Interim Results

RNS Number : 1041E

Scott Wilson Group plc

15 December 2009

 



15 December 2009

SCOTT WILSON GROUP PLC

Interim Results for the 26 week period ended 1 November 2009

"Increased profits, robust order book and further progress in international business"

Highlights

	2009/2010	2008/2009
Revenue including share of joint ventures	£170.5m	£180.4m
Group revenue	£159.3m	£173.2m
Operating profit	£11.5m	£10.1m
Adjusted* operating profit	£12.5m	£12.0m
Adjusted* operating margin	7.3%	6.7%
Adjusted* profit before tax	£10.8m	£11.4m
Adjusted* diluted earnings per share	10.1p	10.1p
Interim dividend	1.33p	1.33p

• Adjusted* operating profit increased by 4.1%

• Adjusted* operating margin increased to 7.3% (2009: 6.7%)

• Adjusted* diluted earnings per share of 10.1p (2009: 10.1p)

• Major project wins across all sectors and regions

• Order book maintained at £280m

• Interim dividend maintained at 1.33p per share

*    The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted earnings per share assists with the understanding of the performance of the Group.

• Adjusted operating profit is operating profit adjusted for recurring adjustments, together with redundancy costs and an exceptional contract loss.

• Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures.

• Adjusted profit before taxation is profit before taxation adjusted for recurring adjustments, together with redundancy costs and an exceptional contract loss.

• Adjusted earnings per share is earnings per share adjusted for recurring adjustments, together with redundancy costs and an exceptional contract loss.

Reconciliations of these measures to operating profit, operating margin and earnings per share are set out in notes 9 and 15.

Geoff French, Chairman of Scott Wilson commented: 

"The first six months of the year have seen a return to a more stable trading environment following the impact of the recession at the end of the last period.  Although the UK market remains relatively weak, Scott Wilson has benefited from the government's ongoing commitment to roads and railways and its focus on renewable energy due to our expertise in those areas. The international business continues to go from strength to strength, reflecting the benefits of years of investment outside the UK and the brand recognition we have established in key regions together with the new management structure we have implemented globally.

Notwithstanding the economic uncertainty, our diversified business model, strong order book and financial strength continue to give us confidence that we can respond effectively to market developments and opportunities as they arise."

Contact Details

Scott Wilson Group plc Hugh Blackwood, Chief Executive Sean Cummins, Finance Director Lak Siriwardene, Head of Communications	www.scottwilson.com 07730 928067 07825 797962 07824 311762
Financial Dynamics Richard Mountain/Sophie Moate	020 7269 7186

Notes to editors:

1.	Scott Wilson Group plc is a global integrated design and engineering consultancy for the built and natural environments. With its headquarters in the UK, the Group has a worldwide network of 80 offices and 6,000 employees. Scott Wilson offers Strategic Consultancy and multi-disciplinary professional services in the Railways, Buildings & Infrastructure, Environment & Natural Resources and Roads Sectors.
	The key regions are the UK, Asia-Pacific, Europe, India and the Middle East, with regional centres in London, Hong Kong, Warsaw, New Delhi and Bahrain/Dubai.
	Current high profile contracts include the Mersey tidal energy project, London Crossrail (recent wins are Farringdon Station, Pudding Mill Lane and Paddington Station), Manchester Waste PFI, Brent Civic Centre, A46 design in the UK, Nam Thuen 2 Hydroelectric project Laos, Erbil International Airport Iraq, Delhi Mumbai Industrial Corridor India, Diyar Al Muharraq Bahrain, Florida I-595 Corridor Roadway Improvements USA, the South Island Line in Hong Kong, Wuxi Integrated Transportation Hub China, Port Botany Container Terminal Expansion Project in Australia and the S69 Expressway Poland.
	www.scottwilson.com
2.	This announcement has been prepared for the shareholders in order to assess the Company's strategies and the potential for those strategies to succeed. In particular, this announcement has not been audited or otherwise independently verified. The Company and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement.
	The announcement contains certain forward-looking statements. These statements are made by the directors in good faith, based on the information available to them up to the time of their approval of this announcement and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Chairman's Statement

The Group's proven ability to provide integrated services globally continues to see Scott Wilson achieve significant success globally across a broad range of major opportunities. We are benefiting from our new management structure which is helping to maximise the Group's involvement in the higher growth market sectors identified in our business plan. In particular, our increasing activities in the international market are now making a significant contribution to Group profits. Our order book stands at £280m, representing 95 per cent of revenue for the remainder of this financial year, with £100m of revenue already secured for the following year.

Results

In challenging market conditions, it is pleasing that the Group has delivered higher operating profits despite lower revenues. Revenue, including our share of joint ventures, was £170.5m (2009: £180.4m).  Adjusted * operating profit improved by 4.1 percent to £12.5m (2009: £12.0m) with an adjusted * operating margin of 7.3 per cent (2009: 6.7 per cent).  During the first half of the year, the financial performance of our joint ventures has been better than originally foreseen by some £2m, which largely reflects the Group's prudent approach to profit recognition.

Adjusted * fully diluted earnings per share were 10.1p (2009: 10.1p).

Net borrowings decreased in the period to £17.0m, £5.1m lower than at the end of the equivalent period last year. This improvement reflects the Group's disciplined approach to cash and working capital management and we are seeking a further improvement in the second half of the financial year. The Group continues to have committed banking facilities of £70m secured until April 2011.

Pensions

At 1 November 2009 the aggregate deficit on the Group's defined benefit schemes was £79.0m, compared with the position at the last balance sheet date of a deficit of £24.2m. The worsening deficit, despite an improvement in asset values, is largely a result of the reduction in corporate bond yield rates and, therefore, the discount rate used in actuarial valuations. The Group is currently contributing an additional £1.2m per annum to address this deficit, a figure we expect to maintain through the remainder of this financial year and all of the next.

Dividend

Although we have delivered a relatively strong financial performance in the first six months of the current year, the Board believes that a prudent approach should be adopted towards the level of dividend payments until there is greater certainty regarding the key demand drivers for our business, more specifically the likely profile of government spending in the UK over the next 12-24 months. The Board, therefore, has declared a maintained interim dividend of 1.33p per share to be paid on 19 February 2010 to Ordinary shareholders on the register on 22 January 2010.

