Final Results

Liberty PLC 11 March 2008 FOR IMMEDIATE RELEASE 11 March 2008 LIBERTY PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 HIGHLIGHTS â€¢ New Chief Executive joined 1 July 2007 and additional appointments to executive management team. â€¢ Advance in total Group revenue to Â£45.8m - up from Â£44.0m in year to December 2006. â€¢ Flagship store sales including concessions advanced in year to 31 December 2007 by 2% to Â£38.3m. o Menswear increased in year to 31 December 2007 by 18% to Â£4.6m. o Liberty of London luxury brand up 8% in year to 31 December 2007 to Â£3.2m â€¢ Liberty Balance Sheet underpinned by Great Marlborough Street Flagship Store valued at Â£33m. â€¢ Independent Liberty of London shop leased in Sloane Street - anticipated Summer 2008 opening. 'We continue to make great strides in establishing our Liberty of London luxury products label, and its progression to becoming a global brand. The Board is confident that Liberty has the structures, products and people to produce an improving platform for growth in the current year'. Richard Balfour-Lynn, Chairman Contact: Richard Balfour-Lynn, Chairman, Liberty plc 020 7706 2121 Geoffroy de La Bourdonnaye, Chief Executive, Liberty plc 020 7734 1234 Crispin Mardon, Finance Director, Liberty plc 020 7734 1234 Baron Phillips, Baron Phillips Associates 020 7920 3161 Nicola Marrin, Seymour Pierce 020 7107 8000 LIBERTY PLC CHAIRMAN'S STATEMENT Retailing this year has been a story of two halves. The first six months of the year under review continued the sales growth we had begun to witness towards the end of 2006. Then in the second half we felt the impact of last Autumn's turmoil in the financial markets. Liberty has weathered this uncertain period well and its performance has been commendable, particularly as it has undertaken a major management re-structuring programme over the same period. Revenue over the 12 months to 31 December 2007 not only held up well but also made further advances over the excellent sales platform established in the previous year. Across the Liberty group total sales amounted to Â£45.8m, an increase of 4% over 2006, with a particularly excellent performance from the fabrics division, recording an 11% rise to Â£13.3m. At the same time, we continue to make great strides in establishing our Liberty of London luxury products label, and its progression to becoming a global brand. Sales within the flagship store of the Liberty of London product range continued to rise but, importantly, the brand is gaining recognition both within Europe and North America. Liberty of London retail revenue throughout the store increased significantly during the year to Â£3.2m while its wholesale business is beginning to gain ground through showcasing the range in both Milan and Paris. However, the Liberty of London business plan continues to require substantial investment and over the year we invested almost Â£3.5m in the brand. This investment included the establishment of a stand-alone studio and showroom in premises close to the flagship store; additional staff, brand distribution, European product launches, and increased marketing spend. Although this investment helps grow and enhance our increasingly valuable brand, these costs are expensed as they occur and inevitably adversely impact the profit and loss account over the short term. We are confident that this brand investment will show commercial returns in the years ahead, though we do not expect this to be translated into positive profit returns by the brand during the next few years while we continue to increase our brand investment and expenditure. During the course of the current year the Liberty of London brand will continue to establish its own identity both within the UK and internationally through the launch of its own dedicated store in London's Sloane Street. This stand-alone store is planned to open this Summer and is an opportunity for Liberty of London to showcase its entire range of designs and products in an entirely dedicated environment. Within the flagship store, the great success story of the year has been the growth of menswear sales which have advanced by approximately 18% over the same period last year. This rise reflects a number of initiatives that have delivered increased footfall through the basement. Not only has the menswear range been more exciting and attractive but also the addition of a champagne bar and a men's grooming centre to the basement offer has been very well received by customers. Other star performers over the year included Gifts (up 14% over the year to December 2006) and, Beauty (up 4%) and although both Ladieswear and Home generated overall lower sales during 2007 compared to the year before. There is little doubt that our Home range was affected by the general downturn in the second half of the year. Our ladieswear offer during 2007 enjoyed less success than in the past and we have already implemented major changes to correct this for the current year. We have now consolidated our position in Japan and have bought out our joint venture partners so that we now own the entire business. Not only does this give us, naturally, far greater control of the business in Japan but it also gives