REG-Matchtech Group PLC Interim Results

Released : 25/04/07 06:01

                                                                                                                       .
RNS Number:4635V 
Matchtech Group PLC 
25 April 2007 
 
 
 
 
                            Matchtech Group plc                                 
 
 
25 April 2007 
 
 
            Interim results for the six months ended 31 January 2007 
 
 
Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leading 
specialist technical recruitment companies, is pleased to announce its maiden 
interim results for the six months ended 31 January 2007, following its 
Admission to AIM in October 2006. 
 
 
Financial Highlights 
 
 
   - Turnover up 30% to £93.4m (2006: £72.1m)* 
   - Net fee income up 29% to £12.5m (2006: £9.7m)* 
   - Operating profit up 35% to £5.0m (2006: £3.7m)* 
   - Operating profit margin 5.4% (2006: 5.1%)* 
   - Profit before tax up 34% to £4.7m (2006: £3.5m)* 
   - Reported profit before tax after non-recurring items up 14% to £4.1m 
     (£2006: 3.6m) 
   - Basic earnings per share (pre non-recurring items) up 38% to 15.66p 
     (2006: 11.33p) 
   - Basic reported EPS up 18% to 13.36p (2006: 11.33p) 
   - Maiden interim dividend of 4.4p per share 
 
 
* 2006 and 2007 results exclude the sales and profits from the US business sold 
on 31 August 2006 as well as the non-recurring costs of the IPO 
 
 
Operating Highlights 
 
 
   - Strong organic growth across all sectors (Engineering, Built Environment 
     and Support Services) 
   - Results reflect continuing strong demand for permanent placements 
   - 27% increase in permanent placements and 15% increase in contractor 
     numbers in the period 
   - Major Master Vendor contract secured with Mouchel Parkman 
   - Successful Admission to AIM in October 2006 
   - Adrian Gunn assumed the role of Group Managing Director on 1 February 
     2007 
 
 
 
Commenting on the results, George Materna, Chairman of Matchtech said: 
 
 
"We are very pleased with these results, our first as an AIM-listed company, 
which show that Matchtech has continued to make strong progress on all fronts. 
The markets we serve are demonstrating strong demand for qualified white collar 
staff and we are continuing to develop our offering though further investment in 
the business. 
 
 
"There is evidence of continuing salary inflation in each of the sectors in 
which we operate and the market remains candidate driven. In the Engineering and 
Built Environment sectors, a shortage of suitably qualified engineers continues 
to be a key factor in the marketplace, favouring our superior service delivery 
capabilities which derive from our systems and people." 
 
 
"The second half has started well and we believe that we will be able to build 
on what has been achieved in the first half, benefiting from our ongoing 
investment in staff, systems and additional office space. We look forward with 
confidence to the future." 
 
 
 
For further information please contact: 
 
+----------------------------------------------------------+-------------------+ 
|Matchtech Group plc                                       |       01489 898989| 
+----------------------------------------------------------+-------------------+ 
|George Materna, Chairman                                  |                   | 
+----------------------------------------------------------+-------------------+ 
|Adrian Gunn, Group Managing Director                      |                   | 
+----------------------------------------------------------+-------------------+ 
|Tony Dyer, Group Finance Director                         |                   | 
+----------------------------------------------------------+-------------------+ 
|Hogarth Partnership                                       |      020 7357 9477| 
+----------------------------------------------------------+-------------------+ 
|John Olsen / James Longfield / Fiona Noblet               |                   | 
+----------------------------------------------------------+-------------------+ 
 
 
 
Background on Matchtech 
 
 
Matchtech specialises in the provision of contract and permanent staff in the 
Engineering, Built Environment and Support Services sectors across the UK. 
 
 
It was established in 1984 and has grown organically to become the UK's 4th 
largest technical and engineering recruitment specialist and one of the UK's 20 
largest recruitment companies (Source: Recruitment International Top 100 Report 
- August 2006). 
 
 
Operating from a single site near Southampton, Matchtech provides predominantly 
professionally-qualified candidates to clients in a broad range of industries 
including oil and petrochemicals, marine, aerospace, automotive, water, 
electronics, civil engineering, building structures and transport 
infrastructure. It structures its business across three main sectors: 
Engineering, Built Environment and Support Services. 
 
