Thorpe Regulatory News (TFW)

26 Mar 2008 07:01

Thorpe(F.W.) PLC26 March 2008 F W Thorpe Plc INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2007 KEY POINTS: • First set of statements prepared under International Financial Reporting Standards • Turnover increased by 10% to £25.3m (2006 £23.0m) • Operating profits up by 26% to £4.0m (2006: £3.2m) • Profit before tax increased by 26% to £4.5m (2006: 3.6m) • Interim dividend increased to 3.9p (2006: 3.25p) up 20% • Basic earnings per share 26.7p (2006: 21.4p) up 25% • Sugg Lighting returns to profitability • Cautious optimism for the year as a whole For further information please contact: F W Thorpe plcAndrew Thorpe - Chairman 01527 583200Peter Mason - Joint Chief Executive and Finance Director 01527 583200 Brewin Dolphin Limited - Nominated AdviserAndrew Kitchingman 0845 270 8613Sean Wyndham-Quin 0845 270 9518 CHAIRMAN'S INTERIM STATEMENT These are F W Thorpe Plc's (the "Group") first results to be presented underInternational Financial Reporting Standards (IFRS). There has been nosignificant impact on the profit figures reported where changes have had to bemade to accounting policies as a result of adopting IFRS. Details of theeffects of the above-mentioned changes are shown later in this report. Your Group's revenue for the first six months of the financial year 2007/8increased by 10% compared to the first six months of 2006/7. The increased revenue resulted in an increase in operating profit of 26% or £827,000 in monetary terms. When added to the improved investment income, the resulting profit before tax was also 26% higher at £4.5M (2006/7: £3.6M). To reflect these results an interim dividend of 3.9p (2006/7: 3.25p) will bepaid on 13 May 2008. This is an increase of 20% on last year's corresponding dividend. It is pleasing to report that all Group Companies made further progress duringthe first six months with regard to both turnover and profitability, with theexception of Compact Lighting, which is currently suffering mildly due to the slow down in activity of some of its retail customers. This should be the last time that I will need to single out Sugg Lighting forspecial mention but having lived to its ninth life Sugg, with the changes madeat the start of last financial year, has regained strength and credibility toturn in pleasing and notable trading profits in five out of the first six monthsof the financial year. Only in the month of notoriety, December, did it, likemany other manufacturers, I'm sure, slip into a small loss in its managementaccounts. Emphasis throughout the Group remains very much on introducing innovative and "to the moment" products, a further number of which are imminently to belaunched, and on searching for the means to increase sales coverage both here inthe UK and elsewhere. Current market "noise" leaves us, again, to be cautiously optimistic for theyear as a whole. Andrew ThorpeChairman 26 March 2008 F W Thorpe PLCMerse RoadNorth Moons MoatRedditchWorcs.B98 9HH CONSOLIDATED INCOME STATEMENTfor the six months to 31 December 2007 Half year to Half year to Full year to 31.12.07 31.12.06 30.6.07 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Revenue 25,304 22,999 45,694 ______ ______ ______ Operating Profit before exceptional items 3,954 3,127 8,270 Exceptional items 77 77 91 ______ ______ ______ Operating Profit 4,031 3,204 8,361 Finance income 478 364 852 ______ ______ ______ Profit before income taxation 4,509 3,568 9,213 Income taxation (1,328) (1,022) (2,170) ______ ______ ______ Profit for the period 3,181 2,546 7,043 ______ ______ ______Dividend rate per share: Interim 3.9p 3.25p 3.25p Final 10.0p Earnings per share for profit attributable to the equity holders of the companyduring the period Earnings per share - basic 26.7p 21.4p 59.2p - diluted 26.7p 21.3p 59.1p The figures for the periods to 30 June 2007 and 31 December 2006 have beenrestated as a result of the change from UK GAAP following IFRS adoption.Further details are provided in the notes including transition statements forthe periods commencing 1 July 2006. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSESfor the six months to 31 December 2007 Half year to Half year to Full year to 31.12.07 31.12.06 30.6.07 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Actuarial gain on pension scheme - - 446Deferred tax (202) Profit for the period 3,181 2,546 7,043 ______ ______ ______ Total recognised income for the period 3,181 2,546 7,287 ______ ______ ______ The figures for the periods to 30 June 2007 and 31 December 2006 have beenrestated as a result of the change from UK GAAP following IFRS adoption.Further details are provided in the notes including transition statements forthe periods commencing 1 July 2006. CONSOLIDATED BALANCE SHEETas at 31 December 2007 As at As at As at 31.12.07 31.12.06 30.6.07 (unaudited) (unaudited) (unaudited)Assets £'000 £'000 £'000Non-Current AssetsProperty, plant and equipment 9,936 9,879 10,017Intangible assets 2,122 2,002 2,060Investment property 184 184 184Available for sale financial assets 87 106 103Retirement benefit surplus 1,146 - 881 ______ ______ ______ 13,475 12,171 13,245Current assetsInventories 7,436 6,969 8,491Trade and other receivables 9,451 8,249 9,499Other financial assets at fair value through 368 351 359profit or lossCash and cash equivalents 15,357 12,586 12,581 ______ ______ ______ 32,612 28,155 30,930 ______ ______ ______ Total Assets 46,087 40,326 44,175 ______ ______ ______LiabilitiesCurrent liabilitiesTrade and other payables (5,574) (5,399) (6,370)Current income taxation liabilities (1,529) (1,233) (825) ______ ______ ______ (7,103) (6,632) (7,195)Non-current liabilitiesLong term provisions (216) (153) (242)Deferred income taxation liability (964) (465) (943)Retirement benefit obligations - (1,636) - ______ ______ ______ (1,180) (2,254) (1,185) ______ ______ ______ Total liabilities (8,283) (8,886) (8,380) ______ ______ ______ Net assets 37,804 31,440 35,795 ______ ______ ______Capital and Reserves attributable to equityholders of the companyIssued share capital 1,191 1,190 1,190Capital Redemption Reserve 135 135 135Share Premium account 624 607 607Retained earnings 35,854 29,508 33,863 ______ ______ ______Total equity 37,804 31,440 35,795 ______ ______ ______ The figures for the periods to 30 June 2007 and 31 December 2006 have beenrestated as a result of the change from UK GAAP following IFRS adoption.Further details are provided in the notes including transition statements forthe periods commencing 1 July 2006. CASH FLOW STATEMENTfor the six months to 31 December 2007 Half year to Half year to Full year to 31.12.07 31.12.06 30.6.07 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000Cash generated from operationsOperating profit 4,031 3,204 8,361Adjustments for- Depreciation 572 545 1,107- Amortisation 372 365 737- Profit on disposal of property, plant and (43) (19) (62)equipment- Retirement benefit contributions in excess of (265) (298) (2,249)current and past service chargeChanges in working capital- Inventories 1,055 (17) (1,539)-Trade and other receivables 110 1,677 575-Trade and other payables (807) (743) 228 - Provisions (26) (30) (59)- Tax paid (604) (795) (2,075) ______ ______ ______ 4,395 3,891 5,024Cash flow from investing activitiesProperty rental and similar income 25 31 61Interest received 398 318 624Capitalisation of development costs (451) (431) (862)Purchase of property, plant and equipment (419) (595) (1,252) ______ ______ ______Net cash outflow from investing activities (447) (677) (1,429) Cash flow from financing activitiesProceeds from the issuance of ordinary shares 18 23 23Dividends paid to company shareholders (1,190) (2,499) (2,885) ______ ______ ______Net cash outflow from financing activities (1,172) (2,476) (2,862) Net increase in cash and cash equivalents 2,776 738 733 ______ ______ ______ Cash and cash equivalents at the beginning of 12,581 11,848 11,848the period in net fundsIncrease in cash and cash equivalents 2,776 738 733 ______ ______ ______ Cash and cash equivalents at the end of the 15,357 12,586 12,581period ______ ______ ______ The figures for the periods to 30 June 2007 and 31 December 2006 have beenrestated as a result of the change from UK GAAP following IFRS adoption.Further details are provided in the notes including transition statements forthe periods commencing 1 July 2006. Notes to the Interim Financial Statements 1. Basis of Preparation The consolidated interim financial statements for the six months to 31December 2007 have been prepared in accordance with the recognition andmeasurement principles of applicable