us a tremendous platform from which we can expand our product sales, including Liberty of London, throughout the Far East. With the necessary infrastructure in place we are very excited about the potential for our business in this part of the world. While the Autumn was slower in some departments, such as Ladieswear and Home, for the reasons I outlined above, the flagship store experienced a good run up to Christmas with sales across the business running at 5% higher than the same four week period in 2006. This was particularly heartening for the store as it tended to buck the general retail trend and showed a healthy rise over the previous year's record levels. We are also building on the increasing success of our fabrics division with a strengthened sales team enabling us to provide a bespoke service to global customers both in terms of design and fabric. We have appointed two experienced sales executives to spearhead our planned growth in Fabrics and we have also appointed new sales agents. We are also delighted to be working with Central St Martins' students on fabric design projects. As shareholders will have noted, expenditure on the Liberty of London brand rose from just under Â£2m in the year to December 2006 to almost Â£3.5m for 2007. The impact of this investment in our future and one-off reorganisation costs this year of Â£2.7m, is that EBITDA for the year was a loss of Â£3.6m compared to last year's loss of approximately Â£0.5m. These one-off reorganisation costs were partially offset by receipt of retention monies and release of provisions relating to the sale of Liberty House in 2005, amounting to Â£1.1m. After interest and depreciation totalling Â£2.9m, this resulted in a loss of Â£6.4m compared to the pre-tax loss of Â£2.3m for the previous year. We are hopeful that the costs incurred this year will show a healthy improvement in bottom line returns during the current year to December 2008. The business is underpinned by a strong balance sheet. This comprises net assets of Â£41.5m, of which Â£33m relates to the valuable Liberty flagship store. Net debt at December 2007 was Â£8.7m, up from last year's Â£1.2m but still represents property gearing of only 26%. The major reorganisation of the business led to the departure of Iain Renwick and the appointment of Geoffroy de La Bourdonnaye as our new Chief Executive in July, joining from Christian Lacroix. He is now supported by two further senior management appointments: Sara Edwards as Human Resources and Change Director, and Guy Hipwell as Director of Internet, Supply Chain and Retail Merchandising. In January 2008 we also appointed Jonathan Samols as IT Director and Fran Page joined us from Harvey Nichols as Head of Marketing for Liberty. These senior executives complement our existing team and give the business a stronger base for future growth. We now have a dedicated and well regarded team at Liberty and we expect to see its impact during the course of 2008. During the first half of 2008 we are re-launching our lingerie offer with a number of international and exclusive brands such as Elle McPherson and Kiki de Montparnasse. Elsewhere we have launched our comprehensive Bridal department with exclusive designs from Christian Lacroix and Karl Lagerfeld as well as an on-line wedding and gift list due to commence later in the year. Importantly, in June 2008 we are launching the Liberty transactional website enabling our world-wide customer base to enjoy the Liberty experience on-line. This will include Liberty of London branded goods, as well as a range of exclusive brands and gifts. This is an important new enhancement to our business model and we believe it will play a key role in providing scale to Liberty retail, leveraging the global awareness of the Liberty brand. At the same time we are exploring a number of initiatives aimed at raising both Liberty's profile and widening its customer base. We have already concluded an agreement with the Victoria and Albert Museum whereby Liberty has become its exclusive retail partner. The first example of this partnership is the important China Design Now exhibition being launched at the V&A in March 2008 which will run through to mid-July. We have curated a selection of many high profile fashion and design artists, including Michael Wolf, who will be exhibiting exclusively during the exhibition. In addition to all the commercial initiatives aimed at enhancing our product offering, service standards and the look, feel and marketing of the store, given the current challenging economic conditions we are streamlining our operation enabling us to become more customer and category focused. Liberty is now well placed to take advantage of its long established reputation of offering cutting edge design based on some of the world's most recognisable fabric prints. With the forthcoming launch of our Liberty of London stand-alone shop, we believe the business is poised to move up to its next level of development. While we appreciate that performance will be impacted to varying degrees by the general economic climate, the Board is confident that Liberty has the structures, products and people to produce an improving platform for growth in the current year. Richard