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Provident Fin.PLC. (PFG)

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Thursday 29 July, 1999

Provident Fin.PLC.

Interim Results

PROVIDENT FINANCIAL PLC
29 July 1999


          Interim report for the half-year ended 30 June 1999


                     H  I  G  H  L  I  G  H  T  S


     -     Profit before tax on a like-for-like basis up 9.8% to        
           £63.6m 

     -     Earnings per share up by 10.9% to 17.7p

     -     Interim dividend increased by 11.2% to 9.9p

     -     Growth of 5.5% in UK home credit customers

     -     Rapid progress in Central Europe

     -     Insurance division profits up 43.7% 


'We continue with our growth strategy for UK home credit with more agents
recruiting more customers.

Internationally, we are continuing our significant expansion of home credit in
the Czech Republic and Poland.  We expect that the international operations
will in due course form a significant part of our home credit business.

Our motor insurance operations continue to benefit from a well-focused
strategy and the general increase in market premiums.  They are on course for
a very good year.

Overall, your board remains confident of a good result for the year.'


                                               John van Kuffeler
                                                        Chairman
                                                    29 July 1999


                         * * * * * * * * * * *

          Enquiries:
                                     Today         Thereafter
                                     -----         ---------- 
          Media
          -----
          David Stevenson         0171 628 5646   01274 731111

          Investor Relations
          ------------------
          Elizabeth Bottomley     0171 628 5646   01274 731111


Interim report for the half-year ended 30 June 1999
---------------------------------------------------

The board is pleased to announce good results for the first half of 1999. 
Pre-tax profits on a like-for-like basis, after adjusting for the effect of
last year's return of capital to shareholders, increased by 9.8 per cent to
£63.6m.  Earnings per share increased by 10.9 per cent to 17.70p (1998 first
half 15.96p).  The interim dividend has been increased by 11.2 per cent to
9.9p (1998 first half 8.9p).  These results are particularly encouraging in
the light of the investment of £4.2m (1998 first half £1.7m) in start-up
losses, principally in building up our business in Central Europe.

Operations
----------
The demand for UK home credit remains strong, with customers continuing to
value small loans, delivered to and collected weekly, in cash, from their
homes.  We have continued to see steady progress in the key growth drivers of
our business, with the number of agents up by 6.3 per cent to 11,433 and the
number of customers up by 5.5 per cent to 1,496,000. The growth in credit
issued was more modest at 4.1 per cent, reflecting caution in our lending in
the early months of the year after a very strong and late Christmas peak and
also low growth in consumer spending during a quiet period for the UK economy.
However, after growth of only 1.9 per cent in the first four months of the
year, the growth in credit issued in May was 6.9 per cent and June 8.0 per
cent, an improvement which has been sustained in July. 

As expected, the trend of higher bad debt levels has continued.  This reflects
our growth strategy with some inexperience amongst our agents and a higher
proportion of new customers after a period of high recruitment and strong
growth, as well as the effects of increased economic uncertainty for our
customers.  Accordingly, the bad debt charge is now running at an annualised
rate of 7.8 per cent of credit issued (1998 full year 6.9 per cent).  In
support of our growth strategy we are increasing the strength of our field
force to manage better the increased number of agents and to enhance our
control of bad debts.  The overall result for UK home credit is a creditable
increase in like-for-like profits of 8.1 per cent.  

International home credit in Central Europe has progressed rapidly according
to plan.  From a base of 15,000 customers and just over 400 agents at the
beginning of the year, at the end of June we had 57,000 customers served by
1,730 agents from 15 offices in Poland and the Czech Republic.  Home credit
has been readily accepted by our new customers with credit issued in the first
six months growing to a sterling equivalent of £7.5m and bad debt levels lower
than those in the UK.  We have proved that our approach to providing home
credit can be successfully introduced in these markets and that we can
reliably collect the money we lend.

For some years now, our strategy in the insurance division has been to focus
on our specialist segments of the motor insurance market - non-comprehensive
insurance, older cars and women drivers - maintaining adequate returns on
capital and retaining the flexibility of our distribution - selling
face-to-face through brokers, as well as directly over the telephone.

