MPAY.L Regulatory News (MPAY)

19 Sep 2007 07:01

Autoclenz Holdings PLC19 September 2007 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 19 September 2007Embargoed: 7.00am Autoclenz Holdings PlcThe UK's leading outsourced car valeting and vehicle preparation providerInterim Results Financial Highlights Six months ended 30 June 2007 2006 (as restated) Sales £13.503m £13.311m Profit before tax £0.542m £0.530m Profit before tax, goodwill amortisation andshare-based £1.119m £1.064mpayments up 5.2% Profit after tax £0.192m £0.178m Basic earnings per share 1.91p 1.71p Earnings per share (excluding amortisation) 7.05p 6.85p Operating cash flow up by 237% £1.660m £0.492m Interim Dividend increased by 20% 1.8pps 1.5pps New business wins in the period include: Three-year contract renewed with a major car rental Company worth £1.5m per annum Contracts with two major construction Companies, with revenues linked to volume of call-out New post-period business wins include: Valeting contract with preferential supplier status awarded for major national dealership network Contract awarded to React with a regional police constabulary "We are continuing to receive directly, and through business identified by ourteams, an encouraging level of new tender opportunities on a regular basis. Thisclearly reflects our reputation and underpins our strong market leadingposition. "We believe we can take advantage of the opportunities in both our core andgrowing businesses which will see the Group make further progress." John Bell, Chairman FULL STATEMENT ATTACHED Enquiries:Grahame Rummery, Chief ExecutiveTrevor Clingo, Group Finance Director Fiona Tooley or Keith Gabriel Julian BluntAutoclenz Holdings Plc Citigate Dewe Rogerson KBC Peel HuntToday: 020 7638 9571 (9.15am - 12.30pm) Today: 020 7638 9571 (8.00am - 12.30pm) Tel: 020 7418 8900Thereafter: 08707 510 410 Thereafter: 0121 455 8370www.autoclenz.co.uk Mobile: 07770 788624 (KG) -2- Autoclenz Holdings Plc Interim Results Six months ended 30 June 2007 STATEMENT BY THE CHAIRMAN, JOHN BELL IntroductionAs indicated in our trading update issued on 24 July 2007, trading conditionshave continued to be very challenging during the first half of 2007,particularly for the core Autoclenz valeting business. Despite these difficult conditions we have still achieved sales and profitgrowth over the equivalent period in 2006. We continue to maintain tight credit control procedures to ensure low levels ofdebt exposure from our customer base. We regard this as a prudent measure, thesuccess of which is evidenced by our excellent working capital position andminimal bad debts. Business ReviewThe Directors are pleased to report sales improvement in three of the strategicgrowth areas; Pinnacle is up 6%, Ready to Rent rose 23% and AC SMART increasedby 21%. As we indicated in our last trading update (Tuesday, 24 July 2007), we have madesignificant investment in these three areas to support the sales growth andshorten the period from contract win to launch. We expect this investment tocontribute to both revenue and profit in the second half of 2007. PinnaclePinnacle's growth has been achieved by expanding the number of services beingprovided and by growing the brand outside of its normal geographical footprint. Ready to RentReady to Rent has seen growth coming from two main areas, the offering of abroader range of services and by securing the renewal of a contract with a majorcar rental company for a further three years. The latter includes threeadditional sites at Gatwick, Birmingham and Southampton. AC SMARTTo continue the growth and development of AC SMART we have acceleratedinvestment in the recruitment of further staff and the purchase of equipmentwhich we expect to contribute to both revenue and profit streams in the future. ReactReact has stabilised its sales at a level similar to that of the first half of2006, and is now looking for opportunities to grow whilst focusing on control ofits cost structure to maintain profit margins. continued... -3- React has tendered for a number of new business contracts. I am pleased toreport that in the period under review we have secured new contracts with twomajor construction companies. The benefits of these new wins will begin to feedthrough during quarter four. We are also delighted to report that, post period, we have been contracted toprovide services for a major regional police constabulary. AutoclenzOur core valeting business has made good progress in a difficult market sectoralthough dealership sales are down on the same period last year. Post-period, wehave won a contract as the preferential supplier to a major national dealershipnetwork. Working Capital and Cash ManagementOur working capital management and cash generation remains strong generating£1.660m from operating activities compared to £0.492m in 2006. 