WTM.L Regulatory News (WTM)

25 Feb 2008 07:00

Waterman Group PLC25 February 2008 WATERMAN GROWTH IN UK AND OVERSEAS BOOSTS PROFITS AND OPERATING MARGINS Waterman Group plc, the International engineering and environmental consultancy,today announces its interim results for the six months to 31 December 2007 • Revenue, profit and earnings per share ahead of expectations• 33% increase in revenue to £63.6m (2006: £47.7m)• EBITDA margin up to 8.0% (2006: 6.7%)• 64% increase in operating profit before amortisation of acquired intangible assets to £4.1m (2006: £2.5m)• 52% increase in profit before tax and amortisation of acquired intangible assets to £3.5m (2006: £2.3m)• 67% increase in adjusted basic earnings per share to 8.2p (2006: 4.9p)• Interim dividend per share increased to 2.5p (2006: 2.2p)• Recent acquisitions of Boreham and Furness Green are performing to expectations• Net Asset Value per share up to 117p (2006: 106p) Statutory disclosures: • 60% increase in operating profit to £4.0m (2006: £2.5m)• 43% increase in profit before tax to £3.3m (2006: £2.3m)• 59% increase in basic earnings per share to 7.8p (2006: £4.9p) Commenting on the results, Nick Taylor, Chief Executive said, " I am delighted to report that Waterman Group has continued to make veryencouraging progress during the first half. Revenue, profit and earnings pershare are all at record levels. Our International and UK acquisitions are performing well and in conjunction with efficiencies from our existing business,we have increased our profit before tax margin by 10%. " In the UK, we have diversified our business further within existing and newsectors. Over 25% of our turnover is overseas and our recently establishedoffices in Kazakhstan, Abu Dhabi, Tianjin and Brisbane have generatedsignificant new appointments and opportunities. Our long term order book is at record levels and demand for our services in the UK and Internationally is strong. " Despite the continuing uncertainty regarding the world economy, all the sectors in which we operate are currently performing well. Your Board remains confident that the Group will continue to perform in line with their expectations." -ends- Date: 25 February 2008For further information contact: Waterman Group plc Nick Taylor, Chief Executive Graham Hiscocks, Finance Director020-7928-7888web: www.waterman-group.co.uk City ProfileSimon CourtenayWilliam Attwell020-7448-3244 INTERIM MANAGEMENT REPORT I am pleased to report that in the six months to December 2007, Waterman Grouphas achieved an increased adjusted pre tax profit of £3.51m (2006: £2.27m) andpre tax profit of £3.33m (2006: £2.27m) on revenue of £63.6m (2006: £47.7m).Adjusted basic earnings per share has increased to 8.2p (2006: 4.9p) and basicearnings per share to 7.8p (2006: 4.9p). The Board has decided to increase theinterim dividend to 2.5p per share (2006: 2.2p) payable on 21 April 2008 toshareholders on the register on 7 March 2008. Group Activities - UK During the first six months of the financial year, Waterman has achieved continuedexpansion through organic growth and acquisitions of complementary businesses.Good progress has been made on a number of the UK's largest urban regeneration projects including Liverpool One in Liverpool, Cabot in Bristol, Westfield London in White City and Highcross in Leicester. Detailed design work has also commenced recently on 350,000m2 of mixed use development on Summer Row in Wolverhampton, Northern Quarter in Portsmouth and Eastgate in Leeds. The company has also increased the long term order book for urban regeneration projects to over £4bn of development and was recently part of the team selected by the City and County of Swansea and the Welsh Assembly Government for the £1bn mixed use urban regeneration project in Swansea. The Government's Building Schools for the Future programme has resulted in many new commissions and Waterman has been appointed for the design of seventeen schools in Lancashire, Bradford, Hackney, Somerset and West Lothian. In addition,Waterman is currently bidding and negotiating for further secondary schools projects with a construction value over £500m. In London, work has commenced on site on Project Bankside which is a high quality residential development next to the Tate Modern Gallery for Grosvenor Estate and Native Land. Waterman has recently been appointed on three developments withthe Crown Estate and work is progressing on a major refurbishment project in Parliament Square which will accommodate the UK Supreme Court. Scheme design has commenced on a significant 1.3 acre mixed use development at Hanover Square for Great Portland Estates which incorporates the Bond Street Crossrail station. Our civil engineering, transportation and infrastructure business has continued to expand and together with the acquisition of Boreham in April 2007 now represents over 45% of the UK turnover. Our framework agreements with Highways Agency, Tube Lines and British Airways has resulted in a steady flow of work in the preparation of road maintenance contracts, rail station improvements and extensions at Heathrow. In addition, a new framework agreement has been signed with Angus Council in Scotland for engineering design. Major infrastructure projects at Parkside Colliery in North West England, Bilston urban village and Brierly Hill in the Midlands are progressing through the detailed design phase and new infrastructure commissions have been received for projects in Newportand Glasgow. At Kings Cross an enabling work package for Argent and Network Rail has reached tender stage. The Civils group has recently been appointed to provide pre-planning and infrastructure consultancy services for an eco-town in the South of England and a major rail freight logistics development in the Midlands. Both projects are expected to progress in the second half of the financial year. Our environmental and sustainability business has grown organically by 24% with increased work in sustainability and corporate environmental advisory services. The environmental due diligence team was voted Specialist Due Diligence adviser of the year in 2007 at both the Unquote Private Equity Awards and the Mergers and Acquisitions awards. Landscape design, ecological and archaeological investigations have progressed at two large greenfield sites of over 600 acres of mixed use development in Northampton and Newark. Waterman is also advising in the production of an Environmental Statement for a wind farm in the South West for Ecotricity. We have also received further commissions to continue with our expert witness services for the South Downs National Park Inquiry. Group Activities - Overseas The Group's revenue from overseas operations has grown by 38% compared to the first six months of financial year 2006/07 and provided over 25% of the Group's total revenue. Established Waterman offices in Russia, Poland, Ireland, the Emirates andAustralia have continued to gain new commissions. Waterman has beenappointed on Park City in Moscow which is a 600,000 m2 mixed use development in the centre of Moscow. In Russia, Waterman is currently engaged on projects of over 2.3 million m2 of development. Significant new retail projects have been awarded in Poland, Romania and Hungary and in response to this demand a larger office has been established in Poland. Our Emirates offices in Dubai and Abu Dhabi have continued to grow during thelast six months. During this period we have received new appointments for elevenresidential and commercial towers within the Dubai Waterfront development. Wehave progressed with detailed design on the longest building development in theworld at Al Raha Beach and also two new hotels on Yas Island for Aldar. Thefirst 6 star green star sustainable commercial development in Sydney hascommenced on site at Darling Harbour and our Australian offices in Melbourne,Brisbane and Sydney have been busy on new residential, commercial, research,medical and teaching facilities for a range of clients. In Kazakhstan, our recently opened office has received appointments as leaddesigners on a 164 metre tall commercial tower of 61,000m2 and a trade centre of85,000m2, both projects are located in Astana. Our landscape design teams haveachieved significant success in Tianjin