Final Results - Amendment

RNS Number : 3561W

Altitude Group PLC

28 July 2009

 



ALTITUDE GROUP PLC

('Altitude' or the 'Company')

CORRECTION : Preliminary results for the year ended 31 December 2008

Correction - This announcement replaces the RNS announcement 95530 released at 7am on 17 March 2009 entitled 'Unaudited Preliminary Results for the year to 31 December 2008'.

In the announcement dated 29 June 2009, Altitude announced that it was undertaking a review of the preliminary results for the year ended 31 December 2008 and that as a consequence the Company no longer believed it would be able to publish its Annual Report and Accounts by the 30 June 2009 as required by the AIM Rules. Consequently the Company's shares were suspended from trading on AIM on 29 June 2009. The Annual Report and Accounts has now been published and as such Altitude's shares have resumed to trading on AIM as from 7 a.m. this morning.

The preliminary results published on 17 March 2009 showed a profit before tax of £338k whereas the final results show a loss before tax of £33k. The adjustment is due to a mixture of changes in provisions (including stock), estimates, restating accounting policies and correcting errors. There has been an increase to the cost of sales of £201k, primarily due to the re-instatement of stock provisions, and an increase in administrative costs of £170k primarily being a combination of reversing incorrect prepayments and  accrual releases and the reinstatement of credit balances in the debtors ledger.

Final Results for the year to 31 December 2008

Notice of annual general meeting

Altitude Group plc ('Altitude', the 'Group' or the 'Company') announces its Audited results for the year to 31 December 2008 and the publication of the Annual Report and Accounts.

Highlights

• Group sales reduced by 8.6% to £18.0m (2007: £19.7m)

• Profit after taxation of £0.1m (2007: loss £0.4m)

• Operating profit* £0.5m (2007: £0.2m)

• Account wins in all business units despite challenging economic climate

• Closing net cash of £0.43 (2007: £0.65)

* before non-recurring items, amortisation of customer related intangibles and share based payment charges

Colin Cooke, Chairman commented:  

'I am pleased that the Group has returned to modest profitability and that the restructuring programme has realised significant cost reductions. Our information and exhibitions businesses have started 2009 well but it has become difficult to predict the level of demand that we will experience from corporate customers in our promotional marketing businesses. We continue to monitor our cost base ready to react quickly to any further softening in our markets to preserve profitability and cash.'

The Annual Report and Accounts have been sent to shareholders and are available from the Company's website www.altitudeplc.com.

Enquiries:

Altitude Group plc 

Colin Cooke, Chairman      0870 224 6677 

Martin Varley, Chief Executive Officer    07912 599 012 

Daniel Stewart & Company plc 

Simon Leathers/Charlotte Stranner/Simon Starr    020 7776 6550 

Chairman's Statement

Performance overview

Group sales reduced by 8.6% to £18.0m (2007: £19.7m). This decline was entirely in the main end user business and the vast proportion is attributable to one major client in the financial sector in the second half of the year. We reacted quickly to this volume reduction with a cost reduction programme and a renewed business development initiative that resulted in new client wins that should contribute in 2009 and beyond. We can report solid revenue growth in our trade supplier business, AdProducts, and our Information and Exhibitions businesses.

The Group has returned to a small profit for the first time in three years with a profit after taxation of £0.1m (2007: loss £0.4m). Operating profit before non-recurring items, amortisation of customer related intangibles and share based payment charges was £0.5m (2007: £0.2m).

The Group balance sheet remains strong and was debt free at 31 December 2008 with a net cash balance of £0.4m. Underlying cash flow before capital investment and taxation cash outflows was in line with operating profitability. The Group's working capital profile has remained strong despite the supplier pressures resultant from the current general economic situation.

The Company has renewed its banking facilities for a further year and with cash at bank of £0.4m and facilities of £0.9m, the Board considers that the Company is securely funded.

Strategy

The Group's core strategy is simple and is built on three objectives:-

• Information and Exhibitions offers an unrivalled set of tools for the promotional products industry and this will be completed, enhanced and in due course offered outside the UK where the market opportunity is substantially greater;  

• Promotional Marketing will further improve customer service and continue to develop more efficient processes in the corporate market; and 

• The Group will continue to pursue and invest in opportunities that provide the highest return for an acceptable risk.

