TIDMGFRM
RNS Number : 6509P
Galiform PLC
21 July 2010
GALIFORM Plc
HALF YEARLY REPORT FOR THE 24 WEEKS ENDED 12 JUNE 2010
HIGHLIGHTS
Galiform's Chief Executive, Matthew Ingle, said:
"We are pleased with these results, which reflect the strength of Howdens'
business model and point the way to future growth. After a slow start to the
year, we delivered a further improvement in gross profit margin and a
substantial increase in operating profit. We also succeeded in further reducing
our property liabilities. The 16 new depots we have opened so far this year are
performing well, as are the new kitchen ranges we have introduced.
"We have identified further opportunities to develop the business and intend to
continue to invest in its growth. We remain cautious about the economic
environment, however, and will continue to manage the business in the light of
economic conditions."
Financial results
· Howden Joinery UK depot revenue increased by 3.2%* to GBP319.2m, up 2.5%*
on a same depot basis (* see note 1 below). However, revenue increased by 6.0%
year on year in the last four periods of the half, after the end of the cold
weather that disrupted the start of 2010. Group revenue was GBP324.7m (2009:
GBP316.8m);
· Gross profit margin rose from 54.1% to 58.1%;
· Operating profit before exceptional items increased to GBP24.5m (2009:
GBP10.0m);
· Profit before tax and exceptional items increased by GBP16.9m to GBP21.6m
(2009: GBP4.7m);
· Basic earnings per share from continuing operations2 increased to 2.3p
(2009: 0.5p);
· Basic earnings per share from continuing and discontinued operations3
increased to 2.3p (2009: 0.2p loss);
· Net cash outflow of GBP5.1m included cash payments totalling GBP21.7m
relating to 'legacy' properties and a payment, in excess of the operating
charge, of GBP13.2m to the Group's pension schemes (the 'pension deficit
contribution');
· Net debt of GBP2.7m at 12 June 2010 (26 December 2009: GBP2.4m net cash).
Business developments
· We continue to strengthen our competitive position:
- 16 new depots opened so far in 2010, bringing total to 478 and in line
with plan to open between 20 and 30 this year;
- New product development and introduction well received.
· Further mitigation of legacy property liability, with termination of
leases on three more legacy properties since the Interim Management Statement,
bringing the total so far this year to seven.
Current trading
· Howden Joinery UK depot total revenue increased by 5.7% in the first period
of the second half of the year (period 7) compared with the same period last
year.
Note 1: Week 1 sales (2010: nil, 2009 GBP0.8m) excluded because of the impact
arising from New Year's Day falling on different days of the week (Thursday in
2009, Friday in 2010).
Note 2: There were no exceptional items from continuing operations in H1 2009 or
H1 2010.
Note 3: There were no items arising from discontinued operations in 2010.
Enquiries
Investors/analysts:
Gary Rawlinson
Head of Investor Relations +44 (0)207 404 5959 (21 July 2010
a.m. only)
+44 (0)207 535 1127
+44 (0)7989 397527
Media:
Brunswick +44 (0)207 404 5959
Kate Holgate
Kate Miller
Note for editors:
Galiform Plc is the parent company of Howden Joinery. In the UK, Howden Joinery
is engaged in the sale of kitchens and joinery products to trade customers,
primarily small local builders, through over 475 depots. Around one-third of
the products it sells are manufactured in the company's own factories in
Runcorn, Cheshire, and Howden, East Yorkshire. The business also has a small
operation in France.
SUMMARY OF GROUP RESULTS
The information presented below relates to the 24 weeks to 12 June 2010 and the
24 weeks to 13 June 2009, unless otherwise stated.
+-------------------------------------------------+-------+--------+
| GBPm unless stated | 2010 | 2009 |
+-------------------------------------------------+-------+--------+
| Continuing operations1: | | |
+-------------------------------------------------+-------+--------+
| | | |
+-------------------------------------------------+-------+--------+
| Revenue | 324.7 | 316.8 |
| - Group | | |
+-------------------------------------------------+-------+--------+
| - Howden Joinery UK depots | 319.2 | 310.1 |
+-------------------------------------------------+-------+--------+
| Gross profit | 188.8 | 171.3 |
+-------------------------------------------------+-------+--------+
| Gross profit margin, % | 58.1 | 54.1 |
+-------------------------------------------------+-------+--------+
| Operating profit | 24.5 | 10.0 |
+-------------------------------------------------+-------+--------+
| Profit before tax | 21.6 | 4.7 |
+-------------------------------------------------+-------+--------+
| | | |
+-------------------------------------------------+-------+--------+
| Loss from discontinued operations before tax | | |
+-------------------------------------------------+-------+--------+
| - including exceptional items2 | - | (4.4) |
+-------------------------------------------------+-------+--------+
| | | |
+-------------------------------------------------+-------+--------+
| Earnings per share from continuing operations1 | | |
+-------------------------------------------------+-------+--------+
| - basic | 2.3p | 0.5p |
+-------------------------------------------------+-------+--------+
| | | |
+-------------------------------------------------+-------+--------+
| Earnings/(loss) per share from continuing and | | |
| discontinued operations | | |
+-------------------------------------------------+-------+--------+
| - basic excluding exceptional items | 2.3p | 0.5p |
+-------------------------------------------------+-------+--------+
| - basic including exceptional items | 2.3p | (0.2)p |
+-------------------------------------------------+-------+--------+
| | | |
+-------------------------------------------------+-------+--------+
| Net debt at end of period | 2.7 | 50.3 |
+-------------------------------------------------+-------+--------+
1 There were no exceptional items in continuing operations in 2009 and 2010.
2 Details of exceptional items incurred in 2009 are given in note 6 to the
Condensed Financial Statements.
FINANCIAL REVIEW
The following discussion relates to the 24 weeks to 12 June 2010 and the 24
weeks to 13 June 2009, unless otherwise stated.
FINANCIAL RESULTS FOR FIRST HALF OF 2010
There were no exceptional items in respect of continuing operations in 2009 and
2010. There were no items arising from discontinued operations in 2010. In
2009, there were exceptional items arising from discontinued operations (see
note 6). In the following, all of the figures relating to the Condensed
Consolidated Income Statement are in respect of continuing operations only.
The financial performance of the Group during the first half of 2010 benefited
from the strength of the Group's competitive position. It also benefited from
actions taken during the course of 2009 and this year to improve financial
performance, including pursuing opportunities to increase gross profit.
Sales through our Howden Joinery UK depots increased by GBP9.1m to GBP319.2m in
2010.
+-------------------------+---------+--------+
| | | |
| Revenue GBPm | 2010 | 2009 |
+-------------------------+---------+--------+
| Group | 324.7 | 316.8 |
+-------------------------+---------+--------+
| comprising: | | |
| Howden Joinery UK | 319.2 | 310.1 |
| depots | 5.5 | 5.5 |
| Howden Joinery French | - | 1.1 |
| depots | | |
| Hygena Cuisines* | | |
| | | |
| * ceased in H1 2009 | | |
+-------------------------+---------+--------+
Excluding the distorting effect of trading in the first week of the year (see
note 1 at end of Highlights section above), Howden Joinery UK depots' revenue
was up 3.2%, rising 2.5% on a same depot basis. This performance reflects the
previously reported impact of the cold weather seen in the first two periods of
the year (to 20th February). Since then, trading has returned to more stable
conditions, with total sales increasing by 6.0% year-on-year in the last four
periods of the first half of the year.
Sales by our French depots of GBP5.5m were up 3.2% in constant currency terms.
Gross profit rose by GBP17.5m to GBP188.8m. This primarily reflects the
continuing focus in our depots on gross profit margin and the benefit from a
small price increase early in the year. In addition, gross profit benefited
from purchasing and manufacturing efficiencies, with exchange rate movements
having only a limited impact.