in China where we have been appointed asoverall masterplanner for a 32.5km2 high-tech city and detailed urban andlandscape designer for the first phase of the development. In addition, we havealso been appointed as landscape designers for a 2km long riverside area knownas Trumpet Island in the centre of Binhai New City, Tianjin. The Group's Irish consultancy, Moylan has continued to expand. Major projects inprogress include the Lamberton Hotel, a 280 room five star leisure complex inSouth Dublin, six new primary and secondary schools in Kildare and Dublin,Airport city office complex next to Dublin Airport, Clongriffen Railway Stationand a major public housing development at Enniskerry in South Dublin. I am pleased to draw shareholders' attention to the size and quality of ouroverseas projects. Waterman now employs 516 staff overseas out of a totalheadcount of 1,980, which has grown from 1,785 in June 2007. Acquisitions On 1 September 2007 Waterman Building Services Ltd acquired a 100% interest ofFurness Green Limited, a mechanical and electrical specialist consultingengineer based in Nottingham, Leeds and London. Furness Green Limited which isto be fully integrated into Waterman Building Services Ltd in this financialyear has specialist expertise in the design of theatres and performing artsprojects and provides a greater regional presence and diversity to Waterman'sbuilding services business. In addition, Boreham Consulting Engineers, acquiredin April 2007, is now fully integrated within the Group and performed stronglyfor the period. Acquisitions of complementary, earnings enhancing businesses inthe UK and overseas remain an important part of our growth strategy. Future Prospects Waterman Group has achieved an increase in revenue of 33% during the first sixmonths of the financial year and with a substantial and growing order bookdiversified by sector and geography, the Group is well placed for the future.The Group's presence in the world's fast growing markets is now well establishedand the further development of Waterman as an international group will remain ahigh priority. Our new vision to be "International consultant of choice" is animportant statement of intent to our employees and clients. Despite the continuing uncertainty regarding the world economy, all the sectorsin which we operate are currently performing well. Your Board remains confidentthat the Group will continue to perform in line with their expectations. Roger FidgenChairman25 February 2008 Independent Review Report to Waterman Group plcfor the six months ended 31 December 2007 Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31December 2007, which comprises the consolidated income statement, consolidatedbalance sheet, consolidated statement of changes in equity, consolidated cashflow statement and related notes. We have read the other information containedin the half-yearly financial report and considered whether it contains anyapparent misstatements or material inconsistencies with the information in thecondensed set of financial statements. Directors' responsibilities The half-yearly report is the responsibility of, and has been approved, by thedirectors. The directors are responsible for preparing the half-yearly financialreport in accordance with the Disclosure and Transparency Rules of the UnitedKingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRS as adopted by the European Union. The condensedset of financial statements included in this half-yearly financial report hasbeen prepared in accordance with International Accounting Standard 34, 'InterimFinancial Reporting', as adopted by the European Union. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. This report, including the conclusion, has been prepared for and onlyfor the company for the purpose of the Disclosure and Transparency Rules of theFinancial Services Authority and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 December 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. PricewaterhouseCoopers LLPChartered AccountantsLondon25 February 2008 Consolidated Income Statement For the six months ended 31 December 2007 Unaudited Unaudited Audited Before Six months Six months Twelve months amortisation Amortisation to 31 to 31 to 30 of acquired of acquired December December June intangibles intangibles 2007 2006 2007 Notes £'000 £'000 £'000 £'000 £'000 Revenue-Continuing 4 63,633 - 63,633 47,702 103,903 operations Employee benefits expense (34,447) - (34,447) (24,768) (52,740) Other operating charges (24,084) - (24,084) (19,761) (43,888) Operating expenses (58,531) - (58,531) (44,529) (96,628) Earnings before interest, taxes, depreciation and amortisation (EBITDA) 5,102 - 5,102 3,173 7,275 Depreciation of property, plant and equipment (819) - (819) (587) (1,301) Amortisation of other intangible assets (149) (184) (333) (108) (357) Operating profit 4 4,134 (184) 3,950 2,478 5,617 Interest payable (839) - (839) (293) (723) Interest receivable 214 - 214 81 200 Profit before taxation 3,509 (184) 3,325 2,266 5,094 Taxation 5 (1,026) 52 (974) (749) (1,337) Profit for the financial period from continuing operations 2,483 (132) 2,351 1,517 3,757 Profit attributable to Equity shareholders 2,373 (123) 2,250 1,412 3,347 Profit attributable to Minority Interests 110 (9) 101 105 410 2,483 (132) 2,351 1,517 3,757 Basic earnings per share 6 8.2p (0.4p) 7.8p 4.9p 11.7p Diluted earnings per share 6 8.0p (0.4p) 7.6p 4.8p 11.4p Dividend paid per share 7 3.6p 3.4p 5.6p Dividend proposed per share 7 2.5p 2.2p 3.6p Consolidated Balance Sheet as at 31 December 2007 Unaudited Unaudited Audited Six months to Six months to Twelve months 31 December 31 December to 30 June 2007 2006 2007 Notes £'000 £'000 £'000Assets Non-current assets Goodwill 16,942 13,328 15,439Other intangible assets 8 2,366 288 2,544Property, plant and 8 14,500 13,543 13,938equipment Loan and receivables 10 10 10Deferred tax asset 411 - 389 34,229 27,169 32,320 Current assets Trade and other receivables 56,048 41,329 50,887Cash and cash equivalents 8,385 4,898 6,221 64,433 46,227 57,108 Total assets 98,662 73,396 89,428 Liabilities Current liabilities Trade and other payables 39,193 28,896 35,120Financial liabilities - 9 3,528 2,472 3,878borrowings Current tax liability 1,068 895 515 43,789 32,263 39,513 Non-current liabilities Financial liabilities - 9 14,958 7,274 12,893borrowings Provisions 10 3,549 2,329 2,915Deferred tax liability 1,766 1,042 1,759 20,273 10,645 17,567 Total liabilities 64,062 42,908 57,080 Net assets 34,600 30,488 32,348 Shareholders' equity Share capital 11 2,906 2,868 2,879Share premium reserve 11,816 11,725 11,764Merger reserve 2,358 2,146 2,170Revaluation reserve 1,491 1,450 1,491Profit and loss reserve 14,837 11,670 13,180Total shareholders' equity 33,408 29,859 31,484 Minority interest 1,192 629 864Total equity 34,600 30,488 32,348 Consolidated Cash Flow Statement for the six months ended 31 December 2007 Unaudited Unaudited Audited Six months to Six months to twelve months 31 December 31 December to 30 June 2007 2006 2007 Notes £'000 £'000 £'000Cash flows from operating activities Cash generated from operations 12a 5,747 1,989 7,211Interest paid (378) (206) (694)Interest received 214 81 200Tax paid (521) (438) (1,602) Net cash from operating activities 5,062 1,426 5,115 Cash flows from investing activities Acquisition of subsidiary undertakings net of cash acquired (1,302) (1,092) (5,208)Part disposal of subsidiary undertaking - 13 13Deferred consideration paid (1,511) (50) (50)Purchase of other intangible fixed assets (145) (35) (349) Purchase of property, plant and equipment (PPE) (1,286) (466) (1,243) Proceeds from sale of PPE and other intangible assets 4 10 23 Net cash used in investing activities (4,240) (1,620) (6,814) Cash flows from financing activities Share issues 67 52 101Net proceeds from issue of new bank loans 2,000 2,304 7,304Repayment of borrowing (501) (330) (708)Repayments on finance leases (7) (16) (48)Equity dividends paid (1,296) (972) (1,705)Purchase of shares by Waterman Trustees Limited (213) (181) (263) Net cash from financing activities 50 857 4,681 Net increase in cash and cash 872 663 2,982equivalents Effect of exchange rate changes 190 (34) 30Net increase in cash and cash 12b 1,062 629 