Interim Results
Cohort PLC
13 December 2007
COHORT PLC
INTERIM RESULTS FOR THE HALF YEAR ENDED
31 OCTOBER 2007
GOOD STRATEGIC AND FINANCIAL PROGRESS
Cohort plc, a leading independent defence technical services business, today
announces interim results for the half year to 31 October 2007. Highlights
include:
• Acquisition of SEA Group on 31 October 2007.
• Group revenue up 54% to £20.9m.
• Adjusted* profit before tax up 42% at £1.5m.
• Adjusted* earnings per share up 38% at 4.12p.
• Group order book at 31 October £56.1m.
• Interim dividend up 12.5% to 0.45p per share.
*Before exceptional items and goodwill amortisation.
Commenting on the result, Nick Prest CBE, Chairman of Cohort plc said:
'With the recent acquisition of SEA and continued strong revenue growth from
both SCS and MASS, Cohort continues to deliver the strategy set out at the time
of flotation in March 2006. The Board is positive about the outlook'.
For further information, please contact
Cohort plc 01491 843150
Stanley Carter, Chief Executive
Simon Walther, Finance Director
Investec 020 7597 5970
Michael Ansell
Hogarth Partnership Limited 020 7357 9477
Julian Walker, Andrew Jaques, Vicky Watkins
NOTES TO EDITORS
Cohort plc (www.cohortplc.com)
Cohort is a defence technical services group. It operates through three
wholly-owned subsidiaries, MASS Consultants ('MASS'), Systems Consultants
Services ('SCS') and SEA Group ('SEA') , all of which are leading independent
service providers, working for defence (air, land and sea), wider government and
industry clients.
• MASS (www.mass.co.uk) was acquired by Cohort in August 2006 for an
initial consideration of £12.5m and is an independent UK Systems House
focused on the defence and aerospace markets. MASS offers specialist skills
in four main business areas: Managed Services, Electronic Warfare, Secure
Communications and Information Systems.
• SCS (www.scs-ltd.co.uk), Cohort's original operating company, provides
independent consultancy support, which combines technical expertise with
practical experience and domain knowledge, primarily but not exclusively to
the defence sector.
• SEA (www.sea.co.uk) is an independent systems engineering and software
company operating primarily in the defence sector, but with three other
divisions focused on the space, transport and offshore arenas. SEA was
acquired by Cohort on 31 October 2007 for an initial consideration of
£20.7m.
Cohort was specifically established to capitalise on consolidation and organic
growth opportunities in the defence technical services market and was admitted
to trading on AIM on 8 March 2006.
CHAIRMAN'S STATEMENT
OVERVIEW
Cohort has made very good progress in executing the strategy set out at the time
of flotation in March 2006. SEA (Group) Ltd (SEA) was acquired in late October
2007 following the acquisition of MASS Consultants Limited (MASS) last year and
organic revenue growth has been strong.
FINANCIALS
This is Cohort's first reporting period under International Financial Reporting
Standards (IFRS). In the six months ended 31 October 2007, Cohort achieved
revenue of £20.9m (2006: £13.6m), a 54% increase. The revenue for the first half
included £12.7m from SCS, which represented growth of 29% on 2006, and £8.2m
from MASS, an annualised increase of 9% on the £3.8m for the three months ended
31 October 2006.
Adjusted operating profit before accounting for the share of joint ventures,
exceptional items and amortisation of acquired intangibles was £1.4m (2006:
£1.0m).
The operating profit included a contribution from MASS of £0.9m, compared with
£0.5m for the three months ended 31 October 2006.
SCS's operating profit for the first half was £0.9m (2006: £0.9m) on turnover of
£12.7m (2006: £9.8m).
The Group incurred a small loss in its joint venture undertaking, reflecting the
developmental nature of this business. As highlighted previously this joint
venture investment is not core to the group and progress has been made in its
restructuring.
The adjusted earnings per share (before exceptional items and amortisation of
acquired intangibles) for the six months ended 31 October 2007 are 4.12 pence
per ordinary share (2006: 2.99 pence).
Net cash flow from operating activities was £0.3m (2006: £1.0m). The period
ended with the Group holding £0.3m of net funds, having paid out £12.1m in cash
for the acquisition of SEA, £6.0m of which was funded from the net proceeds of
an equity fundraising, £3.0m from debt and the balance of £3.1m from Cohort's
own cash resources.