 
Matchtech Group plc floated on AIM in October 2006. 
 
 
 
 
 
 
MATCHTECH GROUP PLC 
 
Interim report for the period ended 31 January 2007 
 
 
Chairman's statement 
 
 
 
Operating review 
 
 
The Group continued to see strong growth across all three of its sectors, 
Engineering, Built Environment and Support Services, during the first half. 
 
                                           H1 2007         H1 2006        Change 
Engineering sector 
Net fee income                               £6.8m           £5.4m           26% 
Operating profit                             £3.0m           £2.3m           30% 
 
Built Environment sector 
Net fee income                               £2.8m           £2.1m           33% 
Operating profit                             £1.2m           £0.9m           33% 
 
Support Services sector 
Net fee income                               £2.8m           £2.2m           27% 
Operating profit                             £0.8m           £0.6m           33% 
 
 
These results exclude any contribution from our small US business, which was 
sold on 31st August 2006, as well as the non-recurring costs of the IPO, and 
have been achieved through organic growth alone. 
 
 
We have seen good progress in Engineering, our largest sector, where we saw a 
significant increase in permanent fees, reflecting strong client demand for 
candidates and continuing salary inflation. In particular demand was strong in 
Oil & Gas and Pharmaceutical, where we achieved some important client wins and 
contract extensions. 
 
 
Built Environment saw the strongest growth and we continue to gain market share 
in this sector. We have broadened our capabilities to include Architecture, 
Building Services and Construction Site candidates and were delighted to enter 
into a Master Vendor relationship with Mouchel Parkman towards the end of the 
half, significantly expanding our involvement with this client. 
 
 
Our newest sector, Support Services, continues to go from strength to strength 
with a number of strategically important client wins in the period, including 
British American Tobacco and the Olympic Delivery Authority. We are also 
expanding our offer in the procurement sector, which is providing opportunities 
for cross-selling into other parts of the Group. 
 
 
We have seen strong increases in permanent placements in the half, along with an 
increase in the average placement fee rates, as demand for candidates continues 
to outstrip availability, and we have shown solid growth in contractor numbers 
which stood at 3,900 at 31st January 2007. The Group has maintained a healthy 
balance between contract and permanent placements. 
 
 
 
                                                H1 2007      H1 2006      Change 
Permanent placements 
Number of permanent placements                    1,022          805         27% 
Permanent fees                                    £3.9m        £2.9m         34% 
Average permanent fees per placement             £3,855       £3,619          7% 
 
Contractors 
Number of working contractors                     3,900        3,400         15% 
Contract net fee income                           £8.6m        £6.9m         25% 
 
Contract / Permanent Mix                            69%          70% 
 
 
 
Board Changes 
 
 
On 1 February 2007 we announced that Adrian Gunn, formerly Deputy Managing 
Director and Sales Director, had taken over the position of Group Managing 
Director. Adrian has been fundamental to the Group's success, having joined 
Matchtech as a consultant in 1988. He has been a member of the senior management 
team for the past nine years and on the Board since 2004. 
 
 
Adrian took over the day-to-day leadership of Matchtech from Paul Raine, who has 
taken up the role of Resources Director, with responsibility for IT, operations, 
marketing and compliance matters. This represents a smooth transition of 
management roles, with the established core executive team of Adrian, Paul and 
Tony Dyer remaining in place. 
 
 
The Board thanks Paul for his past leadership and looks forward to his 
continuing contribution in the revised role. 
 
 
People 
 
 
Our performance reflects the strength of our management team and the quality of 
our staff. Their continued focus during a period of significant change as we 
became a listed company, is a great testament to our strong operating culture. I 
would like to thank all our staff on behalf of our new shareholders for their 
contribution. 
 
 
As a key feature of the Board's plans for growth, staff numbers were increased 
by 23 in the period to 219. Staff attrition remained at 20%, which the Board 
believes is well below the industry average. 
 
 
Financial Overview 
 
 
The Group achieved a strong set of results across all of its sectors in the 
first half of the year, reflecting strong trading conditions in each of the 
three markets we serve. 
 
 
Turnover increased 30% to £93.4m (2006: £72.1m), with a similar increase of 29% 
in net fee income to £12.5m (2006: £9.7m). Both years' figures are stated 
excluding the results from our small US business which was sold on 31 August 
2006. 
 
 
Underlying operating profit (excluding profits from the US business sold in 
August 2006 as well as non-recurring costs) was £5.0m, an increase of 35% (2006: 
£3.7m). This reflected an increase in operating margin to 5.4% (2006: 5.1%) as 
we continued to achieve greater efficiencies within the business, as a result of 
the Group's single-site model. This was achieved despite continued investment in 
new staff, systems and office space in the period. 
 
Reported profit before tax was up 14% at £4.1m (2006: £3.6m) giving an increase 
in basic earnings per share of 18% to 13.36p (2006: 11.33p). Underlying profit 
before tax (excluding profits from the US business sold in August 2006 as well 
as non-recurring items) was up 34% to £4.7m (2006: £3.5m). 
 
 
Earnings per share 
 
 
The Group continued to show strong growth in earnings per share. 
 
 
Basic earnings per share increased by 18% to 13.36p (2006: 11.33p), with basic 
earnings per share (pre non-recurring items) increasing by 38% to 15.66p (2006: 
11.33p). Fully diluted earnings per share increased by 19% to 12.82p (2006: 
10.77p), with fully diluted earnings per share (pre non-recurring items) 
increasing by 40% to 15.03p (2006: 10.77p). 
 
 
Cash flow 
 
 
Cash inflows from operating activities in the period were £4.1m (2006: £7.1m) 
representing cash conversion of 93% (2006: 121% excluding an increase in 
creditors due to directors' loans and a decrease in debtors due to EBT loan 
repayments.) 
 
 
Capital expenditure was £0.5m (2006: £0.3m), with the increase being mainly due 
to the fitting out of additional office space. 
 
 
Net debt at 31 January 2007 was £11.5m (31 January 2006: £6.0m, 31 July 2006: 
£9.5m). During the period the Group agreed a loan facility with Barclays Bank; 
£4.6m was outstanding at 31 January 2007. In addition, the confidential invoice 
discounting facility as at 31 January 2007 was £7.1m (2006: £6.6m) 
 
 
Dividend 
 
 
Reflecting the strong performance of the business in the first half, the Board 
has declared an interim dividend of 4.4 pence per share. Despite the fact that 
Matchtech has only been a listed company for three months of the reporting 
period, the dividend is being paid in respect of the results for the full six 
month period. The interim dividend will be paid on 22 June 2007 to those 
shareholders on the register at close of business on 8 June 2007. 
 
 
Growth strategy 
 
 
The Board's strategy remains unchanged from that outlined at the time of our 
Admission to AIM. We intend to maintain our stable low cost platform for growth 
in our target recruitment markets, each of which benefit from strong macro 
drivers, and to continue with our successful business model based around a 
balanced contract/permanent mix. We aim to increase our market share and convert 
appropriate contingency business into beneficial retained business. The success 
of this strategy is demonstrated in the first half by extended relationships 
with British American Tobacco, Exxon, Severn Trent Water, Transport for London 
and Mouchel Parkman. 
 
 
Outlook 
 
 
Trading in the second half to date has remained encouraging. We are continuing 
to invest in the business, including a significant expansion of our office space 
and further investment in systems. Plans are underway to recruit a further 20 
graduates in the second half. The Board is confident that Matchtech is in robust 
shape and expects to be able to report sound progress in the second half. 
 
 
George Materna 
 
Chairman 
 
 
25 April 2007 
 
 
 
CONSOLIDATED PROFIT AND LOSS ACCOUNT 
 
for the six months ended 31 January 2007 
 
 
 
                                   Note      6 months     6 months    12 months 
                                          to 31/01/07  to 31/01/06  to 31/07/06 
                                            Unaudited    Unaudited      Audited 
TURNOVER                                        £'000        £'000        £'000 
 
Continuing operations                          93,438       72,124      156,686 
Discontinued operations                           135          733        1,442 
                                             --------    ---------    --------- 
                                     2         93,573       72,857      158,128 
COST OF SALES 
Continuing operations                        (80,933)     (62,455)    (135,893) 
Discontinued operations                         (117)        (604)      (1,196) 
                                             --------    ---------    --------- 
                                             (81,050)     (63,059)    (137,089) 
GROSS PROFIT 
Continuing operations                          12,505        9,669       20,793 
Discontinued operations                            18          129          246 
                                             --------    ---------    --------- 
                                               12,523        9,798       21,039 
ADMINISTRATIVE EXPENSES 
Continuing operations                         (7,475)      (5,945)     (12,554) 
Discontinued operations                          (10)         (51)         (93) 
Cost of Admission to AIM                        (572)            0            0 
                                             --------    ---------    --------- 
                                              (8,057)      (5,996)     (12,647) 
 
OPERATING PROFIT 
Continuing operations                           4,458        3,724        8,239 
Discontinued operations                             8           78          153 
                                             --------    ---------    --------- 
                                     2          4,466        3,802        8,392 
 
NON-RECURRING ITEM 
Profit on sale of discontinued 
operations                                         59            0            0 
                                             --------    ---------    --------- 
PROFIT AFTER NON-RECURRING ITEMS                4,525        3,802        8,392 
Net Interest and other similar 
charges                                         (377)        (242)        (549) 
                                             --------    ---------    --------- 
PROFIT ON ORDINARY ACTIVITIES 
BEFORE TAXATION                                 4,148        3,560        7,843 
 
Tax on profit on ordinary 
activities                           3        (1,172)      (1,124)      (2,098) 
                                             --------    ---------    --------- 
PROFIT ON ORDINARY ACTIVITIES 
AFTER TAXATION                                  2,976        2,436        5,745 
                                             --------    ---------    --------- 
 
 
EARNINGS PER ORDINARY SHARE 
                                                 pence       pence       pence 
Basic                                   5        13.36       11.33       26.60 
Diluted                                 5        12.82       10.77       25.56 
 
 
 
 
 
CONSOLIDATED SUMMARISED BALANCE SHEET 
 
as at 31st January 2007 
 
 
 
                                       31/01/2007     31/01/2006     31/07/2006 
                                        Unaudited      Unaudited        Audited 
                                            £'000          £'000          £'000 
FIXED ASSETS                                1,702          1,453          1,399 
 
CURRENT ASSETS 
Debtors                                    25,818         21,595         24,670 
Cash at bank and in hand                      353            626            495 
                                        ---------      ---------      --------- 
                                           26,171         22,221         25,165 
CREDITORS 
Amounts falling due within one year      (18,656)       (17,557)       (19,313) 
                                        ---------      ---------      --------- 
NET CURRENT ASSETS                          7,515          4,664          5,852 
 
CREDITORS 
Amounts falling after one year            (2,917)              0              0 
                                        ---------      ---------      --------- 
TOTAL ASSETS LESS LIABILITIES               6,300          6,117          7,251 
                                        ---------      ---------      --------- 
 
CAPITAL AND RESERVES 
Called-up equity share capital                225            215            221 
Share premium account                       2,367          1,659          2,009 
Other reserves                                685            477            567 
Profit and loss account                     3,023          3,766          4,454 
                                        ---------      ---------      --------- 
SHAREHOLDERS' FUNDS                         6,300          6,117          7,251 
                                        ---------      ---------      --------- 
 
 
CONSOLIDATED SUMMARISED CASH FLOW STATEMENT 
 
for the period ended 31 January 2007 
 
                                        6 months        6 months       12 months 
                                     to 31/01/07     to 31/01/06     to 31/07/06 
                                       Unaudited       Unaudited         Audited 
                                           £'000           £'000           £'000 
NET CASH INFLOW FROM OPERATING 
ACTIVITIES                                 4,098           7,069           7,540 
 
RETURNS ON INVESTMENTS & SERVICING 
OF FINANCE                                 (377)           (243)           (549) 
 
TAXATION                                 (1,256)           (746)         (2,006) 
 
CAPITAL EXPENDITURE                        (528)           (286)           (455) 
 
DISPOSAL OF INVESTMENT                       105               0               0 
 
EBT CAPITAL DISTRIBUTION                       0               0         (1,070) 
 
EQUITY DIVIDENDS PAID                    (4,414)         (2,579)         (4,124) 
 
FINANCING                                  2,275         (3,178)             416 
                                       ---------       ---------       --------- 
INCREASE/(DECREASE) IN CASH                 (97)              37           (248) 
                                       ---------       ---------       --------- 
 
 
 