Employees

We have taken decisive action to adjust the balance of our employee resources over the past twelve months. This has included a number of redundancies within our UK workforce and further internal transfers from the UK to our international regional businesses. We currently have a total of 6,000 staff across the world, 10 per cent lower than the peak at mid 2008, almost half of whom are now outside the UK. We have continued with our talent management programme and the recruitment and training of graduates, albeit at a slower rate than in previous years.

The efforts and flexibility of our staff to help minimise the impact of the uncertainties faced this year is very much appreciated by the Board and on their behalf, I would like to thank all the staff for their contribution.

Awards

Scott Wilson projects have continued to win prestigious industry awards, reflecting the Group's international reputation for excellence in innovative design and project delivery. The Costa Azul Caisson Breakwater, Mexico won the British Expertise Major Project of the Year and the National Industrial Symbiosis Programme won their Environmental Impact of the Year Award. The Clackmannanshire  Bridge won the Transportation Structures Award, a Saltire Award for Civil Engineering and was highly commended in the British Construction Industry Awards. Other awards were won by the RoadGard Highway Warning System, the Scott Building at the University of Plymouth, Goodfellows at Bury St Edmunds, Markham Vale, Greengauge Affordable Housing, Shoreditch High Street Bridge, Harold Hill Fire Station, Solais House, Dickens Heath mixed use development and the 3 Counties Alliance.

Outlook

Our internal plans assume no significant growth in our UK business this year or next. However we see  continuing growth opportunities in our international markets.  The Group already operates across all geographies and is particularly well established both in China and India: two major growth markets. Our diversified business model, strong order book and financial strength continue to give us confidence that we can respond effectively to market developments and opportunities as they arise.

Geoff French

Group Chairman

15 December 2009

Business Review

The past six months has seen a return to a more stable, steady-state operational environment following the sudden and material slowdown in private sector activity, particularly within the property sector, which we experienced during the first quarter of 2009. Our new management and reporting structure has settled down and is empowering the management team to drive the business directly toward its markets and its clients.

In the UK, the benefits of the government's fiscal stimulus actions continue to be felt, particularly in the Roads Sector and there have been positive movements in the Rail Sector following the commitment to Crossrail and a new focus on renewable energy with the first tangible steps toward creating the next generation of nuclear power stations.

Our international markets have been less affected by the recession, although Dubai continues to be difficult.  The international proportion of our revenue has grown to 34.6 per cent (H1 2009: 30.6 per cent) and has gone some way to replace the revenue lost in the UK private property sector.

Continuing success in a series of major international projects proves our diversity and resilience and allows us to confirm our position as a leading consultant in the global arena. 

UK & Ireland

The UK & Ireland Region is managed through five Sector businesses, namely Strategic Consultancy, Railways, Buildings & Infrastructure, Environment & Natural Resources and Roads. A feature of the  UK & Ireland business is the increasing revenue obtained from projects outside the UK, often in collaboration with our regional businesses. We refer to this sub-segment as UK (Rest of the World) and it generated £19m (15 per cent) of the £128m of revenue recorded by the UK & Ireland Region in the first half.

Strategic Consultancy

	H1 2009/2010	H1 2008/2009
Revenue	£12.7m	£13.3m
Adjusted* operating profit	£1.4m	£1.5m
Adjusted* operating margin	11.2%	11.1%

• The Sector's performance for the first half of the year has been satisfactory with both revenue and operating profit holding up reasonably well. 

• The Transport Consultancy sub-sector has been successful in expanding its work, most notably through its appointment by the Department for Transport to model all modes of long-distance travel in the UK. The half year has also seen further growth in the Intelligent Transport Systems business, including an expanded role in the Highways Agency's managed motorway programme.  

• Improved Programme and Project Management capability within this sector has enabled the Group to take an increasingly significant role in managing major projects. 

• The Project Finance team, which is heavily involved in supporting Tube Lines' investors through the periodic review process under the LUL PPP, has been recognised in the Infrastructure Journal's league tables for Technical Advisors, where Scott Wilson was ranked No.2 overall and No.1 in Transport.  

• The Ports sub-sector continues to expand in oil & gas, most notably in Angola and its work with other major port projects including the London Gateway Port in the Thames Estuary and the South Harbour in Colombo, Sri Lanka. 

Railways

	H1 2009/2010	H1 2008/2009
Revenue	£20.4m	£21.4m
Adjusted* operating profit	£1.7m	£0.1m
Adjusted* operating margin	8.1%	0.5%

• The Sector has delivered much improved results during the first half of the year compared with the corresponding six months. The order book is at its highest level for three years and, together with modest restructuring in the previous financial year, has brought improved productivity and increased resilience across the Sector.  

• Of particular importance has been our success on Crossrail, Europe's largest infrastructure project, which will yield approximately £40m of fees for the Group across a range of packages. This was the highest project workload awarded to any design consultant and Scott Wilson is the only consultant to secure two station redevelopment projects, Farringdon and Paddington. 

• The UK pipeline of projects remains good despite a very competitive market with a number of major opportunities available.  

• Overseas demand for our rail services remains strong and support to the regional businesses has helped bring successes in Hong Kong, the Middle East and Poland with promising opportunities in Australia, assisted by the strong return of the mineral railways market.  

Buildings & Infrastructure

	H1 2009/2010	H1 2008/2009
Revenue	£28.5m	£42.2m
Adjusted* operating profit	£0.7m	£3.9m
Adjusted* operating margin	2.5%	9.2%

• The Sector has performed relatively well in the period in a market which continues to be very difficult. This is a real testament to the effort being devoted to winning projects and the growing success of B&I's new business development strategies.

• Inevitably, increased competition and fiercer fee bidding have driven down profit margins in this sector, the half year position being slightly better than break even. 
  

• There have been some very notable project wins in the UK in the first half of this financial year, including NW Cambridge Development Area, a contribution to Crossrail stations, the OGC Framework, Heathrow Terminal 2 Energy Centre, Mersey Tidal Energy project, Finsbury Exhibition Space, St Helier Hospital Epsom, together with various other framework appointments complemented by the Telecity Data Exchange, Stockholm and Elaf Bank, Bahrain.  

Environment & Natural Resources

	H1 2009/2010	H1 2008/2009
Revenue	£31.8m	£34.9m
Adjusted* operating profit	£2.2m	£1.8m
Adjusted* operating margin	6.9%	5.2%

• The newly formed ENR Sector comprises five sub-sectors: power, mining, water, geoservices and environment.  