3,012equivalents Consolidated Statement of Changes in Shareholders' Equity as at 31 December 2007 Profit Total Share and share- Share premium Merger Revaluation loss holders' Minority Total capital reserve reserve reserve reserve equity Interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2006 2,856 11,685 2,146 1,450 11,361 29,498 364 29,862 Currency translation - - - - (162) (162) 3 (159)adjustments Share based payments charge - - - - 24 24 - 24Adjustment in respect of Share Incentive Plan - - - - (1) (1) - (1) Profit on disposal of own shares - - - - 8 8 - 8 Acquisition of 41% effective interest in subsidiary undertaking - - - - - - 138 138Part disposal of 1% of share capital in subsidiary undertaking - - - - - - 19 19 Net income recognised directly in equity - - - - (131) (131) 160 29 New ordinary shares issued 12 40 - - - 52 - 52Profit for the financial period - - - - 1,412 1,412 105 1,517 Dividend - - - - (972) (972) - (972) Balance at 31 December 2006 2,868 11,725 2,146 1,450 11,670 29,859 629 30,488 Currency translation adjustments - - - - 149 149 31 180 Deferred tax charge for the period - - - 41 91 132 - 132 Share based payments charge - - - - 47 47 - 47Adjustment in respect of Share Incentive Plan - - - - (80) (80) - (80) Net income recognised directly in equity - - - 41 207 248 31 279 New ordinary shares issued 11 39 24 - - 74 - 74Profit for the financial period - - - - 1,935 1,935 305 2,240 Dividend - - - - (632) (632) (101) (733) Balance at 30 June 2007 2,879 11,764 2,170 1,491 13,180 31,484 864 32,348 Currency translation - - - - 505 505 32 537adjustments Share based payments charge - - - - 121 121 - 121Adjustment in respect of Share Incentive Plan - - - - 98 98 - 98 Loss on disposal of own shares - - - - (21) (21) - (21) Minority interest share of intangibles acquired on AHW (Victoria) Pty Ltd acquisition - - - - - - 195 195 Net income recognised directly in equity - - - - 703 703 227 930 New ordinary shares issued 27 52 188 - - 267 - 267Profit for the financial period - - - - 2,250 2,250 101 2,351 Dividend - - - - (1,296) (1,296) - (1,296) Balance at 31 December 2007 2,906 11,816 2,358 1,491 14,837 33,408 1,192 34,600 Notes to Financial Informationfor the six months ended 31 December 2007 1. General information The company is a limited liability company incorporated and domiciled in the UK.The address of its registered office is Pickfords Wharf, Clink Street, LondonSE1 9DG.The company has its listing on the London Stock Exchange. This condensed consolidated half-yearly financial information was approved forissue on 25 February 2008. These interim financial results do not comprise statutory accounts within themeaning of Section 240 of the Companies Act 1985.Statutory accounts for the yearended 30 June 2007 were approved by the Board of Directors on 26 October 2007and delivered to the Registrar of Companies. The report of the auditors on thoseaccounts was unqualified, did not contain an emphasis of matter paragraph anddid not contain any statement under Section 237 of the Companies Act 2005. 2. Basis of preparation This condensed unaudited consolidated financial information for the half yearended 31 December 2007 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with IAS 34 'InterimFinancial Reporting ' as adopted by the European Union (EU).The half yearcondensed consolidated financial report should be read in conjunction with theannual financial statements for the year ended 30 June 2007, which have beenprepared in accordance with International Financial Reporting Standards (IFRS)as adopted by the EU. The condensed unaudited consolidated half yearly financial statements have beenprepared in accordance with IFRS as adopted by the EU, and those parts of theCompanies Act 1985 related to reporting under IFRS that the directors expect tobe applicable as at 30 June 2008.IFRS are subject to amendment or interpretationby the International Accounting Standards Board and there is an ongoing processof review and endorsement by the EU. For these reasons, it is possible that theinformation presented in this report may be subject to change. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the dates of the financialstatements and the reported amounts of revenue and expenses during the reportedperiod. Although these estimates are based on management's best knowledge of theamount, events or actions, actual results ultimately may differ from thoseestimates. 3. Accounting policies The accounting policies adopted are consistent with those of the annualfinancial statements for the year ended 30 June 2007, as described in thoseannual financial statements. The Group will review the Goodwill that has been recognised in the currentperiod in accordance with IFRS 3 'Business Combinations' and separately identifyany intangible assets that arise as required by IAS 38 'IntangibleAssets'. The Group intends to finalise any fair value adjustments in accordance with IFRS 3 within one year of the relevant acquisition date and any adjustments required will be reported in the annual financial statements. 4. Segmental information Six months ended 31 December 2007 Building Civil and Environmental International Consolidated services transportation consultancy Structures multi-disciplinary Total Income Statement £ '000 £ '000 £ '000 £ '000 £'000 £ '000 Revenue - total 5,984 22,489 8,119 14,266 19,981 70,839Revenue - internal (37) (766) (781) (2,014) (3,608) (7,206)Revenue 5,947 21,723 7,338 12,252 16,373 63,633EBITDA 414 2,143 455 1,192 898 5,102Depreciation (65) (256) (78) (112) (308) (819)Amortisation (9) (182) (19) (30) (93) (333)Operating profit 340 1,705 358 1,050 497 3,950Net finance costs (625)Profit before taxation 3,325Taxation (974)Profit attributable to (101)minority interestsProfit attributable to 2,250equity shareholders Six months ended 31 December 2006 Consolidated Building Civil and Environmental International TotalIncome Statement services transportation consultancy Structures multi-disciplinary £ '000 £ '000 £ '000 £ '000 £ '000 £'000 Revenue - total 4,914 14,033 6,440 13,024 13,479 51,890Revenue - internal (12) (489) (514) (1,529) (1,644) (4,188)Revenue 4,902 13,544 5,926 11,495 11,835 47,702EBITDA 336 908 251 1,221 457 3,173Depreciation (64) (118) (78) (115) (212) (587)Amortisation (4) (39) (17) (29) (19) (108)Operating profit 268 751 156 1,077 226 2,478Net finance costs (212)Profit before taxation 2,266Taxation (749)Profit attributable to (105)minority interestsProfit attributable 1,412to equity shareholders 5. Taxation Taxation for the six months ended 31 December 2007 has been calculated at 28% ofthe profit before taxation being the estimated effective rate for the year,£378,000 being the estimated overseas tax charge. The total effective rate forthe period has fallen due to the change in the mix of the profits between thedifferent jurisdictions in which the Group operates and a reduction in the UKrate of Corporation tax. 6. Earnings per share The basic earnings per share has been calculated on the profit attributable toshareholders and based on the weighted average of 28,950,581 shares in issueduring the period and ranking for dividend (31 December 2006: 28,601,153 and 30June 2007: 28,685,569). The fully diluted earnings per share also takes account of unexercised optionspotentially convertible into new ordinary shares and shares conditionallyawarded in accordance with the Long Term Incentive Plan. The calculation isbased on a weighted average of 29,636,167 shares during the period (31 December2006: 29,215,654 and 30 June 2007: 29,302,516). 7. Dividends The directors propose an interim dividend of 2.5p per share (December 2006: 2.2pper share). The shares become ex-dividend on 5 March 2008 and the dividend willbe paid on 21 April 2008 to those shareholders on the register at the close ofbusiness on 7 March 2008. Unaudited Unaudited Audited Six months to Six months to Year ended 30 31 December 2007 31 December 2006 June 2007 £'000 £'000 £'000 Dividends charged to equity in the period 1,296 972 1,604Dividend per ordinary share paid in period 3.6p 3.4p 5.6p 8. Capital expenditure PPE and Other intangible assets £'000Six months ended 31 December 2007 Opening net book amount at 1 July 2007 16,482Additions 1,431Disposals -Acquisitions through business