Tyman Regulatory News (TYMN)

29 Apr 2009 07:00



LUPUS CAPITAL PLC

Audited Statement of Results for the year ended 

31 December 2008

Highlights:

-	EBITDA* up to £42.870 million (2007: £36.559 million)
-	Pre-tax profits* up to £27.685 million (2007: £25.021 million)
-	EPS* up to 14.83p (2007: 14.82p)
-	Strong cash generation
-	Substantial cost reduction achieved
-	Debt negotiations continuing

*before amortisation of acquired intangible assets, deferred tax on amortisation of intangible assets, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect.

For further information:

Lupus Capital plc

Greg Hutchings/Denis Mulhall

Tel: +44 (0) 20 7976 8000

Collins Stewart Europe Limited

Mark Dickenson/Stewart Wallace

Tel: +44 (0) 20 7523 8350

 

 

Lupus Capital plc

Audited Statement of Results for the year ended 31 December 2008

CHAIRMAN'S STATEMENT

Dear Shareholder,

We started the 2008 year well and in good shape but as the global economic crisis developed almost all our US businesses were affected by progressively dramatically lower demand and this has continued right into 2009. Our non-US businesses, apart from our oil services company, started to experience the slow down in sales and orders later in the 2008 year.

Despite these unprecedented conditions, and as a result of our management teams' rapid reactions, Lupus is pleased to be able to report that results for the 12 months to 31 December 2008 are excellent - earnings per share up marginally on 2007 - in comparison to our competitors and bearing in mind the financial and economic turmoil during the period.

The majority of Lupus' businesses are manufacturers and suppliers to the door and window sector mainly for the refurbishment, and less so, for the new build markets (where US housing starts slumped to an annualised 0.466 million units from a high of 2.265 million in January 2006) in the USA and Europe. The Company's main products are locks, seals, hinges, handles, doors and balances.

Results for the year

To help understand the audited results, adjusted measures of underlying profit before tax and earnings per share have been used as defined.

Sales, including a full 12 months of the acquisition of LSS (8 months in 2007) were £266.559 million (2007: £216.859 million). Underlying earnings before interest, tax, depreciation and amortisation were up £6.311 million to £42.870 million (2007: £36.559 million) and pre-tax profits increased by £2.664 million to £27.685 million (2007: £25.021 million).

We are proud to say that reported underlying earnings per share marginally increased to 14.83p (2007: 14.82p) (see note 8).

Net Indebtedness

In relation to our group debt, the US dollar to pound exchange rate changed rapidly last year by over 25% from $2.1 to around $1.5 to the pound. We comfortably met all our interest and debt repayments during 2008. However, the group's net debt increased significantly in sterling terms when translated at the year end exchange rate and this increase, upon translation, was greater than that of the group's proportionate dollar earnings measured in sterling at the average exchange rate of the year. This issue, which is relevant to the debt taken on for the LSS division acquisition, brought us to enter into discussions with our bankers. Further to the Company's announcement on 1 April, we are continuing to negotiate our debt facilities and banking covenants to more appropriate levels through 2009 and beyond. It is anticipated that these discussions will be successfully concluded and will likely result in certain exceptional costs for arrangement fees etc arising this year. Revised banking facilities will also reflect current market conditions.

Our audited accounts show borrowings at an exchange rate of $1.45 to £1 at 31 December 2008 resulting in the Company's net debt position of £145.321 million. This included approximately $224 million borrowings designated in US dollars. If the exchange rate on 31 December 2008 had been the same as at 31 December 2007 our equivalent net debt in Sterling would have been £90.532 million (after accounting for the one-off payment to Laird PLC in 2008) (2007: £99.992 million) i.e. a £9.460 million (9.5%) reduction in our borrowings. For information, US dollar earnings have been translated at $1.86 to £1 being the average rate for the 2008 year.

