Trifast Regulatory News (TRI)

23 Nov 2005 07:02

Trifast PLC23 November 2005 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 23 November 2005 Embargoed: 7.00am Trifast plc Interim Results for the six months ended 30 September 2005 Six months ended Year ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Revenue 50,939 53,044 103,823 Gross profit 12,871 14,148 27,007 Operating profit 2,631 2,948 5,892before financingcosts, restructuring, property gainsand exchange gains/ (loss) on loan Profit before income 2,016 2,812 6,135tax after financing costs, restructuring, propertygains and exchange gains/ (loss) on loan Earnings per share- Basic 1.86p 2.74p 6.10p- Diluted 1.85p 2.71p 6.05p Dividend 0.73p 0.69p 2.10p "The Group has maintained momentum of sales in deteriorating market conditionsparticularly in Europe and the USA. Gross margins have been maintained in theface of cost-down pressures..." "The Serco Ryan acquisition gives us further scale to compete more effectivelyin the UK and opens up a number of exciting opportunities for our businessglobally." "Overall, the Board remains confident that the Group can continue to build onits leading position, brand awareness and considerable expertise to drive thebusiness forward to the next level of its development." "Given the Board's confidence in the future for the enlarged Group, theDirectors have declared an increased interim dividend..." JOINT STATEMENT ATTACHED Enquiries:Jim Barker, Chief Executive Fiona TooleyStuart Lawson, Group Finance Director Citigate Dewe RogersonTrifast plc Today: Tel: +44 (0)1825 769696Tel: +44 (0)1825 769696 Mobile: +44 (0)77 85703523Web-site: www.trifast.com Thereafter: +44(0) 121 455 8370 Editors Note:Trifast is a global manufacturer and distributor of industrial fastenings and isa leading supplier of 'Vendor Managed Solutions'. Post the period beingreported, the Group acquired Serco Ryan for £18 million. The combined businessoperates 30 sites, through its network in Europe, the Far East and USA. -2- Trifast plc Interim Results for the six months ended 30 September 2005 STATEMENT BY THE CHAIRMAN, ANTHONY ALLEN AND JIM BARKER, CHIEF EXECUTIVE IntroductionRevenue and gross margin for the six months to September 2005 are in-line withthose of the second half of last year despite a continuing worsening of marketconditions since the end of 2004. However, profit before tax, adjusted fornon-recurring items, is below the second half of last year reflecting overheadcost inflation and higher US interest rates and a weaker performance from someof our key sectors. The Group has maintained momentum of sales in deteriorating market conditionsparticularly in Europe and the USA. Gross margins have been maintained in theface of cost-down pressures, reflecting both the improved product mix andbalance of sales particularly from China but more importantly demonstrating theGroup's overall resilience in the face of challenging market conditions.Although we have not lost customers in the period under review we have witnessedexisting customers ordering lower volumes than previously anticipated which hasoffset the positive effect of new business wins. Saying this, our strategic focus has been to add to our skills base and furtherstrengthen Trifast's overall position for the future. The Directors haverecognised that a key challenge is to grow our share of the consolidating UKmarket more substantially and rapidly than was possible from our historic base.The acquisition of Serco Ryan completed in October 2005, (post the period end)is key to our delivery of this. The Serco Ryan acquisition gives us further scale to compete more effectively inthe UK and opens up a number of exciting opportunities for our businessglobally. We expect to set new standards in the supply of industrial fastenersby harnessing the joint sales and global expertise of the two organisations. We are at an advanced stage of a thorough review of the activities of thecombined business to ensure that the enlarged Group delivers what customersrequire in an efficient and profitable manner. The Board expects to benefit fromcombining the expertise of both management teams and their people and will beworking closely to ensure that we create the best operation to deliver the nextstage of our growth. We have already indicated that the combined business will reflect significantsynergies in the first full year of ownership and that overall, afterrestructuring costs, the acquisition will be earnings enhancing in the financialyear ending March 2007. Our current view is that cost savings will exceed ourinitial estimates. Phase One of our Chinese manufacturing operation is on schedule to be completedby the end of 2005. The initial focus will be on serving our growing domesticChinese business, but over time this will be a significant resource for thewhole Group. Commentary and Financial Results for the interim period ended 30 September 2005These results have been prepared using the presentation, recognition andmeasurement requirements of International Financial Reporting Standards (IFRS)and, in order to give a greater level of clarity, we have restated Group resultsfor 2004 and 2005 under the same rules with explanatory notes following thefinancial report. continued... -3- In the six months ended 30 September 2005, Group revenues from our continuingbusinesses were £50.94 million (2004: £53.04 million). Although on the surface,this is 4.0% below the comparable period it must be emphasised that during thefirst-half of the previous year we had a stronger performance by some of our keycustomers. Despite the on-going difficult trading environments and the overallslowdown in the marketplace, we have been encouraged to see that Trifast'sunderlying business has held revenues and gross margins at the same running rateas the second half of last year and at similar levels to 2003/2004. Revenues reflect a 76.9% contribution from the European businesses of £39.18million which is 8.0% below the same period last year primarily as a result ofthe slowdown in electronics and telecoms where we witnessed a 17.2% decline inthese sectors over the comparable six months as a number of key global accountsand OEM's have been reducing their component order intake ahead of theintroduction of new technologies. This is evident by the reduction in exports infor example France and Poland where we have seen volume levels in the six monthsended September 2005 less than half that of the 2004 interim period. Our Asian revenues were up from £8.66 million to £10.35 million, this creditableperformance was primarily due to the increase in business from our Chineseoperation which benefited from the impact of the on-going movement by our globalcustomers from relatively higher cost economies to lower cost regions. However,the region as a whole is witnessing cost-down pressures from its customers whichhave impacted on the gross margin, but having said this it has been able tomaintain its bottom line profit contribution to the Group. Our investment ofUS$5 million in a new purpose built facility in mainland China is currentlyunderway and to date, the investment totals US$1 million. Our American business witnessed a small decrease in its revenues as a result ofthe slowdown in the US automotive sector. Gross profit for the six month period was £12.87 million compared to £14.15million