Interim Results

RNS Number : 2402J

Anite PLC

01 December 2008

 



For immediate release                                    1st December 2008

ANITE PLC

Interim results for the six months ended 31 October 2008

Anite plc ('Anite' or 'the Company'), the international software and solutions company, today announces its interim results for the six months ended 31 October 2008.

Financial highlights (adjusted)1:

• Revenue of £47.4m (2007: £48.1m)

• Operating profit of £12.4m (2007: £8.7m)

• Operating margin of 26.2% (2007: 18.1%)

• EBITDA £15.3m (2007: £12.5m)

• Profit before tax of £10.9m (2007: £7.7m) after net finance charges of £1.5m (2007: £1.0m)

• Net cash of £41.5m (2007: net debt £22.8m)2 following repayment of £25.0m debt

• Interim dividend of 0.3p per share (2007: 0.275p)

• Proposed special dividend of 3.0p per share (c.£10.2m) and share consolidation 

• Share buyback of up to £10m over the next two years

• Basic earnings per share 2.3p (2007: 1.9p) 

Statutory results:

• Revenue from continuing operations £47.4m (2007: £48.9m)

• Profit after tax: £31.6m (2007: £4.8m) includes profit from discontinued operations of £29.8m

• Basic earnings per share from continuing and discontinued operations 9.5p (2007: 1.4p)

Operating highlights:

• Disposal of Public Sector completed on 31 October 2008

• Largest ever first half profits from Wireless

• Stable underlying performance from Travel excluding one-off customer impacts

• 68% of revenues now derived from international markets (Wireless 95%, Travel 24%)

• Order intake down to £40.9m (2007: £53.5m) reflecting XL Leisure administration and significant multi-year orders in prior period 

• Closing order book £62.5m (£64.1m)

Following completion of the disposal of Anite Public Sector on 31 October 2008, this report refers to the continuing businesses only (Wireless and Travel). The results of Public Sector are treated as discontinued operations in Anite's results.

1Continuing operations before disposed businesses, share based payments, amortisation of acquired intangible assets and restructuring costs.

2See note 8 for summary of net debt.

Clay Brendish, Chairman, said:

'We have announced separately today that Steve Rowley, our Chief Executive, has decided to step down from his position. Christopher Humphrey, our Group Finance Director, will be appointed Chief Executive.  A new Group Finance Director will be recruited as soon as possible. We thank Steve for his significant contribution to Anite and wish him well with his future plans.'

 'The sale of Anite Public Sector marked the end of a successful first half with a good trading performance and another phase completed in our transformation.  Wireless has been reinforced as the heart of our business and performed well in the first half.'

'The second half will not benefit from some of the one-off items that enhanced the first half performance. As a result our expectations for the year as a whole remain unchanged although we continue to monitor global economic conditions and their impact on our markets.'

For further information, please contact:
Anite plc	www.anite.com
Steve Rowley, Chief Executive Christopher Humphrey, Group Finance Director	01753 804000
Smithfield	020 7360 4900
Reg Hoare/Will Henderson

An analysts' meeting will be held today at 9.15 for 9.30 a.m. at the offices of JP Morgan Cazenove, 20 Moorgate, EC2

Print resolution images are available for the media to view and download from www.vismedia.co.uk

Notes to editors 

Anite is an international software and solutions company focused on the provision of test & operational systems in the wireless market and reservation & ecommerce solutions to the leisure travel industry.

Our comprehensive solutions have developed from Anite's deep sector knowledge and are focused around the supply of Anite-owned software products.  Anite provides a full range of services to its customers, including implementation, systems integration, maintenance and managed services, enabling it to maximise customer satisfaction. With our headquarters in the UK, Anite employs around 500 staff in 13 countries across Europe, America, Asia and the Middle East.

 Interim results for the six months ended 31 October 2008

All references to adjusted revenue and profit relate to continuing operations for the half  year before disposed businesses, share based payments, amortisation of acquired intangible assets and restructuring costs,. See the attached income statement and notes for details. A reconciliation of adjusted results to reported statutory results is given below.

Introduction

This half year has been an important period in Anite's recent history. Just before the period end, we completed the sale of Anite Public Sector for a very good price. We are reporting strong half year results, with our largest ever reported first half profits from Wireless. 

Over the past five years Anite has been transformed from a troubled and fragmented IT services company to a focused international software company. Wireless is the global number two provider in both handset protocol and air interface testing and has been firmly positioned as the heart of our business. Travel is the market leader for travel technology solutions in the UK and Northern Europe. As a consequence the Company now derives 68% of revenues from international markets (Wireless 95%, Travel 24%).

Acquisitions and disposals

On 31 October 2008, we completed the sale of Public Sector for £54.3m that we had originally announced in August. The sale has resulted in a provisional net profit on the disposal of £25m subject to working capital adjustment. 

As a result of the disposal of Public Sector and staff vacating the Slough property, a restructuring provision of £5.0m has been made for vacant space (see note 2.5).

Since 2004, we have disposed of 11 businesses, raising total proceeds of £88.1m and have acquired two businesses, at a total cost of £65.4m. Our policy is to review disposals that both sharpen the focus of our business and deliver shareholder value as well as selective acquisition opportunities that will help achieve our aim of being number one or two in our chosen markets. 

Strategy 

Our strategy is to position Anite as a global leader in wireless test software. The Board believes that wireless is a long-term growth market, that there are high barriers to entry with few competitors in Anite's markets resulting in attractive margins. 

The disposal of Public Sector has made Anite a more focused company with the intention over time of reducing the conglomerate discount that has affected the share price. The Board is however mindful that in current stock market conditions it may take some time for the valuation of the shares to recover and accordingly has determined that a return of cash to shareholders is appropriate. In reaching this conclusion, the Board has sought an appropriate balance between investing in the long term future of Anite, retaining financial flexibility given the current credit crisis and delivering shareholder value.

Results

Adjusted revenue from continuing operations was £47.4m (2007: £48.1m).  EBITDA was £15.3m (2007: £12.5m).  Adjusted operating profit was £12.4m (2007: £8.7m) and operating margin was 26.2% (2007: 18.1%). 