Balfour-Lynn Chairman 11 March 2008 LIBERTY PLC KEY FINANCIAL HIGHLIGHTS Liberty Plc is in the process of transforming itself into a dynamic retail destination, underpinned by a strong and expanding retail brand. The historical trading and balance sheet performance of Liberty Plc is summarised below:- Year ended Year ended Eighteen months ended 31 December 31 December 31 December 2007 2006 2006 Financial performance Â£'000 Â£'000 Â£'000 ---------------------------------------------------------------------------------- Total revenue 45,845 44,012 66,407 EBITDA before brand expenditure (136) 1,415 1,461 Operating loss before brand expenditure (2,893) (180) 13 Brand expenditure (3,484) (1,971) (2,843) Pre-tax loss (6,376) (2,310) (2,187) Total recognised income and expense (8,223) 8,955 3,095 ---------------------------------------------------------------------------------- 31 December 31 December 2007 2006 Balance sheet composition Â£'000 Â£'000 -------------------------------------------------------------------- Intangible assets 18,382 18,200 Property, plant and equipment 34,400 36,587 Net debt (8,704) (1,191) Net assets 41,536 51,141 Equity attributable to shareholders in pence per share 181p 219p CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2007 Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Notes Â£'000 Â£'000 Â£'000 --------------------------------------------------------------------------------- Revenue 1 45,845 44,012 66,407 Cost of sales (25,663) (24,000) (36,197) --------------------------------------------------------------------------------- Gross profit 20,182 20,012 30,210 Selling and distribution costs (22,789) (19,952) (30,932) Administrative expenses (4,426) (2,784) (3,942) Other operating income 941 573 2,629 --------------------------------------------------------------------------------- Results from operating activities (6,092) (2,151) (2,035) Finance income 1,002 33 77 Finance expenses (1,286) (192) (229) --------------------------------------------------------------------------------- Loss before taxation (6,376) (2,310) (2,187) Taxation (371) (437) (669) --------------------------------------------------------------------------------- Loss for the period (6,747) (2,747) (2,856) --------------------------------------------------------------------------------- Attributable to: Equity shareholders of the Company (7,107) (3,115) (3,349) Minority interests 360 368 493 --------------------------------------------------------------------------------- Loss for the period (6,747) (2,747) (2,856) --------------------------------------------------------------------------------- Loss per share (basic and diluted) 2 (31.4p) (13.8p) (14.8p) --------------------------------------------------------------------------------- All operations are continuing. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the year ended 31 December 2007 Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 Â£'000 ---------------------------------------------------------------------------------- Revaluation of property, plant and equipment net of tax (2,312) 7,183 8,072 Defined benefit pension scheme actuarial gains, net of tax 754 4,714 4,977 Foreign exchange translation differences for foreign operations 82 (195) (235) ---------------------------------------------------------------------------------- Income and expense recognised directly to equity (1,476) 11,702 12,814 Loss for the period (6,747) (2,747) (2,856) ---------------------------------------------------------------------------------- Total recognised income and expense for the year / eighteen months (8,223) 8,955 9,958 ---------------------------------------------------------------------------------- Attributable to: Equity shareholders of the Company (8,583) 8,587 9,465 Minority interests 360 368 493 ---------------------------------------------------------------------------------- Total recognised income and expense for the year / eighteen months (8,223) 8,955 9,958 ---------------------------------------------------------------------------------- Total recognised income and expense attributable to shareholders of Liberty Plc in pence per share (note 2) (36.4p) 39.6p 44.1p ---------------------------------------------------------------------------------- All recognised gains and losses are attributable to equity shareholders' interests. CONSOLIDATED BALANCE SHEET at 31 December 2007 31 December 31 December 2007 2006 Notes Â£'000 Â£'000 -------------------------------------------------------------------------------- Non-current assets Intangible assets 3 18,382 18,200 Property, plant and equipment 5 34,400 36,587 Employee benefits - 45 -------------------------------------------------------------------------------- 52,782 54,832 -------------------------------------------------------------------------------- Current assets Inventories 7,595 7,489 Trade and other receivables 6,812 5,997 Cash and cash equivalents 4,296 1,020 -------------------------------------------------------------------------------- 18,703 14,506 -------------------------------------------------------------------------------- Total assets 71,485 69,338 -------------------------------------------------------------------------------- Current