Promotional Marketing

Promotional Marketing made an operating profit before non-recurring items, amortisation of customer related intangibles and share based payment charges of £0.9m in 2008 (2007: £0.9m). AdProducts and Distinctive Ideas both achieved double digit revenue growth in the year. These strong results were offset by weaker results in the main Dowlis Corporate Solutions business where we further rationalised the cost base and operations to bring it under one management team.

Information and Exhibitions

Information and Exhibitions made an operating profit before software development costs, non-recurring items, amortisation of customer related intangibles and share based payment charges of £0.3m in 2008 (2007: £0.1m), with profits in catalogues and exhibitions reinvested in software and the magazine. Our software, PromoServe, continued to gain market share to become the market leading choice for distributors and suppliers alike. The Trade Only national exhibition performed exceptionally well in January 2009, continuing the excellent progress that it has made since its inception only 3 years ago.

Corporate activity

Whilst we look at further acquisitions on an opportunistic basis, our focus is primarily on the development and profitability of the existing Group.

We supplemented our own on-line business with the acquisition of the trade and selected assets of Silent Kite Limited, a specialist on-line distributor, during September 2008. We paid approximately £0.3m for this opportunity to accelerate our growth in this channel. 

The Company changed its name to Altitude Group plc during the year and we believe the underlying businesses are benefitting from the clearer brand identities that this change has allowed.

People

The pace of change in the Group creates many opportunities and also places great demands on our people. I would like to take this opportunity to thank all of our staff for their hard work and achievements in 2008.

Altitude has an experienced and dedicated executive and non-executive team and I am delighted to see Martin Varley step back into the role of Chief Executive Officer, replacing Craig Slater and for David Smith to replace Tim Sykes as Group Finance Director.

Outlook

Following a review of the 2008 un audited preliminary figures at the request of the incoming CEO and FD, the board has decided that the restatement of the preliminary results for the year ended 31st December 2008 is necessary. These adjustments are reflected in these audited statutory accounts.

The Group has returned a small profit for the last financial year and the restructuring programme continues to reduce the cost base in line with reductions in demand, particularly in relation to our distributor businesses. Our information and exhibitions businesses have started 2009 ahead of plan.

It has become difficult to predict the level of demand that we will experience from corporate customers in our promotional marketing businesses due to current market conditions. We continue to monitor our cost base ready to react quickly to any further softening in our markets to preserve profitability and cash.

Colin Cooke,

Chairman

Operating and Financial Review 

Operating review

Promotional Marketing

	2008 £m	2007 £m
Sales	15.9	18.3
Operating profit before non-recurring items, amortisation of customer related intangibles and share based payment charges	0.9	0.9
Operating profit after non-recurring items, amortisation of customer related intangibles and share based payment charges	0.7	0.4
Net assets	4.8	5.1

Promotional Marketing includes our trade supplier AdProducts, our marketing design consultancy Touchpaper and our end user businesses Dowlis Corporate Solutions, Ross and Distinctive Ideas. The end user businesses form the largest part of the Group, with £13.6m revenues in 2008 (£16.4m in 2007).

AdProducts grew sales in 2008, expanding its product offering and extending its customer base as planned. This business now has over 400 active distributor customers out of a total market of approximately 3,500. The business is managed separately from other activities to avoid competitive conflicts.

The main end user business, Dowlis Corporate Solutions, suffered with declining volumes as the impact of the global economic slow down took its toll but was successful in winning a number of key accounts in the second half that should contribute in 2009. During 2008, we further rationalised operations and the business is now managed as one unit; previously being split between Byfleet and Manchester. Ross Promotional contributed positively again, and Distinctive Ideas improved on its 2007 performance through volume increases increased sales albeit primarily from a customer that is no longer operating in this sector which resulted in revenues of £1.7m (2007: £1.1m). Without the benefit of this customer, sales would have been lower at only £0.6m.

In each of these businesses, improved efficiency and additional sales have had a positive effect on profitability. We are mindful of further volume reductions and are prepared to take the corrective action quickly to maintain profitability as far as is possible.

Cash performance improved modestly following the poor performance of Dowlis Corporate Solutions in 2007 being reversed in 2008. Its business model is typically cash generative, with strong credit control being a key factor which balanced somewhat the poor stock management in the AdProducts business that resulted in higher stocks than planned.