CONSOLIDATED SUMMARISED CASH FLOW STATEMENT 
 
for the period ended 31 January 2007 
 
 
RECONCILIATION OF OPERATING PROFIT TO 
 
NET CASH INFLOW FROM OPERATING ACTIVITIES 
 
                                      6 months          6 months       12 months 
                                     Unaudited         Unaudited         Audited 
                                    to 31/01/07      to 31/01/06     to 31/07/06 
                                           £'000           £'000           £'000 
Operating profit                           4,466           3,802           8,392 
Depreciation and amortisation                226             190             412 
(Profit)/loss on disposal of fixed 
assets                                         0             (4)             (4) 
(Increase)/decrease in debtors           (1,152)             868         (2,207) 
Increase in creditors                        433           2,132             786 
Increase in FRS20 provision                  125              81             161 
                                       ---------       ---------       --------- 
Net cash inflow from operating 
activities                                 4,098           7,069           7,540 
                                       ---------       ---------       --------- 
 
 
 
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 
 
                                          6 months      6 months     12 months 
                                       to 31/01/07   to 31/01/06   to 31/07/06 
                                         Unaudited     Unaudited       Audited 
                                             £'000         £'000         £'000 
Increase in cash in the period                (97)            37         (248) 
Net cash (inflow)/outflow from trade 
debt finance                               (1,918)         3,223          (10) 
Change in net debt                         (2,015)         3,260         (258) 
 
Net debt at start of period                (9,508)       (9,250)       (9,250) 
                                         ---------     ---------     --------- 
Net debt at end of period                 (11,523)       (5,990)       (9,508) 
                                         ---------     ---------     --------- 
 
 
 
ANALYSIS OF CHANGES IN NET DEBT 
 
                                         At 1 Aug 2006     Cash flows     31 Jan 2007 
                                               Audited      Unaudited       Unaudited 
                                                 £'000          £'000           £'000 
Net cash:  Cash in hand and at bank                290           (97)             193 
 
Debt:      Trade debt finance                  (9,798)          2,665         (7,133) 
 
           Barclays Loan                             0        (4,583)         (4,583) 
                                            ----------      ---------       --------- 
Net debt                                       (9,508)        (2,015)        (11,523) 
                                            ----------      ---------       --------- 
 
 
 
 
 
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 
 
for the six months ended 31 January 2007 
 
 
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 
 
                                        6 months        6 months       12 months 
                                     to 31/01/07     to 31/01/06     to 31/07/06 
                                       Unaudited       Unaudited         Audited 
                                           £'000           £'000           £'000 
 
Profit for the period                      2,976           2,436           5,745 
New share capital issued                       4               0               6 
Premium on share capital issued              358              44             395 
FRS20 reserve movement                       125              81             161 
Shares held by EBT                             0               0               5 
EBT capital distribution                       0               0         (1,070) 
Dividends                                (4,414)         (2,579)         (4,124) 
Foreign currency translation                   0               0             (2) 
                                      ----------       ---------        -------- 
Net increase/(decrease) to funds           (951)            (18)           1,116 
 
Opening shareholders' funds                7,251           6,135           6,135 
                                      ----------       ---------        -------- 
Closing shareholders' equity funds         6,300           6,117           7,251 
                                      ----------       ---------        -------- 
 
 
 
 
NOTES 
 
forming part of the financial statements 
 
 
1 BASIS OF PREPARATION OF INTERIM FINANCIAL INFORMATION 
 
 
The interim financial information does not constitute statutory accounts for the 
purpose of Section 240 of the Companies Act 1985. The financial statements for 
the year ended 31 July 2006 have been delivered to the Registrar of Companies 
and include an auditor report which was unqualified and did not contain a 
statement under section 237 (2) and (3) of the Companies Act 1985 
 
 
The interim financial information has been prepared using the same accounting 
policies and estimation techniques as set out in the group accounts for the year 
ended 31 July 2006. 
 
 
2 SEGMENTAL & GEOGRAPHIC INFORMATION 
 
 
The turnover and profit before tax are attributable to the one principal 
activity of the company. 
 
