Interim Results
Jarvis Securities plc
31 July 2007
JARVIS SECURITIES PLC
('Jarvis' or 'the Company')
Interim Report for the six months to 30 June 2007
Financial highlights
•Revenue +30% £2.24M (30/6/06 £1.72M)
•Profit before tax +71% £1.23M (30/6/06 £0.72M)
•Basic earnings per share +73% 7.75p (30/6/06 4.49p)
Key performance indicators (KPI)
The Board introduced a number of key performance indicators (KPIs) in the 2006
Annual Report as part of its improved reporting regime for the Group. These are
designed to give stakeholders in the business a more rounded view of the Group's
performance. Further details on the KPIs and their measurement can be found in
the last Annual Report. A selection of KPIs and the Group's results to the
interim period for these are detailed below. These results have been annualised
from the position at 30 June 2007 where measurement over a year is required.
KPI: 30/6/07 31/12/06 Target
----------------------------------------------- --------- --------- --------- --------
Profit before tax margin 55% 34% 20% X
ROCE - return on capital employed (annualised) 101% 77% 12% X
Revenue per employee (annualised) £203,818 £155,439 to increase X
Funds under administration £368M £309M to increase X
Growth in client numbers (annualised) 23.2% 19.6% 10% X
Complaints ratio (annualised) 0.61 0.51 < 2 X
Telephone calls answered in three rings 92% 88% 90% X
Sickness days (annualised) 0.56% 1.85% 1% per year X
Basic earnings per share (annualised) 122% 165% 25% X
Chairman's statement
In my statement to shareholders in March 2007 reporting on the results for the
year ending 31 December 2006 and outlining our expectations for 2007, I said
that having absorbed the start up costs of our expanded services to retail and
institutional clients, we could look forward to a good year. I am thus more than
pleased to be able to report to you a profit before tax for the six months to 30
June 2007 of £1,225,776 compared to £716,275 for the same period in 2006 and in
fact not far short of the market forecasts for the year of £1,300,000 disclosed
last year. This was subsequently revised upwards to £1,700,000 for the year and
thus we are already well on course to at least achieve that target by the
year-end.
We have always striven to provide a friendly professional service to our clients
and this effort and commitment from our employees continues to reflect in our
results. So far as shareholders are concerned it is pleasing to note that the
share price on AIM had moved upwards to 210p per share on 30 June 2007, and at
one time peaked at 235p although currently the market has dropped across the
board. This upward movement was just the activity we had hoped for, the share
price having stuck in the doldrums for considerable periods in 2006 - a
situation that I commented on in last year's interim review.
In the period under review we have extended our range of activities and now
offer a competitive CFD trading platform for retail and institutional clients.
We additionally increased our throughput in the established activities,
particularly in our outsourcing and settlement services. Accordingly your Board
has followed its dividend policy of a two-thirds distribution and thus a 4p per
share dividend was recently paid to shareholders.
Once again I cannot let this occasion pass without recording the thanks due to
the Jarvis team, who take the stresses and strains associated with the peaks and
troughs of activity and sometimes the complexity present in their day-to-day
tasks and produce a good service. Thanks also to our increasing number of
shareholders for having the confidence to invest in our business.
On a purely technical note, shareholders may notice a few presentational changes
in the Interim Financial Statements. These arise as we have now adopted
International Financial Reporting Standards in place of UK GAAP. The impact on
the actual numbers reported has been minimal although the layout of our results
is quite different.