Dividend

A growing dividend was one of our objectives, however, with the economic crisis causing a decline in trading profits, the adverse US dollar exchange rate and restrictions placed on us by our bankers, we are unable to pay a final dividend.

The interim half year dividend of 2.06p per share was paid on 4 November 2008. This now represents the total dividend for the year and will mean a significant decline from the 5.57p per share from all those paid for the 2007 year. We anticipate dividends will be resumed as soon as practically allowed.

Group 2008 Performance

Throughout 2008 the US market declined significantly. Then in Europe, starting with Spain, followed later by the UK and finally the rest of Europe, our customers cut back on orders.

Both in advance of, and in response to, these conditions we have taken very decisive actions to cut our costs accordingly. Staff and shop floor personnel have been reduced and temporary labour let go. Overheads such as freight, energy and commissions have been flexed/ lowered and factories consolidated or rationalised. Short time working practices have been instigated and wages, in countries where National Governmental Legislation allows, frozen. Cash has been generated from working capital reductions (although reduced credit insurance terms have limited this) and capital expenditure sanctioned only if necessary. Fragile customers are sold to on a cash only basis where appropriate (although regrettably we have had some bad debts). Input costs were brought down: raw materials such as steel and polypropylene have been renegotiated as well as component price decreases given by some suppliers, or resourced elsewhere. These numerous actions have ameliorated 2008 profit reductions in comparison to 2007.

Gall Thomson Environmental, which manufactures products primarily for the oil and gas sector, has had another excellent performance. At the year-end order books were solid both in marine and industrial breakaway couplings.

Exceptional costs of £5.987 million have been incurred during 2008. These include restructuring and redundancy costs as well as asset write-downs.

All our businesses have generated good cash flow during 2008 enabling us to service our interest costs and to meet our debt obligations as they fell due. As sales levels declined local management acted promptly and decisively to reduce working capital accordingly.

Outlook

The general economic climate for 2009 is still very uncertain. The oil and gas services sector remains positive, despite the recent declines in the oil price. The US housing environment continues to decline and the European building components market is following the US trends, albeit delayed. These business conditions require continuous monitoring and control of our cost base.

Given the uncertainty in our building products end markets, the Board believes that predicting the 2009 outcome is difficult. Our businesses both in the US and Europe face unprecedented market conditions which may continue to deteriorate for a while longer. We are confident that we have excellent management teams who will be reacting to these market forces and maximising profitability and cash generation. 

Greg Hutchings

Chairman

29 April 2009

Group income statement

for the year ended 31 December 2008

				Note		2008		2007
						£'000		£'000
Revenue				3		266,559		216,859
Cost of sales				3		(175,666)		(142,675)
Gross profit						90,893		74,184
Administrative expenses						(70,046)		(51,461)
Operating profit						20,847		22,723
Analysed as:						36,619		31,857
Operating profit before exceptional items and amortisation of intangible assets						-		-
Exceptional items				4		(5,987)		(1,385)
Amortisation of intangible assets				3		(9,785)		(7,749)
Operating profit						20,847		22,723
Finance income				6		1,687		1,888
Finance costs				6		(11,743)		(9,241)
Net finance costs						(10,056)		(7,353)
Profit before taxation						10,791		15,370
Income tax expense				7		(4,275)		(3,128)
Profit for the year from continuing operations						6,516		12,242
Earnings per share
- Basic EPS from continuing operations						5.01p		10.68p
- Diluted EPS from continuing operations						4.92p		10.68p
All results relate to continuing operations.

				Note		2008		2007
						£'000		£'000
Non GAAP measure
Adjusted1 profit before taxation						27,685		25,021
Earnings per share
- Adjusted1 basic EPS from continuing operations				8		14.83p		14.82p
- Adjusted1 diluted EPS from continuing operations				8		14.57p		14.82p

1before amortisation of acquired intangible assets, deferred tax on amortisation of intangible assets, exceptional items, unwinding of discount on provisions, amortisation of borrowing costs and the associated tax effect.