2006 included £0.35m of costs relating to the float of the Company onto AIM. Themajority of the residual improvement is from greater cash received from tradedebtors in 2007. StrategyWhilst the Group continues to strengthen its brand profile and build on itscurrent partnerships with its customers, it is also investigating newopportunities where its operations can add value to a partnership with thecustomer. This being said, our strategy remains: - focused on higher margin businesses where we have identified potential sustainable growth; - competing hard and building on our leading market position in our core business; striving to further improve our own customer service levels and operational efficiency; - further exploiting opportunities for cross-selling across our disciplines, already evidenced by both Pinnacle and AC SMART recently through the expansion of their geographical and service offering which through increased exposure has given both businesses a broader appeal to a larger audience; - on-going strict cost control and efficient management of our working capital. Current TradingAfter an encouraging start to the period in the three growth areas of ourbusiness, we have had to contend with an unhelpful trading environment which isalso being influenced by the recent upward trend in interest rates andtightening credit conditions in what is already a highly competitive market forboth our customers and the Group. continued... -4- However, we are regularly continuing to receive an encouraging level of tenderopportunities directly and through our business teams' activities. This clearlyreflects our reputation and underpins our strong market leading position. We, like many other businesses, have little doubt that the remainder of the yearwill be tough but despite this, we believe we can take advantage of theopportunities in both our core and growing businesses which will see the Groupmake further progress. DividendIn line with the Group's progressive dividend strategy and to underpin theBoard's confidence in the Group's future, the Directors have recommended aninterim dividend of 1.8p per share. This will be paid on 26 October 2007 toShareholders on the Register as at 28 September 2007. John BellNon-Executive Chairman19 September 2007 Notes to Editors: Founded in the 1960s, Autoclenz is widely recognised as the leading name in carvaleting and vehicle preparation in the UK. The Company provides the completepackage for the total valeting operation that includes labour, chemicals,equipment, materials, management and quality control systems that are requiredto achieve quality vehicle preparation. A commitment to a high quality, costeffective service has made Autoclenz a key partner to many of the best knownnames in the fleet, daily rental, auction and dealer network across the country. -5- Autoclenz Holdings Plc Condensed consolidated income statementFor the period from 1 January to 30 June 2007 Six months ended Six months ended 30 June 2007 30 June 2006 (as restated see note 11) Notes £000 £000 Revenue 13,503 13,311 Cost of sales (9,738) (9,502) --------------------------------Gross profit 3,765 3,809 Distribution costs (314) (278) Administration expenses (2,739) (2,796) Operating Profit 712 735 Finance cost (170) (205) Profit before taxation 542 530 Taxation (350) (352) --------------------------------Profit for the period 192 178 ================================Basic Earnings per share 3 1.91p 1.71p Diluted Earnings per Share 3 1.87p 1.71p Basic Earnings per share (excludingamortisation) 3 7.05p 6.85p Diluted Earnings per Share (excludingamortisation) 3 6.88p 6.84p The results for the period are derived from continuing operations -6- Autoclenz Holdings Plc Condensed consolidated balance sheetAs at 30 June 2007 As at 30 June 2007 As at 31 December 2006 (as restated see note 11) Notes £000 £000 Assets Non-current assets Goodwill 6,292 6,292 Other intangible assets 4 7,708 8,242 Property, plant and equipment 5 755 721 Deferred tax asset 6 108 167 Called up share capital notpaid 6 38 38 ------------------------------------------- 14,901 15,460Current assets Inventories 13 2 Trade and other receivables 6 4,165 4,003 Cash and cash equivalents 868 191 ------------------------------------------- 