liabilities Overdraft - (2,211) Trade and other payables (15,688) (12,562) Tax payable (249) (135) -------------------------------------------------------------------------------- (15,937) (14,908) -------------------------------------------------------------------------------- Non-current liabilities Loans and borrowings (13,000) - Long term payables (46) (396) Provisions (550) (1,300) Employee benefits (416) (1,593) -------------------------------------------------------------------------------- (14,012) (3,289) -------------------------------------------------------------------------------- Total liabilities (29,949) (18,197) -------------------------------------------------------------------------------- Net assets 41,536 51,141 -------------------------------------------------------------------------------- Equity Share capital 6,036 6,036 Reserves 71,791 74,103 Retained earnings (36,869) (30,639) -------------------------------------------------------------------------------- Total equity attributable to shareholders of the Company 40,958 49,500 Minority interests 578 1,641 -------------------------------------------------------------------------------- Total equity 6 41,536 51,141 -------------------------------------------------------------------------------- Approved by the Board of Directors on 11 March 2008 and signed on its behalf by: Richard Balfour-Lynn G de La Bourdonnaye Chairman Chief Executive CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2007 Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Loss for the year (6,747) (2,747) (2,856) Adjustments for non-cash items Taxation 371 437 669 Finance cost 1,286 192 229 Finance income (1,002) (33) (77) Depreciation 2,475 1,491 2,234 Currency translation differences 8 (172) (352) ----------------------------------------------------------------------------------- Cash flows from operations before changes in working capital (3,609) (832) (153) Change in inventories 106 (653) (832) Change in trade and other receivables 815 999 2,157 Change in trade and other payables (240) (1,680) (1,536) Change in provisions and employee benefits 124 104 138 ----------------------------------------------------------------------------------- Cash generated from operations (2,804) (2,062) (226) Interest paid (338) (195) (232) Tax paid (486) (370) (582) ----------------------------------------------------------------------------------- Net cash from operating activities (3,628) (2,627) (1,040) ----------------------------------------------------------------------------------- Cash flows from investing activities Interest received 46 33 81 Purchase of property, plant and equipment (2,600) (2,287) (2,840) Acquisition of subsidiary net of cash acquired (1,235) - - ----------------------------------------------------------------------------------- Net cash from investing activities (3,789) (2,254) (2,759) ----------------------------------------------------------------------------------- Cash flows from financing activities Borrowings drawn 13,000 - - Payments to minority interests (96) (202) (1,022) ----------------------------------------------------------------------------------- Net cash used in financing activities 12,904 (202) (1,022) ----------------------------------------------------------------------------------- Net increase in cash and cash equivalents 5,487 (5,083) (4,821) Opening cash and cash equivalents (1,191) 3,892 3,630 ----------------------------------------------------------------------------------- Closing cash and cash equivalents 4,296 (1,191) (1,191) ----------------------------------------------------------------------------------- 1. SEGMENTAL REPORTING Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Revenue by business division Retail including brand 32,570 32,043 48,753 Fabric 13,275 11,969 17,654 ----------------------------------------------------------------------------------- 45,845 44,012 66,407 ----------------------------------------------------------------------------------- Revenue by geographical origin United Kingdom 40,840 39,036 59,382 Japan 5,005 4,976 7,025 ----------------------------------------------------------------------------------- 45,845 44,012 66,407 ----------------------------------------------------------------------------------- Revenue by geographical destination United Kingdom 33,402 33,367 50,641 Japan 5,283 4,976 7,025 Other 7,160 5,669 8,741 ----------------------------------------------------------------------------------- 45,845 44,012 66,407 ----------------------------------------------------------------------------------- (Loss) / profit for the period by business division Retail (5,675) (2,884) (3,150) Fabric 2,993 2,704 3,958 Liberty of London branded product (3,410) (1,971) (2,843) ----------------------------------------------------------------------------------- Operating loss (6,092) (2,151) (2,035) Net finance costs (284) (159) (152) Taxation (371) (437) (669) ----------------------------------------------------------------------------------- Loss for the period (6,747) (2,747) (2,856) ----------------------------------------------------------------------------------- (Loss) / profit for the period by