 
 
(i)  Segmental 
                                                           6 months     6 months    12 months 
                                                        to 31/01/07  to 31/01/06  to 31/07/06 
                                                          Unaudited    Unaudited      Audited 
                                                              £'000        £'000        £'000 
     A segmental analysis of turnover is given below: 
 
     Engineering                                             59,990       47,108      101,989 
     Built Environment                                       18,629       14,632       31,617 
     Support Services                                        14,819       10,384       23,080 
     Discontinued Operations                                    135          733        1,442 
                                                          ---------    ---------    --------- 
     Total                                                   93,573       72,857      158,128 
                                                          ---------    ---------    --------- 
 
 
 
A segmental analysis of net fee income is given below: 
 
Engineering                                                  6,844      5,378     11,679 
Built Environment                                            2,824      2,103      4,544 
Support Services                                             2,837      2,188      4,570 
Discontinued Operations                                         18        129        246 
                                                         ---------  ---------  --------- 
Total                                                       12,523      9,798     21,039 
                                                         ---------  ---------  --------- 
 
 
A segmental analysis of operating profit is given below: 
 
Engineering                                                    2,992      2,263      5,332 
Built Environment                                              1,230        909      1,679 
Support Services                                                 808        552      1,228 
Discontinued Operations                                            8         78        153 
IPO Costs                                                      (572)          0          0 
                                                           ---------  ---------  --------- 
Total                                                          4,466      3,802      8,392 
                                                           ---------  ---------  --------- 
 
 
 
(i)  Geographic 
                                                                    6 months     6 months    12 months 
                                                                 to 31/01/07  to 31/01/06  to 31/07/06 
                                                                   Unaudited    Unaudited      Audited 
                                                                       £'000        £'000        £'000 
     A geographic analysis of turnover is given below: 
 
     United Kingdom                                                   93,438       72,124      156,686 
     Overseas                                                            135          733        1,442 
                                                                   ---------    ---------    --------- 
     Total                                                            93,573       72,857      158,128 
                                                                   ---------    ---------    --------- 
 
     A geographic analysis of net fee income is given below: 
 
     United Kingdom                                                   12,505        9,669       20,793 
     Overseas                                                             18          129          246 
                                                                   ---------    ---------    --------- 
     Total                                                            12,523        9,798       21,039 
                                                                   ---------    ---------    --------- 
 
     A geographic analysis of operating profit is given below: 
 
     United Kingdom                                                    4,458        3,724        8,239 
     Overseas                                                              8           78          153 
                                                                   ---------    ---------    --------- 
     Total                                                             4,466        3,802        8,392 
                                                                   ---------    ---------    --------- 
 
 
 
 
 
3 TAX ON PROFIT ON ORDINARY ACTIVITIES 
 
Analysis of charge in the year           6 months        6 months       12 months 
                                      to 31/01/07     to 31/01/06     to 31/07/06 
                                        Unaudited       Unaudited         Audited 
                                            £'000           £'000           £'000 
Current Tax:  UK corporation tax            1,207           1,108           2,058 
              Foreign Tax                       3              40              89 
                                        ---------       ---------       --------- 
                                            1,210           1,148           2,147 
 
Deferred tax on timing 
differences                                  (38)            (24)            (49) 
                                        ---------       ---------       --------- 
Tax on profit on 
ordinary activities                         1,172           1,124           2,098 
                                        ---------       ---------       --------- 
 
 
 
The current tax charge is lower than the standard rate of corporation tax. The 
differences are detailed below: 
 
Profit on ordinary activities before taxation        4,148      3,560      7,843 
 
Corporation Tax at current rate 30%                  1,244      1,068      2,353 
 
Disallowable flotation costs                           172          0          0 
Profit on Sale of US business                         (18)          0          0 
Disallowable expenses                                  117         97        194 
Capital Allowances                                    (60)       (57)      (109) 
Cost of share options granted in the period          (251)          0      (340) 
Other                                                    3          0       (40) 
                                                 ---------  ---------  --------- 
Current UK Tax Charge                                1,207      1,108      2,058 
                                                 ---------  ---------  --------- 
 
 
 
4 DIVIDENDS 
 
Dividends on shares classed as equity:      6 months      6 months    12 months 
                                         to 31/01/07   to 31/01/06  to 31/07/06 
                                            Unaudited    Unaudited      Audited 
                                                £'000        £'000        £'000 
Paid during the period 
Equity dividends on ordinary shares             4,414        2,579        4,124 
                                            ---------    ---------    --------- 
 
 
 
5 EARNINGS PER SHARE 
 
 
Earnings per share has been calculated by dividing the consolidated profit after 
taxation attributable to ordinary shareholders by the weighted average number of 
ordinary shares in issue during the period. 
 