5,046 4,196 -------------------------------------------Total assets 19,947 19,656 -------------------------------------------Current liabilities Trade and other payables 7 (1,631) (1,463) Current tax liabilities 7 (1,230) (1,057) Bank overdrafts and loans 7 (1,700) (1,400) Non-current liabilities Bank Loans 8 (2,960) (3,440) -------------------------------------------Total liabilities (7,521) (7,360) ------------------------------------------- -------------------------------------------Net assets 12,426 12,296 ===========================================Equity Share capital 1,040 1,040 Share premium account 11,383 11,383 Share option reserve 163 120 Retained earnings (160) (247) -------------------------------------------Total equity 12,426 12,296 =========================================== -7- Autoclenz Holdings Plc Condensed consolidated cash flow statementFor the period from 1 January to 30 June 2007 Six months ended Six months ended 30 June 2007 30 June 2006 Notes £000 £000 £000 £000Net cash inflow from operatingactivities 9 1,660 492 Investing Activities Interest Received 5 0 Proceeds on disposal of property,plant 36 4and equipment Purchase of property, plant andequipment (344) (268) Net cash used in investing activities (303) (264) Financing Activities Dividends paid (312) 0 Proceeds from drawdown of short termcredit facility 300 0 Repayments of short term borrowings 0 (1,000) Repayments of long term borrowings (500) 0 Interest Paid (168) (118) Net cash outflow from financingactivities (680) (1,118) Increase / (Decrease) in cash 677 (890) ========== ========= Condensed consolidated statement of recognised income and expenseFor the period from 1 January to 30 June 2007 Six months ended Six months ended 30 June 2007 30 June 2006 £000 £000 Transfers:Transferred profit from equity on cashflow hedges 7 - Profit for the period 192 178 --------------------------------- ---------------------------------Total recognised income and expense forthe period 199 178 =================================Attributable to: ---------------------------------Equity holders of the parent 199 178 ================================= -8- Autoclenz Holdings Plc Notes to the Financial Accounting Statements 1 Accounting Policies Basis of PreparationPrior to 2007 the Group prepared its audited annual financial statements underUK Generally Accepted Accounting Practices (UK GAAP). For the year ended 31December 2007, the Group is required to prepare its annual consolidatedfinancial statements in accordance with IFRS as adopted in the European Union(EU) and implemented in the UK. Comparative data for 2006 has been restated toconform to the new accounting polices and where appropriate these new policiesreflect the exemptions from restating certain financial information as permittedunder IFRS First-time Adoption of International Financial Reporting Standards(IFRS)'. An explanation of how the transition from UK GAAP to IFRS has affectedthe Group's results and income statements for the period ended 30 June 2006 and30 June 2007 and the balance sheets as at 30 June 2007 and 31 December 2006 isset out in notes 11 and 12. The unaudited consolidated income statement for each of the six month periodsand the unaudited consolidated balance sheet as at 30 June 2007 do not amount tofull accounts within the meaning of section 240 of the Companies Act 1985 andhave not been delivered to the Registrar of Companies. The interim report wasapproved by the Board of Directors on 12 September 2007. The unauditedcomparative figures for the six months to 30 June 2006, and the balance sheet asat 31 December 2006 have been prepared using accounting policies consistent withIFRS. They do not constitute statutory accounts within the meaning of section240 of the Companies Act 1985. The unqualified audited accounts for the sixteenmonths ended 31 December 2006, under previous UK GAAP, have been filed with theRegistrar of Companies and did not contain statements under section 237(2) or(3) of the Companies Act 1985. Accounting Convention The financial statements have been prepared under the historical costconvention. RevenueRevenue represents the fair value of invoiced goods sold, and services provided,to third parties, net of value added tax and trade discounts. Intangible AssetsThe purchased goodwill of the Group is regarded as having an indefinite usefuleconomic life and, in accordance with IAS36 Impairment of Assets, is notamortised but is subject to annual tests for impairment. In reviewing thecarrying value of goodwill of the various