Profitability benefited from a continuing improvement in the mix of revenues and the early settlement of a part of the MyTravel contract resulting in a one-off £2.3m benefit to revenue and profit. However, it was impacted by a one off £1.0m increase in legacy, non-operating property costs. 

The increased proportion of continuing revenues now derived from outside the UK together with the weakness of sterling against both the US Dollar and Euro benefited revenue and operating profit by £2.6m and £1.2m, respectively. 

Adjusted profit is stated before disposed businesses, share based payments, amortisation of acquired intangible assets and restructuring costs.

The reconciliation of adjusted operating profit to profit before tax from continuing businesses is as follows:

	2008	2007
	£m	£m
Adjusted operating profit	12.4	8.7
Net finance charge	(1.5)	(1.0)
Profit before tax	10.9	7.7
Share-based payments credit / (charge)	0.4	(0.9)
Amortisation of acquired intangible assets	(1.9)	(1.6)
Restructuring costs (see note 2.5)	(5.0)	(2.5)
Profit before tax from continuing operations before disposed businesses	4.4	2.7
Profit on disposed businesses	-	0.2
Profit before tax from continuing operations	4.4	2.9

The reconciliation of adjusted operating profit to EBITDA from continuing businesses is as follows:  

	2008	2007
	£m	£m
Adjusted operating profit	12.4	8.7
Depreciation	1.6	2.2
Amortisation	1.3	1.6
EBITDA	15.3	12.5

Profit before tax from continuing operations was £4.4m (2007: £2.9m). This gives basic earnings per share (after tax) of 0.5p (2007: 0.6p).

Profit for the period after tax was £31.6m (2007: £4.8m) and this includes profit from discontinued operations of £29.8m (2007: £2.7m). This gives basic earnings per share of 9.5p (2007: 1.4p). 

Dividend and share buyback

The Board has declared a 9% increase in the interim dividend to 0.3p per share (2007: 0.275p). 

The Board is proposing to return up to £20m in cash to shareholders during the next twelve months. This will be achieved through the payment of a proposed special dividend of 3.0p per ordinary share (circa £10.2m), combined with a share consolidation and an on market share buyback programme of up to £10m which will be completed over the course of the next two years, taking into account market conditions.

The Company will send a circular to shareholders in early January 2009 giving fuller details of this proposal and convening a general meeting of the Company to be held on 27 January 2009.  

Subject to shareholder approval, it is proposed that the special dividend will be paid together with the interim dividend, on 20 February 2009 to shareholders who are on the register on 30 January 2009.

Balance sheet and cash

Net cash was £41.5m (2007: net debt £22.8m; 30 April 2008: net debt £15.5m). This includes the cash consideration of £54.3m from the disposal of Anite Public Sector. The Company used some of the proceeds to repay £25m of its term loan, reducing it to £20m.  Given the current macroeconomic conditions, the Board believes it prudent to retain a strong cash balance. In addition, to provide financial flexibility, Anite retains total bank facilities of £50m.

Wireless

Anite provides specialist test systems and software which enable manufacturers of mobile phones to bring their new products to market quickly and mobile operators to optimise their networks.

Wireless KPIs	2008	2007
Orders	£28.6m	£35.6m
Revenue	£29.7m	£32.3m
Adjusted operating profit1	£8.2m	£5.9m
Adjusted operating margin2	27.6%	18.3%
R&D - P&L expense	£5.6m	£6.5m
R&D total cash spend	£5.1m	£6.5m
Headcount	256	297

1continuing operations before disposed businesses, share based payments, amortisation of acquired intangible assets and in 2007 own platform development exit costs.

2operating margin represents adjusted operating profit divided by revenue.

Wireless results 

Overall Wireless revenue was down 8% year on year but up sequentially on the second half of last year by 6%. Overall operating profit was up significantly with operating margins rising to over 25%. 

Total Wireless order intake in the period fell year on year, reflecting an anticipated reduction due to the weaker market conditions in the wireless market, but rose sequentially on the second half last year.  It should be noted that the first half last year order intake benefited from several 3 year maintenance contracts totalling £6.4m.

The effect of net capitalised R&D was a net charge to profit of £0.5m (£2007: £nil). Capitalised R&D is amortised over three years. The strong US Dollar and Euro increased Wireless revenue by £2.4m and profit by £1.0m. In addition, costs of third party hardware fell by £1.2m. 

Wireless overview 

In a tough market, Wireless performed strongly. This improvement was the result of a strong performance in Network Testing, cost cutting actions taken in Handset Testing last year, and the benefits from the stronger US Dollar and Euro.  During the period, we have also strengthened the Wireless management team with a number of senior appointments including Mike Bonin, formerly managing director of TEMS, the network testing division of Ericsson. 

In Handset Testing, fewer new system sales were achieved, as generally customers now have sufficient 2G and 3G testing capability but maintenance revenues with existing customers remain robust. The consolidation amongst chip set manufacturers has reduced the scale of that customer base, which is being replaced in part by manufacturers of new smart devices.  There was a recovery in sales in North America, but European and Asian performance weakened. 

In Network Testing, technology upgrades and a growing amount of business coming from emerging markets contributed to revenue growth. In mature markets, the launch and take up by consumers of new smart devices that use more data is resulting in operators needing to upgrade their infrastructure. 

Progress on LTE (4G)

It is now evident that LTE will be the most successful of the next generation Wireless technologies. The pace of roll out of 4G may be impacted by macroeconomic conditions but is expected to provide a strong revenue platform for most of the next decade as customers invest in new 4G test systems. 

We have secured an early market position with key LTE customers with Anite's prototype system which will in due course be replaced by the fully functional Agilent 'Predator' system. The initial release of this Agilent system (launched in October 2008) does not offer equivalent functionality but will do so progressively during 2009. We are confident that the ultimate system will be the market leading product. As a result we only expect to derive a small amount of revenue this financial year from 4G but we expect revenues to ramp up next year.

Wireless strategy

Anite's Wireless strategy has three main strands: first, to complete and secure market penetration of our 4G LTE solution; second, to increase our sales to network operators globally; and third, to widen our offering of products and tools for our customers. 

