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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Siemens Healthineers AG | TG:SHL | Tradegate | Ordinary Share |
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RNS Number:3731P
SHL Group PLC
03 September 2003
For Immediate Release 4 September 2003
SHL Group plc
Interim Results for the six months to 30 June 2003
SHL Group plc ("SHL"), world leader in the provision of psychometric products
and assessment consulting, announces its interim results for the six months to
30 June 2003.
HEADLINES
Financial:
* Continuing turnover #33.0m (2002: #33.8m)
* Pre-tax profits before exceptional items #1.7m (2002: #2.9m)
* Pre-tax loss after exceptional items #11.3m (2002: profit: #2.9m)
* Earnings per share before exceptional items 1.5p (2002: 3.5p)
* Interim dividend 1.0p per share
Operational:
* Strategic review to drive performance
* Non-essential costs reduced whilst investing in the future
* Park Human Resources, our recruitment advertising business, sold for #4.6m
David Best, new Chairman of SHL Group plc, commented:
"Today's market conditions continue to be very challenging. The Board, together
with the senior management across the regions, has revalidated and extended the
Group's strategy during the period to ensure that the business will be solidly
positioned to respond to the eventual upturn in our markets. This has involved
a balance between eliminating overheads and ensuring that essential investments
in people and processes are maintained, as well as bringing focus to all key
areas of our business.
As newly appointed Chairman, I can report that all those involved in leading the
business across the regions are in determined mood and eager to deliver the
business strategy and trading performance expected by shareholders."
Note
In 2002 SHL changed its financial year end from 30 September to 31 December.
This is the first interim report under the new financial calendar and is for the
six months to 30 June 2003. The comparatives used throughout the business review
are unaudited proforma numbers to 30 June 2002.
Contact:
Buchanan Communications 020 7466 5000
Tim Anderson / Bobbie Swanson
SHL Group plc 020 8335 8184
John Bateson
Emma Lancaster
BUSINESS REVIEW
INTRODUCTION
During the half year we have maintained the focus of the business on our core
areas of expertise: psychometric products and assessment consulting. At the
same time we have continued to balance short term and long term objectives with
reductions in non-essential costs, and investment in increasing web-based sales,
intellectual property and marketing. This has resulted in continuing turnover
for the period being only slightly down at #33.0m, 2% less than 2002 (#33.8m)
despite volatile markets. Pre-tax profit before exceptional items was #1.7m
(2002: #2.9m). In line with our strategy Park Human Resources, our recruitment
advertising business, was sold for #4.6m on 6 February 2003, with a resultant
loss on disposal of #13.0m, after a non-cash goodwill write-off of #15.3m.
TRADING
As set out in our trading statement of 26 June 2003, revenues in the first four
months of the year were flat against the prior year. May and June showed a
decline on last year although the period ended better than anticipated at the
time of the pre-close statement. Sales of web delivered products were up by 19%
which partially offset an operating margin deterioration resulting from
decreased consulting turnover.
Across the Group, regional performance continues to be variable. Total product
sales have increased by 5% and now account for 42% of revenue. Within that,
web-delivered products account for 23% with Meridian and Europe showing growth
rates of over 70%. Shortfalls in consulting revenue have reduced profits in
Meridian and North America.
STRATEGY
Following the disposal of Park Human Resources, our recruitment advertising
business, earlier this year, a large scale review was undertaken to revalidate
the strategy first articulated in May 2001. SHL will be increasingly focused on
two businesses: psychometric products and assessment consulting. The product
and assessment businesses are linked but have different key drivers and often
have different customers. In future the focus will be on managing those
businesses separately.
The strength of SHL's customer base has always been its breadth. In recognition
of this we are focusing our marketing efforts on a large number of small
customers whilst maintaining an emphasis on our major accounts. We are
investing in building a more suitable marketing and sales organisation: we have
redesigned our website for launch in the third quarter; we are trialling
e-marketing in five countries and we are installing a sophisticated sales lead
tracking system.
The centralisation and regionalisation programme introduced in October 2001
continues to deliver benefits. The processes in the organisation however are
complex and in many cases restrict our ability to drive efficiencies.