Our strategy continues to be successful with profits increasing by 43.7 per
cent to £11.5m whilst gross written premiums increased by 28.3 per cent.  Our
competitors have continued to raise their premiums, at an annualised rate of
about 15 per cent.  Provident Insurance has followed this trend, allowing it
to grow its number of motor policyholders by 10.7 per cent to 550,000 whilst
improving its margins.

Prospects
---------
We continue with our growth strategy for UK home credit with more agents
recruiting more customers and we will invest further in our field force to
support agents better and to enhance our control of bad debts.  This will take
time to show benefit and so we expect some increase in the bad debt ratio in
the second half of the year.

Internationally, we are continuing our significant expansion of home credit in
the Czech Republic and Poland. We have young, well-qualified and highly
motivated teams of local employees who are running and building the business. 
We invested £4.7m last year, mainly in start-up losses in the two countries,
and we are doubling that this year.  This is the peak year of our investment
and we are on course to move into profit internationally in 2002.  We expect
that the international operations will in due course form a significant part
of our home credit business.

Our motor insurance operations continue to benefit from a well-focused
strategy and the general increase in market premiums.  They are on course for
a very good year.

Overall, your board remains confident of a good result for the year.

                                                      John van Kuffeler
                                                               Chairman
                                                           29 July 1999

Consolidated profit and loss account
------------------------------------
for the half-year ended 30 June 1999
------------------------------------
                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                              Half-year to    Half-year to     Full year 
                              30 June 1999    30 June 1998        1998
                              ------------    ------------     ---------
                                 £'000           £'000            £'000 
 
Turnover                       266,244         237,863          506,014
                              ------------------------------------------
Operating profit and
 profit before taxation         63,605          61,028          145,900
 
Taxation (note 3)              (17,809)        (18,919)         (41,115)
                              ------------------------------------------
Profit after taxation           45,796          42,109          104,785 

Dividends (note 4)             (25,642)       (116,531)        (151,776) 
                              ------------------------------------------

Retained profit/(loss)          20,154         (74,422)         (46,991)
                              ------------------------------------------
Earnings per share (note 5)

   -  Basic                     17.70p          15.96p           40.12p

   -  Diluted                   17.49p          15.73p           39.65p
                              ------------------------------------------

Dividend per share (note 4)      9.90p           8.90p           22.50p
                              ------------------------------------------

The results shown in the profit and loss account derive wholly from continuing
activities.

There is no material difference between the retained profit as shown above and
the historical cost equivalent.

Statement of total recognised gains and losses
----------------------------------------------
for the half-year ended 30 June 1999
------------------------------------
                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                              Half-year to    Half-year to     Full year 
                              30 June 1999    30 June 1998        1998
                              ------------    ------------     ---------
                                 £'000           £'000            £'000

Profit after taxation           45,796          42,109          104,785

Currency translation
 differences                      (900)           (793)            (527)
                              -------------------------------------------
Total recognised gains and
 losses relating to the period  44,896          41,316          104,258
                              -------------------------------------------

Segmental analysis of turnover
------------------------------
for the half-year ended 30 June 1999
------------------------------------


                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                              Half-year to    Half-year to     Full year      
                              30 June 1999    30 June 1998        1998
                              ------------    ------------     ---------      
                                 £'000           £'000            £'000 

UK home credit                 196,123         184,235          390,642

International home credit        2,150              93              713  

Motor insurance                 67,971          53,535          114,659 
                             -------------------------------------------
                               266,244         237,863          506,014
                             -------------------------------------------


Segmental analysis of operating profit and profit before taxation
-----------------------------------------------------------------
for the half-year ended 30 June 1999
--------------------------------------

                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                              Half-year to    Half-year to     Full year      
                              30 June 1999    30 June 1998        1998 
                              ------------    ------------     ---------      
                                 £'000           £'000            £'000 

UK home credit:
 Profit before interest         69,194          66,965          158,827    
 Interest payable              (10,290)         (9,379)         (21,917)
                              ------------------------------------------
UK home credit                  58,904          57,586          136,910

International home credit       (4,201)         (1,675)          (4,725)

Motor insurance                 11,510           8,012           19,619

Central costs                   (2,608)         (2,895)          (5,904)
                             -------------------------------------------
Operating profit and
 profit before taxation         63,605          61,028          145,900
                             -------------------------------------------