ACQUISITION OF SEA
SEA was acquired on 31 October 2007. The Group will recognise revenue and
operating profit of SEA from 1 November 2007. The initial consideration of
£20.7m included £8.8m of Cohort plc shares taken up by the vendors, a strong
endorsement of the vendor's commitment to the Cohort concept.
Up to £4.7m of deferred consideration is payable in cash to the vendors of SEA;
this is dependent upon SEA achieving an agreed level of earnings for the
thirteen months ended 30 April 2008. This deferred consideration is linearly
scalable, from zero deferred consideration payable if SEA profit before interest
and tax is £2.0m up to £4.7m of deferred consideration payable if SEA profit
before interest and tax is at or above £2.5m for the thirteen months ended 30
April 2008.
MASS
MASS, acquired in August 2006, has continued to perform well. Good progress on
the main MoD secure communications project contributed to a performance in the
Systems Development division that exceeded expectations. The Managed Services
division started work on contracts with several new customers. A new export
contract valued at approximately £7m was won; together with other orders, this
brought MASS's order book to over £34m at the end of the period.
SCS
Overall, revenue growth has been strong in SCS, particularly in the areas of the
business which feed into and support MoD operations. Demand in areas dependent
on MoD capital budgets has been weaker. New contracts won include work through
the Haldane Spearman consortium, support to BAE Systems, our NATO enabling
contract and elements of the Future Rapid Effects System (FRES). However, a
number of programmes have slipped including the Land Equipment Air Picture
Programme (LEAPP) and Joint Effects Tactical Targeting Systems (JETTS) and this
has impeded revenue and utilisation. In addition, there have been some
investments in management and business infrastructure, including a new business
information system. The overall impact is that while revenue expanded strongly
net profit was held back. We expect a stronger performance in the second half.
BOARD & PERSONNEL
Following the acquisition of SEA, Ian Dale-Staples, Chief Executive of SEA,
joined the Cohort Board. As well as overseeing SEA, Ian will contribute to the
Group acquisition effort.
We welcome warmly the 200 or so SEA staff who have joined the Cohort Group, many
as shareholders as well as employees. Group staff now number around 450 and it
is their skills and energy that will provide the forward impulse for the
business.
DIVIDENDS
In accordance with the Group's progressive dividend policy, it plans to pay an
interim dividend of
0.45 pence (2006: 0.40 pence) per ordinary share on 7 March 2008 to shareholders
on the register at 8 February 2008.
OUTLOOK
The Group's order book at 31 October 2007 stood at £56.1m including £13.7m
acquired with SEA. £22.8m of this order book is deliverable in the second half.
We expect the profits of MASS and SCS to be weighted towards the second half, as
in previous years, and with the addition of SEA, this effect will be amplified.
The Cohort business model of providing technical advice and services to defence
markets, independent of major producer interests, is strong and we intend to
exploit it by capitalising on the organic growth opportunities available to SCS,
MASS and SEA and by continuing to make complementary acquisitions as and when
opportunities arise. The Board is positive about the overall outlook.
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 October 2007
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October 2006 April 2007
Unaudited Unaudited Unaudited
Notes £000 £000 £000
Revenue 2 20,902 13,596 34,419
Cost of sales (15,427) (10,151) (26,027)
----------- ----------- -----------
Gross profit 5,475 3,445 8,392
Administrative expenses (4,029) (2,396) (5,481)
----------- ----------- -----------
Adjusted operating profit* 2 1,446 1,049 2,911
Amortisation of goodwill and
other intangible assets 7a (168) (84) (252)
Exceptional items 3 - 3 114
Share of results of joint
ventures (101) (116) (242)
----------- ----------- -----------
Operating profit 2 1,177 852 2,531
Finance revenue 143 119 214
Finance costs (14) (10) (22)
----------- ----------- -----------
Profit before tax 1,306 961 2,723
----------- ----------- -----------
Tax Expense 4 (260) (333) (454)
----------- ----------- -----------
Profit for the period 1,046 628 2,269
----------- ----------- -----------
All profit for the period is attributable to equity shareholders and derived
from continuing operations.
*Adjusted operating profit is the operating profit before exceptional items,
amortisation of acquired intangibles and share of results of joint ventures.
