Norman Broadb Regulatory News (NBB)

6 Sep 2007 11:04

Business Highlights

* Turnover of ‚£1.662 million, an increase of just over 50% on same period in 2006 * Pre tax profits of ‚£313,000, an increase of 34% on the same period in 2006 * Earnings per share for the period 0.58p per share

For further information please contact:

Garner plc

J Bartle ChairmanAndrew Garner Chief ExecutiveTel: 020 7629 8822

City Financial Associates Limited

Ross AndrewsTel: 020 7492 4777CHAIRMAN'S STATEMENT

I am pleased to report further progress by the Company in the first 6 months of 2007.

Turnover has increased by just over 50% compared with the same period in 2006, to ‚£1.662million from ‚£1.104million.

Our costs have increased more or less in line with this growth, primarily reflecting our headcount increases in the second half of last year but, overall, we have seen strong progress in trading revenues and another significant increase in profitability. Our operating profit in this period was 28% higher than the same period last year (‚£367,000 versus ‚£286,000) and our profit before tax was 34% higher (‚£313,000 versus ‚£234,000).

So, whilst we continue to address diligently our cash management, debt reduction/ balance sheet issues, we continue to see strong trading progress. Witness four consecutive six-month periods of pre-tax profits with each six-months showing growth over the preceding six months.

We continue to build a stronger and more dynamic Company, so we see no reason why this significant progress should not continue for the immediate future. I congratulate all in the Company on this very positive performance and in the turnaround in the Company's fortunes that it represents.

J BARTLEChairmanCONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Note Six months Six months Year ended ended ended 31 December 30 June 2007 2006 30 June 2006 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Turnover 1,662 1,104 2,612 Administrative expenses 4 (1,295) (818) (1,978) -------- --------- --------- Total operating profit 367 286 634 Interest payable and similar (54) (52) (116)charges -------- -------- --------- Profit on ordinary activities 4 313 234 518before taxation Taxation (94) - (153) -------- -------- --------- Profit for the financial period 4 219 234 365 Dividends - - - -------- -------- --------- Retained profit for the financial 4 219 234 365period -------- -------- ---------

Earnings per share (pence) - Basic 2 0.58p 0.04p 1.19p and diluted

-------- -------- ---------CONSOLIDATED BALANCE SHEET AT 30 JUNE 2007 At 30 June 2007 At 30 June 2006 At 31 December 2006 (unaudited) (unaudited) (audited) Note ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Fixed assets Tangible assets 22 1 16 Investments 5 959 959 959 -------- -------- -------- 981 960 975 Current assets Debtors 991 573 671 Cash at bank and in hand - - - -------- -------- -------- 991 573 671 Creditors: amounts falling (3,035) (3,243) (2,845) due within one year -------- -------- -------- Net current liabilities (2,044) (2,670) (2,174) --------- --------- --------- Total assets less current (1,063) (1,710) (1,199)liabilities Creditors: amounts falling (421) (593) (504)due after more than one year Provisions for liabilities - - -and charges --------- --------- --------- Total assets less current (1,484) (2,303) (1,703)liabilities ====== ===== ===== Capital and reserves Called up share capital 4,942 4,795 4,942 Share premium account 3,845 3,523 3,845 Profit and loss account 5 (10,271) (10,621) (10,490) ---------- --------- -------- Shareholders' funds (1,484) (2,303) (1,703) ====== ===== ===== CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Note Six months Six months Year ended ended 30 31 ended 30 June 2006 December 2006 June 2007 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Net cash inflow/(outflow) from i 12 (36) 90operating activities Returns on investments and servicing of (54) (52) (116)finance Taxation - - - Capital expenditure and financial (9) - (20)investment Acquisitions and disposals - - - ---------- ---------- ---------- Net cash flow before use of liquid (51) (88) (46)resources and financing Financing (112) 58 67 ---------- ---------- ---------- Increase / (decrease) in cash ii (163) (30) 21 ====== ====== ======

NOTES TO THE CASH FLOW STATEMENT

i RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH FLOW

Six months Six months Year ended ended 30 31 December ended 30 June 2006 2006 June 2007 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Operating profit for the period 367 286 634 Depreciation of tangible fixed assets 3 - 4 Amortisation - - 2 (Increase) / decrease in debtors (320) (270) (368) (Decrease) / increase in creditors (38) (52) (182) --------- --------- --------- Net cash inflow / (outflow) from operating 12 (36) 90activities ====== ====== ======