Information and Exhibitions

	2008 £m	2007 £m
Sales	2.9	2.4
Operating profit before non-recurring items, amortisation of customer related intangibles and share based payment charges	0.3	0.1
Operating profit / (loss) after non-recurring items, amortisation of customer related intangibles and share based payment charges	0.3	-
Net capital employed	0.1	(0.5)

Information and Exhibitions offers a collection of tools to the promotional products industry, suppliers and distributors alike. These tools are inter-related but can be used individually and each one can improve efficiency and increase performance.

The Trade Only national exhibition in 2008 was a success on all counts, improving on its strong performance in 2007. Exhibitor and visitor numbers both grew in line with our expectations and customer feedback on the overall exhibition experience was exceptional. The exhibition has rapidly become the leading event in the UK industry and has been profitable from since inception, only three years ago.

Spectrum and Envoy catalogues are two of the top four leading offerings in the industry. These catalogues offer suppliers and distributors an effective showpiece for their products and creativity, enabling them to benefit from a comprehensive marketing tool without all the costs and resources required to produce their own.

PromoServe is an ERP software package and Trade Only Search is an on-line product portal offering. PromoServe has continued to attract new users. The rental model used by this company leads to a good recurring revenue base, which grew to £70,000 per month (2007: £55,000 per month). Operations in this business include development, installation and support alongside sales and marketing

Our magazine, Promotional Product Distributor (PPD), is published bi-monthly and has over 8,000 readers and is one of the most widely read publications in the industry.

Each element of this division grew sales in 2008. PromoServe reached a monthly break-even position during the second half of the year. Although they each have a clear cash cycle, leading to capital use at certain times, these businesses are not significant users of our capital.

Financial review

Results for the year and key performance indicators

Group revenues decreased by 8.6% to £18.0m (2007: £19.7m). Gross margin improved to 41.3% (2007: 35.4%) as a result of a mix shift toward our stronger margin business units. With total operating costs flat at £7.4m (2007: £7.4m) the Group posted a profit after taxation of £0.1m (2007: loss £0.4m). Operating costs included £0.5m (2007: £0.6m) non-recurring administrative expenses, amortisation of intangible assets and share based payment charges taking operating profit before these costs to £0.5m (2007: £0.2m).

Acquisitions

During the year, the Group acquired the trade and selected assets of Silent Kite Limited, a small on-line distributor, for £0.3m. This business has been subsumed within the on-line operations of the Group. We have attributed £150,000 of value to customer related intangibles, and have assumed a five year life. The balance has been recognised as goodwill with no impairment as at 31 December 2008.

Taxation

The Group recorded a tax credit during the year following the release of prior year provisions and our change in accounting policy on revenue recognition of our catalogue business.

Earnings per share

Basic earnings per share improved to 0.28p (2007: loss per share 1.05p).

Cash flow

The Group has reported a net cash inflow from operations of £0.1m which is in line with the reported operating profit of the Group. Cash flows reflect higher than planned inventory of approximately £0.2m within the AdProducts division, and an increased level of supplier pressure following the difficulties in the general economic environment which we estimate at approximately £0.3m. Our underlying cash performance has been strong during the year following the cleansing of our trade receivables ledgers.

The Group benefited in the year from only minor capital investment of £0.1m, funded in part by the inception of new hire purchase contracts.

Treasury

The Group continues to manage the cash position in a manner designed to maximise interest income, whilst at the same time minimising any risk to these funds. Where there are surplus cash funds, these are deposited with commercial banks that meet credit criteria approved by the Board. At 31 December 2008, the Group had £0.4m on short term deposits (2007: £0.7m).

Prior year restatements

The Group is required to recognise a prior year restatement in respect of four matters. The nature of these matters is set out in detail at Note 1.

Martin Varley

Chief Executive Officer

David Smith

Group Finance Director and Company

Secretary

Consolidated Income Statement for the year ended 31 December 2008

			Restated (Note 3)
		2008	2007
	Note	£000	£000
Revenue
- continuing		17,972	19,664
Cost of sales		(10,556)	(12,687)
		-------------	-------------
Gross profit		7,416	6,977
Administrative costs		(7,451)	(7,356)
		-------------	-------------
Operating profit before amortisation of intangible customer related assets, non-recurring administrative expenses and share based payment charges		450	171
Amortisation of intangible customer related assets		(95)	(84)
Non-recurring administrative expenses	4	(346)	(429)
Share based payment charges		(44)	(37)
		-------------	-------------
Operating profit / ( loss)		(35)	(379)
Finance income		7	2
Finance expenses		(5)	(55)
		-------------	-------------
Profit / (loss) before taxation		(33)	(432)
Taxation		140	31
		-------------	-------------
Profit / (loss) attributable to the equity shareholders of the Company		107	(401)
		-------------	-------------
Earnings / (loss) per ordinary share attributable to the equity shareholders of the Company :
- Basic and Diluted	5	0.28p	(1.05p)
		-------------	-------------

