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Taylor Nelson Sofres (TNS)

  Print      Mail a friend       Annual reports

Monday 05 September, 2005

Taylor Nelson Sofres

Interim Results

Taylor Nelson Sofres PLC
05 September 2005


                                                                5 September 2005


                            Taylor Nelson Sofres plc
        Unaudited interim results for the six months ended 30 June 2005

Highlights

•         Reported revenue up 3.1%; underlying revenue up 2.5%
•         Adjusted operating profit up 5.6% at £43.6m; operating margin 9.5%
•         Adjusted earnings per share increased 12.5% to 5.4p
•         Interim dividend per share raised by 13.6% to 1.25p
•         Net debt £342.9m (December 2004 £329.5m; June 2004 £366.5m)


Business performance                                               2005               2004       Change
Revenue                                                         £460.0m            £446.0m         3.1%

Operating profit*                                                £43.6m             £41.3m         5.6%
Operating margin*                                                  9.5%               9.3%
Profit before tax*                                               £35.9m             £32.4m        10.8%
Earnings per share*                                                5.4p               4.8p        12.5%
Interim dividend per share                                        1.25p               1.1p        13.6%
Statutory results

Operating profit                                                 £41.4m             £34.8m        19.0%
Profit before tax                                                £33.7m             £25.9m        30.1%
Basic earnings per share                                           4.6p               3.8p        21.1%



These are the first results published under IFRS.  Reconciliation of 2004
results between UK GAAP and IFRS are set out in note 8
to the interim statements.



* Adjusted results are before amortisation of acquired intangible assets, share
based payments, exceptional pension credit and integration costs.  Adjusted
earnings per share is shown before deferred tax on goodwill.





Chief Executive, Mike Kirkham, said:

"In the first half of 2005, the group saw a strong underlying revenue
performance across its syndicated services and in the custom businesses of
Continental Europe and Asia Pacific.  The success of these custom services,
often in challenging markets, indicates that the group's strategy is delivering
share gains in those markets.  With the UK and US custom businesses performing
less well, the group as a whole achieved underlying revenue growth of 2.5 per
cent.



"As indicated in July, we expect to deliver an improved performance for the
group overall in the second half, leading us to believe that, assuming no
significant deterioration in general economic conditions, we can grow underlying
revenue by around 4 per cent for the year as a whole."


On 5 5eptember, all enquiries to +44 (0)20 7638 9571



Thereafter:


Mike Kirkham, Chief Executive                           +44 (0)20 8967 4022
Andy Boland, Finance Director                           +44 (0)20 8967 1472
Janis Parks, Head of Investor Relations                 +44 (0)20 8967 1584
Margaret George, Citigate Dewe Rogerson                 +44 (0)20 7638 9571





Email to: Janis.Parks@tns-global.com



A webcast of the results presentation made to analysts will be broadcast live on
the Investors section of the group's website, at www.tns-global.com, from 9.00am
on Monday 5 September 2005.





Note to editors

About TNS

TNS is a market information group.  We are the world's largest custom research
company and a leading provider of social and political polling.  We are also a
major supplier of consumer panel, TV audience measurement and media intelligence
services.



TNS operates a global network spanning 70 countries and employs over 13,000
people.  We provide market information and measurement, together with insights
and analysis, to local and multinational organisations.



We combine our specialist sector knowledge with expertise in the areas of new
product development, motivational research, brand and advertising research and
stakeholder management to bring our clients
up-to-the minute, internationally consistent information.



We think differently to help our clients build competitive advantage, making TNS
the sixth sense of business.



www.tns-global.com





High resolution images are available for the media to view and download (free of
charge) from www.vismedia.co.uk.




Commenting on the six months' results, Mike Kirkham, Chief Executive of TNS,
said:



"In the first half of 2005, the group saw a strong underlying revenue
performance across its syndicated services and in the custom businesses of
Continental Europe and Asia Pacific.  The success of these custom services,
often in challenging markets, indicates that the group's strategy is delivering
share gains in those markets.  With the UK and US custom businesses performing
less well, the group as a whole achieved underlying revenue growth of 2.5 per
cent.



Our markets

"While the market for syndicated services maintains its steady growth, the
picture in custom is more mixed, both by geography and sector.  In the UK, the
overall market declined in the second quarter, while markets in Continental
Europe and the Americas are believed to be showing some growth.  China and
India's economic development continues to drive a buoyant market in Asia
Pacific.



Syndicated services

"Worldpanel continues to perform well, with a number of new client wins, and the
investment programme announced earlier this year is proceeding to plan.  This
investment is intended to reinforce TNS' already strong competitive advantage in
consumer panels.  This is illustrated by our performance in France, where last
year we increased the panel size by 50 per cent resulting in a number of good
client wins, as we deliver greater granularity of data and analysis to our
clients.



"Our Media Intelligence sector provides advertising expenditure tracking,
evaluation and consultative services for broadcast, internet and print media.
It also covers news and editorial monitoring, as well as creative tracking.  TNS
Media Intelligence is market leader in the US and France, with significant
operations throughout Europe and Asia.  In the US, the investments we have made
into product development and technology have strengthened our competitive
positioning in an increasingly fragmented media market.

A similar strategy has led to good growth in our news and editorial monitoring
businesses in Europe.



"Our TV and Radio Audience Measurement (TRAM) business is performing strongly.
We are increasing the panel size in Russia, where our competitor has withdrawn
from the market.  In Asia, we have recently won five-year contracts in both
Singapore and Hong Kong.  The latter builds on our ongoing success in China,
where we are continuing to expand both TV and radio measurement services.  At
the same time, we are exploring the challenges and opportunities presented by
digital broadcasting and are extending our innovative measurement initiatives in
Europe and the US.



Custom business

"Our first half performance in the UK and US custom business was below the
expectations that we had at the end of the first quarter.  In the UK, the market
saw a clear deterioration in the second quarter.

The Nationwide Consumer Confidence Index, compiled in partnership with TNS,
showed steep falls in May and June and we believe this has particularly affected
the consumer sector, an area where we have significant UK exposure.  In the US,
we were impacted by cut backs from two of our largest clients in the Technology
sector as the period progressed, as well as the competitive nature of the
domestic healthcare market.  We are putting considerable efforts into the
improvement of our competitive position by strengthening our sales activities,
particularly in the higher growth sectors, and focusing more strongly on the
group's Areas of Expertise, as well as transitioning more business on to our
managed access panels.




"Across the rest of our custom business we are seeing real benefits from our
strengthened network, which is fuelling growth that we believe to be ahead of
the market in countries such as France and Germany, as well as across Asia
Pacific.  This excellent performance is being driven by the combination of
factors that enable us to build competitive advantage in custom research.  These
are: the strength of our network, sector specialisation, global account
relationships, Areas of Expertise and our high quality managed access panels.
Our network was further reinforced in March, by the acquisition of a Brazilian
custom research company.  This acquisition fills the last significant gap in our
network and is performing very well.