Simplifying these processes will be a priority in the next twelve months and we
aim to significantly reduce administrative costs. Our target is to move to a
ratio of one administrative person for every two revenue generating employees by
31 December 2004. The geographic footprint of SHL's wholly owned subsidiaries
adds disproportionate complexity and administrative costs in relation to
returns. We expect that enhanced focus and improved returns can be achieved by
moving a number of subsidiaries to distributor status. This will enable us to
reduce costs whilst maintaining our extensive geographic coverage. Plans are in
hand to convert the status of nine subsidiaries within the next twelve months.
Our continuing market research and the growth of revenues from our web based
products support our decision to focus on internet delivery. Clients rate both
'ease of use' and 'customisation' as equally important alongside strength of
products. Web products clearly deliver this and for the first time web based
sales have exceeded the value of our PC product sales. We continue to focus on
growing and leveraging our rich intellectual property, with the launch of new
ability tests in eight languages in the first half year alone.
BOARD CHANGES
Neville Bain retired as Chairman on 6 May 2003 after six years with SHL. The
Board would like to extend its thanks to Neville for his support and commitment
through a difficult period. As announced on 23 July 2003, David Best was
appointed as Chairman with effect from 22 July 2003. David joined the Board as
a non-executive director in September 2002 and has extensive experience both as
an executive and non-executive director.
In addition, we are pleased to announce the appointment of George Battersby to
the Board as a non-executive director. George is HR Director and a member of
the Board of Amersham plc, a FTSE 100 company, and, with many years as an HR
Director in different public companies, brings to the Board experience both as a
customer and user of our products.
DIVIDEND
Despite minimal operating cash flows being generated in the period, our strong
balance sheet allows the Board to declare an interim dividend of 1.0p which is
broadly in line with the 2002 full pro-rated annual dividend of 3.5p.
REGIONAL PERFORMANCE
Meridian
6 months to 6 months to 15 months to
#m 30 June 2003 30 June 2002 31 December 2002
(Proforma) (before exceptionals)
Turnover 13.4 13.8 33.2
Operating Profit 4.5 4.7 10.2
In Meridian, strong cost control and an increase in contribution to margins from
product has ensured that total margin was maintained at 34%. Web based revenues
have grown by 74% at least partially offsetting a 12% fall in consulting
revenue. South Africa continues to grow with revenue increasing by 7% at
constant exchange rates. This, together with the benefit from the movement in
the South African rand, has partially offset the 6% decline in UK turnover, with
the result that turnover for Meridian was only down by 3% overall in a difficult
market.
Continental Europe
6 months to 6 months to 15 months to
#m 30 June 2003 30 June 2002 31 December 2002
(Proforma) (before exceptionals)
Turnover 10.0 9.5 24.2
Operating Profit 0.8 0.5 2.2
Across Europe there has been an improvement in operating margins, reflecting the
benefits of the restructuring in the second half of 2002. Countries have
produced mixed results in difficult economic conditions: Sweden and Germany have
grown by over 10%, but Belgium and Italy have under performed against last year.
The impact of the 2002 restructuring programme was seen most significantly in
the Netherlands where revenues have remained flat, but the profit margin has
increased from 6% to 20%. Web based revenues were up on last year by 85%, and
although consulting revenues continued to suffer from the impact of the economic
environment they were down only 8%. There was an exchange benefit to revenue in
the period of #0.9m but this had minimal impact on operating profit.
North America
6 months to 6 months to 15 months to
#m 30 June 2003 30 June 2002 31 December 2002
(Proforma) (before exceptionals)
Turnover 5.1 6.4 14.1
Operating Profit 0.9 1.1 1.6
Usage of the Internet systems continues to grow and it is anticipated that a
number of new systems will come on line in the second half. There was strong
revenue growth from the US litigation practice and Canada has seen increases of
10% in revenue and 17% in operating profit. The US suffered an adverse exchange
movement on revenues of #0.4m. There was a fall in consulting revenues, largely
as a result of a sharp downturn in our public safety business, the delay of some
projects into the second half and a poor result from Mexico.
Asia Pacific
6 months to 6 months to 15 months to
#m 30 June 2003 30 June 2002 31 December 2002
(Proforma) (before exceptionals)
Turnover 4.5 4.1 10.2
Operating Profit (excluding associate) 0.6 0.8 2.1
Asia Pacific has continued to grow, with revenue 10% ahead of last year. A
number of Asian countries had exceptional performances with Indian revenues 53%
ahead and Hong Kong up by 20%. Investment has been made in regional management
resources to provide senior psychometric, marketing and product support to
capitalise on the region's growth potential. A sales team has been built in
Australia during the period. Together these investments have had a short term
impact on profitability.