As a result, the gross profit margin rose from 54.1% in the first half of 2009
to 58.1%, which was ahead of the 57.6% achieved in the second half of last year.
Selling and distribution costs and administrative expenses increased by GBP3.0m
to GBP164.3m. This reflects the costs of new depots, the impact of inflation,
particularly on payroll costs, increased marketing expenditure and higher
logistics costs, which were partly offset by cost reductions in other areas.
Operating profit increased by GBP14.5m to GBP24.5m (2009: GBP10.0m).
The net interest charge fell by GBP2.4m to GBP2.9m, due to the lower level of
debt this year and the reduced finance expense in respect of pensions. The net
result was profit before tax from continuing operations rose by GBP16.9m to
GBP21.6m (2009: GBP4.7m).
The tax charge on profit before tax was GBP7.4m, based on the estimated
effective rate of tax on profit before tax for the 2010 financial year of 34.1%.
This tax rate mainly reflects the impact of depreciation on capital expenditure
that is disallowable for tax purposes and other non-deductible expenditure.
Basic earnings per share were 2.3p (2009: 0.5p)
Net cash inflows from operating activities were GBP2.1m. This included payments
relating to 'legacy' properties totalling GBP21.7m and a cash contribution to
the Group's pension schemes, in excess of the operating charge, of GBP13.2m.
Excluding the 'legacy' properties payments, underlying working capital changes
generated a cash inflow of GBP8.4m. Within this, stock levels at the end of the
period were GBP3.0m lower than at the beginning of the year, despite the
requirement for stock in new depots. Creditors increased by GBP12.4m.
Offsetting these, debtors increased by GBP7.0 million pounds. The movements in
creditors and debtors reflected the seasonal difference in sales levels at the
year-end and the end of the half year. In respect of debtors, we have seen an
improvement in the age profile of debtors and a reduction in the bad debt
write-off.
Payments to acquire fixed and intangible assets totalled GBP6.7m (2009:
GBP3.8m).
As a result of the above, there was a GBP5.1m net cash outflow in the first half
of the year, the Group having net debt at the end of the period of GBP2.7m (26
December 2009: GBP2.4m net cash). Excluding payments in respect of legacy
properties and the contribution to the pension deficit, there was a cash inflow
of GBP29.8m.
At 12 June 2010, the pension deficit shown on the balance sheet was GBP176.1m
(26 December 2009: GBP196.3m). The decrease in the deficit in the period was
driven by the Company's contribution (GBP13.2m) made as part of the 2009
agreement to clear the actuarial deficit (over a 10-year period) and the impact
of changes in actuarial assumptions used to calculate liabilities, principally
with respect to inflation.
No interim dividend is being paid (2009: nil).
OPERATIONAL REVIEW
The overriding strategic goal of Howden Joinery is "To supply from local stock
nationwide the small builder's ever-changing routine kitchen and joinery
requirements, assuring no call back quality and best local price".
An unwavering focus on this goal, a unique business model and a readiness to
test and learn from new ideas led to the rapid growth of Howden Joinery from the
time it was founded in 1995. In recent years, the strength of the business has
enabled it to continue to perform well, despite the severity of the economic
downturn and the major challenges posed by the effects of the disposal of MFI.
The business has continued to invest in areas that are critical to future
growth, including product development and implementation of robust, scalable IT
systems.
Today, the opportunity to transform the scale of the business is apparent. This
can be achieved through: further significant growth in the size of the depot
portfolio, beyond previous expectations; ongoing sales and profit growth in
existing depots as they become mature, typically over 7 years or so; and the
pursuit of further opportunities to improve performance that have been
identified across the depot portfolio. The growth and development of the
business takes place against a background of ever-increasing demand for
sophisticated, functional, professionally fitted kitchens that represent value
for money. In addition, there is the opportunity to develop Howdens' operations
in France, at the appropriate time.
As the performance of the business is improving and legacy issues diminish,
investment in the future growth of Howden Joinery is being stepped up. Already
this year, a number of developments have taken place.
Depots
16 new depots have been opened so for this year, bringing the total to 478.
This is in line with the plan to open between 20 and 30 depots in 2010. The
stated target of 600 depots is being reviewed and is likely to be revised
upwards.
Products
Following the review of our kitchen ranges undertaken at the end of 2009, the
phased roll-out of new products continues. So far this year, this has included
eight new kitchens that complement our most successful existing ranges. These
new introductions are performing well. We have also launched new sinks and
appliances in our 'own brand' Lamona range and extended our range of Bosch
appliances to cover all large domestic appliances.
Supply operations
New IT systems for manufacturing have been successfully implemented in our
factories at Howden, completing the roll-out in all our manufacturing plants,
and a new warehouse management system has been implemented in our distribution
centre in Northampton. These systems facilitate improved production planning
and stock control.
In the coming months, investment in the business to support its growth will
continue, as new depots are opened, staffing levels in existing depots are
increased to enable them to reach their full potential, and new machinery is
introduced in manufacturing to increase its capacity and improve efficiency.
GROUP DEVELOPMENTS
Legacy properties
The Group continues to reduce its 'legacy property' portfolio.
The number of legacy properties now stands at 46, compared with 55 at the end of
2009. Included within this are 22 properties that are fully or part occupied by
tenants.
Since the release of the Interim Management Statement, on 29 April 2010, the
leases of a further three properties have been terminated, at a cost of GBP7.4m.
This means that the leases of seven properties have been terminated so far this
year, at a cost of GBP14.5m (of which GBP10.1m was incurred in the first half of
the year), mitigating future liabilities that would have totalled over GBP50m.
With the leases of two additional properties having reached the end of their
term, the profile of properties remaining and the net annual rent and rates
(current values) for the associated leases going forward, before any further
mitigating action is taken, is shown below.
+-------------------------------------+---------+------+------+------+------+
| | Current | As | 31 | 31 | 31 |
| | | at | Dec | Dec | Dec |
| | | 31 | | | |
| | | Dec | | | |
+-------------------------------------+---------+------+------+------+------+
| | | 2011 | 2014 | 2019 | 2024 |
+-------------------------------------+---------+------+------+------+------+
| Number of properties1 | 46 | 43 | 24 | 13 | 33 |
+-------------------------------------+---------+------+------+------+------+
| Net annual rent and rates, GBPm2 | 14.6 | 14.3 | 8.0 | 6.3 | 0.4 |
+-------------------------------------+---------+------+------+------+------+
Estimated future costs associated with these properties were provided for in
2009 and previous years.
1. Vacant and tenanted.
2. Gross rent & rates less payments by tenants.
3. The leases on these properties expire during the course of 2025.
Group name
We intend to change the name of the Group to a variant of the Howden Joinery
name, rather than Galiform, and are taking steps to effect the formal change.
OUTLOOK
With sales 5.7% ahead of last year in the first period of the second half of
2010, sales growth continues to be in line with management's expectations. We
are seeing pressures on product input costs in a number of areas, although we
would hope to be able to offset these.
In the second half, our cost base will be impacted by the non-recurrence of
one-off cost savings last year that totalled around GBP4m and the increasing
costs associated with new depots. Our year-end net cash/debt position will
reflect any costs associated with terminating further legacy leases.
The key risk to performance in the second half of the year is the continuing
uncertainty surrounding the general economic environment. Other risks to the
business are discussed in the following section on 'Risks and Uncertainties'.
Although, we remain cautious about the macro outlook, we will invest prudently
in the areas that present growth opportunities for the business. However, as in
recent years, we will continue to manage the business in light of economic
conditions.