Wireless outlook

We expect an improvement in Wireless's performance compared to the second half last year.  In Handset Testing, we believe that we are close to the low point of the current revenue cycle in this business although the rate of recovery will be determined by the speed of adoption of LTE and general economic conditions. Network Testing is continuing to grow its sales in an increasingly competitive market. At current rates, currencies are expected to continue to be a benefit.  

Travel

Anite is a leading provider of travel technology solutions for tour operators, low cost airlines, ferry and holiday park operators in the UK and Europe. Customers can choose to license our products, manage the system themselves, or - as many do - take advantage of our fee based service where we provide hosting and 24/7 system availability from our secure data centre. 

Travel KPIs	2008	2007
Orders	£12.3m	£17.9m
Revenue1	£17.7m	£15.8m
Adjusted operating profit1	£6.4m	£3.9m
Adjusted operating margin2	36.2%	24.6%
R&D - P&L expense and total spend	-	£0.1m
Headcount	215	229

1continuing operations before disposed businesses and share based payments

2operating margin represents adjusted operating profit divided by revenue

Travel results

Travel performed strongly in the half year benefiting from some one-off revenue and profit and a good underlying performance.  Revenue was up 12% over the previous year. 

During the period, part of the MyTravel (Thomas Cook) contract was settled early, resulting in a one-off £2.3m benefit to revenue and profit. Excluding this, but including a very small bad debt in respect of the XL Leisure administration, divisional operating profit was slightly up on the same period last year with underlying revenue slightly down. Second half profitability will be impacted by the reduction in ongoing MyTravel work and the loss of XL Leisure work.  

The divisional order intake has been reduced by some £1.7m as a result of the XL Leisure administration and is compared with prior periods of record order intake.  The total order book at the half year end stood at £45.0m (2007: £43.0m). 

As anticipated, the managed services contract with Norwich Union has not been renewed, due to a change in their business strategy. This will affect profitability in the financial year commencing 1 May 2009 by about £1.5m year on year although, as a non-travel customer, it does not impact the underlying Travel business.  

Travel overview

Three new contracts, including one international customer, were signed during the period for @com, our market leading solution for tour operators. Continued good progress was achieved on our large contract with TUI Germany: delivery of Phase Two of the contract was completed in November, with testing and integration underway and a target go live date in summer 2009. Despite the early settlement of part of the MyTravel contract, we still have an ongoing relationship with this customer, including a commitment to provide a modified service for a minimum of five years.

During the period under review, @com revenues have exceeded ATOP revenues for the first time.

Travel strategy

Travel's strategy is to continue to win customers for its internet based tour reservation system (@com) particularly internationally.

Travel outlook 

There continues to be good interest in and a strong international order pipeline for @com set against a difficult trading background for the sector and tough comparatives.  Customers' investment in their reservation systems is being driven by the need to reduce costs and take advantage of opportunities provided by the internet whilst the number of holiday transactions has only a minor direct impact on our revenues.  

The progress with TUI Group and other customers has resulted in 24% of our revenue now being derived from international customers and this is expected to rise in the future. We see further opportunities within the TUI Group and the German market as a whole.  

Although overall Travel profitability will be reduced in both the second half and next year by the one-off customer issues referred to above, its underlying performance is stable and its prospects are good.

Summary and outlook 

Wireless has been reinforced as the heart of our business and its performance has improved.  Travel's underlying performance remains strong but it is being affected by some one off customer impacts. Our overall order intake is lower than the same time last year but this is in line with our expectations. 

The second half will not benefit from the MyTravel settlement that enhanced the first half performance. As a result our expectations for the year as a whole remain unchanged although we continue to monitor global economic conditions and their impact on our markets.

People

On behalf of the Board, we would like to thank all employees for their contribution, hard work and support during the period.

Clay Brendish

Chairman

Steve Rowley

Chief Executive

1 December 2008

Key risks and uncertainties and Statement of Director's Responsibilities

Risks and uncertainties  

Forward looking statements

Any forward looking statements made within this interim half year report have been made in good faith by the directors based on the information made available up to the date of the Directors approval of this report, and these forward looking statements should be treated with caution due to the inherent uncertainties, including macroeconomic, and IT service and solution market uncertainties, and business risk factors which may affect the outcome.

Strategic and operational risks

Wireless

The seasonal nature of our customers' buying patterns in handset testing could have an effect on the outcome for the financial year consistent with previous years. The sales activity in the second half therefore will be an important factor in achieving the overall results for the year. Given the international nature of the business, it can also be affected by fluctuations in the currency markets. The development aspects of the partnership with Agilent are ongoing and are at a relatively early stage.

Travel

The successful outcome for the year for our Travel business relies on the continued successful completion and delivery of large development projects within budget, cost, and specifications. As with all large IT projects, the delivery of these projects is subject to certain technical, commercial, and economic risks, and also an effective relationship with the customer.

Financial risks

The Company recognises that through the continued change in the Company's portfolio, its expanding geographic reach, and the financing of recent acquisitions by debt, there are additional risks in terms of currency and interest rate exposure. The Company has taken steps to mitigate these risks by hedging its interest rate and currency exposure within policies approved by the Board. Against the background of changing market dynamics, the Company continues its policy of re-forecasting the outturn for the financial year on a monthly basis.

Further information on the principal long-term risks and uncertainties of the Company is included in the latest annual financial statements as available on our website www.anite.com..

Statement of Directors' Responsibilities

The directors confirm that to the best of their knowledge:

•    the condensed set of financial statements has been prepared in accordance with IAS 34; and

•    the financial highlights and review of business performance includes a fair review of the
     information required by Disclosure and Transparency Rules (DTR) of the Financial Services
    Authority, paragraph DTR 4.2.7R and DTR 4.2.8R.