Andrew J Grant
Chairman
Consolidated income statement for the period ended 30 June 2007
Notes Six months ended Year to
30/6/07 30/6/06 31/12/06
as restated as restated
---------------------------- ------ --------- --------- ---------
£ £ £
Continuing operations
Revenue 2,241,999 1,724,835 3,419,658
Administrative expenses (1,014,389) (1,006,481) (2,255,165)
Finance costs (1,834) (2,079) (2,605)
---------------------------- ------ --------- --------- ---------
Profit before tax 1,225,776 716,275 1,161,888
Income tax charge 4 (360,446) (202,065) (364,322)
---------------------------- ------ --------- --------- ---------
Profit for the period 865,330 514,210 797,566
============================ ====== ========= ========= =========
Attributable to equity
holders of the parent 865,330 514,210 797,566
============================ ====== ========= ========= =========
Earnings per share 5 p p p
Basic 7.75 4.49 6.97
Diluted 7.29 4.25 6.60
Consolidated balance sheet at 30 June 2007
Notes 30/6/07 30/6/06 31/12/06
as restated as restated
----------------------------- ------ --------- --------- ---------
£ £ £
Assets
Non-current assets
Property, plant and equipment 123,610 178,717 144,145
Intangible assets 21,823 21,823 21,823
Goodwill 342,872 342,872 342,872
Available-for-sale 20,000 - -
investments
----------------------------- ------ --------- --------- ---------
508,305 543,412 508,840
Current assets
Trade and other receivables 7,507,490 4,736,141 5,710,459
Investments held for trading 24,121 23,882 34,186
Cash and cash equivalents 13,238,952 6,388,947 6,561,264
----------------------------- ------ --------- --------- ---------
20,770,563 11,148,970 12,305,909
----------------------------- ------ --------- --------- ---------
Total assets 21,278,868 11,692,382 12,814,749
============================= ====== ========= ========= =========
Equity and liabilities
Capital and reserves
Share capital 7 110,000 114,600 113,500
Share premium 789,834 789,834 789,834
Capital redemption reserve 4,845 245 1,345
Other reserves 23,544 13,272 17,696
Retained earnings 706,801 795,478 688,886
Own shares held in treasury (52,071) (130,371) (69,793)
----------------------------- ------ --------- --------- ---------
Total equity 8 1,582,953 1,583,058 1,541,468
Non-current liabilities
Deferred tax liabilities 18,119 18,119 13,130
----------------------------- ------ --------- --------- ---------
Current liabilities
Trade and other payables 19,025,637 9,705,820 10,909,451
Current tax liabilities 4 652,159 385,385 350,700
----------------------------- ------ --------- --------- ---------
Total liabilities 19,677,796 10,091,205 11,260,151
----------------------------- ------ --------- --------- ---------
Total equity and liabilities 21,278,868 11,692,382 12,814,749
============================= ====== ========= ========= =========
Consolidated statement of recognised income and expense for the period
Notes Six months ended Year to
30/6/07 30/6/06 31/12/06
as restated as restated
---------------------------- ----- --------- --------- ---------
£ £ £
Purchase of own shares (722,658) (130,371) (323,072)
Sale of shares from 174,965 - 149,833
treasury
---------------------------- ----- --------- --------- ---------
Net income recognised
directly in equity (547,693) (130,371) (173,239)
Profit for the period 865,330 514,210 797,566
---------------------------- ----- --------- --------- ---------
Total recognised income and
expense for the period 317,637 383,839 624,327
============================ ===== ========= ========= =========
Attributable to equity
holders of the parent 317,637 383,839 624,327
============================ ===== ========= ========= =========
Consolidated statement of changes in equity for the period
Share Share Capital Other Retained Own shares Attributable
capital premium redemption reserves earnings held to equity
reserve as restated holders of
the parent
---------------- ------- ------- ------- ------- ------- ------- --------
£ £ £ £ £ £ £
Balance at
1/1/06 114,845 789,834 - 8,848 472,412 (18,879) 1,367,060
Purchase of
own shares - - - - - (130,371) (130,371)
---------------- ------- ------- ------- ------- ------- ------- --------
Net income
recognised
directly in
equity - - - - - (130,371) (130,371)
---------------- ------- ------- ------- ------- ------- ------- --------
Cancellation