Consolidated balance sheet
--------------------------
as at 30 June 1999
------------------
                                   Unaudited      Unaudited      Audited
                                   ---------      ---------      ------- 
                                     As at          As at       As at 31
                                  30 June 1999  30 June 1998  December 1998
                                  ------------  ------------  -------------
                                     £'000          £'000          £'000 

Fixed assets                        36,583         33,423         36,571      
                                  -----------------------------------------
Current assets
 Amounts receivable from customers
  - due within one year            471,897        432,086        522,318 
  - due in more than one year        7,086          7,809          8,896
 Debtors                           117,294        138,875        107,303
 Investments
  - realisable within one year     251,707        204,093        223,635
  - realisable in more than
     one year                       25,000         65,000         45,000
 Cash at bank and in hand           27,922         32,308         31,583
                                  -----------------------------------------
                                   900,906        880,171        938,735      
                                  -----------------------------------------
Current liabilities
 Bank and other borrowings         (41,340)       (19,735)       (25,352)
 Creditors - amounts falling 
  due within one year             (120,596)      (135,851)      (116,332)
 Insurance accruals and 
  deferred income                 (287,763)      (283,798)      (291,840)     
                                  -----------------------------------------
                                  (449,699)      (439,384)      (433,524)     
                                  -----------------------------------------
Net current assets                 451,207        440,787        505,211      
                                  -----------------------------------------
Total assets less current 
 liabilities                       487,790        474,210        541,782
                                  -----------------------------------------
Non-current liabilities
 Bank and other borrowings        (208,936)      (240,155)      (291,437) 
 Creditors - amounts falling 
  due after more than one year      (8,783)       (17,761)             -
 Provision for liabilities and
  charges - deferred taxation       (3,043)          (391)        (3,043)     
                                  -----------------------------------------
                                  (220,762)      (258,307)      (294,480)     
                                  -----------------------------------------
Net assets                         267,028        215,903        247,302      
                                  -----------------------------------------
Capital and reserves
 Called-up share capital            27,244         27,176         27,229
 Share premium account              48,217         43,452         47,760
 Revaluation reserve                 1,641          1,641          1,641
 Other reserves                      2,451          2,451          2,451
 Profit and loss account           187,475        141,183        168,221
                                  -----------------------------------------
Equity shareholders' funds         267,028        215,903        247,302 
                                  -----------------------------------------


Notes to the financial information
----------------------------------

1.  The financial information, which has been prepared on the basis of the
accounting policies set out in the group's 1998 statutory accounts, does not
constitute a set of statutory accounts and is unaudited.

2.  The information relating to the full year ended 31 December 1998 is an
extract from the latest published accounts on which the auditors gave an
unqualified opinion and which have been delivered to the Registrar of
Companies.

3.  The taxation charge has been calculated by applying the directors' best
estimate of the effective tax rate for the year, which is 28% (30 June 1998 -
31%), to the profit for the period.

4.  Dividends paid and proposed
                                     Unaudited     Unaudited     Audited
                                     ---------     ---------     -------
                                    Half-year to  Half-year to  Full year
                                    30 June 1999  30 June 1998     1998
                                    ------------  ------------  ---------
                                       £'000         £'000        £'000
    (a) Interim dividend
        proposed 9.90p (1998 - 8.90p) 25,642        22,976       23,034

    (b) Final dividend paid 13.60p         -             -       35,187

    (c) Dividend paid in connection
        with share capital
        consolidation 35.00p               -        93,555       93,555
                                   -------------------------------------
                                      25,642       116,531      151,776
                                   -------------------------------------
    Dividend cover, excluding
     item 4(c) above, is:              1.79          1.83         1.80
                                   ------------------------------------- 

5.  Earnings per share

a)  The basic earnings per share figure has been calculated using the profit
for the period available for ordinary dividends of £45,796,000 (30 June 1998 -
£42,109,000) and the weighted average number of shares outstanding during the
period of 258,789,000 (30 June 1998 - 263,896,000). The calculation of the
weighted average number of shares outstanding during the period excludes the
3,996,000 shares held by the Provident Financial Qualifying Employee Share
Ownership Trust ('QUEST') at 30 June 1999 (30 June 1998 - 4,226,000) which are
treated as cancelled for the purposes of calculating the weighted average
number of shares outstanding until those shares vest unconditionally in the
group's employees.

