Half Yearly Report

RNS Number : 4099M

Tribal Group PLC

16 August 2011

 



Tribal Group plc

16 August 2011

Half year results for the six months ended 30 June 2011 

Summary

§ Successful completion of the sale of Health, Government and Resourcing businesses

§ Business now focused on the education, learning and training markets

§ Cost reduction programme well advanced, targeting annualised savings of £5.1m

§ Encouraging development of opportunities in international markets

§ Sustained high levels of committed income at £180.2m (December 2010: £186.1m)

§ Bank facilities refreshed and committed to February 2015

§ Net debt reduced to £17.3m (December 2010: £18.5m)

§ Revenue of £57.5m (2010: £52.4m)

§ Adjusted profit before tax of £2.8m (2010: £3.1m)

§ Interim dividend of 0.40p (2010: 1.85p)

Financial Summary
	Six months ended	Six months ended
	30 June	30 June
	2011	2010	Change
Revenue1	£57.5m	£52.4m	9.7%
Adjusted profit before tax1, 2	£2.8m	£3.1m	(10.0)%
Profit/(loss) before tax1	£(0.7)m	£1.3m
Loss for the period3	£(23.9)m	£0.5m
Adjusted earnings per share1, 2	2.9p	2.3p	26.1%
Interim dividend	0.40p	1.85p	(78.4)%
1 From continuing operations. 2 Adjusted profit before tax and adjusted earnings per share exclude exceptional costs of £3.5m (2010: £1.2m), IFRS3 intangible asset amortisation of £0.1m (2010: £0.2m) and a financial instrument credit of £0.2m (2010: charge of £0.5m). 3 Loss for the period is stated after loss on disposal, discontinued operations and exceptional operating costs.

Commentary

John Ormerod, Tribal's Chairman, commented: "The first half of 2011 has been a period of continued change for Tribal.  We successfully completed the sale of our Health, Government and Resourcing businesses, and the uncertainty surrounding our future ownership was brought to an end. As a result, Tribal is now focused on developing its activities in the education, learning and training markets.

"Following these disposals we have organised our business into two clear divisions: Technology and Services.  As part of the re-organisation we are also well advanced in the implementation of a further cost reduction programme targeted on management de-layering and central overhead reduction.  We expect this programme to deliver annualised savings of approximately £5.1 million.

"Throughout this period of change, our staff have remained focussed on delivering excellent service for our clients.  I am very grateful for the support and professionalism our staff have demonstrated during this time.

"With some continuing uncertainty in our UK market, we have focussed our business development efforts on selective international markets and have made good progress with significant contract wins in Australia, New Zealand and the US.  This activity, combined with continuing progress in the UK, has sustained our high levels of committed income at £180.2 million.

"Corporately, we have refreshed our banking facilities which are now committed to February 2015, and reduced our level of debt to £17.3 million.

"Based on half year revenue of £57.5 million, and adjusted profit before tax of £2.8 million, we have declared an interim dividend of 0.4p per share.  We are trading in line with management's expectations for the full year. We emerge from the first half year with a focussed, well structured business, and a growing confidence in our market position which together offer the potential to make progress over the medium term."

For further information please contact:

Tribal Group plc	Tel: [phone]
Keith Evans, Chief Operating Officer
Steve Breach, Group Finance Director
Weber Shandwick Financial	Tel: [phone]
Nick Oborne
Stephanie Badjonat
Robert Cook

Presentation

A copy of the presentation will be available later this morning on the Tribal Group website: www.tribalgroup.com.

Notes to Editors

Tribal Group plc (Tribal) is a leading provider of technology products and services to the education, learning and training markets in the UK and internationally.

Our people are sector experts and we work in partnership with a wide range of organisations, including schools, colleges, universities, local authorities and government departments, as well as employers in the private sector. Tribal has over 1,300 staff.  Tribal's shares are quoted on the London Stock Exchange (TRB). Links: www.tribalgroup.com. 

This Statement has been prepared for and is addressed only to our shareholders as a whole and should not be relied on by any other party or for any other purpose.  Tribal, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.  This Statement may contain forward-looking statements.   Any forward-looking statement has been made by the directors in good faith based on the information available to them up to the time of approval of this Statement and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information.  To the extent that this Statement contains any statement dealing with any time after the date of its preparation, such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur and therefore the facts stated and views expressed may change.  Tribal undertakes no obligation to update these forward-looking statements.

Chief Operating Officer's statement

Introduction

Tribal has undergone fundamental change during the first half of the year.  Following the successful completion of the sale of our Resourcing business in March 2011, and our Health and Government businesses at the end of April, we are focused on serving the education, learning and training markets.

Following these disposals, Tribal now comprises two principal areas of activity:

§ Technology - a range of high value software products with high competitive barriers to entry, together with one-off bespoke solutions leveraged from our core software components.

§ Services - long term service contracts based on strong market domain knowledge with embedded scalable technology

As part of our re-focusing, we have streamlined our organisational structure to match the scale of our continuing activities. We have achieved savings of £0.5m during the period, and a further £2.4m are expected to be realised in the second half of the year.  As a result, we expect our profits to be weighted towards the second half of the year. The completed cost reduction programme will deliver annualised gross cost savings of £5.1m. The cost of implementing these change programmes was £4.2m in the period. In addition, incentive arrangements have been restored across the business.  Subject to the satisfaction of performance criteria, these new incentive arrangements may result in charges of approximately £2.0m per annum. As a result, the net annualised savings from cost reduction will be approximately £3.1m.

Revenue for the six months ended 30 June 2011 in our continuing operations was £57.5m (2010: £52.4m). Adjusted operating profit was £3.9m (2010: £3.7m) and the adjusted operating profit margin was 6.8% (2010: 7.1%). Adjusted profit before tax was £2.8m (2010: £3.1m) and adjusted earnings per share were 2.9p (2010: 2.3p).  The adjusted profit figures set out above exclude exceptional costs of £3.5m. Our effective tax rate for our continuing operations in the current year is expected to be modest due to the benefit of various deductions, but the effective tax rate of the continuing Group in 2012 and future years is anticipated to be broadly equivalent to the UK corporation tax rate. Statutory loss for the period was £23.9m (2010: profit of £0.5m), including a loss on disposal of discontinued operations of £18.7m (2010: profit of £0.3m).