By order of the Board

Christopher Humphrey, Group Finance Director

28 November 2008    

CONDENSED CONSOLIDATED INCOME STATEMENT

Six months ended 31 October 2008

	Note	Six months ended 31 October 2008 (unaudited) £000	Six months ended 31 October 2007 (unaudited) £000	Year ended 30 April 2008 (audited) £000
Continuing operations
Revenue	2.1	47,433	48,916	92,807
Cost of sales		(18,325)	(20,268)	(36,900)
Gross profit		29,108	28,648	55,907
Distribution costs		(4,987)	(5,017)	(10,133)
Research and development		(6,264)	(9,665)	(16,687)
Administrative expenses		(11,942)	(10,105)	(18,871)
Operating expenses	2.4	(23,193)	(24,787)	(45,691)
Operating profit before disposed businesses,  share-based payments, amortisation of acquired intangible assets and restructuring costs
		12,409	8,700	18,709
Disposed businesses		-	149	202
Share-based payment credit/(charge)		386	(908)	(1,951)
Amortisation of acquired intangible assets		(1,879)	(1,639)	(3,416)
Restructuring costs	2.5	(5,001)	(2,441)	(3,328)
Operating profit		5,915	3,861	10,216
Other gains and losses	3.1	-	-	(65)
Finance income		683	1,139	3,030
Finance charges		(2,184)	(2,141)	(3,714)
Profit from continuing operations before tax		4,414	2,859	9,467
Tax expense	4	(2,618)	(730)	(2,739)
Profit from continuing operations		1,796	2,129	6,728
Profit from discontinued operations	3.2	29,784	2,716	6,506
Profit for the period		31,580	4,845	13,234
Profit attributable to equity holders of the parent		31,580	4,845	13,234
Continuing and discontinued operations
Earnings per share - basic	5	9.5p	1.4p	3.8p
- diluted		9.2p	1.4p	3.7p
Continuing operations
Earnings per share - basic	5	0.5p	0.6p	1.9p
- diluted		0.5p	0.6p	1.9p

CONDENSED CONSOLIDATED BALANCE SHEET

31 October 2008

	Note	31 October 2008 (unaudited)  £000	31 October 2007 (unaudited) £000	30 April 2008 (audited)  £000
Non-current assets
Goodwill		57,482	77,178	78,658
Other intangible assets		26,469	30,679	30,755
Property, plant and equipment		11,545	11,761	11,653
Deferred tax assets		-	2,400	104
Derivative financial assets		-	67	-
		95,496	122,085	121,170
Current assets
Inventories	6	2,783	3,683	3,885
Trade and other receivables	7	26,403	47,696	53,123
Derivative financial assets		-	-	13
Current tax assets		894	967	160
Cash deposit held in escrow	8	-	8,380	-
Cash and cash equivalents	8	61,376	18,480	29,374
		91,456	79,206	86,555
Total assets		186,952	201,291	207,725
Current liabilities
Trade and other payables	9	(27,185)	(49,546)	(57,617)
Bank borrowings	8	(4,987)	(4,964)	(4,981)
Current tax payable		(8,950)	(12,663)	(10,283)
Derivative financial liabilities		(6,046)	-	(4,328)
Provisions	10	(7,454)	(10,456)	(4,887)
		(54,622)	(77,629)	(82,096)
Non-current liabilities
Bank borrowings	8	(14,895)	(44,676)	(39,843)
Deferred tax liabilities		(6,384)	(7,681)	(6,356)
Derivative financial liabilities		(13,253)	(3,296)	(11,949)
Provisions	10	(6,223)	(4,198)	(4,937)
		(40,755)	(59,851)	(63,085)
Total liabilities		(95,377)	(137,480)	(145,181)
Net assets		91,575	63,811	62,544
Equity
Issued share capital	11	33,900	35,174	33,854
Share premium account		25,485	25,333	25,406
Own shares		(5,007)	(4,348)	(5,132)
Merger reserve		722	6,538	6,538
Capital redemption reserve		2,485	1,117	2,485
Other reserves		(1,116)	670	(940)
Retained earnings		35,106	(673)	333
Total equity		91,575	63,811	62,544

The accompanying notes are an integral part of this consolidated balance sheet.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months ended 31 October 2008

	Share capital £000	Share premium account £000	Own shares £000	Merger reserve £000	Capital redemption reserve £000	Other reserve £000	Retained earnings £000	Total £000
Balance at 1 May 2007	35,325	25,010	(1,019)	6,538	859	(7)	(1,764)	64,942
Changes in equity for the period to 31 October 2007
Exchange differences arising on
translation of foreign operations	-	-	-	-	-	89	-	89
Cash flow hedges taken to equity	-	-	-	-	-	(55)	-	(55)
Fair value gains on net
investment hedges (net of foreign
exchange and tax)	-	-	-	-	-	643	-	643
Net income recognised directly in equity	-	-	-	-	-	677	-	677
Profit for the period	-	-	-	-	-	-	4,845	4,845
Total recognised income and expense for the period	-	-	-	-	-	677	4,845	5,522
Issue of share capital	107	323	-	-	-	-	-	430
Purchase of own shares into treasury	-	-	(3,329)	-	-	-	-	(3,329)
Share buy back and cancellation	(258)	-	-	-	258	-	(1,842)	(1,842)
Dividend paid (note 13)	-	-	-	-	-	-	(877)	(877)
Dividend payable (note 13)	-	-	-	-	-	-	(1,927)	(1,927)
Recognition of share-based payments
(before tax)	-	-	-	-	-	-	1,103	1,103
Deferred tax related to share-based
payments	-	-	-	-	-	-	(211)	(211)
Balance at 31 October 2007	35,174	25,333	(4,348)	6,538	1,117	670	(673)	63,811
Balance at 1 May 2008	33,854	25,406	(5,132)	6,538	2,485	(940)	333	62,544
Changes in equity for the period to 31 October 2008
Exchange differences arising on translation of foreign operations1	-	-	-	-	-	994	-	994
Cash flow hedges taken to equity	-	-	-	-	-	(581)	-	(581)
Fair value losses on net investment hedges (net of foreign exchange and tax)2	-	-	-	-	-	(589)	-	(589)
Net expense recognised directly in equity	-	-	-	-	-	(176)	-	(176)
Profit for the period	-	-	-	-	-	-	31,580	31,580
Total recognised income and expense for the period	-	-	-	-	-	(176)	31,580	31,404
Issue of share capital	46	79	-	-	-	-	-	125
Purchase of own shares into treasury	-	-	(125)	-	-	-	-	(125)
Sale of own shares from treasury	-	-	250	-	-	-	(250)	-
Dividend paid (note 13)	-	-	-	-	-	-	(1,992)	(1,992)
Utilisation of merger reserve	-	-	-	(5,816)	-	-	5,816	-
Share buy back and cancellation	-	-	-	-	-	-	(9)	(9)
Recognition of share-based payments
(net of tax)	-	-	-	-	-	-	(372)	(372)
Balance at 31 October 2008	33,900	25,485	(5,007)	722	2,485	(1,116)	35,106	91,575