b)  The diluted earnings per share figure has been calculated using the profit
for the period available for ordinary dividends of £45,796,000 (30 June 1998 -
£42,109,000).  The weighted average number of shares outstanding during the
period used in the calculation of diluted earnings per share is 261,788,000
(30 June 1998 - 267,679,000).  This includes 2,999,000 (30 June 1998 -
3,783,000) dilutive ordinary shares in respect of outstanding options to
purchase shares, including those options for which shares have already been
issued to the QUEST.

6. Reconciliation of movement in equity shareholders' funds
   

                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                              Half-year to    Half-year to     Full year      
                              30 June 1999    30 June 1998        1998        
                              ------------    ------------     ---------      
                                 £'000           £'000           £'000 
  Profit attributable to
   equity shareholders          45,796           42,109        104,785
  Dividends                    (25,642)        (116,531)      (151,776)
                              ------------------------------------------
  Retained profit/(loss)        20,154          (74,422)       (46,991)
  New share capital issued         472              361          4,722
  Shares issued to the QUEST         -                -           (659)
  Currency translation 
   differences                    (900)            (793)          (527)
                               -----------------------------------------
  Net addition to/(reduction
   in) equity shareholders'
   funds                        19,726          (74,854)       (43,455) 
  Equity shareholders' funds
   at beginning of period      247,302          290,757        290,757  
                              ------------------------------------------
  Equity shareholders' funds
   at end of period            267,028          215,903        247,302
                              ------------------------------------------

7. Amounts receivable from customers

a) Instalment credit receivables

                               Unaudited       Unaudited        Audited
                               ---------       ---------        -------
                                As at            As at         As at 31
                             30 June 1999    30 June 1998    December 1998
                             ------------    ------------    -------------
                                 £'000           £'000           £'000 
   Gross instalment credit
    receivables                746,858         682,937         807,541
   Less: provision for bad
    and doubtful debts         (88,984)        (75,546)        (74,103)
                             ---------------------------------------------
   Instalment credit
    receivables after
    provision for bad and
    doubtful debts             657,874         607,391         733,438
   Less: deferred revenue
    thereon                   (178,891)       (167,496)       (202,224) 
                             ---------------------------------------------
                               478,983         439,895         531,214
                             ---------------------------------------------
   Analysed as:
    - due within one year      471,897         432,086         522,318
    - due in more than 
      one year                   7,086           7,809           8,896
                             ---------------------------------------------
                               478,983         439,895         531,214
                             ---------------------------------------------

b) Bad and doubtful debts

                              Unaudited       Unaudited       Audited
                              ---------       ---------       -------         
                                As at           As at         As at 31
                             30 June 1999    30 June 1998   December 1998     
                             ------------    ------------   -------------
                                £'000           £'000           £'000 

   Gross provision at end
    of period                  88,984          75,546          74,103
   Less: deferred revenue
    thereon                   (24,497)        (20,439)        (20,874)
                           ---------------------------------------------
   Net provision at end of
    period                     64,487          55,107          53,229
   Net provision at start
    of period                 (53,229)        (48,381)        (48,381) 
                           ---------------------------------------------
   Increase in provision
    (net of deferred
     revenue)                  11,258           6,726           4,848
   Amounts written off (net
     of deferred revenue)      27,528          23,027          50,518
                           ---------------------------------------------
   Net charge to profit and 
    loss account for bad and
    doubtful debts             38,786          29,753          55,366
                           ---------------------------------------------
   Analysed as:
    - UK home credit           38,513          29,737          55,301
    - International home
      credit                      273              16              65
                           ---------------------------------------------
                               38,786          29,753          55,366
                           ---------------------------------------------

   At 30 June 1999 the net amounts receivable from UK home credit customers 
   were £474.4m (30 June 1998 - £439.6m) and from international home credit
   customers were £4.6m (30 June 1998 - £0.3m).


c) The figures for receivables, provisions and bad and doubtful debts at 30
   June 1999 should be compared with the equivalent information at 30 June 
   1998 in view of the long-established seasonal patterns in lending and
   collections.