Central Costs (Net of Other Income)
6 months to 6 months to 15 months to
#m 30 June 2003 30 June 2002 31 December 2002
(Proforma) (before exceptionals)
Information Technology 2.6 2.1 5.2
Other 2.9 2.3 5.9
Total 5.5 4.4 11.1
Central costs reflect our investment in the future of the business. We have
continued to invest in the functionality and reliability of our web systems with
availability now at 99.9% for the period. As planned technology costs are now
at their full run rate of around #5m. We anticipate that in 2004 these will be
reduced by 10% as the full benefits of our cost saving programme, including
outsourcing, come through. Other central costs include the investment in
building our marketing capabilities and some one-off costs including the
strategic review. There was other income of #0.2m in 2002 relating to the sale
of a property.
CASH
Cash inflow from operating activities before exceptional items was #1.7m (2002:
#3.2m) for the period, reflecting the lower profit, and a slightly increased
working capital outflow. During the period, cash outflow relating to the
exceptional items was #1.1.m, and we expect a further outflow of #0.5m in the
remainder of 2003. Free cash inflow after capital expenditure, dividends,
taxation and the disposal of Park was #0.8m, with the sale of Park generating a
cash inflow of #3.1m. A loan note of #0.9m in relation to the purchase of
Advanced Personnel Technology Limited was repaid in February 2003. A further
loan note of #0.9m in relation to this acquisition was issued in February 2003,
replacing a liability previously shown in creditors, and this has been repaid in
August. Net funds at 30 June 2003 were #1.5m (31 December 2002: #1.3m).
TAXATION
The effective tax rate of the Group has increased to 53% (15 months to 31
December 2002: 36%) excluding exceptional items and remains very sensitive to
the profitability mix. This significant increase has been caused by a number of
factors related to changes in the relative mix of profitability of the Group's
subsidiaries. These include lower profits in the United States which has
considerable tax losses available and net tax losses incurred in the UK
companies for which no relief is available. Tax continues to be payable in a
number of key countries although group profit has fallen. The future benefit
of tax losses has not been reflected within the accounts.
TRADING OUTLOOK
We are continuing to manage the business on the basis that market conditions
will be challenging for the rest of the year but will not get worse. We are
maintaining tight cost control and are driving out non-essential costs. At the
same time we continue to invest in our future, particularly in intellectual
property, product development and marketing. As July and August are
traditionally quiet months and not representative of trends, it is too soon to
say whether the declines in May and June will continue in the final four months
of this year. We remain cautious about the short term outlook but have
confidence in our long term prospects. We expect the strategic initiatives we
are undertaking to have meaningful impact over the next twelve months, and are
seeking to increase return on sales by 3% every year for the next three years.
David Best John Bateson
Chairman Chief Executive
4 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six months to 30 June 2003
(UNAUDITED)
6 months to 6 months to
30 June 2003 30 June 2002
(Proforma)
Notes #m #m
Turnover
Continuing operations 33.0 33.8
Discontinued operations 0.6 3.2
Total turnover 2 33.6 37.0
Group operating profit/(loss)
Continuing operations 1.3 2.7
Discontinued operations - (0.3)
Group operating profit/(loss) 1.3 2.4
Share of operating profit from associates 0.4 0.5
Total operating profit/(loss): Group and share of 2 1.7 2.9