• The power sub-sector has increased opportunities, with participation in the UK with Balfour Beatty and Vinci on the proposed Nuclear New Build programme and continued involvement on the UK Nuclear Decommissioning programme in collaboration with Amec and Babcock. 

• Our mining sub-sector, which includes the Group's Canada-based operations, has been little affected by the global recession and is recognised as a top five provider of high level advisory services to investment banks and mining companies. 

• The water sub-sector has a diverse portfolio of work for public and regulated bodies, in areas such as flood risk, environmental projects associated with storm overflows secured with Southern Water and the continuation of work on framework contracts with water companies particularly in Scotland and Ireland. 

• Affected only marginally by the downturn in the property sector, the environment sub-sector has actively re-focused its services and increased its involvement in other areas, particularly transport and energy, with significant input on the A46 Road project, the Mersey Tidal Energy project, the Planning and Environmental Consent for Thames Tideway Tunnel and the Crossrail Stations. 

• Climate change and sustainability continue to dominate activity with an increasing number of commissions for organisations who require services to ensure compliance with ever more complex legislation. 

Roads

	H1 2009/2010	H1 2008/2009
Revenue	£34.7m	£32.3m
Adjusted* operating profit	£4.4m	£2.7m
Adjusted* operating margin	12.6%	8.4%

• The Sector has continued to benefit from the government's fiscal stimulus packages on our major roads projects. 

• The collaborative working approach developed with contracting partners on Early Contractor Involvement (ECI) projects has continued to deliver successful outcomes, particularly in response to the Highways Agency's Managed Motorway programme. Specifically £1bn of construction activity involving engineering design roles was accelerated following Government intervention and the Sector is involved as designer on many projects, including M1 junctions 10 to 13, A46 dualling in Nottinghamshire and the A421 dualling from Bedford to the M1.  

• Design work also continues on M80 (DBFO) scheme in Scotland and the Carlisle Northern Development Road (DBFO).  

• The Highways Agency Area 7 MAC, serviced through the Amscott joint venture, ended in July 2009 but performed very well during its final few months and benefited from renewed Government spending.  We are in the process of agreeing the final account and it is possible that future upside may arise from various outstanding commercial issues spanning the seven year contract.

• The Sector has been successful in retaining the Group's position as lead consultant on the DOE Northern Ireland Framework and the advisory framework commissions with South East Scotland Transport partnership and the Strathclyde Partnership for Transport.  

International Regions

Scott Wilson's International Regional Operations comprise four regional businesses: Asia Pacific, Europe, India and Middle East. The first half has again shown rapid revenue growth although profit levels have been tempered by depressed earnings in the Middle East and Thailand businesses. Revenue increased to £42.4m representing a year-on-year growth rate of 16.7 per cent, with adjusted* operating profit growing at 6.2 per cent. 

This growth, driven by our policy of creating a greater proportion of non-UK sourced revenue, further develops our global footprint whilst providing the opportunity for inter-regional participation and collaboration guided by our integrated global strategy. 

Asia Pacific

	H1 2009/2010	H1 2008/2009
Revenue	£18.7m	£14.9m
Adjusted* operating profit	£0.9m	£0.8m
Adjusted* operating margin	4.9%	5.2%

• The region continues to be dominated by the China and Hong Kong businesses with Hong Kong slightly ahead of budget and China slightly behind due to the disposal during the period, subject to local regulatory approval, of the Group's interest in the largest of our local joint ventures (Jiangsu Scott Wilson), following the expiry of the fifteen year agreement. New joint ventures with design institutes are already operational and our overall policy of growing our China business continues. China's GDP growth is now accelerating again and with commissions such as the design of the South Island Line extension to the Hong Kong Mass Transit Rail network and the multi modal transportation hub in Wuxi, the order book remains strong with potential to develop further opportunities in the remainder of the year. Our joint venture in Tianjin continues to grow rapidly and has recently been awarded a series of design licences in its own name, a first for Scott Wilson.

• Conditions in Thailand and Malaysia remain challenging due to a dearth of private sector commercial development and the slow down in the aviation industry respectively although the new sector alignment in Malaysia is developing opportunities. Recent new orders in the Thai domestic market should see a return to profitability there in the coming months.  

• The new Australian business is developing well in both rail and ports and has returned to profitability helped by the fact that the economy appears to have avoided the worst impact of the global recession as a result of its mineral wealth. 

Europe

	H1 2009/2010	H1 2008/2009
Revenue	£12.3m	£12.6m
Adjusted* operating profit	£0.9m	£0.8m
Adjusted* operating margin	7.2%	6.6%

• The regional business has produced year-on-year earnings growth as more EU funded infrastructure projects come on stream. There is also a significant increase in PFI projects for which we are well positioned due to the Group's involvement in their early development.  

• Much of this growth has been driven by the hub operation in Poland which has added to its core major road and rail markets with work such as the recently won Odra flood defence study. 

• In addition to Poland, significant work continues on the two major toll highway concessions in Greece and an extension to the Novi Sad-Belgrade Motorway supervision project has resulted in higher revenues for the Serbian business unit.

India

	H1 2009/2010	H1 2008/2009
Revenue	£4.8m	£3.6m
Adjusted* operating profit	£1.0m	£0.3m
Adjusted* operating margin	21.7%	8.7%

• India continues to perform exceptionally well with year-on-year revenue growth of 33.3 per cent and adjusted* operating margins in excess of 20 per cent. 

• Substantial new road supervision work places the business in a prime position to benefit from the ongoing investment in infrastructure being made by the Indian government.  

• We have recently completed study work on the dedicated Rail Freight Corridor funded by the Asian Development Bank which promises to develop into a major design opportunity. 

• The business now has significant nascent operations in rail, power transmission, water and ports in addition to well established road design and supervision units.  

Middle East

	H1 2009/2010	H1 2008/2009
Revenue	£6.6m	£5.3m
Adjusted* operating profit	(£0.7m)	£0.2m
Adjusted* operating margin	(9.8%)	2.8%

• The region has continued to face challenging economic conditions as a result of the lack of private sector investment which previously drove development in the region particularly in Dubai. 