GOING CONCERN AND RISKS AND UNCERTAINTIES
GOING CONCERN
The Group meets its day to day working capital requirements through an asset
backed lending facility of GBP160m, which is due for renewal in May 2014. The
current economic conditions create uncertainty, particularly over (a) the level
of demand for the Group's products and, (b) the exchange rate between sterling
and both the Euro and the US Dollar which would affect the cost of the Group's
operations.
The Group's forecasts and projections have been stress-tested for reasonably
possible adverse variations in trading performance. The results of this testing
show that the Group should be able to operate within the level of its current
facility and covenants. The Group's banking facility expires in May 2014 so at
this stage the Group has not sought any written commitment that the facility
will be renewed. We will open renewal negotiations with the banks in due
course.
After making enquiries, the directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the half-yearly condensed financial statements.
RISKS AND UNCERTAINTIES
The Board continually assesses and monitors the key risks of the business. The
principal risks and uncertainties that could have a material impact on the
Group's performance over the remaining 28 weeks of the financial year have not
changed from those which are set out in detail on pages 16 to 17 of the Group's
2009 Annual Report, and which are summarised below:
· Defined benefit pension scheme
· Legacy properties
· Market conditions
· IT systems
· Continuity of supply
· Failure to implement Howdens' strategy
· Product design leadership
· Loss of key personnel
A copy of the Group's 2009 Annual Report is available on the Group's website,
www.galiform.com.
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Condensed consolidated income statement |
+-----------------------------------------------------------------------------------------------------------------------------------+
| | | 24 weeks | | 24 weeks to 13 June 2009 | | 52 weeks to 26 December |
| | | to | | unaudited | | 2009 |
| | | 12 June | | | | audited |
| | | 2010 | | | | |
| | | unaudited | | | | |
+------------------------------+-------+------------+-+-------------------------------------+-+-------------------------------------+
| |Notes | Total | | Before | Exceptional | Total | | Before | Exceptional | Total |
| | | GBPm | | exceptional | items | GBPm | | exceptional | items | GBPm |
| | | | | items | GBPm | | | items | GBPm | |
| | | | | GBPm | | | | GBPm | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Continuing operations: | | | | | | | | | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Revenue - sales of goods | | 324.7 | | 316.8 | - | 316.8 | | 769.5 | - | 769.5 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Cost of sales | | (135.9) | | (145.5) | - | (145.5) | | (337.4) | - | (337.4) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Gross profit | | 188.8 | | 171.3 | - | 171.3 | | 432.1 | - | 432.1 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Selling & distribution costs | | (133.6) | | (131.7) | - | (131.7) | | (294.0) | - | (294.0) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Administrative expenses | | (30.7) | | (29.6) | - | (29.6) | | (58.6) | - | (58.6) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Other operating expenses | 6 | - | | - | - | - | | - | (0.1) | (0.1) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Operating profit | | 24.5 | | 10.0 | - | 10.0 | | 79.5 | (0.1) | 79.4 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Finance income | 7 | 0.2 | | 0.1 | - | 0.1 | | 0.2 | - | 0.2 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Finance expense | 7 | (0.7) | | (1.7) | - | (1.7) | | (3.0) | - | (3.0) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Other finance expense - | 7 | (2.4) | | (3.7) | - | (3.7) | | (8.0) | - | (8.0) |
| pensions | | | | | | | | | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Profit before tax | | 21.6 | | 4.7 | - | 4.7 | | 68.7 | (0.1) | 68.6 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Tax charge for the period | 8 | (7.4) | | (1.7) | - | (1.7) | | (18.5) | - | (18.5) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Profit after tax | | 14.2 | | 3.0 | - | 3.0 | | 50.2 | (0.1) | 50.1 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| | | | | | | | | | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Discontinued operations: | | | | | | | | | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Loss before tax | 6 | - | | - | (4.4) | (4.4) | | - | (4.4) | (4.4) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Tax on loss | 6 | - | | - | - | - | | - | - | - |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Loss after tax | | - | | - | (4.4) | (4.4) | | - | (4.4) | (4.4) |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| | | | | | | | | | | |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
| Profit/(loss) for the period | | 14.2 | | 3.0 | (4.4) | (1.4) | | 50.2 | (4.5) | 45.7 |
+------------------------------+-------+------------+-+-------------+-------------+---------+-+-------------+-------------+---------+
There are no exceptional items in the current period. All profits and losses
for all periods are attributable to the equity holders of the parent.
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Condensed consolidated income statement (continued) |
+---------------------------------------------------------------------------------------------------------------+
| | | 24 weeks to 12 June | | 24 weeks to 13 June | | 52 weeks to 26 |
| | | 2010 | | 2009 | | December 2009 |
| | | unaudited | | unaudited | | audited |
+-------------------------+-------+----------------------+--+----------------------+---+------------------------+
| |Notes | | Total | | | | Total | | | | Total | |
| | | | pence | | | | pence | | | | pence | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Earnings per share: | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| From continuing | | | | | | | | | | | | |
| operations | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Basic earnings per 10p | 9 | | 2.3 | | | | 0.5 | | | | 8.3 | |
| share | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Diluted earnings per | 9 | | 2.3 | | | | 0.5 | | | | 8.3 | |
| 10p share | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| From continuing and | | | | | | | | | | | | |
| discontinued operations | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Basic earnings/(loss) | 9 | | 2.3 | | | | (0.2) | | | | 7.6 | |
| per 10p share | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
| Diluted earnings/(loss) | 9 | | 2.3 | | | | (0.2) | | | | 7.5 | |
| per 10p share | | | | | | | | | | | | |
+-------------------------+-------+------+--------+------+--+------+--------+------+---+-------+--------+-------+
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Condensed consolidated statement of comprehensive income |
+-----------------------------------------------------------------------------------------------------------------+
| |Notes | 24 weeks | 24 | 52 weeks to |
| | | to | weeks | 26 December |
| | | 12 June | to | 2009 |
| | | 2010 | 13 June | audited |
| | | unaudited | 2009 | GBPm |
| | | GBPm | unaudited | |
| | | | GBPm | |
| | | | | |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Profit/(loss) for the financial period | | 14.2 | (1.4) | 45.7 |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Items of other comprehensive income: | | | | |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Actuarial gain/(loss) on defined benefit pension schemes | 11 | 9.4 | (18.7) | (87.0) |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Deferred tax on actuarial (gain)/loss on defined benefit pension | | (2.6) | 5.3 | 24.4 |
| schemes | | | | |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Deferred tax on share schemes | | (0.3) | 0.1 | 2.1 |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Currency translation differences | | (0.4) | 0.1 | (0.7) |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Other comprehensive income for the period | | 6.1 | (13.2) | (61.2) |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| | | | | |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
| Total comprehensive income for the period attributable to equity | | 20.3 | (14.6) | (15.5) |
| holders of the parent | | | | |
+------------------------------------------------------------------+-------+------------+-----------+-------------+
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Condensed consolidated balance sheet |
+----------------------------------------------------------------------------------+
| |Notes | | 12 June | | 13 June | | 26 December |
| | | | 2010 | | 2009 | | 2009 |
| | | | unaudited | | unaudited | | audited |
| | | | GBPm | | GBPm | | GBPm |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Non current assets | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Goodwill | | | 2.5 | | 2.5 | | 2.5 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Other intangible assets | | | 5.1 | | 5.8 | | 5.4 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Property, plant and | 10 | | 78.7 | | 85.2 | | 79.5 |
