Severfield Regulatory News (SFR)

3 Apr 2007 07:01

Severfield-Rowen PLC03 April 2007 3 April 2007 2006 Full Year Results RECORD PROFIT, EXCELLENT PROSPECTS Severfield-Rowen Plc, the market leading structural steel group, announces itsfull year results to 31 December 2006. £m 2006 2005 Change Revenue 295.1 236.7 + 24.7%Operating profit 29.1 19.3 + 50.8%Profit before tax 30.3 19.7 + 54.1%Basic earnings per share 102.54p 66.39p + 54.5%Dividend per share 57.0p 37.0p + 54.1% Highlights • Record pre-tax profit of £30.3m increased by 54.1%• Operating margin increased to 9.9% (2005: 8.2%)• Profit before tax margin increased to 10.3% (2005: 8.3%)• Dividend increased by 54.1%• Gross cash balance of £38.3m up 27.1%, buoyed by a net cash inflow of £8.2m• All core businesses performed strongly• Strong order book of £207m, plus a very high level of future contract prospects• 2007 commenced ahead of Board's expectations Commenting on the results, Peter Levine, Chairman said: "Severfield-Rowen had a very strong year and the Group's prospects areexcellent. "Our markets remain robust and demand for structural steelwork projects,particularly larger projects, continues to be significant. "We have started the current year with trading ahead of the Board's expectationsand we are confident of further success in 2007." Enquiries Severfield-Rowen PlcPeter Levine, Chairman 07802 312249Peter Davison, Finance Director 01845 577 896 Financial DynamicsRichard Mountain/Susanne Walker 020 7269 7291 CHAIRMAN'S STATEMENT Introduction The Group performed very well in 2006, with all of our core businessesdelivering record results. The resultant financial strength of Severfield-Rowen underlines our confidencein the Group's long-term growth prospects. Overview In 2006 operating profit increased by 50.8% to £29.1 million (2005: £19.3million) on increased revenue of £295.1 million (2005: £236.7 million). Theoperating margin increased to 9.9% (2005: 8.2%). Profit before tax was 54.1% higher at £30.3 million (2005: £19.7 million)producing, after the tax charge of £9.4 million (2005: £6.1 million), a 54.5%increase in basic earnings per share of 102.5p (2005: 66.4p). The profit beforetax margin increased to 10.3% (2005: 8.3%). Net assets increased to £66.2 million (2005: £55.2 million) with a gross cashbalance at the year end of £38.3 million (2005: £30.1 million), reflecting a netcash inflow of £8.2 million. The Group retains its dominant position in the structural steel industry and isinvolved in many significant projects and flagship developments. We are particularly pleased that each of the Company's core subsidiaries namelySeverfield-Reeve Structures, Watson Steel Structures, Rowen Structures and AtlasWard Structures, contributed record results. Dividend With the record results announced today and the strength of our financialposition, the Directors are pleased to announce a 54.1% increase in the fulldividend for the year to 57.0p per share which is covered 1.8 times by earnings. The final dividend is 37.0p per share (2005: 24.5p) payable on 18 June 2007 toshareholders on the register on 11 May 2007. Board Changes John Severs, our Group Managing Director, intends to retire from the Board thisyear. John was one of the founders of Severfield-Rowen, and was fundamental increating and shaping the Group. He will continue as a consultant to the Group for a three year period after hisdeparture and his mentoring and experience will greatly assist the newmanagement team in taking the Group forward. I am delighted to announce that Tom Haughey will be appointed as Chief ExecutiveOfficer and Peter Emerson will become Chief Operations Officer following John'sdeparture, thus ensuring a smooth management transition. Tom and Peter havebeen Main Board Directors of Severfield-Rowen since 2002 and 1998 respectivelyand, with complementary skill sets have, over the years, made significantcontributions to the Group. On behalf of all shareholders, management and colleagues, I would like to thankJohn for his tireless leadership and we all wish him the best in his retirement. On 26 September 2006, it was announced that Geoff Wright had joined the Board asa non-executive director and details of this were set out in our 2006 InterimResults Statement. Employees The consistent achievements of the Group are a tribute to our management andworkforce. They are pivotal to the success of our Group and the Directors'sincere gratitude is owed to them. Outlook The Group's prospects are excellent. Our markets remain robust and demand forstructural steelwork projects, particularly larger projects, continues to besignificant. We have started the current year with trading ahead of the Board's expectationsand we are confident of further success in 2007. Peter LevineChairman 3 April 2007 OPERATIONAL REVIEW Core Business Overview In 2006 the core businesses of the