• Continued involvement in major Port and Infrastructure work in Dubai, Abu Dhabi and Bahrain has enabled the business to increase year-on-year revenues and, with new work now in the pipeline in places such as Saudi Arabia, this trend is expected to continue. 

• Margins continue to be depressed due to the deferral of projects as a result of the economic conditions in the region, although there is now evidence of some of the deferred work coming back online. 

Managing Risks

Our strategy for achieving consistent and sustainable growth in revenue, profit and margins in a changing economic climate is to manage the balance between the markets in which we operate. The Group's mitigation strategy includes spreading market risks to achieve an acceptable balance of revenue earned from market sector, geography, public/private client and contract type, to invest in market sectors where growth is more assured, to ensure our commitment to excellence in quality of our services and client care. In addition, we use hedging instruments to reduce our currency and interest rate risks. These factors remain fundamental to mitigating economic risks.

The key financial and non-financial risks faced by the Group are disclosed in the Group's Annual Report and Accounts for the 53 week period ended 3 May 2009 within the Business Review (pages 11-13) and in Note 3 of the Consolidated Financial Statements available at www.scottwilson.com. The Board considers that these remain a current reflection of the risks and uncertainties facing the business.

Market Drivers

The demand for infrastructure development services remains robust, particularly beyond the UK markets. In the rapidly growing economies of China and India, significant opportunities continue to be available, driven by population growth, urbanisation and social expectation. The western economies have generally promoted infrastructure development as a fiscal stimulus during recession and this will continue in a number of markets. Within the UK, the common expectation is that publicly financed capital works programme budgets will be impacted following the 2010 general election. The extent and duration of potential cutbacks remain uncertain but the Group is already addressing the expected challenge and employing its sector and geographical diversity to reduce its involvement in potentially vulnerable areas.

Following a strong first half, the order book is virtually secure for the remainder of the financial year and is at a level of 60+ per cent on a rolling twelve month forward view. Increased investment in marketing and business development is geared towards maintaining this level of forward cover despite the expected reduction in the size of the UK public sector market. The strong continuing focus on cash conversion and collection and a reduction in overheads will help drive margin which will inevitably come under pressure from increased competition.

Looking forward, our new management structure has invigorated our business at all levels and we foresee substantial opportunities in the months ahead. Strategically, an increasing proportion of our order book pipeline will be associated with major international projects where we can use our long-standing reputation for quality and reliability in delivering highly complex projects. As a result of following this strategy we now have 34.6 per cent of our revenue sourced outside the UK (H1 2009: 30.6 per cent).

As markets recover, it is our intention to resume our strategy of seeking out value-adding acquisitions and integrating them into the business. Consequently, we remain confident that, despite more potential turbulence in the UK, we will be able to plot a successful course and make headway toward our long term aspiration to become a successful and growing integrated global enterprise. 

Hugh Blackwood

Group Chief Executive

15 December 2009

Condensed Consolidated Income Statement

		26 weeks ended 1 November 2009 unaudited			26 weeks ended  26 October 2008 unaudited			53 weeks ended  3 May 2009 audited
		Adjusted*	Note (i)	Total	Adjusted*	Note (i)	Total	Adjusted*	Note (i)	Note (ii)	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Continuing operations:
Revenue including share of joint venture revenues		170,504	-	170,504	180,355	-	180,355	360,000	-	-	360,000
Less: share of joint venture revenues		(11,176)	-	(11,176)	(7,125)	-	(7,125)	(14,211)	-	-	(14,211)
Group revenue		159,328	-	159,328	173,230	-	173,230	345,789	-	-	345,789
Cost of sales		(92,855)	-	(92,855)	(110,551)	(22)	(110,573)	(213,544)	-	(2,725)	(216,269)
Gross profit		66,473	-	66,473	62,679	(22)	62,657	132,245	-	(2,725)	129,520
Administrative expenses		(55,983)	(493)	(56,476)	(51,748)	(1,582)	(53,330)	(114,123)	(3,622)	(4,262)	(122,007)
Share of result of joint ventures		2,035	(555)	1,480	1,111	(326)	785	4,480	(1,270)	-	3,210
Operating profit		12,525	(1,048)	11,477	12,042	(1,930)	10,112	22,602	(4,892)	(6,987)	10,723
Finance income	5	5,540	67	5,607	7,300	-	7,300	14,734	-	-	14,734
Finance costs	6	(7,222)	-	(7,222)	(7,956)	(261)	(8,217)	(15,376)	(675)	-	(16,051)
Profit before taxation		10,843	(981)	9,862	11,386	(2,191)	9,195	21,960	(5,567)	(6,987)	9,406
Taxation		(3,412)	674	(2,738)	(3,595)	848	(2,747)	(6,945)	2,474	2,826	(1,645)
Profit for the period		7,431	(307)	7,124	7,791	(1,343)	6,448	15,015	(3,093)	(4,161)	7,761
Attributable to:
Equity holders of the Company		7,295	(307)	6,988	7,774	(1,343)	6,431	14,947	(3,093)	(4,161)	7,693
Minority interests		136	-	136	17	-	17	68	-	-	68
		7,431	(307)	7,124	7,791	(1,343)	6,448	15,015	(3,093)	(4,161)	7,761
Earnings per share:
Basic	9	10.05p	(0.42)p	9.63p	10.28p	(1.77)p	8.51p	19.95p	(4.13)p	(5.55)p	10.27p
Diluted	9	10.05p	(0.43)p	9.62p	10.08p	(1.74)p	8.34p	19.76p	(4.09)p	(5.50)p	10.17p
Dividends declared:
Amount per share				2.67p			2.4p				3.73p
Total amount absorbed (£'000)				1,905			1,828				2,828

There were no discontinued operations in any period.

* Before items described in note (i) and note (ii) below.

Note (i):	Recurring adjustments - amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, the Group's share of taxation in relation to joint ventures, as detailed further in note 4.
Note (ii):	Other adjustments - redundancy costs, an exceptional contract loss and prior year research and development tax credits, as detailed further in note 4.