of own shares (245) - 245 - (18,879) 18,879 -
Expense of
employee
options - - - 4,424 - - 4,424
Profit for the
period - - - - 514,210 - 514,210
Dividends - - - - (172,265) - (172,265)
---------------- ------- ------- ------- ------- ------- ------- --------
Balance at
30/6/06 114,600 789,834 245 13,272 795,478 (130,371) 1,583,058
Purchase of
own shares - - - - - (192,701) (192,701)
Sale of shares
from treasury - - - - - 149,833 149,833
---------------- ------- ------- ------- ------- ------- ------- --------
Net income
recognised
directly in
equity - - - - - (42,868) (42,868)
---------------- ------- ------- ------- ------- ------- ------- --------
Cancellation
of own shares (1,100) - 1,100 - (103,446) 103,446 -
Expense of
employee
options - - - 4,424 - - 4,424
Profit for the
period - - - - 283,354 - 283,354
Dividends - - - - (286,500) - (286,500)
---------------- ------- ------- ------- ------- ------- ------- --------
Balance at
31/12/06 113,500 789,834 1,345 17,696 688,886 (69,793) 1,541,468
Purchase of
own shares - - - - - (722,658) (722,658)
Sale of shares
from treasury - - - - - 174,965 174,965
---------------- ------- ------- ------- ------- ------- ------- --------
Net income
recognised
directly in
equity - - - - - (547,693) (547,693)
---------------- ------- ------- ------- ------- ------- ------- --------
Cancellation
of own shares (3,500) - 3,500 - (565,415) 565,415 -
Expense of
employee
options - - - 5,848 - - 5,848
Profit for the
period - - - - 865,330 - 865,330
Dividends - - - - (282,000) - (282,000)
---------------- ------- ------- ------- ------- ------- ------- --------
Balance at
30/6/07 110,000 789,834 4,845 23,544 706,801 (52,071) 1,582,953
Condensed consolidated cash flow statement for the period ended 30 June 2007
Notes Six months ended Year to
30/6/07 30/6/06 31/12/06
as restated as restated
----------------------------- ----- --------- --------- ---------
£ £ £
Net cash from operating 1,344,177 535,060 518,468
activities
----------------------------- ----- --------- --------- ---------
Additions to property, plant
and equipment (13,431) (47,277) (64,659)
Proceeds on disposal of property,
plant and equipment - - 15,977
Other investing cash flows (20,000) 14,571 (1,009)
(net)
----------------------------- ----- --------- --------- ---------
Net cash used in investing
activities (33,431) (32,706) (49,691)
----------------------------- ----- --------- --------- ---------
Other financing cash flows
(net) (829,692) (302,639) (632,008)
----------------------------- ----- --------- --------- ---------
Net cash from (used in)
financing activities (829,692) (302,639) (632,008)
----------------------------- ----- --------- --------- ---------
Net increase in cash and
cash equivalents 481,054 199,715 (163,231)
----------------------------- ----- --------- --------- ---------
Cash and cash equivalents at
1 January 471,499 634,730 634,730
Cash and cash equivalents at
30 June 952,553 834,445
Cash and cash equivalents at
31 December 471,499
----------------------------- ----- --------- --------- ---------
Bank balances and cash 952,553 834,445 471,499
============================= ===== ========= ========= =========
Notes forming part of the interim financial statements
1. Basis of preparation
The interim consolidated financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34, Interim Financial Reporting and
are covered by IFRS 1, First-time Adoption of IFRS, because they are part of the
period covered by the Group's first IFRS financial statements for the year ended
31 December 2007. These interim financial statements have been prepared in
accordance with those IFRS standards and IFRIC interpretations issued and
effective or issued and early adopted as at the time of preparing these
statements (July 2007).
Jarvis Securities' consolidated financial statements were prepared in accordance
with UKGAAP until 31 December 2006. UKGAAP differs in some areas from IFRS. In
preparing Jarvis Securities' 2007 consolidated interim statements, management
has amended certain accounting methods applied in the UKGAAP financial
statements to comply with IFRS. The comparative figure in respect of 2006 was
restated to reflect these adjustments.
Reconciliations and descriptions of the effect of the transition from UKGAAP to
IFRS on the Group's equity and net income and cash flows are shown in Note 8.
The implementation of IFRS has had no material impact on the cash flow statement
of the Group.
These consolidated interim financial statements have been prepared under the
historical cost convention, as modified by the revaluation of available-for-sale
financial assets, and financial assets and liabilities at fair value through
profit or loss.
The preparation of financial statements in accordance with IAS34 requires the
use of certain accounting estimates. It also requires management to exercise
judgement in the process of applying the Company's accounting policies. The
areas involving a high degree of judgement or complexity, or areas where the
assumptions and estimates are significant to the consolidated interim financial
statements, are disclosed in Note 10.
The financial information contained in this report, which has not been audited,
does not constitute statutory accounts as defined by Section 240 of the
Companies Act 1985. The auditors' report for the 2006 accounts was unqualified
and did not contain a statement under Section 237(2) or (3) of the Companies Act
1985.
2. Accounting policies
(a) Revenue
Revenue represents net sales of services, commissions and interest excluding
value added tax. Management fees charged in arrears are accrued pro-rata for the
expired period of each charging interval. Interest is accrued on cash deposits
pro-rata for the expired period of the deposit. Commission income is recognised
as earned
(b) Basis of consolidation
Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date on which control ceases. The group financial
statements consolidate the financial statements of Jarvis Securities plc, Jarvis
Investment Management plc, Sharegain Limited, JIM Nominees Limited, Galleon
Nominees Limited and Dudley Road Nominees Limited made up to 30 June 2007.
The Group uses the purchase method of accounting for the acquisition of
subsidiaries. The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest. The cost
of acquisition over the fair value of the Group's share of identifiable net
assets acquired is recorded as goodwill. If the cost of acquisition is less than
the fair value of the Group's share of the net assets of the subsidiary
acquired, the difference is recognised in the income statement.
Intra-group sales and profits are eliminated on consolidation and all sales and
profit figures relate to external transactions only. No profit and loss account
is presented for Jarvis Securities plc as provided by S230(3) of the Companies
Act 1985.
(c) Property, plant and equipment
All property, plant and equipment is shown at cost less subsequent depreciation
and impairment. Cost includes expenditure that is directly attributable to the
acquisition of the items. Depreciation is provided on cost in equal annual
instalments over the lives of the assets at the following rates:
Website - 33% on cost
Leasehold improvements - 33% on cost
Motor vehicles - 15% on cost
Office equipment - 20% on cost
Software developments - 33% on cost
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date. Gains and losses on disposals are
determined by comparing proceeds with carrying amount. These are included in the
income statement.
(d) Intangible assets
Intangible assets are capitalised at their fair value on acquisition and are
tested annually for impairment and carried at cost less accumulated impairment
losses.
(e) Goodwill
Goodwill represents the excess of the fair value of the consideration given over
the aggregate fair values of the net identifiable assets of the acquired
subsidiary at the date of acquisition. Goodwill is tested annually for
impairment and carried at cost less accumulated impairment losses.
(f) Deferred income tax
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. The
deferred income tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction, other than a business combination,
that at the time of the transaction affects neither accounting or taxable profit
or loss. Deferred income tax is determined using tax rates that have been
enacted or substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary differences
can be utilised.
Deferred income tax is provided on temporary differences arising on investments
in subsidiaries except where the timing of the reversal of the timing difference
is controlled by the Group and its probable that the temporary differences will
not reverse in the foreseeable future.
(g) Segmental reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. The directors regard the operations of
the Group as a single segment.
(h) Pensions
The group operates a defined contribution pension scheme. Contributions payable
for the year are charged to the profit and loss account.
(i) Stockbroking balances
The gross assets and liabilities of the group relating to stockbroking
transactions on behalf of clients are included in debtors, creditors and cash at
bank.
(j) Operating leases and finance leases
Costs in respect of operating leases are charged on a straight line basis over
the lease term in arriving at the operating profit. Where the company has
entered into finance leases, the obligations to the lessor are shown as part of
borrowings and the rights in the corresponding assets are treated in the same
way as owned fixed assets. Leases are regarded as finance leases where their
terms transfer to the lessee substantially all the benefits and burdens of
ownership other than right to legal title.
