Michelmersh Brick Holdings Regulatory News (MBH)

12 Sep 2007 07:02

Michelmersh Brick Holdings PLC12 September 2007 12 September 2007 Michelmersh Brick Holdings plc ("Michelmersh", the "Company", or the "Group") Interim results for the six months to 30 June 2007 Strong Results Highlight Improved Performance Across The Group Michelmersh Brick Holdings plc (AIM: MBH), the UK's largest producer ofhandmade specification bricks and clay paviors, today announces interimresults for the six months to 30 June 2007. Highlights of the results are as follows:• Group turnover increased by 17% to £11.84 million (2006: £10.1 million)• sales volume grew 17% to 39.0 million units (2006: 33.2 million) a record figure for the six month period• operating profit up 412% to £825,000 (2006: £161,000) • net assets rose 8% to £38.9 million (2006: £35.9 million) • cash generated from operating activities before changes in working capital improved to £1.5 million (2006: £929,000)• all plants operating at capacity - increased demand from repair and maintenance market• Board anticipates that gearing will be largely eliminated at the start of the 2009 financial year• market conditions stablised in H1 2007 Post period events:• shareholding in Baggeridge Brick sold for 247p per share Commenting on the results, Eric Gadsden, Chairman, said: "I am pleased to reporta significant improvement for the first half of 2007. Turnover and profit hasincreased as the investment put in place over the last years has started toyield benefits. Demand for our full range of products has been robust acrossall our brick works. "There are a number of options for building on our strong base, which will bereviewed over the coming months but, coupled with a strong market for ourproducts and increased enquiries and sales across all our product ranges, wecan look forward with great confidence." For further information:Martin Warner, Chief Executive, Michelmersh Brick Holdings, plc: 01442 870 227Jeremy Carey/Rachel Drysdale, Tavistock Communications: 020 7920 3150Russell Cook, Charles Stanley Securities, Nominated Adviser: 020 7149 6000 Chairman's Statement I am pleased to report a significant improvement, as anticipated, for the sixmonths ending 30 June 2007. Turnover and profit increased as the investmentput in place over the last years has started to yield benefits. Demand for ourproducts has been robust across all our brick works. In addition, whilst we were not able to achieve our objective of acquiringBaggeridge Brick, we have sold our shareholding since the period end, which hasyielded a substantial profit and cash benefit. Persimmon is now in the public consultation phase in relation to the developmentof the land at our Telford site. The application is for development of 80acres, rather than the 60 acres we had previously stated, which, if granted,will provide for 1,000 homes. The planning application will be submitted inthe next few weeks. Financial Results Group turnover increased by 17% to £11.8 million (2006: £10.1 million),yielding an operating profit of £825,000 (2006: £161,000) and profit before taxof £179,000 (2006: loss of £346,000). Interest costs increased to £646,000(2006: £507,000), partly reflecting the carrying cost of the shares acquiredin Baggeridge Brick and also the increase in interest rates during the period. Operating profit before changes in working capital improved to £1.5 million(2006: £0.9 million). Net assets increased to £38.9 million from £35.9 million due to the increasedlevels of stocks being held as a result of a period of continuous productionreflecting the Board's optimism in current market conditions and also the valueof the Baggeridge shareholding. On 1 August; the Board announced that it had agreed to accept the WeinerbergerFinance Service BV offer in respect of its entire shareholding in BaggeridgeBrick. The 23.1% stake, acquired at an average cash acquisition price of 214.8p,realised 247p per share from the Weinerberger offer. The shares have beenincluded at market value of £23.6 million as at 30 June 2007. All borrowings advanced in relation to the purchase of the Baggeridge Brickshares, totalling approximately £16.5 million, are included within currentliabilities. No profit on the sale of shares has been provided for in the firstsix months figures. This will be in excess of £1.3 million and net cash inflowfrom the sale will be over £3.8 million. In line with our established dividend policy, the Board is not recommending aninterim dividend, but again expects to recommend the payment of a finaldividend at the year end. In these statements International Financial Accounting Standards have beenadopted for the first time. On transition the Group has recalculated thedeferred tax balances to include £8 million deferred tax calculated on therevaluation of operational property. Operational Review It is pleasing to note increased sales in a more stable market than thatexperienced in 2006. In particular, we saw the benefits at Blockleys of ournew ranges of wirecut bricks. This combined with good demand for products fromour niche brick works. We also saw the benefit