Interim Results

Johnson Service Group PLC 10 September 2004 10 September 2004 JOHNSON SERVICE GROUP PLC INTERIM RESULTS FOR THE 26 WEEKS TO 26 JUNE 2004 Johnson delivers as progress continues HIGHLIGHTS • Turnover from continuing operations, excluding costs recharged to customers, increased to £125.7m (2003: £96.0m). • Adjusted operating profit from continuing operations (excluding goodwill amortisation) increased to £14.0m (2003: £12.9m). • Adjusted pre-tax profit (excluding goodwill amortisation and exceptional items) up 8% at £12.1m (2003: £11.2m). • Adjusted fully diluted EPS increased by 4.3% to 14.6p (2003: 14.0p). • Pre-tax profit was £8.9m (2003: Loss £5.5m). • Net debt of £43.7m as at 26 June 2004 (December 2003: £43.4m). • Interim dividend increased by 5% to 4.2p (2003:4.0p). • Acquisitions performing well. Simon Sherrard, Chairman, said 'We have again delivered on our plans and will continue to pursue our stated strategy of organic growth and selective acquisition. Overall, I am very encouraged by the progress that we have made during the first six months of the year. The two months of the second half year have continued this trend and I anticipate a satisfactory outcome for the year as a whole. ' Enquiries: Johnson Service Group PLC Stuart Graham, CEO Tel: 020 7796 4133 on Friday 10 September 2004 only Mike Sutton, CFO thereafter on 0151 933 6161 gcg hudson sandler Michael Sandler Tel: 020 7796 4133 Sandrine Boussard James Benjamin CHAIRMAN'S STATEMENT During the first half of 2004, we have again delivered on our plans and will continue to pursue our stated strategy of organic growth supported by selective acquisition. We invested in our established businesses, implemented operating efficiencies and made targeted acquisitions in areas that offer attractive long term growth potential. GROUP RESULTS AND DIVIDEND The Group results for the six months to 26 June were in line with expectations. Total turnover was £168.7million (2003: £110.3million) and operating profit was £10.8million (2003: £10.8million). Turnover from continuing operations (excluding costs recharged to customers) was £125.7million (2003: £96.0million) and adjusted operating profit from continuing operations (which excludes goodwill amortisation) was £14.0million (2003: £12.9million), an increase of 8.5%. Profit before tax was £8.9million (2003: loss £5.5million) and fully diluted earnings per share were 9.1p (2003: loss 9.5p). Adjusted pre-tax profit (which excludes goodwill amortisation and, in 2003, exceptional items) was £12.1million (2003: £11.2million) and adjusted fully diluted earnings per share (which excludes goodwill amortisation and, in 2003, exceptional items and a tax credit relating to previous years) were 14.6p (2003: 14.0p). The net interest charge was £1.9million (2003: £2.2million) reflecting the Group's lower level of debt compared to the first half of 2003. The interest charge was covered over seven times by adjusted operating profit. Net debt at 26 June was £43.7million. Since the end of the period we have acquired Dimensions Holdings Limited for £24 million in cash and loan notes, of which £21.7 million was paid in cash. The Board has decided to pay an increased interim dividend of 4.2p (2003: 4.0p) per share. DIVISIONAL TRADING RESULTS Textile and Hospitality Services Turnover from continuing operations increased by 8.1% to £65.1million (2003: £60.2million), though operating profit before goodwill amortisation was 7.9% lower than in the first half last year at £8.2million (2003: £8.9million). The reduction in turnover and operating profit in Johnsons Apparelmaster masks the increases achieved in our other businesses. Our actions to strengthen the Johnsons Apparelmaster management and invest in both improved customer service and more effective selling have delivered significant and sustainable improvement in new sales performance. However, this has only partly offset the continued effects of wearer attrition in our traditional customer base, an industry trend identified by us two years ago, particularly in the manufacturing sector of the Midlands and North. This attrition has created a highly competitive market environment but we