Group statement of recognised income and expense

for the year ended 31 December 2008

			2008		2007
		Note	£'000		£'000
Actuarial (losses) on defined benefit plans			(5,559)		(159)
Exchange differences on retranslation of foreign operations			42,620		(148)
Effective portion of changes in value of cash flow hedges			(2,392)		(1,546)
Tax on items recognised directly in equity			1,890		54
Income and expense recognised directly in equity			36,559		(1,799)
Profit for the period			6,516		12,242
Total recognised income and expense for the period - attributable to equity shareholders of the Company		9	43,075		10,443

Group balance sheet

As at 31 December 2008

		Note			2008		2007
							(restated)
					£'000		£'000
ASSETS
Non-current assets
Intangible assets					369,260		306,796
Property, plant and equipment					41,663		36,325
Deferred tax		7			8,297		6,018
					419,220		349,139
Current assets
Inventories					36,857		34,285
Trade and other receivables					34,720		36,755
Cash and cash equivalents					32,407		46,969
					103,984		118,009
TOTAL ASSETS					523,204		467,148
LIABILITIES
Current liabilities
Current tax payable					(6,321)		(4,329)
Trade and other payables					(39,148)		(58,225)
Finance lease obligations					(231)		(188)
Interest bearing loans and borrowings					(27,857)		(16,694)
					(73,557)		(79,436)
Non-current liabilities
Finance lease obligations					(54)		(214)
Deferred tax		7			(30,386)		(25,315)
Interest bearing loans and borrowings					(149,586)		(129,865)
Employee benefit liability					(7,598)		(3,497)
Provisions					(20,441)		(18,937)
Derivative financial instruments					(3,938)		(1,546)
Other creditors					(244)		(1,206)
					(212,247)		(180,580)
TOTAL LIABILITIES					(285,804)		(260,016)
NET ASSETS					237,400		207,132
EQUITY
Capital and reserves attributable to equity holders of the Company
Called up share capital		9			6,864		6,861
Share premium		9			101		45
Other reserves		9			10,389		10,389
Treasury reserve		9			(6,764)		(1,075)
Hedging reserve		9			(3,938)		(1,546)
Translation reserve		9			40,819		(1,801)
Retained earnings		9			189,929		194,259
TOTAL EQUITY					237,400		207,132

Group cash flow statement

For the year ended 31 December 2008

			2008		2007
	Note		£'000		£'000
Cash flows from operating activities
Profit before tax			10,791		15,370
Net finance costs			10,056		7,353
Depreciation	3		6,251		4,702
Amortisation	3		9,785		7,749
Property, plant and equipment written off			1,237		(12)
Share based payments			55		-
Movement in inventories			4,013		1,173
Movement in trade and other receivables			5,891		11,665
Movement in trade and other payables			(14,228)		3,267
Movement in provisions			373		1,110
Income tax paid			(3,351)		(6,492)
Net cash inflow from operating activities			30,873		45,885
Investing activities
Payments to acquire property, plant and equipment			(4,484)		(3,918)
Acquisition of subsidiary, net of cash acquired			-		(239,397)
Deffered consideration on previous acquisition			(12,500)		-
Interest received			1,708		1,867
Net cash outflow from investing activities			(15,276)		(241,448)
Financing activities
Proceeds from shares issue, net of costs			59		131,536
Purchase of treasury shares			(5,689)		(1,075)
Equity dividends paid			(7,232)		(3,753)
New borrowings			5,390		119,064
Interest paid			(9,849)		(7,172)
Repayment of short term borrowings			(17,937)		(5,000)
Repayment of capital element of finance leases			(117)		(88)
Net cash (outflow)/inflow from financing activities			(35,375)		233,512
(Decrease)/increase in cash and cash equivalents			(19,778)		37,949
Effect of exchange rates on cash and cash equivalents			5,216		(718)
Cash and cash equivalents at the beginning of the year			46,969		9,738
Cash and cash equivalents at the year end			32,407		46,969

NOTES TO THE FINANCIAL STATEMENTS

1. BASIS OF PREPARATION AND ACCOUNTING POLICIES

The Group's principal activities are the manufacture, supply and distribution of building products and goods to the oil and gas industry. Lupus Capital plc is the Group's ultimate parent company. It is incorporated and domiciled in England and Wales at Crusader House, 145-157 St. John Street, London EC1V 4RU.

