Morgan Sindall Group Regulatory News (MGNS)

22 Feb 2005 07:01

Morgan Sindall PLC22 February 2005 MORGAN SINDALL plc ("Morgan Sindall" or "the Group") Preliminary Results for the year ended 31 December 2004 Morgan Sindall today announces record preliminary results for the year to 31December 2004. 2004 2003 Group turnover £1,219.3m £1,137.5m +7%Profit before tax and goodwill amortisation £31.0m £24.1m +29%Profit before tax £27.9m £20.9m +34%Basic earnings per share before goodwill amortisation 50.70p 43.78p +16%Basic earnings per share 43.26p 36.04p +20%Diluted earnings per share 42.46p 35.45p +20%Total dividend per share 18.50p 16.50p +12%Cash at bank £73.4m £14.6m +403% Group Highlights • Record year with particularly strong performances from Affordable Housing and Fit Out • £59m of cash generated, driven by improvements in management of working capital • Forward order book increased to £2.26bn Divisional Highlights Fit Out • Profit up 34% with margin maintained at 4.5% • Expansion through growth in market share Construction • Margin improvement through continued sector focus • Three NHS LIFT frameworks now secured and preferred bidder on fourth Infrastructure Services • Good progress made on key projects • NGT West Midlands Alliance contract secures position in gas sector Affordable Housing • Another year of strong growth with turnover up 31% and profit up 51% • Exciting prospects with record order book of £1.34bn John Morgan, Executive Chairman, commented: "We are pleased to announce record results for 2004. The Group's excellentperformance demonstrates the strength of our businesses. We have never been inbetter shape and look forward to another successful year." 22 February 2005 ENQUIRIES: Morgan Sindall plc Tel: 020 7307 9200John Morgan, Executive ChairmanPaul Smith, Chief ExecutiveDavid Mulligan, Finance Director College Hill Tel: 020 7457 2020Kate PopeMatthew Gregorowski MORGAN SINDALL plc Chairman and Chief Executive's Statement We are pleased to announce record results for 2004. Turnover was up 7% to£1,219m and profit before tax increased 34% to £27.94m. The Group's strongperformance demonstrates the success of our focus on our chosen market places.In particular, growth has been driven from the market leading positions held byour Affordable Housing and Fit Out divisions, whilst we have also enjoyedsuccess in our Construction and Infrastructure Services divisions. In addition,our margin has improved during 2004 underlining the quality of our delivery,whilst cash generation has been strong with cash balances peaking at the yearend. Board changes John Bishop will retire from the board at the forthcoming AGM in April. Overthe last ten years John has contributed a great deal to the development of theGroup and we thank him for his valuable input. As previously announced, DavidMulligan joined the board on 1 April 2004 as Finance Director. In September, Geraldine Gallacher stepped down as a non-executive director fromthe board having held this position since May 1995. We would like to thank herfor her contribution during a period of rapid growth. Gill Barr joined theboard as a non-executive director in September. She was formerly BusinessDevelopment Director of Woolworths plc and we welcome her to the board. Outlook We start 2005 in an excellent position to build on last year's success. Theorder book has grown to £2.26bn and we have a number of exciting prospects inthe pipeline. Fit Out is strengthening its market position and geographiccoverage and is very well placed to take advantage of the improvement in thecommercial property sector. Construction is making progress with its focus onthe health and education sectors. Infrastructure Services' longer termprospects are exciting, albeit volumes will be slightly lower in the shorterterm. Finally, Affordable Housing's prospects remain excellent and weanticipate another year of strong growth. Overall we are encouraged by the current state of our chosen markets, withstrong Government spending on housing, health and education alongside animproving commercial sector. We believe we are well placed to take advantage ofmarket opportunities and have already secured some significant contract winsearly in 2005. The Group has never been in better shape and we look forward toanother successful year. MORGAN SINDALL plc Operating and Financial Review Operating Review 2004 was a record year for the Group with profit before tax increasing 34% to£27.94m (2003: £20.92m) on turnover of £1,219m (2003: £1,138m). Basic earningsper share adjusted for goodwill grew by 16% to 50.70p (2003: 43.78p).Consequently the board recommends an increase in the final dividend to 13.25pgiving a total of 18.50p for the year (2003: 16.50p). Cash generation during the year was strong at £58.83m giving a cash balance