Six months Restated Restated
ended six year ended
31 October 2007 months ended 30 April
Unaudited 31 October 2007
Pence 2006 Unaudited
Unaudited Pence
Pence
Earnings per share 5
Basic 3.55 2.65 8.21
Diluted 3.52 2.63 8.16
Adjusted earnings per share 5
Basic 4.12 2.99 8.71
Diluted 4.09 2.97 8.65
Dividends per share proposed
in respect of the period 6
Interim 0.45 0.40 0.40
Final - - 0.90
CONSOLIDATED BALANCE SHEET
As at 31 October 2007
31 October
Notes 2007 Restated at Restated at
Unaudited 31 October 2006 30 April 2007
£000 Unaudited Unaudited
£000 £000
ASSETS
Non-current assets
Goodwill 7a 30,158 12,162 12,162
Other intangible assets 7a 2,300 1,476 1,308
Property, plant and equipment 4,904 371 282
Interest in joint ventures (334) (210) (233)
Finance lease receivables - 82 -
Deferred tax asset 71 43 71
----------- ----------- -----------
37,099 13,924 13,590
----------- ----------- -----------
Current assets
Inventories 4,629 82 409
Trade and other receivables 11,569 7,382 7,964
Finance lease receivables - 115 -
Cash and cash equivalents 4,603 3,426 5,015
----------- ----------- -----------
20,801 11,005 13,388
----------- ----------- -----------
Total assets 57,900 24,929 26,978
----------- ----------- -----------
LIABILITIES
Current liabilities
Trade and other payables (10,162) (4,413) (5,713)
Current tax liabilities (552) (743) (126)
Other loans (51) - -
Bank loans and overdrafts (358) - -
Provisions (4,956) (280) (60)
----------- ----------- -----------
(16,079) (5,436) (5,899)
----------- ----------- -----------
Non-current liabilities
Other loans (53) - -
Bank loans (3,864) - -
Deferred tax liability (32) - -
Long term provisions (500) (500) (500)
----------- ----------- -----------
(4,449) (500) (500)
----------- ----------- -----------
Total liabilities (20,528) (5,936) (6,399)
----------- ----------- -----------
Net Assets 37,372 18,993 20,579
----------- ----------- -----------
Equity
Share capital 4,035 2,946 2,947
Share premium account 29,019 14,134 14,155
Share option reserve 131 30 71
Retained earnings 4,187 1,883 3,406
----------- ----------- -----------
Total Equity 37,372 18,993 20,579
----------- ----------- -----------
All equity is attributable to equity shareholders of Cohort plc
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 October 2007
Notes Six months Restated Restated
ended six months year ended
31 October 2007 ended 31 30 April 2007
Unaudited October 2006 Unaudited
£000 Unaudited £000
£000
Net Cash from operating activities 8 318 970 2,155
---------- ---------- ----------
Investing activities
Interest received 143 136 225
Proceeds on disposal of property,
plant and equipment - 3 -
Purchases of property, plant and
equipment (161) (65) (87)
Acquisition of subsidiaries, net
of cash acquired 7d (10,945) (11,670) (11,935)
Investment in a joint venture - - (220)
---------- ---------- ----------
Net cash used in investing
activities (10,963) (11,596) (12,017)
---------- ---------- ----------
Financing activities
Dividends paid (265) (118) (236)
Interest paid (2) (4) (8)
Repayment of borrowings - - -
Proceeds from finance leases - 54 251
Proceeds on issue of shares 7d 7,500 8,529 9,279
New bank loans raised 7d 3,000 - -
---------- ---------- ----------
Net cash from financing activities 10,233 8,461 9,286
---------- ---------- ----------
Net decrease in cash and cash
equivalents (412) (2,165) (576)
---------- ---------- ----------
At 1 May Cash flow At 31 October
2007 £000 2007
£000 £000
Funds reconciliation
Cash and bank 15 50 65
Short term deposits 5,000 (462) 4,538
---------- ---------- ----------
Cash and cash equivalents 5,015 (412) 4,603
---------- ---------- ----------
Overdraft - (244) (244)
Other loans - (104) (104)
Bank loan - (3,978) (3,978)
---------- ---------- ----------
Debt - (4,326) (4,326)
---------- ---------- ----------
---------- ---------- ----------
Net funds 5,015 (4,738) 277
---------- ---------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Notes Six months Restated Restated
ended six year
31 months ended 31 ended
October 2007 October 2006 30 April 2007
Unaudited Unaudited Unaudited
£000 £000 £000
At 1 May as previously stated 8,924 8,924
under UK GAAP
Adjustment on introduction of IFRS - -
------------ ------------ ------------
20,579 8,924 8,924
Profit reported under IFRS 9 1,046 628 2,269
Equity dividends paid (265) (118) (236)
Issue of new 10p ordinary
shares 16,313 9,906 9,906
Costs of new share issue (361) (377) (377)
Exercise of share options - - 22
Share-based payments 60 30 71
------------ ------------ ------------
At end of period 37,372 18,993 20,579
============ ============ ============
NOTES TO THE INTERIM STATEMENT
1. BASIS OF PREPARATION
The financial information contained within this interim report has been prepared
using accounting policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the EU and expected to apply at 30 April 2008.
