Chapelthorpe PLC - Interim Results

RNS Number:0536I

Chapelthorpe PLC

20 November 2007

Under embargo until 0700 hrs on Tuesday 20 November 2007

Chapelthorpe plc

Interim Results for the six months ended 30 September 2007

Chapelthorpe plc, a leading manufacturer of industrial products which are

supplied to carefully chosen niche markets worldwide, today announces its

interim results for the six months ended 30 September 2007.

HIGHLIGHTS

* Significant improvement in profitability - #0.1m profit on continuing

operations compared to a loss of #5.6m in 2006

* Underlying* operating profit on continuing operations #0.7m (2006:

#nil)

* Umbrella Frames operation sold for #1.05m cash plus #0.35m deferred

* New increased bank facilities put in place in UK and US

* Net debt reduced by #1.6m to #11.1m

* Transfer to AIM completed

* before exceptional items.

Leslie Goodman, Chairman, commented:

'We have taken measures to reduce costs in all divisions and centrally. In

addition certain business streams have been discontinued and we have disposed of

the loss making Umbrella Frames business. These actions have resulted in a

significant improvement in the Group's performance. We now have a smaller but

more financially robust Group and we are building on our market positions to

improve performance, although this is against a background of continuing

industry pressures.'

For further information, please contact:

Chapelthorpe plc

Leslie Goodman (Chairman) Tel. 07946 590 643

Ian Powell (Chief Executive) Tel. 07711 123 124

Brewin Dolphin

Kenneth Fleming Tel. 0845 213 4214

CHAIRMAN'S STATEMENT

INTRODUCTION

In the first six months of this financial year we have taken measures to reduce

costs in all divisions and centrally. Certain business streams have been

discontinued and we have disposed of the loss making Umbrella Frames business.

These actions have resulted in a significant improvement in the Group's

performance. Sales in continuing operations were #54.8m (2006: #54.8m),

generating an underlying operating profit of #0.75m before exceptionals compared

to break even a year ago. After exceptional items, operating profit was #0.1m

compared to a loss of #5.6m a year ago. In addition, borrowings have further

reduced by #1.6m to #11.1m as a consequence of our actions to improve working

capital.

Most recently the Group has completed its move from the Official List to AIM.

FIBRES

Sales for the period were #43.0m (2006: #43.2m) generating an operating profit

before exceptional items of #0.4m (2006: #0.2m).

US

The US business remains robust. Staple fibre demand has remained solid with the

plant running at close to capacity in the first half. Automotive volumes have

declined significantly from their peak but appear to have stabilised and new

business, albeit at lower margins, has made up for the shortfall in the

automotive sector. Cost cuts and reorganisation savings have helped contain the

impact of rising healthcare costs and offset margin pressures.

EUROPE

The continued high price of polypropylene has resulted in further margin erosion

as not all price increases have been recovered from customers. Overcapacity in

the marketplace, compounded by substitution of polypropylene in end products,

has brought further pressure to bear on our UK and Austrian businesses.

Notwithstanding these pressures, volumes are at similar levels and operating

profits slightly improved on those of a year ago. A reduction in staff numbers

of 15% has been key to this improvement in profitability.

We do not envisage any significant raw material price relief in the foreseeable

future. European supply remains tight, following cuts in capacity, in

anticipation of significant new capacity due to come on stream in the Middle

East during 2008. It is unclear at this stage just how much of the new Middle

East capacity will be made available to service European requirements.

SPECIALIST COATINGS

Sales for the period were #11.9m (2006: #11.5m) generating an underlying

operating profit of #0.7m (2006: #0.2m).

The demand for wallcoverings across Western Europe has shown an increase in

recent months. Following several years of decline, volumes in the UK market

alone have grown by 14% in the first half compared to the same period last year.

The reduction in the cost base and market recovery have contributed to a strong

performance in the first half despite raw material shortages and cost increases.