| equipment | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Investments | | | 2.0 | | 2.0 | | 2.0 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Deferred tax asset | | | 68.4 | | 56.9 | | 73.6 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | 156.7 | | 152.4 | | 163.0 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Current assets | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Inventories | | | 83.3 | | 99.5 | | 86.3 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Trade and other receivables | | | 102.4 | | 100.1 | | 95.4 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Other assets | | | 0.4 | | 1.0 | | 0.7 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Cash at bank and in hand | | | 17.4 | | 18.4 | | 14.0 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | 203.5 | | 219.0 | | 196.4 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Total assets | | | 360.2 | | 371.4 | | 359.4 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Current liabilities | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Trade and other payables | | | (127.1) | | (122.4) | | (119.4) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Current tax liability | | | (12.7) | | (5.7) | | (12.8) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Current borrowings | | | (1.9) | | (2.6) | | (2.3) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | (141.7) | | (130.7) | | (134.5) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Non current liabilities | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Non current borrowings | | | (18.6) | | (67.1) | | (10.0) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Pension liability | 11 | | (176.1) | | (131.2) | | (196.3) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Deferred tax liability | | | (5.5) | | (5.5) | | (5.5) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Provisions | 12 | | (70.1) | | (107.5) | | (86.8) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | (270.3) | | (311.3) | | (298.6) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Total liabilities | | | (412.0) | | (442.0) | | (433.1) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Net liabilities | | | (51.8) | | (70.6) | | (73.7) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Equity | | | | | | | |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Called up share capital | | | 63.4 | | 63.4 | | 63.4 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Share premium account | | | 85.1 | | 85.1 | | 85.1 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| ESOP reserve | | | (25.9) | | (25.3) | | (27.5) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Other reserves | | | 28.1 | | 28.1 | | 28.1 |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Retained loss | | | (202.5) | | (221.9) | | (222.8) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
| Total deficit | | | (51.8) | | (70.6) | | (73.7) |
+-----------------------------+-------+-+------------+-+-----------+-+-------------+
+--------------------------+---------+---------+---------+----------+----------+--------+
| Condensed consolidated statement of changes in equity |
+---------------------------------------------------------------------------------------+
| | Share | Share | ESOP | Other | Retained | Total |
| 24 weeks to 12 June 2010 | capital | premium | reserve | reserves | earnings | GBPm |
| | GBPm | account | GBPm | GBPm | GBPm | |
| | | GBPm | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| As at 26 December 2009 - | 63.4 | 85.1 | (27.5) | 28.1 | (222.8) | (73.7) |
| audited | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Profit for the period | - | - | - | - | 14.2 | 14.2 |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Net actuarial gain on | - | - | - | - | 6.8 | 6.8 |
| pension schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Deferred tax on share | - | - | - | - | (0.3) | (0.3) |
| schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Currency translation | - | - | - | - | (0.4) | (0.4) |
| differences | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Net movement in ESOP | - | - | 1.6 | - | - | 1.6 |
+--------------------------+---------+---------+---------+----------+----------+--------+
| As at 12 June 2010 - | 63.4 | 85.1 | (25.9) | 28.1 | (202.5) | (51.8) |
| unaudited | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
During the current period, the Group did not issue any shares.
+--------------------------+---------+---------+---------+----------+----------+---------+
| 24 weeks to 13 June 2009 | Share | Share | ESOP | Other | Retained | Total |
| | capital | premium | reserve | reserves | earnings | GBPm |
| | GBPm | account | GBPm | GBPm | GBPm | |
| | | GBPm | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
| As at 27 December 2008 - | 63.4 | 85.1 | (27.1) | 28.1 | (207.3) | (57.8) |
| audited | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
| Loss for the period | - | - | - | - | (1.4) | (1.4) |
+--------------------------+---------+---------+---------+----------+----------+---------+
| Net actuarial loss on | - | - | - | - | (13.4) | (13.4) |
| pension schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
| Deferred tax on share | - | - | - | - | 0.1 | 0.1 |
| schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
| Currency translation | - | - | - | - | 0.1 | 0.1 |
| differences | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
| Net movement in ESOP | - | - | 1.8 | - | - | 1.8 |
+--------------------------+---------+---------+---------+----------+----------+---------+
| As at 13 June 2009 - | 63.4 | 85.1 | (25.3) | 28.1 | (221.9) | (70.6) |
| unaudited | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+---------+
During the period above, the Group did not issue any shares.
+--------------------------+---------+---------+---------+----------+----------+--------+
| 52 weeks to 26 December | Share | Share | ESOP | Other | Retained | Total |
| 2009 | capital | premium | reserve | reserves | earnings | GBPm |
| | GBPm | account | GBPm | GBPm | GBPm | |
| | | GBPm | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| As at 27 December 2008 | 63.4 | 85.1 | (27.1) | 28.1 | (207.3) | (57.8) |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Profit for the period | - | - | - | - | 45.7 | 45.7 |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Net actuarial loss on | - | - | - | - | (62.6) | (62.6) |
| pension schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Deferred tax on share | - | - | - | - | 2.1 | 2.1 |
| schemes | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Currency translation | - | - | | - | (0.7) | (0.7) |
| differences | | | | | | |
+--------------------------+---------+---------+---------+----------+----------+--------+
| Net movement in ESOP | - | - | (0.4) | - | - | (0.4) |
+--------------------------+---------+---------+---------+----------+----------+--------+
| As at 26 December 2009 | 63.4 | 85.1 | (27.5) | 28.1 | (222.8) | (73.7) |
+--------------------------+---------+---------+---------+----------+----------+--------+
During the period above, the Group did not issue any shares.
+-------------------------------------+-------+------------+-----------+-------------+
| Condensed consolidated cash flow statement |
+------------------------------------------------------------------------------------+
| |Notes | 24 weeks | 24 weeks | 52 weeks to |
| | | to | to | 26 December |
| | | 12 June | 13 June | 2009 |
| | | 2010 | 2009 | audited |
| | | unaudited | unaudited | GBPm |
| | | GBPm | GBPm | |
| | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Net cash flows from operating | 14 | 2.1 | 13.5 | 71.4 |
| activities | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Cash flows from investing | | | | |
| activities | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Interest received | | 0.1 | 0.1 | 0.2 |
+-------------------------------------+-------+------------+-----------+-------------+
| Redemption of investment | | - | 2.0 | 2.0 |
+-------------------------------------+-------+------------+-----------+-------------+
| Payments to acquire property, plant | | (6.7) | (3.8) | (8.1) |
| and equipment and intangible assets | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Receipts from sale of property, | | - | 1.0 | 1.2 |
| plant and equipment and intangible | | | | |
| assets | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Net cash used in investing | | (6.6) | (0.7) | (4.7) |
| activities | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Cash flows from financing | | | | |
| activities | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Interest paid | | (0.6) | (1.9) | (3.1) |
+-------------------------------------+-------+------------+-----------+-------------+
| Increase/(decrease) in loans | | 9.0 | (13.2) | (69.7) |
+-------------------------------------+-------+------------+-----------+-------------+
| Repayment of capital element of | | (0.8) | (0.8) | (1.7) |
| finance leases | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Decrease in other assets | | 0.3 | 0.3 | 0.6 |
+-------------------------------------+-------+------------+-----------+-------------+
| Net cash from/(used in) financing | | 7.9 | (15.6) | (73.9) |
| activities | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Net increase/(decrease) in cash and | | 3.4 | (2.8) | (7.2) |
| cash equivalents | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Cash and cash equivalents at | 14 | 14.0 | 21.2 | 21.2 |
| beginning of period | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
| Cash and cash equivalents at end of | 14 | 17.4 | 18.4 | 14.0 |
| period | | | | |
+-------------------------------------+-------+------------+-----------+-------------+
Cash flows from discontinued operating activities are shown in note 14. There
are no cash flows from discontinued investing or financing activities.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1 General information
The results for the 24 week periods ended 12 June 2010 and 13 June 2009 are
unaudited but have been reviewed by the Group's auditors, whose report on the
current period forms part of this document. The information for the 52 week
period ended 26 December 2009 does not constitute statutory accounts as defined
in section 435 of the Companies Act 2006. A copy of the statutory accounts for
that period has been delivered to the Registrar of Companies. The auditors'
report on those accounts was not qualified or modified, did not draw attention
to any matters by way of emphasis and did not contain statements under section
498(2) or (3) of the Companies Act 2006.