This interim report is condensed with respect to IFRS requirements. As
permitted, this interim report has been prepared in accordance with AIM Rules
for companies and not in accordance with IAS34 'Interim Financial Reporting' and
is therefore not fully compliant with IFRS.
This interim report reflects the first time adoption by the Group of IFRS and
comparatives have been restated accordingly, as shown in the consolidated
statement of changes in equity and notes 7a and 9.
On introducing IFRS, the resulting accounting policy changes have had no impact
upon the group's equity with the exception of goodwill amortisation (see note
7c). The impact of IFRS on the goodwill acquired was to require it to be split
between other intangibles, to be written off over their respective lives (notes
7b in respect of MASS and 7d in respect of SEA) with the remaining balance of
unallocated goodwill not being amortised but subject to annual impairment test.
There have been a number of presentational changes, but these are not material,
with the exception of the splitting of the goodwill arising on acquisition (note
7a).
The introduction of IFRS has had no impact upon the Group cash flows.
Date of transition to IFRS by the Group was 1 May 2006.
In accordance with s240(3) of the Companies Act 1985, the unaudited results do
not constitute statutory financial statements of the Company. The six months
results for both years are unaudited. The Group's auditors, Baker Tilly, UK
Audit LLP, have reviewed this statement (see page 15).
The comparative figures for the year ended 30 April 2007 were derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The previous statutory accounts prepared under UK GAAP have been
restated to IFRS. Those accounts received an unqualified audit report which did
not include statements under section 237(2) or (3) of the Companies Act 1985.
The interim report was approved by the Board and authorised for issue on 12
December 2007.
2. SEGMENTAL ANALYSIS OF REVENUE AND ADJUSTED OPERATING PROFIT
Six months Restated Restated
ended six year
31 months ended 31 ended 30
October 2007 October 2006 April 2007
Unaudited Unaudited Unaudited
£000 £000 £000
Revenue
SCS 12,662 9,820 22,144
MASS (acquired 1 August 2006) 8,240 3,776 12,275
------------- ------------- -------------
20,902 13,596 34,419
------------- ------------- -------------
Adjusted operating profit SCS 866 886 2,208
MASS (acquired 1 August 2006) 901 464 1,308
Central Costs (321) (301) (605)
------------- ------------- -------------
1,446 1,049 2,911
------------- ------------- -------------
Amortisation of goodwill and other (168) (84) (252)
intangible assets
Exceptional items - 3 114
Share of results of joint ventures (101) (116) (242)
------------- ------------- -------------
Operating profit 1,177 852 2,531
------------- ------------- -------------
All revenue and adjusted operating profit is in respect of continuing
operations.
The operating profit as reported under IFRS is reconciled to the adjusted
operating profit as reported above by the exclusion of exceptional items, the
Group's share of joint ventures and amortisation of goodwill and other
intangible assets.
The adjusted operating profit is presented in addition to the operating profit
to provide the trading performance of the Group, as derived from its constituent
elements on a comparable basis from period to period.
The adjusted operating profit is stated after charging £60,000 in respect of
share-based payments (six months ended 31 October 2006: £30,000, year ended 30
April 2007: £71,000)
3. EXCEPTIONAL ITEMS
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October April 2007
Unaudited 2006 Unaudited
£000 Unaudited £000
£000
Write back of provision against - - 113
joint ventures
Profit on sale of property, plant - 3 1
and equipment ------------- ------------- -------------
- 3 114
------------- ------------- -------------
4. TAX EXPENSE
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October April 2007
Unaudited 2006 Unaudited
£000 Unaudited £000
£000
Corporation tax:
Prior year 4 - 33
Current year 256 333 449
------------- ------------- -------------
260 333 482
Deferred taxation - - (28)
------------- ------------- -------------
260 333 454
============= ============= =============
The tax expense for the six months ended 31 October is based upon the
anticipated charge for the full year.