International Financial Reporting Standards(IFRS) in issue as adopted by the European Union (EU) and InternationalFinancial Reporting Standards as issued by the International AccountingStandards Board and the Alternative Investment Market (AIM) Rules for Companies. These are the Group's first financial statements that have been prepared usingthe principles adopting IFRS. Comparative figures for the six months ended 31December 2006 and for the year ended 30 June 2007 have been restated to reflectthe changes in accounting policies as a result of the adoption of IFRS. Thecomparative figures on the basis of IFRS have not been audited or reviewed andare therefore disclosed as unaudited. Prior to 1 July 2007 financial statementswere prepared using UK GAAP and these statements for the year ended 30 June 2007have been delivered to the Registrar of Companies. The report of the Auditorswas unqualified and did not contain a statement under section 237 (2) or (3) ofthe Companies Act 1985. The interim financial statements do not constitutestatutory accounts within the meaning of the Companies Act 1985. For the yearending 30 June 2008 the Group is required to prepare financial statements inaccordance with applicable accounting standards using IFRS. These financial statements have been prepared using IFRS taking intoconsideration the requirements and options set out in IFRS 1 "First timeadoption of International Financial Reporting Standards". The board has notsought to adopt the guidance on business combinations and cumulativetranslational differences retrospectively. The board has not sought an earlyadoption of "Interim Financial Reporting". The transition date for theapplication of IFRS is 1 July 2006. Reconciliations of the Income statement andBalance sheet from those previously reported under UK GAAP are provided later inthis report. The financial statements are presented in Pounds Sterling, rounded to thenearest thousand. The interim financial statements are prepared under the historical costconvention, modified by the revaluation of certain current and non-currentinvestments at fair value through profit or loss. The accounting policies set out below have been applied consistently throughoutthe Group during the period. 2. Principal accounting policies Basis of consolidation The interim financial statements for F W Thorpe Plc incorporate the financialstatements of the company and its subsidiary undertakings. A subsidiary is acompany controlled directly by the Group and all the subsidiaries are whollyowned by the Group. The Group achieves control over the subsidiaries by beingable to influence financial and operating policies so as to obtain benefits fromtheir activities. Intra-Group transactions, balances, income and expenses are eliminated inpreparing consolidated financial statements. Revenue recognition Revenue is recognised by reference to the fair value of consideration receivedor receivable by the Group for goods supplied and services provided, excludingVAT and trade discounts. Revenue is recognised when the goods are delivered tothe customer or the service is performed. Segment reporting The Group's segment is that of the sale and distribution of professionallighting equipment. Exceptional items The Group regards the costs associated with the restructuring of Sugg LightingLtd and the onerous nature of their leased premises costs as exceptional. Theproperty was impaired in 2005 and 2006. The impairment is based on theremaining term of the lease. Foreign currencies Transactions in foreign currency are converted to sterling using the exchangerate applicable to the date of the transaction. Foreign currency gains andlosses resulting from the settlement of foreign currency transactions at adifferent time are recognised in the income statement. Currency exchangedifferences arising from holding monetary assets or liabilities in a foreigncurrency are fair valued at the balance sheet date in accordance with prevailingexchange rates and resulting gains or losses are recognised in the incomestatement. Pension costs The Group operates a hybrid defined benefit and defined contribution pensionscheme. The assets of the scheme are invested and managed independently of thefinances of the Group. Pension costs are assessed in accordance with the adviceof an independent