Developments

"We continue to make investments in support of our strategy and the results are
encouraging.  In Worldpanel, we are increasing panel sizes and making technology
upgrades and we are introducing innovations in our TRAM services related to
digital broadcasting.  In the custom business, our European and Asia Pacific
managed access panels are both now operational and being used for an increasing
proportion of our custom research in those regions.  We also continue to build
multi-cultural representation on our US access panel.  We are reinforcing our
global account management and our capabilities in Areas of Expertise where, for
example, we have been developing an innovative new approach to brand equity.
This has been well received in early presentations to clients.



Outlook

"As indicated in July, we expect to deliver an improved performance for the
group overall in the second half, leading us to believe that, assuming no
significant deterioration in general economic conditions, we can grow underlying
revenue by around 4 per cent for the year as a whole.



"The fourth quarter is proportionately the largest quarter for revenue and, with
limited visibility in custom research, much of our expected business for that
quarter has not yet been confirmed.  However, the proportion of orders secured
at the end of July was at a similar level to the previous year, representing
over 80 per cent of our internal forecast for the year, which supports our
outlook.



"In both UK and US custom, we anticipate achieving a better performance in the
second half and we will continue to concentrate on building our competitive
positioning in both these important markets.  We expect that Europe as a whole
will maintain steady growth for the full year but the Americas region is still
expected to show a small decline.  We anticipate that Asia Pacific will maintain
its momentum in the second half and perform strongly for the year.



"By sector, demand in Consumer and Business Services remains challenging and
both sectors are expected to show a small decline for the year.  Media
Intelligence and TV and Radio Audience Measurement will both contribute to a
good level of growth for the full year in the Media sector.  Healthcare and
Technology are also expected to perform well in the second half, driven by a
focus on both global accounts and Areas of Expertise.  Social & Polling,
classified in Other, should maintain strong levels of underlying growth through
the year.



"With the expected growth in revenue in the second half and ongoing focus on
operational efficiency, we anticipate achieving an improvement in full year
adjusted operating margin of between 25 and 50 basis points."




Financial review

The following results are the first reported by TNS under International
Financial Reporting Standards (IFRS).



To assist understanding of the underlying performance of the business, operating
profit and earnings per share have been disclosed on an adjusted basis.
Adjusted operating profit is before amortisation of acquired intangible assets,
share based payments, exceptional pension credit and integration costs.
Adjusted earnings per share also excludes deferred tax on goodwill (see Taxation
below).



The group's calculation of underlying revenue growth remains consistent with
that published in 2004. Underlying revenue growth is calculated by taking the
increase in 2005 revenue over 2004 pro forma revenue, at constant exchange
rates.  The pro forma revenue assumes that any acquisitions were owned, and
discontinued operations excluded, for the comparable period in the prior year.



Revenue

Reported revenue increased by 3.1 per cent to £460.0 million (2004 £446.0
million).  Foreign exchange movements in the first half, principally the
weakening of the US dollar and the strengthening of the euro, had a positive
impact of 0.7 per cent on reported revenue.  The net effect of acquisitions and
discontinued operations was neutral.  The group increased underlying revenue by
2.5 per cent at constant exchange rates in the first half.



Operating profit and margin

Adjusted operating profit increased by 5.6 per cent to £43.6 million (2004 £41.3
million), providing an operating margin of 9.5 per cent (2004 9.3 per cent).
Reported operating profit increased by 19.0 per cent to £41.4 million (2004
£34.8 million).



Interest

The net interest charge, excluding other finance charges, fell to £7.9 million
(2004 £9.7 million), reflecting reduced debt levels and the refinancing of bank
facilities at lower interest rates, announced in March 2005.  Interest cover
against EBITDA, excluding other finance charges, was 7.9x (2004 6.5x).  Interest
cover is calculated on net interest expense of £16.2m (excluding other finance
charges) and EBITDA of £128.3m (excluding integration costs) for the 12 months
ended 30 June 2005.



Taxation

The tax charge for the period was £12.2 million, representing a reported rate of
36.2 per cent.  Under IFRS, where goodwill is deductible against tax, a deferred
tax liability is recognised, even if such a liability would only unwind on the
eventual sale or impairment of the business in question.  This has led to a tax
charge for deductible goodwill of £1.6 million for the period.  Excluding
deferred tax on goodwill, the tax charge was £10.6 million, representing an
underlying rate of 31.5 per cent.  This represents the group's current estimate
of the underlying tax rate for the year.  For the year ended 31 December 2004,
the tax charge was
£23.6 million, representing a reported rate of 34.1 per cent.  Excluding
deferred tax on goodwill of £3.2 million and the benefit of tax credits arising
on exceptional items of £5.4 million, the tax charge was £25.8 million,
representing an underlying rate of 31.5 per cent.




Earnings and dividend per share

Based on a weighted average of 440.6 million shares, adjusted earnings per share
were 5.4p (2004 4.8p), an improvement of 12.5 per cent.  Basic earnings per
share were 4.6p (2004 3.8p).  See note 3 to the interim statements.



The board has declared an interim dividend of 1.25p per share (2004 1.1p), up
13.6 per cent.  The dividend will be paid on 12 December 2005 to shareholders on
the register on 11 November 2005.

Net debt and cash flow

Net debt at 30 June 2005 was £342.9 million compared with £329.5 million at 31
December 2004 (£366.5 million at 30 June 2004).  Operating cash flow was £21.3
million (2004 £28.5 million).



The seasonal movement in working capital in the first half generated a net
outflow of £33.1 million (2004 £18.0 million), reflecting increased levels of
billings and work in progress entering the third quarter.  Based on TNS' past
experience, the group expects that this seasonal trend in working capital should
broadly reverse during the course of the second half.



Net debt to EBITDA at 30 June 2005 was 2.7x (2004 3.2x) using EBITDA of £128.3m
for the 12 months ended 30 June 2005.




REVIEW OF OPERATING ACTIVITIES



Regional revenue performance


                                                6 months to 30 June                             Change
                                         2005                 2004          Reported        Underlying 
                                           £m                   £m                 %                 %
UK                                       69.6                 77.4             (10.1)             (7.9)
France                                   73.7                 66.4              11.0               8.3
Rest of Europe                          162.7                147.8              10.1               7.9
Europe                                  306.0                291.6               4.9               3.9
Americas                                109.2                114.5              (4.6)             (3.8)
Asia Pacific                             44.8                 39.9              12.3               9.3
Total                                   460.0                446.0               3.1               2.5



Europe (including Middle East and Africa)

In the first half of 2005, underlying revenue growth in Europe was 3.9 per cent,
reflecting varied rates of improvement across the region.



In the UK, underlying revenue declined by 7.9 per cent.  The UK entered the year
with a weak order book and was originally expected to show only a small decline
in the first half.  Although trading in the first quarter was in line with
expectations, the custom business deteriorated through the second quarter, as
market conditions became increasingly difficult, especially in the Consumer
sector, and some business was deferred into the second half.



In France, underlying revenue growth was 8.3 per cent.  Strong growth has been
driven by a good performance across most sectors, especially Technology and
Healthcare.  The recently expanded consumer panel has made good progress and won
some major new contracts in the first half.  Media Intelligence achieved a good
underlying performance in the first half and its strong position in France has
been bolstered by the acquisition in May of Presse+.



In the Rest of Europe, underlying revenue growth was 7.9 per cent.  Germany
continues to perform exceptionally well, especially given the backdrop of a weak
economic environment, with the Healthcare and Automotive sectors, in particular,
making good progress.  Most other parts of the region, including Middle East and
Africa, have also delivered solid growth in the first half.