Note 6 below contains a reconciliation between the 30 June 2006 and 31 December 2006 numbers previously reported and those reported in above note. This change is due to the requirement of the company to adopt International Financial Reporting Standards

ii RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

Six months Six months Year ended ended 30 31 ended 30 June 2006 December 2006 June 2007 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000

(Decrease) / increase in cash in the period (163) (30) 21

Directors' loan advance - (82) 300 Net movement on secured loans 110 101 76 ---------- ---------- ----------

Change in net debt resulting from cash flows (53) (11) 397

Net debt at the beginning of the period (1,287) (1,683) (1,684)

---------- ---------- ---------- Net debt at the end of the period (1,340) (1,694) (1,287) ====== ====== ======

iii ANALYSIS OF CHANGES IN NET DEBT

At 31 December Cash flow At 30 June 2006 2007 ‚£'000 ‚£'000 ‚£'000 Cash at bank and in hand - - - Bank overdraft (25) (163) (188) ----------- ---------- ----------- Total for cash at bank and in hand (25) (163) (188) Debt due within one year (662) 28 (634) Debt due after more than one year (503) 82 (421) Directors loan account (97) - (97) ------------ ---------- ------------ (1,287) (53) (1,340) ======= ====== =======NOTES TO THE UNAUDITED INTERIM REPORT

1. BASIS OF PREPARATION

The results for the six months ended 30 June 2007, which are unaudited, have been prepared in accordance with applicable accounting standards and under the historical cost convention.

The financial information set out in this document which has been neither audited nor reviewed by the auditors does not comprise the statutory accounts of the Company within the meaning of section 240(5) of the Companies Act 1985.

BASIS OF CONSOLIDATION

The group financial statements consolidate those of the Company and of its subsidiary undertaking Garner International Limited, a company incorporated in England and Wales. Profits or losses on intra-group transactions are eliminated in full.

2. EARNINGS PER ORDINARY SHARE

The calculation of the earnings per share is based on the profit attributable to ordinary shareholders of ‚£219,000 (2006: ‚£234,000) and the weighted average number of ordinary shares in issue during the period, being 37,968,937 (2005: 1,167,118,360).

The 30 June 2006 profit attributable to ordinary shareholders had been reported as ‚£200,000 and used as the basis for calculating earnings per share. This number has now been restated to ‚£234,000 due to the requirement for the company to comply with International Financial Reporting Standards. Note 4 below contains the details regarding this change.

The requirement for the company to comply with International Financial Reporting Standards has also resulted in the restatement of the profit attributable to ordinary shareholders for the year ended 31 December 2006 and therefore the earnings per share figure covering that period. Note 4 below contains details regarding this change.

3. COPIES OF THE UNAUDITED INTERIM REPORT

Copies of this report are available on request from the Company's registered office at 6 Derby Street, London, W1J 7AD.

4. RECONCILIATION OF PROFIT

Reconciliation for the 6 months ended 30 June 2006

Note Previous UK Effect of IFRS GAAP transition to IFRSs ‚£'000 ‚£'000 ‚£'000 Turnover 1,104 - 1,104 Administrative expenses 1 (852) 34 (818) ------------ ------------ ----------- Total operating profit 252 34 286 Interest payable and similar (52) - (52)charges ------------ ------------ ----------- Profit on ordinary activities 200 34 234before taxation Taxation - - - ------------ ------------ ------------ Profit for the financial period 200 34 234 Dividends - - - ------------ ------------ ------------ Retained profit for the financial 200 34 234period ======= ======= =======

Reconciliation for the year ended 31 December 2006

Note Previous UK Effect of IFRS GAAP transition to IFRSs ‚£'000 ‚£'000 ‚£'000 Turnover 2,612 - 2,612 Administrative expenses 1 (2,045) 67 (1,978) ------------ ------------ ----------- Total operating profit 567 67 634 Interest payable and similar (116) - (116)charges ------------ ------------ ----------- Profit on ordinary activities 451 67 518before taxation Taxation (153) - (153) ------------ ------------ ------------ Profit for the financial period 298 67 365 Dividends - - - ------------ ------------ ------------ Retained profit for the financial 298 67 365period ======= ======= =======

Note 1: Goodwill has been adjusted by ‚£34,000 for the 6 months ended 30 June 2006 and by ‚£67,000 for the year ended 31 December 2006, being the amortisation charge for each period. In line with International Financial Reporting Standards, goodwill has not been amortised from the transition date, but has instead been subject to an impairment review. The review has indicated that goodwill is not impaired.