in 2004 (second half of 2004/05: £12.86 million). Administration expenses remained broadly in-line with last year despiterestructuring costs of £0.18 million and the charge for IFRS option costs in theperiod under review of £0.08 million. Operating profit before financing costs was £2.22 million compared to £2.94million in 2004 due to the lower first-half trading, a £0.23 million exchangeloss and general inflationary increases across our overhead base. The exchangeloss relates to the US$ loan taken out to finance the acquisition in Taiwan. We continue to generate cash from the majority of our trading activities and theGroup's gross debt has again been reduced in the period. However, net stocklevels around the world increased by £1.54 million. This is principally due to:an increase in raw materials to protect against price increases and shortages;whole new product lines being added to our product portfolio and, new businessopportunities arising. Stock provisioning remains prudent at 18.1%. As a result,net debt has increased by £1.31 million to £6.91 million, giving us a modestgearing by the end of the period of 17.5%. Debtor management remains a priority and once again, we are pleased to report nosignificant bad debts in the period. Debtor days remain strong at 64. Capital expenditure was again low at £0.38 million (2004: £0.27 million) withdepreciation at £0.60 million (2004: £0.66 million). Net Financing costs were £204,000 of which, interest payable amounted to£251,000 (2004: £156,000) which was off-set by financial income of £47,000(2004: £32,000). This increase is attributable to the rise in the US$ base rate. continued... -4- Profit before income tax in the period under review was £2.02 million comparedto £2.81 million, once again reflecting impact on profitability of the reductionin volumes in some key customers, inflationary overhead increases and the risein US interest rates. With an effective tax rate of 33.5% (2004:30.0%), profitafter tax, on the same basis was £1.34 million (2004: £1.97 million). Basic earnings per share in the period amounted to 1.86 pence against 2.74 pencein the 2004 equivalent period, whilst diluted earnings per share were 1.85 penceand 2.71 pence respectively. Adjusting for restructuring, property gains andexchange gains/(loss) on loans the adjusted earnings per share were 2.25p and2.72p respectively. Current Trading and ProspectsAs we indicated to our shareholders in the Circular issued on 20 September 2005,challenging global markets, some cost-down pressures and increases in rawmaterial and energy prices impacted our performance in the second half of 2005,and this trend has continued into the current financial year. Since then, aswidely reported and in line with the experiences of our competitors, the overallmarket has further weakened for both the traditional Trifast and the Serco Ryanbusinesses. September through to November have historically been the strongest tradingmonths for the Group. Contrary to our expectations, October trading has beendisappointing and this has not recovered in November. For the month of October,revenue and profitability in our European businesses, including Serco Ryan, wereboth significantly below budget and our Asian operations, whilst slightly aheadon revenue, fell marginally short of budget in terms of profits. Consequently, due to a combination of continued challenging markets and reducedvisibility, the outcome for the year as a whole has become much more difficultto predict. However, if market conditions do not deteriorate below those of thefirst half year, we would expect to at least maintain our current momentum. Notwithstanding this, the Group remains well placed to take advantage of newopportunities which are emerging both in the UK, as well as those we have in theAsian and European regions. The full integration of Serco Ryan is expected to be achieved within the nexttwelve months. We are very positive on the enhanced potential of the enlargedTrifast Group and through the combination of synergies and opportunities open tothe combined businesses as well as in terms of efficiencies and, organic andacquisitive growth in developing economies. This well balanced mix not only consolidates our market position but should alsosee us enhance margins through improved purchasing power; reduction of totalstockholding and an increased utilisation of Trifast's existing Far Eastmanufacturing base. It also enables us to add new sectors and capitalise on theexperience of the combined workforce to develop further both in the UK andoverseas. Overall, the Board remains confident that the Group can continue to build on itsleading position, brand awareness and considerable expertise to drive thebusiness forward to the next level of its development. We expect that this willstart to be reflected in the Group's performance and financial results for theyear ending 31 March 2007 and onwards. Interim DividendGiven the Board's confidence in the future for the enlarged Group, the Directorshave declared an increased interim dividend of 0.73 pence per ordinary share(2004: 0.69 pence). The interim dividend will be paid on 18 January 2006, toshareholders on the Register on 2 December 2005; with an ex-dividend date of 30November 2005. -5- Condensed consolidated interim income statementUnaudited results for the six months ended 30 September 2005 Notes Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000 Revenue 50,939 53,044 103,823Cost of Sales (38,068) (38,896) (76,816) -------------------------------------------------------Gross Profit 12,871 14,148 27,007 Other Operating Income 109 60 606Distribution Expenses (1,736) (2,055) (3,423)--------------------------------------------------------------------------------AdministrativeExpenses before the following items: (8,534) (9,174) (17,806) - Exchange(Loss)/Gain on Acquisition Loan (231) (12) 146 - Restructuring Costs (180) - - - IFRS Option Charge (79) (31) (108)--------------------------------------------------------------------------------Total Administration Costs (9,024) (9,217) (17,768) -------------------------------------------------------Operating Profitbefore Financing Costs 2,220 2,936 6,422 ------------------------------------------------------- Financial Income 47 32 44 Financial Expenses (251) (156) (331) ------------------------------------------------------- Net Financing costs (204) (124) (287) Profit before Income Tax 2,016 2,812 6,135 Income Tax 3 (676) (845) (1,751) ------------------------------------------------------- Profit for the period 1,340 1,967 4,384 ======================================================= Earnings per Share- Basic 5 1.86p 2.74p 6.10p- Diluted 5 1.85p 2.71p 6.05p -6- Condensed consolidated interim statement of recognised income and expenseUnaudited results for the six months ended 30 September 2005 Six months ended Six months ended Year ended 30 September 2005 30 September 2004 31 March 2005 £000 £000 £000 Foreign exchange translationdifferences gain/(loss) 677 153 (19) Net gain/(loss) on hedge of netinvestment in foreign subsidiary 20 (97) (47) -------------------------------------------------Income and ExpenseRecognised Directly in Equity 697 56 (66) ------------------------------------------------- Profit for the Period 1,340 1,967 4,384 -------------------------------------------------Total RecognisedIncome