Our net debt levels at 31 December 2010 were unusually low as they were supported by favourable credit terms that unwound in the first quarter of 2011.  During the period, our operating cash flow was therefore also unusually low, being an outflow from continuing operations of £1.2m (2010: inflow of £12.5m).  Net debt, supported by cash proceeds from our disposal programme but offset by the reversal of the favourable credit terms and exceptional restructuring cash costs, fell from £18.5m at the start of the year to £17.3m at 30 June 2011. Following the sale of our Health and Government businesses, Tribal now benefits from a £30m revolving credit facility committed until February 2015, and a £10m combined overdraft and bonding facility next renewable in March 2012.

During the period, our levels of committed income have remained strong and stood at £180.2m at 30 June 2011 (31 December 2010: £186.1m). In our Technology business, committed income was £57.6m at 30 June 2011 (31 December 2010: £55.2m).  In our Services business, committed income was £122.6m at 30 June 2011 (31 December 2010: £130.9m).

We have continued to see a steady flow of new opportunities for both our Service and Technology businesses, particularly in our international markets.  Our overall sales pipeline continues to prove resilient.

The UK Government has demonstrated its commitment to reduce the public sector budget deficit, primarily through substantial reductions in government spending.  The public sector is grasping this challenge, and is demonstrating appetite for significant change.  This process is creating good medium term opportunities for Tribal in the UK:

            § in delivering services on behalf of the Government through lower-cost business models, and

§ in deploying technology to drive efficiency and value for money.

We have seen encouraging demand in our international markets, and we are continuing to develop our presence in selected overseas locations, particularly in Australasia and the US. 

Following the sale of our Resourcing, Health and Government businesses and the cessation of talks regarding a potential offer for the Company, we are continuing to develop our strategy for the further development of our Technology and Services businesses in which our core software platforms and embedded applied technology will play a strong part in the development of our growth plans.

Business Review

Segmental operating profit and operating profit margin figures for the six months ended 30 June 2011 and six months ended 30 June 2010 are stated in accordance with the business segment information in note 4 to the financial information. The reconciling items between segmental operating profit and operating profit are also shown in note 4 to the financial information.

Technology
	Six months ended 30 June 2011 £'m	Six months ended 30 June 2010 £'m
Revenue	22.9	21.9
Segment operating profit	4.4	5.1
Operating profit margin	19%	23%

   

Our Technology business saw an increase in revenue to £22.9m (2010: £21.9m).  Operating profit was £4.4m (2010: £5.1m) and the operating margin was 19% (2010: 23%).

Market conditions for our Technology activities in the UK have presented some challenges, as our clients have seen pressure on Government funding streams in certain of our markets.  Internationally, however, we have enjoyed continuing success, particularly in Australasia.  The reduced operating margin in the six months ended 30 June 2011 reflects significant (non-recurring) licence sales to the University of Sydney in 2010, the impact of funding challenges for our UK clients in 2011, and the cost of investment in business development activities in international markets.

Our technology development activities are now operated as an integrated unit, allowing enhanced productivity and increasing innovation.  As part of our further streamlining programme across Tribal, within our Technology business we have undertaken cost savings initiatives with an annual benefit of £1.5m.  These savings form part of the overall annualised gross cost savings of £5.1m referred to above.  The majority of these actions are now complete, and the benefit of this will be reflected in the operating profit for the second half year.

§ Higher Education (HE).  We have continued to build on our leading position in the UK market through winning significant new clients and effective delivery of product enhancements to our existing client base. We are pleased that we have been appointed to supply a new student management system for the University of Oxford.  Internationally, we have successfully implemented student management systems for the University of Sydney and the University of Otago in New Zealand, and we have also secured new clients including Trinity College, Dublin, the University of Queensland and Jiaotong-Liverpool University in China.

§ Further Education (FE). Our FE student management system business has performed well, driven by strong international activity levels compensating for subdued market activity in the UK. In New Zealand, we have expanded our client base since securing our first client (Waiariki Institute of Technology) at the end of last year.  To date in 2011, we have been appointed by Manukau Institute of Technology in Auckland, and also by Tertiary Accord New Zealand, a grouping of seven polytechnic colleges, under a framework which is expected to underpin a roll-out of our student management systems across multiple colleges.

§ Work-based learning (WBL). The WBL market has experienced reduced volumes due to lower national and local government spending. However, demand for our WBL student management system ("Maytas") has broadly proved resilient, and the market is now beginning to exhibit greater confidence as activity levels return.

§ Children's Services.  The market for our Children's Services activity planning and management software has experienced inertia following Government consultation in late 2010 which recommended changes in the approach to records management taken by Children's Services departments. Whilst this inertia has protected our existing client base, as the requirements driven by this consultation have become clearer we have developed and will soon launch a new product which will address the needs of the market going forward.

§ Bespoke.  We undertake a range of bespoke software development work for our clients.  Whilst our work varies, we have established unique online and mobile learning technologies which underpin the delivery of service contracts such as those with the NHS South West and the National Centre for the Excellence in Teaching of Mathematics.

Services
	Six months ended 30 June 2011 £'m	Six months ended 30 June 2010 £'m
Revenue	36.5	31.8
Segment operating profit	1.6	0.8
Operating profit margin	4%	3%

Our Services business saw an increase in revenue to £36.5m (2010: £31.8m).  Operating profit was £1.6m (2010: £0.8m) and the operating margin was 4% (2010: 3%).  The operating margin reflects particularly the benefits of growth through our Ofsted Early Years contract, offset by the impact of challenging conditions in the UK schools advisory market and business development costs in our US operations.