Americas

In the Americas, underlying revenue declined by 3.8 per cent.  Overall
performance in the region was impacted by a weak performance in the US custom
business.  This was primarily caused by a significant reduction in marketing
expenditure by certain key clients in the Technology sector and continued
competition in the domestic Healthcare market.  In other areas, the business
performed well, although some pricing pressure has been noticeable in the
Consumer sector.



The demand for market information from developing markets in Latin America
continues to be strong and to drive TNS' growth.  The recently acquired business
in Brazil, TNS Interscience, delivered a high level of growth in the first half.




Asia Pacific

Economic conditions across Asia Pacific remain buoyant, especially in China.
The group has the largest custom network in the region as well as consumer
panels in nine countries.  It is using this powerful position to win significant
new business, leading to an excellent performance in the first half.  Underlying
revenue growth in Asia Pacific was 9.3 per cent.



Sector revenue performance


                                               6 months to 30 June                              Change
                                         2005                2004*          Reported        Underlying 
                                           £m                   £m                 %                 %
Consumer                                158.6                158.6                 -              (1.1)
Media                                    90.8                 84.7               7.2               6.1
Business Services                        56.4                 59.8              (5.7)             (4.5)
Technology                               50.7                 50.1               1.2               0.5
Healthcare                               38.2                 37.9               0.8               3.1
Other                                    65.3                 54.9              18.9              15.7
Total                                   460.0                446.0               3.1               2.5

* restated for reclassification of £2.2m of revenue between Technology and
Business Services.



Consumer

Worldpanel has continued its steady growth and is starting to see the benefit
from the investment programme of expansion and upgrades initiated in 2004.  New
scanning technology has been introduced in Portugal and Brazil and panel
expansion is underway in the UK and Spain, where there have been several major
new client wins in the first half.  The Consumer sector overall has been held
back by weaker demand in the custom business.  The overall environment,
especially in the developed markets of Europe, has been tough with variable
corporate profitability affecting marketing budgets of some clients.



Media

TV and Radio Audience Measurement had an excellent first half with several major
new wins, including the Personal People Meter (PPM) contract in Belgium, as well
as the extension of services in Russia and China.  Overall, Media Intelligence
activities have delivered solid growth in the first half, with a pick-up in news
and editorial monitoring in Europe, especially in Spain, where performance has
been very encouraging.  The US has benefited from increased focus on providing
Media Intelligence services directly to advertisers.  Growth has been held back
by a decline in TES, the group's cinema monitoring service, which has been
directly impacted by weak box office receipts in the US.



Business Services

Business Services remained challenging across most regions in the first half as
variable corporate profitability affects component sectors such as travel and
utilities.  The sector was also affected by lower levels of contract renewals in
Asia Pacific and the year on year effect of the loss of third party business on
the US access panel.




Technology

First half performance in Technology varied by region and individual markets
within the sector.  Cuts in marketing expenditure by certain key clients in the
US offset strong performances in other areas. These include France, Germany and
Asia Pacific, where there were some major successes with projects for large
multinationals, including mobile handset and software companies, based on Areas
of Expertise.



Healthcare

Underlying growth in Healthcare was solid, with a strong performance in the UK
and excellent growth in Germany offsetting some of the ongoing weakness in the
domestic US market.  Healthcare has continued to enjoy success from the focus on
a global account strategy and the recent diversification into the field of brand
performance for the world's largest pharmaceutical companies.



Other

In the Automotive sector, significant new contract wins and extensions in
Germany and Asia Pacific helped deliver double-digit growth in the first half.



In Social & Polling, there was also very strong underlying revenue growth.  As
well as the positive impact in the first half from the Standard Eurobarometer
contract won last year, the sector benefited from a significant amount of work
related to the vote on the European Constitution in France.  Increasing levels
of work are being seen in developing markets, such as Asia Pacific, where a
major contract was won with the Korean government to study issues related to the
elderly.





ENDS



The results of the group are shown on the following pages.




CONSOLIDATED UNAUDITED INTERIM INCOME STATEMENT



                                                                            6 months to 30 June         Full year
                                                                            2005       Restated          Restated
                                                                              £m     under  IFRS      under  IFRS
                                                                                        (note 1)          (note 1)
                                                                                           2004              2004
                                                                                             £m                £m
                                                                                                               

Revenue (note 2)                                                           460.0          446.0             945.3
Cost of sales                                                             (156.0)        (154.1)           (322.5)

Gross profit                                                               304.0          291.9             622.8
Administrative expenses                                                   (262.6)        (257.1)           (531.7)
Operating profit (note 2)                                                   41.4           34.8              91.1

Operating profit before highlighted items                                   43.6           41.3             102.8
Integration costs                                                              -           (5.7)             (9.8)
Goodwill impairment                                                            -             -               (3.5)
Amortisation of additional intangibles identified on acquisitions           (0.4)          (0.2)             (0.6)
Exceptional pension credit                                                     -            0.4               4.8
Share based payments                                                        (1.8)          (1.0)             (2.6)

Operating profit                                                            41.4           34.8              91.1


Operating profit                                                            41.4           34.8              91.1
Finance income                                                               0.7            0.3               0.8
Finance costs                                                               (8.6)         (10.0)            (20.0)
Exceptional finance costs                                                      -              -              (3.6)
Share of post tax profit of associates                                       0.2            0.8               1.0

Profit before taxation                                                      33.7           25.9              69.3
Taxation (note 6)                                                          (12.2)          (8.3)            (23.6)

Taxation - excluding deferred tax on goodwill                              (10.6)          (6.7)            (20.4)
Taxation - deferred tax on goodwill                                         (1.6)          (1.6)             (3.2)
Taxation                                                                   (12.2)          (8.3)            (23.6)


Profit for the period                                                       21.5           17.6              45.7
Attributable to:
Equity holders of the parent company                                        20.3           16.5              43.6
Minority interests                                                           1.2            1.1               2.1


Basic earnings per share (note 3)                                            4.6p           3.8p             10.0p

Diluted earnings per share (note 3)                                          4.5p           3.7p              9.8p




Dividends paid and proposed in the period were £nil (£nil 6 months to 30 June
2004, £13.7m full year 2004) and £5.5m (£4.8m 6 months to 30 June 2004, £15.4m
full year 2004) respectively.