Group, Severfield-Reeve Structures, WatsonSteel Structures, Rowen Structures and Atlas Ward Structures, each producedrecord results ahead of our expectations at the time of the interim results. They were again well supported by Steelcraft Erection Services. Severfield-Reeve Structures Once again, the business continued to achieve outstanding productionefficiencies. Contracts were undertaken in a wide variety of areas and on anumber of projects including: • Ongoing retail development opposite BBC Television Centre, White City, London• Office development at No.1 Coleman Street, London• Redevelopment and enlargement of the Pollok retail centre in Glasgow• Retail and residential development in the Princesshay area of Exeter• Retail development at the Grand Arcade, Wigan• Creation of an international centre for book conservation at the British Library, London• Development of a new plaster calcination and milling facility for British Gypsum at East Leake, Leicestershire• New data centre for Morgan Stanley in Croydon• New printing facility for News International in Broxbourne, Hertfordshire• Concert hall, arts venue and office development with unique rippling glass facade at Kings Place, London• Office development using the innovative Corus Bi-Steel Core at One Basinghall Avenue, London The current year has commenced well. New significant contracts include: • Continuing specialist development of oil pipeline carrying racks on Sakhalin Island, Russian Federation• First ever inner city Ikea store on Queen Victoria Road, Coventry• Extension to the Shires shopping centre in Leicester• Retail, leisure and residential centre Eagles Meadow, Wrexham• Retail development at the Broadmead Shopping complex in Bristol• New 1200 bed Hospital development at Queen Elizabeth Medical centre, Edgbaston, Birmingham• Development of the learning disability treatment and assessment centre in Kirklands Hospital, Bothwell, Lanarkshire• Mixed use retail and residential development at Livingston near Edinburgh• New Hospitals in Glasgow, Pontefract, Wakefield, and Salford Capital investment at the Dalton site continued in 2006 with almost £5 millionbeing invested in further improvements to the production facilities. Thisincluded the building and equipping of a third intumescent paint line, togetherwith the purchase and extension of another production line building usedprimarily for the fabrication involved in carrying out smaller volumes of worksuch as contract variations. This type of work was previously sub-let to anexternal sub-contractor. A small amount of land was also acquired to facilitatethe movement of steel on the site. Watson Steel Structures Watson's expertise in the specialised steelwork sector was reinforced in 2006with a number of successful project completions covering a broad spectrum of theconstruction industry. Contracts performed in 2006 included: • Ongoing works at Heathrow Airport Terminal 5 for BAA plc• Arena and Conference Centre at Kings Waterfront, Liverpool• Link bridge at Terminal 3, Heathrow Airport for BAA plc• South East Pier in Edinburgh Airport for BAA plc• Two new grandstands at Aintree Racecourse• Steelwork for O2 Arena and Waterfront in London• Finnieston Bridge arching the river Clyde, Glasgow New contracts for 2007 include: • Ongoing works at Heathrow Airport Terminal 5 for BAA plc• Redevelopment of Wimbledon Centre Court• Underground ticket hall at Kings Cross Station• Second phase of the Darwin centre at the Natural History Museum• Development of luxury residential apartments in Hyde Park, London• UBS sponsored academy in Hackney• Terminal extension at Stansted airport• The regeneration of Paradise Street, Liverpool• Waste to energy plant at Colnbrook near Heathrow Rowen Structures Rowen Structures continued to play a key role in the development of the airportsector in the UK whilst enjoying success in other sectors of the market. As well as the management of the BAA airport work, contracts undertaken by Rowenin 2006 included: • Retail and leisure development at the Eagle Centre, Derby• Office and retail development at Piccadilly, London New contracts for 2007 include: • Office development in Piccadilly, Manchester• Landmark office development at 30 Crown Place, London• Silken Hotel and apartments at the east end of the Strand, London• Central London office development at Holborn Circus Atlas Ward Structures 2006 saw Atlas Ward further develop its position as the market leader in thedesign and build sector of the industry. In addition to delivering steel toprovide in excess of 10 million sq ft of floor area into the distribution andwarehouse sector, projects were successfully completed in both the educationaland major retail sectors. The £5 million capital expenditure programme to update the production facilitywas completed in 2006. This, combined with the highly skilled and