Consolidated Balance Sheet as at 31 December 2008

			Restated (Note 3)
		2008	2007
		£000	£000
Non-current assets
Property, plant & equipment		721	942
Customer related intangible assets		174	119
Goodwill		2,621	2,296
		-------------	-------------
		3,516	3,357
		-------------	-------------
Current assets
Inventories		1,825	1,756
Trade and other receivables		3,964	5,093
Current taxes		-	290
Cash and cash equivalents		431	652
		-------------	-------------
		6,220	7,791
		-------------	-------------
Total assets		9,736	11,148
		-------------	-------------
Current liabilities
Trade and other payables		(4,392)	(5,696)
Current taxes		-	(431)
		-------------	-------------
		(4,392)	(6,127)
		-------------	-------------
Non-current liabilities
Trade and other payables		(59)	(20)
Deferred consideration		(297)	(147)
Deferred tax liabilities		(78)	(95)
		-------------	-------------
		(434)	(262)
		-------------	-------------
Total liabilities		(4,826)	(6,389)
		-------------	-------------
Net assets		4,910	4,759
		-------------	-------------
Equity attributable to equity holders of the Company
Called up share capital		153	153
Share premium account		5,293	5,293
Retained earnings		(536)	(687)
		-------------	-------------
Total equity		4,910	4,759
		-------------	-------------

Statement of Changes in Equity

	Share capital	Share premium	Retained earnings
	£000	£000	£000
At 1 January 2007 (as restated - see note 3)	153	5,293	(323)
Result for the period (as restated - see note 3)	-	-	(401)
Share based payment charges	-	-	37
	-------------	-------------	-------------
At 31 December 2007 (as restated)	153	5,293	(687)
Result for the period	-	-	107
Share based payment charges	-	-	44
	-------------	-------------	-------------
At 31 December 2008	153	5,293	(536)
	-------------	-------------	-------------

Consolidated Cash Flow Statement for the year ended 31 December 2008

			Restated (Note 3)
		2008	2007
		£000	£000
Operating activities
Profit /(loss) for the period		107	(401)
Impairment of goodwill		-	104
Amortisation of intangible assets		95	84
Depreciation		343	241
Net finance expense / (income)		(2)	53
Income tax charge / (credit)		(140)	(31)
Share based payment charges		44	37
		-------------	-------------
Operating cash inflow before changes in working capital		447	87
Movement in inventories		(69)	(72)
Movement in trade and other receivables		1,129	122
Movement in trade and other payables		(1,307)	978
		-------------	-------------
Operating cash inflow from operations		200	1,115
Interest received		7	2
Interest paid		(5)	(55)
Income tax received / (paid)		(60)	147
		-------------	-------------
Net cash flow from operating activities		142	1,209
		-------------	-------------
Investing activities
Purchase of plant and equipment		(122)	(257)
Acquisition of subsidiaries		(283)	(104)
		-------------	-------------
Net cash flow from investing activities		(405)	(361)
		-------------	-------------
Financing activities
Net proceeds / (payments) of hire purchase contracts		42	(17)
		-------------	-------------
Net cash flow from financing activities		42	(17)
		-------------	-------------
Net (decrease) / increase in cash and cash equivalents		(221)	831
Cash and cash equivalents at the beginning of the year		652	(179)
		-------------	-------------
Cash and cash equivalents at the end of the year		431	652
		-------------	-------------

  Notes

1. The financial information set out herein does not constitute the Group's statutory accounts for the year ended 31 December 2008 or the year ended 31 December 2007. The comparative information in respect of the year ended 31 December 2007 has been derived from the audited statutory accounts for the year ended on that date upon which an unqualified audit opinion was expressed and which did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The audited accounts have been posted to all shareholders and are available on request by contacting the Company Secretary at the Company's Registered Office.

2. Basis of preparation

   The Group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the European Union.  

   In the current year, the Group has adopted IFRS7 'Financial Instruments: Disclosures' for the first time. As IFRS7 is a disclosure standard, there is no impact of that change in accounting policy on the financial results presented for the year ended 31 December 2007. Full details of the change will be disclosed in the statutory accounts for the year ended 31 December 2008.

