that goodwill might be impaired. The next goodwill impairment review will be performed at 31 December 2014. Management do not consider there to be any indications of impairment as at 30 June 2014.

9. Property, plant and equipment

Fleet disposals are transferred to inventory prior to external sale or scrappage. The June 2013 disclosure, has been adjusted to reflect this treatment.

10. Inventories

11. Analysis of changes in net debt

Note

The unamortised debt issue costs relate to the costs associated with the loan placement in 2012, which is being amortised over the term of that facility.

12. Financial liabilities - borrowings

Bank loans and the loan placement are repayable as follows:

Bank loans and the loan placement are secured by both fixed and floating charges on certain assets of the Group.

With the exception of long term borrowings before unamortised debt issue costs, the fair value of the Group's financial instruments are materially equal to their carrying value. The fair value of long term borrowings before unamortised debt issue costs is £118,317,000 (June 2013: £123,606,000; December 2013: £122,815,000).

13. Capital commitments

14. Contingent liabilities

The Group has no significant contingent liabilities as at 30 June 2014 (30 June 2013 and 31 December 2013: £nil).

15. Seasonality of interim operations

The Group's financial results and cash flows have, historically, been subject to seasonal trends between the first and second half of the financial year. Traditionally, the second half of the financial year sees higher revenue and profitability as a result of there being an increased number of working days and higher customer demand in the Group's countries of operation.

There is no assurance that this trend will continue.

16. Principal risks and uncertainties

The principal risks and uncertainties for the Group are set out below: