RNS Number:6060K
Innovation Group PLC
01 May 2003
1 May 2003
THE INNOVATION GROUP PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2003
The Innovation Group plc ("TiG" or "the Group"), the provider of
innovative insurance solutions to the global financial
services industry, today announces its unaudited interim
results for the six months to 31 March 2003.
Highlights for the six months ended 31 March 2003:
* BPO revenue of #11.5m (ongoing H1 2002: #9.6m)
* Technology solutions revenue of #19.7m (ongoing H1
2002: #45.0m)
* Total revenue of #31.2m (ongoing H1 2002: #54.6m)
* EBITDA of #3.1m (H1 2002: #18.2m)
* Disposal of French BPO operation to Groupama for 4
million euros highlights the significant value of BPO
operations
* FRS 3 loss before tax of #5.2m inclusive of a
goodwill amortisation charge of #8.2m and profit on
disposal of #1.6m (H1 2002: loss of #3.5m)
* Positive quarter on quarter trading improvement.
Adjusted profit before tax Q2 2003 #1.1m vs. Q1 2003 of
#0.3m
* Adjusted EPS of 0.43p (H1 2002: 5.21p); basic EPS
loss of 2.4p (H1 2002: loss of 3.33p)
* Successful completion of rights issue which raised
approximately #9m (net of expenses)
* Cash is strong at #13.2m (after deducting guaranteed
loan notes) as at 31 March 2003
Enquiries:
The Innovation Group plc 01489 898300
Hassan Sadiq, Chief Executive Officer
Paul Smolinski, Group Finance Director
KBC Peel Hunt 020 7418 8900
Simon Hayes / Jonathan Marren
Weber Shandwick Square Mile 020 7067 0700
Sara Musgrave / Katie Hunt
Chairman's Statement
Our focus on core profitable revenue lines coupled with our actions
to continue reducing costs in line with revenue expectations
has ensured that the positive start to the financial year
reported at the end of the first quarter has continued as we
complete another profitable quarter before goodwill
amortisation. The state of the general economic environment
and volatility of global financial markets continue to mean
that many insurers remain cautious in their view on
technology infrastructure and systems investments. Whilst
this remains a difficult market for technology solutions and
new licence sales, it is also one in which we have been able
to drive growth and identify new opportunities for our BPO
operations.
Financial and Operating Review
Revenue from continuing operations for the six months to 31 March
2003 was #31.2m (ongoing, as explained further in note 2, H1
2002: #54.6m); Business Process Outsourcing ("BPO") revenue
for six months to 31 March 2003 was #11.5m (ongoing H1 2002:
#9.6m); Technology Solutions revenue for six months to 31
March 2003 was #19.7m (ongoing H1 2002: #45.0m). EBITDA for
the same period was #3.1m (H1 2002: #18.2m). FRS 3 loss
before tax was #5.2m inclusive of a goodwill amortisation
charge of #8.2m and profit on French BPO disposal of #1.6m
(H1 2002: loss of #3.5m); profit before tax, goodwill
amortisation, and gains on disposal was #1.4m (H1 2002: #16m)
based on #0.3m for the first quarter and growing to #1.1m for
the second quarter; adjusted EPS was 0.43p (H1 2002: 5.21p),
basic EPS loss of 2.4p (H1 2002: loss of 3.33p). Cash is
strong at #13.2m (after deducting guaranteed loan notes) as
at 31 March 2003.
BPO revenue for the quarter ended 31 March 2003 was #5.8m (Q1 2003:
#5.7m), (excluding our former French operation the increase
was #5.2m to #5.7m). Revenue from Technology Solutions for
the quarter ended 31 March 2003 was #9.6m (Q1 2003: #10.1m),
comprising #3.4m initial licence fee and implementation and
#6.2m recurring revenue.
Technology Solutions Division
Following his appointment as CEO in February, Hassan Sadiq has
consolidated the company's operations into two global
divisions, Technology Solutions and BPO. Ed Ossie moves from
Chief Operating Officer of North American operations to
Chief Operating Officer, Technology Division and remains a
main board director. The Technology Solutions Division
currently represents 60% of the total Group revenue. The key
to new licence and implementation revenues will be driven by
success in the North American market and this will be helped
significantly by the strength of the Group's partnership
with IBM.
BPO Division
BPO revenues and profitability have continued to increase and we
have been successful in contracting with major new blue-chip
clients. BPO operations in the mature markets across the
globe have achieved an operating margin of 17% for Q2 2003,
an increase from the 15% achieved in Q1 2003.
To reflect the global expansion of the product offering beyond the
automotive sector and into the household sector, our BPO
operations are now branded as TiG eQuals - the trading name
of our South African operation. Furthermore, Eric Wadsworth,
previously head of South African operations, has been
promoted to Chief Operating Officer, BPO. Our South African
entity has been the consistent innovator and business leader
within these operations, and Eric's charter is to leverage
this success around the world.
As previously reported in the early part of the quarter, the Group
sold its BPO business in France to Groupama for a total
consideration of 4 million euros. The Board assessed
Groupama's approach from a perspective of creating
shareholder value and this was the key driver for accepting
this unsolicited but attractive offer at a multiple of more
than 80 times the historic earnings of the French BPO
business or 25 times the net asset value. The French
operation represented less than 1% of total revenue and less
than 5% of our total BPO revenues of approximately #20m
during 2002. This transaction highlights the significant
value of our BPO operations.
Rights Issue
In March 2003, the Group concluded a rights issue which raised
approximately #9m net of expenses. As previously anticipated
the rights issue has already given us the opportunity to
extend several of our current customer relationships.
Board Changes
As previously reported, Hassan Sadiq has been appointed as Chief
Executive of the Company and Robert Terry, founder and
previously Chief Executive of the Company, has been appointed
Non-Executive Vice Chairman and Chairman Elect. Following
the departures of John Birkmire, Gordon Crawford and Clive
Vlotman, we are continuing to make good progress with the
appointment of additional fully independent non-executive
directors to the Board.
Share Issue
On 1 April 2003 the company issued #1m of new shares as the first
installment of the InterX Technology deferred consideration.
This share issue followed consultation with representatives
of our major stakeholders, and has contributed to maintaining
a strong cash balance post the rights issue. The shares were
issued at a price of 6 pence per share representing a 20%
premium to the price of our rights issue.
Outlook
The Directors have taken the necessary steps to put the business on
a sound financial footing for the future whilst ensuring that
the Group is still recognized as an independent thought
leader in applying technology to the business issues facing
insurance companies around the globe.
Looking ahead to the second half we expect the licences and
maintenance renewals from existing Technology Solutions
customers to occur primarily in the fourth quarter. We will
continue to balance our ongoing cost base with our revenue
whilst maintaining the benefits of our strengthened balance
sheet. This position provides clear opportunities for the
Technology Solutions division once the market returns to more
positive trading conditions.
Finally, I would like to commend our staff and advisors for their
continued hard work and commitment, as well as thanking our
shareholders whose support and commitment have been
invaluable to us over the last six months.
Geoff Squire, OBE
Chairman
1 May 2003
FINANCIAL HIGHLIGHTS
For the six months ended 31 March 2003
Note 6 months ended 31 March Year to
30 September
2003 2002 2002
#'000 #'000 #'000
Turnover 31,172 62,426 100,071
Adjusted profit before tax 1 1,400 16,008 10,028
Loss before tax (5,216) (3,474) (391,114)
Adjusted earnings per share (pence) 0.43 5.21 2.46
Basic loss per share (pence) (2.40) (3.33) (173.78)
Dividend per share (pence) - 0.6 0.6
Note:
1. Adjusted profit before tax for the six months ended
31 March 2003 is FRS 3 loss before tax of #5,216,000 (six
months ended 31 March 2002: loss of #3,474,000; year
ended 30 September 2002: loss of #391,114,000) after
excluding profit on disposal of operations of #1,612,000
(six months ended 31 March 2002 and year ended 30
September 2002: #nil), exceptional costs of #nil (six
months ended 31 March 2002: #4,539,000; year ended 30
September 2002: #374,498,000) and the amortisation charge
of #8,228,000 (six months ended 31 March 2002:
#14,943,000; year ended 30 September 2002: #26,644,000).
References to adjusted profit reflect the Directors' view
that this is an important measure for their own, and
shareholders' assessment of the Group's underlying
performance.
The Innovation Group plc
UNAUDITED PROFIT AND LOSS ACCOUNT
For the six months ended 31 March 2003
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
Note #'000 #'000 #'000
TURNOVER 2 31,172 62,426 100,071
Cost of sales (5,644) (7,671) (14,687)
-----------------------------------------
Gross profit 25,528 54,755 85,384
Administrative expenses
- exceptional items 3 - (4,539) (374,498)
- other (32,182) (54,040) (102,411)
-----------------------------------------
(32,182) (58,579) (476,909)
-----------------------------------------
OPERATING LOSS (6,654) (3,824) (391,525)
Profit on disposal of operations 4 1,612 - -
Net interest (174) 350 411
-----------------------------------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (5,216) (3,474) (391,114)
Adjusted profit before tax 1,400 16,008 10,028
Amortisation (8,228) (14,943) (26,644)
Exceptional items - (4,539) (374,498)
Profit on disposal of operations 1,612 - -
-----------------------------------------
Loss before tax (5,216) (3,474) (391,114)
=========================================
Tax on loss on ordinary activities 5 (378) (3,899) -
-----------------------------------------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (5,594) (7,373) (391,114)
Equity minority interests (8) - (85)
-----------------------------------------
LOSS FOR THE PERIOD (5,602) (7,373) (391,199)
Dividends paid - (1,150) (1,255)
-----------------------------------------
RETAINED LOSS FOR THE PERIOD (5,602) (8,523) (392,454)
=========================================
Adjusted earnings per ordinary
share (pence) 6 0.43 5.21 2.46
Basic loss per ordinary share (pence) 6 (2.40) (3.33) (173.78)
Diluted loss per ordinary share (pence) 6 (2.40) (3.33) (173.78)
All amounts relate to continuing operations.
The Innovation Group plc
UNAUDITED BALANCE SHEET
As at 31 March 2003
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
Note #'000 #'000 #'000
FIXED ASSETS
Intangible assets 46,055 410,588 53,987
Tangible assets 20,998 29,918 22,441
Investments 5,992 4,905 5,034
-------------------------------------------
73,045 445,411 81,462
CURRENT ASSETS
Stocks 150 158 131
Debtors 7 14,620 39,508 15,492
Investments 5,650 37,116 11,060
Cash at bank and in hand 12,778 18,252 9,149
-------------------------------------------
33,198 95,034 35,832
CREDITORS: amounts falling due
within one year (21,478) (62,077) (30,576)
-------------------------------------------
NET CURRENT ASSETS 11,720 32,957 5,256
-------------------------------------------
TOTAL ASSETS LESS CURRENT 84,765 478,368 86,718
LIABILITIES
CREDITORS: amounts falling due
after more than one year
Convertible loan notes (2,030) - (2,040)
Other creditors (12,310) (11,984) (13,021)
-------------------------------------------
(14,340) (11,984) (15,061)
PROVISIONS FOR LIABILITIES AND CHARGES (2,316) (818) (3,673)
DEFERRED INCOME 8 (8,734) (24,423) (10,379)
EQUITY MINORITY INTERESTS (183) - (206)
-------------------------------------------
NET ASSETS 59,192 441,143 57,399
===========================================
CAPITAL AND RESERVES
Called up share capital 7,947 3,845 3,952
Shares to be issued 2,302 14,448 14,000
Share premium account 473,697 454,915 458,973
Profit and loss account (424,754) (32,065) (419,526)
-------------------------------------------
EQUITY SHAREHOLDERS' FUNDS 59,192 441,143 57,399
===========================================
The interim results were approved by the Board of
Directors on 1 May 2003.
The Innovation Group Plc
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
As at 31 March 2003
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Loss for the financial period (5,602) (7,373) (391,199)
Currency translation differences 374 950 (2,580)
-------------------------------------------
Total recognised gains and losses
relating to the period (5,228) (6,423) (393,779)
===========================================
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Loss for the financial period (5,602) (7,373) (391,199)
Dividends - (1,150) (1,255)
-------------------------------------------
(5,602) (8,523) (392,454)
Currency translation differences 374 950 (2,580)
Issue of shares 18,719 40,216 44,381
Shares to be issued (11,698) 2,448 2,000
-------------------------------------------
Net additions/(reduction) to shareholders' funds 1,793 35,091 (348,653)
Opening shareholders' funds 57,399 406,052 406,052
-------------------------------------------
Closing shareholders' funds 59,192 441,143 57,399
===========================================
The Innovation Group plc
UNAUDITED CASH FLOW STATEMENT
For the six months ended 31 March 2003
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
RECONCILIATION OF OPERATING LOSS TO
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Operating (loss)/profit before exceptional items (6,654) 715 (17,027)
Depreciation and amortisation charges 9,790 17,498 32,121
Profit on disposal of fixed assets - - (131)
(Increase)/decrease in stocks (19) (5) 55
Decrease/(increase) in debtors 678 (2,850) 15,935
(Decrease) in creditors (8,081) (6,865) (23,138)
----------------------------------------
(4,286) 8,493 7,815
Cash outflow arising from exceptional items (2,581) (4,039) (13,140)
Acquisition related outflows * - (1,651) (2,761)
----------------------------------------
Net cash (outflow)/inflow from
operating activities (6,867) 2,803 (8,086)
========================================
Net cash (outflow)/inflow from operating activities (6,867) 2,803 (8,086)
Returns on investments and servicing of finance (14) 489 697
Taxation 58 (2,451) (2,014)
Capital expenditure (900) (3,567) (7,328)
Acquisitions and disposals 1,001 (12,838) (14,958)
Equity dividends paid - (4,370) (5,625)
----------------------------------------
Cash outflow before management of
liquid resources and financing (6,722) (19,934) (37,314)
Management of liquid resources 5,410 25,904 51,960
Financing 4,941 (1,937) (19,811)
----------------------------------------
Increase/(decrease) in cash less bank overdraft 3,629 4,033 (5,165)
========================================
*Acquisition related outflows during the six months ended 31 March
2002 and year ended 30 September 2002 relate to payments made by
the Company in respect of liabilities which crystallised as a
consequence of the acquisitions of MTW and Huon and creditor
payments associated with the pre-acquisition activities of the
Cosy Group.
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Increase/(decrease) in cash in the period 3,629 4,033 (5,165)
Cash outflow from decrease in debt and lease financing 4,267 1,937 19,811
Cash inflow from decrease in liquid resources (5,410) (25,904) (51,960)
--------------------------------------
Change in net funds resulting from cash flows 2,486 (19,934) (37,314)
Loans, loan notes and finance leases acquired
with subsidiaries - (1,754) (1,508)
Foreign exchange 10 (465) (484)
--------------------------------------
Movement in net funds in the period 2,496 (22,153) (39,306)
Net (debt)/funds at start of period (1,255) 38,051 38,051
--------------------------------------
Net funds/(debt) at end of period 1,241 15,898 (1,255)
======================================
The Innovation Group Plc
NOTES TO THE UNAUDITED RESULTS
For the six months ended 31 March 2003
1. BASIS OF PREPARATION
The interim financial information of The Innovation Group
Plc is for the six month period to 31 March 2003, and has
been prepared in accordance with the accounting policies
set out in, and is consistent with, the audited financial
statements for the year ended 30 September 2002. The
results for the year ended 30 September 2002 have been
extracted from the audited financial statements for that
year. The audited financial statements have been filed
with the Registrar of Companies and the auditors' report
on those accounts was unqualified. The unaudited profit
and loss account for the six month period to, and the
unaudited balance sheet as at 31 March 2003, do not
amount to full accounts within the meaning of section 240
of the Companies Act 1985 and have not been delivered to
the Registrar of Companies.
2. ANALYSIS OF TURNOVER, OPERATING LOSS AND NET ASSETS
Turnover can be analysed into the following categories:
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Initial licence fees 2,162 16,759 17,520
Implementation 4,926 18,293 29,408
Recurring 24,084 27,374 53,143
----------------------------------
31,172 62,426 100,071
==================================
Following the restructuring of the group at the end of
2002, the Directors now consider that the Group has two
principal activities. These are technology solutions and
business process outsourcing. The results for the six
months ended 31 March 2003 can be analysed as follows. In
practice it is not feasible to provide comparative data
with sufficient accuracy and so, as permitted by SSAP 25
no comparative information is provided. In order to
assist the reader when comparing results of the
divisions, the comparatives provided in the Chairman's
statement have been given with reference to ongoing
revenues which exclude the revenues transferred to
partners as described in the financial statements for the
year ended 30 September 2002.
Unaudited
6 months to 31 March 2003
Technology
Solutions BPO Total
#'000 #'000 #'000
Turnover 19,712 11,460 31,172
--------------------------------------
EBITDA before R&D and 6,307 1,348 7,655
central costs
Amortisation and depreciation (5,397) (4,273) (9,670)*
--------------------------------------
910 (2,925) (2,015)
======== ========
R&D (3,256)*
Central costs (1,383)
Profit on disposal - BPO 1,612
---------------
Loss before interest and tax (5,042)
===============
* Research and development costs include approximately
#120,000 of depreciation.
BPO activities include certain territories and activities
where operations are still in initial development or are
operating in markets where they are yet to achieve
critical mass. The result above consequently includes
turnover of #558,000 and an adjusted operating loss of
approximately #386,000 in relation to these businesses.
Excluding these and businesses disposed of in the period,
BPO operations are achieving an adjusted operating margin
of 16% for the six months ended 31 March 2003 and 17% for
the three months ended 31 March 2003.
The geographical analysis by location is as set out
below:
Turnover Loss before interest and tax
Unaudited Unaudited Audited Unaudited Unaudited Audited
6 months to 6 months to Year to 6 months to 6 months to Year to
31 March 31 March 30 Sept 31 March 31 March 30 Sept
2003 2002 2002 2003 2002 2002
#'000 #'000 #'000 #'000 #'000 #'000
Europe,Middle
East and Africa 19,738 41,665 59,227 4,368 15,467 (262,381)
Americas 9,607 18,311 35,143 1,507 4,456 (66,340)
Asia Pacific 1,827 2,450 5,701 338 1,938 (1,412)
Central and R&D - - - (4,639) (6,203) (10,250)
Exceptional charge - - - - (4,539) (24,498)
Profit on disposal - - - 1,612
Amortisation - - - (8,228) (14,943) (26,644)
-------------------------------------------------------------------------------
31,172 62,426 100,071 (5,042) (3,824) (391,525)
===============================================================================
Due to the geographical spread of certain acquisitions
and the centralisation of certain functions, it is not
possible to allocate the related central costs over the
geographical areas for the above periods.
Net assets
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Europe, Middle East and Africa 32,122 3,582 18,156
Americas (21,421) (2,136) (21,191)
Asia Pacific (8,443) (4,716) (7,792)
Central 56,934 444,413 68,226
--------------------------------------------------
59,192 441,143 57,399
==================================================
Central net assets include goodwill, other investments and net funds.
3. EXCEPTIONAL ADMINISTRATIVE EXPENSES
Unaudited Unaudited Audited
6 months 6 months Year
to to to
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Fixed asset impairment - - 4,616
Goodwill impairment - - 350,000
Office closure costs - 500 3,050
Termination payments - 744 5,804
Redundancy period costs - 3,295 9,255
Contractual settlements - - 1,773
---------------------------------------------------
- 4,539 374,498
===================================================
4. PROFIT ON DISPOSAL OF BUSINESS
#'000
Net assets disposed of:
Tangible fixed assets 647
Debtors 194
Cash at bank and in hand 88
Creditors (334)
--------------
595
Profit on disposal 1,612
--------------
2,207
==============
Satisfied by:
Cash 2,207
==============
The disposal of the Group's French BPO business was
completed on 29 January 2003. The profit on disposal,
which was determined including attributable goodwill of
#nil was #1,612,000.