The Group's shares are admitted to trading on AIM, a market of the London Stock Exchange.

The Group's consolidated financial statements are prepared in accordance with the principal accounting policies adopted by the Group and International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations ("IFRIC") as adopted for use in the European Union (EU), and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. 

The 2007 Group balance sheet has been restated in accordance with IFRS 3 Business Combinations as a result of the fair value adjustments made in respect of the LSS acquisition.

Going concern

The financial statements have been prepared on the going concern basis, which assumes that the Group will have sufficient funds to continue in operational existence for the foreseeable future.

The US dollar to pound exchange rate changed rapidly last year by over 25% from $2.1 to around $1.5 to the pound. We comfortably met all our interest and debt repayments during 2008. However, the group's net debt increased significantly in sterling terms when translated at the year end exchange rate and this increase, upon translation, was greater than that of the group's proportionate dollar earnings measured in sterling at the average exchange rate of the year.

This issue, which is relevant to the debt taken on for the LSS division acquisition, brought us to enter into discussions with our bankers. We are currently renegotiating our debt facilities and banking covenants to more appropriate levels through 2009 and beyond. The Board believes that, whilst there is material uncertainty over the timing and precise terms of agreement, these discussions will be successfully concluded. Until the negotiations are concluded there remains significant doubt as to their outcome, however the Board believes it is appropriate to continue to adopt the going concern basis in preparing the annual report and accounts (see note 10).

2. Business combinations

Acquisition of Laird Security Systems Division (LSS) 

On 27 April 2007, the Group acquired 100% of the equity of LSS. The acquisition was funded by the raising of £136m by way of a placing and open offer of 755.6m new ordinary shares in Lupus Capital plc at an issue price of 18p per share and by way of a new debt facility comprising a term loan of $240m. 

The investment in LSS has been included in the Group balance sheet at its fair value at 31 December 2008 and at the provisional fair value at 31 December 2007, as set out in the following table:

	Provisional fair value to Group 31 December 2007	Fair value adjustments	Fair value to Group  31 December 2008
	£'000	£'000	£'000
Intangible assets	96,575	-	96,575
Tangible assets	25,108	-	25,108
Inventories	29,640	(976)	28,664
Trade receivables and other debtors	33,420	-	33,420
Deferred tax asset	13,605	-	13,605
Cash at bank	120	-	120
Current liabilities	(24,667)	(251)	(24,918)
Taxation	(2,744)	(586)	(3,330)
Non-current liabilities	(95)	-	(95)
Provision for liabilities and charges	(18,391)	1,955	(16,436)
Deferred tax	(34,772)	(593)	(35,365)
Net assets	117,799	(451)	117,348
Goodwill arising on acquisition			134,749
Total Consideration			252,097

Fair values have been adjusted to reflect various changes to previous assumptions the material items of which relate to:

inventory adjustments to reflect obsolete and slow moving items against which the directors considered there was inadequate provision at acquisition;

adjustments have been made to onerous lease provisions that existed at acquisition as a result of better information being obtained;

writing off overseas deferred tax assets that existed at acquisition.

Comparative figures have been restated as appropriate.