are, and will remain, ahead in addressing the effects of this. Our restructured sales team is now operating at full strength and we expect to see increasing benefit from their activities over the coming months. Simultaneously and with equal importance, we continue to identify cost reductions and production efficiency improvements which will contribute to the stabilisation of profitability in this business. The strong growth achieved by Stalbridge Linen Services in recent years has continued. We are having considerable success in developing new accounts where quality and service is a requirement, areas where we see long-term growth potential. CCM, our garment sourcing business, has also continued its growth, expanding product range through a further small acquisition with other potential lines having been identified. Importantly, CCM has expanded its reach in the sourcing and supply chain to our business. Our hospitality services business which was acquired in December 2003, and which now trades under the Johnson Hospitality Services name, performed to expectations. The range of product on offer was expanded in April 2004 through the acquisition of HSS Events Hire and we are now the UK's largest hospitality and event hire company. Each of the businesses within this division are at the forefront of the markets they serve. Drycleaning Turnover was £41.4million (2003: £35.8million) and operating profit before goodwill amortisation increased by 12.5% to £4.5million (2003: £4.0million). In particular our Johnsons drycleaning business performed well within a somewhat challenging market, achieving an encouraging sales increase that reflected the quality and range of the services we offer. The roll-out of the GreenEarth(R) process has continued with over 150 shops now converted. A new EPOS system has also been introduced which will further improve our database and marketing and allow further initiatives. In May we acquired the Sketchley high street drycleaning shops for a nominal £1, thereby strengthening our coverage in the South and South East of England. The refurbishment and reorganisation of the acquired shops is under way but it will take time for them to be fully integrated into the Johnson portfolio. It is intended that the Sketchley brand will be retained within the London area. The estimated cost of reorganisation is £2million which will be incurred in the second half and charged as an exceptional operating cost. We are revitalising the Jeeves of Belgravia brand with a new shop design being developed. A new branch in central London has opened and we intend to expand into other suitable locations. Facilities Management and Specialist Supplies Turnover excluding costs recharged to customers from Johnson Workplace Management and Alex Reid was £19.2million and operating profit excluding goodwill amortisation was £1.3million. Johnson Workplace Management continues to perform well and achieved good growth. The head office has been relocated, contributing to a reduction in overhead. We are expanding the range of services offered to clients and are currently developing these offerings across the country. Our Alex Reid business supplying consumables to the clothes care sector produced good results despite a difficult trading period for the UK drycleaning industry as a whole. We have begun marketing the innovative GreenEarth(R) cleaning technology to independent drycleaners in the UK and Ireland and initial reaction has been very positive. SUBSEQUENT EVENTS In July we acquired Dimensions, the UK's leading supplier of corporatewear, for a maximum consideration of up to £27.4million including performance related deferred consideration. This acquisition expands the range of textile-related services we offer, making Johnson Service Group the country's clear market leader in both corporate and workwear, and takes us into a market where we see considerable growth potential. THE BOARD We were pleased to welcome Simon Moate and Michael Del Mar to the Board on 12 May 2004. Simon (42), who joined the Group in 2002, has executive responsibility for corporate strategy and for our facilities management and specialist supplies division. Michael (58) has extensive experience of corporate finance as a former investment banker, and joins us an additional independent non-executive director. OUTLOOK We will continue to pursue our stated strategy of organic growth and selective acquisition. Management and employees will benefit from and participate in our success as we continue to introduce incentive schemes at all levels. In the Johnsons Apparelmaster business, we are focusing on new sales, product development and cost reduction to mitigate the effects of contraction in our UK manufacturing customer base, with the aim of stabilising profitability. The other businesses within the textile and hospitality services division address growing markets and prospects are good. Our facilities management and specialist supplies division is continuing to expand its customer base as well as developing additional services all organically. We expect our drycleaning business to continue to benefit from our various initiatives and from the re-organisation and subsequent integration of the Sketchley portfolio. The re-positioning of the Group through strong organic growth, coupled with acquisition growth, has reduced our dependency on the traditional workwear rental market of Johnsons Apparelmaster. We are now, therefore, no longer as reliant on any one of the Group's businesses. At this time, all other than Johnsons Apparelmaster are performing very well and are either market leaders or significant players in their respective sectors. During this my first year as Chairman I have visited many of our businesses as indeed have a number of my Board colleagues. A great amount of activity has taken place over the last two years and there is significant enthusiasm for the future throughout the Group. I must say a large thank you to all our employees who contribute to the Group in so many different ways. Overall, I am very encouraged by the progress that we have made during the first six months of the year. The first two months of the second half year have continued this trend and I anticipate a satisfactory outcome for the year as a whole. Simon P Sherrard Chairman JOHNSON SERVICE GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER Note 2004 2003 2003 £m £m £m 2 TURNOVER Continuing 168.7 96.0 213.3 Discontinued - 14.3 18.3 TOTAL TURNOVER 168.7 110.3 231.6 Costs recharged to customers (43.0) - (12.0) Turnover excluding costs recharged to customers 125.7 110.3 219.6 2 OPERATING PROFIT BEFORE GOODWILL AMORTISATION Continuing 14.0 12.9 26.4 Discontinued - 0.5 0.7 Total 14.0 13.4 27.1 Amortisation of goodwill (3.2) (2.6) (5.0) OPERATING PROFIT Continuing 10.8 11.1 22.4 Discontinued - (0.3) (0.3) Total 10.8 10.8 22.1 3 EXCEPTIONAL ITEMS Disposal of businesses (discontinued) - (14.1) (9.2) Gain on disposal of property (discontinued) - - 0.8 2 PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE INTEREST 10.8 (3.3) 13.7 Net interest (1.9) (2.2) (4.0) 2 PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 8.9 (5.5) 9.7 5 Tax on profit/(loss) on ordinary activities (3.6) - (2.8) PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 5.3 (5.5) 6.9 6 Dividends (2.4) (2.3) (10.0) 9 RETAINED PROFIT/(LOSS) FOR THE PERIOD 2.9 (7.8) (3.1) 4 PROFIT BEFORE TAX EXCLUDING GOODWILL AMORTISATION AND 12.1 11.2 23.1 EXCEPTIONAL ITEMS JOHNSON SERVICE GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT (continued) 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER Note 2004 2003 2003 £m £m £m 6 RATES OF DIVIDEND PER SHARE Ordinary shares of 10p each:- Interim - paid - 4.0p 4.0p Interim - proposed 4.2p - - Final - paid - - 13.6p 7 EARNINGS/(LOSS) PER SHARE BASIC 9.3p (9.6)p 12.3p FULLY DILUTED 9.1p (9.5)p 12.2p 7 ADJUSTED EARNINGS PER SHARE* BASIC 14.8p 14.1.p 28.9p FULLY DILUTED 14.6p 14.0p 28.7p * As detailed in note 7 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Profit/(loss) for the period 5.3 (5.5) 6.9 Charge for share options - - 0.1 Currency translation differences on foreign currency - 0.2 0.1 net investments Total gains and losses recognised since last annual 5.3 (5.3) 7.1 report JOHNSON SERVICE GROUP PLC CONSOLIDATED BALANCE SHEET 26 JUNE 28 JUNE 27 DECEMBER Note 2004 2003 2003 £m £m £m Restated Restated FIXED ASSETS Goodwill 86.8 67.8 89.8 Tangible fixed assets: Property, plant and equipment 65.6 73.7 64.2 Rental items 22.3 25.4 21.4 87.9 99.1 85.6 174.7 166.9 175.4 CURRENT ASSETS Stocks 9.7 8.7 8.8 Debtors: Amounts falling due within one year 55.5 34.2 47.7 Amounts falling due after more than one year 10.7 6.3 5.8 66.2 40.5 53.5 Cash at bank and in hand 8.4 1.2 2.2 84.3 50.4 64.5 CURRENT LIABILITIES Creditors: Amounts falling due within one year (77.7) (40.5) (71.0) NET CURRENT ASSETS/(LIABILITIES) 6.6 9.9 (6.5) TOTAL ASSETS LESS CURRENT LIABILITIES 181.3 176.8 168.9 Creditors: Amounts falling due after more than one year (55.6) (64.0) (49.1) PROVISIONS FOR LIABILITIES AND CHARGES (17.3) (13.2) (14.9) NET ASSETS 108.4 99.6 104.9 CAPITAL AND RESERVES Called-up share capital 5.8 5.7 5.7 9 Share premium account 8.5 7.4 8.0 9 Revaluation reserve 8.3 9.4 8.5 9 Other reserves 2.1 2.1 2.1 9 Profit and loss account 83.7 75.0 80.6 10 SHAREHOLDERS' FUNDS 108.4 99.6 104.9 The Interim Statement was approved by the Board of Directors on 10th September 2004 JOHNSON SERVICE GROUP PLC CONSOLIDATED CASH FLOW STATEMENT 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER Note 2004 2003 2003 £m £m £m Operating profit 10.8 10.8 22.1 Depreciation and goodwill amortisation 13.9 16.4 30.3 Working capital and other items (net) (0.7) 0.6 0.5 NET CASH INFLOW FROM OPERATING ACTIVITIES 24.0 27.8 52.9 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Net interest paid (1.6) (2.5) (4.4) Issue costs of new bank loans - (0.2) (0.3) NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND (1.6) (2.7) (4.7) SERVICING OF FINANCE TAXATION Tax paid (net) (2.3) (3.5) (6.9) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets - property, (3.0) (2.2) (5.2) plant and equipment Receipts from sales of tangible fixed assets - property, 1.0 0.9 4.1 plant and equipment Payments to acquire tangible fixed assets - rental items (8.6) (10.2) (19.8) Proceeds from tangible fixed assets - rental items 2.3 2.5 4.8 withdrawn from circulation NET CASH OUTFLOW FOR CAPITAL EXPENDITURE AND FINANCIAL (8.3) (9.0) (16.1) INVESTMENT FREE CASHFLOW 11.8 12.6 25.2 ACQUISITIONS AND DISPOSALS Payments to acquire businesses, net of cash balances (2.1) (4.5) (23.1) acquired Receipts from disposal of businesses, net of cash 0.2 - 28.7 balances disposed NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (1.9) (4.5) 5.6 JOHNSON SERVICE GROUP PLC CONSOLIDATED CASH FLOW STATEMENT 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER Note 2004 2003 2003 £m £m £m EQUITY DIVIDENDS PAID (7.8) (7.7) (10.0) CASH INFLOW BEFORE FINANCING 2.1 0.4 20.8 FINANCING Issue of Ordinary share capital 0.6 0.1 0.7 Debt due in more than one year: Loans repaid (0.3) (42.6) (62.4) New loans advanced 4.0 46.0 46.0 Capital element of payments under finance agreements (0.2) (0.4) (0.6) NET CASH INFLOW/(OUTLFOW) FROM FINANCING 4.1 3.1 (16.3) 11 INCREASE IN CASH IN PERIOD 6.2 3.5 4.5 JOHNSON SERVICE GROUP PLC NOTES 1. Change in Accounting Policy The Accounting Standards Board has issued Urgent Issues Task Force ('UITF') Abstract 38 'Accounting for ESOP Trusts' which supersedes UITF Abstract 13 and requires presentation of an entity's own shares held in an ESOP trust to be deducted in arriving at shareholders' funds as opposed to being recognised as assets. The Group has changed its accounting policy in respect of its trust to comply with the provisions of the Abstract. The impact of adopting UITF 38 was to reduce investments and shareholders' funds by £0.4million as at 28th June 2003 and 27th December 2003. 2. Segmental Information 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Turnover Continuing Textile and Hospitality Services 65.1 60.2 122.4 Drycleaning 41.4 35.8 73.5 Facilities Management and Specialist Supplies 62.2 - 17.4 Total continuing 168.7 96.0 213.3 Discontinued UK - Textile rental - 4.6 6.1 IR - Textile rental - 9.7 12.2 Total discontinued - 14.3 18.3 168.7 110.3 231.6 Turnover excluding costs recharged to customers Continuing Textile and Hospitality Services 65.1 60.2 122.4 Drycleaning 41.4 35.8 73.5 Facilities Management and Specialist Supplies 19.2 - 5.4 Total continuing 125.7 96.0 201.3 Total discontinued (as above) - 14.3 18.3 125.7 110.3 219.6 Operating profit before goodwill amortisation Continuing Textile and Hospitality Services 8.2 8.9 18.0 Drycleaning 4.5 4.0 8.0 Facilities Management and Specialist Supplies 1.3 - 0.4 Total continuing 14.0 12.9 26.4 Discontinued UK - Textile rental - 0.2 0.3 IR - Textile rental - 0.3 0.4 Total discontinued - 0.5 0.7 14.0 13.4 27.1 2. Segmental Information / Continued .... 