combinations 34Exchange rate adjustments 71Depreciation and amortisation (1,152)Closing net book amount at 31 December 2007 16,866 Six months ended 31 December 2006Opening net book amount at 1 July 2006 13,871Additions 499Disposals (6)Acquisitions through business combinations 172Exchange rate adjustments (10)Depreciation and amortisation (695)Closing net book amount at 31 December 2006 13,831 9. Financial liabilities-borrowings 31 December 2007 31 December 2006 30 June 2007 £'000 £'000 £'000CurrentBank loans 970 802 1,443Bank overdrafts 1,526 1,484 424Finance leases 6 32 12Deferred consideration 1,026 154 1,999 3,528 2,472 3,878 Non-currentBank loans 12,699 6,722 10,693Finance leases 1 13 1Deferred consideration 2,258 539 2,199 14,958 7,274 12,893Total 18,486 9,746 16,771 Movements in financial liabilities-borrowings are analysed as follows: £'000 Six months ended 31 December 2007 Opening amount as at 1 July 2007 16,771 Increase in bank overdrafts 1,102 New bank loans 2,000 Net repayment of borrowing (186) Deferred consideration arising on acquisition of Furness 310 Green Ltd Settlement of part of deferred consideration on Waterman Boreham Ltd and AHW (Victoria ) Pty Ltd (1,511) Closing amount as at 31 December 2007 18,486 Six months ended 31 December 2006 Opening amount as at 1 July 2006 6,178 Increase in bank overdrafts 936 New bank loans 2,304 Net repayment of borrowing (299) Finance leases acquired through business combinations 9 Deferred consideration arising on acquisition of AHW 693 (Victoria) Pty Ltd Settlement of deferred consideration on Waterman (75) Envirosystems Ltd Closing amount as at 31 December 2006 9,746 10. Provisions Liability insurance provision £'000Six months ended 31 December 2007Opening amount as at 1 July 2007 2,915 Charged to the consolidated income statement 3,064Utilised (430)Released (2,043)Unwinding of discount 43 Closing amount as at 31 December 2007 3,549 Six months ended 31 December 2006Opening amount as at 1 July 2006 2,023 Charged to the consolidated income statement 1,116Utilised (107)Released (686)Discount (17) Closing amount as at 31 December 2006 2,329 11. Share capital The share capital of the Company comprises ordinary shares of 10p each. Shareswere issued during the period at an issue price ranging from 44.5p to 164.5p(2006: 44.5p to 50p) and a weighted average share price of 98.9p (2006: 45.8p). Six months ended 31 December 2007 Authorised Issued and fully paid No '000 £'000 No '000 £'000 At 1 July 2007 41,000 4,100 28,791 2,879Issued during the year in respect of share option - - 149 15schemesIssued as part of the deferred consideration for the - - 121 12acquisition of Furness Green LtdAt 31 December 2007 41,000 4,100 29,061 2,906 Six months ended 31 December 2006 Authorised Issued and fully paid No '000 £'000 No '000 £'000 At 1 July 2006 41,000 4,100 28,564 2,856Issued during the year in respect of share option - - 115 12schemesAt 31 December 2006 41,000 4,100 28,679 2,868 12. Notes to the Consolidated Cash Flow Statement a) Reconciliation of profit for the financial period to cash generated from operations Unaudited Unaudited Audited Six months to Six months to twelve months to 31 December 31 December 30 June 2007 2007 2006 £'000 £'000 £'000 Profit for the financial period 2,351 1,517 3,757Taxation 974 749 1,337Interest payable 839 293 723Interest receivable (214) (81) (200)Amortisation of other intangible assets 333 108 357Depreciation 819 587 1,301Profit on disposal of PPE and other (4) (6) (19)intangible assets Loss on part disposal of subsidiary - 13 -undertaking Shares granted under the Share Incentive Plan 290 188 198Other non cash charges 121 24 71Changes in working capital Increase in Trade and other receivables (3,123) (4,875) (9,206) Increase in Trade and other payables 2,883 3,187 8,035 Increase in Provisions 478 285 857Cash generated from operations 5,747 1,989 7,211 b) Analysis of net debt Other 31 December 30 June non-cash Exchange 31 December 2006 2007 Cash flow changes movements 2007 £'000 £'000 £'000 £'000 £'000 £'000 Cash balances 4,898 6,221 1,974 - 190 8,385Bank overdrafts (1,484) (424) (1,102) - - (1,526)Cash