Royalty income from Russia has also been robust; however, this royalty agreement

is due to end in FY 2009. There are other prospects in Eastern Europe which may

involve cooperation with the current royalty partner or other partners. We are

hopeful this will, to some extent, offset the expiry of our current royalty

stream. The first of these potential contracts has recently been signed with a

manufacturer in Siberia.

We believe that this division will deliver a significantly improved performance

for the year as a whole.

BORROWINGS

A key part of our strategy is to continue to reduce borrowings in the Group. Our

businesses are cash generative, require relatively modest levels of capital

expenditure and we have also taken strong action to reduce our working capital

requirements. As a consequence we have been able to reduce borrowings by #1.6m

to #11.1m, notwithstanding exceptional cash payments of over #2.0m in the first

half, nearly half of which was in connection with the Group's refinancing

completed in June 2007.

Our new facilities renegotiated in the US and UK replaced existing UK facilities

and together with previously renegotiated Austrian facilities have resulted in

additional headroom and increased level of committed facilities.

DIVIDENDS

The Directors do not recommend the payment of an interim dividend.

PENSIONS

The IAS 19 valuation of our UK defined pension scheme has resulted in the

elimination of the deficit of #2.8m at 31 March 2007, mainly due to a favourable

move in bond yields which determines the applicable discount rate.

STRATEGY AND OUTLOOK

Following the sale of the Umbrella Frames business we have a smaller but more

financially robust Group and we are building on our market positions to improve

performance. However, this is against a background of industry pressures,

particularly in Fibres, where raw material prices continue to increase

reflecting the rise in the price of oil.

Overall, trading performance for the current year continues to be in line with

our expectations.

Leslie Goodman

Chairman

20 November 2007

CONSOLIDATED INCOME STATEMENT (UNAUDITED)

HALF YEAR ENDED 30 SEPTEMBER 2007

Half year Half year Year

30 30 31 March

September September

2007 2006 2007

Notes #000 #000 #000

Continuing operations

Revenue 2 54,835 54,753 108,429

Cost of sales (48,801) (48,648) (96,645)

Gross profit 6,034 6,105 11,784

Operating expenses (5,896) (11,722) (27,048)

Operating profit (loss)

Operating profit (loss) before exceptional items 745 (18) (1,040)

Exceptional items 3 (607) (5,599) (14,224)

Operating profit (loss) 2 138 (5,617) (15,264)

Financial expenses (681) (775) (1,817)

Financial income 36 61 102

Net financing costs 4 (645) (714) (1,715)

Loss before taxation (507) (6,331) (16,979)

Taxation (28) (29) (218)

Loss for the period from continuing operations (535) (6,360) (17,197)

Profit (loss) from discontinued operation 5 90 (979) 1,258

Loss for the period attributable

to equity shareholders (445) (7,339) (15,939)

Loss per share

Basic and diluted 6 (2.21)p (36.71)p (79.46)p

CONSOLIDATED STATEMENT OF RECOGNISED INCOME

AND EXPENSE (UNAUDITED)

HALF YEAR ENDED 30 SEPTEMBER 2007

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

#000 #000 #000

Actuarial gains (losses) on defined benefit

pension schemes 2,746 (142) (1,258)

Exchange differences on translation of foreign (446) (1,869) (2,784)

operations

(Losses) gains in fair value of hedging derivatives (134) 203 59

Net income (expense) recognised directly in equity 2,166 (1,808) (3,983)

Loss for the period (445) (7,339) (15,939)

Total recognised income and expense for the period

(attributable to equity shareholders) 1,721 (9,147) (19,922)

CONSOLIDATED BALANCE SHEET (UNAUDITED)

30 SEPTEMBER 2007

30 September 30 September 31 March

2007 2006 2007

Notes #000 #000 #000

Non-current assets

Goodwill - 4,201 -

Property, plant and equipment 23,729 30,552 25,659

Other non-current assets 504 554 496

Other financial assets - 18 -

24,233 35,325 26,155

Current assets

Inventories 9,021 14,569 9,767

Trade and other receivables 18,981 19,650 21,195

Current tax assets - - 33

Other financial assets - 260 139

Cash and cash equivalents 4,074 4,167 2,256

32,076 38,646 33,390

Freehold properties held for resale - 2,179 -

Assets classified as held for sale - - 2,067

32,076 40,825 35,457

Current liabilities

Trade and other payables (16,237) (17,553) (19,429)