and Expense forthe Period 2,037 2,023 4,318 ================================================= -7- Condensed consolidated interim balance sheetUnaudited results as at 30 September 2005 Notes 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000Current assets Inventories 22,756 21,220 21,573 Trade andotherreceivables 22,581 22,456 22,042 Cash and cashequivalents 1,894 5,393 3,622 -------------------------------------------------------Total currentassets 47,231 49,069 47,237 ------------------------------------------------------- Non-current assets Property,plant andequipment 8,390 9,842 8,463 Intangibleassets 35 47 41 Equityinvestments - 128 126 Goodwill 11,378 11,223 11,057 Deferred taxassets 482 327 471 -------------------------------------------------------Totalnon-current assets 20,285 21,567 20,158 ------------------------------------------------------- Total assets 67,516 70,636 67,395 ------------------------------------------------------- EquityShare capital 3,595 3,594 3,595Share premium 4,598 4,598 4,598Capital reserves 465 652 465IFRS2 Share Option Reserve 228 72 149Retained earnings 6 30,159 27,150 29,136 -------------------------------------------------------Total equity 7 39,045 36,066 37,943 ------------------------------------------------------- Current liabilitiesBank and other loans 1,899 1,871 1,815 Trade andother payables 17,250 21,149 18,642 Current taxpayable 801 826 920 Dividendspayable 1,014 963 - -------------------------------------------------------Total currentliabilities 20,964 24,809 21,377 ------------------------------------------------------- Non-current liabilities Bank and other loans 6,907 8,981 7,413 Provisions forliabilities and charges 181 258 214 Deferred tax 419 522 448 ------------------------------------------------------- Total non-currentliabilities 7,507 9,761 8,075 ------------------------------------------------------- Total liabilities 28,471 34,570 29,452 ------------------------------------------------------- Total equityand liabilities 67,516 70,636 67,395 ------------------------------------------------------- -8- Condensed consolidated interim statement of cash flowsUnaudited results for the six months ended 30 September 2005 Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 £000 £000 £000Cash Flows from Operating Activities Profit before taxation 2,016 2,812 6,135 Adjustments for: Depreciation 597 662 1,276 Loss/(profit) on sale of property, plant & equipment 6 7 (384) Profit on sale of investments (32) - - IFRS 2 share option costs 79 31 108 Investment income (47) (32) (44) Interest expense 251 156 331 ------------------------------------------- 2,870 3,636 7,422 (Decrease)/Increase intrade payables (1,569) 1,479 40 Increase in stocks (905) (2,541) (2,822) (Increase)/Decrease intrade receivables (26) 1,788 368 ------------------------------------------- Cash generated fromoperations 370 4,362 5,008 Interest paid (245) (155) (326) Tax paid (867) (661) (1,680) ------------------------------------------- Net Cash fromOperating Activities (742) 3,546 3,002 ------------------------------------------- Cash Flows from InvestingActivities Disposal/(Acquisition)of subsidiaries and investments net of cash 137 (32) (734) Purchase of property,plant & equipment (377) (280) (835) Proceeds from sale ofproperty, plant &equipment 1 13 2,753 Interest received 46 30 44 -------------------------------------------Net cash used ininvesting activities (193) (269) 1,228 ------------------------------------------- Cash Flows from FinancingActivities Proceeds from issue ofshare capital - 4 5 Repayment of long termborrowings (900) (984) (2,234) Payment of financelease liabilities - (2) (3) Dividends paid - - (1,460) -------------------------------------------Net Cash used inFinancing Activities (900) (982) (3,692) ------------------------------------------- Net (decrease)/increase inCash and Cash Equivalents (1,835) 2,295 538 Cash and CashEquivalents at startof period 3,622 3,075 3,075 Effect of exchangerate fluctuations oncash held 107 23 9 ------------------------------------------- Cash and CashEquivalents at end ofperiod 1,894 5,393 3,622 =========================================== -9- Notes to the condensed consolidated interim financial statementsUnaudited results for the six months ended 30 September 2005 1. Significant accounting policiesTrifast (the "Company") is a company domiciled in the United Kingdom. Thecondensed consolidated interim financial statements of the Company for the sixmonths ended 30 September 2005 comprise the Company and its subsidiaries(together referred to as the "Group"). (a) Statement of ComplianceThe condensed consolidated interim financial statements have been prepared inaccordance with International Financial Reporting Standards (IFRSs). These arethe Group's first IFRS condensed consolidated interim financial statements forpart of the period covered by the first IFRS annual financial statements andIFRS 1 First-time adoption of International Financial Reporting Standards hasbeen applied. The condensed consolidated interim financial statements do notinclude all of the information required for full annual financial statements. An explanation of how the transition to IFRSs has affected the reportedfinancial position, financial performance and cash flows of the Group isprovided in note 8. This note includes reconciliations of equity and profit forcomparative periods reported under United Kingdom GAAP (previous GAAP) to thosereported for those periods under IFRSs. (b) Basis of preparationThese interim statements are prepared in Sterling, rounded to the nearestthousand. They are prepared on a historical cost basis with the exception ofcertain items which are measured at fair value, as disclosed in the accountingpolicies below. The preparation of interim financial statements requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. Actual results may differ from these estimates. These condensed consolidated interim financial statements have been prepared onthe basis of IFRSs in issue that are effective or available for early adoptionat the Group's first IFRS annual reporting date, 31 March 2006. Based on theseIFRSs, the Board of Directors have made assumptions about the accountingpolicies expected to be adopted when the first IFRS annual financial statementsare prepared for the year-ended 31 March 2006. The IFRSs that will be effective or available for voluntary early adoption inthe annual financial statements for the period ended 31 March 2006 are stillsubject to a small degree of change and to the issue of additionalinterpretation(s) and therefore cannot be determined with absolute certainty.Accordingly, the accounting policies for that annual period that are relevant tothis interim financial information will be determined only when the first IFRSfinancial statements are prepared at 31 March 2006. The comparative figures for the financial year ended 31 March 2005 are not theGroup's statutory accounts for the year. Those accounts, which were preparedunder UK GAAP, have been reported on by the company's auditors and delivered tothe Registrar of Companies. The report of the auditors was unqualified and didnot contain statements under s237 (2) and (3) of the Companies Act 1985. The preparation of the condensed consolidated interim financial statementsresulted in changes to