motivatedworkforce, has resulted in improved efficiency whilst maintaining the high levelof service to all clients. Contracts for 2006 included: • New Ikea store at Ashton-under-Lyme near Manchester• Rebuilding of the Monkhill Confectionery Popcorn Factory in Pontefract• Lex Autos car components distribution centre in Chorley• Rebuilding of a TNT distribution centre in Lutterworth• New Tesco distribution centre in Donabate, Dublin New Contracts for 2007 include: • New headquarters for the West Midlands Fire Brigade• Second phase of Aylesbury Higher Education College• Tesco distribution centres in Livingston, Edinburgh and Goole, Humberside• Regional distribution centre in Doncaster for Asda Steelcraft Erection Services Steelcraft, our dedicated steel erection service, continued to provideinvaluable support to the Group. The outstanding results reflect its effective management under Peter Ellison,the Managing Director, and close working relationship with other members of theGroup. Severfield-Reeve Projects 2006 was a successful year for Severfield-Reeve Projects, our design and buildproject management company, with revenue reaching a record level of £19 million. Two of the company's largest contracts to date were completed. These wereThirsk Rural Business Centre for Thirsk Farmers Auction Mart for £5.2 millionand the Belmont House Nursing Home, Harrogate for Lincare at £5.1 million. Bothof these jobs performed to budget and programme and proved to be fine examplesof the benefits of Projects' unique approach to DesignBuild. The order book for 2007 is very encouraging and management is currentlyinvestigating various new lines of business and new contacts. New key membersof staff have recently been recruited. The Directors look forward to a busy 2007 with optimism. Steel UK Limited This partnership with Murray Metals Group has been of significant assistance tothe Group in the sourcing of steel with the pricing and other benefits comingthrough during 2006. Summary The Group produced a record performance in 2006 and is on course for anotheryear of progress in 2007, underpinned by an excellent order book of £207 millionand a very high level of future contract prospects. Enquiry levels remain robust throughout the Group against a background ofbuoyant industry demand. This year I intend to retire from the Group as a full-time executive. As one of the founders of Severfield-Rowen, I have seen the Group grow to becomethe major force in the industry that it is today. Over the last 30 years I have thoroughly enjoyed my time with the Group. I haveworked with some great characters within the Construction Sector, includingclients and colleagues, some of which I know will be lifelong friends. I would like thank my Board colleagues, superb management, employees andshareholders for their support for both myself and Severfield-Rowen. I leave my executive role knowing that in my Board colleagues Tom Haughey andPeter Emerson, in whom I have the utmost confidence, the future is in very safehands and the outlook for the Group is better than I have ever known. I am looking forward to my retirement and spending time with my family, but I ampleased that I will be on hand in the future, in a long-term consultingcapacity, to guide and give assistance to the Group. I am confident that Severfield-Rowen will continue on its successful path. John SeversManaging Director Financial Review 2006 was a strong year and I am pleased to report that the Group's results forthe year show another significant improvement with revenue, profit before tax,earnings per share, dividends per share and the year end gross cash position allreaching record levels for the third successive year. Revenue of £295.08 million and profit before tax of £30.29 million and haveincreased 24.7% and 54.1% respectively over the figures achieved in 2005. Basic earnings per share of 102.54p increased 54.5% over 2005. Consequently, itis recommended that the total dividend for the year is increased by 54.1% to 57pper share, giving a dividend cover of 1.8 times. It is particularly pleasing that the year ended with the Group having anexcellent gross cash balance of £38.30 million and net funds of £38.24 million.Net assets increased by 20.0% to £66.23 million. Revenue Group revenue increased by 24.7% to a record level of £295.08 million, helped bythe first full year of trading by Atlas Ward, following its acquisition in March2005. Operating Profit The Group's operating profit increased by 50.8% to £29.12 million with operatingmargins, expressed as a percentage of revenue, continuing to increase to 9.87%from the 8.15% achieved in 2005. These figures continue to incorporate the Group's two associated companies,Kennedy Watts Partnership Limited and Fabsec Limited, of which the Group owns25.1% and 25% respectively. The Group's operating profit for the year includesits share of