Condensed Consolidated Statement of Comprehensive Income 

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Profit for the period	7,124	6,448	7,761
Exchange differences on translation of foreign operations	(998)	554	1,630
Actuarial (losses)/gains on defined benefit pension schemes	(55,401)	6,662	(7,670)
Tax relating to components of other comprehensive income	15,512	(2,020)	2,213
Deferred tax relating to unexercised share options	-	(668)	(605)
Other comprehensive (expense)/income for the period	(40,887)	4,528	(4,432)
Total comprehensive (expense)/income for the period	(33,763)	10,976	3,329
Attributable to:
Equity holders of the Company	(33,899)	10,959	3,261
Minority interests	136	17	68
	(33,763)	10,976	3,329

Condensed Consolidated Statement of Changes in Equity 

	Issued Capital	Own Shares	Other Reserves (note 11)	Retained Earnings	Total	Minority Interest	Total Equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 4 May 2009	99,118	(2,116)	(3,737)	(14,916)	78,349	478	78,827
Total comprehensive income for the period	-	-	(998)	(32,901)	(33,899)	136	(33,763)
Issue of new ordinary shares	7	-	-	-	7	-	7
Equity-settled share-based compensation	-	-	-	316	316	-	316
Translation differences (net of tax)	-	-	-	-	-	(46)	(46)
Dividends declared on Ordinary Shares	-	-	-	(1,905)	(1,905)	-	(1,905)
At 1 November 2009	99,125	(2,116)	(4,735)	(49,406)	42,868	568	43,436

	Issued Capital	Own Shares	Other Reserves (note 11)	Retained Earnings	Total	Minority Interest	Total Equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 27 April 2008	98,645	-	(5,310)	(14,423)	78,912	237	79,149
Total comprehensive income for the period	-	-	399	10,560	10,959	17	10,976
Issue of new ordinary shares	470	-	(97)	-	373	-	373
Equity-settled share-based compensation	-	-	-	407	407	-	407
Own shares acquired in the period		(1,282)		-	(1,282)	-	(1,282)
Translation differences (net of tax)	-	-	(11)	-	(11)	145	134
Dividends declared on Ordinary Shares	-	-	-	(1,828)	(1,828)	-	(1,828)
Other movements	-	-	(28)	-	(28)	-	(28)
At 26 October 2008	99,115	(1,282)	(5,047)	(5,284)	87,502	399	87,901
Total comprehensive income for the period	-	-	1,296	(8,994)	(7,698)	51	(7,647)
Issue of new ordinary shares	3	-	-	-	3	-	3
Equity-settled share-based compensation	-	-	-	348	348	-	348
Own shares acquired in the period	-	(834)	-	-	(834)	-	(834)
Translation differences (net of tax)	-	-	-	-	-	(58)	(58)
Dividends declared on Ordinary Shares	-	-	-	(1,000)	(1,000)	-	(1,000)
Transfer from retained earnings to other reserves	-	-	(14)	14	-	-	-
Additions to Minority Interests	-	-	-	-	-	121	121
Dividends paid to minority interests	-	-	-	-	-	(35)	(35)
Other movements	-	-	28	-	28	-	28
At 3 May 2009	99,118	(2,116)	(3,737)	(14,916)	78,349	478	78,827

Condensed Consolidated Balance Sheet

		1 November 2009	26 October 2008	3 May 2009
		unaudited	unaudited	Audited
	Notes	£'000	£'000	£'000
Assets
Non-current assets
Tangible fixed assets		18,865	20,106	20,250
Goodwill		42,785	42,074	42,849
Other intangible assets		13,409	16,131	14,790
Investments in joint ventures		-	1,766	1,328
Deferred tax assets		22,479	2,996	7,056
		97,538	83,073	86,273
Current assets
Trade and other receivables		126,279	134,554	124,607
Current tax assets		1,058	-	1,586
Cash and cash equivalents		12,926	14,044	10,382
		140,263	148,598	136,575
Investment in joint venture held for sale	8	1,372	-	-
		141,635	148,598	136,575
Total assets		239,173	231,671	222,848
Current liabilities
Trade and other payables		76,733	82,895	78,671
Derivative financial instruments		1,618	2,092	2,107
Current tax liabilities		1,955	2,896	421
Borrowings		28,998	33,797	27,067
Provisions		5,816	6,108	8,094
		115,120	127,788	116,360
Net current assets		26,515	20,810	20,215
Non-current liabilities
Shares to be issued		-	-	127
Borrowings		944	2,363	1,588
Derivative financial instruments		144	-	959
Provisions		179	1,779	331
Deferred tax liabilities		332	-	493
Retirement benefit obligations	10	79,018	11,840	24,163
		80,617	15,982	27,661
Net assets		43,436	87,901	78,827
Equity
Issued capital		99,125	99,115	99,118
Own shares		(2,116)	(1,282)	(2,116)
Other reserves	11	(4,735)	(5,047)	(3,737)
Retained loss		(49,406)	(5,284)	(14,916)
Equity attributable to equity holders of the Company		42,868	87,502	78,349
Minority interests		568	399	478
Total equity		43,436	87,901	78,827

Condensed Consolidated Cash Flow Statement

		26 weeks ended	26 weeks ended	53 weeks ended
		1 November 2009	26 October 2008	3 May 2009
		unaudited	unaudited	Audited
	Notes	£'000	£'000	£'000
Cash flows from operating activities
Cash generated from operations	12	9,305	470	15,409
Defined benefit pension plan contributions		(2,618)	(2,876)	(5,463)
Dividends received from joint ventures		2,400	800	5,327
Tax paid		(1,305)	(2,358)	(5,026)
Net cash flows from operating activities		7,782	(3,964)	10,247
Cash flows from investing activities
Interest received		129	107	342
Purchase of tangible fixed assets		(1,635)	(2,224)	(5,252)
Purchase of intangible assets		(694)	(1,219)	(2,296)
Proceeds from sale of tangible fixed assets		72	50	58
Acquisition of subsidiaries, net of cash and cash equivalents acquired		(1,044)	(3,454)	(7,629)
Net cash flows from investing activities		(3,172)	(6,740)	(14,777)
Cash flows from financing activities
Interest and finance charges paid		(701)	(1,127)	(1,763)
Proceeds from issue of Ordinary Shares, net of issue costs of £nil		1	40	38
Purchase of Ordinary Shares		-	-	(2,116)
Receipt of new loans and finance lease advances		55	14,998	8,961
Repayment of loans and finance leases		(2,482)	(4,139)	(10,762)
Dividends paid to equity shareholders		(1,905)	(1,828)	(2,828)
Net cash flows from financing activities		(5,032)	7,944	(8,470)
Net decrease in cash and cash equivalents		(422)	(2,760)	(13,000)
Net cash and cash equivalents at start of period		5,221	18,279	18,279
Foreign exchange		(752)	(1,482)	(58)
Net cash and cash equivalents at end of period		4,047	14,037	5,221
Cash and cash equivalents		12,926	14,044	10,382
Bank overdrafts		(8,879)	(7)	(5,161)
Net cash and cash equivalents		4,047	14,037	5,221

Notes to the Condensed Consolidated Interim Financial Statements

1  General Information

Scott Wilson Group plc (the 'Company') is a company domiciled in England. The condensed consolidated interim financial statements of the Company for the 26 weeks ended 1 November 2009 comprise the Company and its subsidiaries (together referred to as the 'Group').