 3. Segmental analysis

Primary reporting format- business segments

The following tables present revenue and profit and certain assets and liability information regarding the Group's business segments:

Year ended 31 December 2008	Oil Services		Building products		Total
	£'000		£'000		£'000
Continuing operations
Revenue	12,286		254,273		266,559
Operating profit	5,878		14,969		20,847
Net finance costs					(10,056)
Profit before income tax					10,791
Income tax expense					(4,275)
Profit for the year					6,516
Assets and liabilities
Segment assets	9,442		493,752		503,194
Unallocated assets					20,010
Total assets					523,204
Segment liabilities	(3,774)		(278,164)		(281,938)
Unallocated liabilities					(3,866)
Total liabilities					(285,804)
Other segment information
Capital expenditure:
- property, plant and equipment	24		4,460		4,484
Cost of goods sold	3,653		172,013		175,666
Depreciation	67		6,184		6,251
Amortisation	-		9,785		9,785
Employee benefit liabilities	-		7,598		7,598
Goodwill allocation	11,421		222,639		234,060
Intangilble asset allocation	-		134,445		134,445
Exceptional items (note 4)	-		5,987		5,987

Comparative segmental disclosure for the year ended 31 December 2007 is as follows:

Year ended 31 December 2007	Oil services		Building materials		Total
	£'000		£'000		£'000
			(restated)		(restated)
Continuing operations
Revenue	11,342		205,517		216,859
Results
Operating profit	5,557		17,166		22,723
Net finance costs					(7,353)
Profit before income tax					15,370
Income tax expense					(3,128)
Profit for the year					12,242
Assets and liabilities
Segment assets	11,828		416,976		428,804
Unallocated assets					38,344
Total assets					467,148
Segment liabilities	(2,290)		(247,267)		(249,557)
Unallocated liabilities					(10,459)
Total liabilities					(260,016)
Other segment information
Capital expenditure:
- property, plant and equipment	37		4,445		4,482
- intangible assets	-		233,771		233,771
Cost of goods sold	3,320		139,355		142,675
Depreciation	62		4,640		4,702
Amortisation	-		7,749		7,749
Employee benefit liabilities	-		3,497		3,497
Goodwill allocation	11,421		180,221		191,642
Intangilble asset allocation	-		115,179		115,154
Exceptional items (note 4)	-		1,385		1,385

Secondary reporting format- Geographical segments

The following tables present revenue, expenditure and certain asset information regarding the Group's geographical segments:

Year ended 31 December 2008	United Kingdom		Europe		Americas		Rest of the world		Total
	£'000		£'000		£'000		£'000		£'000
Revenue
Revenue from continuing operations	105,181		35,070		109,872		16,436		266,559
Other segment information
Total assets	194,578		22,477		294,504		11,645		523,204
Capital expenditure:
- property, plant and equipment	1,912		233		2,107		232		4,484

Comparative segmental disclosure for the year ended 31 December 2007 is as follows:

Year ended 31 December 2007	United Kingdom		Europe		Americas		Rest of the world		Total
	(restated)				(restated)				(restated)
	£'000		£'000		£'000		£'000		£'000
Revenue
Revenue from continuing operations	79,202		32,927		99,344		5,386		216,859
Other segment information
Total assets	76,274		19,786		362,636		8,452		467,148
Capital expenditure:
- property, plant and equipment	1,745		372		2,278		87		4,482
- intangible assets	57,634		-		176,137		-		233,771

4. Exceptional items

		2008		2007
		£'000		£'000
Reorganisation costs		5,987		1,236
Workers compensation		-		149
		5,987		1,385

Reorganisation costs reflect redundancy and restructuring costs of £3,243,000 and asset write-offs of £2,744,000, associated with downsizing some of the Group's businesses.