these two companies' results which amounted to a net profit of£10,000 (2005: loss £1,000). Net interest receivable for the Group amounted to £1,168,000 (2005: £349,000),producing a profit before tax of £30.29 million, an increase of 54.1% over theprevious year. Margins, at this level, expressed as a percentage of revenue,increased to 10.26% (2005: 8.30%). Taxation The tax charge of £9.37 million represents an effective tax rate of 30.92%compared with 31.23% in the previous year. These effective rates are higherthan the prevailing rate of 30% due to the adjustments made in respect ofdisallowable expenditure incurred during the year. Earnings per Share Basic earnings per share was at a record level of 102.54p, an increase of 54.5%over the previous year. This calculation is based on the profit after tax of£20.92 million and 20,401,969 shares, being the weighted average number ofshares in issue during the year. As there were no share options outstanding at the year end the diluted earningsper share is the same as the basic calculation. Dividend The Board will be recommending a final dividend of 37.0p per share (2005:24.50p) at the Company's Annual General Meeting on 7 June 2007 bringing thetotal dividend for the year to 57.0p per share. This total dividend representsa 54.1% increase over the total dividend of 37.0p per share paid for 2005. Thisis in line with the basic earnings per share increase and maintains the totaldividend cover at 1.8 times earnings, a level at which the Board remainscomfortable and at which it remains confident of maintaining in the future. The final dividend will be paid on 18 June 2007 to shareholders on the registeron 11 May 2007. The ex-dividend date will be 9 May 2007. Balance Sheet The Group's balance sheet continues to strengthen with shareholders' fundsincreasing by £11.02 million to £66.23 million. This equates to a net assetvalue per share at 31 December 2006 of 324.6p, compared with 270.6p at the endof 2005. The Group's balance sheet now has property, plant and equipment totalling £43.60million. Depreciation charged in the year amounted to £4.24 million. Thisfigure is higher than in previous years due, in part, to the fact that duringthe year the depreciation rates applied in respect of plant and machinerychanged from the reducing balance method to a straight line basis as it isconsidered more appropriate given the useful economic life of the assets. Theeffect of this change was to increase depreciation charged in the year by£828,000. We continued to invest heavily in our business with capital expenditure in theyear of £13.01 million. This is a particularly high level of annual expenditurefor the Group with the total cost of the investments including; productionfacilities at Severfield-Reeve Structures - £4.82 million, production facilitiesat Atlas Ward Structures - £5.19 million, mobile cranes for use on sites - £1.02million and motor vehicles/vans - £1.28 million. Expenditure in 2007 isbudgeted to be approximately £6 million The value of Goodwill on the balance sheet of £6.73 million is primarily theresult of the acquisition of the Atlas Ward group of companies in 2005. It isincluded as an Intangible Fixed Asset and continues to be subject to an annualimpairment review under IFRS 3. Given the excellent performance of Atlas Wardin the year no impairment has been considered necessary. Other Intangible Assets on the balance sheet, amounting to £1.61 million,represents the capitalisation of the Group's costs in the development of apedestal mounted powered work platform for use on sites in the erection ofsteel, which we hope to bring into use during 2007. Unlike the rest of the Group, Atlas Ward has a defined benefit pension schemewhich, although now closed to new members, had a book value deficit of £6.38million as at 31 December 2005. At 31 December 2006, as a result of changesmade to the assumptions used in calculating pension scheme assets andliabilities, the deficit increased to £7.29 million and is shown as a liabilityin the Group balance sheet with the movement largely going through the Statementof Recognised Income and Expense as permitted under IFRS. Associated Companies During 2001 the Company acquired a 25% shareholding in Fabsec Limited, a companyinvolved in the development of a bespoke and fire engineered beam made out ofplate. This company holds the master intellectual property rights for these andthe other Fabsec family of beams the world over. It also carries out marketingpromotion and provides technical support. The Group benefits from thesefunctions whilst contributing 25% towards overheads. Fabsec Limited is not tobe confused with the Group's successful and profitable plate and intumescentpaint lines at Dalton which produce the Fabsec and fire engineered beams under aperpetual no royalty licence from Fabsec Limited. Investment in Fabsec