The financial information in the Interim Report relating to the 53 weeks ended 3 May 2009 does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The statutory accounts of the Group for the 53 week period ended 3 May 2009 have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under s498(2) or (3) of the Companies Act 2006.

2  Accounting policies

The annual financial statements of Scott Wilson Group plc are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The condensed set of financial statements included in this Interim Report has been prepared in accordance with International Accounting Standard (IAS) 34 'Interim Financial Reporting', as adopted by the European Union.

Basis of preparation

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. 

The Directors believe the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except as described below.

Changes in accounting policy

In the current financial year, the Group has adopted IFRS 8 'Operating Segments' and IAS 1 'Presentation of Financial Statements' (revised 2007).

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board to allocate resources to the segments and to assess their performance. In contrast, the predecessor standard (IAS 14 'Segment Reporting') required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to key management personnel serving only as the starting point for the identification of such segments. As a result, the segmental information required by IAS 34 which is included in note 3 below is presented in accordance with IFRS 8. Additionally, the Group now manages its trading activities and performance through five core market-facing sectors and four overseas regions. The comparatives have been restated accordingly.

IAS 1(revised) requires the presentation of a statement of changes in equity as a primary statement, separate from the income statement and statement of comprehensive income. As a result, a condensed consolidated statement of changes in equity has been included in the primary statements, showing changes in each component of equity for each period presented.

3  Business segments

In prior years, segment information reported externally was analysed on the basis of activities undertaken by each of the Group's geographical operating divisions, UK Central, UK South, Scotland & Ireland, UK Railways and International. 

The trading activities and performance of the Group are now managed through five core market-facing sectors and four overseas regions. 

The five sectors are Strategic Consultancy, Railways, Buildings & Infrastructure, Environment & Natural Resources and Roads. The five sectors cover the UK, Ireland and the Rest of the World (excluding the four overseas regions defined below). 

The four overseas regions are Asia Pacific, Europe, India and the Middle East.

Information regarding the Group's operating segments is reported below. Amounts reported for the prior year have been restated to conform to the requirements of IFRS8 and the change in the management of the trading activities and performance described above.

Segment revenue and results

Segment revenue and results for the 26 weeks ended 1 November 2009 (unaudited):

	Revenue including share of joint venture revenues	Group revenue	Adjusted* operating profit	Operating profit - segment result
	£'000	£'000	£'000	£'000
Strategic Consultancy	12,718	12,718	1,427	1,535
Railways	20,421	20,421	1,655	1,513
Buildings & Infrastructure	28,448	28,448	719	434
Environment & Natural Resources	31,800	31,800	2,179	1,780
Roads	34,671	24,335	4,355	3,857
Asia Pacific	18,732	17,892	915	864
Europe	12,256	12,256	883	1,102
India	4,816	4,816	1,045	1,045
Middle East	6,642	6,642	(653)	(653)
	170,504	159,328	12,525	11,477
Finance income				5,607
Finance costs				(7,222)
Profit before taxation				9,862
Taxation				(2,738)
Profit for the period				7,124

The accounting policies of the reportable segments are the same as the Group's accounting policies which are described in the Group's latest annual financial statements. Segment result represents the profit earned by each segment together with an allocation of central administrative costs. Finance income, finance costs and taxation expense are not allocated to a segment.

Segment revenue and results for the 26 weeks ended 26 October 2008 (restated, unaudited):

	Revenue including share of joint venture revenues	Group revenue	Adjusted* operating profit	Operating profit - segment result
	£'000	£'000	£'000	£'000
Strategic Consultancy	13,279	13,279	1,477	1,444
Railways	21,370	21,370	110	16
Buildings & Infrastructure	42,154	42,154	3,866	2,961
Environment & Natural Resources	34,931	34,931	1,819	1,342
Roads	32,250	26,894	2,707	2,437
Asia Pacific	14,852	13,083	774	649
Europe	12,633	12,633	831	805
India	3,550	3,550	308	308
Middle East	5,336	5,336	150	150
	180,355	173,230	12,042	10,112
Finance income				7,300
Finance costs				(8,217)
Profit before taxation				9,195
Taxation				(2,747)
Profit for the period				6,448

Segment revenue and results for the 53 weeks ended 3 May 2009 (restated, unaudited):

	Revenue including share of joint venture revenues	Group revenue	Adjusted* operating profit	Operating profit - segment result
	£'000	£'000	£'000	£'000
Strategic Consultancy	26,367	26,367	4,046	2,481
Railways	43,936	43,936	1,131	225
Buildings & Infrastructure	74,781	74,781	2,401	(2,815)
Environment & Natural Resources	68,368	68,368	2,903	709
Roads	64,822	54,280	9,324	7,818
Asia Pacific	34,226	30,557	1,687	1,344
Europe	25,981	25,981	1,150	1,091
India	8,117	8,117	1,050	1,050
Middle East	13,402	13,402	(1,090)	(1,180)
	360,000	345,789	22,602	10,723
Finance income				14,734
Finance costs				(16,051)
Profit before taxation				9,406
Taxation				(1,645)
Profit for the period				7,761

Segment total assets

	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Unaudited
	£'000	£'000	£'000
Strategic Consultancy	10,132	11,024	10,262
Railways	19,069	22,926	19,458
Buildings & Infrastructure	55,149	58,796	53,041
Environment & Natural Resources	57,762	56,405	54,548
Roads	23,688	21,888	20,418
Asia Pacific	26,614	21,153	22,598
Europe	18,669	16,658	16,579
India	10,387	5,082	7,600
Middle East	15,971	12,913	16,644
Total segment assets	237,441	226,845	221,148
Unallocated assets	1,732	4,826	1,700
Consolidated total assets	239,173	231,671	222,848