atthe end of December of £73.45m (2003: £14.61m). The increase in the Group's order book to £2.26bn reflects a change by Lovell inthe calculation of its order book (as explained under Affordable Housing below).The forward order book without this change would have been £1.74bn (2003:£1.63bn). General market conditions Construction industry output, including the repair and maintenance sector, grewby around 3.7% during 2004 and is forecast to grow by 2.1% during 2005. Stronggrowth is forecast in the health, education, private commercial and publichousing sectors, which are key markets for the Group. Group strategy The strategy is to create a diversified construction group with market leadingbusinesses operating in distinct market sectors in order to provide sustainablegrowth. This approach also provides a balance between the public and privatesectors, which reduces the risk to the Group of changes within particularsectors of the economy. Divisional performance Fit Out Fit Out operates through four individual businesses namely Overbury, MorganLovell, Vivid Interiors and Backbone Furniture. Overbury (turnover of £197m)provides fit out and refurbishment services to the commercial property sectorand works for larger clients who employ their own professional teams of projectmanagers and architects. Morgan Lovell (turnover of £46m) provides design andbuild fit out solutions to the commercial and public sectors, giving advice toclients as to their requirements, providing design services and managing thebuilding works. Vivid Interiors (turnover of £8m) focuses specifically on theretail, leisure and entertainment sectors. Backbone Furniture (turnover of £1m)supplies innovative solutions to clients' furniture needs. The division's strategy is for each of its businesses to be the market leader inits chosen sector through superior quality, service and workmanship. Itsoffices cover the South East, Midlands and North of England. In 2004 Fit Out delivered an operating profit of £11.24m (2003: £8.41m) on aturnover of £252m (2003: £189m) giving an operating margin of 4.5% (2003: 4.4%),which is consistent with the long term margin for this division. 2004 saw a steady recovery in the commercial office fit out market, with demandfor new office space rising modestly. This contributed in part to the increasein turnover of this division. However, expansion has largely been achievedthrough further growth of the division's market share, which demonstrates thestrength of its businesses and the ability of management to fully exploitopportunities presented by the market. In 2004 the division extended its geographic coverage with Morgan Lovell openingan office in Birmingham in June and Overbury establishing an office inManchester in October. The division has started the year well with an order book of £98m compared to£77m last year. Levels of enquiries remain buoyant and further growth isanticipated. Construction Construction operates through the Bluestone brand and has a national network of23 offices across England and Wales with an emphasis on contracts up to £20m invalue. The division's strategy is to develop a business where most of its workload iswith key clients and is delivered through negotiated and framework contracts,thereby reducing the reliance upon competitively tendered work. In 2004 Bluestone increased its operating profit to £1.30m (2003: £0.60m) on alower turnover of £271m (2003: £300m). The benefits of its focused approach tothe health, education, industrial and property services sectors are beingrealised and the division continues to make solid progress. During the year the division secured two NHS LIFT (Local Improvement FinanceTrust) frameworks for Barnsley and for Camden & Islington NHS Trusts. Since theyear end it was awarded a third framework for East Hants, Fareham & Gosport NHSLIFT and is preferred bidder on a fourth at Doncaster. LIFTs are a partnershipbetween the public and private sectors to deliver primary health and social carefacilities in a local area over a prescribed period, typically 25 years. In December the division augmented its geographic coverage with the £3macquisition of part of the trade of Benson Limited, a privately ownedconstruction company. The acquisition has provided offices in Hatfield, Reigateand Southampton, strengthening the division's offering in the South and SouthEast. It is expected to be earnings enhancing in 2005. Bluestone starts the year with an order book of £197m (2003: £170m), whichcomprises the acquired contracts relating to the three new offices and amoderate increase in the underlying business. Looking ahead growth will bemodest and controlled as the division continues with its focused approach. Infrastructure Services Infrastructure Services which operates through the Morgan Est brand, is