qualified actuary. Costs include the regular cost ofproviding benefits which it is intended should remain at a substantially levelpercentage of current and expected future earnings of the employees covered.Variations from the regular pensions cost are spread evenly through the profitand loss account over the remaining service lives of current employees.Contributions made to the defined contribution scheme are charged to the profitand loss account in the period in which they are made. Taxation Taxation expense represents the sum of current taxation and deferred taxation atthe prevailing rates at the balance sheet date. Non-current assets Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciationand impairment losses where applicable. Leased assets are included where theyare held under a finance lease. Depreciation is calculated to write down the cost less estimated residual valueof all plant and equipment assets by equal instalments over their expecteduseful life. The rates generally applicable are: Buildings 2-4% Plant, vehicles and equipment 7-33% Assets are reviewed for impairment where there is an indication that thecarrying value may not be recoverable. Leases Leases are classified as finance leases where the risks and rewards of ownershipare transferred to the lessee. The related asset is recognised at the inceptionof the lease at the fair value of the leased asset. The interest element of thelease is charged to the income statement over the period of the lease based onthe capital element outstanding. All other leases are operating leases and payments made under them are chargedto the Income statement on a straight line basis over the term of the lease. Intangible assets Research and development The Group undertakes research and development activities on an ongoing basis.Part of these costs relates to projects where the benefit is received in theshort term (less than one year) and part relates to longer term projects wherethe benefit is expected to be received for several years to come. Costsassociated with the shorter term activities are expensed as and when they areincurred. Costs associated with the longer term projects are capitalised as anintangible asset and amortised over the expected life of the benefit, generallyat 33.33% per annum, commencing when the income stream is expected to flow intothe business. Research and development assets are recognised where there iscertainty that the asset will generate economic benefit. The economic successfor research and development activities is uncertain and carrying amounts arereviewed at each balance sheet date for impairment. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair valueof the Group's share of the net assets of the acquired subsidiary undertaking atthe date of acquisition. Goodwill is tested at least annually for impairment. An impairment loss isrecognised for the amount by which the asset's carrying amount exceeds itsrecoverable amount. Investment properties Investment properties are stated at cost. Current assets Inventories Stocks are stated at the lower of cost and net realisable value. Cost isdetermined by the first-in, first-out (FIFO) method. The cost of finished goodsand work in progress comprises raw materials, direct labour, other direct costsand related production overheads based on normal operating capacity. Netrealisable value is the estimated selling price in the ordinary course ofbusiness, less the costs of completion and selling expenses. Provision is madeagainst the cost of slow-moving stock lines based on the estimated recoverableamounts. Trade receivables Trade receivables are recorded at their fair value on initial recognition lessprovision for expected settlement discounts and for impairment. A provision forimpairment of trade receivables is established when there is evidence that theGroup may not be able to collect all amounts due and is calculated as thedifference between the carrying value and present value of expected cash flowsreceivable. Any change in the value of trade receivables through impairment orreversal of impairment is recognised as an administrative expense in the Incomestatement. Warranty The Group recognises the obligation to repair or replace parts or productssupplied still under warranty at the balance sheet date. This provision