associates
Loss on disposal of subsidiary undertakings 3 (13.0) -
(Loss)/profit on ordinary activities before taxation (11.3) 2.9
Taxation on (loss)/profit on ordinary activities (0.9) (1.0)
(Loss)/profit on ordinary activities after taxation (12.2) 1.9
Minority interests in equity - -
(Loss)/profit for the financial period (12.2) 1.9
Equity dividends paid and proposed 4 (0.6) (1.2)
Retained (loss)/profit for the period (12.8) 0.7
Basic earnings/(loss) per ordinary share 5
- Before exceptional items 1.5p 3.5p
- After exceptional items (22.2p) 3.5p
Diluted (loss)/earnings per ordinary share 5 (22.2p) 3.4p
CONSOLIDATED PROFIT AND LOSS ACCOUNT (continued)
Six months to 30 June 2003
(AUDITED)
15 months to 31 December 2002
Before After
Exceptional Exceptional Exceptional
Items Items Items
Notes #m #m #m
Turnover
Continuing operations 81.8 - 81.8
Discontinued operations 8.0 - 8.0
Total turnover 2 89.8 - 89.8
Group operating profit/(loss)
Continuing operations 5.0 (5.4) (0.4)
Discontinued operations (1.0) (0.1) (1.1)
Group operating profit/(loss) 4.0 (5.5) (1.5)
Share of operating profit from associates 0.4 - 0.4
Total operating profit/(loss): Group and share of 2 4.4 (5.5) (1.1)
associates
Loss on disposal of subsidiary undertakings 3 - -
(Loss)/profit on ordinary activities before taxation 4.4 (5.5) (1.1)
Taxation on (loss)/profit on ordinary activities (1.6) 1.0 (0.6)
(Loss)/profit on ordinary activities after taxation 2.8 (4.5) (1.7)
Minority interests in equity 0.1 - 0.1
(Loss)/profit for the financial period 2.9 (4.5) (1.6)
Equity dividends paid and proposed 4 (2.4) - (2.4)
Retained (loss)/profit for the period 0.5 (4.5) (4.0)
Basic earnings/(loss) per ordinary share 5
- Before exceptional items 5.3p
- After exceptional items (2.9p)
Diluted (loss)/earnings per ordinary share 5 (2.9p)
CONSOLIDATED BALANCE SHEET
At 30 June 2003
(UNAUDITED) (UNAUDITED) (AUDITED)
30 June 30 June 31 December
2003 2002 2002
(Proforma)
#m #m #m
Fixed assets
Intangible assets 4.9 5.1 5.1
Tangible assets 10.0 11.1 10.6
Investments 2.2 2.2 2.0
17.1 18.4 17.7
Current assets
Stock 1.7 1.3 1.2
Debtors
Due within one year 17.8 21.5 20.7
Due after more than one year 1.2 0.6 0.7
19.0 22.1 21.4
Cash and short term deposits 3.6 4.4 5.6
24.3 27.8 28.2
Creditors: amounts falling due within one year (19.2) (22.6) (25.4)
Net current assets 5.1 5.2 2.8
Total assets less current liabilities 22.2 23.6 20.5
Creditors: amounts falling due after more than one year 0.3) (1.9) (0.2)
Provisions for liabilities and charges (2.1) (0.5) (3.5)
Net assets 19.8 21.2 16.8
Capital and reserves
Called up share capital 5.5 5.5 5.5
Shares to be issued 0.2 0.4 0.2
Share premium account 11.7 11.7 11.7
Other reserves 0.5 0.1 0.1
Profit and loss account 2.0 3.5 (0.6)
Equity shareholders' funds 19.9 21.2 16.9
Equity minority interests (0.1) - (0.1)
19.8 21.2 16.8
CONSOLIDATED CASHFLOW STATEMENT
Six months to 30 June 2003
Reconciliation of Group Operating Profit/(Loss) to Net Cash Inflow from
Operating Activities
(UNAUDITED) (UNAUDITED) (AUDITED)
6 months to 6 months to 15 months to
30 June 2003 30 June 2002 31 December 2002
(Proforma)
#m #m #m
Operating profit/(loss) 1.3 2.4 (1.5)
Exceptional items - - 5.5
Operating profit before exceptional items 1.3 2.4 4.0
Depreciation and amortisation charges 1.5 1.5 3.7
(Increase)/decrease in working capital (1.1) (0.7) 4.2
1.7 3.2 11.9
Cash outflow from exceptional restructuring (1.1) - (2.8)
Cash inflow from operating activities 0.6 3.2 9.1
Cash Flow Statement
(UNAUDITED) (UNAUDITED) (AUDITED)
6 months to 6 months to 15 months to
30 June 2003 30 June 2002 31 December 2002
(Proforma)
#m #m #m
Cash inflow from operating activities 0.6 3.2 9.1
Dividend from associates 0.1 0.2 0.2
Taxation (1.0) (0.9) (2.1)
Capital expenditure