As part of our further streamlining programme across Tribal, within our Services business we have undertaken cost savings initiatives with an annual benefit of £1.7m.  These savings form part of the overall annualised gross cost savings of £5.1m referred to above.  The majority of these actions are now complete, and the benefit of this will be reflected in the operating profit for the second half year.

Our Services business works with clients across three key areas:

§ Quality Improvement Services- incorporating inspection, improvement and compliance contracts which are embedded with our own diagnostic and assessment technology tools  

§ Professional Development Solutions- development and operation of large scale staff development knowledge portals incorporating technology solutions for content management, mobile access and social networking functions

§ Adult Learning and Careers- management of large information, advice and guidance contracts as well as a range of apprenticeship management solutions incorporating records management systems and specialist e-learning content

During the period, we have continued to see good levels of interest in our services offerings, reflecting our ability to combine deep domain expertise with technology solutions and service delivery capabilities.

§ Quality Improvement Services.  We successfully implemented our Early Years Ofsted inspection contract during the second half of 2010.  This contract complements our Schools and Colleges Ofsted inspection contract which has been operational since 2009.  Delivery of these inspections contracts is in line with our expectations.  We are seeing new opportunities for inspection services in the Middle East, and have recently completed a focused inspections contract on behalf of the Abu Dhabi Education Council.   Whilst the UK market for schools advisory services has been subdued, we have been appointed to a US$6m contract working for the Metropolitan Board of Public Education in Nashville, USA under which we will support the development and delivery of a school turn-around model for a group of under-performing schools.  This new appointment represents an important step as we develop our US business around Class Measures Inc., which we acquired during 2010.

§ Professional Development Solutions  We have continued to deliver the National Centre for the Excellence in the Teaching of Mathematics and Early Years Professional Status contracts on behalf of the UK Government. We are seeking to diversify our activities, and have begun to grow our work in the Donor Aid market, assisting the improvement of educational delivery in EC accession states and the developing world, through which we were pleased to win a key contract to support Special Educational Needs policy development in Turkey. Education reform remains a priority area of investment for the Middle East and, notwithstanding political unrest in the region, we are well-placed to participate in this market.  We are also partnering with Capita in the delivery of the previously announced NHS South West contract which will provide e-learning professional development to over 48,000 NHS staff in the South West.

§ Adult Learning and Careers.  Our careers advisory contracts, which provide advice and support to offenders to assist their return to the job market, continue to perform well.  We deliver this service in 52 prisons across different regions in England.  Our apprenticeship services, through which we support and deliver apprenticeship programmes for major employers, has performed well and we are successfully growing our private sector client base with the addition of, for example, Royal Mail and DHL.  Internationally, we are seeing increasing opportunities through Donor Aid funded international education projects.  In May 2011, we were awarded an EU-funded contract to assist in the improvement of lifelong career guidance services in Croatia.  Our learning materials publishing business has seen improved trading conditions, following challenging changes to its markets during 2010.

Discontinued activities

On 1 March 2011, we completed the sale of our Resourcing business to TMP (UK) Limited for an initial consideration of £1 resulting in a loss on disposal of £1.3m. In addition, TMP will pay to Tribal 20% of the revenue from existing clients for three years following completion for its Advertising and E-Solutions business streams up to a maximum deferred consideration of £6m.

On 28 April 2011, we concluded the sale of our Health and Government businesses to The Capita Group Plc for a maximum consideration of £15.9m, of which £2.5m is payable subject to the satisfaction of certain conditions. Net assets disposed of totalled £31.7m, of which £22.5m related to goodwill, and £0.9m of liabilities related to retirement benefit obligations. A loss on disposal arose of £18.5m. Additionally a contingent liability of £10.6m in relation to a further defined benefit pension scheme was transferred.

Revenue from all discontinued operations in the period was £18.6m (2010: £62.1m).  Operating losses from discontinued operations were £4.3m (2010: profit of £nil). Total losses from discontinued operations were £23.2m (2010: £0.2m).

People

We are fortunate at Tribal in employing staff and associates who are motivated by working with our customers to improve the delivery of services to the education, learning and training markets.

Tribal has been through a period of significant change over the last 18 months, and our staff have remained supportive and focused on sustaining the excellent service that we offer to our clients throughout this time. I am very grateful for the continued support from our management and staff across the organisation.

We continue to build on our market-leading positions in the UK, and increasingly in international markets.  Our success is solely attributable to the skills, expertise and dedication of our 1,400 staff and the associates that work with us.

Risks and uncertainties

Tribal regularly reviews its corporate risk register and the Board considers risk assessment, identification of mitigating actions and operation of suitable internal controls to be fundamental to achieving the Group's strategic objectives.

Our risk management policies and key risks are more fully documented in the Group's report and accounts for the year ended 31 December 2010.  However, the changes within Tribal over the six months ended 30 June 2011 have led to the evolution of our risk profile.  In light of these changes, set out below are details of the principal risks that the Group will be managing during the second half of the year.

Risks which have changed since 31 December 2010:

§ Managing change - the Group has undergone significant organisational change at a corporate level and as a result of cost reduction activities within our day-to-day operations. During periods of change, the ability of an organisation to secure the services of the right people is challenging.  We have restored our incentive programmes, and are seeking to create a vibrant and attractive working environment for our people.

§ Responding to changes in the market - during 2010 the Group faced significant uncertainty as a result of changes in government policy and spending. Following the sale of the Health and Government businesses, the Group's continuing markets are more stable than during 2010.  Therefore, whilst market risks remain, the capacity of the Group to manage these risks is now significantly enhanced.

§ Revenue visibility - the revenue visibility of the Group has improved following the disposal of the Health and Government businesses. The Group continues to monitor pipeline and committed income levels closely, and is prioritising business opportunities which leverage longer- term service arrangements and our technology expertise in order to enhance revenue visibility and stability.

§ International growth - we are seeking to develop our client base in a number of international markets, including Australasia, the US and the Middle East.  We are increasingly investing in business development and operational capabilities in these locations.  These developments expose the Group, inter alia, to greater competition, foreign exchange volatility and risks associated with staff safety and security.