 
Diluted earnings per share has been calculated, on the same basis as above, 
except that the weighted average number of ordinary shares that would be issued 
on the conversion of all the dilutive potential ordinary shares (arising from 
the Group's share option schemes) into ordinary shares has been added to the 
denominator. There are no changes to the profit (numerator) as a result of the 
dilutive calculation. 
 
 
 
 
The earnings per share information has been calculated as follows: 
                                                                           6 months        6 months       12 months 
                                                                        to 31/01/07     to 31/01/06     to 31/07/06 
                                                                                         (restated)      (restated) 
                                                                          Unaudited       Unaudited         Audited 
 
Profits                                                                       £'000           £'000           £'000 
 
Profit on ordinary 
activities after taxation 
attributable to ordinary 
shareholders                                                                  2,976           2,436           5,745 
Non-recurring items                                                             513               0               0 
                                                                         ----------       ---------       --------- 
Profit on ordinary 
activities after taxation 
(pre non-recurring)                                                           3,489           2,436           5,745 
                                                                         ----------       ---------       --------- 
 
Number of Shares                                                              000's           000's           000's 
 
Weighted average number of 
ordinary shares in issue                                                     22,277          21,499          21,600 
Effect of dilutive 
potential ordinary shares 
under option                                                                    939           1,125             883 
                                                                         ----------       ---------       --------- 
                                                                             23,216          22,624          22,483 
                                                                         ----------       ---------       --------- 
 
Earnings per Share                                                            pence           pence           pence 
 
Earnings per ordinary share                      - Basic                      13.36           11.33           26.60 
                                                 - Diluted                    12.82           10.77           25.56 
 
Earnings per ordinary share 
(pre non-recurring)                              - Basic                      15.66           11.33           26.60 
                                                 - Diluted                    15.03           10.77           25.56 
 
 
 
AUDITORS REPORT 
 
 
We have been instructed by the company to review the financial information for 
the six months ended 31 January 2007 which comprise the summary profit and loss 
account, balance sheet, cash flow statement and the related notes on pages 2 to 
8. We have read the other information contained in the interim report which 
comprises only the Chairman's Statement and considered whether it contains any 
apparent misstatements or material inconsistencies with the financial 
information. Our responsibilities do not extend to any other information. 
 
 
This report is made solely to the company's members as a body in accordance with 
guidance contained in APB Bulletin 1999/4 "Review of Interim Financial 
Information". Our review work has been undertaken so that we might state to the 
company's members those matters we are required to state them in a review 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 and the 
company's members as a body, for our review work, for this report, or for the 
conclusion we have formed. 
 
 
 
 
 
Directors' Responsibilities 
 
 
The interim report including the financial information contained therein is the 
responsibility of, and has been approved by, the directors. The Listing Rules of 
the Financial Services Authority require that the accounting policies and 
presentation applied to the interim figures should be consistent with those 
applied in preparing the preceding annual accounts except where any changes, and 
the reasons for them, are disclosed. 
 
 
Review Work Performed 
 
 
We conducted our review in accordance with guidance contained in Bulletin 1999/4 
"Review of Interim Financial Information" issued by the Auditing Practices Board 
for use in the United Kingdom. A review consists primarily of making enquiries 
of management and applying analytical procedures to the financial information 
and underlying financial data and based thereon, assessing whether the 
accounting policies and presentation have been consistently applied unless 
otherwise disclosed. A review excludes audit procedures such as tests of 
controls and verification of assets, liabilities and transactions. It is 
substantially less in scope than an audit performed in accordance with United 
Kingdom auditing standards and therefore provides a lower level of assurance 
than an audit. Accordingly we do not express an audit opinion on the financial 
information. 
 
 
Review Conclusion 
 
 
On the basis of our review we are not aware of any material modifications that 
should be made to the financial information as presented for the six months 
ended 31 January 2007. 
 
 
GRANT THORNTON UK LLP 
Chartered Accountants & Registered Auditors 
Manor Court 
Barnes Wallis Road 
Fareham 
PO15 5GT 
12 April 2007 
 
 
 
 
                      This information is provided by RNS 
            The company news service from the London Stock Exchange 
 
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