Current tax liabilities (626) (448) (546)

Other financial liabilities (32) (11) (7)

Borrowings and bank overdrafts (6,110) (9,207) (12,484)

Liabilities directly associated with assets

classified as held for sale - - (1,017)

(23,005) (27,219) (33,483)

Net current assets 9,071 13,606 1,974

Non-current liabilities

Retirement benefit obligations 10 (1,580) (3,368) (4,378)

Other financial liabilities (858) (800) (800)

Borrowings (9,051) (12,954) (2,475)

Provisions and other liabilities (1,172) (1,364) (1,341)

Deferred tax liabilities (3,998) (4,808) (4,260)

(16,659) (23,294) (13,254)

Net assets 16,645 25,637 14,875

Shareholders' equity

Called up share capital 10,202 10,202 10,202

Share premium reserve 1,251 1,251 1,251

Other reserves (1,246) 393 (666)

Retained earnings 6,438 13,791 4,088

Total shareholders' funds 9 16,645 25,637 14,875

CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

HALF YEAR ENDED 30 SEPTEMBER 2007

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

Notes #000 #000 #000

Cash flows from operating activities

Cash generated from (used in) operations 8 1,553 (85) (1,684)

Tax (paid) received (40) 215 (12)

Interest received 37 76 116

Interest paid (546) (810) (1,736)

Net cash generated from (used in) operating 1,004 (604) (3,316)

activities

Cash flows from investing activities

Purchases of property, plant and equipment (173) (663) (1,539)

Proceeds from sale of property, plant and equipment 2 - 9,115

Proceeds from sale of business 1,050 - -

Net cash generated from (used in) investing 879 (663) 7,576

activities

Cash flows from financing activities

Net proceeds from issue of new bank loans 7,613 - 2,674

Repayment of borrowings (6,694) (1,336) (10,187)

Repayment of capital element of finance leases (63) - (26)

Dividends paid to shareholders - (1,539) (1,539)

Net cash generated from (used in) financing 856 (2,875) (9,078)

activities

2,739 (4,142) (4,818)

Net increase (decrease) in cash and cash equivalents

Cash and bank overdrafts at beginning of period (3,518) 1,519 1,519

Exchange losses on cash and bank overdrafts (191) (78) (219)

Cash and cash equivalents at end of the period (970) (2,701) (3,518)

CONSOLIDATED RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (UNAUDITED)

HALF YEAR ENDED 30 SEPTEMBER 2007

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

#000 #000 #000

Net increase (decrease) in cash and cash equivalents 2,739 (4,142) (4,818)

(Increase) decrease in debt and lease financing (856) 1,336 7,468

Change in net debt from cash flows 1,883 (2,806) 2,650

Exchange adjustments (267) 60 (105)

Movement in net debt in the period 1,616 (2,746) 2,545

Net debt at start of period (12,703) (15,248) (15,248)

Net debt at end of period (11,087) (17,994) (12,703)

NOTES TO THE INTERIM ACCOUNTS

HALF YEAR ENDED 30 SEPTEMBER 2007

1. BASIS OF PREPARATION

The interim financial statements of Chapelthorpe plc for the half year ended 30

September 2007 are unaudited and do not comprise statutory accounts within the

meaning of Section 240 of the Companies Act 1985.

The financial information has been prepared on the basis of the accounting

policies set out in the Group's annual report and accounts for the year ended 31

March 2007. The comparative results for the year ended 31 March 2007 are

abridged and as such do not represent statutory accounts. Those accounts have

been reported on by the Company's auditors and delivered to the Registrar of

Companies. The auditors' report was unqualified and did not contain statements

under Section 237(2) or (3) of the Companies Act 1985.