businesses, the Board has consideredthe separate plans and cash flows of these businesses consistent with therequirements of IAS36, and is satisfied that these demonstrate that noimpairment has occurred. For the acquisition of Autoclenz Ltd on 7 December 2005 the Group recognisesseparately from goodwill intangible assets that are separable or arise fromcontractual or other legal rights and whose fair value can be measured reliably.These intangible assets have finite lives and are amortised on a straight-linebasis over those lives, which range from 7-10 years. continued... -9- Property, Plant and EquipmentTangible non-current assets are stated at cost, net of depreciation and aretested for impairment. The cost of tangible non-current assets is depreciatedusing a straight-line basis over their expected useful lives as follows: Plant and motor vehicles between 2 and 5 yearsProperty improvements 7 years InventoriesInventories are valued at the lower of cost or net realisable value. Netrealisable value is based on estimated selling price, less further costsexpected to be incurred to completion and disposal. Provision is made forobsolete, slow-moving or defective items where appropriate. TaxationUK Corporation tax is provided at amounts expected to be paid using the taxrates and laws that have been enacted or substantially enacted by the balancesheet date. Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Timingdifferences are differences between the company's taxable profits and itsresults as stated in the financial statements that arise from the inclusion ofgains and losses in tax assessments in periods different from those in whichthey are recognised in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognisedonly when, on the basis of all available evidence, it can be regarded as morelikely than not that there will be suitable taxable profits from which thefuture reversal of the underlying timing differences can be deducted. Deferred tax is measured at the tax rates that are expected to apply in theperiods in which the timing differences are expected to reverse, based on thetax rates and laws that have been enacted or substantively enacted by thebalance sheet date. Deferred tax is measured on a non-discounted basis. ConsolidationThe accounts consolidate the accounts of the company and Autoclenz Ltd, the onlysubsidiary using the acquisition method of accounting. Employee BenefitsThe Group offers all employees membership of the Group personal pension planafter 3 months' service. The company makes contributions at varying levels from4% to 10%, depending on the level of contribution made by the employee. Amountscharged to the profit and loss account in respect of pension costs is thecontribution payable in the year. Differences between contributions payable andpaid in the year are shown as either accruals or prepayments on the balancesheet. Under IAS19 there is a requirement to recognise the monetary value of employeebenefits accruing to employees but not yet settled; typically holiday pay. Thereis a requirement to present the value of the liability for employee benefits tobe paid in the future for services provided up to the reporting date. continued... -10- Finance CostsFinance costs of debt are recognised in the profit and loss account over theterm of such instruments at a constant rate on the carrying amount. Period CoveredAll notes below detail costs and statistics relating to the period 1 January2007 to 30 June 2007. Derivative TransactionsThe group enters derivative transactions to manage the interest rate riskarising from its operations and sources of finance. The group does not hold or issue derivative financial instruments forspeculative purposes. Changes in the fair value of derivative financial instruments that aredesignated and effective as hedges of future cash flows are recognised directlyin equity and the ineffective proportion is recognised immediately in the incomestatement. Share-Based PaymentsThe group has applied the requirements of IFRS 2 Share-based Payment. The group issues equity-settled share based payments to directors and seniormanagement. Equity settled share-based payments are measured at fair value atthe date of grant. The fair value determined at the grant date is expensed on astraight-line basis over the vesting period. Fair value is measured by use ofthe Black Scholes model. 