the accounting policies as compared with the most recentannual financial statements prepared under previous GAAP. The accountingpolicies set out below have been applied consistently to all periods presentedin these condensed consolidated interim financial statements. They also havebeen applied in preparing an opening IFRS balance sheet at 1 April 2004 for thepurposes of the transition to IFRSs, as required by IFRS 1. The impact of thetransition from previous GAAP to IFRSs is explained in note 8. continued... -10- (c) Basis of consolidation(i) SubsidiariesSubsidiaries are entities controlled by the Company. Control exists when theCompany has the power, directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefits from its activities. Inassessing control, potential voting rights that presently are exercisable orconvertible are taken into account. The financial statements of subsidiaries areincluded in the condensed consolidated interim financial statements from thedate that control commences until the date that control ceases. (ii) Transactions eliminated on consolidationIntragroup balances, and any unrealised gains and losses or income and expensesarising from intragroup transactions, are eliminated in preparing the condensedconsolidated interim financial statements. (d) Foreign currency(i) Foreign currency transactionsTransactions in foreign currencies are translated at the foreign exchange rateruling at the date of the transaction. Monetary assets and liabilitiesdenominated in foreign currencies at the balance sheet date are translated toSterling at the foreign exchange rate ruling at that date. Foreign exchangedifferences arising on translation are recognised in profit or loss.Non-monetary assets and liabilities that are measured in terms of historicalcost in a foreign currency are translated using the exchange rate at the date ofthe transaction. Non-monetary assets and liabilities denominated in foreigncurrencies that are stated at fair value are translated to Sterling at foreignexchange rates ruling at the dates the fair value was determined. (ii) Financial statements of foreign operationsThe assets and liabilities of foreign operations, including goodwill and fairvalue adjustments arising on consolidation are translated to Sterling at foreignexchange rates ruling at the balance sheet date. The revenues and expenses offoreign operations are translated to Sterling at average rates of exchangeduring the year. Foreign exchange differences arising on retranslation arerecognised directly in a separate component of equity. (e) Hedge of net investment in foreign operationsThe portion of the gain or loss on an instrument used to hedge a net investmentin a foreign operation that is determined to be an effective hedge is recogniseddirectly in equity in the exchange reserve. The ineffective portion isrecognised immediately in the income statement. The effective portion isrecycled and recognised in the income statement upon disposal of the operation. (f) Property, plant and equipment(i) Owned assetsItems of property, plant and equipment are stated at cost or deemed cost lessaccumulated depreciation (see below) and impairment losses (see accountingpolicy l). Certain items of property, plant and equipment that had been revalued to fairvalue on or prior to 1 April 2004, the date of transition to IFRSs, are measuredon the basis of deemed cost, being the revalued amount at the date of thatrevaluation. When parts of an item of property, plant and equipment have different usefullives, those components are accounted for as separate items of property, plantand equipment. continued... -11- (ii) DepreciationDepreciation is charged to the income statement on a straight-line basis overthe estimated useful lives of each part of an item of property, plant andequipment. Land is not depreciated. The estimated useful lives are as follows: Freehold and long leasehold buildings - 2% per annum on a straight-line or theperiod of the leaseShort leasehold properties - period of the leaseMotor vehicles - 25% on a straight-line basisPlant and machinery - 10-20% per annum on a straight-line basisFixtures, fittings and office equipment - 10-25% per annum on a straight-linebasis Where relevant, residual values are reassessed annually. (iii) Leased assetsWhere the company enters into a lease which entails taking substantially all therisks and rewards of ownership of an asset, the lease is treated as a "financiallease". The asset is recorded in the balance sheet as a tangible fixed asset andis depreciated over its estimated useful life or the term of the lease,whichever is shorter. Future instalments under such leases, net of financecharges, are included within creditors. Rentals payable are apportioned betweenthe finance element, which is charged to the profit and loss account, and thecapital element which reduces the outstanding obligation for future instalments. All other leases are accounted for as "operating leases" and the rental chargesare taken to the profit and loss account on a straight-line basis over the lifeof the lease. (iv) Subsequent costsThe Group recognises in the carrying amount of an item of property, plant andequipment the cost of replacing part of such an item when that cost is incurredif it is probable that the future economic benefits embodied within the itemwill flow to the Group and the cost of the item can be measured reliably. Allother costs are recognised in the income statement as an expense as incurred. (g) Intangible assets(i) GoodwillAll business combinations are accounted for by applying the purchase method. Inrespect of business acquisitions that have occurred since 1 April 2004, goodwillrepresents the difference between the cost of the acquisition and the fair valueof the net identifiable assets acquired. Goodwill arising on acquisitions is stated at cost less any accumulatedimpairment losses. Goodwill is allocated to cash-generating units and is nolonger amortised but is tested annually for impairment (see accounting policyl). Goodwill arising on acquisitions before 1 April 1998 was written off to reservesin the year of acquisition. Under IFRS1 and IFRS2, this goodwill will now remaineliminated against reserves. Goodwill arising on acquisitions after 1 April 1998but before 31 March 2004 is included on the basis of its deemed cost, whichrepresents the amortised amount recorded under previous GAAP as at 31 March2004. The classification and accounting treatment of business combinations thatoccurred prior to 1 April 2004 has not been reconsidered in preparing theGroup's opening IFRS balance sheet at 1 April 2004. Negative goodwill arising on an acquisition is recognised directly in profit orloss. continued... -12- (ii) Other intangible assetsIntangible assets other than goodwill that are acquired by the Group are statedat cost less accumulated amortisation (see below) and impairment losses (seeaccounting policy l). Expenditure on internally generated goodwill and brands is recognised in profitor loss as an expense as incurred. (iii) Subsequent expenditureSubsequent expenditure on capitalised intangible assets is capitalised only whenit increases the future economic benefits embodied in the specific asset towhich it relates. All other expenditure is expensed as incurred. (iv) AmortisationAmortisation is charged to profit or loss on a straight-line