§ Pension obligations - The Group provides defined benefit pension arrangements to a portion of its employees, although following the sale of the Health and Government businesses the level of the deficit on defined benefit pension arrangements has reduced significantly. 

§ Interest rate risk - as at 30 June 2011, the Group had a £25m designated hedge under which the Group paid 4.45% until 31 December 2013.  On 1 July 2011, this hedge was settled and an interest cap at 3% (plus applicable margin) on £25m of borrowings was put in place until December 2012.

§ Funding risk - the availability of credit to fund day-to-day operations and long-term investment is essential to the Group.  Following the disposal of the Group's Health and Government businesses, the Group's senior debt banking facility has been amended such that £30m of borrowing capacity is now available until February 2015.

Risks which remain materially unchanged since 31 December 2010, and for which reference should be made to page 17 of the Group's report and accounts for the year ended 31 December 2010, are as follows:

§ Service delivery implementation

§ Technology obsolescence

§ Information security

§ Credit risk

§ Foreign exchange risk

Going concern

The Group is funded by a credit facility of £30m which is committed until February 2015 and a combined bonding and overdraft facility of £10m which is renewable in March 2012. Net debt was £17.3m at 30 June 2011.

The Group's technology products benefit from a significant installed UK customer base, whilst the services activities are underpinned by a number of long-term contracts.  Collectively, the Group has a range of customers across different geographic areas, high levels of committed income and a strong pipeline of new opportunities.  The Group's forecasts and projections, which allow for reasonably possible changes in trading performance, show that the Group will be cash generative across the forecast period.  As a consequence, the directors believe that the Group is well placed to manage its business risks despite the current uncertain economic outlook.

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  Thus they continue to adopt the going concern basis in preparing the financial statements.

Dividend

The Board has declared an interim dividend of 0.40p in respect of the six months ended 30 June 2011 (2010: 1.85p). This will be paid on 21 October 2011 to shareholders on the register at 23 September 2011.

Related parties

Transactions with related parties during the period are set out in note 22.

Prospects

Tribal has a strong domestic client base, an established portfolio of technology products, and high levels of committed income at £180.2million. Our investment in international markets is generating positive initial results. 

As a result of our restructuring actions and our cost reduction programme, we now have a more stable and efficient platform from which to launch new growth initiatives, and increasing confidence from which to target conversion of an encouraging pipeline of prospects for the second half of the year and beyond.

Keith Evans

Chief Operating Officer

15 August 2011

Condensed Consolidated Income Statement For the six months to 30 June 2011
	Note	Before exceptional and amortisation costs £'000	Exceptional and amortisation costs (Note 5) £'000	Six months ended 30 June 2011 Total £'000	Before exceptional and amortisation costs £'000	Exceptional and amortisation costs (Note 5) £'000	Six months ended 30 June 2010 Total £'000
Continuing operations
Revenue	4	57,469	-	57,469	52,370	-	52,370
Cost of sales		(36,390)	-	(36,390)	(33,946)	-	(33,946)
Gross profit		21,079	-	21,079	18,424	-	18,424
Net administrative expenses
Other administrative expenses:		(17,154)	(3,488)	(20,642)	(14,767)	(1,158)	(15,925)
Amortisation of IFRS 3 intangibles		-	(149)	(149)	-	(156)	(156)
Total administrative expenses		(17,154)	(3,637)	(20,791)	(14,767)	(1,314)	(16,081)
Operating profit/(loss)	4	3,925	(3,637)	288	3,657	(1,314)	2,343
Investment income	6	34	-	34	50	-	50
Other gains and losses	7	-	165	165	-	(456)	(456)
Finance costs	8	(1,197)	-	(1,197)	(640)	-	(640)
Profit/(loss) before tax		2,762	(3,472)	(710)	3,067	(1,770)	1,297
Tax	9	(30)	40	10	(874)	332	(542)
Profit/(loss) for the period from continuing operations		2,732	(3,432)	(700)	2,193	(1,438)	755
Discontinued operations
Profit/(loss) from discontinued operations	10	(723)	(22,441)	(23,164)	2,630	(2,843)	(213)
Profit/(loss) for the period		2,009	(25,873)	(23,864)	4,823	(4,281)	542
Attributable to:
Equity holders of the parent				(23,864)			542
Earnings per share
From continuing operations
Basic	11	2.9p	(3.6)p	(0.7)p	2.3p	(1.5)p	0.8p
Diluted	11	2.9p	(3.6)p	(0.7)p	2.3p	(1.5)p	0.8p
From continuing and discontinued operations
Basic	11	2.1p	(27.6)p	(25.5)p	5.1p	(4.5)p	0.6p
Diluted	11	2.1p	(27.6)p	(25.5)p	5.1p	(4.5)p	0.6p

Condensed Consolidated Income Statement

	Note	Before exceptional and amortisation costs £'000	Exceptional and amortisation  costs (Note 5) £'000	Year ended 31 December 2010 Total £'000
Continuing operations
Revenue	4	104,097	-	104,097
Cost of sales		(67,180)	-	(67,180)
Gross profit		36,917	-	36,917
Net administrative expenses
Other administrative expenses:		(28,642)	(6,257)	(34,899)
Amortisation of IFRS 3 intangibles		-	(314)	(314)
Total administrative expenses		(28,642)	(6,571)	(35,213)
Operating profit/(loss)	4	8,275	(6,571)	1,704
Investment income	6	143	-	143
Other gains and losses	7	-	(625)	(625)
Finance costs	8	(1,634)	-	(1,634)
Profit/(loss) before tax		6,784	(7,196)	(412)
Tax	9	(1,484)	1,439	(45)
Profit/(loss) for the year from continuing operations		5,300	(5,757)	(457)
Discontinued operations
Profit/(loss) from discontinued operations	10	401	(62,048)	(61,647)
Profit/(loss) for the year		5,701	(67,805)	(62,104)
Attributable to:
Equity holders of the parent				(62,104)
Earnings per share
From continuing operations
Basic	11	5.7p	(6.2)p	(0.5)p
Diluted	11	5.6p	(6.1)p	(0.5)p
From continuing and discontinued operations
Basic	11	6.1p	(72.4)p	(66.3)p
Diluted	11	6.1p	(72.4)p	(66.3)p