aleading provider of civil engineering solutions in the utilities and transportsectors. The full spectrum of contractual arrangements are entered into, namelytraditional contracts, design and build, partnering and framework agreements aswell as Private Finance Initiative (PFI) structures. The division is based inRugby and has a network of offices around the United Kingdom aligned with itsmain clients and project commitments. Infrastructure Services delivered an operating profit of £7.84m (2003: £9.24m)on turnover of £332m which was below that of the previous year (2003: £365m).The reduction in workload was anticipated with a number of the division's largerprojects beginning to draw to a close. During the year good progress was madeon its key projects at Heathrow Terminal 5 and the A92 in Scotland. In Decemberthe Newport Southern Distributor Road was opened concluding the constructionphase of this key PFI project. The division begins the year with an order book of £626m (2003: £695m, 2002:£550m), which includes a water framework under Asset Management Programme 4 forSevern Trent Water and a gas utility contract for National Grid Transco,securing its position in the water and gas utilities markets. Looking ahead,the division expects volumes again to be lower in 2005 with modest growthreturning in 2006. Affordable Housing The division's brand, Lovell, is the United Kingdom's leading provider ofaffordable housing which are homes designed for low income households. Thedivision's strategy is to strengthen its market leading position and continue toprovide innovative affordable housing solutions. The division achieved a record operating profit in 2004 of £13.45m, an increaseof 51% on the previous year (2003: £8.92m) on turnover of £364m (2003: £279m).Lovell has continued to grow strongly as a result of its success in deliveringmixed tenure and refurbishment solutions to local authorities and housingassociations. Lovell operates through nine regions which cover England, Scotland and Wales andprovides new build homes and housing refurbishment services. Refurbishments aretypically large scale schemes focused on improvements to kitchens, bathrooms,building exteriors and public areas. New build homes include those for the openmarket, local authorities and housing associations. Lovell's particularexpertise is in mixed tenure developments, which combine both open marketproperties and homes for public ownership and may also include refurbishment ofexisting dwellings. Lovell starts 2005 with a forward order book of £1.3bn, which now reflects thefull anticipated workload for the duration of its framework agreements.Previously, Lovell had only recognised the first year's workload from suchagreements in its order book. This change in approach adds £525m to the orderbook and brings Lovell into line with industry practice. The Government'sinvestment in affordable housing through its Decent Homes and SustainableCommunities programmes is expected to be maintained for the foreseeable future.As a result we anticipate further growth and improvement in the operating marginfor this business in 2005. Financial Review Turnover and operating profit Group turnover increased by 7% during the year to £1,219m (2003: £1,138m). Theincrease was mainly due to growth in Fit Out, up 33% to £252m and AffordableHousing, up 31% to £364m. Both Construction and Infrastructure Services'turnovers were around 10% down on the previous year at £271m and £332mrespectively. Group operating profit was a record at £26.85m, up 22% on the prior year (2003:£21.97m). This improvement is attributable to the impressive growth inprofitability at Affordable Housing and Fit Out. Affordable Housing againsignificantly increased its profit, by 51% to £13.45m (2003: £8.92m) and Fit Outby 34% to £11.24m (2003: £8.41m) driven by margin enhancement at AffordableHousing and organic growth within both divisions. Construction continued withits focus on key sectors with profit more than doubling to £1.30m (2003:£0.60m). Infrastructure Services' operating profit reduced to £7.84m (2003:£9.24m) reflecting lower workload. The cost of Group activities has increasedto £6.98m (2003: £5.20m) as the result of a larger executive team during theyear, payment of performance bonuses and the cessation of the rental incomestream following the disposal of investment properties in 2003. Profit before and after taxation Profit before taxation of £27.94m was 34% ahead of last year's £20.92m. Thisincludes a net interest receipt of £0.82m (2003: charge of £1.18m) reflectinghigher cash balances maintained by the Group. Profit after taxation was £18.05m (2003: £14.91m). The tax charge was £9.89m(2003: £6.01m) giving a current year effective tax rate of 35%. International Financial Reporting Standards (IFRS) In 2001 