of a strong repair, maintenanceand improvement market and desire to use local product for both aestheticreasons and to satisfy the increased focus on sustainability. The Company increased sales by 17% to 39 million units (2006: 33.2 million) andproduction to 41.3 million (2006: 35.2 million). These are record figures forthe six month period and show both the strengths of Michelmersh products and anupturn in the market. In particular, a much higher level of enquiries for our Hydrosmart permeablepaving system is encouraging. These enquiries will result in increased demandas sustainable solutions are sought to deal with current drainage issues. Looking forward, whilst our major capital projects are now completed we continueto consider investments in line with our depreciation rate and anticipatefurther improvements to both product ranges and efficiencies in the future. Forexample a new kiln at Dunton Brothers is now in the process of beingcommissioned, and will start to have a positive impact in the next financialyear. As noted above, the planning application for residential development at ourTelford site is progressing well. Whilst the initial 15 acres is alreadydesignated in the Local Development Framework, in consultation with the localauthority a detailed application is being prepared for this area and alsooutline consent for the remaining 65 acres. Good progress is being made withclay extraction and restoration of this land and we now anticipate all theincome from the first phase falling into the 2008 accounting period as opposedto 2008 and 2009. We have also now obtained planning consent to extract clay on the land adjacentto our Michelmersh plant which secures supplies for production for theforeseeable future. I would draw shareholders attention to our revised website,www.michelmersh.co.uk, which not only complies with the latest AIM regulationsgiving up to date financial information, but also gives comprehensive detailsabout the Group's products. Outlook In light of the continuing consolidation of the brick industry, we continue tosee a number of opportunities for Michelmersh. Over 90% of the market is now inthe hands of three multi nationals. Michelmersh, specialising in high qualitybricks, is the next largest followed by a number of single brick works servinglocal markets. We have a market share of about 5% by value and 3% by volume of the UK marketand are uniquely placed with our niche product range, customer service recordand strong sales team. As a result of improved profitability, cash received from the sale of theBaggeridge shares, and on the basis that the anticipated sale of the initial 15acres of land proceeds in 2008, the Board anticipates that gearing will belargely eliminated at the start of the 2009 financial year, and will have thebenefit of planning consent for a further 65 acres of residential land atTelford to be delivered in the future. There are a number of options for building on this strong base and these will bereviewed over the coming months but, coupled with a strong market and increasedenquiries and sales across all our product ranges, we can look forward withgreat confidence. Consolidated Income Statement 6 months 6 months 12 months to 30 June 2007 to 30 June 2006 to 31 December 2006 £'000 £'000 £'000 Unaudited Unaudited Audited Revenue 11,839 10,112 21,097Cost of sales (8,285) (7,714) (15,497) ________ ________ ________ Gross profit 3,554 2,398 5,600 Administrative expenses (2,758) (2,263) (4,850)Other income 29 26 309 ________ ________ ________ Operating profit 825 161 1,059Financial expense (646) (507) (1,001) ________ ________ ________ Profit/(loss) before taxation 179 (346) 58 Taxation - - 15 ________ ________ ________ Profit/(loss) for the financial period 179 (346) 73 ======== ======== ======== Earnings per share (note 5)Earnings per share 0.5p (0.9)p 0.2p Diluted earnings per share 0.5p (0.9)p 0.2p Consolidated Balance Sheet As at As at As at 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Unaudited Unaudited AuditedAssetsNon-current assetsIntangible assets 71 326 69Property, plant and equipment 54,863 53,881 54,265 ________ ________ ________ Total non-current assets 54,934 54,207 54,334 ________ ________ ________Current assetsInventories 8,386 7,475 8,171Trade and other receivables 5,281 4,577 3,603Available for sale financial assets 23,583 - -Cash and cash equivalents 389 811 195 ________ ________ ________ Total current assets 37,639 12,863 11,969 ________ ________ ________ Total assets 92,573 67,070 66,303 ________ ________ ________ Liabilities Current liabilitiesTrade and other payables 19,916 4,144 2,629Interest bearing borrowings 9,245 1,662 3,533 ________ ________ ________ 29,161 5,806 6,162 ________ ________ ________Non-current liabilitiesDeferred tax liabilities 10,029 9,830 9,176Interest bearing borrowings 14,461 15,540 14,416 ________ ________ ________ 24,490 25,370 23,592 ________ ________ ________ Total liabilities 53,651 31,176 29,754 ________ ________ ________ Net assets 38,922 35,894 36,549 ======== ======== ======== Equity attributable to equity holdersShare capital 7,604 7,604 7,604Share