basis over theestimated useful lives of intangible assets unless such lives are indefinite.Goodwill and intangible assets with an indefinite useful life are testedsystematically for impairment at each annual balance sheet date. (h) Investments in equity securitiesInvestments in equity securities held by the Group are stated at fair value,with any resultant gain or loss recognised directly in equity, except forimpairment losses. When these investments are derecognised, the cumulative gainor loss previously recognised directly in equity is recognised in profit orloss. Such investments are recognised (derecognised) by the Group on the date itcommits to purchase (sell) the investments (trade date accounting). (i) Trade and other receivablesTrade and other receivables are stated at their cost less impairment losses (seeaccounting policy l). (j) InventoriesInventories are stated at the lower of cost and net realisable value withprovision being made for obsolete and slow-moving items. In determining the costof raw materials, consumable and goods purchased for resale, a FIFO purchaseprice is used. For work in progress and finished goods manufactured by theGroup, cost is taken as production cost, which includes an appropriateproportion of attributable overheads. (k) Cash and cash equivalentsCash and cash equivalents comprises cash balances and call deposits with anoriginal maturity of three months or less. Bank overdrafts that are repayable ondemand and form an integral part of the Group's cash management are included asa component of cash and cash equivalents. (l) ImpairmentThe carrying amounts of the Group's assets, other than inventories (seeaccounting policy j), employee benefit assets (see accounting policy o) anddeferred tax assets (see accounting policy t), are reviewed at each balancesheet date to determine whether there is any indication of impairment. If anysuch indication exists, the asset's recoverable amount is estimated (seeaccounting policy l(i)). For goodwill, intangible assets that have an indefinite useful life andintangible assets that are not yet available for use, the recoverable amount isestimated at each annual balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. Impairment losses arerecognised in profit or loss unless the asset is recorded at a revalued amountin which case it is treated as a revaluation decrease. continued... -13- Goodwill and indefinite-lived intangible assets were tested for impairment at 1April 2004, the date of transition to IFRSs, even though no indication ofimpairment existed. (i) Calculation of recoverable amountThe recoverable amount is the greater of their net selling price and value inuse. In assessing value in use, the estimated future cash flows are discountedto their present value using a pre-tax discount rate that reflects currentmarket assessments of the time value of money and the risks specific to theasset. For an asset that does not generate largely independent cash inflows, therecoverable amount is determined for the cash-generating unit to which the assetbelongs. (ii) Reversals of impairmentAn impairment loss in respect of an investment in an equity instrumentclassified as available-for-sale is not reversed through profit or loss. Animpairment loss in respect of goodwill is not reversed. An impairment loss onany other asset is reversed only to the extent that the asset's carrying amountdoes not exceed the carrying amount that would have been determined, net ofdepreciation or amortisation, if no impairment loss had been recognised. (m) Share capital - DividendsDividends to the company's shareholders are recognised as a liability anddeducted from shareholders' equity in the period in which the shareholders'right to receive payment is established. (n) Interest-bearing borrowingsInterest-bearing borrowings are recognised initially at fair value lessattributable transaction costs. Subsequent to initial recognition,interest-bearing borrowings are stated at amortised cost. (o) Employee benefits(i) Defined contribution plansThe Group operates Defined Contribution Pension Schemes. The assets of theseschemes are held separately from those of the Group in independentlyadministered funds. The amount charged against profits represents thecontributions payable to the schemes in respect of the accounting period. (ii) Share-based payment transactionsThe share option programme allows Group employees to acquire shares of theCompany. The fair value of options granted is recognised as an employee expensewith a corresponding increase in equity. The fair value is measured at grantdate and spread over the period during which the employees becomeunconditionally entitled to the options. The fair value of the options grantedis measured using a binomial lattice model, taking into account the terms andconditions upon which the options were granted. The amount recognised as anexpense is adjusted to reflect the actual number of share options that vestexcept where forfeiture is only due to share prices not achieving the thresholdfor vesting. (p) ProvisionsA provision is recognised in the balance sheet when the Group has a presentlegal or constructive obligation as a result of a past event, and it is probablethat an outflow of economic benefits will be required to settle the obligation.If the effect is material, provisions are determined by discounting the expectedfuture cash flows at a pre-tax rate that reflects current market assessments ofthe time value of money and, when appropriate, the risks specific to theliability. (q) Trade and other payablesTrade and other payables are stated at cost. continued... -14- (r) RevenueRevenue from the sale of goods and services rendered are recognised in profit orloss when the significant risks and rewards of ownership have been transferredto the buyer. In accordance with normal operations, this will be on despatch ofgoods. (s) Expenses(i) Operating lease paymentsPayments made under operating leases are recognised in profit or loss on astraight-line basis over the term of the lease. Lease incentives received arerecognised in profit or loss as an integral part of the total lease expense. (ii) Net financing costsNet financing costs comprise interest payable on borrowings calculated using theeffective interest rate method, interest receivable on funds invested, dividendincome, foreign exchange gains and losses, and gains and losses on hedginginstruments that are recognised in profit or loss (see accounting policy e).Interest income is recognised in profit and loss as it accrues, using theeffective interest method. (t) Income taxIncome tax on the profit or loss for the periods presented comprises current anddeferred tax. Income tax is recognised in profit or loss except to the extentthat it relates to items recognised directly in equity, in which case it isrecognised in equity. Current tax is the expected tax payable on the taxable income for the year,using tax rates enacted or substantially enacted at the balance sheet date, andany adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing fortemporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for taxation purposes. Thefollowing temporary differences are not provided for: goodwill not deductiblefor tax purposes, the initial recognition of assets or liabilities that affectneither accounting nor taxable profit, and