(k) Investments
The Group classifies its investments in the following categories:
available-for-sale investments and investment held for trading. The
classification depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at initial
recognition and re-evaluates this designation at every reporting date.
Investment held for trading
Investments held for trading are stated at fair value. An investment is
classified in this category if acquired principally for the purpose of selling
in the short term. Assets in this category are classified as current.
Available-for-sale investments
Available-for-sale investments are stated at fair value. They are included in
non-current assets unless management intends to dispose of them within 12 months
of the balance sheet date.
Purchases and sales of investments are recognised on the trade-date - the date
on which the Group commits to purchase or sell the asset. Investments are
initially recognised at fair value plus transaction costs. Investments are
derecognised when the rights to receive cash flows from the investments have
expired or been transferred and the Group has transferred substantially all the
risks and rewards of ownership. Realised and unrealised gains and losses arising
from changes in fair value of investments held for trading are included in the
income statement in the period in which they arise. Unrealised gains and losses
arising in changes in the fair value of available-for-sale investments are
recognised in equity. When investments classified as available-for-sale are sold
or impaired, the accumulated fair value adjustments are included in the income
statement as gains and losses from investment securities.
The fair value of quoted investments is based on current bid prices. If the
market for an investment is not active, the Group establishes fair value by
using valuation techniques. These include the use of recent arm's length
transactions, reference to other instruments that are substantially the same,
discounted cash flow analysis refined to reflect the issuer's specific
circumstances.
The Group assesses at each balance sheet date whether there is objective
evidence that an investment is impaired. In the case of investments classified
as available-for-sale, a significant or prolonged decline in the fair value
below its cost is considered in determining whether the security is impaired.
(l) Cashflow statement
Cash movements relating to stockbroking balances derived from client trading are
excluded from the cashflow statement on the basis that these amounts do not form
part of the cashflow position of the group.
(m) Foreign Exchange
The company offers settlement of trades in sterling, US dollars, euros, Canadian
dollars and Swiss francs. The company does not hold any assets or liabilities
other than in sterling and converts client currency on matching terms to
settlement of trades realising any currency gain or loss immediately in the
income statement. Consequently the company has no foreign exchange risk.
(n) Share Capital
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction from proceeds, net of tax.
Where the Company purchases its equity share capital (treasury shares), the
consideration paid, including any directly attributable incremental costs (net
of income tax), is deducted from equity attributable to the Company's equity
holders until the shares are cancelled, reissued or disposed of. Where such
shares are subsequently sold or reissued, any consideration received, net of any
directly incremental transaction costs and the related income tax effects, is
included in equity attributable to the Company's equity holders.
(o) Options
Employee options are expensed equally in each year from issue to the date of
first exercise. The total cost is calculated on issue based on the Black Scholes
method with a volatility rate of 30% and a risk free interest rate of 3.75%. It
is assumed that all current employees with options will still qualify for the
options at the exercise date.
3. Segmental information
All of the reported revenue and operational results for the period derive from
the Group's continuing financial services operations.
4. Income tax (charge) credit
Interim period income tax is accrued based on the estimated average annual
effective income tax rate of 30%.