premium account 3,432 3,432 3,432Reserves 22,504 19,796 20,310Retained earnings 5,382 5,062 5,203 ________ ________ ________ Total equity 38,922 35,894 36,549 ======== ======== ======== 6 months 6 months 12 months to 30 June 2007 to 30 June 2006 to 31 December 2006 £'000 £'000 £'000 Unaudited Unaudited Audited Consolidated Cash Flow Statement Cash flows from operating activitiesProfit/(loss) before taxation 179 (346) 58Share based payment - - 15Finance costs 646 507 1,001Depreciation 634 767 1,464Amortisation - 1 2 ________ ________ ________Operating profit before changes inworking capital 1,459 929 2,540 Increase in inventories (215) (206) (902)Increase/(decrease) in receivables (1,678) (350) 623Increase/(decrease) in payables 17,287 512 (683) ________ ________ ________ Net cash generated by operations 16,853 885 1,578Interest paid (646) (592) (999) ________ ________ ________ Net cash generated from operating activities 16,207 293 579 ======== ======== ======== Cash flows from investing activitiesPurchase of intangible assets (2) - (2)Purchase of property, plant and equipment (1,232) (515) (1,501)Purchase of financial assets (20,536) - - ________ ________ ________ Net cash used in investing activities (21,770) (515) (1,503) ======== ======== ======== Cash flows from financing activitiesIssue of loans 47 8,718 8,218Repayment of finance lease obligations - (24) (430)Dividends paid to shareholders - - (418) ________ ________ ________ Net cash generated from financing activities 47 8,694 7,370 ________ ________ ________ Net (decrease)/increase in cash and cash equivalents (5,516) 8,472 6,446 Cash and cash equivalents at beginning of period (2,307) (8,753) (8,753) ________ ________ ________ Cash and cash equivalents at end of period (7,823) (281) (2,307) ======== ======== ======== Group Statement of Changes in Equity Total Share Share Share Fin Assets Land Retained Capital Premium Option Available and Earnings Equity Account Reserve For Sale Buildings Reserve Reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2006 7,604 3,432 26 - 19,770 5,408 36,240Loss for the period - - - - - (346) (346) ______ ______ ______ ______ ______ ______ ______ As at 30 June 2006 7,604 3,432 26 - 19,770 5,062 35,894Profit for the period - - - - - 419 419Equity dividends paid - - - - - (418) (418)Transfer to retained earnings - - - - (140) 140 -Deferred tax - - - - 639 - 639Share based payment - - 15 - - - 15 ______ ______ ______ ______ ______ ______ ______ As at 31 December 2006 7,604 3,432 41 - 20,269 5,203 36,549Profit for the period - - - - - 179 179Equity dividends paid - - - - - - -Revaluation in the period - - - 3,047 - - 3,047Deferred tax on revaluationMovement - - - (853) - - (853) ______ ______ ______ ______ ______ ______ ______ As at 30 June 2007 7,604 3,432 41 2,194 20,269 5,382 38,922 ______ ______ ______ ______ ______ ______ ______ NOTES TO THE GROUP INTERIM REPORT 1. GENERAL INFORMATION Michelmersh Brick Holdings Plc is a public limited company ("Company") incorporated in the United Kingdom under the Companies Act 1985 (registration number 3462378). The Company is domiciled in the United Kingdom and its registered address is 121 High Street, Berkhamsted, Hertfordshire, HP4 2PJ. The Company's Ordinary Shares are traded on the Alternative Investment Market ("AIM"). Copies of the Interim Report are being sent to shareholders. Further copies of the Interim Report and Annual Report and Accounts may be obtained from the address above. 2. BASIS OF PREPARATION Michelmersh Brick Holdings Plc has adopted International Financial Reporting Standards ("IFRS") as adopted by the European Union with effect from 1 January 2006. The Group will apply IFRS in its consolidated financial statements for the year ended 31 December 2007. Therefore, these interim statements for the six months ended 30 June 2007 are prepared using accounting policies in accordance with IFRS and International Financial Reporting Interpretations Committee ("IFRIC") interpretations that are expected to be applicable to the consolidated financial statements for the year ended 31 December 2007. These standards remain subject to ongoing amendment and/or interpretation and are therefore still subject to change. Accordingly, information contained in these interim financial statements may need updating for subsequent amendments to IFRS required for first time adoption or for new standards issued post the balance sheet date. The basis of preparation and accounting policies followed in this interim report differ from those set out in the Annual Report and Accounts for the year ended 31 December 2006 which were prepared in accordance with United Kingdom accounting standards (UK GAAP). As permitted, this interim report has not been prepared in accordance with IAS 34 ("Interim Financial Reporting"). The interim financial statements do not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2006 has been extracted from the statutory accounts for the Group for that period now amended to conform with the IFRS accounting policies expected to be applied in the consolidated financial statements for the year ended 31 December 2007. These published accounts in a form consistent with UK GAAP were reported on by the auditors without qualification or an emphasis of matter reference and did not include a statement under Section 237(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of Companies. A summary of significant accounting policies used in the preparation of this interim report under IFRS is provided in note 3 below. The financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated. A detailed explanation of the impact of the transition from UK GAAP to IFRS is contained in the appendix to the interim financial statements. 