   The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

   The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3. Prior year restatements

   In accordance with IAS8 'Accounting Policies, Changes in Accounting Estimates and Errors', the Group has identified the need to recognise a prior year restatement in respect of four matters. 

		As at 31 December 2007	At 1 January  2007
	Note	£000	£000
Duplicated sales invoices	a	146	-
Unrecognised trade payables	b	79	-
Revenue recognition	c	599	580
Client owned stock	d	44	-
		-------------	-------------
		868	580
		-------------	-------------

• During the year ended 31 December 2007 certain sales invoices were duplicated in error. The impact of this duplication was to increase revenues and profit for the year ended 31 December 2007 by £146,000 and to overstate net assets at that date by £146,000.  

• The net assets at 31 December 2007 did not recognise a liability in respect of trade payables at that date of £79,000. The impact was to overstate net assets as at 31 December 2007 and the profit for the year then ended by £79,000.

• Part of the Group's business includes the provision of certain catalogues for trade distributors. The production of these catalogues incorporates a consolidated effort by a number of different elements of the Group's overall operations. During the year, the Directors identified that the revenue recognition policy adopted by the various different elements of the Group's overall operations was not consistent with some operations recognising revenue during the current accounting period and some deferring revenue to future accounting periods. The Directors consider that the Group revenue recognition policy should be consistent and that revenue from the provision of the catalogues should be recognised in the accounting period in which the catalogues are actually provided. The impact of this restatement is to reduce net assets by £599,000 as at 31 December 2007 and to reduce profit for the year then ended by £19,000.

• Included within inventories as at December 2007 were items that were held on behalf of a client. These items are not assets of the company but had been valued in error. The impact of this restatement is to reduce both net assets at 31 December and profit for the year then ended by £44,000.

4.    Non-recurring administrative expenses

	2008	2007
	£000	£000
Termination payments	163	142
Non-recurring administrative expenses	183	-
Inventory impairment on specific product range	-	96
Provision for prior period rates	-	42
Aborted deal costs	-	45
Impairment of goodwill	-	104
	-----------	-----------
	346	429
	-----------	-----------

a.        The Group has incurred termination payments to certain of its employees beyond a normalised level.

b.    Non-recurring administrative expenses relate principally to the costs of those terminated employees whilst employed within the Group which, following the restructuring programme, will no longer be incurred.

c.    Provision was made for the impairment of an entire product line to its recoverable value during the year.

d.    The Group received notification regarding an assessment to business rates that had been undercharged during prior financial year periods. This amount of the assessment has been provided for in full.

e.    The Group incurred costs related to aborted acquisitions.

f.     The Group took an impairment charge against the goodwill acquired on Poyle Promotions.

     5.    Basic and diluted loss per ordinary share

The calculation of earnings per ordinary share is based on the profit or loss for the period and the weighted average number of equity voting shares in issue as follows. 

	2008	2007
Earnings (£000)	466	(391)
	-----------	-------------
Weighted average number of shares (number '000)	38,203	38,203
	-----------	-------------
Fully diluted average number of shares (number '000)	38,605	38,488
	-----------	-------------
Basic and diluted earnings / (loss) per ordinary share (pence)	0.28p	(1.05p)
	-----------	-------------

Altitude Group Plc

(Incorporated with limited liability in England and Wales with Company number 5193579)

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the annual general meeting of the above named Company will be held at Cobb House, 2 -4 Oyster Lane, Byfleet, Surrey KT14 7HQ on 24 August 2009 at 10 am for the following purposes: 

Ordinary Business 

Resolution 1 

To receive the Company's annual accounts for the financial year ended 31 December 2008 together with the last directors' report, the last directors' remuneration report and the auditors' report on those accounts. 

Resolution 2 

To re-elect Keith Willis, who retires by rotation pursuant to article 118 of the articles of association of the Company (the 'Articles') and who, being eligible, offers himself for re-election as a director. 

Resolution 3 

To approve the appointment of David Smith as a director of the Company in accordance with the Articles. 

Resolution 4 

To re-appoint KPMG UK LLP as auditors of the Company and to authorise the directors to fix their remuneration.