All assets are allocated to reportable segments with the exception of centrally managed cash balances. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

4  Recurring and other adjustments 

	26 weeks ended	26 weeks ended	53 weeks ended
Recurring adjustments	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Amortisation of intangible assets acquired in business combinations	(1,185)	(1,350)	(2,785)
Changes in the fair value of derivative financial instruments	759	(490)	(1,487)
Retention bonuses arising from acquisitions	-	(25)	(25)
Group's share of taxation relating to joint ventures	(555)	(326)	(1,270)
	(981)	(2,191)	(5,567)
Taxation	674	848	2,474
	(307)	(1,343)	(3,093)

Changes in the fair value of derivative financial instruments

The Group has entered into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange risk, which do not qualify for hedge accounting under IAS 39. When the commercial transaction to which they relate is reflected in the Income Statement, the financial impact of the associated instruments is reflected in the adjusted results. The timing impact of the requirement to mark-to-market derivatives relating to future transactions, not yet reflected in the Income Statement, is captioned as "Changes in the fair value of derivative financial instruments" and not reflected in the adjusted results. Amounts relating to the revaluation of exchange rate derivative financial instruments are included in administrative expenses, amounts relating to the revaluation of interest rate derivative financial instruments are included in finance income or costs.

Retention bonuses arising from acquisitions

The amounts recorded reflect retention bonuses arising from acquisitions. 

Group's share of taxation relating to joint ventures

The Group's share of tax in relation to joint ventures has been included as an adjustment in order to present operating profit before tax (which would have been arrived at under UK GAAP equity accounting), a measure which management uses for internal performance analysis.

	26 weeks ended	26 weeks ended	53 weeks ended
Other adjustments	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Redundancy costs	-	-	(4,262)
Contract loss	-	-	(2,725)
	-	-	(6,987)
Taxation	-	-	2,826
	-	-	(4,161)

Redundancy costs

Redundancy costs relate to costs incurred as a result of the Group's restructuring to re-align its resource requirements to market demand. 

Contract loss

Contract loss relates to an exceptional loss incurred on an overseas contract, which has been postponed indefinitely.

Taxation

The exceptional taxation credit for the 53 weeks ended 3 May 2009 relates to redundancy and contract loss (£1,956,000) together with the benefit of research and development tax credits relating to prior periods (£870,000). The research and development tax credits reflected here represents the benefit of a retrospective claim covering five financial years. The Group anticipates benefiting from research and development tax credits on an ongoing basis and additional benefits are reflected in the adjusted tax charge.

5  Finance income

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Interest income on bank deposits	211	107	349
Gain on interest rate derivative financial instruments	67	-	-
Expected return on pension plan assets	5,329	7,193	14,385
	5,607	7,300	14,734

6  Finance costs

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Interest on bank loans and overdrafts	461	828	1,228
Interest on other loans	59	104	131
Finance lease charges	150	196	407
Unwind of discount on deferred consideration	37	101	155
Loss on interest rate derivative financial instruments	-	261	675
Interest on retirement benefit obligations	6,515	6,727	13,455
	7,222	8,217	16,051

7  Tax

Tax for the 26 weeks ended 1 November 2009 is charged at 27.8% (26 weeks ended 26 October 2008: 29.9%; 53 weeks ended 3 May 2009: 17.5%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the period.

8  Investment in joint venture held for sale

The Group has entered into an agreement to sell its 50% shareholding in Jiangsu Scott Wilson. The Group's investment has accordingly been reclassified as held for sale. The profit before taxation expected to arise on the completion of the disposal, which remains subject to approval from the Chinese authorities, is £830,000. 

9  Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares held by the Scott Wilson Holdings Ltd Employee Share Ownership Trust.

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	'000	'000	'000
Profit attributable to equity holders of the Company	6,988	6,431	7,693
Weighted average number of Ordinary Shares in issue (thousands)	72,598	75,604	74,918
Basic earnings per share	9.63p	8.51p	10.27p
Profit attributable to equity holders of the Company	6,988	6,431	7,693
Weighted average number of Ordinary Shares in issue (thousands)	72,598	75,604	74,918
Dilutive effect of share options	14	1,427	451
Dilutive effect of business combination deferred consideration shares	-	99	254
Diluted weighted average number of Ordinary Shares in issue (thousands)	72,612	77,130	75,623
Diluted earnings per share	9.62p	8.34p	10.17p

Adjusted* earnings per share

The Directors believe that the presentation of adjusted* earnings per share assists with the understanding of the results of the Group. Adjusted* earnings per share is earnings per share adjusted for amortisation of business combination intangibles, retention bonuses arising from acquisitions and changes in the fair value of derivative financial instruments, redundancy costs, an exceptional contract loss and prior year research and development tax credits.

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Profit attributable to equity holders of the Company	6,988	6,431	7,693
Amortisation of intangible assets acquired in business combinations	1,185	1,350	2,785
Retention bonuses arising from acquisitions	-	25	25
Changes in the value of derivative financial instruments	(759)	490	1,487
Redundancy costs	-	-	4,262
Contract loss	-	-	2,725
Tax relating to amortisation of business combination intangibles, changes in the value of derivative financial instruments, retention bonuses arising from acquisitions, redundancy costs, an exceptional contract loss and prior year research and development tax credits	(119)	(522)	(4,030)
Adjusted* profit attributable to equity holders of the Company	7,295	7,774	14,947
Weighted average number of Ordinary Shares in issue (thousands)	72,598	75,604	74,918
Adjusted* basic earnings per share	10.05p	10.28p	19.95p
Adjusted* profit attributable to equity holders of the Company	7,295	7,774	14,947
Diluted weighted average number of Ordinary Shares in issue (thousands)	72,612	77,130	75,623
Adjusted* diluted earnings per share	10.05p	10.08p	19.76p

No options over Ordinary Shares have been awarded since 1 November 2009.

10  Retirement benefit obligations

Defined benefit schemes

The defined benefit obligation as at 1 November 2009 is calculated on a year-to-date basis, using the latest actuarial valuation as at 3 May 2009. 

The defined benefit plan assets have been updated to reflect their market value as at 1 November 2009. Differences between the expected return on assets and the actual return on assets have been recognised as an actuarial gain or loss in the Condensed Consolidated Statement of Comprehensive Income in accordance with the Group's accounting policy.  