5. Employees

Number of employees

The average monthly number of employees (including directors) of the Group during the financial year was:

		2008		2007
		Number		Number
Administration		358		360
Sales		198		207
Operations		1,946		2,269
		2,502		2,836

The number of employees (including directors) of the Group as at 31 December was:

		2008		2007
		Number		Number
Administration		337		348
Sales		189		204
Operations		1,746		2,221
		2,272		2,773

Post 31 December 2008 the number of employees at 31 March 2009 was:

		31 March 2009
		Number
Administration		317
Sales		164
Operations		1,489
		1,970

Employment costs

Employment costs of these employees during the year were as follows:

		2008		2007
		£'000		£'000
Wages and salaries		50,900		43,167
Social Security costs		5,675		5,053
Pension costs - defined contribution schemes		1,057		1,231
Pension costs - defined benefit schemes		464		187
Share based payments		55		-
		58,151		49,638

6. Finance revenue and costs 

	2008		2007
	£'000		£'000
Finance income
Bank interest receivable	1,687		1,845
Fair value gains on financial instruments
- interest rate swap - cash flow hedge, transfer from equity	-		43
	1,687		1,888
Finance costs
Interest payable on bank loans and overdraft	(9,464)		(8,303)
Fair value losses on financial instruments
- interest rate swap - cash flow hedge, transfer from equity	(1,039)		-
Ineffective portion of changes in value of cash flow hedges	(54)		-
Finance charges payable under finance lease and hire purchase contracts	(30)		(23)
Amortisation of borrowing costs	(364)		(264)
Unwinding of discount on provisions	(758)		(517)
Other finance costs	(34)		(134)
	(11,743)		(9,241)
Net finance costs	(10,056)		(7,353)

7. Taxation

(a) Tax on profit on ordinary activities

Income tax in the income statement

		2008		2007
		£'000		£'000
Current income tax:
UK Corporation tax		4,626		2,735
Foreign tax		1,876		4,051
Current income tax charge		6,502		6,786
Adjustments in respect of prior periods		(34)		278
Total current income tax		6,468		7,064
Deferred tax:
Effect of change in rates		-		(2,013)
Origination and reversal of temporary differences		(2,193)		(1,964)
Other items		-		41
Total deferred tax		(2,193)		(3,936)
Income tax expense in the income statement		4,275		3,128

An adjustment was made in 2007 to recognize the change in the UK corporation tax rate to 28% with effect from 1 April 2008.

(b) Reconciliation of the total tax charge

The tax assessed for the year differs from the standard rate of tax in the UK of 28.5% (2007: 30.0%). The differences are explained below:

		2008		2007
		£'000		£'000
Profit from continuing operations before taxation		10,791		15,370
Rate of corporation tax in the UK of 28.5% (2007: 30%)		3,075		4,611
Effects of:
Expenses not deductible for tax purposes:		718		351
Overseas tax rate differences		393		307
Other movements		119		-
Deferred tax rate changes		-		(2,013)
Adjustment in respect of prior periods		(30)		(128)
Income tax expense in the income statement		4,275		3,128

(c) Deferred tax

Deferred income tax at 31 December relates to the following:

		Group balance sheet				Group income statement
		2008		2007		2008		2007
		£'000		£'000		£'000		£'000
Deferred tax liability
Fair value adjustments on acquisition		(29,647)		(25,128)		(1,902)		(4,221)
Other		(739)		(187)		(276)		6
		(30,386)		(25,315)		(2,178)		(4,215)
Deferred tax assets
Post-employment benefits		1,791		1,303		-		-
Fair value adjustments on acquisition		5,467		4,440		94		180
Other		1,039		275		(109)		99
		8,297		6,018		(15)		279
Deferred income tax (income)						(2,193)		(3,936)
Deferred tax liabilities net		(22,089)		(19,297)
Reflected in the balance sheet as follows
Deferred tax assets		8,297		6,018
Deferred tax liabilities		(30,386)		(25,315)
Deferred tax liabilities net		(22,089)		(19,297)

(d) Factors that may affect future tax charges:

There are estimated tax losses of £7,939,000 (2007: £8,401,000) within the Group, comprising capital losses of £7,348,001 and other tax losses of £591,000. As the future use of these losses is uncertain, in accordance with the Group's accounting policy no deferred tax asset has been recognised in respect of them.