the European Commission (EC) took the decision to require the use ofIFRS for all entities listed on European stock exchanges. The EC has set 1January 2005 as the date for this transition and as a result the Group willreport its 2005 results under IFRS commencing with its interim statement inAugust 2005. During 2004 the Group has taken steps to consider the impact of the transitionto reporting under IFRS and has identified the key areas which will impact theGroup's report and accounts. These include accounting for goodwill, pensions,share based payments and deferred tax. Currently goodwill is capitalised and amortised over 20 years. Under IFRSgoodwill is required to be carried at cost and is not amortised but will besubject to annual impairment reviews. Existing goodwill will therefore becarried forward and will be reviewed annually from the date of transition. Under existing accounting standards information regarding pensions is disclosedby way of note and does not impact the accounts. In future pension assets anddeficits will need to be recognised in theGroup balance sheet and movements in those balances will be recognised in theprofit and loss account (to be renamed the income statement). Under IFRS thecurrent pension deficit will be recognised in the balance sheet and any futurechange in the scheme's assets and liabilities will be shown in the incomestatement. With regard to share based payments the fair value of options and share basedincentives issued to employees is to be accounted for in the income statement.This will impact the Group with regard to any options issued after 7 November2002. Deferred taxation has a wider scope under IFRS with the most significant impactfor the Group being in relation to revaluation gains on which deferred taxationwill now be recognised. Earnings per share and dividends Basic earnings per share have increased 20% to 43.26p (2003: 36.04p) giving 21%compound growth since 1995. Basic earnings per share adjusted for goodwillamortisation are 50.70p (2003: 43.78p). The final dividend is proposed at 13.25p (2003: 11.75p) giving a total dividendof 18.50p up 12% on last year (2003: 16.50p). Over the period since 1995 thecompound growth in the dividend is 24%. Earnings cover the ordinary dividend2.3 times (2003: 2.2 times). Shareholders' funds and capital structure Shareholders' funds have increased to £93.22m (2003 restated: £78.88m). Thenumber of ordinary shares in issue at 31 December 2004 was 42.15m. The increaseof 151,000 is due to the exercise of share options. There were no other newissues during the year. At December 2004 directors held interests over 22% of the ordinary shares of theCompany. Cash flow and treasury Net cash inflow from operating activities was £78.69m (2003: £22.83m). Capitalexpenditure was £4.30m (2003: £3.03m), which reflects ongoing investment in thebusiness particularly in information technology. Payments of £3.41m were madeduring the year to acquire part of the trade relating to three offices fromBenson Limited. After payments for taxation, dividends and servicing of finance the net increasein cash and short term deposits was £58.83m (2003: £7.76m). It is anticipatedthat these resources will be utilised in the Affordable Housing division as itfocuses on large mixed tenure regeneration schemes. In addition to its cash resources the Group has a £25m three year revolvingfacility, available until June 2006 and a £30m overdraft facility with its mainclearing bankers, which is renewed annually. Banking facilities are subject tonormal financial covenants, all of which have been met in the year. The Group has established treasury policies setting out clear guidelines as tothe use of counterparties and the maximum period of borrowings and deposits.Borrowings are for periods of no longer than three months and are at ratesprevailing on the day of the transaction. The Group considers that its exposureto interest rate movements is not significant. The Group has no exposure toforeign exchange risk due to its operations being based solely in the UnitedKingdom. In addition, it does not use derivatives as a risk management tool. MORGAN SINDALL plc Preliminary results for the year ended 31 December 2004 Group Profit and Loss Account for the year ended 31 December 2004 (Unaudited) 2004 2003 £'000s £'000s TurnoverContinuing operations 1,221,574 1,139,456Less share of joint ventures' turnover (2,277) (1,919)Group turnover (note 1) 1,219,297 1,137,537Cost of sales (1,095,932) (1,030,719)Gross profit 123,365 106,818Administrative expenses (96,536) (85,276)Other operating income 21 428Operating profit from continuing operations (note 1) 26,850 21,970 Share of profit of joint ventures 268 132Net interest receivable/(payable) 822 (1,182)Profit on ordinary activities before taxation 27,940 20,920 