Update on current position

28 Oct 2005 16:32

Sanctuary Group PLC28 October 2005 28 October 2005 The Sanctuary Group plc - Update on current position The Sanctuary Group plc ("Sanctuary" or the "Group") is currently finalising itsreview of the business as well as preparing its annual results for theyear-ended 30th September 2005. As part of the review of its business (which was announced in the InterimResults of 28th June and described more fully in the Pre-close Trading Update of21st September) the Board has instigated a cost reduction programme and, hascommenced a review of its accounting policies. The cost reduction programme isprogressing well and is substantially implemented. Given the adverse changes in the trading environment experienced in 2005, theBoard has carefully reviewed the accounting policies and the judgements used incompiling the financial statements. As a consequence the Board believes that itis likely to make changes to accounting policies, which may give rise to prioryear adjustments, and to alter its methods of estimation in certain areas, whichmay give rise to exceptional items. The Group is continuing discussions with its auditors and whilst the exactdetails of the impact of changes are still to be fully determined, the Boardexpects that the effect of such changes combined with the effect of the adversetrading environment already experienced and referred to above will be to alterthe balance sheet significantly and that the Group will show net liabilities onits balance sheet at 30th September 2005. The Board is therefore examiningwhether this constitutes a serious loss of capital as defined by Section 142 ofthe Companies Act (1985). The Group is continuing to make good progress in the implementation of its newbusiness plan and is pleased to note current trading successes. 2006 has startedwell with Elton John continuing his sold out world-wide tour, Joss Stone havingrecently completed her debut film and continuing her tour with the RollingStones and strong sales from albums from artists such as Status Quo and SimpleMinds. In addition, Morrissey is due to complete his new album shortly for ascheduled release in the Spring of 2006. The Board continues to enjoy the support of its bankers. Executive Chairman, Andy Taylor commented: "Whilst this process has been very painful for staff and shareholders, wecontinue to command gratifying support in the industry amongst artists andtrading partners. Our aim in undertaking the review is to reposition Sanctuaryfor a return to profitability and sustainable long-term growth in future years." Ends For further information, please contact: Andy Taylor, Executive Chairman 0207 602 6351 Mike Miller, Finance Director 0207 602 6351 Philip RangerDirector, Corporate & Investor Relations The Sanctuary Group plc 07768 534641/ 020 7300 1323 Paul Downes Merlin 07900 244888/020 7653 6620 Eddy LevitenHead of Corporate Communications The Sanctuary Group 020 7300 6542 This information is provided by RNS The company news service from the London Stock Exchange