Condensed Consolidated Statement of Comprehensive Income

For the six months to 30 June 2011
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Profit/(loss) for the period	(23,864)	542	(62,104)
Cash flow hedges	6	(992)	(618)
Actuarial gain/(loss) on defined benefit pension schemes	-	(501)	969
Tax relating to components of other comprehensive income	(2)	418	(98)
Exchange differences on translation of foreign operations	63	16	63
Total comprehensive income for the period attributable to equity holders of the parent	(23,797)	(517)	(61,788)

Condensed Consolidated Balance Sheet At 30 June 2011
	Note	30 June 2011 £'000	30 June 2010 £'000	31 December 2010 £'000
Non-current assets
Goodwill	13	72,616	145,800	95,116
Other intangible assets	14	4,610	8,794	7,801
Property, plant and equipment		4,366	5,796	6,188
Investments		1	1	1
Deferred tax assets		2,017	2,738	3,256
		83,610	163,129	112,362
Current assets
Inventories		1,452	1,066	610
Trade and other receivables	15	31,487	59,831	34,885
Cash and cash equivalents	20	7,060	14,769	14,659
Assets held for sale	10	92	11,016	4,319
		40,091	86,682	54,473
Total assets		123,701	249,811	166,835
Current liabilities
Trade and other payables	16	(43,964)	(58,599)	(50,771)
Tax liabilities		(3,291)	(4,143)	(2,227)
Bank loans and loan notes		-	(273)	-
Liabilities held for sale	10	(145)	(10,506)	(5,382)
Provisions	17	(1,966)	(538)	(525)
		(49,366)	(74,059)	(58,905)
Net current assets		(9,275)	12,623	(4,432)
Non-current liabilities
Bank loans		(24,341)	(36,826)	(33,157)
Retirement benefit obligations	18	(226)	(2,484)	(1,159)
Deferred tax liabilities		(193)	(1,194)	(1,024)
Derivative financial instruments		(2,002)	(2,378)	(2,173)
Other payables		-	-	(662)
Provisions	17	(2,412)	-	-
		(29,174)	(42,882)	(38,175)
Total liabilities		(78,540)	(116,941)	(97,080)
Net assets		45,161	132,870	69,755
Equity
Share capital		4,685	4,685	4,685
Special reserve		-	78,723	-
Other reserves		26,119	30,036	26,246
Retained earnings		14,357	19,426	38,824
Equity shareholders' funds		45,161	132,870	69,755

Condensed Consolidated Statement of Changes in Equity
For the six months to 30 June 2011
		Share capital £'000	Other reserves £'000	Retained earnings £'000	Total equity £'000
Balance at 1 January 2011		4,685	26,246	38,824	69,755
Total comprehensive income for the period		-	4	(23,801)	(23,797)
Dividends		-	-	(606)	(606)
Debit to equity for share-based payments		-	(131)	(60)	(191)
Balance at 30 June 2011		4,685	26,119	14,357	45,161

For the six months to 30 June 2010
	Share capital £'000	Share premium £'000	Special reserve £'000	Other reserves £'000	Retained earnings £'000	Total equity £'000
Balance at 1 January 2010	4,685	78,723	-	31,597	21,512	136,517
Total comprehensive income for the period	-	-	-	(698)	181	(517)
Capital reduction	-	(78,723)	78,723	-	-	-
Dividends	-	-	-	-	(2,577)	(2,577)
Debit to equity for share-based payments	-	-	-	(863)	310	(553)
Balance at 30 June 2010	4,685	-	78,723	30,036	19,426	132,870

For the year ended 31 December 2010
	Share capital £'000	Share premium £'000	Other reserves £'000	Retained earnings £'000	Total equity £'000
Balance at 1 January 2010	4,685	78,723	31,597	21,512	136,517
Total comprehensive income for the period	-	-	(445)	(61,343)	(61,788)
Capital reduction	-	(78,723)	-	78,723	-
Dividends	-	-	-	(4,284)	(4,284)
Debit to equity for share-based payments	-	-	(580)	(110)	(690)
Transfer	-	-	(4,326)	4,326	-
Balance at 31 December 2010	4,685	-	26,246	38,824	69,755

Condensed Consolidated Cash Flow Statement For the six months to 30 June 2011
		Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
	Note
Net cash from operating activities	19	(6,653)	4,735	15,871
Investing activities
Interest received		34	49	143
Disposal of subsidiaries		11,275	7,098	8,217
Proceeds on disposal of property, plant and equipment		160	160	185
Disposal of trading investments		-	1	1
Purchases of property, plant and equipment		(355)	(1,133)	(2,588)
Expenditure on product development and business systems		(1,639)	(1,258)	(3,203)
Acquisitions and deferred consideration		(70)	(631)	(839)
Cash and cash equivalents (disposed)/acquired		(408)	(2,932)	(2,932)
Net cash inflow/(outflow) from investing activities		8,997	1,354	(1,016)
Financing activities
Interest paid		(1,061)	(596)	(1,496)
Equity dividend paid		-	-	(4,284)
Repayment of borrowings		(11,500)	(108)	(3,843)
New bank loans		2,543	-	-
Net cash used in financing activities		(10,018)	(704)	(9,623)
Net (decrease)/increase in cash and cash equivalents		(7,674)	5,385	5,232
Cash and cash equivalents at beginning of period		14,659	9,370	9,370
Effect of foreign exchange rate changes		75	14	57
Cash and cash equivalents at end of period	20	7,060	14,769	14,659

Notes to the Condensed Consolidated Financial Information For the six months to 30 June 2011

1.  General information The condensed consolidated financial information for the six months ended 30 June 2011 was approved by the Board of Directors on 15 August 2011. The information for the year ended 31 December 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.  The auditor's report 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 section 498(2) or (3) of the Companies Act 2006.