Tax charge on profit on ordinary activities (note 2) (9,891) (6,006) Profit on ordinary activities after taxation 18,049 14,914Dividends on equity and non-equity shares (note 3) (7,739) (6,830) Retained profit for the year 10,310 8,084 Basic earnings per ordinary share (note 4) 43.26p 36.04p Diluted earnings per ordinary share (note 4) 42.46p 35.45p MORGAN SINDALL plc Preliminary results for the year ended 31 December 2004 Group Balance Sheet at 31 December 2004 (Unaudited) 2004 2003 (restated) £'000s £'000s £'000s £'000s Fixed assets Intangible assets 52,860 53,002Tangible assets 14,890 13,375Share of joint ventures' gross assets 87,891 59,509Share of joint ventures' gross liabilities (78,746) (53,711)Investment in joint ventures 9,145 5,798Other investments 103 103 76,998 72,278Current assets Stocks 60,817 65,411Debtors 204,002 195,546Cash at bank and in hand 73,447 14,613 338,266 275,570Creditors: amounts falling due within one year (320,339) (267,401)Net current assets 17,927 8,169 Total assets less current liabilities 94,925 80,447 Creditors: amounts falling due after more than one year (1,707) (1,569) Net assets 93,218 78,878 Capital and reserves Called up share capital 2,107 2,100Share premium account 25,679 25,392Investment in own shares (993) (1,094) Capital redemption reserve 623 623Revaluation reserve 9,142 5,507Profit and loss account 56,660 46,350 Total equity shareholders' funds 93,218 78,878 The Group Balance Sheet at 31 December 2003 has been restated followingimplementation of accounting abstracts UITF 37 (Purchases and Sales of OwnShares) and UITF 38 (Accounting for ESOP Trusts), which requires the Group'sinvestment in own shares to be deducted from shareholders' funds. MORGAN SINDALL plc Preliminary results for the year ended 31 December 2004 Group Cash Flow Statement for the year ended 31 December 2004 (Unaudited) 2004 2003 £'000s £'000s Net cash inflow from operating activities (note 5) 78,685 22,832 Dividend received from joint venture 335 355 Returns on investments and servicing of financeInterest received 3,217 2,021Interest paid (2,309) (3,127)Dividends paid to preference shareholders - (62)Interest paid on finance lease charges (107) (80) 801 (1,248) TaxationCorporation tax paid (6,134) (6,946) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (4,296) (3,034) Receipts from sale of tangible fixed assets 501 9,205 (3,795) 6,171 Acquisitions and disposalsPurchase of business (3,409) (6,801) Equity dividends paid (7,099) (6,357) Management of liquid resourcesIncrease in short term deposits (1,015) (421) Net cash inflow before financing 58,369 7,585 FinancingIssue of shares, net of expenses 294 717Redemption of preference shares - (623)Capital element of finance leases (844) (336)Net cash outflow from financing activities (550) (242) Net cash inflow 57,819 7,343 Net cash inflow 57,819 7,343Movement in short term deposits 1,015 421Net increase in cash at bank and in hand per Group Balance Sheet 58,834 7,764 MORGAN SINDALL plc Preliminary results for the year ended 31 December 2004 Combined statement of movements in reserves and shareholders' funds for the year ended 31 December 2004 (Unaudited) 2004 2003 Share- Share Capital Profit Investment Share- holders' premium redemption Revaluation and loss in own Total Share holders' funds account reserve reserve account shares reserves capital funds (restated) £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s £'000s Balance at 1 25,392 623 5,507 46,350 - 77,872 2,100 79,972 70,280January (previously stated) Own shares - - - - (1,094) (1,094) - (1,094) (1,234)reclassified Balance at 1 25,392 623 5,507 46,350 (1,094) 76,778 2,100 78,878 69,046January(restated) Retained profit for - - - 10,310 - 10,310 - 10,310 8,084 the year Own shares - - - - (48) (48) - (48) (32)purchased Options exercised 287 - - - - 287 7 294 717 LTIP shares vested - - - - 149 149 - 149 172 Share of joint - - 3,635 - - 3,635 - 3,635 1,514venture revaluationsurplus Redeemed preference - - - - - - - - (623)shares Balance at 31 25,679 623 9,142 56,660 (993) 91,111 2,107 93,218 78,878December Goodwill arising on acquisitions prior to 31 December 1997 was written offagainst reserves. Cumulative goodwill written off to the profit and lossaccount in prior years amounts to £7,034,000 (2003: £7,034,000) Statement of total recognised gains and losses for the year ended 31 December 2004 (Unaudited) 2004 2003 £'000s £'000sProfit for the financial year before dividends 18,049 14,914Share of joint venture revaluation surplus 3,635 1,514 Total recognised gain since last annual report 21,684 16,428 MORGAN SINDALL plc Preliminary results for the year ended 31 December 2004 Notes (Unaudited) 1. Analysis of turnover, operating profit and net assets 2004 2003 Net Net Profit/ assets/ Profit/ assets/ Turnover (loss) (liabilities) Turnover (loss) (liabilities) (restated) £'000s £'000s £'000s £'000s £'000s £'000s Fit Out 251,594 11,238 (5,336) 189,001 8,407 (3,221)Construction 271,113 1,301 (4,551) 300,313 599 (690)Infrastructure Services 332,283 7,841 28,261 365,108 9,241 31,153Affordable Housing 364,307 13,445 (1,343) 278,814 8,920 24,393Group activities - (6,975) 5,290 4,301 (5,197) 14,930 1,219,297 26,850 22,321 1,137,537 21,970 66,565Net funds (note 6) 70,897 12,313Net assets 93,218 78,878 Segmental net assets are stated after deducting interest bearing net funds. Theprincipal activities are carried out in the United Kingdom and Channel Islands. 