2 Segmental Analysis Six months ended Six months ended 30 June 2007 30 June 2006 (as restated see note 11) £000 £000 RevenueAutoclenz 11,591 11,586React 796 805AC Smart 1,116 920 -----------------------------------------------Total 13,503 13,311 -----------------------------------------------ResultsAutoclenz 2,974 3,031React 479 474AC Smart 312 304Distribution costs (314) (278)Administration expenses (2,739) (2,796)Finance cost (170) (205) -----------------------------------------------Profit before taxation 542 530 -----------------------------------------------Income tax charge (350) (352) -----------------------------------------------Profit after taxation 192 178 =============================================== continued... -11- 3 Earnings per Share Basic shares Diluted shares Weighted average number of ordinary shares 10,400,020 10,400,020 Effect of dilutive potential ordinary shares:share options 0 260,806 Total 10,400,020 10,660,826 Earnings (£000s) 199 199 Earnings per share 1.91p 1.87p Earnings per share (excluding amortisation) 7.05p 6.88p 4 Other Intangible Assets Contractual Other Brand Total Customers CustomersCostAt 1 January 2007 and 30 June 2007 2,656 3,169 3,506 9,331 AmortisationAt 1 January 2007 as restated 271 461 357 1,089 Charge for the period 133 226 175 534 ------------------------------------------At 30 June 2007 404 687 532 1,623 Carrying Amount ------------------------------------------At 30 June 2007 2,252 2,482 2,974 7,708 ==========================================Carrying Amount ------------------------------------------At 31 December 2006 2,385 2,708 3,149 8,242 ========================================== continued... -12- 5 Property, Plant and Equipment Plant, Motor Vehicles and Property Improvements £000CostAt 1 January 2007 2,487Additions 344Disposals (173) -------------------At 30 June 2007 2,658 ------------------- Accumulated DepreciationAt 1 January 2007 1,766Charge for the period 305Eliminated on disposals (168) -------------------At 30 June 2007 1,903 ------------------- Carrying AmountAt 30 June 2007 755 ===================Carrying AmountAt 31 December 2006 721 =================== 6 Trade and other receivables 2007 2006 £000 £000 Amounts receivable for the sale of goods 3,910 3,787 Other debtors 4 2Prepayments 251 214 --------------------------Amounts falling due within one year 4,165 4,003 --------------------------Deferred Taxation 108 167Called up share capital not paid 38 38 --------------------------Amounts falling due after more than one year 146 205 -------------------------- --------------------------Total debtors 4,311 4,208 -------------------------- continued... -13- 7 Current Liabilities 2007 2006 (as restated see note 11) £000 £000Amounts falling due within one yearShort term loan 700 400Bank loan and overdraft 1,000 1,000Trade payables 1,057 697Current tax 264 292Other taxation and social security 966 765Other creditors 15 21Accruals and deferred income 322 383Proposed dividend 187 312Redeemable preference shares 50 50 ---------------------------------- 4,561 3,920 ---------------------------------- 8 Non-Current Liabilities 2007 2006 £000 £000Bank loan 2,960 3,440 ------------------------- 2,960 3,440 -------------------------More than one year but not more than two years 1,150 1,000More than two years but not more than five years 1,950 2,600Finance costs incurred obtaining the bank loan (200) (200)Finance costs amortised 60 40 ------------------------- 2,960 3,440 ------------------------- The bank loan is secured by a charge on all the assets of the Group. Interest ischarged at 1.75% over LIBOR. continued... -14- 9 Cash FlowReconciliation of profit for the period to net cash from operating activities 2007 2006 (as restated) £000 £000 Profit for the period 199 178Adjustments for:Finance Income (7) 0Finance costs 170 205Income tax expense 350 352Depreciation of property, plant and equipment 305 272Amortisation of intangible assets 534 534Amortisation of finance costs 20 20Share based payment expense 43 0Gain on disposal of property, plant and equipment (31) (24) Operating cash flows before movements in working capital 1,583 1,537 (Increase) / Decrease in inventories (11) 2Increase in receivables (157) (865)Increase in payables 567 109 Cash generated by operations 399 (754) Income taxes paid (322) (291) --------------------------Net cash from operating activities 1,660 492 -------------------------- 10 Dividends Paid and Proposed 2007 2006 £000 £000Dividends paid and proposed on equity shares- interim of 1.8p (2006: 1.5p) per ordinary share 187 156 continued... -15- 11 Transition to IFRS The reconciliation between UK GAAP and IFRS for the Group's profit and incomestatements for the period ended 