Purchase of tangible fixed assets (1.0) (1.4) (3.0)
Sale of tangible fixed assets 0.2 0.4 0.4
(0.8) (1.0) (2.6)
Acquisitions and disposals
Sale of subsidiaries 3.5 - -
Cash retained by subsidiaries sold (0.4) - -
3.1 - -
Equity dividends paid (1.2) (2.3) (3.5)
Cash inflow/(outflow) before use of liquid resources and 0.8 (0.8) 1.1
financing
Net cash inflow from management of liquid resources - - 0.1
Net cash outflow from financing (0.9) - (3.0)
Decrease in cash in the period (0.1) (0.8) (1.8)
RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET FUNDS
Six months to 30 June 2003
(UNAUDITED) (UNAUDITED) (AUDITED)
6 months to 6 months to 15 months to
30 June 2003 30 June 2002 31 December 2002
(Proforma)
#m #m #m
Decrease in cash in the period (0.1) (0.8) (1.8)
Cash outflow from decrease in debt 0.9 - 3.0
Cash withdrawn from short term deposits - - (0.1)
Change in net funds resulting from cash flows 0.8 (0.8) 1.1
Finance leases drawn down (0.1) - -
Loan notes issued (0.9) - -
Exchange movement 0.4 0.4 0.3
Movement in net funds in the period 0.2 (0.4) 1.4
Opening net funds/(debt) 1.3 0.8 (0.1)
Closing net funds 1.5 0.4 1.3
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months to 30 June 2003
(UNAUDITED) (UNAUDITED) (AUDITED)
6 months to 6 months to 15 months to
30 June 2003 30 June 2002 31 December 2002
(Proforma)
#m #m #m
(Loss)/profit for the financial period:
Group (12.4) 1.6 (1.8)
Associates 0.2 0.3 0.2
(12.2) 1.9 (1.6)
Gain on deemed partial disposal of interest in associate - - 0.5
Exchange adjustments 0.5 0.2 0.2
Total recognised gains and losses relating to the period (11.7) 2.1 (0.9)
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Six months to 30 June 2003
(UNAUDITED) (UNAUDITED) (AUDITED)
6 months to 6 months to 15 months to
30 June 2003 30 June 2002 31 December
(Proforma) 2002
#m #m #m
(Loss)/profit for the financial period (12.2) 1.9 (1.6)
Dividends (0.6) (1.2) (2.4)
Retained (loss)/profit for the financial period (12.8) 0.7 (4.0)
Shares to be issued - (0.1) (0.1)
Gain on deemed partial disposal of interest in associate - - 0.5
Exchange adjustments 0.5 0.2 0.2
Goodwill written back on the sale of Park 15.3 - -
Goodwill adjustment arising from change in value of - 0.1 0.1
shares to be issued
Increase/(decrease) in shareholders' funds 3.0 0.9 (3.3)
Opening shareholders' funds 16.9 20.3 20.2
Closing shareholders' funds 19.9 21.2 16.9
NOTES TO THE INTERIM RESULTS (UNAUDITED)
For the six months to 30 June 2003
1. Financial Information
The financial information contained in this interim report does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Financial information is presented on the basis of the accounting policies of
the Group as set out in the Annual Report for the fifteen months to 31 December
2002.
The consolidated profit and loss accounts and cash flow statements and
associated notes for the 6 months to 30 June 2003 and 30 June 2002, and the
consolidated balance sheets at 30 June 2003 and 30 June 2002 are unaudited.
Financial information for the fifteen months to and as at 31 December 2002 has
been extracted from the statutory accounts filed with the Registrar of Companies
which contained an unqualified audit report and no adverse statement under
Section 237(2) or (3) of the Companies Act 1985.
The unaudited proforma financial information for the six months to 30 June 2002
has been prepared in accordance with applicable accounting standards under the
historical cost convention. The proforma financial information is based on the
Group's results for the nine months to 30 June 2002, adjusted for the three
months to 31 December 2001.
2. Segmental Information
The turnover and total operating profit for the 6 months to 30 June 2003 and 30
June 2002 (proforma) is attributable to the principal activity of the Group.