geographical origin United Kingdom (7,069) (3,228) (3,450) Japan 977 1,077 1,415 ----------------------------------------------------------------------------------- Operating loss (6,092) (2,151) (2,035) Net finance costs (284) (159) (152) Taxation (371) (437) (669) ----------------------------------------------------------------------------------- Loss for the period (6,747) (2,747) (2,856) ----------------------------------------------------------------------------------- 31 December 31 December 2007 2006 Net assets Â£'000 Â£'000 ----------------------------------------------------------------------------------- By business division Retail 31,490 42,494 Fabric 10,046 8,647 Liberty of London branded product - - ----------------------------------------------------------------------------------- 41,536 51,141 ----------------------------------------------------------------------------------- By geographical origin: United Kingdom 39,960 48,973 Japan 1,576 2,168 ----------------------------------------------------------------------------------- 41,536 51,141 ----------------------------------------------------------------------------------- Concession revenue Sales from concession departments are included on a commission only basis. Gross revenue of concession departments was as follows: Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Gross revenue of concession departments 7,660 7,589 11,758 ----------------------------------------------------------------------------------- 2. LOSS PER SHARE AND RECOGNISED INCOME AND EXPENSE PER SHARE Loss per share The loss per share figures are calculated by dividing the loss attributable to equity shareholders of the Company for the period, by the weighted average number of ordinary shares in issue during the period, as follows:- Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Loss for the period attributable to equity shareholders of the Company (7,107) (3,115) (3,349) ----------------------------------------------------------------------------------- Number Number Number '000 '000 '000 ----------------------------------------------------------------------------------- Weighted average number of ordinary shares in issue during the period 22,603 22,603 22,603 ----------------------------------------------------------------------------------- Loss per share (basic and diluted) (31.4p) (13.8p) (14.8p) ----------------------------------------------------------------------------------- Recognised income and expense per share The figures for recognised income and expense attributable to shareholders of the Company in pence per share are calculated by dividing the recognised income and expense attributable to equity shareholders of the Company for the period, by the weighted average number of shares in issue during the period, as follows:- Eighteen Year Unaudited months ended year ended ended 31 December 31 December 31 December 2007 2006 2006 Â£'000 Â£'000 Â£'000 ----------------------------------------------------------------------------------- Recognised income and expense for the period attributable to equity shareholders of the Company (8,223) 8,955 9,958 ----------------------------------------------------------------------------------- Number Number Number '000 '000 '000 ----------------------------------------------------------------------------------- Weighted average number of ordinary shares in issue during the period 22,603 22,603 22,603 ----------------------------------------------------------------------------------- Recognised income and expense attributable to equity Shareholders of the Company, in pence per share (36.4p) 39.6p 44.1p ----------------------------------------------------------------------------------- 3. INTANGIBLE ASSETS Brand Total Goodwill Â£'000 Â£'000 ---------------------------------------------------------------------------------------- Balance at 1 January 2006 / 31 December 2006 - 18,200 18,200 Acquisition of minority interest 182 - 182 ---------------------------------------------------------------------------------------- Balance at 31 December 2007 182 18,200 18,382 ---------------------------------------------------------------------------------------- Assessment of the useful life and impairment testing on the carrying value of the Brand The Directors consider that the Group's brand has an indefinite life due to the durability of the underlying business. This has been demonstrated over many years. Accordingly the brand has not been amortised but has instead been subject to an annual impairment review. An annual assessment of the useful life and an annual review of the impairment on the carrying value of the brand were undertaken by the Directors at 31 December 2007. For the purposes of this valuation Liberty of London has been excluded because the pay-back expectation from the investment plans is beyond the time horizon of the valuation. This review was based on the projected underlying business performance of the Liberty brand over the period from January 2008 to December 2012, assuming a compound sales growth rate of 9.9%, a discount rate of 10.2% and a subsequent sales growth rate to perpetuity of 2%. This supported a value of the Liberty brand in excess of the book value of Â£18.2m at which it has been included in the financial statements throughout the year. It has therefore been retained at that level in these financial statements. Impairment testing for cash-generating units containing goodwill The goodwill balance arose from the acquisition of the minority interest in Liberty Japan Co. Ltd on 25 December 2007. An impairment review was undertaken by the Directors on 31 December 2007 comparing the carrying value of goodwill with the recoverable amount of the cash-generating unit to which goodwill was allocated. As a result of this review, the Directors have determined that there has been no impairment to goodwill during the year ended 31 December 2007. 