1    Includes amounts recycled through the income statement (note 3.3).

2    The net loss of £589,000 comprises the fair value loss on the net investment hedge of £1,745,000 relating to the effective portion of the cross currency swaps, partly offset by the foreign exchange gains of £446,000 and tax credit of £710,000.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Six months ended 31 October 2008

	Note	Six months ended 31 October 2008 (unaudited) £000	Six months ended 31 October 2007 (unaudited)  £000	Year ended 30 April 2008 (audited) £000
Profit for the period
Continuing		1,796	2,129	6,728
Discontinued		29,784	2,716	6,506
		31,580	4,845	13,234
Adjustments for:
Tax (income)/expense - continuing and discontinued	4	(112)	1,849	5,049
Profit before tax on disposal of discontinued operations	3.2	(25,604)	(2,179)	(3,200)
Loss before tax on disposal of disposed businesses	3.1	-	-	65
Finance charges - continuing and discontinued		1,401	980	762
Depreciation of property, plant and equipment		1,916	2,611	4,583
Amortisation and impairment of intangible assets		2,351	2,942	5,320
Amortisation of acquired intangible assets		1,879	1,639	3,416
Loss on disposal of property, plant and equipment		13	175	94
Share-based payments (credit)/charge		(372)	1,103	2,294
Increase/(decrease) in provisions		305	(268)	(1,260)
Increase in provisions - restructuring costs	2.5	5,001	-	-
Operating cash flows before movements in  working capital		18,358	13,697	30,357
Decrease in inventories		754	826	624
Decrease in receivables		13,253	8,909	2,979
Decrease in payables		(12,887)	(16,740)	(5,613)
Movements in working capital		1,120	(7,005)	(2,010)
Cash generated from operations		19,478	6,692	28,347
Interest received		648	1,247	2,104
Interest paid		(1,659)	(1,895)	(3,699)
Income taxes paid		(1,256)	(1,663)	(3,928)
Net cash generated from operating activities		17,211	4,381	22,824
Cash flow from investing activities
Proceeds from disposal of subsidiary undertakings		53,239	7,358	8,535
Net bank balance disposed with subsidiary undertakings		(8,315)	(397)	(677)
Increase in cash held in escrow related to acquisitions		-	-	9,471
Net payments to previously closed businesses		(87)	-	(492)
Deferred consideration paid		-	(1,986)	(2,309)
Part settlement of cross currency swap		-	-	(440)
Purchase of property, plant and equipment		(2,145)	(1,506)	(2,781)
Proceeds from disposal of property, plant and equipment		-	42	43
Purchase of software licences		(411)	(695)	(1,080)
Expenditure on capitalised product development		(751)	(1,836)	(2,982)
Net cash generated from investing activities		41,530	980	7,288
Cash flow from financing activities
Issue of ordinary share capital		125	430	551
Share buy back for cancellation		(9)	(1,842)	(7,497)
Purchase of own shares into treasury		(125)	(3,329)	(4,333)
Dividend paid to Company's shareholders		(1,992)	(877)	(3,709)
Decrease in bank loans		(25,000)	-	(5,000)
Net cash used in financing activities		(27,001)	(5,618)	(19,988)
Net increase/(decrease) in cash and cash equivalents		31,740	(257)	10,124
Effect of exchange rate changes		262	72	585
Cash and cash equivalents at beginning of period		29,374	18,665	18,665
Cash and cash equivalents at end of period		61,376	18,480	29,374

Discontinued operations include Anite Public Sector (2007: Anite Deutschland) which generated net operating cash inflows of £3,323,000 (2007: outflow £4,789,000), paid £nil (2007: £16,000) in respect of net returns on investment and servicing of financing and paid £526,000 (2007: £714,000) for capital expenditure.

 1 Basis of preparation and accounting policies

The unaudited condensed consolidated financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in preparation of the Group's annual financial statements for the year ended 30 April 2008 as available on our website www.anite.com.

a) Information regarding future accounting standards 

The IFRIC interpretations, amendments to existing standards and new standards that are mandatory and relevant for the Group's accounting periods beginning on or after 1 May 2008 have been adopted in the Group's October 2008 Interim Reports.

The financial information contained in this Interim Report does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The financial information contained in this Interim Report has been reviewed by the auditors but not audited.

The figures for the year ended 30 April 2008 do not constitute the statutory accounts for that period but are based upon the Group's audited accounts prepared under IFRS. The statutory accounts for the year ended 30 April 2008 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under Section 237(2) or 237(3) of the Companies Act 1985.

This unaudited Interim Financial Report has been approved by the Board of Directors for issue on 28 November 2008.

2 Revenue and segmental information

2.1 Revenue from continuing and discontinued operations

	2008 £000	2007 £000
Own product software licences	18,674	19,122
Bespoke services, systems integration and implementation of software products	4,452	5,117
Managed services	5,105	5,193
Software maintenance and support	10,722	10,003
Sale of third-party products and services	6,180	8,718
Other - contract settlement	2,300	-
Continuing operations excluding disposed businesses	47,433	48,153
Disposed businesses	-	763
Revenue from continuing operations	47,433	48,916
Finance income	683	1,139
Total revenue from continuing operations	48,116	50,055
Discontinued operations
Revenue	28,810	32,267
Finance income	100	22
Total revenue	77,026	82,344

  2 Revenue and segmental information Continued

2.2 Business segments - primary basis

At 31 October 2008, the Group is organised into two business segments: Wireless and Travel. These two business segments are the Group's primary reporting format for segmental information. During the period to 31 October 2008, Anite Public Sector Holdings Limited and its subsidiaries ('Anite Public Sector') were sold. Its results are included as a discontinued operation and details are disclosed in note 3.