2.  Accounting policies The annual financial statements of Tribal Group plc are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the condensed consolidated financial information as applied in the Group's latest annual audited financial statements. Income statement and cash flow comparative information has been restated to reflect the results of the continuing Group in accordance with IFRS 5 "Non-current assets held for sale and discontinued operations".

3.  Going concern After making enquiries and on the basis of the information set out in the Chief Operating Officer's statement, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.  Thus they continue to adopt the going concern basis in preparing the half year results.

4.  Segmental analysis Following the sale of our Health and Government businesses, the Group is now organised into two business segments - Services and Technology.  These segments were previously reported together as "Education". In view of the relevance to future reporting, the business segment information for the period to 30 June 2011 has been reported under this structure and the segment information for the period to 30 June 2010 and the year ended 31 December 2010 has been restated to reflect the changes. In accordance with IFRS 8 "Operating Segments" information on segment assets is not shown as this is not currently provided to the Chief Operating decision maker.

Principal activities are now as follows: Technology     a range of high value software products, together with one-off bespoke solutions leveraged from our core software components Services          supporting quality improvement in educational establishments, professional development for teachers, and adult learning and career development

	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Revenue
Technology	22,897	21,895	44,337
Services	36,501	31,817	62,511
Inter segment	(1,929)	(1,342)	(2,751)
Continuing operations	57,469	52,370	104,097
Segment operating profit
Technology	4,397	5,087	10,733
Services	1,627	772	1,607
Unallocated corporate expenses	(2,099)	(2,202)	(4,065)
Segment operating profit	3,925	3,657	8,275
Amortisation of IFRS 3 intangibles	(149)	(156)	(314)
Exceptional costs	(3,488)	(1,158)	(6,257)
Operating profit	288	2,343	1,704
5.  Exceptional administrative expenses
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Restructuring costs	4,152	554	2,938
Write down of business systems	-	-	1,888
China business development	-	604	770
Release of deferred consideration	(664)	-	-
Other	-	-	661
	3,488	1,158	6,257

Exceptional costs have arisen during the period which are not part of the Group's normal trading activities. As explained in the Business Review, significant restructuring costs (£4.2m) have been incurred to reduce headcount and property capacity, and certain assets have been impaired, following the disposal of the Group's Health and Government businesses and the subsequent refocusing of the continuing business. Also included within exceptional items is the release of deferred consideration in respect of acquisitions which are no longer expected to meet the criteria required to trigger these payments and have therefore been credited to the income statement in line with IFRS 3 (Revised 2008) "Business combinations".
6. Investment income
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Interest on bank deposits	28	42	87
Other interest receivable	6	8	56
	34	50	143
7. Other gains and losses
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Hedge ineffectiveness in the cash flow hedge	165	(456)	(625)
8. Finance costs
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Finance charges
Interest on bank overdrafts and loans	1,197	640	1,563
Net finance cost of retirement benefit obligations	-	-	71
	1,197	640	1,634

9. Tax
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Continuing operations
Current tax
UK corporation tax	64	438	2,408
Adjustments in respect of prior periods	(219)	(100)	(1,328)
	(155)	338	1,080
Deferred tax
Current year	145	204	(1,035)
Tax charge	(10)	542	45
Discontinued operations
Current tax
UK corporation tax	201	559	(2,239)
Total
Current tax
UK corporation tax	265	997	169
Adjustments in respect of prior periods	(219)	(100)	(1,328)
	46	897	(1,159)
Deferred tax
Current year	145	204	(1,035)
Tax charge	191	1,101	(2,194)

The Group continues to hold an appropriate corporation tax provision in relation to the Group relief claimed from Care UK for the year ended 31 March 2007.  On 4 August 2010 the Government enacted a reduction in the corporation tax rate to 24% by 2014. This will have a corresponding effect on the Group's future effective tax rate. The effective tax rate of the continuing Group in 2012 and future years is anticipated to be broadly equivalent to the UK corporation tax rate.   10. Discontinued operations   The Group disposed of its Health and Government businesses on 28 April 2011.  The maximum gross sale proceeds are £15.9 million payable as follows:   (i)         initial consideration at completion of £13.4m; and   (ii)        further deferred consideration of up to £2.5m payable on the satisfaction of certain conditions such as assigning key contracts and framework agreements.

The total consideration estimated in determining the loss on disposal is £15.8 million which represents management's estimate of the likely outcome.    Details of net assets disposed of and disposal proceeds are as follows:

	£'000
Goodwill	22,500
Other intangible assets	2,668
Property, plant and equipment	653
Trade and other receivables	18,490
Cash and cash equivalents	408
Trade and other payables	(12,531)
Retirement benefit obligations	(933)
Deferred tax	461
Net assets disposed	31,716
Loss on disposal	(18,477)
Consideration	13,239
Satisfied by:
Cash	13,372
Deferred and contingent consideration	2,450
Directly attributable costs	(2,583)
	13,239
Net cash flow arising from disposal
Cash consideration	13,372
Cash disposed	(408)
Directly attributable costs	(2,464)
Cash inflow from disposal	10,500

On 9 February 2011 we announced the sale of the trade and certain assets of our Resourcing business to TMP (UK) Limited for an estimated contingent consideration of £1.8m. A loss on disposal of £1.3m was recognised on the transaction, which completed on 1 March 2011. In the period we also recognised an additional profit on the disposal of our Architecture business which took place in June 2010. The increase in profit of £1.1m arises due to deferred contingent consideration exceeding the previous estimate.   The Group is in the process of disposing of its Treasury Services subsidiary.  This business has therefore been included within assets held for sale at 30 June 2011, as well as its results being presented in discontinued operations.