2 Accounting policies
The annual financial statements of Galiform Plc are prepared in accordance with
IFRSs as adopted by the European Union. The condensed set of financial
statements included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting", as adopted by the European Union.
Basis of preparation
The Group's business activities, together with the factors likely to affect its
future development, performance, and position are set out on pages 4 to 7, and
include a summary of the Group's financial position, its cash flows and
borrowing facilities, and a discussion of why the directors consider that the
going concern basis is appropriate.
The same accounting policies, presentation methods, and methods of computation
are followed in the condensed set of financial statements as applied in the
Group's latest annual audited financial statements, except that the taxation
charge for the half-year is calculated by applying the annual estimated
effective tax rate to the profit for the period, and except for the adoption of
IFRS8 and the revisions to IAS1, which are explained directly below.
Adoption of new accounting standards in the current period
In the current period, the Group has adopted International Financial Reporting
Standard 8 'Operating segments' and the revisions to International Accounting
Standard 1 'Presentation of Financial Statements'.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the group that are regularly reviewed by the Chief
Executive to allocate resources to the segments and to assess their performance.
In contrast, the predecessor (IAS 14 'Segmental reporting') required the group
to identify two sets of segments (business and geographical), using a risks and
rewards approach, with the Group's system of internal financial reporting to key
management personnel serving only as the starting point for identification of
such segments.
IAS 1 (revised) requires the presentation of a statement of changes in equity as
a primary statement, separate from the income statement and statement of
comprehensive income. As a result, a condensed statement of changes in equity
has been included in the primary statements.
3 Segmental results
Basis of segmentation
Information reported to the Group's Chief Executive is focussed on one operating
segment, Howden Joinery. Thus, the information required in respect of segmental
disclosure can all be found in the condensed consolidated income statement.
4 Seasonality of revenue
Howden Joinery sales are more heavily weighted to the second half of the
financial year. This partly reflects the fact that there are 24 weeks in the
first half of the financial year and 28 weeks in the second half. It also
reflects sales in the peak October trading period. In the last two financial
years, approximately 60% of sales have been in the second half of the year.
5 Write down of inventories
During the period, the Group incurred a charge of GBP0.6m to write inventories
down to their net realisable value (24 weeks to 13 June 2009 - GBP3.5m, 52 weeks
to 26 December 2009 - GBP7.1m).
6 Exceptional items
Exceptional items in the 24 weeks to 12 June 2010:
There are no exceptional items in the 24 weeks to 12 June 2010.
Exceptional items charged to operating profit in the 24 weeks to 13 June 2009
are analysed as follows:
+----------------------------------+----------+-------+
| | | Total |
+----------------------------------+----------+-------+
| | | GBPm |
+----------------------------------+----------+-------+
| Discontinued operations: | | |
+----------------------------------+----------+-------+
| Costs and obligations relating | | (4.4) |
| to empty properties | | |
+----------------------------------+----------+-------+
| Total discontinued exceptional | | (4.4) |
| items before tax | | |
+----------------------------------+----------+-------+
| Tax on discontinued exceptional | | - |
| items | | |
+----------------------------------+----------+-------+
| Net exceptional items in | | (4.4) |
| discontinued operations | | |
+----------------------------------+----------+-------+
| | | |
+----------------------------------+----------+-------+
| Continuing and discontinued | | |
| operations: | | |
+----------------------------------+----------+-------+
| Total exceptional items before | | (4.4) |
| tax | | |
+----------------------------------+----------+-------+
| Tax on exceptional items | | - |
+----------------------------------+----------+-------+
| Total exceptional items after | | (4.4) |
| tax | | |
+----------------------------------+----------+-------+
There are no exceptional items in continuing operations. The items in
discontinued operations relate to the Group's former Sofa Workshop Limited
operations, which were sold and treated as discontinued in 2006 and which are
currently in administration.
As was disclosed in the Contingent Liabilities note to the Group's Annual Report
and Accounts for the 52 weeks to 27 December 2008, the Group is guarantor on up
to 12 leases in relation to properties which were held by Sofa Workshop Limited
and which were occupied by Sofa Workshop Limited retail operations. During the
course of the 24 weeks to 13 June 2009, these contingent liabilities
crystallised and the Group has begun to incur costs in connection with them.
The item "Costs and obligations relating to empty properties" covers the Group's
best estimate of the rent, rates, and other associated costs of these
properties. It includes amounts paid under the property guarantees up to the
end of the 24 weeks to 13 June 2009, as well as a provision for expected future
amounts payable. The amounts are discounted to their present value where
material.
Exceptional items charged to operating profit in the 52 weeks to 26 December
2009 are analysed as follows:
+---------------------------+-------+-----------+-------+
| |Notes | Other | Total |
| | | operating | GBPm |
| | | expenses | |
| | | GBPm | |
+---------------------------+-------+-----------+-------+
| Continuing operations: | a | | |
+---------------------------+-------+-----------+-------+
| Loss on disposal of | | (0.1) | (0.1) |
| property, plant and | | | |
| equipment | | | |
+---------------------------+-------+-----------+-------+
| Total charged to | | (0.1) | (0.1) |
| operating profit | | | |
+---------------------------+-------+-----------+-------+
| Tax on exceptional items | | | - |
+---------------------------+-------+-----------+-------+
| Total exceptional items | | | (0.1) |
| after tax | | | |
+---------------------------+-------+-----------+-------+
| | | | |
+---------------------------+-------+-----------+-------+
| Discontinued operations: | b | | |
+---------------------------+-------+-----------+-------+
| Costs and obligations | | | (4.4) |
| relating to empty | | | |
| properties | | | |
+---------------------------+-------+-----------+-------+
| Total exceptional items | | | (4.4) |
| before tax | | | |
+---------------------------+-------+-----------+-------+
| Tax on exceptional items | | | - |
+---------------------------+-------+-----------+-------+
| Total exceptional items | | | (4.4) |
| after tax | | | |
+---------------------------+-------+-----------+-------+
| | | | |
+---------------------------+-------+-----------+-------+
| Continuing and discontinued | | |
| operations: | | |
+-----------------------------------+-----------+-------+
| Total exceptional items | | | (4.5) |
| before tax | | | |
+---------------------------+-------+-----------+-------+
| Tax on exceptional items | | | - |
+---------------------------+-------+-----------+-------+
| Total exceptional items | | | (4.5) |
| after tax | | | |
+---------------------------+-------+-----------+-------+
(a) Continuing operations
The item "Loss on disposal of property, plant and equipment" comprises the net
loss on disposals of property, plant and equipment during the 52 weeks to 26
December 2009.
(b) Discontinued operations
As was disclosed in the Contingent Liabilities note to the Group's Annual Report
and Accounts for the 52 weeks ended 27 December 2008, the Group is guarantor for
certain leases in relation to properties which were held by Sofa Workshop
Limited and which were occupied by Sofa Workshop retail operations. During the
course of the 52 weeks to 26 December 2009, these contingent liabilities
crystallised and the Group has begun to incur costs in connection with them.
The item "Costs and obligations relating to empty properties" covers the Group's
best estimate of the rent, rates and other associated costs of these properties.
It includes amounts paid under the property guarantees up to 26 December 2009,
as well as a provision for expected future amounts payable. The amounts are
discounted to their present value where material. The provision element of the
exceptional item is included as part of the total additions to the property
provision in the 52 weeks to 26 December 2009.