Segmental information under the primary reporting format is as disclosed in the table below:

	Wireless		Travel		Total
	2008 £000	2007 £000	2008 £000	2007 £000	2008 £000	2007 £000
Revenue
- continuing businesses1	29,733	32,328	17,802	16,027	47,535	48,355
- inter-segment revenue2	-	(8)	(102)	(194)	(102)	(202)
	29,733	32,320	17,700	15,833	47,433	48,153
- disposed businesses3	-	-	-	763	-	763
Revenue
- continuing operations	29,733	32,320	17,700	16,596	47,433	48,916
- discontinued operations3	-	-	-	-	28,810	32,267
Total revenue	29,733	32,320	17,700	16,596	76,243	81,183
Continuing operations
Segment profit before amortisation and exceptional items
- continuing businesses1	8,274	5,510	6,434	3,833	14,708	9,343
- disposed businesses3	-	-	-	149	-	149
- continuing operations	8,274	5,510	6,434	3,982	14,708	9,492
Unallocated corporate costs (after recharges)					(1,913)	(1,551)
Operating profit for continuing operations before amortisation and exceptional items					12,795	7,941
Amortisation of acquired intangible assets	(1,879)	(1,639)	-	-	(1,879)	(1,639)
Restructuring costs	-	(2,441)	-	-	-	(2,441)
Restructuring costs - unallocated
corporate costs					(5,001)	-
Segment operating profit	6,395	1,430	6,434	3,982
Operating profit					5,915	3,861
Finance charges (net)					(1,501)	(1,002)
Profit from continuing operations before tax					4,414	2,859
Tax expense					(2,618)	(730)
Profit from continuing operations					1,796	2,129
Discontinued operations
Operating profit from discontinued operations (note 3.2)					1,350	1,634
Profit on disposal of businesses					25,604	2,179
Finance income					100	22
Profit from discontinued operations before tax					27,054	3,835
Tax credit/(charge)					2,730	(1,119)
Profit from discontinued operations					29,784	2,716
Profit for the period					31,580	4,845
Profit for the period is stated after:
Capitalisation of development costs ('DC')	478	1,289	-	-	478	1,289
Impairment of DC (included in own platform development exit costs)	-	(475)	-	-	-	(475)
Amortisation of DC	(965)	(1,313)	-	-	(965)	(1,313)
Net reduction of DC	(487)	(499)	-	-	(487)	(499)

1    Continuing businesses comprise operating results of continuing operations before the operating results of disposed businesses.

2    Inter-segment sales are charged at prevailing market rates.

3    Disposed businesses comprise the operating results of continuing operations which have ceased during the period and which do not meet the 
      definition of discontinued operations under IFRS 5. Discontinued operations comprise the operating result of Anite Public Sector and International 
      Consultancy operations. 

2 Revenue and segmental information Continued

2.3 Business segments - continuing operations before disposed businesses

	Wireless		Travel		Total
	2008 £000	2007 £000	2008 £000	2007 £000	2008  £000	2007 £000
Revenue
- continuing before disposed businesses	29,733	32,320	17,700	15,833	47,433	48,153
Segment profit1	8,247	5,873	6,355	3,945	14,602	9,818
Unallocated corporate costs					(2,193)	(1,118)
Adjusted operating profit1					12,409	8,700
Net finance charge					(1,501)	(1,002)
Adjusted profit before tax					10,908	7,698
Share-based payments
- corporate credit/(charge)					280	(433)
- business segment	27	(363)	79	(112)	106	(475)
Amortisation of acquired intangible assets	(1,879)	(1,639)	-	-	(1,879)	(1,639)
Restructuring costs	-	(2,441)	-	-	-	(2,441)
Restructuring costs - unallocated corporate costs					(5,001)	-
Segment operating profit before disposed businesses	6,395	1,430	6,434	3,833
Profit before disposed businesses and tax					4,414	2,710
- disposed businesses	-	-	-	149	-	149
Profit from continuing operations before tax					4,414	2,859

1     Continuing operations before disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs.

This additional information has been disclosed to give a clearer understanding of the results of the business segments before and after disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs.

2.4 Operating expenses

	Six months ended 31 October 2008 £000	Six months ended 31 October 2007 £000	Year ended 30 April 2008 £000
Distribution costs
– amortisation of acquired intangible assets	1,196	1,043	1,900
– others	3,791	3,974	8,233
	4,987	5,017	10,133
Research and development
– amortisation of acquired intangible assets	683	596	1,516
– amortisation of internally generated assets	965	1,313	2,309
– restructuring costs	–	2,441	2,474
– others	4,616	5,315	10,388
	6,264	9,665	16,687
Administrative expenses
– restructuring costs	5,001	–	854
– share-based payment (credit)/charge	(386)	908	1,951
– others	7,327	9,197	16,066
	11,942	10,105	18,871
Total operating expenses	23,193	24,787	45,691
Analysed as:
– amortisation of acquired intangible assets	1,879	1,639	3,416
– amortisation of internally generated assets	965	1,313	2,309
– restructuring costs	5,001	2,441	3,328
– share-based payment (credit)/charge	(386)	908	1,951
– others	15,734	18,486	34,687
	23,193	24,787	45,691

 2 Revenue and segmental information Continued

2.5 Restructuring costs

As a result of the disposal of Anite Public Sector, the head office property at 353 Buckingham Avenue, Slough will be underutilised due to the relocation of Anite Public Sector staff. In light of the current market conditions for office space, there is uncertainty over whether the Group will be able to utilise or sublet the empty space in the near future although management are actively seeking to mitigate this. A provision has been established in the current period in accordance with IAS 37: Provisions, contingent liabilities and contingent assets.

The provision in the prior periods relates to the restructuring of the Telecoms division as reported in the Anite plc Annual Report and Accounts 2008. The provision includes the impact of both asset writedowns of the own-platform development costs and other costs of restructuring and redundancy.

	Six months ended 31 October 2008 £000	Six months ended 31 October 2007 £000	Year ended 30 April 2008 £000
Property provision established	5,001	-	-
Cost of exiting own-platform development	-	2,441	2,474
Other restructuring/redundancy costs	-	-	854
	5,001	2,441	3,328

3 Disposed businesses/discontinued operations

3.1 Other gains and losses

The other gains and losses for the year ended 30 April 2008 relate to the loss on the disposed business of Anite Travel Systems Ab Ltd ('Carus') within the Travel business segment.