The results of the discontinued operations which have been included in the consolidated income statement were as follows:
	Six months ended 30 June 2011 £'000		Six months ended 30 June 2010 £'000		Year ended 31 December 2010 £'000
Turnover	22,781		79,229		123,727
Direct agency costs	(4,191)		(17,132)		(25,898)
Revenue	18,590		62,097		97,829
Operating (loss)/profit before amortisation of IFRS 3 intangibles and exceptional costs	(723)		3,538		555
Exceptional costs	(3,298)		(869)		(6,369)
Goodwill impairment	-		(2,250)		(56,360)
Amortisation of IFRS 3 intangibles	(237)		(374)		(738)
Operating (loss)/profit	(4,258)		45		(62,912)
Attributable tax (charge)/credit	(201)		(559)		2,239
(Loss)/profit on disposal of discontinued operations	(18,705)		301		(974)
Net loss attributable to discontinued operations	(23,164)		(213)		(61,647)
Operating cash flows for discontinued operations	(5,560)		(4,402)		(6,605)
Effect of foreign exchange rate changes	3		(18)		(9)
Investing cash flows for discontinued operations	10,867		3,658		4,752
Total cash flows for discontinued operations	5,310		(762)		(1,862)
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
		30 June 2011 £'000		30 June 2010 £'000		31 December 2010 £'000
Goodwill and other intangible assets		-		2,610		-
Property, plant and equipment		-		1,213		488
Deferred tax asset		2		199		202
Investments		-		31		-
Inventories		-		-		82
Trade and other receivables		90		6,963		3,547
Trade and other payables		(145)		(10,506)		(5,382)
		(53)		510		(1,063)

Notes to the Condensed Consolidated Financial Information 11. Earnings per share Earnings per share and diluted earnings per share are calculated by reference to a weighted average number of ordinary shares calculated as follows:
	Six months ended 30 June 2011 thousands	Six months ended 30 June 2010 thousands	Year ended 31 December 2010 thousands
Basic weighted average number of shares in issue	93,696	93,696	93,696
Employee share options	3	219	160
Weighted average number of shares for the purpose of calculating diluted Earnings per share	93,699	93,915	93,856
The adjusted basic and adjusted diluted earnings per share figures shown on the condensed consolidated income statement are included as the directors believe that they provide a better understanding of the underlying trading performance of the Group.  A reconciliation of how these figures are calculated is set out below.
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Earnings
From continuing operations
Net profit/(loss) from continuing operations attributable to equity holders of the parent	(700)	755	(457)
Earnings per share
Basic	(0.7)p	0.8p	(0.5)p
Diluted	(0.7)p	0.8p	(0.5)p
From continuing and discontinued operations
Net profit/(loss) from continuing operations attributable to equity holders of the parent	(23,864)	542	(62,104)
Earnings per share
Basic	(25.5)p	0.6p	(66.3)p
Diluted	(25.5)p	0.6p	(66.3)p

	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year Ended 31 December 2010 £'000
Adjusted earnings
From continuing operations
Net profit/(loss) from continuing operations attributable to equity holders of the parent	(700)	755	(457)
Amortisation of IFRS 3 intangibles (net of tax)	109	112	226
Exceptional costs (net of tax)	3,488	998	5,081
Financial instrument charge/(credit) (net of tax)	(165)	328	450
Adjusted earnings	2,732	2,193	5,300
Adjusted earnings per share
Basic	2.9p	2.3p	5.7p
Diluted	2.9p	2.3p	5.6p
From continuing and discontinued operations
Net profit/(loss) from continuing and discontinued operations attributable to the equity holder	(23,864)	542	(62,104)
Amortisation of IFRS 3 intangibles (net of tax)	281	382	757
Goodwill impairment	-	2,250	55,777
Exceptional costs (net of tax)	6,786	1,622	9,847
Profit on disposal of discontinued operations	18,971	(301)	974
Financial instrument charge/(credit) (net of tax)	(165)	328	450
Adjusted earnings	2,009	4,823	5,701
Adjusted earnings per share
Basic	2.1p	5.1p	6.1p
Diluted	2.1p	5.1p	6.1p
12. Dividends
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Amounts recognised as distributions to equity holders in the period:
Interim dividend for the year ended 31 December 2010 of 1.85 pence per share	-	-	1,722
Final dividend for the year ended 31 December 2010 of 0.65 pence per share (2009: 2.75 pence per share)	606	2,577	2,562
	606	2,577	4,284
The Board has declared an interim dividend of 0.40 pence per share (2010: 1.85 pence per share), which will absorb £0.4m (2010: £1.7m). The interim dividend was approved by the Board on 15 August 2011 and has not been included as a liability as at 30 June 2011.  The dividend is payable on 21 October 2011 to ordinary shareholders who are on the register on 23 September 2011.  The shares will be quoted ex-dividend on 21 September 2011.

Notes to the Condensed Consolidated Financial Information 13. Goodwill
	£'000
Cost
At 1 January 2011	259,605
Derecognised on disposal of a subsidiary	(157,409)
At 30 June 2011	102,196
Accumulated impairment losses
At 1 January 2011	164,489
Derecognised on disposal of a subsidiary	(134,909)
At 30 June 2011	29,580
Net book value
At 30 June 2011	72,616
At 31 December 2010	95,116
The Group tests annually for impairment or more frequently if there are indications that goodwill might be impaired. Following the sale of the Health and Government businesses, the continuing Group has traded in line with the projections which formed the basis of our impairment review at 31 December 2010.  No formal impairment review has therefore been performed at this stage - the annual review will be carried out as at 31 December 2011.