5. TAXATION
The effective tax rate for the group based on projected
results before amortisation and after profit on disposal
for the year ended 30 September 2003 is 20% (March 2002:
34%; September 2002: nil). The charge for the period is
based on the pre amortisation and profit on disposal
effective tax rate of 27%.
6. EARNINGS PER SHARE
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 March 31 March 30 September
2003 2002 2002
pence pence pence
Diluted loss per share (2.40) (3.33) (173.78)
Adjustments for share options and shares
to be issued - - -
-----------------------------------------------
Basic loss per share (2.40) (3.33) (173.78)
Adjustments for exceptional
items, profit on disposal and amortisation 2.83 8.54 176.24
-----------------------------------------------
Adjusted earnings per share 0.43 5.21 2.46
===============================================
Earnings per share is calculated as follows:
Basic earnings per share
Average number of shares 233,165,078 221,729,052 225,104,606
Loss for the financial period (#'s) (5,602,000) (7,373,000) (391,199,000)
===============================================
Diluted earnings per share
Average number of shares 233,165,078 221,729,052 225,104,606
Loss for the financial period (#'s) (5,602,000) (7,373,000) (391,199,000)
===============================================
Adjusted earnings per share
Average number of shares 233,165,078 221,729,052 225,104,606
Loss for the financial period (#'s) (5,602,000) (7,373,000) (391,199,000)
Add amortisation (#'s) 8,228,000 14,943,000 26,644,000
(Less)/add exceptional items (#'s) (1,612,000) 4,539,000 374,498,000
Less tax credit arising on
exceptional items (#'s) - (547,000) (4,400,000)
-----------------------------------------------
Adjusted earnings (#'s) 1,014,000 11,562,000 5,543,000
==================================================
FRS 14 requires presentation of diluted EPS when a
company could be called upon to issue shares that would
decrease net profit or increase net loss per share. For
a loss making company with outstanding share options, net
loss per share would only be increased by the exercise of
out-of-the-money options. Since it seems inappropriate
to assume that option holders would act irrationally, no
adjustment has been made to diluted EPS for out-of-the-
money share options.
7. WORKING CAPITAL
Debtors as at 31 March 2003 comprise trade debtors of
#10.3m (30 September 2002: #11.8m), accrued income of
#1.0m (30 September 2002: #0.3m), prepayments, deposits
and other debtors of #3.3m (30 September 2002: #3.4m). On
1 April 2003 the company issued #1m shares representing
the first installment of the InterX Technology deferred
consideration. This was recorded as a current liability
as at 31 March 2003.
8. DEFERRED INCOME
The Company's Act format of accounts allows for the
inclusion of accruals and deferred income as a separate
balance sheet category. In view of the significance of
deferred income to the Group, the Directors believe that
showing deferred income as opposed to accruals and
deferred income separately provides a fairer
presentation. Comparatives have been adjusted as
appropriate.
9. ADDITIONAL COPIES OF THIS STATEMENT
Copies of this statement are available from The
Innovation Group plc, Yarmouth House, 1300 Parkway,
Solent Business Park, Whiteley PO15 7AE.
INDEPENDENT REVIEW REPORT TO THE INNOVATION GROUP PLC
Introduction
We have been instructed by the company to review the
financial information for the six months ended 31 March
2003, which comprises the profit and loss account, the
balance sheet, the cash flow statement and related notes
1 to 9 together with the reconciliation of operating loss
to net cash outflow from operating activities and the
reconciliation of net cash flow to movement in net funds.
We have read the other information contained in the
interim report and considered whether it contains any
apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the company in accordance
with Bulletin 1999/4 issued by the Auditing Practices
Board. Our work has been undertaken so that we might
state to the company those matters we are required to
state to them in an independent 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, for our review work, for this report,
or for the conclusions 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 directors are responsible
for preparing the interim report in accordance with the
Listing Rules of the Financial Services Authority which
require that the accounting polices and presentation
applied to the interim figures are 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 the guidance
contained in Bulletin 1999/4 issued by the Auditing
Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group
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 March 2003.
Deloitte and Touche
Chartered Accountants
London
1 May 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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