The amounts of deferred tax not recognised are as follows:

		2008		2007
		£'000		£'000
Tax losses		(165)		(316)
Capital losses		(2,057)		(2,057)
		(2,222)		(2,373)

8. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 

 

			2008		2007
			'000		'000
Weighted average number of shares (including treasury shares)			137,284		114,648
Treasury shares			(7,311)		(39)
Weighted average number of shares - basic			129,973		114,609
Effect of dilutive potential ordinary shares - options			2,348		-
Weighted average number of shares - diluted			132,321		114,609

The number of shares has been restated to reflect the share consolidation in December 2007.

Earnings per share from continuing operations before exceptional items

The Group presents as exceptional items on the face of the income statement, those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

To this end, basic and diluted adjusted earnings per share information is presented as an additional measure and using the weighted average number of ordinary shares for both basic and diluted amounts as per the table above. Net profit from continuing operations before exceptional items is derived as follows:

			2008		2007
			£'000		£'000
Profit for the year from continuing operations			6,516		12,242
Exceptional costs			5,987		1,385
Amortisation of intangible assets, unwinding discount on provisions and amortisation of borrowing costs			10,907		8,266
Tax effect on exceptional costs and amortisation of intangible assets			(4,137)		(2,895)
Deferred tax adjustment relating to the rate of corporation changing from 30% to 28%			-		(2,013)
Adjusted underlying profit after tax			19,273		16,985
Adjusted underlying basic earnings per share			14.83p		14.82p
Adjusted underlying diluted earnings per share			14.57p		14.82p

9. Reconciliation of movements in equity

	Share	Share	Other	Treasury	Hedging	Translation	Retained
	capital	Premium	reserves	reserve	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2007	3,083	45	10,389	-	-	(1,653)	58,117	69,981
Shares issued net of costs	3,778	-	-	-	-	-	127,758	131,536
Total recognised income and expense for the year	-	-	-	-	(1,546)	(148)	12,137	10,443
Dividends paid	-	-	-	-	-	-	(3,753)	(3,753)
Share buyback	-	-	-	(1,075)	-	-	-	(1,075)
At 31 December 2007	6,861	45	10,389	(1,075)	(1,546)	(1,801)	194,259	207,132
Shares issued net of costs	3	56	-	-	-	-	-	59
Total recognised income and expense for the year	-	-	-	-	(2,392)	42,620	2,847	43,075
Dividends paid	-	-	-	-	-	-	(7,232)	(7,232)
Share buyback	-	-	-	(5,689)	-	-	-	(5,689)
Share based payments	-	-	-	-	-	-	55	55
At 31 December 2008	6,864	101	10,389	(6,764)	(3,938)	40,819	189,929	237,400

			2008		2007
			£'000		£'000
Dividends paid in the year were as follows:
Final dividend for 2006 at 3.34p per share			-		2,059
Special interim dividend for 2007 at 1.50p per share			-		925
Interim dividend for 2007 at 0.56p per share			-		769
Final dividend for 2007 at 3.51p per share			4,557		-
Interim dividend for 2008 at 2.06p per share			2,675		-
			7,232		3,753
Dividends not reflected in the financial statements:
Proposed final dividend for the year 2007 at 3.51p per share			-		4,557

10. Status of this report

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and under the historical cost convention and were approved by the Board on 29 April 2009. They are presented in Sterling, which is the functional currency of the parent company. The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.

These results are audited, however the financial information does not constitute statutory accounts as defined under section 240 of the Companies Act 1985. The auditors opinion is unqualified but modified to include an emphasis of matter paragraph on going concern. The financial information for the year ended 31 December 2008 has been derived from the Group's statutory accounts for that year. The auditors' report on the statutory accounts for the year ended 31 December 2007 was unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. 

ENDFR BLGDSDSDGGCI