The principal assumptions underlying the actuarial assessments of the present value of the plan liabilities are:

	1 November 2009	26 October 2008	3 May 2009
Inflation rate	3.60%	3.55%	3.40%
Future salary increases	4.60%	4.55%	4.40%
Future pension increases	3.50%	3.45%	3.35%
Discount rate	5.60%	7.10%	7.05%

Mortality assumptions for the plan are as follows:

Life expectancy at 65	1 November 2009	26 October 2008	3 May 2009
Future pensioners - male	88.3	88.3	88.3
Current pensioners - male	87.0	87.0	87.0
Future pensioners - female	91.0	91.0	91.0
Current pensioners - female	89.8	89.8	89.8

The movements in the retirement benefit obligations are:

	1 November 2009 £'000	26 October 2008 £'000	3 May 2009 £'000
At the start of the period	(24,163)	(19,940)	(19,940)
Current service cost	(886)	(1,473)	(2,946)
Interest cost	(6,515)	(6,727)	(13,455)
Expected return on assets	5,329	7,193	14,385
Experience losses	-	-	(4,175)
Actuarial gains/(losses) due to:
- Assets	15,966	(39,145)	(52,155)
- Liabilities	(71,367)	45,376	48,660
Employer contributions	2,618	2,876	5,463
At the end of the period	(79,018)	(11,840)	(24,163)
Represented by:
Plan assets	185,958	168,613	163,722
Plan liabilities	(264,976)	(180,453)	(187,885)
	(79,018)	(11,840)	(24,163)

11  Other reserves

	Ordinary Shares to be issued	Reverse Acquisition reserve	Translation reserve	Other reserves	Total other Reserves
	£'000	£'000	£'000	£'000	£'000
At 27 April 2008	397	(9,250)	106	3,437	(5,310)
Total comprehensive income for the period	-	-	399	-	399
Issue of new ordinary shares	(97)	-	-	-	(97)
Translation differences (net of tax)	(11)	-	-	-	(11)
Other movements	-	-	(28)	-	(28)
At 26 October 2008	289	(9,250)	477	3,437	(5,047)
Total comprehensive income for the period	-	-	1,296	-	1,296
Transfer from retained earnings to other reserves	-	-	-	(14)	(14)
Other movements	-	-	28	-	28
At 3 May 2009	289	(9,250)	1,801	3,423	(3,737)
Total comprehensive income for the period	-	-	(998)	-	(998)
At 1 November 2009	289	(9,250)	803	3,423	(4,735)

12  Cash generated from operations

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Operating profit	11,477	10,112	10,723
Share of result of joint ventures	(1,480)	(785)	(3,210)
(Profit)/loss on sale of tangible fixed assets	(8)	(20)	49
Defined benefit pension plan current service cost	886	1,473	2,946
Depreciation and amortisation	4,871	4,664	10,022
Share-based compensation expense	316	407	755
(Gain)/loss on exchange rate derivative financial instruments	(692)	229	812
Increase in receivables and prepayments	(1,585)	(18,314)	(5,927)
(Decrease)/increase in payables and accruals	(2,825)	4,550	(1,334)
(Decrease)/increase in provisions	(1,655)	(1,846)	573
Cash generated from operations	9,305	470	15,409

13  Interim dividend

An interim dividend for the 53 week period ended 3 May 2009 of 1.33p per Ordinary Share was paid on 20 February 2009. A final dividend for the 53 week period ended 3 May 2009 of 2.67p per Ordinary Share was paid on 5 October 2009.

The Directors have declared an interim dividend for the 52 week period ending 2 May 2010 of 1.33p per Ordinary Share to be paid on 19 February 2010 to shareholders on the register on 22 January 2010. In accordance with IAS 10, this interim dividend has not been recognised in the Interim Report.

14  Related party transactions

Transactions between the Company and its subsidiaries and joint ventures represent related party transactions. Transactions with subsidiaries are eliminated on consolidation. Except as disclosed below, no material related party transactions have been entered into, during the period, which might reasonably affect any decisions made by the users of these Condensed Consolidated Interim Financial Statements.

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Transactions with joint ventures:
- sales of goods and services	1,291	2,485	6,624
- purchases of goods and services	49	139	226
Net amount due to Group at the period end	153	237	164

In the 26 weeks ended 1 November 2009, the Group made contributions to defined benefit pension schemes of £2,618,000 (26 weeks ended 26 October 2008: £2,876,000: 53 weeks ended 3 May 2009: £5,463,000).

Compensation paid to key management of the Group will be disclosed in the Group's Annual Report for the 52 weeks ending 2 May 2010.

15  Reconciliation of adjusted Group results

The Directors believe that the presentation of adjusted operating profit, adjusted operating margin and adjusted profit before taxation assists with the understanding of the results of the Group.

Adjusted operating profit is operating profit adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, the Group's share of taxation in relation to joint ventures, redundancy costs and an exceptional contract loss.

Adjusted operating margin is adjusted operating profit expressed as a percentage of revenue including share of joint ventures.

Adjusted profit before taxation is profit before taxation adjusted for the impact of amortisation of business combination intangibles, changes in the fair value of derivative financial instruments, retention bonuses arising from acquisitions, the Group's share of taxation in relation to joint ventures, redundancy costs and an exceptional contract loss.

A reconciliation of these measures to operating profit is given below:

	26 weeks ended	26 weeks ended	53 weeks ended
	1 November 2009	26 October 2008	3 May 2009
	unaudited	unaudited	Audited
	£'000	£'000	£'000
Statutory operating profit	11,477	10,112	10,723
Amortisation of intangible assets acquired in business combinations	1,185	1,350	2,785
Retention bonuses arising from acquisitions	-	25	25
Group's share of taxation relating to joint ventures	555	326	1,270
(Gain)/loss on exchange rate derivative financial instruments	(692)	229	812
Redundancy costs	-	-	4,262
Contract loss	-	-	2,725
Adjusted operating profit	12,525	12,042	22,602
Net finance costs	(1,615)	(917)	(1,317)
(Gain)/loss on interest rate derivative financial instruments	(67)	261	675
Adjusted profit before taxation	10,843	11,386	21,960
Adjusted operating margin	7.3%	6.7%	6.3%

 

END

 

 

IR FFIFALSUSESE