2. SEGMENTAL REPORTING

PRIMARY REPORTING FORMAT - BUSINESS SEGMENTS

Until 13 June 2007, the Group was organised on a worldwide basis into three

business segments: Fibres, Specialist Coatings and Umbrella Frames. On that date

the Umbrella Frames operation was sold leaving the Group with two business

segments: Fibres and Specialist Coatings.

Discontinued

Continuing operations operation

Specialist Umbrella

Fibres Coatings Unallocated Total Frames

Half year ended 30 #000 #000 #000 #000 #000

September 2007

Revenue 42,971 11,864 - 54,835 1,581

Operating profit (loss)

before exceptional items 379 709 (343) 745 25

Exceptional items (357) - (250) (607) 64

Operating profit (loss) 22 709 (593) 138 89

Net financial expense (645) (645) 1

Profit (loss) before taxation 22 709 (1,238) (507) 90

Taxation (28) -

(Loss) profit for the period (535) 90

Discontinued

Continuing operations operation

Specialist Umbrella

Fibres Coatings Unallocated Total Frames

Half year ended 30 #000 #000 #000 #000 #000

September 2006

Revenue 43,205 11,548 - 54,753 2,476

Operating profit (loss)

before exceptional items 228 215 (461) (18) (427)

Exceptional items (1,180) (4,372) (47) (5,599) (932)

Operating loss (952) (4,157) (508) (5,617) (1,359)

Net financial expense (714) (714) 1

Loss before taxation (952) (4,157) (1,222) (6,331) (1,358)

Taxation (29) 379

Loss for the period (6,360) (979)

Year ended 31 March 2007

Revenue 84,484 23,945 - 108,429 6,119

Operating profit (loss)

before exceptional items

(101) 192 (1,131) (1,040) (1,285)

Exceptional items (3,790) (8,481) (1,953) (14,224) 1,922

Operating (loss) profit (3,891) (8,289) (3,084) (15,264) 637

Net financial expense (1,715) (1,715) -

(Loss) profit before taxation (3,891) (8,289) (4,799) (16,979) 637

Taxation (218) 621

(Loss) profit for the period (17,197) 1,258

The taxation credit and net financial expense have not been allocated to

individual segments.

SECONDARY REPORTING FORMAT - GEOGRAPHICAL SEGMENTS

The Group operations are based in two main geographical regions being Europe and

North America. The UK is the home of the parent.

The revenue analysis in the table below is based on the location of the

customer:

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

Continuing operations #000 #000 #000

Europe 33,500 31,876 65,460

North America 18,973 19,249 36,284

Australasia and Far East 1,949 2,845 5,309

Rest of the World 413 783 1,376

54,835 54,753 108,429

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

Discontinued operation #000 #000 #000

Europe 1,518 2,348 5,931

North America - 35 48

Australasia and Far East - 93 31

Rest of the World 63 - 109

1,581 2,476 6,119

3. EXCEPTIONAL ITEMS

During the period, the Group has incurred a number of exceptional costs. These

costs represent the following items:

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

Continuing operations #000 #000 #000

European Fibres restructuring 357 80 411

Specialist Coatings restructuring - - 1,482

Head office restructuring 65 47 860

Cost associated with transfer to AIM 67 - -

Costs associated with re-financing the Group 118 - 1,071

Specialist Coatings bad debt charges - 672 1,276

Provision for onerous lease in Specialist Coatings - - 150

Provision for environmental liabilities - - 22

Goodwill impairment - 4,800 8,952

Net costs relating to exceptional items 607 5,599 14,224

Exceptional items in relation to the discontinued operation are shown in Note 5.

4. NET FINANCING COSTS

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

Continuing operations #000 #000 #000

Interest payable

Bank loans, overdrafts and short term facilities 523 701 1,414

Preference share dividends 23 23 46

Finance leases 9 - 2

Other interest 36 47 90

591 771 1,552

Interest receivable

Bank and other deposits (29) (45) (80)

Other interest (7) (16) (22)

(36) (61) (102)

Net borrowing costs 555 710 1,450

Interest on pension scheme liabilities 90 4 265

Net financing costs 645 714 1,715

591 771 1,552

Interest payable

Interest payable on pension scheme liabilities 90 4 265

Total financial expense 681 775 1,817

Interest receivable (36) (61) (102)

Net financing costs 645 714 1,715

5. DISCONTINUED OPERATION

On 13 June 2007 the entire share capital of Hoyland Fox Limited was sold for

1,050,000 on completion and 350,000 deferred consideration.