CONSOLIDATED UNAUDITED INTERIM BALANCE SHEET



                                                                                       At 30 June       At 31 Dec
                                                                              2005       Restated        Restated
                                                                                £m     under  IFRS     under  IFRS
                                                                                           (note 1)        (note 1)
                                                                                             2004            2004
                                                                                               £m              £m
                                                                                                               
Assets
Non-current assets
Intangible assets                                                            412.2          411.7           402.2
Property, plant and equipment                                                 69.4           69.7            71.5
Investment in associates                                                       2.2            9.0             1.3
Available for sale investments                                                 0.2              -             0.6
Deferred tax assets                                                           27.6           20.7            28.9
                                                                             511.6          511.1           504.5

Current assets
Inventories                                                                   82.4           80.2            75.3
Trade and other receivables                                                  271.6          257.1           260.9
Available for sale investments                                                 0.7            0.9             0.7
Cash and cash equivalents                                                     36.0           25.7            63.3
Total current assets                                                         390.7          363.9           400.2
Total assets                                                                 902.3          875.0           904.7

Liabilities
Current liabilities
Borrowings                                                                    (2.8)         (18.7)           (3.2)
Trade and other payables                                                    (304.8)        (299.3)         (312.9)
Current tax payable                                                          (30.3)         (25.3)          (30.6)
Provisions                                                                    (7.9)         (14.6)           (5.5)
Total current liabilities                                                   (345.8)        (357.9)         (352.2)

Non-current liabilities
Borrowings                                                                  (378.2)        (372.9)         (389.0)
Deferred tax liabilities                                                     (23.8)         (13.6)          (19.3)
Retirement benefit obligations                                               (17.8)         (14.0)          (13.3)
Provisions                                                                   (14.6)         (14.9)          (17.4)
Other payables                                                                (2.4)          (4.2)           (2.9)
Total non-current liabilities                                               (436.8)        (419.6)         (441.9)
Total liabilities                                                           (782.6)        (777.5)         (794.1)
Total net assets                                                             119.7           97.5           110.6

Equity
Issued share capital                                                          22.4           22.3            22.3
Share premium                                                                125.9          122.8           123.8
Shares to be issued                                                              -              -             4.2
Other reserves                                                                 1.4            1.2             1.5
Retained earnings                                                            (38.6)         (55.5)          (49.9)
Total equity attributable to equity holders of the parent                    111.1           90.8           101.9
Minority interests                                                             8.6            6.7             8.7

Total equity                                                                 119.7           97.5           110.6






CONSOLIDATED UNAUDITED INTERIM CASH FLOW STATEMENT




                                                                            6 months to 30 June          Full year
                                                                             2005        Restated         Restated
                                                                               £m      under  IFRS     under  IFRS
                                                                                           (note1)         (note 1)
                                                                                             2004             2004
                                                                                               £m               £m
Cash flows from operating activities
Cash generated from operations (note 4)                                      21.3            28.5            113.4
Income tax paid                                                             (11.6)          (10.8)           (20.2)
Net cash generated from operating activities                                  9.7            17.7             93.2

Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)                           (6.0)           (1.8)           (11.0)
Sale of subsidiaries (net of cash disposed)                                     -             0.1              0.1
Sale of associates                                                              -               -              7.4
Proceeds from sale of property, plant and equipment                           0.5             1.3              2.2
Purchase of property, plant and equipment                                    (7.4)          (10.4)           (22.3)
Purchase of intangibles                                                      (1.1)           (4.4)            (5.7)
Purchase of associate                                                        (0.9)              -                -
Interest received                                                             0.7             0.2              0.7
Dividends received                                                              -             0.4              0.5
Net cash used in investing activities                                       (14.2)          (14.6)           (28.1)
Cash flow from financing activities
Net proceeds from issue of ordinary share capital                             1.0             1.3              3.2
Dividends paid to company's shareholders                                        -               -            (13.7)
Dividends paid to minority interests                                         (0.8)           (0.6)            (1.4)
Interest paid                                                                (8.0)          (12.0)           (20.2)
Arrangement fees paid                                                        (1.4)              -                -
Repayment of borrowings                                                     (13.5)            3.0             (1.6)
Purchase of company shares                                                      -            (4.1)            (4.1)
Net cash used in financing activities                                       (22.7)          (12.4)           (37.8)
Net (decrease)/increase in cash and bank overdrafts                         (27.2)           (9.3)            27.3
Cash and bank overdrafts at beginning of period                              63.3            35.7             35.7
Exchange (losses)/gains on cash and bank overdrafts                          (0.1)           (0.7)             0.3
Cash and bank overdrafts at end of period                                    36.0            25.7             63.3
Net debt*                                                                  (342.9)         (366.5)          (329.5)






* Net debt is defined as cash less bank borrowings, overdrafts and obligations
under finance leases excluding accrued interest.








CONSOLIDATED UNAUDITED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                 Share       Share       Shares      Other       Own      Retained       Total    Minority        Total
               capital     premium        to be    reserves     shares    earnings               interests              
                                         issued                           
                    £m          £m                      £m         £m          £m          £m           £m           £m 
         
                                                                                             
                                                                               
Balance at 1     22.2        120.0           -         1.4       (5.2)      (68.6)       69.8          6.9         76.7
January 2004
First-time          -            -           -           -          -         4.8         4.8            -          4.8 
adoption of
IFRS                                                     
                                                                   

Restated         22.2        120.0           -         1.4       (5.2)      (63.8)       74.6          6.9         81.5 
balance at 1
January 2004
                    

Currency            -            -           -           -          -         8.7         8.7            -          8.7 
translation
differences                                              

Net profit          -            -           -           -          -        16.5        16.5          1.1         17.6

                                                         
                  

New share         0.1          2.8           -           -          -           -         2.9            -          2.9 
capital issued
net of
expenses
                    

Minority            -            -           -           -          -           -           -         (1.3)        (1.3)
additions and
dividends                                                
                    

Purchase of         -            -           -           -       (4.1)          -        (4.1)           -         (4.1)
  own shares
                                                                                  

Proceeds on         -            -           -        (0.2)       0.3           -         0.1            -          0.1 
exercise of
options
                    

Share based         -            -           -           -          -         1.0         1.0            -          1.0 
payments
Equity              -            -           -           -          -        (8.9)       (8.9)           -         (8.9)
dividends
                                                         
                 

Restated         22.3        122.8           -         1.2       (9.0)      (46.5)       90.8          6.7         97.5 
balance at 30
June 2004
                    

Currency            -            -           -           -          -       (15.4)      (15.4)           -        (15.4)
 translation
differences

Net profit          -            -           -           -          -        27.1        27.1          1.0         28.1

                                                         
                    

New share           -          1.0           -           -          -           -         1.0            -          1.0 
capital issued
net of
expenses
                    

Minority            -            -           -           -          -           -           -           1.0         1.0 
additions and
dividends                                                                                             
                    

Proceeds on         -            -           -         0.3        0.5           -         0.8             -         0.8 
exercise of
options
                    

Share based         -            -           -           -          -         1.6         1.6             -        1.6  
payments
Shares to be        -            -         4.2           -          -           -         4.2             -        4.2
issued                                                                                                        
Actuarial           -            -           -           -          -        (3.4)       (3.4)            -       (3.4)
losses on
pensions net
of tax
                                                         
                    

Equity              -            -           -           -          -        (4.8)       (4.8)           -       (4.8)
dividends
                 

Restated         22.3        123.8         4.2         1.5       (8.5)      (41.4)      101.9          8.7      110.6  
balance at 31
December 2004
                    

First-time          -            -        (4.2)          -          -        (1.2)       (5.4)           -       (5.4) 
adoption of
IAS 32 and IAS
39
                

Movement in         -            -           -           -          -         0.4         0.4            -        0.4
fair value of
financial                                                
instruments
                    

Currency            -            -           -           -          -         2.9         2.9            -        2.9
translation
differences                                              
                    

Net profit          -            -           -           -          -        20.3        20.3          1.2       21.5
                  