Special Business 

Resolution 5 

To consider and, if thought fit, pass the following resolution which will be proposed as an ordinary resolution: 

'THAT, in substitution for all existing and unexercised authorities and powers, the directors of the Company be and they are hereby generally and unconditionally authorised for the purpose of section 80 of the Companies Act 1985 (the 'Act') to exercise all or any of the powers of the Company to allot relevant securities (as defined in section 80(2) of the Act) up to an aggregate nominal value of £50,938 to such persons at such times and generally on such terms and conditions as the directors may determine (subject always to the articles of association of the Company) PROVIDED THAT this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting or on the date which is 6 months after the next accounting reference date of the Company (if earlier) save that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require relevant securities or equity securities (as the case may be) to be allotted after the expiry of such period and the directors of the Company may allot relevant securities or equity securities (as the case may be) in pursuance of such offer or agreement as if the authority conferred hereby had not expired.' 

Resolution 6 

To consider and, if thought fit, pass the following resolution which will be proposed as a special resolution: 

'THAT, subject to and conditional upon the passing of the resolution numbered [6] in the notice convening the meeting at which this resolution was proposed and in substitution for all existing and unexercised authorities and powers, the directors of the Company be and are hereby empowered pursuant to section 95 of the Act to allot equity securities (as defined in section 94 of the Act) pursuant to the authority conferred upon them by resolution 5 as if section 89(1) of the Act did not apply to any such allotment provided that this authority and power shall be limited to: 

(a)     the allotment of equity securities in connection with a rights issue or similar offer in favour of ordinary shareholders where the equity securities respectively attributable to the interest of all ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares held by them subject only to such exclusions or other arrangements as the directors of the Company may consider appropriate to deal with fractional entitlements or legal and practical difficulties under the laws of, or the requirements of any recognised regulatory body in any, territory; and 

(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £15,281, representing approximately 10% of the current issued share capital of the Company, 

and shall expire at the conclusion of the next annual general meeting or on the date which is 6 months after the next accounting reference date of the Company (if earlier) save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.'

REGISTERED OFFICE: Cobb House 2-4 Oyster Lane Byfleet, Surrey KT14 7HQ

BY ORDER OF THE BOARD David Smith 22 July 2009 Group Finance Director and Company Secretary

NOTES

1 A member of the Company entitled to attend and vote at the meeting convened by this notice is entitled to appoint one or more proxies to exercise any of his rights to attend, speak and vote at that meeting on his behalf. If a member appoints more than one proxy, each proxy must be entitled to exercise the rights attached to different shares. A proxy need not be a member of the Company. 

2 A proxy may only be appointed using the procedures set out in these notes and the enclosed proxy form. To appoint a proxy, a member must complete, sign and date the enclosed proxy form and deposit it at the office of the Company's Registrars, Neville Registrars Limited, at 18 Laurel Lane, Halesowen, West Midlands B63 3BR by 6pm on 21 August 2009. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be enclosed with the proxy form. 

3 In order to revoke a proxy appointment, a member must sign and date a notice clearly stating his intention to revoke his proxy appointment and deposit it at the the office of the Company's Registrars, Neville Registrars Limited, at 18 Laurel Lane, Halesowen, West Midlands B63 3BR by [time] on 22 August 2009. 

4 CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so in relation to the meeting, and any adjournment(s) thereof, by utilising the procedures described in the CREST Manual. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message must be transmitted so as to be received by the Company's registrars, Neville Registrars Limited, at 18 Laurel Lane, Halesowen, West Midlands B63 3BR (whose CREST ID is R023) by the latest time for receipt of proxy appointments specified in note 2 above. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 

5 Any corporation which is a member of the Company may authorise a person (who need not be a member of the Company) to attend, speak and vote at the meeting as the representative of that corporation. A certified copy of the board resolution of the corporation appointing the relevant person as the representative of that corporation in connection with the meeting must be deposited at the office of the Company's Registrars prior to the commencement of the meeting. 

6 In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that: (i) if a corporate shareholder has appointed the chairman of the meeting as its corporate representative to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate representative, a designated corporate representative will be nominated from those corporate representatives who attend and that designated corporate representative will vote on a poll. The other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. 

7 As permitted by regulation 41 of the Uncertificated Securities Regulations 2001, only those persons whose names are entered on the register of members of the Company at 6pm on 21 August 2009 shall be entitled to attend and vote in respect of the number of shares registered in their names at that time. Changes to entries on the register of members after that time shall be disregarded in determining the rights of any person to attend and/or vote at the meeting.

 

END

 

 

FR SEFFIWSUSEIW