Financial information relating to this discontinued operation is set out below.

Further information is also provided in Note 2, Segmental Reporting, as Hoyland

Fox Limited is treated as a separate business segment.

(i) RESULT

The result of the discontinued operation which has been included in the

Consolidated Income Statement is as follows:

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

#000 #000 #000

Revenue 1,581 2,476 6,119

Cost of sales (1,293) (2,205) (5,962)

Gross profit 288 271 157

Operating (expenses) income (199) (1,630) 480

Operating profit (loss)

Operating profit (loss)before exceptional items 25 (427) (1,285)

Exceptional items (see Note 5 (iii)) 64 (932) 1,922

Operating profit (loss) 89 (1,359) 637

Net financing costs 1 1 -

Profit (loss) before taxation 90 (1,358) 637

Taxation - 379 621

Profit (loss) for the period from discontinued 90 (979) 1,258

operation

The loss from discontinued operation includes #9,000 post tax gain (#nil: half

year ended 30 September 2006; #3,464,000: loss year ended 31 March 2007) from

the re-measurement of the disposal assets to fair value.

(ii) EXCEPTIONAL ITEMS

Half year Half year Year

30 September 30 September 31 March

2007 2006 2007

#000 #000 #000

Umbrella Frames restructuring - (932) (1,242)

Costs incurred in connection with ongoing sale

of Umbrella Frames business and assets 55 - (170)

Profit on sale of properties - - 6,798

Impairment of Umbrella Frames assets to fair value 9 - (3,464)

64 (932) 1,922

(iii) CASH FLOWS FROM DISCONTINUED OPERATION

Net cash flows from operating activities (166) (790) (949)

Net cash flows from investing activities - (36) 8,426

Net (decrease) increase in cash and cash equivalents (166) (826) 7,477

(iv) CARRYING VALUE OF ASSETS AND LIABILITIES

The carrying value of the major classes of assets and liabilities of the

discontinued operation at 31 March 2007 and the date of sale were as follows:

Fair value

Fair Changes of assets

value at in value to sold on

31 March 13 June 13 June

2007 2007 Impairment 2007

#000 #000 #000 #000

Inventories 996 (3) 5 998

Trade and other receivables 1,071 (41) 4 1,034

2,067 (44) 9 2,032

Trade and other payables (1,017) 35 - (982)

Net current assets 1,050 (9) 9 1,050

Net assets 1,050 (9) 9 1,050

At 31 March 2007 the net assets of the Umbrella Frames operation were impaired

to a fair value of #1,050,000:

#000

Consideration

Cash and cash equivalents 1,050

Deferred sales proceeds 350

1,400

6. EARNINGS PER SHARE

CONTINUING AND DISCONTINUED OPERATION

Basic and diluted (loss)

Basic and diluted loss per share earnings

before exceptionals per share

Half year Half year Year Half year Half year Year

30 30 31 March 30 September 30 31 March

September September September

2007 2006 2007 2007 2006 2007

Restated Restated Restated Restated

#000 #000 #000 #000 #000 #000

Loss for the period (445) (7,339) (15,939) (445) (7,339) (15,939)

Exceptional items - - - 543 6,531 12,302

(Loss) earnings attributable to (445) (7,339) (15,939) 98 (808) (3,637)

ordinary shareholders

Weighted average number

of ordinary shares in issue

during the period* 20,126 19,991 20,059 20,126 19,991 20,059

Basic and diluted (loss) earnings (2.21) (36.71) (79.46) 0.49 (4.04) (18.13)

per ordinary share (pence)

* excluding shares held by the Chapelthorpe plc 1996 Employee Benefit Trust.