Limited continued in 2006 by way of licence fees paid of£275,000. Loans outstanding to the Group by Fabsec as at 31 December 2006amounted to £614,000 (2005: £614,000). However, the Board is of the opinionthat there may be an element of doubt over the collection of this loan in theshort to medium term future and continues to hold a provision of £543,000against this debt. Fabsec continues to be involved in technical and market development and theresults for the year to 31 December 2006 showed a small loss. The Group's 25%share of this loss amounted to £10,000 (2005: £6,000). The Group also owns a 25.1% shareholding in Kennedy Watts Partnership Ltd, acompany involved in CAD/CAM steelwork design. The Group's share of the profitof Kennedy Watts for the year amounted to £20,000 (2005: £5,000) resulting in anet profit arising from the associated companies of £10,000 (2005: loss £1,000). Cash Flow Management of the Group's cash has always been of prime importance to the Boardand this remains the case with cash being tightly controlled. It isparticularly pleasing, therefore, to report that the Group ended the year with arecord positive cash balance of £38.30 million (2005: £30.13 million). During the year £35.49 million was generated from operations. Outflows of cash during the year included dividends paid of £9.08 million,corporation tax paid of £6.34 million and the purchase of property, plant andequipment, net of sale proceeds, of £12.09 million. Borrowings, representing amounts due on hire purchase contracts, will be repaidin full during 2007 and amounted to £0.06 million leaving the Group with a netfunds surplus of £38.24 million and, therefore, no gearing. Treasury Group treasury activities are managed and controlled centrally. Risks to assetsand potential liabilities to customers, employees and the public continue to beinsured. The Group maintains its low risk financial management policy byinsuring all significant trade debtors. The treasury function seeks to reduce the Group's exposure to any interest rate,foreign exchange and other financial risks, to ensure that adequate and costeffective funding arrangements are maintained to finance current and plannedfuture activities and to invest cash assets safely and profitably. The Group remains committed to strong financial controls, cash management andappropriate accounting and treasury policies. Summary The Group had a very successful year with revenue, profit before tax, earningsper share and dividends per share once again reaching record levels. Cash generation continued to be very strong where, in spite of significantoutgoings on tax, dividends and particularly capital expenditure totalling£28.43 million, the net funds of the Group increased by £8.54 million to £38.24million. The Group has continued to improve its healthy financial position and is wellplaced for future growth and cash generation. Peter DavisonFinance Director Consolidated Income StatementFor the year ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 £000 £000 Continuing OperationsRevenue 295,084 236,722Cost of sales (261,148) (212,100)Gross profit 33,936 24,622 Other operating income 79 63Distribution costs (877) (784)Administrative expenses (4,030) (4,597)Share of results of associates 10 (1)Operating Profit 29,118 19,303 Investment income - interest 1,250 459Finance costs - interest (82) (110)Profit before tax 30,286 19,652 Tax (9,365) (6,137)Profit for the period attributable to the equity 20,921 13,515holders of the parent Earnings per share:Basic 102.54p 66.39pDiluted 102.54p 66.39p Consolidated Balance Sheet31 December 2006 At At 31 December 2006 31 December 2005 £000 £000ASSETS Non-current assets Goodwill 6,732 6,732 Other intangible assets 1,608 1,008 Property, plant and equipment 43,602 36,784 Interests in associates 46 36 51,988 44,560Current assets Inventories 3,333 7,318 Trade and other receivables 46,786 32,419 Cash and cash equivalents 38,304 30,132 88,423 69,869 Total assets 140,411 114,429 LIABILITIES Current liabilities Trade and other payables 56,966 48,221 Tax liabilities 6,125 3,251 Obligations under finance leases 66 363 63,157 51,835Non-current liabilities Retirement benefit obligations 7,287 6,384 Provisions 3,000 - Deferred tax liabilities 742 943 Obligations under finance leases - 66 11,029 7,393 Total liabilities 74,186 59,228 NET ASSETS 66,225 55,201 EQUITY Share capital 2,040 2,040Share premium 9,770 9,770Other reserves 139 139Retained earnings 54,276 43,252TOTAL EQUITY 66,225 55,201 Consolidated Statement of Recognised Income and ExpenseFor the year ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 £000 £000 Actuarial loss on defined benefit (1,169) (745)pension scheme Tax on items taken directly to equity 351 224 Net expense recognised directly (818) (521)in equity Profit for the year from 20,921 13,515continuing operations Total recognised