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Profit / (loss) before taxation Continuing Textile and Hospitality Services 6.2 7.2 14.6 Drycleaning 4.1 3.9 7.6 Facilities Management and Specialist Supplies 0.5 - 0.2 Total continuing 10.8 11.1 22.4 Discontinued UK - Textile rental - (3.8) 1.5 IR - Textile rental - (10.6) (10.2) Total discontinued - (14.4) (8.7) 10.8 (3.3) 13.7 Interest (1.9) (2.2) (4.0) Profit / (loss) before taxation 8.9 (5.5) 9.7 In respect of discontinued operations in 2003 UK Textile rental represents the results of Johnson Washroom Services Ltd (JWS) and Central Laundries Ltd (Central) and IR Textile rental of Connacht Court Group Ltd (CCG) up to the date of disposal. The results for the period to 28 June 2003 have been re-presented to include Central within discontinued operations. There is no material difference between turnover by origin and by destination. 3. Exceptional Items The loss on disposal of businesses in 2003 represents the loss on disposal of CCG and Central and the gain on the disposal of JWS. No taxation arises on the exceptional items. 4. Adjusted Profit Before Tax The reconciliation of profit before tax and adjusted profit before tax is as follows: 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Profit / (loss) on ordinary activities 8.9 (5.5) 9.7 before taxation Add goodwill amortisation 3.2 2.6 5.0 Add exceptional items - 14.1 8.4 Adjusted profit before tax 12.1 11.2 23.1 5. Tax on Profit on Ordinary Activities 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Taxation has been estimated at: CURRENT TAX UK corporation tax charge for the period 3.3 3.2 5.8 Adjustment in relation to previous years - (3.2) (4.5) (see note 7) Current tax charge for the period 3.3 - 1.3 DEFERRED TAX Deferred tax charge for the period 0.3 - 1.5 Total charge for taxation 3.6 - 2.8 The adjustment in the periods of 26 weeks to June 2003 and 52 weeks to December 2003 include £3.2 million and £3.9 million, respectively, in relation to the agreement of specific, non recurring matters with the Inland Revenue. 6. Dividends 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Dividend on Ordinary shares 2.4 2.3 10.0 The interim dividend, of 4.2p, on Ordinary shares will be paid on 22nd October 2004 to those Shareholders registered in the books of the Company at 1st October 2004. 7. Earnings Per Share 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Profit / (loss) attributable to Ordinary 5.3 (5.5) 6.9 Shareholders Exceptional items (net of taxation) - 14.1 8.4 Tax credit relating to prior periods - non routine - (3.2) (3.9) (see note 5) Goodwill amortisation 3.2 2.6 5.0 Adjusted profit attributable 8.5 8.0 16.4 Weighted average number of Ordinary shares 57,366,096 56,894,476 56,940,711 Fully diluted number of Ordinary shares 58,335,967 57,233,861 57,449,593 Adjusted earnings per share figures exclude the effects of goodwill amortisation, exceptional items (net of taxation), and, in 2003, the non-recurring tax credit relating to the agreement of specific matters in prior periods and are considered to show the underlying results of the Group. 8. Acquisitions Several acquisitions, with a total cash consideration payable of £2.1million and deferred consideration payable of £3.0million, have been completed in the period to 26th June 2004 on which goodwill estimated at £0.2million arises. Sketchley Services Ltd (Sketchley) was acquired on 18th May 2004 for a nominal cash consideration of £1 plus deferred consideration. Sketchley will benefit from the potential tax benefits which may arise from the future utilisation of brought forward trading losses. If such tax benefits are realised deferred consideration, representing a proportion of such potential tax benefits which are expected to arise, will be payable to the Vendor. The Directors have currently estimated that the potential tax benefits that may be realised are £5.1million arising between 2007 and 2010. This amount has been recognised as a deferred tax asset, falling due after more than one year, but within current assets. If this benefit is realised the deferred consideration payable will be £3.0million and this has been recognised as an amount due after more than one year. Any future amendments to these estimates will change the goodwill recognised in respect of this acquisition. 