and cash equivalents 3,414 5,797 872 - 190 6,859 Current Bank loans (239) (1,443) 501 6 (34) (970)Finance leases (32) (12) 7 - (1) (6)Deferred consideration (717) (1,999) 1,511 (518) (20) (1,026) Non-current Bank loans (7,261) (10,693) (2,000) (6) - (12,699)Finance leases (13) (1) - - - (1)Deferred consideration - (2,199) - (59) - (2,258) Net debt (4,848) (10,550) 891 (577) 135 (10,101) 13. Acquisitions a) Furness Green Limited On 1 September 2007, Waterman Building Services Limited purchased 100% of theissued share capital of Furness Green Limited, a consultancy providingmechanical and electrical design services from offices in London, Leeds andNottingham. Furness Green has contributed £894,406 to revenue and £79,400 profitattributable to equity shareholders from acquisition until 31 December 2007. Assets acquired Book and provisional fair value £'000Non- current assetsProperty, plant and equipment 34Current assetsTrade and other receivables 946Cash and cash equivalents 37Current liabilitiesTrade and other payables (413)Current tax liability (93)Non-current liabilitiesDeferred taxation liability (2)Net assets acquired 509Intangibles 830Consideration 1,339Satisfied by:Cash 800Deferred consideration - cash 310 - shares 200Related costs of acquisition 29 1,339 If the acquisition had been made at 1 July 2007, Furness Green would havecontributed £1,320,930 to revenue and £90,878 profit attributable to equityshareholders. This information should not be viewed as indicative of the resultsof operations that would have occurred if the acquisitions had been made at thebeginning of the financial year or the future results of the combinedoperations. The outflow of cash and cash equivalents on the acquisition can be calculated asfollows: Total £'000 Cash consideration 829 Cash acquired (37) Total outflow of cash and cash equivalents 792 b) RJA Consulting Limited On 13 November 2007, Waterman Civils Limited purchased the trade and work inprogress of RJA Consulting Limited, a civil and structural engineeringconsultancy based in Glasgow, Scotland for total cash consideration of £475,000.The provisional fair values of the WIP acquired were £151,000 and intangibleswere £324,000. All of the intangible assets in both acquisitions have been classified asgoodwill as at 31 December 2007.The fair value adjustments in respect of otherintangible assets will be finalised at 30 June 2008. 14. Related party transactions The directors have identified 19 (2006: 19) key management personnel whosecompensation was as follows: - 2007 2006 £'000 £'000 Short term benefits 1,416 1,437Charge in respect of share based payments 59 23Post employment benefits 94 96 1,569 1,556 15. Further information Copies of the Interim Report will be sent to shareholders. Additional copies will be available from the Company's registered office at Pickfords Wharf, Clink Street, London SE1 9DG. In addition, electronic copies of the Interim Report will be made available on the Group's website and the 30 June 2007 financial statements can be viewed on the Group's website www.waterman-group.co.uk The directors are responsible for the maintenance and integrity of the Group'swebsite on the internet. However, information is accessible in many differentcountries where legislation governing the preparation and dissemination offinancial information may differ to that applicable to the United Kingdom. Statement of Directors' Responsibilities The directors confirm that this condensed set of financial statements has beenprepared in accordance with IAS 34 as adopted by the European Union, and thatthe Interim Management Report herein includes a fair review of the informationrequired by DTR 4.2.7 and DTR 4.2.8. The directors of Waterman Group plc are listed in the Waterman Group plc AnnualReport and Financial Statement 2007.There have been no changes of directorssince the Annual Report. A list of current directors is maintained on theWaterman Group website www.waterman-group.co.uk. By order of the Board Graham R HiscocksCompany Secretary25 February 2008 This information is provided by RNS The company news service from the London Stock Exchange