7 Finance income, finance expense and other finance charges - pensions
+-------------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to | weeks | to |
| | 12 June | to | 26 |
| | 2010 | 13 June | December |
| | unaudited | 2009 | 2009 |
| | GBPm | unaudited | audited |
| | | GBPm | GBPm |
+-------------------------------------+-----------+-----------+------------+
| Finance income | | | |
+-------------------------------------+-----------+-----------+------------+
| Bank interest receivable | 0.1 | 0.1 | 0.2 |
+-------------------------------------+-----------+-----------+------------+
| Other interest receivable | 0.1 | - | - |
+-------------------------------------+-----------+-----------+------------+
| | 0.2 | 0.1 | 0.2 |
+-------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------+-----------+-----------+------------+
| Finance expense | | | |
+-------------------------------------+-----------+-----------+------------+
| Bank interest payable | (0.5) | (1.5) | (2.6) |
+-------------------------------------+-----------+-----------+------------+
| Other interest (including finance | (0.1) | (0.1) | (0.2) |
| lease interest) payable | | | |
+-------------------------------------+-----------+-----------+------------+
| Interest charge on remeasuring | (0.1) | (0.1) | (0.2) |
| creditors to fair value | | | |
+-------------------------------------+-----------+-----------+------------+
| | (0.7) | (1.7) | 3.0 |
+-------------------------------------+-----------+-----------+------------+
| | | | |
+-------------------------------------+-----------+-----------+------------+
| Other finance expense - pensions | | | |
+-------------------------------------+-----------+-----------+------------+
| Finance element of pension charge | (2.4) | (3.7) | (8.0) |
+-------------------------------------+-----------+-----------+------------+
8 Tax
(a) Tax in the income statement
+--------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to 13 | 26 |
| | 2010 | June | December |
| | unaudited | 2009 | 2009 |
| | GBPm | unaudited | audited |
| | | GBPm | GBPm |
+--------------------------------+-----------+-----------+------------+
| Current tax | | | |
+--------------------------------+-----------+-----------+------------+
| Current year | 5.1 | 0.9 | 15.2 |
+--------------------------------+-----------+-----------+------------+
| Adjustments in respect of | - | - | (2.2) |
| previous periods | | | |
+--------------------------------+-----------+-----------+------------+
| Total current tax | 5.1 | 0.9 | 13.0 |
+--------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------+-----------+-----------+------------+
| Deferred tax | | | |
+--------------------------------+-----------+-----------+------------+
| Current year | 2.3 | 0.8 | 4.3 |
+--------------------------------+-----------+-----------+------------+
| Adjustments in respect of | - | - | 1.2 |
| previous periods | | | |
+--------------------------------+-----------+-----------+------------+
| Total deferred tax | 2.3 | 0.8 | 5.5 |
+--------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------+-----------+-----------+------------+
| Total tax charged in the | 7.4 | 1.7 | 18.5 |
| income statement | | | |
+--------------------------------+-----------+-----------+------------+
The tax charge is based on the estimated effective rate of tax on profit before
tax for the 2010 financial year of 34.14% (52 weeks to 26 December 2009 -
35.6%). Tax on losses from discontinued operations for the 24 weeks to 13 June
2009 was GBPnil.
(b) Tax relating to items credited to equity
+--------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to 13 | 26 |
| | 2010 | June | December |
| | unaudited | 2009 | 2009 |
| | GBPm | unaudited | audited |
| | | GBPm | GBPm |
+--------------------------------+-----------+-----------+------------+
| Deferred tax | | | |
+--------------------------------+-----------+-----------+------------+
| Actuarial gains/(losses) on | 2.6 | (5.3) | (24.4) |
| pension scheme | | | |
+--------------------------------+-----------+-----------+------------+
| Share schemes | 0.3 | (0.1) | (2.1) |
+--------------------------------+-----------+-----------+------------+
| Total tax charged/(credited) | 2.9 | (5.3) | (26.5) |
| to statement of recognised | | | |
| income and expense | | | |
+--------------------------------+-----------+-----------+------------+
9 Earnings per share
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| | 24 weeks to 12 June 2010 | | 24 weeks to 13 June 2009 | | 52 weeks to 26 December |
| | unaudited | | unaudited | | 2009 |
| | | | | | audited |
+-------------------------+--------------------------------+-+--------------------------------+-+--------------------------------+
| | Earnings | Weighted | Earnings | | Earnings | Weighted | Earnings | | Earnings | Weighted | Earnings |
| | GBPm | average | per | | GBPm | average | per | | GBPm | average | per |
| | | number | share | | | number | share | | | number | share |
| | | of | p | | | of | p | | | of | p |
| | | shares | | | | shares | | | | shares | |
| | | m | | | | m | | | | m | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| From continuing | | | | | | | | | | | |
| operations | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Basic earnings per | 14.2 | 605.0 | 2.3 | | 3.0 | 602.5 | 0.5 | | 50.1 | 602.8 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Effect of dilutive | - | 0.7 | - | | - | 7.1 | - | | - | 3.2 | - |
| share options | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Diluted earnings per | 14.2 | 605.7 | 2.3 | | 3.0 | 609.6 | 0.5 | | 50.1 | 606.0 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| | | | | | | | | | | | |
| From discontinued | | | | | | | | | | | |
| operations | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Basic loss per share | - | 605.0 | - | | (4.4) | 602.5 | (0.7) | | (4.4) | 602.8 | (0.7) |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Effect of dilutive | - | 0.7 | - | | - | 7.1 | - | | - | 3.2 | - |
| share options | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Diluted loss per share | - | 605.7 | - | | (4.4) | 609.6 | (0.7) | | (4.4) | 606.0 | (0.7) |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| | | | | | | | | |
| From continuing and discontinued operations | | | | | | | | |
+----------------------------------------------------------+-+----------+----------+----------+-+----------+----------+----------+
| Basic earnings/(loss) | 14.2 | 605.0 | 2.3 | | (1.4) | 602.5 | (0.2) | | 45.7 | 602.8 | 7.6 |
| per share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Effect of dilutive | - | 0.7 | - | | - | 7.1 | - | | - | 3.2 | (0.1) |
| share options | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Diluted earnings/(loss) | 14.2 | 605.7 | 2.3 | | (1.4) | 609.6 | (0.2) | | 45.7 | 606.0 | 7.5 |
| per share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| | | | | | | | | |
| From continuing operations, excluding exceptional | | | | | | | | |
| items | | | | | | | | |
+----------------------------------------------------------+-+----------+----------+----------+-+----------+----------+----------+
| Basic earnings per | 14.2 | 605.0 | 2.3 | | 3.0 | 602.5 | 0.5 | | 50.2 | 602.8 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Effect of dilutive | - | 0.7 | - | | - | 7.1 | - | | - | 3.2 | - |
| share options | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Diluted earnings per | 14.2 | 605.7 | 2.3 | | 3.0 | 609.6 | 0.5 | | 50.2 | 606.0 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| | | | | | | |
| From continuing and discontinued operations, excluding | | | | | | |
| exceptional items | | | | | | |
+-----------------------------------------------------------------------+----------+----------+-+----------+----------+----------+
| Basic earnings per | 14.2 | 605.0 | 2.3 | | 3.0 | 602.5 | 0.5 | | 50.2 | 602.8 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Effect of dilutive | - | 0.7 | - | | - | 7.1 | - | | - | 3.2 | - |
| share options | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
| Diluted earnings per | 14.2 | 605.7 | 2.3 | | 3.0 | 609.6 | 0.5 | | 50.2 | 606.0 | 8.3 |
| share | | | | | | | | | | | |
+-------------------------+----------+----------+----------+-+----------+----------+----------+-+----------+----------+----------+
10 Property, plant and equipment
During the period, the Group spent GBP6.4m on additions to property, plant and
equipment (24 weeks to 13 June 2009 - GBP3.6m; 52 weeks to 26 December 2009 -
GBP7.5m). It also disposed of property, plant and equipment with a net book
value of GBPnil (24 weeks to 13 June 2009 - GBP0.4m; 52 weeks to 26 December
2009 - GBP0.6m) for proceeds of GBPnil (24 weeks to 13 June 2009 - GBPnil; 52
weeks to 26 December 2009 - GBP0.2m).