income and 20,103 12,994expense for the year attributableto equity shareholders Consolidated Cash FlowFor the year ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 £000 £000 Cash flows from operating activitiesCash generated from operations 35,488 35,543Interest paid (82) (139)Tax paid (6,341) (5,824)Net cash from operating activities 29,065 29,580 Cash flows from investing activitiesProceeds from sale of property, plant and equipment 920 648Interest received 1,239 456Acquisition of subsidiary, including costs - (1,424)Overdraft acquired with subsidiary - (3,592)Purchases of property, plant and equipment (13,010) (4,216)Purchases of intangible fixed assets (600) (1,008)Net cash used in investing activities (11,451) (9,136) Cash flows from financing activitiesProceeds from the issue of share capital - 368Repayment of borrowings - (2,453)Payment of finance lease liabilities (363) (616)Dividends paid (9,079) (5,456)Net cash used in financing activities (9,442) (8,157) Net increase in cash and cash equivalents 8,172 12,287Cash and cash equivalents at beginning of period 30,132 17,845Cash and cash equivalents at end of period 38,304 30,132 1) Basis of preparation The Group's financial statements have been computed in accordance withInternational Financial Reporting Standards (IFRS) as adopted by the EuropeanUnion and on a basis consistent with that adopted in the previous year. The financial information set out in this preliminary announcement does notamount to full accounts within the meaning of section 240 of the Companies Act1985. Full accounts for the year ended 31 December 2006 have not yet beenaudited or delivered to the Registrar of Companies. The Annual Report is due tobe posted to shareholders on or around 15 May 2007. A copy of the statutoryaccounts for the year ended 31 December 2005 has been delivered to the Registrarof Companies. The Auditor's Report on those accounts was not qualified and didnot contain a statement under section 237 (2) or (3) of the Companies Act 1985. 2) Revenue and segmental analysis Revenue in both years originated from the United Kingdom. Revenue, profitbefore tax and net assets, in both years, related to the design, fabrication anderection of structural steel work and related activities. 3) Taxation The taxation charge comprises: 2006 2005 £000 £000 Current tax UK corporation tax 9,304 5,303Adjustments to prior years' tax provision (89) (4) 9,215 5,299 Deferred tax Current year charge 86 822Adjustments to prior years' provision 64 16 150 838 Total tax charge 9,365 6,137 4) Dividends 2006 2005 £000 £000 Final dividend for the year ended 4,998 2,90631 December 2005 of 24.50p(2004: 14.25p) per share Interim dividend for the year ended 4,081 2,55031 December 2006 of 20.00p(2005: 12.50p) per share 9,079 5,456 Proposed final dividend for the year 7,549 4,998ended 31 December 2006 of 37.00p(2005: 24.50p) per share The proposed final dividend is subject to approval by shareholders at the AnnualGeneral Meeting and has not been included as a liability in these financialstatements. The proposed dividend will be paid on 18 June 2007 to shareholderson the register on 11 May 2007. The ex-dividend date is 9 May 2007. 5) Earnings per share There are no discontinued operations in either the current or prioryear. The calculation of the basic and diluted earnings per share is based on thefollowing data: 2006 2005 £000 £000Earnings Profit for the year 20,921 13,515 2006 2005 Weighted average of number of shares 20,401,969 20,358,229in issue Weighted average of number of shares 20,401,969 20,358,229in issue, allowing for dilutive effectof share options Basic earnings per share 102.54p 66.39p Diluted earnings per share 102.54p 66.39p 6) Reconciliation of Group operating profit to cash generatedfrom operations 2006 2005 £000 £000 Operating profit 29,118 19,303Adjustments for:Depreciation of property, plant and equipment 4,238 2,719Loss on disposal of property, plant and equipment 212 56Movement in pension (266) -Provision against loan from associated company - 543Share of results of associated company (10) 1Increase in provisions 3,000 - Operating cash flows before changes 36,292 22,622in working capitalDecrease in inventories 4,807 6,491(Increase)/decrease in receivables (14,356) 5,729Increase in payables 8,745 701 Cash generated from operations 35,488 35,543 7) Statement of changes in equity At At 31 December 31 December 2006 2005 £000 £000 Opening total equity 55,201 47,295Total recognised income and expense 20,103 12,994Dividends paid in period (9,079) (5,456)Issue of share capital - 368 Closing total equity 66,225 55,201 8) Analysis of net funds At At 31 December 31 December 2006 2005 £000 £000 Cash in hand 38,304 30,132Finance leases (66) (429) Closing net funds 38,238 29,703 This information is provided by RNS The company news service from the London Stock Exchange