New share         0.1          2.1           -           -          -           -         2.2            -        2.2  
capital issued
net of
expenses
                    

Minority            -            -           -           -          -           -           -         (1.3)      (1.3) 
additions and
dividends
                    

Proceeds on         -            -           -        (0.1)       1.3           -         1.2            -        1.2
exercise of
options
                    

Share based         -            -           -           -          -         1.8         1.8            -        1.8
payments
                    

Actuarial           -            -           -           -          -        (3.6)       (3.6)           -       (3.6) 
losses on
pensions net
of tax
                    

Equity              -            -           -           -          -       (10.6)      (10.6)           -      (10.6)
dividends
Balance at 30    22.4        125.9           -         1.4       (7.2)      (31.4)      111.1          8.6      119.7
June 2005


                                                       






NOTES TO THE INTERIM STATEMENT



1.                   Basis of preparation

Prior to 2005, the group prepared its audited annual financial statements using
accounting principles generally accepted in the UK (UK GAAP).  For the year
ended 31 December 2005, the group is required to prepare its annual consolidated
financial statements in accordance with accounting standards adopted for use in
the European Union, International Financial Reporting Standards (IFRS).  As
such, those financial statements will take account of the requirements and
options in IFRS 1 "First-time adoption of International Financial Reporting
Standards" as they relate to the 2004 comparatives included therein.



Certain of the requirements and options in IFRS 1, relating to comparative
financial information presented on first-time adoption, may result in a
different application of accounting policies in the 2004 restated financial
information to that which would apply if the 2004 financial statements were the
first financial statements of the group prepared in accordance with IFRS.  An
explanation of how transition from UK GAAP to IFRS has affected the group's
financial position, income statement and cash flows is set out in note 8.  The
reconciliations set out in note 8 are based on the IFRS expected to be
applicable as at 31 December 2005 and the interpretation of those standards.
The IFRS and IFRIC interpretations that will be applicable at
31 December 2005 are not known with certainty.  These consolidated interim
statements are based on management's understanding of current issued standards
and interpretations and current facts and circumstances, which may change.  For
example, amended or additional standards or interpretations may be issued by the
International Accounting Standards Board.  IFRS is currently being applied in
the UK and in a large number of other countries simultaneously for the first
time.  Due to a number of new and revised standards issued after December 2003,
there is not yet a significant body of established practice on which to draw in
forming opinions regarding interpretation and application of IFRS.  Accordingly,
practice is continuing to evolve.  At this preliminary stage, therefore, the
full financial effect of reporting under IFRS as it will be applied and reported
on in the group's first financial statements for the year ended 31 December 2005
cannot be determined with certainty.



The accounting policies published on the group's website, www.tns-global.com, on
5 September 2005, have been consistently applied to all periods presented,
except those relating to the classification and measurement of financial
instruments.  The group has made use of the exemption available under IFRS 1 to
apply the standards related to financial instruments, IAS 32 and IAS 39, from 1
January 2005.



The financial information contained in this report has been prepared on the
basis of the accounting policies published on the group's website and has not
been audited and does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.  The statutory accounts for 2004, which
were prepared under UK GAAP, have been delivered to the Registrar of Companies.
The auditors' opinion on those accounts was unqualified and did not contain a
statement made under Section 232(2) or Section 237(3) of the Companies Act 1985.




2.    Segment information

Primary reporting format - by geographical segment


                                           Revenue                   Operating profit

                               6 months to 30 June                6 months to 30 June
                             2005             2004             2005     2004 restated
                               £m         restated               £m        under IFRS
                                        under IFRS
                                                                                   £m
                                                £m
UK                           69.6             77.4              5.1               4.4
France                       73.7             66.4              6.4               3.2
Rest of Europe              162.7            147.8             17.4              15.9
Europe                      306.0            291.6             28.9              23.5
Americas                    109.2            114.5              8.6               7.5
Asia Pacific                 44.8             39.9              3.9               3.8
Total                       460.0            446.0             41.4              34.8



3.       Earnings per share

Basic earnings per share of 4.6p have been calculated on the profit after
taxation attributable to equity holders of the parent company of £20.3m (2004
restated £16.5m) and on 440.6 shares (2004 436.4m), being the weighted average
number of shares in issue during the period, excluding those held in the ESOP
and the EBT, which are treated as cancelled.  Basic earnings per share for the
comparative period have been restated due to changes in the profit following the
transition to IFRS and have increased from 1.3p reported under UK GAAP to 3.8p
under IFRS.



The diluted earnings per share have been calculated in accordance with the
provisions of IAS 33, with the weighted average number of shares in issue being
adjusted to assume conversion of all dilutive potential shares for the period
they were outstanding.  Diluted earnings per share for the comparative period
have been restated due to changes in the profit following the transition to IFRS
and have increased from 1.3p reported under UK GAAP to 3.7p under IFRS.



Shares held by the ESOP and the EBT, which are under performance-based options,
are included in the diluted weighted average number of shares as the performance
conditions are deemed to have been met for the purposes of this calculation.
The diluted weighted average number of shares is 448.8m (2004 443.9m).




The weighted average number of ordinary shares in issue during the period for
the purpose of these calculations is as follows:


                                                                                  2005              2004
Weighted average number of shares (millions)
Share capital                                                                    447.2             444.3
Shares held by ESOP                                                               (0.6)             (1.6)
Shares held by EBT                                                                (6.0)             (6.3)
Basic earnings per share denominator                                             440.6             436.4
Dilutive effect of share options                                                   8.2               7.5
Dilutive earnings per share denominator                                          448.8             443.9



An adjusted earnings per share using an adjusted profit after taxation and
minority interests is also presented, as the directors believe that this assists
in understanding the underlying performance of the group.  The adjusted earnings
per share is based on the profit as adjusted for the items shown below:


                                                                           2005             2004

                                                                             £m               £m
Profit after taxation and minority interests                               20.3             16.5
Integration costs net of tax                                                  -              2.4
Amortisation of additional intangibles identified on                        0.4              0.2
acquisitions
Exceptional pension credit net of tax                                         -             (0.3)
Share based payments                                                        1.8              1.0
Deferred tax on goodwill                                                    1.6              1.6
Tax on share based payments and amortisation of                            (0.4)            (0.4)
additional intangibles identified on acquisitions
Adjusted profit after taxation and minority interests                      23.7             21.0
Adjusted earnings per share                                                 5.4p             4.8p






            Profit used for EPS purposes      Weighted average number of shares        Earnings per share
                   2005              2004                2005              2004           2005           2004

                     £m                £m
Basic              20.3              16.5               440.6             436.4           4.6p           3.8p
Diluted            20.3              16.5               448.8             443.9           4.5p           3.7p
Adjusted           23.7              21.0               440.6             436.4           5.4p           4.8p