3.2 Discontinued operations

The Group has now completed its disposal of the Anite Public Sector division with the sale of its 100% interest in the ordinary share capital of Anite Public Sector Holdings Ltd and its subsidiaries ('Anite Public Sector') on 31 October 2008.

The profits in respect of the disposal of Anite Public Sector, set out below, are provisional and subject to the agreement of a final working capital adjustment.

The operating profit before interest of Anite Public Sector up to the date of disposal was £1,362,000 (2007: £1,559,000, April 2008: £5,598,000). These results, including other discontinued businesses, are shown in the results below:

	Six months ended 31 October 2008 £000		Six months ended 31 October 2007 £000	Year ended  30 April 2008 £000
Profit after tax for the period from discontinued operations
Revenue		28,810	32,267	64,428
Cost of sales		(16,323)	(19,801)	(35,731)
Gross profit		12,487	12,466	28,697
Operating expenses		(11,137)	(10,832)	(23,003)
Operating profit before interest		1,350	1,634	5,694
Investment income/(expense)		100	22	(78)
Profit before tax		1,450	1,656	5,616
Tax charge		(406)	(474)	(1,110)
Profit after tax		1,044	1,182	4,506
Profit after tax on sale of discontinued operations
Provisional profit on disposal of Anite Public Sector		25,048	-	-
Net movement in provision in relation to previously  discontinued operations		556	723	1,935
Profit on disposal of Anite Deutschland		-	1,456	1,265
Net profit before tax on sale of discontinued operations		25,604	2,179	3,200
Tax credit relating to activity discontinued in prior period		3,136	555	-
Tax charge on the profit on sale of discontinued operations (note 4)		-	(1,200)	(1,200)
Profit after tax on sale of discontinued operations		28,740	1,534	2,000
Profit from discontinued operations		29,784	2,716	6,506

3 Disposed businesses/discontinued operations Continued

3.3 Sale of discontinued operations

The net assets and consideration in respect of the disposal of Anite Public Sector, set out below, are provisional and subject to the agreement of a final working capital adjustment.

	Six months ended 31 October 2008 £000  Anite Public Sector	Six months ended  31 October 2007  £000  Anite Deutschland	Year ended 30 April 2008  £000  Anite Deutschland
Goodwill	22,210	4,000	4,000
Intangible assets	1,675	91	91
Property, plant and equipment	1,132	87	87
Current assets	14,024	2,716	2,716
Cash and cash equivalents	8,315	397	397
Current liabilities	(20,541)	(1,220)	(1,220)
Provisions	(925)	(169)	(170)
Net assets	25,890	5,902	5,901
Recycled foreign exchange	(363)	-	38
Profit on disposal	25,048	1,456	1,265
Net consideration	50,575	7,358	7,204
Relating to:
Cash consideration	54,333	8,000	8,000
Disposal costs	(3,758)	(642)	(796)
Net consideration	50,575	7,358	7,204
Net cash flows in respect of the disposal of operations  are as follows:
Cash received (net of disposal costs paid)	53,239	7,358	7,204
Cash and cash equivalents sold	(8,315)	(397)	(397)
	44,924	6,961	6,807

4 Tax expense

	Six months ended 31 October 2008 £000		Six months ended 31 October 2007 £000	Year ended 30 April 2008 £000
Continuing operations
Current tax
UK corporation tax		631	822	2,515
Foreign tax		1,877	468	2,587
		2,508	1,290	5,102
Adjustments in respect of prior years
- UK corporation tax		-	156	9
Total current tax expense		2,508	1,446	5,111
Deferred tax
UK		110	(716)	(1,339)
Foreign		-	-	(1,033)
Total deferred tax expense/(credit)		110	(716)	(2,372)
Total tax expense - continuing operations		2,618	730	2,739

Income tax on continuing operations for the interim period is charged at 31.3% (October 2007: 27.1%), representing the weighted average of the estimated annual effective income tax rate expected for the full year in each jurisdiction and major category of income within continuing operations.

  4 Tax expense Continued

	Six months ended 31 October 2008 £000	Six months ended 31 October 2007 £000	Year ended 30 April 2008 £000
Discontinued operations
Current tax
UK Corporation tax	508	474	1,185
Foreign tax	(3)	-	-
	505	474	1,185
Adjustments in respect of prior years
- UK corporation tax	(3,136)	(555)	-
Total current tax (credit)/expense	(2,631)	(81)	1,185
Deferred tax
UK	(99)	-	(75)
Foreign	-	1,200	1,200
Total deferred tax (credit)/expense	(99)	1,200	1,125
Total tax (credit)/expense - discontinued operations	(2,730)	1,119	2,310

The deferred tax (credit)/charge on discontinued operations arises from the disposal of Anite Public Sector 
(2007: Anite Deutschland).

Total tax (credit)/expense - continuing and discontinued operations

(112)

1,849

5,049

  5 Earnings per share

The calculations of earnings per share are based on the Group profit for the period, adjusted profit1 and weighted average number of shares in issue:

	Basic			Diluted
	Six months  ended 31 October  2008	Six months  ended 31 October  2007	Year  ended 30 April  2008	Six months  ended 31 October  2008	Six months  ended 31 October  2007	Year  ended 30 April  2008
EPS summary
EPS	9.5p	1.4p	3.8p	9.2p	1.4p	3.7p
EPS for continuing operations	0.5p	0.6p	1.9p	0.5p	0.6p	1.9p
Adjusted EPS2	2.3p	1.9p	3.5p	2.2p	1.9p	3.5p