differences relating to investmentsin subsidiaries to the extent that they will probably not reverse in theforeseeable future. The amount of deferred tax provided is based on the expectedmanner of realisation or settlement of the carrying amount of assets andliabilities, using tax rates enacted or substantively enacted at the balancesheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. Deferred tax assets are reduced to the extent that it is no longerprobable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends arerecognised at the same time as the liability to pay the related dividend.Information as to the calculation of income tax on the profit or loss for theinterim periods presented is included in note 3. (u) Segment reportingA segment is a distinguishable component of the Group that is engaged either inproviding products or services (business segment), or in providing products orservices within a particular economic environment (geographical segment), whichis subject to risks and rewards that are different from those of other segments. The Group operates in a number of geographical economic environments. Theseeconomic environments are subject to different risks and rewards and the resultsare shown by different geographical segments. The company only operates in onebusiness segment being the manufacture and logistical supply of industrialfasteners and category 'C' components. continued... -15- 2. Segment reportingSegment information is presented in the condensed consolidation interimfinancial statements in respect of the Group's geographical segments, which arethe primary basis of segment reporting. The geographical segment reportingformat reflects the Group's management and internal reporting structure. Inter-segment pricing is determined on an arm's length basis. Segment results include items directly attributable to a segment as well asthose that can be allocated on a reasonable basis. Business segmentsThe Group is comprised of the following main geographical segments: Europe includes UK, Norway, Sweden, France, Hungary, Southern Ireland and HollandAsia: includes Malaysia, China, Singapore and TaiwanAmerica: includes Los Angeles and Phoenix Segment revenue and result under primary reporting format are disclosed in thetable below: Europe Asia America Group 2005 2004 2005 2004 2005 2004 2005 2004 £000 £000 £000 £000 £000 £000 £000 £000Revenue Continuingbusinesses 41,551 45,275 12,778 10,736 1,438 1,726 55,767 57,737 Intersegment sales (2,374) (2,504) (2,433) (2,076) (21) (113) (4,828) (4,693) -------------------------------------------------------------------- Sales tothird 39,177 42,771 10,345 8,660 1,417 1,613 50,939 53,044parties ==================================================================== Profit/(loss)beforeinterestandtaxation Segmentprofit/ (loss) 1,298 1,959 1,986 1,962 (107) (80) 3,177 3,841 Central costs (957) (905) -------------Profit onordinaryactivitiesbeforeinterest andtaxation 2,220 2,936 =============== Europe Asia America Group 2005 2004 2005 2004 2005 2004 2005 2004 £000 £000 £000 £000 £000 £000 £000 £000 Segment netassets 26,261 24,782 13,220 8,977 2,353 2,211 41,834 35,970 Central net(liabilities)/assets - - - - - - (2,789) 96 ---------------------------------------------------------------- 26,261 24,782 13,220 8,977 2,353 2,211 39,045 36,066 ================================================================ Revenue is derived from the manufacture and logistical supply of industrialfasteners and category 'C' components. continued... -16- 3. TaxationThe charge for tax is an estimate based on the anticipated effective rate of taxfor the year ending 31 March 2006, adjusted for prior year items as shown below: Six months Six months ended ended 30 September 2005 30 September 2004 £'000 £'000 Current tax on income for the period UK Tax 63 115 Foreign Tax 622 737 Adjustments in respect of prior years (9) (7) ---------------------------------- 676 845 ================================== 4. DividendsThe Directors have declared an interim dividend of 0.73 pence per ordinary shareto be paid on 18 January 2006 to shareholders on the register on 2 December2005. 5. Earnings per shareThe calculation of earnings per 5p ordinary share is based on profit for theperiod after taxation and the weighted average number of shares in the period of71,891,969 (September 2004: 71,890,674; March 2005: 71,890,674). The calculation of the fully diluted earnings per 5p ordinary share is based onprofit for the period after taxation. In accordance with IAS 33 the weightedaverage number of shares in the period has been adjusted to take account of theeffects of all dilutive potential ordinary shares. The number of shares used inthe calculation amount to 72,354,246 (September 2004: 72,542,379; March 2005:72,513,275). The adjusted earnings per share for the six months ended 30 September 2005 is asfollows: Six months Six months Year ended ended ended 31 March 30 September 30 September 2005 2004 2005 £'000 £'000 £'000 Profit for the period 1,340 1,967 4,384 Profit on disposal of fixed assets - - (384) Exchange loss/(gain) on 231 12 (146)loan Restructuring costs 180 - - Tax affect (123) (4) 157 -----------------------------------------------Adjusted Profit 1,628 1,975 4,011 ===============================================Basic EPS 1.86 2.74 6.10Diluted Basic EPS 1.85 2.71 6.05Adjusted Diluted EPS 2.25 2.72 5.53 continued... -17- 6. Retained Earnings Six months Six months Year ended ended ended 31 March 2005 30 September 30 September £'000 2005 2004 £'000 £'000 Opening balance 29,136 26,091 26,091 Retained profit for 326 1,003 2,924period Realisation of property - - 187revaluation gains ofprevious years Exchange differences 697 56 (66) -------------------------------------------------Closing Balance 30,159 27,150 29,136 ------------------------------------------------- Retained Earnings Analysis Retained Profit 30,530 28,098 30,204Exchange Reserve (371) (948) (1,068) ---------------------------------------------------- 30,159 27,150 29,136 ---------------------------------------------------- 7. Reconciliation of Movements in Total Equity Six months Six months Year ended ended ended 30 September 30 September 31 March 2005 2004 2005 £'000 £'000 £'000 Profit for the financialperiod 1,340 1,967 4,384 Dividends (1,014) (964) (1,460) ----------------------------------------------- Retained profit for the 326 1,003 2,924period Issue of ordinary shares - 4 5 IFRS2 Share Option Reserve Movement 79 31 108 Exchange differences 697 56 (66) -----------------------------------------------Net addition to Total Equity 1,102 1,094 2,971 Opening Total Equity 37,943 34,972 34,972 ----------------------------------------------- Closing Total Equity 39,045 36,066 37,943 =============================================== 8. Explanation of transition to IFRSsAs stated in note 1(a), these are the Group's first condensed consolidatedinterim financial statements for part of the period covered by the first IFRSannual consolidated financial statements prepared in accordance with IFRSs. The accounting policies in note 1 have been applied in preparing the condensedconsolidated interim financial statements for the six months ended 30 September2005, the comparative information for the six months ended 30 September 2004,for the year ended 31 March 2005 and the preparation of an opening