4.             Consolidated unaudited statement of cash flow

Reconciliation of profit to cash flow from operations

                                                 6 months to 30 June       Full year
                                                 2005       Restated        Restated
                                                   £m          under           under  
                                                                IFRS            IFRS
                                                                2004            2004
                                                                  £m              £m
Profit for the period                            21.5           17.6            45.7
Taxation                                         12.2            8.3            23.6
Amortisation and impairment of                    3.4            3.1             4.1
intangible fixed assets
Depreciation of tangible fixed assets             9.3            9.7            24.3
Profit on sale of fixed assets                   (0.1)             -             0.4
Interest income                                  (0.7)          (0.3)           (0.8)
Interest expense                                  8.6           10.0            20.0
Exceptional finance costs                           -              -             3.6
Share of results of associates before            (0.2)          (0.8)           (1.0)
taxation
Share based payments                              1.8            1.0             2.6
Exceptional pension credit                          -           (0.4)           (4.8)
(Increase)/decrease in inventories               (8.0)         (17.2)            2.3
(Increase)/decrease in debtors                   (4.5)           5.2            (2.7)
(Decrease)/increase in creditors                (20.6)          (6.0)            3.0
(Decrease) in provisions                         (1.4)          (1.7)           (6.9)

Net cash flow from operations                    21.3           28.5           113.4



5.     Acquisitions

On 1 March 2005, the group acquired a 51% share of Interscience Informacao e
Tecnologia Aplicada Ltda, a well-established Brazilian custom research business.
The group also acquired the business of Presse+, a French media intelligence
business, on 25 May 2005.  A further 8% of the group's subsidiary in the Czech
Republic, AISA was also purchased on 31 March 2005.  The total consideration
payable was £6.3m.  Acquisitions have contributed £1.6m to revenue and £0.2m to
profit for the six months ended 30 June 2005.  If these acquisitions had taken
place on 1 January 2005, the group's results would be revenue of £463.6m and
profit for the period of £21.7m.



6.       Taxation

The tax charge for the period was £12.2m, representing a reported rate of 36.2%.
Under IFRS, where goodwill is deductible against tax, a deferred tax liability
is recognised, even if such a liability would only unwind on the eventual sale
or impairment of the business in question. This has led to a tax charge for
deductible goodwill of £1.6m for the period. Excluding deferred tax on goodwill,
the tax charge was £10.6m, representing an underlying rate (calculated before
highlighted items) of 31.5%.  This represents our current estimate of the
underlying tax rate for the year.



For the year ended 31 December 2004, the tax charge was £23.6m, representing a
reported rate of 34.1%. Excluding deferred tax on goodwill of £3.2m and the
benefit of tax credits arising on highlighted items of £5.4m, the tax charge was
£25.8m, representing an underlying rate of 31.5%.




7.       Currency conversion

The 2005 consolidated unaudited interim income statement has been prepared
using, among other currencies, an average exchange rate of US$1.8727 to the
pound (period ended 30 June 2004: US$1.8225; year ended 31 December 2004:
US$1.8320) and €1.4583 to the pound (period ended 30 June 2004: €1.4905; year
ended 31 December 2004: €1.4747).  The consolidated unaudited interim balance
sheet as at 30 June 2005 has been prepared using the exchange rate on that day
of US$1.7918 to the pound
(30 June 2004: US$1.8137; 31 December 2004: US$1.9158) and €1.4818 to the pound
(30 June 2004: €1.4905; 31 December 2004: €1.4133).



8.       Reconciliation of IFRS financial statements to previously reported UK
GAAP financial statements

The adoption of IFRS has resulted in changes to the group's accounting policies
that have affected the amounts reported for the current or prior periods in the
following areas:



Share based payments

The fair value of share options granted to employees is estimated for each grant
using the Black-Scholes-Merton model and charged to the income statement over
the minimum life of the options.  This IFRS charge replaces the UITF 17
(revised) charge for options issued at below market value previously recognised.



Goodwill

In place of amortisation, all goodwill will be subjected to an annual impairment
test.  Any impairment identified will be charged immediately to the income
statement.  Negative goodwill will be written off immediately to the income
statement.  Any fair value adjustments made to goodwill in a later financial
year (permitted within 12 months from the date of acquisition) will be reflected
as a restatement of the prior year accounts.



Retirement and other employee benefits

Defined benefit plan assets and liabilities are recorded in the balance sheet
with actuarial gains and losses taken to reserves.  Under SSAP 24, pension
scheme assets and liabilities were not recorded on the balance sheet and the
cost of plans was charged to the income statement so as to spread the cost of
pensions over the service lives of employees in the plans.  Under the IFRS
transitional arrangements, TNS has elected to recognise the cumulative actuarial
loss at 1 January 2004 as a movement in equity.



Joint ventures

Under IFRS, TNS has elected to consolidate joint ventures on a proportionate
basis, with the group's share of assets and liabilities, profits and losses and
cash flows being reflected with items of a similar nature on a line by line
basis in the group financial statements.  Previously, joint ventures were shown
within investments, with the group's share of operating profit shown in the
income statement.  Under UK GAAP, joint venture cash flows were not included in
the group cash flow statement.



Associates

Under IFRS, losses from an associate in excess of the group's interest in that
associate are no longer recognised where there is no contractual obligation to
fund those losses.  Under UK GAAP, losses were recognised even if in excess of
the group's interest in the associate.



Deferred tax

IFRS requires deferred tax to be provided in full, using the balance sheet
liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial
statements.  Deferred tax assets are recognised only to the extent that it is
probable that they can be utilised against future taxable profits.  Where
goodwill is deductible against tax, a deferred tax liability is required even if
such a liability would only unwind on the eventual sale of the business in
question.





Dividends

As required under IFRS, dividends will be recognised when approved not when
declared and will be disclosed in the statement of equity and not the income
statement.



Financial instruments

Under the transitional IFRS arrangements, IAS 32 "Financial instruments:
Disclosure and Presentation" and IAS 39 "Financial instruments: Recognition and
Measurement" have been applied from 1 January 2005.



Tangible and intangible fixed assets

IFRS requires that, for acquisitions made since 1 January 2004, certain
intangible assets are recognised separately to reflect the fair value of brands,
customer lists, or other intangibles acquired.  Previously these intangible
assets would have been included in goodwill.  The intangible assets will be
amortised over their estimated useful lives.  Software, previously included
within tangible fixed assets, is classified as an intangible fixed asset under
IFRS.



IFRS 1 "First -time adoption of International Financial Reporting Standards"

The policies published on the group's website, www.tns-global.com, have been
consistently applied to all the periods presented except for those relating to
specific exemptions available under IFRS 1.  The most significant optional
exemptions taken by the group are as follows:



Business combinations

Business combinations prior to the transition date of 1 January 2004 have not
been restated.



Retirement and other employee benefits

TNS has taken cumulative actuarial gains and losses of defined benefit or
post-retirement plans directly to equity at the transition date.



Share based payment transactions

TNS has elected to apply recognition and measurement requirements only to
equity instruments granted after 7 November 2002 that had not vested by 1
January 2005.



Financial instruments

TNS continues to report financial instruments for the 2004 comparative period in
accordance with UK GAAP.



Cumulative translation differences

TNS has reset the cumulative translation differences for all foreign operations
to £nil as at 1 January 2004.