There are non-cancellable commitments to purchase property, plant and equipment
of GBP3.5m (24 weeks to 13 June 2009 - GBP0.5m; 52 weeks to 26 December 2009 -
GBP0.5m) at the current period end.
11 Retirement benefit obligations
(a) Total amounts charged in respect of defined pensions in the period
+--------------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to | 26 |
| | 2010 | 13 | December |
| | unaudited | June | 2009 |
| | GBPm | 2009 | audited |
| | | unaudited | GBPm |
| | | GBPm | |
+--------------------------------------+-----------+-----------+------------+
| Charged to the income statement | | | |
+--------------------------------------+-----------+-----------+------------+
| Defined benefit schemes - current | 3.5 | 3.2 | 6.9 |
| service cost and total operating | | | |
| charge | | | |
+--------------------------------------+-----------+-----------+------------+
| Defined benefit schemes - net | 2.4 | 3.7 | 8.0 |
| finance charge | | | |
+--------------------------------------+-----------+-----------+------------+
| Total net amount charged to profit | 5.9 | 6.9 | 14.9 |
| before tax | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
+--------------------------------------+-----------+-----------+------------+
| Charged to equity | | | |
+--------------------------------------+-----------+-----------+------------+
| Defined benefit schemes - net | 6.8 | 13.4 | 62.6 |
| actuarial losses, net of deferred | | | |
| tax | | | |
+--------------------------------------+-----------+-----------+------------+
(b) Other information - defined benefit pension schemes
The most recent actuarial valuation was carried out at 6 April 2008 by the
scheme actuary. The actuary advising the Group has subsequently rolled forward
this valuation to 12 June 2010 and restated the results onto a basis consistent
with market conditions at that date. The pension deficit has decreased over the
24 weeks ended 12 June 2010. The following summary information analyses the
main changes in greater detail.
Key assumptions used in the valuation of the schemes
+----------------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to | 26 |
| | 2010 | 13 | December |
| | unaudited | June | 2009 |
| | | 2009 | audited |
| | | unaudited | |
+----------------------------------------+-----------+-----------+------------+
| Rate of increase of pensions in | | | |
| payment: | | | |
+----------------------------------------+-----------+-----------+------------+
| Pensions with guaranteed increases | 3.25% | 3.00 | 3.55 |
| (i.e. most of the pre-1997 pensions) | | | |
+----------------------------------------+-----------+-----------+------------+
| Pensions with increases capped at the | 3.25% | 3.60 | 3.55 |
| lower of LPI and 5% | | | |
+----------------------------------------+-----------+-----------+------------+
| Pensions with increases capped at the | 2.50% | 2.50 | 2.50 |
| lower of LPI and 2.5% | | | |
+----------------------------------------+-----------+-----------+------------+
| Rate of increase in salaries | 4.25% | 4.60 | 4.55 |
+----------------------------------------+-----------+-----------+------------+
| Inflation assumption | 3.25% | 3.60 | 3.55 |
+----------------------------------------+-----------+-----------+------------+
| Expected return on scheme assets | 6.79% | 6.35 | 6.79 |
| (weighted average) | | | |
+----------------------------------------+-----------+-----------+------------+
| Discount rate | 5.55% | 6.60 | 5.65 |
+----------------------------------------+-----------+-----------+------------+
Balance sheet
Movements in the deficit during the period were as follows:
+----------------------------------------+-----------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to | 26 |
| | 2010 | 13 | December |
| | unaudited | June | 2009 |
| | | 2009 | audited |
| | | unaudited | |
+----------------------------------------+-----------+-----------+------------+
| Deficit at start of period | (196.3) | (122.2) | (122.2) |
+----------------------------------------+-----------+-----------+------------+
| Current service cost | (3.5) | (3.2) | (6.9) |
+----------------------------------------+-----------+-----------+------------+
| Employer contributions | 16.7 | 16.6 | 27.8 |
+----------------------------------------+-----------+-----------+------------+
| Other finance charge | (2.4) | (3.7) | (8.0) |
+----------------------------------------+-----------+-----------+------------+
| Actuarial gains/(losses) gross of | 9.4 | (18.7) | (87.0) |
| deferred tax | | | |
+----------------------------------------+-----------+-----------+------------+
| Deficit at end of period | (176.1) | (131.2) | (196.3) |
+----------------------------------------+-----------+-----------+------------+
Statement of comprehensive income
Amounts taken to equity via the statement of comprehensive income in respect of
the Group's defined benefit schemes are shown below.
+----------------------------------------+----------+---------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 | weeks | to |
| | June | to | 26 |
| | 2010 | 13 | December |
| | % | June | 2009 |
| | | 2009 | % |
| | | % | |
+----------------------------------------+----------+---------+------------+
| Actuarial (loss)/gain on scheme assets | (9.7) | (0.7) | 62.1 |
+----------------------------------------+----------+---------+------------+
| Actuarial gain/(loss) on scheme | 19.1 | (18.0) | (149.1) |
| liabilities | | | |
+----------------------------------------+----------+---------+------------+
| Total actuarial gain/(loss) before tax | 9.4 | (18.7) | (87.0) |
+----------------------------------------+----------+---------+------------+
12 Provisions
+------------------------+-----------+------------+--------+
| | Property | Other | Total |
| | provision | provisions | GBPm |
| | GBPm | GBPm | |
+------------------------+-----------+------------+--------+
| At 26 December 2009 - | 84.4 | 2.4 | 86.8 |
| audited | | | |
+------------------------+-----------+------------+--------+
| Additional provision | 5.1 | 0.7 | 5.8 |
| in the period | | | |
+------------------------+-----------+------------+--------+
| Utilisation of | (21.7) | (0.8) | (22.5) |
| provision in the | | | |
| period | | | |
+------------------------+-----------+------------+--------+
| At 12 June 2010 - | 67.8 | 2.3 | 70.1 |
| unaudited | | | |
+------------------------+-----------+------------+--------+
The property provision mainly covers onerous leases. For any such leases, the
Group provides for any shortfall between rent payable and rent receivable. The
provision is based on the period until the end of the lease, or until the Group
can cover the shortfall by subletting, assigning or surrendering the lease.
None of the provisions are short term. The property provision also includes
amounts for any related shortfalls in business rates on these properties and for
dilapidations.
During the current period, the property provision has been increased by GBP0.1m
arising from an unwinding of the discount rate over time. None of this amount
relates to a change in the discount rate. This amount is shown as a finance
charge in note 7. The amount of the expected future cash flows has been
adjusted to reflect the expected range of possibilities and, as the outflows
under this provision are expected to take place over a number or years, the
provision has been discounted to its present value.
Other provisions relate to amounts due in respect of contractual terminations.
13 Related party transactions
Transactions between Group companies, which are related parties, have been
eliminated on consolidation and are therefore not disclosed. The only other
transactions which fall to be treated as related party transactions are those
relating to the remuneration of key management personnel, which are not
disclosed in the Half Yearly Report, and which will be disclosed in the Group's
next Annual Report.