5. Earnings per share
Six months ended Year to
30/6/07 30/6/06 31/12/06
as restated as restated
------------------------------------------------ ------- --------- --------
£ £ £
Earnings for the purposes of basic and diluted
earnings per share (profit (loss) for the period
attributable to the equity holders of the
parent) 865,330 514,210 797,566
================================================ ======== ======== =========
Date Event Number Days
------- ----------------- --------- ------ -------- -------- ---------
Basic earnings per share
1/1/06 Balance at 1/1/06 11,484,545 8 507,604 251,716
9/1/06 Cancellation of 11,460,000 173 10,953,481 5,431,726
treasury shares
30/6/06 Balance at 30/6/06 11,460,000 79 2,480,383
18/9/06 Cancellation of 11,400,000 81 2,529,860
treasury shares
7/12/06 Cancellation of 11,350,000 24 746,301
treasury shares
1/1/07 Balance at 1/1/07 11,350,000 7 438,950
8/1/07 Cancellation of 11,280,000 73 4,549,392
treasury shares
21/3/07 Cancellation of 11,200,000 37 2,289,503
treasury shares
27/4/07 Cancellation of 11,000,000 64 3,889,502
treasury shares
------- ----------------- --------- ------ -------- -------- ---------
11,167,347 11,461,085 11,439,986
======== ======== =========
Diluted earnings per share
1/1/06 Balance at 1/1/06 12,134,545 8 536,333 265,962
9/1/06 Cancellation of 12,110,000 173 11,574,751 5,739,808
treasury shares
30/6/06 Balance at 30/6/06 12,110,000 79 2,621,068
18/9/06 Cancellation of 12,050,000 81 2,674,109
treasury shares
7/12/06 Cancellation of 12,000,000 24 789,041
treasury shares
1/1/07 Balance at 1/1/07 12,000,000 7 464,088
8/1/07 Cancellation of 11,930,000 73 4,811,547
treasury shares
21/3/07 Cancellation of 11,850,000 37 2,422,375
treasury shares
27/4/07 Cancellation of 11,650,000 21 1,351,657
treasury shares
18/5/07 Grant of options 11,880,000 43 2,822,320
------- ----------------- --------- ------ -------- -------- ---------
11,871,987 12,111,084 12,089,988
======== ======== =========
6. Dividends
During the interim period a dividend of 4p per ordinary share was declared. This
dividend was paid to shareholders on 20 July 2007.
7. Share capital
The movements in the share capital of the company during the interim period are
detailed in the consolidated statement of changes in equity and in note 5.
Notes forming part of the interim financial statements (continued)
8. Reconciliation of amounts reported under previous UK GAAP to IFRS
The Group adopted IFRS on 1 January 2007. A reconciliation of equity and profit
reported under previous UK GAAP to that stated in the interim financial
statements under IFRS is given below in accordance with the requirements of IAS
34 and IFRS 1.
Six months Year
ended to
30/6/06 31/12/06
as restated as restated
---------------------------------------------- --------- ---------
£ £
Total equity reported under UK GAAP 1,572,740 1,520,833
IFRS adjustment - amortisation of goodwill 9,693 19,385
IFRS adjustment - amortisation of intangible
assets 625 1,250
---------------------------------------------- --------- ---------
Total equity reported under IFRS 1,583,058 1,541,468
Total profit reported under 508,316 776,931
UK GAAP IFRS adjustment - amortisation of
goodwill 9,693 19,385
IFRS adjustment - amortisation of intangible
assets 625 1,250
Error adjustment - apportionment of employee
options expense (4,424) -
---------------------------------------------- --------- ---------
Total profit reported under IFRS 514,210 797,566
9. Interim measurement
Costs that incur unevenly during the financial year are anticipated or deferred
in the interim report only if it would also be appropriate to anticipate or
defer such costs at the end of the financial year.
10. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. These estimates
and judgements are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of
assets with the next financial year relate to goodwill.
The Group tests annually whether goodwill has suffered any impairment, in
accordance with the accounting policy stated in Note 2 (e). These calculations
require the use of estimates.
For Further Information:
Jarvis Securities plc
Mathew Edmett Tel: 0870 224 1111
Daniel Stewart & Company plc
Stewart Dick Tel: 0207 776 6550
INDEPENDENT REVIEW REPORT TO
JARVIS SECURITIES PLC
Introduction
We have been instructed by the company to review the financial information set
out in these interim financial statements and we have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The continuing
obligations of the AIM listing rules require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
Horwath Clark Whitehill LLP
Chartered Accountants
10 Palace Avenue
Maidstone
Kent
ME15 6NF
Date: 31 July 2007
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