5. EARNINGS PER SHARE
The earnings per share are calculated as follows:
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October April 2007
Unaudited 2006 Unaudited
£000 Unaudited £000
£000
Earnings
Basic and diluted earnings 1,046 628 2,269
Exceptional items - (3) (114)
Amortisation of goodwill and other
intangible assets 168 84 252
------------- ------------- -------------
Adjusted basic and diluted earnings 1,214 709 2,407
------------- ------------- -------------
Number Number Number
Weighted average number of shares
For the purposes of basic earnings
per share 29,477,161 23,650,201 27,633,096
Share options 224,308 194,539 168,184
------------- ------------- -------------
For the purposes of diluted 29,701,469 23,844,740 27,801,280
earnings per share ============= ============= =============
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October 2006 April 2007
Unaudited Unaudited Unaudited
Pence Pence Pence
Earnings per share
Basic 3.55 2.65 8.21
Diluted 3.52 2.63 8.16
Adjusted earnings per share
Basic 4.12 2.99 8.71
Diluted 4.09 2.97 8.65
6. DIVIDENDS
The interim dividend for the six months ended 31 October 2007 is 0.45p (six
months ended 31 October 2006: 0.40p) per ordinary share. This dividend will be
payable 7 March 2008.
The final dividend for the year ended 30 April 2007 was 1.3p per ordinary share
(£383,000).
7. GOODWILL AND OTHER INTANGIBLE ASSETS
a. BALANCE SHEET
b.
Net book value At 31 October At 30 April
2006 2007
Unaudited Unaudited
£000 £000
At 1 May as previously stated under UK GAAP 13,562 13,207
Adjustment to acquired intangibles on introduction of 76 263
IFRS ------------ -----------
At 1 May as restated under IFRS 13,638 13,470
------------ -----------
Net Book Value MASS SEA Total
£000 £000 £000
At 1 May 2007 as restated under IFRS 13,470 - 13,470
Addition - 19,156 19,156
Amortisation of goodwill and other (168) - (168)
intangible assets for the six months
ended 31 October 2007
------------ ------------ -----------
At 31 October 2007 13,302 19,156 32,458
============ ============ ===========
Analysed as follows:
Goodwill 12,162 17,996 30,158
Other intangible assets 1,140 1,160 2,300
------------ ------------ -----------
13,302 19,156 32,458
============ ============ ===========
b. GOODWILL ON ACQUISITION OF MASS (ACQUIRED 1 AUGUST 2006)
£000
Goodwill on acquisition under UK GAAP 13,722
=========
Under IFRS:
Intangible asset in respect of acquired contracts 1,060
Intangible asset in respect of contracts to be secured 500
Goodwill on acquisition 12,162
---------
13,722
=========
The intangible asset in respect of acquired contracts is to be amortised over
four years, the life of the contracts' earnings. The intangible asset in respect
of contracts to be secured is to be written off over seven years and is in
respect of certain overseas contracts for which further consideration would be
payable if secured in accordance with the terms of the acquisition of MASS.
In accordance with IFRS the goodwill is not amortised but tested annually for
impairment.
c. AMORTISATION OF GOODWILL AND OTHER INTANGIBLE ASSETS
Six months Year ended
ended 31 30 April
October 2006 2007
Unaudited Unaudited
£000 £000
Amortisation for the period previously reported 171 515
under UK GAAP
Adjustment to amortisation on introduction of IFRS (87) (263)
------------- -------------
Amortisation of goodwill and other intangible
assets 84 252
------------- -------------
d. ACQUISITION OF SEA (GROUP) LIMITED
On 7 November 2007, the Group completed the acquisition of 100% of the issued
share capital of SEA (Group) Limited for initial consideration of £20.7 million
with further performance related deferred consideration of up to £4.7m, payable
in cash. SEA (Group) Limited is the parent company of Systems Engineering and
Assessment Limited, an independent systems engineering and software company.
The transaction has been accounted for as at 31 October 2007 by the purchase
method of accounting.