isprincipally based on past experience. Cash and cash equivalents Cash and cash equivalents are defined as cash in hand, on demand deposits andshort-term deposits with banks. Financial derivatives The Group does not hold derivatives other than a small amount of currencyexchange swaps or options, where they are used to hedge currency movements. Ifforeign currency trade receivables and payables exist at the balance sheet datewhich have been hedged in this way then the swaps or options are considered invaluing these items. Current asset investments Current asset investments are valued at fair value. Changes in fair value arerecognised in the Income statement. Current liabilities Trade payables Trade payables are not interest bearing and are recorded at their settlementamount. Provisions Provisions are recognised when the Group has an obligation as a result of pastevents which can be quantified or reasonably estimated at the balance sheetdate. Deferred tax Deferred tax is provided in full using the liability method on temporarydifferences arising between the tax base of the assets and liabilities and theircarrying amounts in the financial statements using tax rates and laws enacted orsubstantially enacted that are expected to apply when the deferred tax isrealised. Deferred tax assets and liabilities are not discounted. Deferred tax assets are recognised to the extent that it is probable that futuretaxable profit will be available to utilise the temporary differences. 3. Transition to IFRS As previously stated, these are the Group's first interim financial statementsprepared in accordance with the principles of IFRS. The transition date is 1July 2006. The comparative data for the six months to 31 December 2006 and yearto 30 June 2007 has been translated to conform to the accounting policies setout above. The Group has taken advantage of certain exemptions available under IFRS 1principally in relation to business combinations. Reconciliation of UK GAAP to IFRS for the six months ended 31 December 2006 Effect of Transition UK GAAP To IFRS IFRS £'000 £'000 £'000 Revenue 23,418 (419) 22,999 ______ ______ ______ Operating profit 2,984 220 3,204 Finance income 349 15 364 ______ ______ ______ Profit before income taxation 3,333 235 3,568 Income taxation (1,000) (22) (1,022) ______ ______ ______Profit for the period 2,333 213 2,546 Actuarial gain on pension scheme - - -Deferred tax - - - ______ ______ ______ Total recognised income for the period 2,333 213 2,546 ______ ______ ______ The adjustment to revenue relates to settlement discounts allowed to customerswhich are no longer shown as an expense. The adjustments to operating profitconsist of settlement discounts receivable £9K, holiday pay timing adjustment of£58K, capitalisation of research and development £66K, timing adjustment tosettlement discounts allowed of £10K, and adjustment relating to leaseobligations and onerous lease provision of £77K. Finance income has beenadjusted by £15K to reflect the market values of the current and fixed assetinvestments. Deferred tax has been adjusted by (£22K). Reconciliation of UK GAAP to IFRS for the year ended 30 June 2007 Effect of Transition UK GAAP To IFRS IFRS £'000 £'000 £'000 Revenue 46,508 (814) 45,694 ______ ______ ______ Operating profit 8,221 140 8,361 Finance income 833 19 852 ______ ______ ______ Profit before income taxation 9,054 159 9,213 Income taxation (2,168) (2) (2,170) ______ ______ ______Profit for the period 6,886 157 7,043 Actuarial gain on pension scheme 446 - 446Deferred tax (202) - (202) ______ ______ ______Total recognised income for the period 7,130 157 7,287 ______ ______ ______ The adjustment to revenue of (£814K) relates to settlement discounts allowed tocustomers which are no longer shown as an expense. The adjustments to operatingprofit consist of settlement discounts receivable (£1K), holiday pay timingadjustment of (£3K), Pension scheme adjustment of £35K, capitalisation ofresearch and development £124K, and timing adjustment to settlement discountsallowed of (£15K). Finance income has been adjusted by £19K to reflect themarket values of the current and fixed asset investments. Deferred tax has beenadjusted by (£2K). Balance sheets Reconciliation of UK GAAP to IFRS as at 30 June 2006 UK GAAP Effect of IFRS As at Transition Note As at 