3. ACCOUNTING POLICIES Key sources of estimation uncertainty The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are the estimation of share-based payment costs. The estimation of share-based payment costs requires the selection of an appropriate valuation model, consideration as to the inputs necessary for the valuation model chosen and the estimation of the number of awards that will ultimately vest, inputs for which arise from judgements relating to the probability of meeting non-market performance conditions and the continuing participation of employees. Basis of consolidation The full year consolidated financial statements incorporate the results and net assets of the Company and its subsidiary undertakings drawn up to 31 December each year. The interim results are prepared for the first 6 months of the relevant full period. Subsidiary undertakings are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. The financial statements of subsidiary undertakings used in the preparation of the consolidated financial statements are prepared for the same reporting period as the parent company and are based on consistent accounting policies. All inter-company transactions and balances between Group entities, including unrealised profits arising from these, are eliminated upon consolidation. Revenue Revenue shown in the income statement represents the value of goods sold and services (which includes the sale of inert landfill) provided to customers net of value added tax, trade discounts and rebates. Revenue is recognised on despatch of goods or provision of services where the balance of risk and reward passes to the customer. Licences The costs of preparing and submitting applications for licences have been capitalised as an intangible fixed asset. Amortisation is calculated so as to write off the cost of the licence over the operational life of the landfill site to which it relates. Property, plant and equipment Plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. Land and buildings are carried at appropriate valuation for the land and buildings concerned. The property is valued every two years. The directors consider that the residual value of the property is not materially different from the carrying value at the balance sheet date, and hence any depreciation of the property is considered immaterial. Depreciation is calculated so as to write off the cost or valuation of an asset, less its estimated residual value, over the useful economic life of the asset as follows: Plant and machinery - 3% - 25% straight line Motor vehicles - 25% straight line Fixtures and fittings - 20% - 25% straight line Equipment - 3% - 25% straight line Site development costs are capitalised. These costs are written off over the operational life of the site as and when the void space created as a result of this expenditure is consumed. The Group does not incur any significant site restoration costs. Assets in the course of construction are not depreciated until available for use within the business. Mineral reserves are amortised on a usage basis. An annual amount equal to the excess of the annual depreciated charge on certain revalued assets over the notional historical cost depreciation charge on those assets is transferred annually from the revaluation reserve to the retained earnings. Impairment of assets At each balance sheet date the Group reviews the carrying amount of its assets other than inventories to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense in the income statement. The recoverable amount of assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Inventories Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost is calculated on the basis of direct cost plus attributable overheads based on a normal level of activity. No element of profit is included in work in progress. Financial Instruments Financial instruments are recognised when the Group becomes a party to the contractual provisions of the instrument. The principal financial assets and liabilities of the Group are as follows. Available for sale financial assets Available for sale financial assets are stated at fair value with consequential changes in fair value being credited to equity. Other borrowings Interest-bearing borrowings relating to finance lease obligations are recognised initially at fair value less attributable transactions costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis. Derivative financial instruments As the Group has only limited exposure to foreign currencies, no derivative products to hedge against current fluctuations are in place. Interest rate exposure is managed by use of fixed rate and floating rate debt. Currently, no derivative products are in use. The Group has secured a derivative product to hedge against current fluctuations in the cost of gas supply. These products are included in the financial statements at the locked in price. Interest expense/income Interest arising, prior to commissioning, on major capital projects is capitalised and written off over the estimated useful life of the asset acquired. Otherwise, interest payable and receivable is recognised in the income statement as it accrues, using the effective interest rate method. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash at bank and in hand, including bank deposits with original maturities of three months or less. Bank overdrafts are also included as they are an integral part of the Group's cash management. Share based payment transactions An expense for equity instruments granted under employee share schemes and the Save-As-You-Earn Schemes is recognised in the financial statements based on their fair value at the date of grant. This expense is recognised over the vesting period of the scheme. The Group has adopted the principles of the Black Scholes Model for the purposes of computing fair value. This policy only applies to equity settled arrangements. Operating lease agreements Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. Deferred tax The charge for taxation is based on the profit for the year and takes into account deferred tax arising on temporary differences. Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method and is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Pension costs Individual subsidiary companies operate defined contribution pension schemes for employees. The assets of the schemes are held separately from those of the companies. Contributions are charged to the income statement in the year in which they are incurred. 4. DIVIDENDS PAID AND PROPOSED (Unaudited) (Unaudited) Year 6 months 6 months ended 30 June 2007 30 June 2006 31 December 2006 £'000 £'000 £'000 Declared and paid during the period Final dividend for the year ended 31 December 2005: 0.011p (2004: 0.011p) - - 418 ________ ________ ________ 5. EARNINGS PER SHARE The calculation of earnings per share is based on earnings of £179,000 (2006: loss of £346,000) and 38,017,865 (2006: 38,017,865) ordinary shares. Diluted The diluted figure is based on the same figures as above but takes into account the weighted average unexercised share options in existence during the period. These amounted to 602,611 (30.06.07) options under the Michelmersh Brick Holdings Plc Group share option scheme (30.06.06: 681,269) and 726,671 (30.06.07) options under the Michelmersh Brick Holdings Plc SAYE scheme. (30.06.06: 465,141). 6. AVAILABLE FOR SALE FINANCIAL ASSETS During the period the company acquired 9,547,869 shares in Baggeridge plc at a cost of £20,536,000. At 30 June 2007 the market value of these shares was £23,583,000. Tax amounting to £853,000 has been provided for the potential capital gain at 30 June 2007. Since the period end the shares have been realised and as a consequence the deferred tax provision has crystallised. 7. Copies of this statement are being sent to shareholders. Further copies are available on request from: The Company Secretary, Michelmersh Brick Holdings plc, 121 High Street, Berkhamsted, Hertfordshire HP4 2PJ. APPENDIX TO THE GROUP INTERIM REPORT REPORTING UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS The interim financial statements are the first to be prepared by the Group usingpolicies in accordance with IFRS as adopted by the European Union. Thecomparative figures have been prepared on the same basis and have therefore beenrestated from those previously prepared under UK GAAP. The commentary belowdetails the key changes that have arisen due to the transition to reportingunder IFRS. The Group's date of transition is 1 January 2006, which is thebeginning of the comparative period for the 2006 financial year. Therefore, theopening balance sheet for IFRS purposes is that reported at 1 January 2006, asamended for changes due to IFRS. To explain the impact of the transition, reconciliations have been included inthis appendix that show the changes made to the statements previously reportedunder UK GAAP. The following un-audited reconciliations are included in thisappendix: 1. Reconciliation of Group balance sheet at 1 January 2006 from UK GAAP to IFRS. 2. Reconciliation of Group balance sheet at 31 December 2006 from UK GAAP to IFRS. 3. Reconciliation of Group balance sheet at 30 June 2006 from UK GAAP to IFRS. There were no reconciling items in respect of the income statements for the yearended 31 December 2006 and the six months ended 30 June 2006. The transition from UK GAAP to IFRS does not affect the cash flows generated bythe Group. The IFRS cash flow statement is presented in a different format thanthat required under UK GAAP. The reconciling items between the UK GAAP formatand