2. Tax charge on profit on ordinary activities 2004 2003 £'000s £'000sCurrent taxation:UK corporation tax charge for the year 9,822 6,697Adjustment in respect of prior years (302) 24Share of taxation of joint ventures 221 (23)Total current tax 9,741 6,698 Deferred taxation:Origination and reversal of timing differences 150 (692)Tax charge on profit on ordinary activities 9,891 6,006 3. Dividends on equity and non-equity shares 2004 2003 £'000s £'000sNon-equity dividends on preference shares:Paid - 62 - 62Equity dividends on ordinary shares:Interim paid 5.25p per share (2003: 4.75p per share) 2,188 1,944Final proposed 13.25p per share (2003: 11.75p per share) 5,551 4,824 7,739 6,768Total dividends 7,739 6,830 The proposed final dividend will be paid on 18 April 2005 to shareholders on theregister at 18 March 2005. The ex-dividend date is 16 March 2005. 4. Earnings per ordinary share The calculation of the basic earnings per share is based on the weighted averagenumber of 41,718,000 (2003: 41,207,000) ordinary shares in issue during the yearand on the profits for the year attributable to ordinary shareholders of£18,049,000 (2003: £14,852,000). In calculating the diluted earnings per share, earnings are no longer adjustedfor any preference dividend (2003: £62,000) giving earnings of £18,049,000(2003: £14,914,000). The weighted average number of ordinary shares is nolonger adjusted for the dilutive effect of the convertible preference shares(2003: 313,000) but it is adjusted for share options by 597,000 (2003: 311,000)and contingent Long Term Incentive Plan shares by 191,000 (2003: 243,000) givingan adjusted average number of ordinary shares of 42,506,000 (2003: 42,074,000). 5. Reconciliation of operating profit to net cash inflow from operatingactivities 2004 2003 £'000s £'000s Operating profit 26,850 21,970Depreciation of tangible fixed assets 3,465 4,292Amortisation of goodwill 3,101 3,191Loss/(profit) on sale of fixed assets 20 (1,056)Decrease/(increase) in stocks and work in progress 4,594 (15,767)Increase in debtors (5,784) (18,367)Increase in creditors 46,439 28,569Net cash inflow from operating activities 78,685 22,832 6. Analysis of net funds 31 December Non cash 31 December 2003 Cash flow movement 2004 £'000s £'000s £'000s £'000s Cash 7,263 57,819 - 65,082Short term deposits 7,350 1,015 - 8,365Cash at bank (per Balance Sheet) 14,613 58,834 - 73,447Finance leases (1,940) 844 (1,094) (2,190)Loan notes (360) - - (360)Total 12,313 59,678 (1,094) 70,897 7. Reconciliation of net cash flow to movement in net funds £'000s Increase in cash 57,819Cash inflow from increase in liquid resources 1,015Cash outflow from decrease in finance leases 844Changes in net funds from cashflows 59,678Non cash movement (1,094) 58,584 Net funds at 1 January 2004 12,313Net funds at 31 December 2004 70,897 8. Accounting policies This announcement is prepared on the basis of accounting policies as stated inthe financial statements for the year ended 31 December 2003 except for theadoption of UITF 37 and UITF 38. The financial information set out in the announcement does not constitute theCompany's statutory accounts for the years ended 31 December 2004 or 2003. Thefinancial information for the year ended 31 December 2003 is derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies. The auditors reported on those accounts; their report was unqualifiedand did not contain a statement under s237(2) or (3) Companies Act 1985. No accounts for the Company in respect of the year ended 31 December 2004 havebeen delivered to the Registrar of Companies, nor have the auditors of theCompany made a report under Section 236 of the Companies Act 1985 in respect ofany accounts for that financial year. The statutory accounts for the year ended 31 December 2004 will be finalised onthe basis of the financial information presented by the directors in thispreliminary announcement, will be posted to shareholders on or abouts the 8March 2005 and will be delivered to the Registrar of Companies following theCompany's Annual General Meeting. This information is provided by RNS The company news service from the London Stock Exchange