8. UK home credit - credit issued and collections

                            Half-year to    Half-year to               
                            30 June 1999    30 June 1998     Growth
                            ------------    ------------     ------ 
                                £'000           £'000           %
   Credit issued              350,634         336,693          4.1%

   Collections                563,272         530,021          6.3%


9. Profit before tax on a like-for-like basis

In May 1998 the company paid a dividend of £93.6m in connection with the share
capital consolidation.  This gave rise to additional interest costs in the
first half of 1999 compared to the first half of 1998.

If this transaction had taken place on 1 January 1998, an additional interest
cost of £3.1m would have been incurred in the first half of 1998 resulting in
a reduction in profit before tax from £61.0m to £57.9m.  Consequently, on a
like-for-like basis, the profit in the first half of 1999 increased by 9.8%,
from £57.9m to £63.6m.

For UK home credit, the additional interest costs of £3.1m would have reduced
profit before tax in the first half of 1998 from £57.6m to £54.5m. On a
like-for-like basis, therefore, UK home credit profit in the first half of
1999 increased by 8.1%, from £54.5m to £58.9m.


10. Year 2000 and EMU

Changes to ensure the efficient and effective transition of the group's major
business systems through the millennium date change have been completed and
successfully tested.  Work on minor systems continues and is expected to be
finished shortly.  In addition, comprehensive continuity and contingency plans
to safeguard the group's position in the event of disruption, particularly
from external sources, are well advanced.

The estimated total cost to the group, which principally comprises internal
development costs, is £2.1m, of which £1.7m had been incurred at 30 June 1999.

Work continues within the group on planning for European Monetary Union.  It
is still too early to forecast accurately the potential costs to the group of
the euro's introduction in the UK.

Independent review report to Provident Financial plc
----------------------------------------------------

Introduction
------------

We have been instructed by the company to review the financial information set
out on pages 4 to 11 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.

Directors' responsibilities
---------------------------

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors.  The Listing
Rules of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.

Review work performed
---------------------

We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board.  A review consists principally
of making enquiries of group management and applying analytical procedures to
the financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.  A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions.  It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit.  Accordingly, we do not express an audit opinion on
the financial information.

Review conclusion
-----------------

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 1999.




PricewaterhouseCoopers
Chartered Accountants and Registered Auditors
Leeds
29 July 1999


Shareholder information
-----------------------


1. The shares will be marked ex-dividend on 20 September 1999.


2. The interim dividend will be paid on 20 October 1999 to shareholders on the
register at the close of business on 24 September 1999.

 
3. Dividend warrants/vouchers will be posted on 18 October 1999.


4. The interim report will be posted to shareholders on 12 August 1999.


5. The Provident Financial Company Nominee Scheme ('the Scheme') enables
shareholders who are eligible to use it, namely individuals, to take advantage
of the CREST system for settling transactions in shares in the company by
means of a low-cost dealing service.  It includes a dividend reinvestment
scheme.  Shareholders who wish to take advantage of the Scheme should contact
the company's registrar, IRG plc, Bourne House, 34 Beckenham Road, Beckenham,
Kent BR3 4TU (telephone: 0208 639 2000) to request an information pack.


6. In April 1999, the general and single company PEPs dedicated to the
company's shares which were operated by Bradford & Bingley PEPs Limited were
transferred to The Share Centre Limited, PO Box 1000, Tring, Hertfordshire
HP23 5AN (telephone: 0800 800008).  It is no longer possible to make a further
subscription into a PEP but it is possible to subscribe to an Individual
Savings Account ('an ISA') which confers similar benefits in relation to
shares held in it.


7. Shareholders may take out an ISA with a provider of their choice.  However,
the company has made arrangements with Redmayne Bentley for the provision of
an ISA for its shareholders and employees.  Shareholders who wish to take
advantage of this should contact Redmayne Bentley, Merton House, 84 Albion
Street, Leeds, West Yorkshire, LS1 6AG (telephone: 0113 243 6941).  Please
note that the suitability of an ISA for an individual depends on his/her tax
position.