9. Reserves Other Reserves Share Revaluation Capital Merger Profit & loss premium reserve redemption reserve account account reserve (restated) £m £m £m £m £m At 27th December 2003 - as 8.0 8.5 0.6 1.5 81.0 previously reported Prior year adjustment - UITF - - - - (0.4) 38 At 27th December 2003 as 8.0 8.5 0.6 1.5 80.6 restated Premium on issue of shares 0.5 - - - - Profit for period - - - - 2.9 Transfer of realised profits - (0.2) - - 0.2 At 26th June 2004 8.5 8.3 0.6 1.5 83.7 10. Reconciliation of Movement in Shareholders' Funds 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m (restated) (restated) Profit / (loss) for the period 5.3 (5.5) 6.9 Dividends (2.4) (2.3) (10.0) 2.9 (7.8) (3.1) Other recognised gains and losses relating to the - 0.2 0.1 period Movement in share capital 0.1 - - Share premium 0.5 0.1 0.7 Charge for share options - - 0.1 Net addition / (reduction) to Shareholders' funds 3.5 (7.5) (2.2) Opening Shareholders' funds, as previously stated 105.3 107.5 107.5 Prior year adjustment - UITF 38 (note 1) (0.4) (0.4) (0.4) Opening Shareholders' funds, as restated 104.9 107.1 107.1 Closing Shareholders' funds 108.4 99.6 104.9 11. Reconciliation of Net Cash Flow to Movement in Net Debt 26 WEEKS 26 WEEKS 52 WEEKS 26 JUNE 28 JUNE 27 DECEMBER 2004 2003 2003 £m £m £m Increase in cash in the period 6.2 3.5 4.5 Cash (inflow) / outflow on change in debt and lease (3.5) (2.8) 17.3 financing Change in net debt resulting from cash flows 2.7 0.7 21.8 Finance leases - new (2.6) (0.9) (1.1) Amortisation of issue costs of bank loans (0.1) - (0.1) Issue of loan notes - - (0.9) Loans and leases acquired with businesses (0.3) - (0.1) Leases disposed with businesses - - 0.3 Exchange movement - (1.1) (1.4) Movement in net debt in period (0.3) (1.3) 18.5 Opening net debt (43.4) (61.9) (61.9) Closing net debt (43.7) (63.2) (43.4) 12. Analysis of Net Debt At 27 Cash Acquisitions Other At 26 December flow (excl cash) non-cash June 2003 changes 2004 £m £m £m £m £m Cash in hand and at bank 2.2 6.2 - - 8.4 Debt due after more than one year (44.7) (3.7) (0.3) (0.1) (48.8) Finance leases (0.9) 0.2 - (2.6) (3.3) (3.5) Total (43.4) 2.7 (0.3) (2.7) (43.7) Non-cash changes represent new finance leases and the effects of amortising issue costs relating to bank loans. 13. Post Balance Sheet Events On 15th July 2004 the Group acquired the issued share capital of Dimensions Holdings Ltd and its subsidiary undertakings for an initial consideration of £21.7million in cash and £2.3million in loan notes. Deferred consideration of up to £3.4million is payable in 2005 and 2006 dependent upon the achievement of certain profit targets. 14. Preparation of Interim Financial Information The interim results have been prepared on the basis of accounting policies set out in the Group's 2003 statutory accounts other than for the change arising on the implementation of UITF Abstract 38 'Accounting for ESOP Trusts'. The profit and loss accounts, balance sheets and cash flow statements as at June 2004 and June 2003, as restated, are unaudited and have not been reviewed by the auditors. The financial information does not amount to full accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). The profit and loss account, balance sheet and cash flow statement for December 2003, as restated, are abridged from the Group's full accounts for that year. Those accounts received an unqualified audit report and have been filed with the Registrar of Companies. The auditors' report did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985 (as amended). 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