The analysis by geographical division is:
Turnover Total Operating Profit
2003 2002 2003 2002
#m #m #m #m
Continuing
Meridian 13.4 13.8 4.5 4.7
Continental Europe 10.0 9.5 0.8 0.5
North America 5.1 6.4 0.9 1.1
Asia Pacific 4.5 4.1 1.0 1.3
Information Technology Costs - - (2.6) (2.1)
Other Central Costs - - (2.9) (2.3)
33.0 33.8 1.7 3.2
Discontinued - Park 0.6 3.2 - (0.3)
33.6 37.0 1.7 2.9
Turnover by category is: 2003 2002
#m #m
Continuing
Web-based revenues 3.1 2.6
Products 10.6 10.5
Consultancy 14.6 15.6
Training 4.2 4.6
Other 0.5 0.5
33.0 33.8
Discontinued - Park
Consultancy 0.5 2.0
Other 0.1 1.2
0.6 3.2
33.6 37.0
Operating profit is stated after charging amortisation of #0.1m (6 months to 30
June 2002: #0.1m, 15 months to 31 December 2002: #0.3m).
Net interest is nil for all periods.
3. Exceptional Items
On 6 February 2003, The Resourceful Group Limited and its subsidiaries (Park
Human Resources Limited and The Resourceful Services Group Limited) were
disposed of by the group as a result of a management decision to concentrate on
core business activities. The activities of the company and its subsidiaries
are shown as discontinued in this period's accounts. Details of the net assets
disposed and the consideration are as follows:
#m
Net assets at 6 February 2003 1.5
Disposal costs 0.8
Goodwill reinstated (previously written off against reserves) 15.3
17.6
Consideration (4.6)
Loss on disposal 13.0
The exceptional items in 2002 consisted of restructuring costs (#5.1m) and the
extraordinary general meeting (#0.4m). Restructuring costs were incurred
following a management review of the Group's operations, which was carried out
with the objective of aligning the cost base with the current level of revenue.
The significant costs of restructuring were incurred reducing headcount in
Europe and reviewing office space requirements in North America and Europe.
4. Dividend
The directors have declared an interim dividend of 1.0p (6 months to 30 June
2002: 2.2p, 15 months to 31 December 2002: 4.4p) per ordinary share payable on
14 November 2003 to shareholders on the register at the close of business on 26
September 2003. Accordingly, the shares will go ex-dividend on 24 September
2003. The dividend shown for the six months to 30 June 2002 is 2.2p, the amount
which had been declared as at 30 June 2002 in respect of the six months to 31
March 2002.
5. Earnings/(Loss) Per Ordinary Share
Earnings and loss per ordinary share after exceptional items for the six months
to 30 June 2003 is calculated based on the loss after tax and minority interests
of #12.2m (6 months to 30 June 2002: profit #1.9m, 15 months to 31 December
2002: loss #1.6m) and a weighted average of 55,035,879 (6 months to 30 June
2002: 55,035,879, 15 months to 31 December 2002: 55,035,879) ordinary shares in
issue during the financial period. Earnings per ordinary share before
exceptional items is calculated based on profit before exceptional items but
after tax and minority interests of #0.8m (6 months to 30 June 2002: #1.9m, 15
months to 31 December 2002: #2.9m).
Dilution increases the weighted average number of shares to 55,435,879 (6 months
to 30 June 2002: 55,442,007, 15 months to 31 December 2002: 55,435,879).
Diluted loss per share is the same as basic loss per share as the issue of the '
shares to be issued' would reduce loss per share and are therefore not dilutive
under FRS 14.
6. Interim Report
This report is being sent to shareholders and will be available to members of
the public at the Company's registered office at The Pavilion, 1 Atwell Place,
Thames Ditton, Surrey KT7 0NE.
INDEPENDENT REVIEW REPORT BY KPMG AUDIT PLC TO SHL GROUP PLC
Introduction
We have been engaged by the Company to review the financial information set out
on pages 6 to 12 and 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 the terms of our
engagement to assist the Company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the Company those matters we are required to state to it
in this 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 reached.
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
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where they
are to be changed in the next annual accounts in which case any changes, and the
reasons for them, are to be disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in the
Bulletin 1999/4: Review of Interim Financial Information 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 is substantially less
in scope than an audit performed in accordance with 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.
In 2002 the Company changed its accounting reference date from 30 September to
31 December. The previous interim statements were prepared for the six months to
31 March 2002 and for the twelve months to 30 September 2002. We reviewed both
these statements last year but have not reviewed the proforma comparative
information for the six months to 30 June 2002.
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 30 June 2003.
As explained above, we have not reviewed the proforma comparative information
for the six months ended 30 June 2002 and as a consequence our conclusion
excludes the comparative information.
KPMG Audit Plc
Chartered Accountants
London
4 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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