the IFRS format have no net impact on the cash flows generated andaccordingly reconciliations have not been presented. The accounting policies used for IFRS are set out in note 3 of the main report. First time adoptionThe Group has applied the provisions of IFRS1 - (First-Time Adoption ofInternational Financial Reporting Standards) which, generally, requires thatIFRS accounting policies be applied retrospectively in determining the openingbalance sheet at the date of transition. IFRS1 contains both mandatory andoptional exemptions to the principle of retrospective application. Where theGroup has made use of an exemption it is noted below. The group has taken the following exemptions: • The Group has chosen to take the first time adoption exemption available under IFRS1 to use a valuation for its property, plant and equipment as its deemed cost at the transition date. Descriptions of the reconciling items between UK GAAP and IFRS are listed below.The amounts of the reconciling items are detailed in tables set out beneath eachof the reconciliations. • Deferred taxation On transition, the Group following the provisions of IAS12 (Income Taxes) has recalculated the deferred tax balances to include the deferred tax calculated on the revaluation of properties. Reconciliation of the Group Balance Sheet at 1 January 2006 UK GAAP IFRS As at Effect of As at 1 January Transition 1 January 2006 to IFRS 2006 £'000 £'000 £'000 Non-current assetsIntangible assets 69 - 69Property, plant and equipment 53,985 - 53,985 ________ _________ ________ 54,054 - 54,054 Current assetsInventories 7,269 - 7,269Trade and receivables 4,226 - 4,226Cash and cash equivalents 42 - 42 ________ _________ ________ 11,537 - 11,537 ________ _________ ________Total assets 65,591 - 65,591 ________ _________ ________ Current liabilitiesTrade and other payables (3,310) - (3,310)Interest bearing borrowings (9,845) - (9,845) ________ _________ ________ (13,155) - (13,155) Non-current liabilitiesInterest bearing borrowings (6,366) - (6,366)Deferred tax liabilities (1,824) (8,006) (9,830) ________ _________ ________Total liabilities (21,345) (8,006) (29,351) ________ _________ ________Net assets 44,246 (8,006) 36,240 ________ _________ ________ Shareholders' fundsShare capital 7,604 - 7,604Share premium account 3,432 - 3,432Share option reserve 26 - 26Land and building reserve 27,776 (8,006) 19,770Retained earnings 5,408 - 5,408 ________ _________ ________Total equity 44,246 (8,006) 36,240 ________ _________ ________ Reconciliation of the Group Balance Sheet at 31 December 2006 UK GAAP IFRS As at Effect of As at 31 December Transition 31 December 2006 to IFRS 2006 £'000 £'000 £'000 Non-current assetsIntangible assets 69 - 69Property, plant and equipment 54,265 - 54,265 ________ _________ ________ 54,334 - 54,334Current assetsInventories 8,171 - 8,171Trade and other receivables 3,603 - 3,603Cash and cash equivalents 195 - 195 ________ _________ ________ 11,969 - 11,969 ________ _________ ________Total assets 66,303 - 66,303 ________ _________ ________ Current liabilitiesTrade and other payables (2,629) - (2,629)Interest bearing borrowings (3,533) - (3,533) ________ _________ ________ (6,162) - (6,162) Non-current liabilitiesInterest bearing borrowings (14,416) - (14,416)Deferred tax liabilities (1,809) (7,367) (9,176) ________ _________ ________Total liabilities (22,387) (7,367) (29,754) ________ _________ ________ Net assets 43,916 (7,367) 36,549 ======== ========= ======== Shareholders' fundsShare capital 7,604 - 7,604Share premium account 3,432 - 3,432Share option reserve 41 - 41Land and building reserve 27,636 (7,367) 20,269Retained earnings 5,203 - 5,203 ________ _________ ________Total equity 43,916 (7,367) 36,549 ________ _________ ________ Reconciliation of the Group Balance Sheet at 30 June 2006 UK GAAP IFRS As at Effect of As at 30 June Transition 30 June 2006 to IFRS 2006 £'000 £'000 £'000 restated Non-current assetsIntangible assets 326 - 326Property, plant and equipment 53,881 - 53,881 ________ _________ ________ 54,207 - 54,207 Current assetsInventories 7,475 - 7,475Trade and other receivables 4,577 - 4,577Cash and cash equivalents 811 - 811 ________ _________ ________ 12,863 - 12,863 ________ _________ ________Total assets 67,070 - 67,070 ________ _________ ________ Current liabilitiesTrade and other payables (4,144) - (4,144)Current tax liabilities - - -Interest bearing borrowings (1,662) - (1,662) ________ _________ ________ (5,806) - (5,806) Non-current liabilitiesInterest bearing borrowings (15,540) - (15,540)Deferred tax liabilities (1,824) (8,006) (9,830) ________ _________ ________Total liabilities (23,170) (8,006) (31,176) ________ _________ ________Net assets 43,900 (8,006) 35,894 ======== ========= ======== Shareholders' fundsShare capital 7,604 - 7,604Share premium account 3,432 - 3,432Share option reserve 26 - 26Land and building reserve 27,776 (8,006) 19,770Retained earnings 5,062 - 5,062 ________ _________ _______Total equity 43,900 (8,006) 35,894 ________ _________ _______ This information is provided by RNS The company news service from the London Stock Exchange