30 June 06 To IFRS Ref 30 June 06Assets £'000 £'000 £'000Non-Current AssetsProperty, plant and equipment 9,907 (100) b) 9,807Intangible assets - 1,939 a),b) 1,939Investment property 219 (35) b) 184Available for sale financial assets 39 59 c) 98 ______ ______ ______ 10,165 1,863 12,028Current assetsInventories 7,005 (53) e) 6,952Trade and other receivables 10,075 (148) f),k) 9,927Other financial assets at fair value through 70 274 g) 344profit or lossCash and cash equivalents 11,848 - 11,848 ______ ______ ______ 28,998 73 29.071 ______ ______ ______ Total Assets 39,163 1,936 41,099 ______ ______ ______LiabilitiesCurrent liabilitiesTrade and other payables (5,824) (318) h)i)k) (6,142)Current income taxation liabilities (1,027) - (1,027) ______ ______ ______ (6,851) (318) (7,169)Non-current liabilitiesLong term provisions (471) 288 k) (183)Deferred income taxation liability (412) (31) d)l) (443)Retirement benefit obligations (1,329) (605) d)j) (1,934) ______ ______ ______ (2,212) (348) (2,560) ______ ______ ______ Total liabilities (9,063) (666) (9,729) ______ ______ ______ Net assets 30,100 1,270 31,370 ______ ______ ______Capital and reserves attributable to equityholders of the companyIssued share capital 1,188 - 1,188Capital Redemption Reserve 135 - 135Share Premium account 586 - 586Retained earnings 28,191 1,270 29,461 ______ ______ ______Total equity 30,100 1,270 31,370 ______ ______ ______ Reconciliation of UK GAAP to IFRS as at 31 December 2006 UK GAAP Effect of IFRS As at Transition Note As at 31 Dec 06 To IFRS Ref 31 Dec 06Assets £'000 £'000 £'000Non-Current AssetsProperty, plant and equipment 9,976 (97) b) 9,879Intangible assets - 2,002 a)b) 2,002Investment property 219 (35) b) 184Available for sale financial assets 39 67 c) 106 ______ ______ ______ 10,234 1,937 12,171Current assetsInventories 7,012 (43) e) 6,969Trade and other receivables 8,375 (126) f)k) 8,249Other financial assets at fair value through 70 281 g) 351profit or lossCash and cash equivalents 12,586 - 12,586 ______ ______ ______ 28,043 112 28,155 ______ ______ ______ Total Assets 38,277 2,049 40,326 ______ ______ ______LiabilitiesCurrent liabilitiesTrade and other payables (5,173) (226) h)k) (5,399)Current income taxation liabilities (1,233) - (1,233) ______ ______ ______ (6,406) (226) (6,632)Non-current liabilitiesLong term provisions (471) 318 k) (153)Deferred income taxation liability (322) (143) d)l) (465)Retirement benefit obligations (1121) (515) d)j) (1,636) ______ ______ ______ (1,914) (340) (2,254) ______ ______ ______ Total liabilities (8,320) (566) (8,886) ______ ______ ______ Net assets 29,957 1,483 31,440 ______ ______ ______Capital and reserves attributable to equity holders of the companyIssued share capital 1,190 - 1,190Capital Redemption Reserve 135 - 135Share Premium account 607 - 607Retained earnings 28,025 1,483 29,508 ______ ______ ______Total equity 29,957 1,483 31,440 ______ ______ ______ Reconciliation of UK GAAP to IFRS as at 30 June 2007 UK GAAP Effect of IFRS As at Transition Note As at 31 Dec 06 To IFRS Ref 31 Dec 06Assets £'000 £'000 £'000Non-Current AssetsProperty, plant and equipment 10,114 (97) b) 10,017Intangible assets - 2,060 a),b) 2,060Investment property 219 (35) b) 184Available for sale financial assets 39 64 c) 103Retirement benefit surplus 634 247 d)j) 881 ______ ______ ______ 11,006 2,239 13,245Current assetsInventories 8,562 (71) e) 8,491Trade and other receivables 9,663 (164) f)k) 9,499Other financial assets at fair value through 70 289 g) 359profit or lossCash and cash equivalents 12,581 - 12,581 ______ ______ ______ 30,876 54 30,930 ______ ______ ______ Total Assets 41,882 2,293 44,175 ______ ______ ______LiabilitiesCurrent liabilitiesTrade and other payables (6,164) (206) h)i)k) (6,370)Current income taxation liabilities (825) - (825) ______ ______ ______ (6,989) (206) (7,195)Non-current liabilitiesLong term provisions (433) 191 k) (242)Deferred income taxation liability (92) (851) d)l) (943) ______ ______ ______ (525) (660) (1,185) ______ ______ ______ Total liabilities (7,514) (866) (8,380) ______ ______ ______ Net assets 34,368 1,427 35,795 ______ ______ ______Capital and reserves attributable to equityholders of the companyIssued share capital 1,190 - 1,190Capital Redemption Reserve 135 - 135Share Premium account 607 - 