4. ACQUISITIONS On 25 December 2007, the Group acquired 49% of the issued share capital of Liberty Japan Co. Limited for a total consideration of Â£1,432k. This acquisition made Liberty Japan Co Limited a fully owned subsidiary of the Group, as previously the Group held 51% of the issued share capital. Liberty Japan Co. Limited distributes Liberty fabric through wholesale and licensing channels. This transaction was accounted for using the purchase method of accounting and is summarised below: Fair value Book value adjustments Fair value Â£'000 Â£'000 Â£'000 Net assets acquired Property, plant and equipment 419 - 419 Trade and other receivables 1,684 - 1,684 Cash and cash equivalents 197 - 197 Trade and other payables (1,050) - (1,050) --------------------------------------- 1,250 - 1,250 ------------------------------- Goodwill 182 ------- Total consideration 1,432 ======= Satisfied by: Â£'000 Cash 1,432 Loan - Directly attributable costs - ----- 1,432 ===== Net cash outflow arising on acquisition Â£'000 Cash consideration 1,432 Cash and cash equivalents acquired (197) ----- 1,235 ===== The goodwill arising on the acquisition of Liberty Japan Co. Limited is attributable to the future income stream that the Group will benefit from. 5. PROPERTY, PLANT AND EQUIPMENT Freehold Fixtures & property equipment Total Group Â£'000 Â£'000 Â£'000 ------------------------------------------------------------------------------------- Cost or valuation At 1 January 2007 32,148 11,345 43,493 Additions - 2,600 2,600 Revaluation (2,674) - (2,674) ------------------------------------------------------------------------------------- At 31 December 2007 29,474 13,945 43,419 ------------------------------------------------------------------------------------- Depreciation At 1 January 2007 - (6,906) (6,906) Charge for the year (362) (2,113) (2,475) Revaluation 362 - 362 ------------------------------------------------------------------------------------- At 31 December 2007 - (9,019) (9,019) ------------------------------------------------------------------------------------- Net book value at 31 December 2007 29,474 4,926 34,400 ------------------------------------------------------------------------------------- Freehold Fixtures & property equipment Total Group Â£'000 Â£'000 Â£'000 ------------------------------------------------------------------------------------- Cost or valuation At 1 July 2005 24,608 8,516 33,124 Additions 11 2,829 2,840 Revaluation 7,529 - 7,529 ------------------------------------------------------------------------------------- At 31 December 2006 32,148 11,345 43,493 ------------------------------------------------------------------------------------- Depreciation At 1 July 2005 - (5,215) (5,215) Charge for the period (543) (1,691) (2,234) Revaluation 543 - 543 ------------------------------------------------------------------------------------- At 31 December 2006 - (6,906) (6,906) ------------------------------------------------------------------------------------- Net book value at 31 December 2006 32,148 4,439 36,587 ------------------------------------------------------------------------------------- Net book value at 1 July 2005 24,608 3,301 27,909 ------------------------------------------------------------------------------------- Valuation The Group's property, plant and equipment is all located in the United Kingdom. The Group's property was valued at 31 December 2007 by qualified professional valuers working for the company of DTZ Debenham Tie Leung, Chartered Surveyors, ('DTZ'), acting in the capacity of External Valuers. All such valuers are Chartered Surveyors, being members of the Royal Institution of Chartered Surveyors ('RICS'). DTZ act as valuers to the Liberty Group and undertake half year and year end valuations for accounting purposes. DTZ has been carrying out this valuation instruction for the Liberty Group for a continuous period since 1999 and Paul Wolfenden has been the signatory of Valuation Reports provided to the Liberty Group for the same period since June 1999. In addition, DTZ provide ad-hoc valuation advice to the Liberty Group. DTZ is a wholly owned subsidiary of DTZ Holdings plc. In the financial year to 30th April 2007, the proportion of total fees payable by the Liberty Group to the total fee income of DTZ Holdings plc was less than 5%. It is not anticipated that this situation will vary in terms of our financial year to 30th April 2008. DTZ have not received any introductory fees or acquisition fees in respect of the property