Book Value Fair Value
£000 £000
Net assets acquired:
Intangible assets 15 -
Property, plant and equipment 3,243 4,553
Inventories 1,677 1,501
Trade and other receivables 4,319 4,177
Cash and cash equivalents 1,203 1,203
Trade and other payables (1,944) (2,758)
Deferred tax (32) (32)
Current tax liabilities (292) (292)
Bank loans (1,082) (1,082)
Provisions - (160)
------------- -------------
7,107 7,110
=============
Other intangible assets 1,160
Goodwill 17,996
-------------
Total consideration 26,266
=============
Total consideration includes estimated costs of acquisition of £0.9 million
Satisfied by:
Cash 12,148
5,875,331 ordinary shares issued to vendors at 8,813
£1.50 per share
Trade and other payables 633
Provision for deferred consideration 4,672
-------------
26,266
=============
Net funds outflow arising on acquisition
Cash consideration (12,148)
Cash and cash equivalents acquired 1,203
-------------
Net cash flow (10,945)
Bank loans acquired (1,082)
-------------
Net funds flow (12,027)
=============
As part of the acquisition, the Group drew down £3.0 million from its
acquisition facility with RBS and raised £6.0m via a vendor placing net of
£361,000 of placing costs, which were charged to the Share Premium Account. A
further £1.5m was raised under the Venture Capital Trust Scheme.
The deferred consideration, if payable, will be settled in July 2008.
The total acquired goodwill and other intangible assets is an estimate since the
fair values are still subject to final review.
The estimated goodwill arising on the acquisition of SEA (Group) Limited is
attributable to the anticipated profitability of SEA in the future and expected
market and customer facing synergies that arise from the combination with the
remainder of the Cohort group. In accordance with IFRS this goodwill will not be
amortised but is subject to an annual impairment test. The other intangible
asset is in respect of the future profitability of the acquired order book of
SEA (Group) Limited and will be amortised over the period in which the acquired
contracts profitability arises, a period of four years.
8. NET CASH FROM OPERATING ACTIVITIES
Six months Restated Restated
ended six year
31 months ended ended 30
October 2007 31 October April 2007
Unaudited 2006 Unaudited
£000 Unaudited £000
£000
Profit for the period 1,046 628 2,269
Adjustments for:
Share of loss of joint ventures 101 116 242
Tax expense 260 333 454
Depreciation of property, plant and
equipment 93 78 187
Amortisation of goodwill and other
intangible assets 168 84 252
Exceptional items - (3) (114)
Finance revenue (net of finance costs) (129) (109) (192)
Share-based payment 60 30 71
Increase/(decrease) in provisions 64 - -
------------- ------------- -------------
Operating cash flows before
movements in working capital 1,663 1,157 3,169
------------- ------------- -------------
(Increase)/decrease in inventories (1,400) 61 (267)
Decrease/(increase) in receivables 33 (329) (1,180)
Increase in payables 363 81 1,220
------------- ------------- -------------
(1,004) (187) (227)
------------- ------------- -------------
Cash generated by operations 659 970 2,942
------------- ------------- -------------
Tax (341) - (787)
------------- ------------- -------------
Net cash flow generated from
operating activities 318 970 2,155
============= ============= =============
9. PROFIT REPORTED UNDER IFRS
Six months Year ended
ended 31 30 April
October 2006 2007
Unaudited Unaudited
£000 £000
The profit for the period reported under IFRS is
reconciled as follows:
As previously stated under UK GAAP 541 2,006
Adjustment to amortisation of goodwill and other 87 263
intangible assets on introduction of IFRS (note 7c)
------------ ------------
Profit for the period as reported under IFRS 628 2,269
============ ============
INDEPENDENT REVIEW REPORT TO COHORT 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 2007 which comprises the consolidated income statement, consolidated
balance sheet, consolidated cashflow statement, consolidated statement of
changes in equity and the related explanatory notes on pages 9 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, including the conclusion, has been prepared for and only for the
Company for the purpose of meeting the requirements of the AIM Rules for
Companies and for no other purpose. We do not, therefore, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Directors' Responsibilities
The half-yearly financial report, is the responsibility of, and has been
approved by the directors. The directors are responsible for preparing and
presenting the half-yearly financial report in accordance with the AIM Rules for
Companies.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards and
International Financial Reporting Interpretations Committee ('IFRIC')
pronouncements 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 the measurement and recognition criteria of International
Financial Reporting Standards and International Financial Reporting
Interpretations Committee ('IFRIC') pronouncements, 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 enquiries, 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 2007 is not prepared, in all material
respects, in accordance with the measurement and recognition criteria of
International Financial Reporting Standards and International Financial
Reporting Interpretations Committee ('IFRIC') pronouncements as adopted by the
European Union, and the AIM Rules for Companies.
Baker Tilly UK Audit LLP
Chartered Accountants
12 Gleneagles Court
Brighton Road
Crawley
West Sussex
RH11 9BX
12 December 2007
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