5. RECONCILIATION OF EQUITY

Reconciliation of equity as at 30 June 2006 Previous UK GAAP Effect of IFRSs transition to IFRSs ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Fixed assets Tangible assets 1 - 1 Investments 925 34 959 -------- -------- -------- 926 34 960 Current assets Debtors 573 - 573 Cash at bank and in hand - - - -------- -------- -------- 573 - 573 Creditors: amounts falling (3,243) - (3,243) due within one year -------- -------- -------- Net current liabilities (2,670) - (2,670) --------- --------- --------- Total assets less current (1,744) 34 (1,710) liabilities Creditors: amounts falling (593) - (593) due after more than one year Provisions for liabilities - - - and charges --------- --------- --------- Total assets less current (2,337) 34 (2,303) liabilities ====== ===== ===== Capital and reserves Called up share capital 4,795 - 4,795 Share premium account 3,523 - 3,523 Profit and loss account (10,655) 34 (10,621) ---------- --------- -------- Shareholders' funds (2,337) 34 (2,303) ====== ===== =====

Investments, which represent goodwill, have been adjusted by ‚£34,000, being the amortisation charge for the year. In line with International Financial Reporting Standards, goodwill has not been amortised from the transition date, but has instead been subject to an impairment review. The review has concluded that goodwill is not impaired.

Reconciliation of equity as at 31 December 2006 Previous UK GAAP Effect of IFRSs transition to IFRSs ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Fixed assets Tangible assets 16 - 16 Investments 892 67 959 -------- -------- -------- 908 67 975 Current assets Debtors 671 - 671 Cash at bank and in hand - - - -------- -------- -------- 671 - 671 Creditors: amounts falling (2,845) - (2,845) due within one year -------- -------- -------- Net current liabilities (2,174) - (2,174) --------- --------- --------- Total assets less current (1,266) 67 (1,199) liabilities Creditors: amounts falling (504) - (504) due after more than one year Provisions for liabilities - - - and charges --------- --------- --------- Total assets less current (1,770) 67 (1,703) liabilities ====== ===== ===== Capital and reserves Called up share capital 4,942 - 4,942 Share premium account 3,845 - 3,845 Profit and loss account (10,557) 67 (10,490) ---------- --------- -------- Shareholders' funds (1,770) 67 (1,703) ====== ===== =====

Investments, which represent goodwill, have been adjusted by ‚£67,000, being the amortisation charge for the year. In line with International Financial Reporting Standards, goodwill has not been amortised from the transition date, but has instead been subject to an impairment review. The review has concluded that goodwill is not impaired.

6. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS

As at 30 June 2006 Previous UK Effect of IFRSs GAAP transition to IFRSs ‚£'000 ‚£'000 ‚£'000 Operating profit for the period 252 34 286 Depreciation of tangible fixed assets - - - Amortisation 34 (34) - (Increase) / decrease in debtors (270) - (270) (Decrease) / increase in creditors (52) - (52) --------- --------- --------- Net cash inflow / (outflow) from operating (36) - (36)activities ====== ====== ======As at 31 December 2006 Previous UK Effect of IFRSs GAAP transition to IFRSs ‚£'000 ‚£'000 ‚£'000 Operating profit for the period 567 67 634 Depreciation of tangible fixed assets 4 - 4 Amortisation 69 (67) 2 (Increase) / decrease in debtors (368) - (368) (Decrease) / increase in creditors (182) - (182) --------- --------- --------- Net cash inflow / (outflow) from operating 90 - 90activities ====== ====== ======Aim Compliance Committee

In accordance with AIM Rule 31 the Company is required to have in place sufficient procedures, resources and controls to enable its compliance with the AIM Rules; seek advice from its nominated adviser ("Nomad") regarding its compliance with the AIM Rules whenever appropriate and take that advice into account; provide the Company's Nomad with any information it requests in order for the Nomad to carry out is responsibilities under the AIM Rules for Companies and the AIM Rules for Nominated Advisers; ensure that each of the Company's directors accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and ensure that each director discloses without delay all information which the Company needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that information is known to the director or could with reasonable diligence be ascertained by the director.

In order to ensure that these obligations are being discharged, the Board has established a committee of the Board (the "AIM Committee"), chaired by Richard Robinson, a non executive director of the Company.

Having reviewed relevant Board papers, and met with the Company's Executive Board and the Nomad to ensure that such is the case, the AIM Committee is satisfied that the Company's obligations under AIM Rule 31 have been satisfied during the period under review.

GARNER PLC interim report For the 6 months to 30 June 2007 1