IFRS balancesheet at 1 April 2004 (the Group's date of transition). continued... -18- In preparing its opening IFRS balance sheet, comparative information for the sixmonths ended 30 September 2004 and financial statements for the year ended 31March 2005, the Group has adjusted amounts reported previously in financialstatements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to IFRSs has affectedthe Group's financial position, financial performance and cash flows is set outin the following tables. The significant changes identified are as follows: IFRS2 share-based paymentsUnder UK GAAP, there was no charge to the income statement in respect of Save AsYou Earn schemes that were offered on similar terms to all, or substantiallyall, UK employees. For other share option schemes, there was a charge only inrespect of the difference between the market price on the date of grant and theexercise price of the option, ie there was no charge in respect of optionsissued at market price. IFRS2 requires the fair value of all equity instruments granted to be charged tothe income statement over the performance period of the award. This will resultin a charge in respect of all share options issued and a charge in respect ofthe recently granted Long Term Incentive Plan ("LTIP") in September 2005. As permitted by IFRS1, Trifast has applied IFRS2 only to those equityinstruments granted after 7 November 2002 that had not vested by 1 April 2005. The impact of this is to reduce profit and create associated tax credit asfollows: Profit Tax Credit £'000 £'000Six months ended September 2004 (31) 7Year ended March 2005 (108) 12 IFRS3 Business combinationsGoodwill arising on acquisitions before 1 April 1998 was written off to reservesin the year of acquisition. Under IFRS1 and IFRS3 this goodwill will now remaineliminated against reserves. Under UK GAAP, goodwill arising on acquisitions made post 1 April 1998 wascapitalised and amortised, on a straight line basis, over its estimated usefuleconomic life. Under IFRS3, positive goodwill is considered to have an indefinite life andconsequently is not amortised, but instead is subject to impairment testing bothannually and when there are indications that the carrying value may not berecoverable in full. As permitted by IFRS1, Trifast has applied IFRS3 prospectively from thetransition date, rather than restating all previous business combinations. The impact of IFRS3 on Trifast means that the amortisation of goodwill isreversed increasing profit as follows: Profit £'000Six months ended September 2004 335Year ended March 2005 683 continued... -19- IAS 10 Events after the balance sheet dateUnder UK GAAP, dividends declared after the period end are recognised as aliability of the company at the balance sheet date. Under IAS10, dividends declared after the period end represent a non-adjustingpost balance sheet event and therefore no liability is recognised at the balancesheet date. Consequently there are the following adjustments: 31 March 2004 the liability of £964k is removed in respect of the 2004 finaldividend;30 September 2004 the liability of £496k is removed in respect of the 2005interim dividend;31 March 2005 the liability of £1,014k is removed in respect of the 2005 finaldividend. IAS 12 Income TaxesUnder IAS 12 a deferred tax liability arises from the revaluation of anon-depreciable asset (IAS 16) measured on the basis of the tax consequencesthat would arise from recovery of the carrying amount of that asset. Thefollowing deferred tax liabilities have arisen in relation to land previouslyrevalued upwards under UK GAAP. 1 April 2004 £'000 28930 September 2004 28931 March 2005 251 -20- Consolidated Balance Sheet as at 1 April 2004 Reported IFRS 2 IAS 10 IAS 12 Restated Events under UK Share after the Tax Under GAAP based balance IFRS sheet payments date £000 £000 £000 £000 £000 Current assets Inventories 18,679 18,679 Trade and otherreceivables 23,620 23,620 Cash and cashequivalents 3,075 3,075 ------------------------------------------------------Total current assets 45,374 45,374 ------------------------------------------------------ Non-current assets Property, plant and 10,180 10,180equipment Intangible assets 54 54 Goodwill 11,141 11,141 Deferred tax assets 423 4 427 ------------------------------------------------------Total non-current 21,798 4 21,802assets ------------------------------------------------------ Total assets 67,172 4 67,176 ====================================================== Equity Share capital 3,594 3,594 Share premium 4,594 4,594 Capital reserves 652 652 Profit & loss a/c 26,267 26,267b'fwd Retained Profit for 188 (37) 964 (289) 826the period IFRS 2 Share Option - 41 41Reserve Exchange Reserve (1,002) (1,002) ------------------------------------------------------Total equity 34,293 4 964 (289) 34,972 ------------------------------------------------------ Current liabilities Bank and other loans 1,919 1,919 Trade and other 19,003 19,003payables Current tax payable 755 755 Dividends payable 964 (964) - ------------------------------------------------------Total current 22,641 - (964) - 21,677liabilities ------------------------------------------------------ Non-currentliabilities Bank and other loans 9,698 9,698 Provisions for 319 319liabilities andcharges Deferred tax 221 289 510 ------------------------------------------------------Total non-current 10,238 289 10,527liabilities ------------------------------------------------------ Total liabilities 32,879 - (964) 289 32,204 ====================================================== Total equity andliabilities 67,172 4 67,176 ====================================================== -21- Consolidated Balance Sheet as at 30 September 2004 Reported IFRS 2 IFRS 3 IAS 10 IAS 12 Restated under UK Share Business Events Tax under after GAAP based combinations the IFRS balance payments sheet date £000 £000 £000 £000 £000 £000 Current assets Inventories 21,220 21,220 Trade and 22,456 22,456other receivables Cash and cash 5,393 5,393equivalents ---------------------------------------------------------------- Total current 49,069 49,069assets ---------------------------------------------------------------- Non-current assets Property, 9,842 9,842plant and equipment Intangible 47 47assets Investments 128 128in subsidiaries Goodwill 10,888 335 11,223 Deferred tax 316 11 327assets ---------------------------------------------------------------- Total 21,221 11 335 21,567non-current assets ----------------------------------------------------------------Total 70,290 11 335 70,636assets ================================================================ Equity Share 3,594 3,594capital Share 4,598 4,598premium Capital 652 652reserves Profit & loss 26,455 (37) 964 (289) 27,093a/c b'fwd Retained 1,160 (24) 335 (468) 1,003Profit for the year IFRS 2 Share - 72 72Option Reserve Exchange (946) (946)Reserve ---------------------------------------------------------------- Total 35,513 11 335 496 (289) 36,066equity ---------------------------------------------------------------- Current liabilities Bank and 1,871 1,871other loans Trade and 21,149 21,149other payables Current tax 826 826payable Dividends 1,459 (496) 963payable ----------------------------------------------------------------Total current 25,305 (496) 24,809liabilities ---------------------------------------------------------------- Non-current liabilities Bank and 8,981 8,981other loans Provisions 258 258for liabilitiesandcharges Deferred 233 289 522tax ----------------------------------------------------------------Total 9,472 289 9,761non-current liabilities ----------------------------------------------------------------Total 34,777 (496) 289 34,570liabilities ================================================================Total equity 70,290 11 335 70,636and liabilities ================================================================ -22- Consolidated Balance Sheet as at 31 March 2005 Reported IFRS 2 IFRS 3 IAS 10 IAS 12 Restated under UK Share Business Events Tax under after GAAP based combinations the IFRS balance payments sheet date £000 £000 £000 £000 £000 £000 Current assets Inventories 21,573 21,573 Trade and 22,042 22,042other receivables Cash and cash 3,622 3,622equivalents ----------------------------------------------------------------Total current 47,237 47,237assets ---------------------------------------------------------------- Non-current assets Property, 8,463 8,463plant and equipment Intangible 41 41assets Investments 126 126in subsidiaries Goodwill 10,374 683 11,057 Deferred tax 455 16 471assets ----------------------------------------------------------------Total 19,459 16 683 20,158non-current assets ----------------------------------------------------------------Total 66,696 16 683 67,395assets ================================================================ Equity Share 3,595 3,595capital Share 4,598 4,598premium Capital 465 465reserves Profit & loss 26,642 (37) 964 (289) 27,280a/c b'fwd Retained 2,249 (96) 683 50 38 2,924Profit for the year IFRS 2 Share - 149 149Option Reserve Exchange (1,068) (1,068)Reserve ---------------------------------------------------------------- Total 36,481 16 683 1,014 (251) 37,943equity ---------------------------------------------------------------- Current liabilities Bank and 1,815 1,815other loans Trade and 18,642 18,642other payables Current tax 920 920payable Dividends 1,014 (1,014) -payable ----------------------------------------------------------------Total current 22,391 (1,014) 21,377liabilities ---------------------------------------------------------------- Non-currentliabilities Bank and 7,413 7,413other loans Provisions 214 214forliabilities andcharges Deferred 197 251 448tax ----------------------------------------------------------------Total 7,824 251 8,075non-current liabilities ---------------------------------------------------------------- Total 30,215 (1,014) 251 29,452liabilities ================================================================Total equity 66,696 16 683 - 67,395and liabilities ================================================================ -23- Consolidated Results for the Period Ended 30 September 2004 IFRS 2 IFRS 3 IAS 10 Reported Share Events Restated Under Based Business After Under UK GAAP Payments Combinations B.Sheet IFRS Date £000 £000 £000 £000 £000 Revenue 53,044 53,044 Cost of Sales (38,896) (38,896) ------------------------------------------------------- Gross Profit 14,148 - - - 14,148 Administration and (11,173) (31) (8) (11,212)DistributionExpenses Goodwill (343) 343 - ------------------------------------------------------- Operating Profit 2,632 (31) 335 - 2,936 Profit on Disposal of - -Fixed Assets ------------------------------------------------------- Operating Profit 2,632 (31) 335 - 2,936before FinancingCosts Net Interest (124) (124) ------------------------------------------------------- Profit before Income 2,508 (31) 335 - 2,812Tax Income Tax (852) 7 (845) ------------------------------------------------------- Profit after Tax 1,656 (24) 335 - 1,967 Dividends (496) (468) (964) ------------------------------------------------------- Retained profit 1,160 (24) 335 (468) 1,003 ======================================================= Consolidated Results for the Period Ended 31 March 2005 IFRS 2 IFRS 3 IAS 10 IAS 12 Reported Share Events Restated Under Based Business After Under UK GAAP Payments Combinations B.Sheet Tax IFRS Date £000 £000 £000 £000 £000 £000 Revenue 103,823 103,823 Cost of (76,816) (76,816)Sales ---------------------------------------------------------------Gross Profit 27,007 - - - - 27,007 Administration (20,858) (108) (3) (20,969)& DistributionExpenses Goodwill (686) 686 - ---------------------------------------------------------------Operating 5,463 (108) 683 - - 6,038Profit Profit on 384 384Disposal ofFixed Assets ---------------------------------------------------------------Operating 5,847 (108) 683 - - 6,422Profit beforeFinancingCosts Net Interest (287) (287) ----------------------------------------------------------------Profit before 5,560 (108) 683 - - 6,135Income Tax Income Tax (1,801) 12 38 (1,751) ----------------------------------------------------------------Profit after 3,759 (96) 683 - 38 4,384Tax Dividends (1,510) 50 (1,460) ----------------------------------------------------------------Retained 2,249 (96) 683 50 38 2,924profit ================================================================ -24- Independent review report by KPMG Audit Plc to Trifast plcIntroductionWe have been engaged by the company to review the financial information set outon pages 5 to 23 and we have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the company forour review work, for this report, or for the conclusions we have reached. Directors' responsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of and has been approved by the Directors. The Directors areresponsible for preparing the interim report in accordance with the ListingRules which require that the accounting policies and presentation applied to theinterim figures should be consistent with those applied in preparing thepreceding annual financial statements except where any changes, and the reasonsfor them, are disclosed. As disclosed in note 1 to the financial information, the next annual financialstatements of the Group will be prepared in accordance with IFRSs adopted foruse in the European Union. This interim report has been prepared in accordancewith the requirements of IFRS 1: First-time Adoption of International FinancialReporting Standards relevant to interim reports. The accounting policies that have been adopted in preparing the financialinformation are consistent with those that the Directors currently intend to usein the next annual financial statements. There is, however, a possibility thatthe Directors may determine that some changes to these policies are necessarywhen preparing the full annual financial statements for the first time inaccordance with those IFRSs adopted for use by the European Union. Review work performedWe conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard for use in the United Kingdom. A review consists principally of makingenquiries of Group management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review is substantially lessin scope than an audit performed in accordance with Auditing Standards andtherefore provides a lower level of assurance than an audit. Accordingly, we donot 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 September 2005. KPMG Audit PlcChartered AccountantsCrawley 23 November 2005 This information is provided by RNS The company news service from the London Stock Exchange