607Retained earnings 32,436 1,427 33,863 ______ ______ ______Total equity 34,368 1,427 35,795 ______ ______ ______ Description of adjustments for transition to IFRS Note Adjustment description As at As at As at Ref 30 June 07 31 Dec 06 30 June 06 £'000 £'000 £'000 a) IAS 38 - Capitalisation of research and development 1,928 1,870 1,804 costs b) IAS 38 and IAS 40 - Property rights element of 132 132 135 investment property reclassified from investments to intangible assets. Reclassification of software from Property, plant and equipment to intangible assets. c) IAS 39 - Quoted investments shown at market value 64 67 59 d) IAS 19 and IAS 26 - deferred tax adjustment to pension 247 480 570 scheme surplus or deficit e) IAS 2 - Settlement discounts received adjusted to fair (71) (43) (53) value f) IAS 18 - settlement discount allowed adjusted to fair (135) (110) (120) value g) IAS 39 - current asset investments shown at market value 289 281 274 h) IAS 2 - Settlement discount received adjusted to fair 33 16 16 value i) IAS 19 - holiday pay timing adjustment for monthly paid (48) 13 (46) staff j) IAS 19 and IAS 26 adjustment of pension scheme assets to - (35) (35) fair value k) IAS 17 - Lease obligations Trade and other receivables (29) (29) (29) Trade and other payables (191) (241) (288) Long term provisions 191 318 288 l) IAS 12 - Deferred Tax adjustment following 604 623 601 capitalisation of Research and development costs Reconciliation of equity at 1 July 2006 Share Share Capital Retained Total Capital Premium Redempt-ion Earnings Account Reserve £'000 £'000 £'000 £'000 £'000 Reported under UK GAAP 1,188 586 135 28,191 30,100IAS 2 - settlement discount received - - - (37) (37)IAS 12 - Deferred income taxation (601) (601)IAS 17 - Lease obligation (29) (29)IAS 18 - settlement discount allowed - - - (120) (120)IAS 19 - holiday pay - - - (45) (45)IAS 19 & IAS 26 - pension scheme - - - (35) (35)valuationIAS 38 - Research & development - - - 1,804 1,804IAS 39 - market value of investments - - - 333 333 ______ ______ ______ ______ ______ 1,188 586 135 29,461 31,370 ______ ______ ______ ______ ______ 4. Statement of changes in equity Share Share Capital Retained Total Capital Premium Redempt-ion Earnings Account Reserve £'000 £'000 £'000 £'000 £'000 As at 1 July 2006 1,188 586 135 29,461 31,370 Profit for six months to 31 Dec 06 - - - 2,546 2,546Proceeds from the issuance of ordinary 2 21 - - 23sharesDividends paid to shareholders - - - (2,499) (2,499) ______ ______ ______ ______ ______As at 31 December 2006 1,190 607 135 29,508 31,440 Profit for six months to 30 June 07 - - - 4,741 4,741Dividends paid to shareholders (386) (386) ______ ______ ______ ______ ______As at 30 June 2007 1,190 607 135 33,863 35,795 Profit for six months to 31 Dec 07 - - - 3,181 3,181Proceeds from the issuance of ordinary 1 17 - - 18sharesDividends paid to shareholders - - - (1,190) (1,190) ______ ______ ______ ______ ______As at 31 December 2007 1,191 624 135 35,854 37,804 ______ ______ ______ ______ ______ 5. Earnings per share The earnings per share is calculated on profit after taxation and the weightedaverage number of ordinary shares in issue of 11,904,394 (2006: 11,888,250)during the period. For diluted earnings per share, the weighted average ofordinary shares in issue is adjusted to assume conversion of all dilutivepotential ordinary shares. The adjusted weighted average number of ordinaryshares is calculated at 11,928,429 (2006: 11,943,559). 6. Exercise of share options On 4 October 2007 7,500 share options were exercised, and on 23 October 20078,483 share options were exercised. The option price was 117 pence per share. 7. Dividend The interim dividend is at the rate of 3.9p per share (2007: 3.25p), and, basedon 11,913,559 shares in issue at the announcement date the dividend will amountto £465,000 (2007:£386,000). The interim dividend will be paid on Tuesday 13May to shareholders on the register at the close of business on 11 April 2008and the shares become ex-dividend on 9 April 2008. 8. Availability of interim statement Copies of this report are being sent to shareholders and will also be availablefrom the company's registered office or on the company's website from 9 April2008. This information is provided by RNS The company news service from the London Stock Exchange