The effect of the exceptional items on the earnings per share for the current

period is a loss of 2.7p (loss of 32.67p: half year ended 30 September 2006;

loss of 61.33p: year ended 31 March 2007).

CONTINUING OPERATIONS

Basic and diluted (loss)

Basic and diluted loss per share earnings

before exceptionals per share

Half year Half year Year Half year Half year Year

30 30 31 March 30 30 31 March

September September September September

2007 2006 2007 2007 2006 2007

Restated Restated Restated Restated

#000 #000 #000 #000 #000 #000

Loss for the period (535) (6,360) (17,197) (535) (6,360) (17,197)

Exceptional items - - - 607 5,599 14,224

(Loss) earnings attributable

to ordinary shareholders (535) (6,360) (17,197) 72 (761) (2,973)

Weighted average number

of ordinary shares in issue

during the period* 20,126 19,991 20,059 20,126 19,991 20,059

Basic and diluted

(loss) earnings per

ordinary share (pence) (2.66) (31.81) (85.73) 0.36 (3.81) (14.82)

* excluding shares held by the Chapelthorpe plc 1996 Employee Benefit Trust.

The effect of the exceptional items on the earnings per share for the current

period is a loss of 3.02p (loss of 28p: half year ended 30 September 2006; loss

of 70.91p: year ended 31 March 2007).

During the period there was a 10 for 1 share consolidation and the comparative

earnings per share figures have been restated to reflect this.

7. DIVIDENDS

No interim dividend is proposed for 2007/08 (interim 2006/07: nil; final 2006/

07: nil).

Ordinary dividends paid in the period totalled #nil (#1,539,000: half year ended

30 September 2006; #1,539,000: year ended 31 March 2007).

8. CASH GENERATED FROM (USED IN) OPERATIONS

Half Half

Year Year Year

30 September 30 September 31 March

2007 2006 2007

Continuing operations #000 # 000 # 000

Operating profit (loss) 138 (5,617) (15,264)

Depreciation 1,567 1,799 3,636

Charge in respect of employee share scheme 49 36 49

Profit on disposal of fixed (2) - -

assets

Working capital:

- Decrease in inventories 789 796 2,524

- Decrease (increase) in 2,265 3,493 (99)

debtors

- (Decrease) in creditors (1,271) (4,696) (3,645)

(Decrease) in provisions (10) (13) -

(Decrease) in retirement benefit obligations (187) (118) (483)

Cash generated from (used in) operations before exceptional items 3,338 (4,320) (13,282)

Exceptional items:

- European Fibres restructuring - amount recognised in 357 80 411

period

- amount paid in period (553) (327) (591)

- Specialist Coatings restructuring - amount recognised in - - 1,482

period

- amount paid in period (259) - (331)

- Head Office restructuring - amount recognised in 65 47 860

period

- amount paid in period (288) (47) (47)

- Costs associated with transfer to - amount recognised in 67 - -

AIM period

- amount paid in period (2) - -

- Provision for onerous lease costs - amount recognised in - - 150

period

- amount paid in period (194) (200) (401)

- Provision for environmental - amount recognised in - - 22

liabilities period

- amount paid in period (5) - (43)

- Costs associated with re-financing - amount recognised in 118 - 1,071

of Group period

- amount paid in period (925) - (264)

- Impairment of goodwill - amount recognised in - 4,800 8,952

period

- Bad debt in Specialist Coatings - amount recognised in - 672 1,276

period

Cash generated from (used in) 1,719 705 (735)

operations

Discontinued operation

Operating profit (loss) 89 (1,359) 637

Depreciation 53 154 303

Working capital:

- Decrease (increase) in inventories 3 (746) 358

- Decrease in debtors 41 1,379 690

- Increase (decrease) in creditors 59 (1,015) (405)

Cash generated from (used in) 245 (1,587) 1,583

operations before exceptional items

Exceptional items:

- Umbrella Frames restructuring - amount recognised in - 627 1,242

period

- amount paid in period (232) (135) (610)

- Costs incurred in connection with

ongoing sale of Umbrella Frames - amount recognised in (55) - 170

business and assets period

- amount paid in period (115) - -

- Profit on sale of properties - amount recognised in - - (6,798)

period

- Impairment of Umbrella Frames - amount recognised in (9) 305 3,464

assets period

Cash (used in) discontinued (166) (790) (949)

operation

Cash generated from (used in) 1,553 (85) (1,684)

operations

In the period to 30 September 2007, #38,000 of cash was generated in the

Umbrella Frames operation and #204,000 of expenses relating to the sale of this

business were paid by Chapelthorpe plc, resulting in a net cash used in

discontinued operation of #166,000.

9. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

Cash Foreign

Share flow currency Capital

Share premium hedging translation redemption Retained

capital reserve reserve reserve reserve earnings Total

#000 #000 #000 #000 #000 #000 #000

Balance at 1 April 2006 10,202 1,251 (15) 1,587 487 22,775 36,287

Loss for the period - - - - - (7,339) (7,339)

Currency translation - - - (1,869) - - (1,869)

adjustments

Employee share schemes - - - - - 36 36

Actuarial losses on pension - - - - - (142) (142)

scheme

Hedging reserve transfers - - 203 - - - 203

Ordinary dividends - - - - - (1,539) (1,539)

Balance at 30 September 2006 10,202 1,251 188 (282) 487 13,791 25,637

Balance at 1 April 2006 10,202 1,251 (15) 1,587 487 22,775 36,287

Loss for the period - - - - - (15,939) (15,939)

Currency translation - - - (2,784) - - (2,784)

adjustments

Employee share schemes - - - - - 49 49

Actuarial losses on pension - - - - - (1,258) (1,258)

scheme

Hedging reserve transfers - - 59 - - - 59

Ordinary dividends - - - - - (1,539) (1,539)

Balance at 31 March 2007 10,202 1,251 44 (1,197) 487 4,088 14,875

Balance at 1 April 2007 10,202 1,251 44 (1,197) 487 4,088 14,875

Loss for the period - - - - - (445) (445)

Currency translation - - - (446) - - (446)

adjustments

Employee share schemes - - - - - 49 49

Actuarial gains on pension - - - - - 2,746 2,746

scheme

Hedging reserve transfers - - (134) - - - (134)

Ordinary dividends - - - - - - -

Balance at 30 September 2007 10,202 1,251 (90) (1,643) 487 6,438 16,645

10. RETIREMENT BENEFITS

The Group operates a number of pension schemes. The major scheme is in the UK

and is of the defined benefit type, although this is now closed to new members.

The last full actuarial valuation of the major UK scheme was carried out by a

qualified independent actuary at 5 April 2005 and this has been updated to 30

September 2007.

The amounts recognised in the income statement for the UK defined benefit scheme

are analysed as follows:

Half year Half year Year

30 30 31 March

September September

2007 2006 2007

#000 #000 #000

Current service cost (251) (219) 402

Interest on pension scheme liabilities (1,360) (1,287) 2,582

Expected return on pension scheme assets 1,270 1,283 (2,399)

Past service costs - - -

Curtailment gains 100 - -

(241) (223) 585

The net of 'interest on pension scheme liabilities' and 'expected return on

pension scheme assets' above has been included within 'interest on pension

scheme liabilities' in net financing costs. All other amounts are included in

operating expenses.

The amount of actuarial gains recognised in the Statement of Recognised Income

and Expenses in respect of the UK scheme is #2,746,000 (#142,000 loss: half year

ended 30 September 2006; #1,258,000 loss: year ended 31 March 2007).

In addition, in Austria, there are leaving indemnities which represent a defined

benefit on retirement. The net liabilities recognised in the balance sheet in

respect of retirement benefit obligations are analysed as follows:

Half year Half year Year

30 30 31 March

September September

2007 2006 2007

#000 #000 #000

UK Scheme - (1,571) (2,756)

Asota leaving indemnities (1,580) (1,797) (1,622)

(1,580) (3,368) (4,378)

All other pension schemes which are operated by the Group are of a defined

contribution type.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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