30 June 2007 and 30 June 2006 and the balancesheets as at 30 June 2007, 31 December 2006 and 1 September 2005 (the date oftransition) are presented below: Reconciliation of profit for the period ended 30 June 2007and the period ended 30 June 2006 Six months ended Six months ended 30 June 2007 30 June 2006 £000 £000 Profit after tax under UK GAAP 416 400 Reversal of amortisation under UK GAAP 387 387Amortisation under IFRS (534) (534)Holiday pay accrual (77) (75) ----------------------------------Profit after tax under IFRS 192 178 ---------------------------------- Reconciliation of income statement for the six months ended 30 June 2007 UK GAAP IFRS effect IFRS £000 £000 £000 Revenue 13,503 - 13,503Cost of sales (9,712) (26) (9,738) ---------------------------------------------------Gross profit 3,791 (26) 3,765 Distribution expenses (311) (3) (314)Administration expenses (2,544) (195) (2,739) ---------------------------------------------------Operating profit 936 (224) 712 Finance cost (170) - (170) ---------------------------------------------------Profit before taxation 766 (224) 542 Taxation (350) - (350) ---------------------------------------------------Profit for the period 416 (224) 192 =================================================== continued... -16- Reconciliation of income statement for the six months ended 30 June 2006 UK GAAP IFRS effect IFRS £000 £000 £000 Revenue 13,311 - 13,311 Cost of sales (9,473) (29) (9,502) -----------------------------------------------Gross profit 3,838 (29) 3,809 Distribution expenses (276) (2) (278) Administration expenses (2,605) (191) (2,796) -----------------------------------------------Operating profit 957 (222) 735 Finance cost (205) - (205) -----------------------------------------------Profit before taxation 752 (222) 530 Taxation (352) - (352) -----------------------------------------------Profit / (Loss) after taxation 400 (222) 178 =============================================== continued... -17- Reconciliation of balance sheet as at 30 June 2007 UK GAAP IFRS effect IFRS £000 £000 £000 Non-current assetsGoodwill 14,404 (8,112) 6,292Other intangible assets - 7,708 7,708Property, plant and equipment 755 - 755Deferred tax asset 108 - 108Called up share capital not paid 38 - 38 -------------------------------------------- 15,305 (404) 14,901Current assetsInventories 13 - 13Trade and other receivables 4,165 - 4,165Cash and cash equivalents 868 - 868 -------------------------------------------- 5,046 - 5,046 --------------------------------------------Total assets 20,351 (404) 19,947 --------------------------------------------Current liabilitiesTrade and other payables (1,554) (77) (1,631)Current tax liabilities (1,230) - (1,230)Bank overdrafts and loans (1,700) - (1,700) Non-current liabilitiesBank loans (2,960) - (2,960) --------------------------------------------Total liabilities (7,444) (77) (7,521) -------------------------------------------- --------------------------------------------Net assets 12,907 (481) 12,426 ============================================EquityShare capital 1,040 - 1,040Share premium account 11,383 - 11,383Share option reserve 163 - 163Retained earnings 321 (481) (160) --------------------------------------------Total equity 12,907 (481) 12,426 ============================================ continued... -18- Reconciliation of balance sheet as at 31 December 2006 UK GAAP IFRS effect IFRS £000 £000 £000 Non-current assetsGoodwill 14,791 (8,499) 6,292Other intangible assets - 8,242 8,242Property, plant and equipment 721 - 721Deferred tax asset 167 - 167Called up share capital not paid 38 - 38 -------------------------------------------- 15,717 (257) 15,460Current assetsInventories 2 - 2Trade and other receivables 4,003 - 4,003Cash and cash equivalents 191 - 191 -------------------------------------------- 4,196 - 4,196 --------------------------------------------Total assets 19,913 (257) 19,656 --------------------------------------------Current liabilitiesTrade and other payables (1,388) (75) (1,463)Current tax liabilities (1,057) - (1,057)Bank overdrafts and loans (1,400) - (1,400) Non-current liabilitiesBank loans (3,440) - (3,440) --------------------------------------------Total liabilities (7,285) (75) (7,360) -------------------------------------------- --------------------------------------------Net assets 12,628 (332) 12,296 ============================================EquityShare capital 1,040 - 1,040Share premium account 11,383 - 11,383Share option reserve 120 - 120Retained earnings 85 332 (247) --------------------------------------------Total equity 12,628 332 12,296 ============================================ continued... -19- Reconciliation of balance sheet as at 1 September 2005 (Date of transition) UK GAAP IFRS effect IFRS £000 £000 £000Current assetsDebtors - - -Cash at bank 1 - 1 ------------------------------------------------ 1 - 1 ================================================ Capital and reservesCalled up share capital 1 - 1 ------------------------------------------------Total equity 1 - 1 ================================================ 12 Detail on IFRS changes impacting published resultsSignificant changes to previously reported UK GAAP figures have been made in thefollowing area to comply with IFRS: A) IFRS 3 - Business CombinationsUnder IFRS 3 there is a specific requirement to recognise identifiableintangible assets that meet the IFRS 3 criteria at a fair value on acquisitionand to amortise these over an appropriate period. This reduces the amount ofgoodwill recognised. The acquisition of Autoclenz Ltd therefore is subject to adjustment. Specificintangible assets with a fair value of £9,331,000 were identified out of a totalUK GAAP goodwill addition of £15,623,000. B) IFRS 2 - Share-Based PaymentsThe Group adopted FRS20 Accounting for Share Based Payments to the auditedstatutory accounts for the sixteen months ending 31 December 2006. FRS20 is theequivalent UK accounting standard and has the effect of implementing therequirements of IFRS 2 hence no adjustments have been made in this respect tothe Income statement for the six months ended 30 June 2007 or to the comparativeinformation for the six months ended 30 June 2006. A charge of £43,000 arose inthe period ended 30 June 2007 (June 2006: £nil) and is included inAdministration expenses. In accordance with IFRS 2, share based payments are measured at a fair value atthe date of grant and expenses on a straight line basis over the vesting periodof the award. C) IAS 19 - Employee BenefitsA review of employee benefits across the Group identified there was noadjustment required to the balance sheet as at 31 December 2006 as all employeesmust take their full holiday entitlement during the year. A charge of £77,058arose in the period ended 30 June 2007 (June 2006: £75,132). C) IAS 16 - Property, Plant and EquipmentA first time adopter may elect to measure individual items of property, plantand equipment at fair value or a revalued amount as deemed cost at the date oftransition to IFRS. No adjustments have been made in this respect for thepurposes of transition. Property, plant and equipment have continued to bereported on the basis of depreciated historical cost, as under UK GAAP. continued... -20- 13 General notesThe interim report will be posted to all shareholders of the company, and willbe available on the Company's website (www.autoclenz.co.uk). The report will be available for inspection by the public at the registeredoffice of the company during normal business hours on any weekday. Furthercopies will be available on request from Autoclenz Holdings plc, Stanhope Road,Swadlincote, Derbyshire, DE11 9BE. -21- INDEPENDENT REVIEW REPORT TO AUTOCLENZ HOLDINGS PLC IntroductionWe have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated cash flow statement,the consolidated statement of recognised income and expense and related notes 1to 13. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare also responsible for ensuring that the accounting policies and presentationapplied to the interim figures are consistent with those applied in preparingthe preceding annual accounts except where any changes, and the reasons forthem, are disclosed. First-time adoption of International Financial Reporting StandardsAs disclosed in note 1, the next annual financial statements of the group willbe prepared in accordance with International Financial Reporting Standards asadopted for use in the EU. Accordingly, the interim report has been prepared inaccordance with the recognition and measurement criteria of IFRS and thedisclosure requirements of the Listing Rules that would be applicable if thecompany were admitted to the Official List. Review work performedWe conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. Deloitte & Touche LLPChartered Accountants19 September 2007 Notes: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but no controlprocedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination offinancial information differs from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock Exchange