Net equity reconciliation
                                                              1 Jan 2004        30 June 2004      31 Dec  2004
                                                                      £m                  £m                £m
Net assets under UK GAAP                                            76.7                85.5              82.4
Impact of changes in accounting for:
Write off negative goodwill                                          0.1                   -                 -
Retirement benefits                                                 (0.3)                0.1              (0.3)
Reversal of net liabilities on investment in associates              0.1                 0.3               0.3
Add back goodwill amortisation                                         -                12.3              24.3
Amortisation of intangibles in accordance with IFRS 3                  -                (0.1)             (0.4)
net of deferred tax
Deferred tax on goodwill and share based payments                   (4.0)               (5.4)             (6.3)
Write back proposed dividends                                        8.9                 4.8              10.6
                                                                     4.8                12.0              28.2
Net equity under IFRS                                               81.5                97.5             110.6






CONSOLIDATED UNAUDITED INCOME STATEMENT
                                        6 months to 30 June 2004                       Year ended December 2004
                              Notes  Published            IFRS      Restated     Published          IFRS
                                       UK GAAP      conversion          under      UK GAAP     conversion    Restated
                                                   adjustments          IFRS                  adjustments        under
                                                                                                                 IFRS
                                            £m              £m            £m           £m             £m           £m
Revenue                                  446.0               -         446.0        945.3              -        945.3
Less share of joint               1       (7.8)            7.8             -        (16.7)          16.7            -
ventures
Revenue                                  438.2             7.8         446.0        928.6           16.7        945.3
Cost of sales                     1     (151.1)           (3.0)       (154.1)      (316.4)          (6.1)      (322.5)

Gross profit                             287.1             4.8         291.9        612.2           10.6        622.8
Administrative expenses       1,2,3     (265.4)            8.3        (257.1)      (550.5)          18.8       (531.7)
                                4,5
                                

Operating profit
Continuing activities                     21.7            13.1          34.8         61.7           29.4         91.1
Share of operating profit         1        1.2            (1.2)            -          2.7           (2.7)           -
of joint ventures
Operating profit before           5       40.9             0.4          41.3        102.0            0.8        102.8
highlighted items
Integration costs                         (5.7)              -          (5.7)        (9.8)             -         (9.8)
Goodwill charges                  2      (12.3)           12.3             -        (27.8)          24.3         (3.5)
Amortisation of additional        3          -            (0.2)         (0.2)           -           (0.6)        (0.6)
intangibles identified on
acquisitions
Exceptional pension credit        4          -             0.4           0.4            -            4.8          4.8
Share based payments              5          -            (1.0)         (1.0)           -           (2.6)        (2.6)


Operating profit                          22.9            11.9          34.8         64.4           26.7         91.1
Share of operating profit         6        0.6            (0.6)            -          1.3           (1.3)          -
of associates
Profit before interest and                23.5            11.3          34.8         65.7           25.4         91.1
taxation
Net interest payable and          4       (9.7)              -          (9.7)       (18.7)          (0.5)       (19.2)
similar charges
Exceptional finance charges                  -               -             -         (3.6)             -         (3.6)
Share of profit of              6,7          -             0.8           0.8            -            1.0          1.0
associates

Profit before taxation                    13.8            12.1          25.9         43.4           25.9         69.3
Taxation                      3,4,5       (7.0)           (1.3)         (8.3)       (21.1)          (2.5)       (23.6)
                                6,8
Profit for the period                      6.8            10.8          17.6          22.3          23.4         45.7
Minority interests                        (1.1)              -          (1.1)        (2.1)             -         (2.1)

Profit for the period                      5.7            10.8          16.5         20.2           23.4         43.6

Basic earnings per share                  1.3p            2.5p          3.8p         4.6p           5.4p        10.0p
Diluted earnings per share                1.3p            2.4p          3.7p         4.5p           5.3p         9.8p






Notes

1.             Under proportionate consolidation, the results of joint ventures
are consolidated in the income statement on a line by line basis and, as a
result, there will be no separate disclosure of joint venture turnover and
operating profit (additional cost of sales £3.0m June, £6.1m December,
administration expenses £3.6m June, £7.9m December, replace separate disclosure
of operating profit of £1.2m June, £2.7m December).

2.             Goodwill amortisation under UK GAAP is reversed (£12.3m June,
£24.3m December) leaving only any impairments identified under IFRS (£nil June,
£3.5m December).

3.             Amortisation of intangible assets recognised on acquisitions in
accordance with IFRS 3 (£0.2m June, £0.6m December) with associated deferred tax
(£0.1m June, £0.2m December).

4.             Retirement benefits charge calculated in accordance with IAS 19
results in an exceptional credit (£0.4m June, £4.8m December) following
curtailments in the Netherlands and US.  Related deferred tax is a charge (£0.1m
June, £0.5m December).

5.             Share based payment charge for employee options granted since 7
November 2002, less UITF 17 (revised) charge included under UK GAAP (£1.0m less
£0.4m June, £2.6m less £0.8m December).

6.             Share of operating profit of associates is reclassified to below
exceptional finance charges and adjusted to include the relevant proportion of
interest (£nil June, £nil December) and tax (£0.1m June, £0.5m December)
previously disclosed under interest and tax.

7.             Losses arising from associates with net liabilities are not
recognised under IFRS (£0.3m June, £0.2m December).

8.             Deferred tax charge relating to the tax deductible goodwill in
the period (£1.6m June, £3.2m December).






CONSOLIDATED UNAUDITED BALANCE SHEET
                                                 30 June 2004                            31 December 2004
                          Notes     Published            IFRS                 Published            IFRS      Restated
                                      UK GAAP      conversion    Restated       UK GAAP      conversion         under
                                                  adjustments       under                   adjustments          IFRS
                                                                     IFRS
                                           £m             £m           £m           £m               £m            £m   
         
                                                                        
Assets
Non-current assets
Intangible assets       1,2,3,7         370.8            40.9        411.7                          50.2         402.2
                             12                                                   352.0
Property, plant and      1,7,12          80.9           (11.2)        69.7         83.6            (12.1)         71.5
equipment
Share of gross assets         1          23.0           (23.0)           -         27.0            (27.0)            -
of joint ventures
Share of gross                1          (5.4)            5.4            -        (10.2)            10.2             -
liabilities of joint
ventures
Investment in              6,12           6.9             2.1          9.0          1.0              0.3           1.3
associates
Other investments                           -               -            -          0.6                -           0.6
Deferred tax assets     3,4,5,8             -            20.7         20.7            -             28.9          28.9
                                        476.2            34.9        511.1        454.0             50.5         504.5
Current assets
Inventories                1,12          80.8            (0.6)        80.2         75.0              0.3          75.3
Trade and other       1,8,11,12         256.0             1.1        257.1        265.6             (4.7)        260.9
receivables
Current asset                             0.9               -          0.9          0.7                -           0.7
investments
Cash and cash                 1          21.5             4.2         25.7         57.4              5.9          63.3
equivalents
Total current assets                    359.2             4.7        363.9        398.7              1.5         400.2
Total assets                            835.4            39.6        875.0        852.7             52.0         904.7
Liabilities
Current liabilities
Borrowings                              (18.7)              -        (18.7)        (3.2)               -          (3.2)
Trade and other             1,9        (299.3)              -       (299.3)      (317.4)             4.5        (312.9)
payables
Current tax payable          11         (14.6)          (10.7)       (25.3)       (22.3)            (8.3)        (30.6)
Provisions                10,12             -           (14.6)       (14.6)           -             (5.5)         (5.5)
Total current                          (332.6)          (25.3)      (357.9)      (342.9)            (9.3)       (352.2)
liabilities
Non-current
liabilities
Borrowings                    1        (372.7)           (0.2)      (372.9)      (388.7)            (0.3)       (389.0)
Deferred tax                  8             -           (13.6)       (13.6)           -            (19.3)        (19.3)
liabilities
Retirement benefit            4             -           (14.0)       (14.0)           -            (13.3)        (13.3)
obligations
Provisions               1,4,10         (40.4)           25.5        (14.9)       (35.8)            18.4         (17.4)
Other payables                           (4.2)              -         (4.2)        (2.9)               -          (2.9)
Total non-current                      (417.3)           (2.3)      (419.6)      (427.4)           (14.5)       (441.9)
liabilities
Total liabilities                      (749.9)          (27.6)      (777.5)      (770.3)           (23.8)       (794.1)
Total net assets                         85.5            12.0         97.5         82.4             28.2         110.6
Equity
Issued share capital                     22.3               -         22.3         22.3                -          22.3
Share premium                           122.8               -        122.8        123.8                -         123.8
Shares to be issued                         -               -            -          4.2                -           4.2
Other reserves                            1.2               -          1.2          1.5                -           1.5
Retained earnings     2,3,4,5,6         (67.5)           12.0        (55.5)       (78.1)            28.2         (49.9)
                         8,9,12
Total equity                             78.8            12.0         90.8         73.7             28.2         101.9
attributable to
equity holders of the
parent
Minority interests                        6.7               -          6.7          8.7                -           8.7