14 Notes to the cash flow statement
(a) Net cash flows from operating activities
+--------------------------------------------+------------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 June | weeks | to 26 |
| | 2010 | to | December |
| | unaudited | 13 June | 2009 |
| | GBPm | 2009 | audited |
| | | unaudited | GBPm |
| | | GBPm | |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| Group operating profit before tax and | 24.5 | 10.0 | 79.4 |
| interest - continuing operations | | | |
+--------------------------------------------+------------+-----------+------------+
| Group operating profit before tax and | - | (4.4) | (4.4) |
| interest - discontinued operations | | | |
+--------------------------------------------+------------+-----------+------------+
| Group operating profit before tax and | 24.5 | 5.6 | 75.0 |
| interest | | | |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| Adjustments for: | | | |
+--------------------------------------------+------------+-----------+------------+
| Depreciation and amortisation included in | 7.7 | 8.1 | 18.1 |
| operating profit | | | |
+--------------------------------------------+------------+-----------+------------+
| Share based payments charge/(credit) | 1.6 | 1.8 | (0.4) |
+--------------------------------------------+------------+-----------+------------+
| Profit on disposal of property, plant and | - | - | 0.1 |
| equipment and intangible assets | | | |
+--------------------------------------------+------------+-----------+------------+
| Other exceptional items before tax | - | 4.4 | 4.4 |
+--------------------------------------------+------------+-----------+------------+
| Operating cash flows before movements in | 33.8 | 19.9 | 97.2 |
| working capital | | | |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| Movements in working capital and | | | |
| exceptional items | | | |
+--------------------------------------------+------------+-----------+------------+
| Decrease in stock | 3.0 | 21.8 | 35.0 |
+--------------------------------------------+------------+-----------+------------+
| (Increase)/decrease in trade and other | (7.0) | (0.9) | 3.8 |
| receivables | | | |
+--------------------------------------------+------------+-----------+------------+
| Decrease in trade and other payables and | (9.3) | (13.5) | (38.3) |
| provisions | | | |
+--------------------------------------------+------------+-----------+------------+
| Difference between pensions operating | (13.2) | (13.4) | (20.9) |
| charge and cash paid | | | |
+--------------------------------------------+------------+-----------+------------+
| Net cash flow - exceptional items | - | (0.4) | (0.4) |
+--------------------------------------------+------------+-----------+------------+
| | (26.5) | (6.4) | (20.8) |
+--------------------------------------------+------------+-----------+------------+
| Cash generated from operations | 7.3 | 13.5 | 76.4 |
+--------------------------------------------+------------+-----------+------------+
| Tax paid | (5.2) | - | (5.0) |
+--------------------------------------------+------------+-----------+------------+
| Net cash flows from operating activities | 2.1 | 13.5 | 71.4 |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| Net cash flows from operating activities | | | |
| comprises: | | | |
+--------------------------------------------+------------+-----------+------------+
| Continuing operating activities | 2.1 | 13.9 | 71.8 |
+--------------------------------------------+------------+-----------+------------+
| Discontinued operating activities | - | (0.4) | (0.4) |
+--------------------------------------------+------------+-----------+------------+
| | 2.1 | 13.5 | 71.4 |
+--------------------------------------------+------------+-----------+------------+
(b) Reconciliation of movement in net debt
+--------------------------------------------+------------+-----------+------------+
| | 24 weeks | 24 | 52 weeks |
| | to 12 June | weeks | to 26 |
| | 2010 | to | December |
| | unaudited | 13 June | 2009 |
| | GBPm | 2009 | audited |
| | | unaudited | GBPm |
| | | GBPm | |
+--------------------------------------------+------------+-----------+------------+
| Net funds/(debt) at start of period | 2.4 | (61.2) | (61.2) |
+--------------------------------------------+------------+-----------+------------+
| Net increase/(decrease) in cash and cash | 3.4 | (2.8) | (7.2) |
| equivalents | | | |
+--------------------------------------------+------------+-----------+------------+
| Decrease in investments | (0.3) | (0.3) | (0.6) |
+--------------------------------------------+------------+-----------+------------+
| (Increase)/decrease in bank borrowings | (9.0) | 13.2 | 69.7 |
+--------------------------------------------+------------+-----------+------------+
| Decrease in finance leases | 0.8 | 0.8 | 1.7 |
+--------------------------------------------+------------+-----------+------------+
| Net (debt)/funds at end of period | (2.7) | (50.3) | 2.4 |
+--------------------------------------------+------------+-----------+------------+
| | | | |
+--------------------------------------------+------------+-----------+------------+
| Represented by: | | | |
+--------------------------------------------+------------+-----------+------------+
| Cash and cash equivalents | 17.4 | 18.4 | 14.0 |
+--------------------------------------------+------------+-----------+------------+
| Investments | 0.4 | 1.0 | 0.7 |
+--------------------------------------------+------------+-----------+------------+
| Bank loans | (19.5) | (67.0) | (10.5) |
+--------------------------------------------+------------+-----------+------------+
| Finance leases | (1.0) | (2.7) | (1.8) |
+--------------------------------------------+------------+-----------+------------+
| | (2.7) | (50.3) | 2.4 |
+--------------------------------------------+------------+-----------+------------+
(c) Analysis of net debt
+----------------------+-------------+-------------+--------+----------+--------------+
| | Cash and | Current | Bank | Finance | Net |
| | cash | asset | loans | leases | (debt)/funds |
| | equivalents | investment | GBPm | GBPm | GBPm |
| | GBPm | GBPm | | | |
+----------------------+-------------+-------------+--------+----------+--------------+
| At 26 December 2009 | 14.0 | 0.7 | (10.5) | (1.8) | 2.4 |
| - audited | | | | | |
+----------------------+-------------+-------------+--------+----------+--------------+
| Cash flow | 3.4 | (0.3) | (9.0) | 0.8 | (5.1) |
+----------------------+-------------+-------------+--------+----------+--------------+
| At 12 June 2010 - | 17.4 | 0.4 | (19.5) | (1.0) | (2.7) |
| unaudited | | | | | |
+----------------------+-------------+-------------+--------+----------+--------------+
Closing bank loans at 12 June 2010 comprise GBP18.4m of non-current liabilities
and GBP1.1m of current liabilities.
Closing finance leases at 12 June 2010 comprise GBP0.2m of non-current
liabilities and GBP0.8m of current liabilities.
CAUTIONARY STATEMENT
Certain statements in this Half Yearly Report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these expectations will
prove to have been correct. Because these statements contain risks and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. We undertake no obligation to
update any forward-looking statements whether as a result of new information,
future events or otherwise.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in accordance
with IAS 34 'Interim Financial Reporting';
(b) the Half Yearly Report includes a fair review of the information required by
DTR 4.2.7R (indication of important events during the first 24 weeks and
description of principal risks and uncertainties for the remaining 28 weeks of
the year); and
(c) the Half Yearly Report includes a fair review of the information required by
DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
The directors are responsible for the maintenance and integrity of the corporate
and financial information included in the company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial
information differs from legislation in other jurisdictions.
By order of the Board
Matthew Ingle Mark
Robson
Chief Executive Officer Chief Financial
Officer
20 July 2010
INDEPENDENT REVIEW REPORT TO GALIFORM PLC
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the 24 weeks ended 12 June
2010 which comprises the income statement, the statement of comprehensive
income, the balance sheet, the statement of changes in equity, the cash flow
statement and related notes 1 to 14. We have read the other information
contained in the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity" 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 half-yearly financial report is the responsibility of, and has been approved
by the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdoms' Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the 24 weeks ended 12 June 2010 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Registered Auditor
London
20 July 2010
FINANCIAL CALENDAR
2010
Interim Management Statement 11 November 2010
End of financial year 25 December 2010
2011
2010 Preliminary Results 3 March 2011
Interim Management Statement 28 April 2011 (provisional)
Half Yearly Report 21 July 2011 (provisional)
Interim Management Statement 10 November 2011 (provisional)
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR RMMFTMBATBTM
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