14. Other intangible assets
	Customer relationships,  contract pipeline  and brands £'000	Development costs £'000	Business systems £'000	Total   £'000
Cost
At 1 January 2011	6,918	8,668	4,331	19,917
Additions	-	1,436	203	1,639
Disposals	(4,472)	(1,201)	(195)	(5,868)
At 30 June 2011	2,446	8,903	4,339	15,688
Amortisation
At 1 January 2011	3,754	5,743	2,619	12,116
Charge for the period	386	513	170	1,069
Disposals	(1,846)	(104)	(157)	(2,107)
At 30 June 2011	2,294	6,152	2,632	11,078
Carrying amount
At 30 June 2011	152	2,751	1,707	4,610
At 31 December 2010	3,164	2,925	1,712	7,801
15. Trade and other receivables
		30 June 2011 £'000	30 June 2010 £'000	31 December 2010 £'000
Trade receivables		14,864	22,050	16,854
Other receivables		6,266	5,535	3,608
Prepayments and accrued income		10,357	32,246	14,423
		31,487	59,831	34,885
16. Trade and other payables
		30 June 2011 £'000	30 June 2010 £'000	31 December 2010 £'000
Trade payables		6,084	6,181	4,864
Other taxation and social security		2,930	4,363	9,813
Other payables		2,687	5,760	2,166
Accruals and deferred income		32,263	42,295	33,856
Deferred cash consideration		-	-	72
		43,964	58,599	50,771

17. Provisions
As at 30 June 2011, there were provisions of £4,378,000 (30 June 2010: £538,000; 31 December 2010: £525,000). £3,843,000 of the June 2011 balance represents provisions for future lease costs on properties vacated as part of the restructuring undertaken by the Group following the sale of the Health and Government businesses. Of this, £2,412,000 is classified as non-current. The balance and the entire amount in each of the comparatives represent an estimate of the cost of settling potential litigation claims.  These claims are expected to be resolved within one year and are therefore shown within current liabilities.  However, it is possible that these claims may take longer to resolve, or the Group may not be promptly notified that the claim has been dropped.  The claim may be settled at amounts higher or lower than that provided depending on the outcome of commercial or legal arguments.  The provision made is management's best estimate of the Group's liability based on past experience, commercial judgement and legal advice.  There is no expected reimbursement for any economic outflow that may be required.  Further details are contained in note 21.

18. Defined benefit schemes
Two of the Group's subsidiary undertakings participate in defined benefit pension schemes: Tribal Technology Limited participates in the TfL Pension Fund, and Tribal Education Limited participates in the Prudential Platinum Pension Fund. The reduction in the obligation since 31 December 2010 from £1.2m to £0.2m is due to the pension schemes which transferred as part of the sale of the Health and Government businesses.
19. Note to the cash flow statement
Reconciliation of operating profit/(loss) to operating cash flows
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Operating profit from continuing operations	288	2,343	1,704
Operating (loss)/profit from discontinued operations	(4,258)	45	(62,912)
Depreciation of property, plant and equipment	1,040	1,518	2,830
Impairment of goodwill	-	2,250	56,360
Amortisation of other intangible assets	1,069	1,149	4,192
Net pension charge	-	(160)	(157)
Loss on disposal of property, plant and equipment	1,512	12	413
Loss on sale of investments	-	5	5
Share-based payments	(189)	(553)	(690)
Release of deferred consideration	(664)	-	-
Operating cash flows before movements in working capital	(1,202)	6,609	1,745
Increase in inventories	(760)	(112)	(363)
(Increase)/decrease in receivables	(9,631)	(4,300)	21,816
Increase/(decrease) in payables	4,028	3,921	(5,978)
Increase in provisions	10	103	90
Net cash from operating activities before tax	(7,555)	6,221	17,310
Tax received/(paid)	902	(1,486)	(1,439)
Net cash from operating activities	(6,653)	4,735	15,871
Net cash from operating activities before tax can be analysed as follows:
Continuing operations (excluding restricted cash)	(1,160)	12,493	25,426
Decrease in restricted cash	(835)	(1,870)	(1,511)
	(1,995)	10,623	23,915
Discontinued operations	(5,560)	(4,402)	(6,605)
	(7,555)	6,221	17,310

20. Analysis of net debt
	30 June 2011 £'000	30 June 2010 £'000	31 December 2010 £'000
Non restricted cash	6,731	13,965	13,495
Restricted cash	329	804	1,164
Gross cash	7,060	14,769	14,659
Short term loans	-	(273)	-
Syndicated bank facility (net of bank arrangement fees)	(24,342)	(36,826)	(33,157)
Gross debt	(24,342)	(37,099)	(33,157)
Net debt	(17,282)	(22,330)	(18,498)
Following the sale of the Health and Government businesses, £10m of the syndicated bank facility was repaid. The bank facility is secured by way of a fixed and floating charge over the assets of the Group. Restricted funds represent funds restricted in use by the relevant commercial terms of certain trading contracts.
21. Contingent liabilities The Group has received notification of a number of potential litigation claims, the majority of which relate to discontinued activities.  On the basis of legal advice claims are being robustly contested as to the liability and quantum.  The principal claim is for breach of contract relating to the design of a new college.  A provision of £535,000 (30 June 2010: £538,000) has been made for defending these claims, where appropriate (see note 17). At 31 December 2010 the Group disclosed a contingent liability of £10.6m in respect of the Social Housing Pension Scheme within its Government business. This contingent liability was sold along with the business.
22. Related party disclosures Transactions between the Company and its subsidiaries which are related parties, have been eliminated on consolidation and are not disclosed in this note. The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures'.
	Six months ended 30 June 2011 £'000	Six months ended 30 June 2010 £'000	Year ended 31 December 2010 £'000
Short-term employee benefits	434	426	1,272
Share-based payments	(112)	(184)	(159)
	322	242	1,113

23. Post balance sheet events

On 1 July 2011 the interest rate swap was settled for a cash cost of £2.1m, and an interest cap at 3% (plus applicable margin) on £25m of borrowings was put in place until December 2012. As a result, and subject to the cap, all of the Group’s borrowings are now floating rate.

Responsibility statement

We confirm that to the best of our knowledge: (a)        the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting'; (b)        the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and (c)        the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).
By order of the Board
Keith Evans Chief Operating Officer	Steve Breach Group Finance Director
15 August 2011

Independent review report to Tribal Group plc We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011, which comprises the income statement, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 23.  We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2011 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
Deloitte LLP Chartered Accountants and Statutory Auditors Bristol, United Kingdom
15 August 2011

 

END

 

 

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