owned by the Liberty Group within the 12 months prior to the date of valuation. However, DTZ have been appointed as valuers in respect of certain of the property and in the last 12 months they have provided valuation advice for bank lending purposes in relation to the property. The valuation was carried out in accordance with the RICS Appraisal and Valuation Standards 5th Edition ('the Manual') and the property was valued on the basis of Market Value of the property. Market Value is defined in the Manual as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing, where the parties had each acted knowledgeably, prudently and without compulsion. The DTZ valuation is not qualified by any reference to existing or alternative use and implies the value to which a property will derive, having regard to its most valuable use. The valuation includes the land and buildings; the trade fixtures, fittings, furniture, furnishings and equipment; and the market's perception of the trading potential excluding personal goodwill; together with an assumed ability to renew existing licences, consents, certificates and permits. The value excludes consumables and stock in trade. The valuation excludes any goodwill associated with the management by the Company or its subsidiaries. As set out in Guidance Note 1 of the Manual the Properties are of a nature normally sold as fully equipped and operational entities and as such have been valued by reference to their trading potential to include: (a) the land and the buildings; (b) trade fixtures, fittings, furniture, furnishings and equipment; (c) the trading potential of the Properties excluding personal goodwill, together with an assumed ability to renew existing licences, consents, certificates and permits; and (d) the benefit of any transferable licences, consents, certificates and permits and any other intangibles. The valuation of the Tudor property and fixtures totalled Â£33m. In addition to this, fixtures and equipment with a net book value of Â£3.5m at 31 December 2007 are carried at the lower of cost and realisable value in the table above. The historic cost of the Group's property at 31 December 2007 includes capitalised interest of Â£0.2m (2006: Â£0.2m). 6. CAPITAL AND RESERVES Attributable to shareholders Share Merger Revaluation Translation Retained Total Minority Total capital reserve reserve reserve earnings interest equity Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Balance at 1 July 2005 6,036 61,503 4,528 196 (32,366) 39,897 2,448 42,345 Total recognised income and expenses before property revaluation - - - (235) 1,628 1,393 (807) 586 Revaluation of freehold property - - 8,072 - - 8,072 - 8,072 Share based payments - - - - 138 138 - 138 --------------------------------------------------------------------------------------- Balance at 31 December 2006 / 1 January 2007 6,036 61,503 12,600 (39) (30,600) 49,500 1,641 51,141 Total recognised income and expenses before property revaluation - - - 82 (6,353) (6,271) 360 (5,911) Revaluation of freehold property - - (2,312) - - (2,312) - (2,312) Share based payments - - - - 124 124 - 124 Acquisition of minority interest - - - - (83) (83) (1,423) (1,506) --------------------------------------------------------------------------------------- Balance at 31 December 2007 6,036 61,503 10,288 43 (36,912) 40,958 578 41,536 --------------------------------------------------------------------------------------- 7. EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF LIBERTY PLC IN PENCE PER SHARE The Equity attributable to shareholders of Liberty plc in pence per share is calculated by dividing the Equity attributable to shareholders of Liberty plc at each period end by the number of ordinary shares in issue at such period end. They are calculated as follows:- 31 December 31 December 2007 2006 -------------------------------------------------------------------------------- Equity attributable to shareholders of Liberty plc per consolidated balance sheet Â£'000 40,958 49,500 -------------------------------------------------------------------------------- Number of ordinary shares in issue at period end '000 22,603 22,603 -------------------------------------------------------------------------------- Equity attributable to shareholders of Liberty plc in pence per share Pence 181p 219p -------------------------------------------------------------------------------- 8. FINANCIAL INFORMATION The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2007 or 31 December 2006 but is derived from ose financial statements. Statutory accounts for the eighteen month period ended 31 December 2006 have been delivered to the Registrar of Companies, and those for the year ended 31 December 2007 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under Section 237(2) or (3) or the Companies Act 1985. 9. DESPATCH OF ACCOUNTS The audited accounts of the Company are expected to be sent to shareholders during April 2008. Thereafter copies will be available from the Company Secretary, Filex Services Limited, 180 Great Portland Street, London W1W 5QZ. This information is provided by RNS The company news service from the London Stock Exchange

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