	Six months  ended 31 October  2008 (unaudited) Pence  per share	Six months  ended 31 October  2007  (unaudited)  Pence  per share	Year  ended 30 April  2008 (audited) Pence  per share	Six months  ended 31 October  2008 (unaudited) £000	Six months  ended 31 October  2007 (unaudited) £000	Year  ended 30 April  2008 (audited)  £000
Profit for the period	9.5	1.4	3.8	31,580	4,845	13,234
Profit from discontinued operations	(9.0)	(0.8)	(1.9)	(29,784)	(2,716)	(6,506)
Profit for the period on continuing operations	0.5	0.6	1.9	1,796	2,129	6,728
Reconciliation to adjusted profit:
Operating profit from disposed businesses	-	(0.0)	(0.1)	-	(149)	(202)
Other gains and losses	-	-	-	-	-	65
Profit for the period on continuing operations (before disposed businesses)	0.5	0.6	1.8	1,796	1,980	6,591
Exchange gain on retranslation of the cash deposit held in escrow (net of tax)	-	-	(0.3)	-	-	(899)
Restructuring costs (net of tax)	1.1	0.7	0.7	3,601	2,441	2,354
Amortisation of acquired intangible assets (net of tax)	0.6	0.4	1.0	1,824	1,308	3,291
Share-based payments (net of tax)	0.1	0.2	0.3	271	672	1,018
Adjusted profit1	2.3	1.9	3.5	7,492	6,401	12,355

1     Profit from continuing businesses before disposed businesses, share-based payments, amortisation of acquired intangible assets and 
       restructuring   costs.

2    Earnings per share on adjusted profit1 has been included to give a clearer understanding of the results of the continuing businesses.

Basic EPS for discontinued operations is 9.0p per share (2007: 0.8p; April 2008: 1.9p)

Diluted EPS for discontinued operations is 8.7p per share (2007: 0.8p; April 2008: 1.8p)

  5 Earnings per share Continued

Number of shares ('000)	Six months ended 31 October 2008	Six months ended 31 October 2007	Year ended 30 April 2008
Weighted average number of shares in issue - used to calculate basic earnings per share	330,830	349,461	344,533
Effect of dilutive ordinary shares
- SAYE and share option schemes	13,377	4,291	12,296
Number of shares used to calculate diluted earnings per share	344,207	353,752	356,829

6 Inventories

	31 October 2008 £000	31 October 2007 £000	30 April 2008 £000
Inventories	2,742	3,264	3,657
Work in progress	-	360	156
Finished goods	41	59	72
	2,783	3,683	3,885

7 Trade and other receivables

	31 October 2008 £000	31 October 2007 £000	30 April 2008 £000
Current assets
Trade receivables	21,401	32,673	41,585
Less: provision for impairment of trade receivables	(877)	(1,196)	(643)
Trade receivables net of provision	20,524	31,477	40,942
Other receivables	895	1,432	2,185
Prepayments	2,058	4,778	3,781
Amount due from construction contract customers	318	687	302
Accrued income	2,608	9,322	5,913
	26,403	47,696	53,123

8 Net cash/(debt)

	31 October 2008 £000	31 October 2007 £000	30 April 2008 £000
Cash deposit held in escrow	-	8,380	-
Cash and cash equivalent	61,376	18,480	29,374
Bank borrowings - current	(4,987)	(4,964)	(4,981)
Bank borrowings - non-current	(14,895)	(44,676)	(39,843)
Net cash/(debt)	41,494	(22,780)	(15,450)

  9 Trade and other payables

	31 October 2008 £000	31 October 2007 £000	30 April 2008 £000
Trade payables	3,805	7,630	7,922
Other taxes and social security	859	2,962	6,018
Amount due to construction contract customers	35	978	647
Payments received on account	-	4,279	4,265
Deferred income	11,291	19,684	26,151
Accruals	10,503	10,844	10,284
Dividend payable (note 13)	-	1,927	-
Other payables	692	1,242	2,330
	27,185	49,546	57,617

10 Provisions

	Deferred     consideration £000	Warranties £000	Property provisions £000	Onerous     contract provisions £000	Other provisions £000	Total £000
At 1 May 2008	202	3,234	5,368	291	729	9,824
Release of provision credited to income statement	-	-	(228)	(63)	-	(291)
Established during the year	-	-	5,973	-	114	6,087
Disposal of subsidiaries in current period (note 3.3)	-	-	(751)	(174)	-	(925)
Disposal of subsidiaries in prior period (note 3.2)	-	(312)	-	-	(244)	(556)
Utilised during the year	-	(96)	(46)	(54)	(379)	(575)
Unwinding of discount	-	-	76	-	-	76
Exchange movement	41	(3)	-	-	(1)	37
At 31 October 2008	243	2,823	10,392	-	219	13,677

The increase in property provisions during the period includes £5,001,000 (2007: £nil) established as part of the restructuring costs disclosed in note 2.5.

11 Issued Share capital                                               

	Ordinary shares of 10p each		Deferred Redeemable shares of £1 each		Total
	Number	£000	Number	£000	£000
Allotted, issued and fully paid:
At 1 May 2008	338,036,645	33,804	50,000	50	33,854
Issued during the period	460,124	46	-	-	46
At 31 October 2008	338,496,769	33,850	50,000	50	33,900

No shares were bought and cancelled by the Group during the period to 31 October 2008, (October 2007: 2.58 million shares, average price 71.4p; April 2008: 16.261 million shares, average price 45.9p), as part of the Group's share buy back programme.

12 Contingent liabilities

There are contingent Group liabilities that arise in the normal course of the business in respect of indemnities, warranties, guarantees and legal claims. However, the Directors consider that none of these claims is expected to result in a material gain or loss to the Group. There has been no change in the Directors' assumptions in regard to contingent liabilities since the year ended 30 April 2008.

13 Dividends

The Company paid a final dividend of 0.6p (2007: 0.55p) per share, totalling £1,992,000 (2007: £1,927,000) on 
20 October 2008.

The 2007 final dividend paid on 16 November 2007, was disclosed as being a dividend payable in the prior period. The dividend paid on 16 May 2007 in the prior period relates to the 2007 interim dividend of 0.25p per share, totalling £877,000.

  Independent review report to Anite plc

Introduction 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2008 which comprises the condensed consolidated income statement, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 13. 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 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 it 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 Kingdom's Financial Services Authority.

As disclosed in note 1, 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 consolidated 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 six months ended 31 October 2008 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 & Touche LLP 

Chartered Accountants and Registered Auditors

London

28 November 2008

 

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