Total equity                             85.5            12.0         97.5         82.4             28.2         110.6





Notes

1.             Proportionate consolidation of joint ventures (intangibles £12.1m
June, £11.9m December, property, plant and equipment £2.0m June, £2.5m December,
inventories £0.3m June, £0.3m December, receivables £4.4m June, £3.3m December,
cash £4.2m June,  £5.9m December, creditors £4.8m June,
£6.1m December, long term borrowings £0.2 m June, £0.3m December, provisions
£0.4m June,
£0.7m December).

2.             Goodwill amortisation under UK GAAP is reversed (£12.3m June,
£24.3m December).

3.             Amortisation of intangibles identified on acquisition in 2004 and
separated out of goodwill (£0.2m June,  £0.6m December) and associated deferred
tax (£0.1m June, £0.2m December).

4.             Retirement benefit assets and liabilities calculated in
accordance with IAS 19 and disclosed separately (net liability £14.0m June,
£13.3m December).  The associated deferred tax is also shown separately.

5.             A deferred tax asset (£0.3m June, £0.3m December) has been set up
at transition date in respect of share based payments.  This was increased
(£0.1m June, £0.5m December) during the period.

6.             Net liabilities on investments in associates not recognised under
IFRS (£0.3m June, £0.3m December).

7.             Software reclassified from tangible fixed assets to intangible
fixed assets (£13.0m June, £14.6m December).

8.             A deferred tax liability (£4.3m June, £4.3m December) has been
set up at transition date in respect of tax deductible goodwill.  A further
deferred tax liability (£1.6m net of £0.1m exchange June, £2.8m net of £0.4m
exchange December) has been recognised relating to tax deductible goodwill in
the period. Deferred tax assets and liabilities are disclosed separately.

9.             Under IFRS, dividends are recognised when approved or paid rather
than when declared.  The accrual for the interim proposed dividend at June
(£4.8m) and the final proposed 2004 dividend (£10.6m) at December is reversed.

10.          Provisions falling due in less than 1 year are disclosed separately
on the face of the balance sheet (£11.8m June, £5.5m December).

11.          Corporation tax receivable has been reclassified from current tax
payable to trade and other receivables (£10.7m June, £8.3m December).

12.          2004 revisions to fair value adjustments booked in relation to 2003
acquisitions under UK GAAP have been booked as a prior year adjustment
(intangibles £3.7m, property, plant and equipment £(0.2)m, associates £1.8m,
inventories £(0.9)m, receivables £(1.7)m, provisions £(2.8)m June).




CONSOLIDATED UNAUDITED CASH FLOW STATEMENT
                                                                                   
                                        6 months to 30 June 2004                   Year ended 31 December 2004
                        Notes    Published           IFRS       Restated      Published             IFRS       Restated
                                   UK GAAP     conversion     under IFRS        UK GAAP       conversion     under IFRS
                                              adjustments                                    adjustments
                                       £m              £m             £m             £m               £m             £m 
                                            
                                                                        
Cash flows from
operating activities
Cash generated from         1         27.3              1.2           28.5          107.2              6.2        113.4
operations
Income tax paid             1        (11.0)             0.2          (10.8)         (19.6)            (0.6)       (20.2)
Net cash generated from               16.3              1.4           17.7           87.6              5.6         93.2
operating activities

Cash flows from
investing activities
Acquisition of                        (1.8)               -           (1.8)         (11.0)               -        (11.0)
subsidiaries (net of
cash acquired)
Sale of subsidiaries                   0.1                -            0.1            0.1                -          0.1
(net of cash disposed)
Sale of associates                       -                -              -            7.4                -          7.4
Proceeds from sale of                  1.3                -            1.3            2.2                -          2.2
property, plant and
equipment
Purchase of property,     1,2        (14.3)             3.9          (10.4)         (26.7)             4.4        (22.3)
plant and equipment
Purchase of intangibles     2            -             (4.4)          (4.4)             -             (5.7)        (5.7)
Interest received                      0.2                -            0.2            0.7                -          0.7
Dividends received          1          0.7             (0.3)           0.4            2.6             (2.1)         0.5
Net cash used in            1        (13.8)            (0.8)         (14.6)         (24.7)            (3.4)       (28.1)
investing activities
Cash flow from
financing activities
Net proceeds from issue                1.3                -            1.3            3.2                -          3.2
of ordinary share
capital
Dividends paid to                        -                -              -          (13.7)               -        (13.7)
company's shareholders
Dividends paid to                     (0.6)               -           (0.6)          (1.4)               -         (1.4)
minority interests
Repayment of borrowings                3.0                -            3.0           (1.6)               -         (1.6)
Interest paid                        (12.0)               -          (12.0)         (20.2)               -        (20.2)
Purchase of company                   (4.1)               -           (4.1)          (4.1)               -         (4.1)
shares
Net cash used in                     (12.4)               -          (12.4)         (37.8)               -        (37.8)
financing activities
Net increase in cash        1         (9.9)             0.6           (9.3)          25.1              2.2         27.3
and bank overdrafts
Cash and bank               1         32.2              3.5           35.7           32.2              3.5         35.7 
overdrafts at beginning
of period                                               
Exchange (losses)/gains     1         (0.8)             0.1           (0.7)           0.1              0.2          0.3
on cash and bank
overdrafts                                              
Cash and bank                         21.5              4.2           25.7           57.4              5.9         63.3
overdrafts at end of
period                                                  

Notes

1.              Cash flows relating to TNS' share of joint ventures are included
in the consolidated cash flow statement under IFRS in each relevant line of the
cash flow statement and any dividends received from joint ventures, previously
shown as a cash inflow, are eliminated.

2.              Purchases of software have been reclassified from purchase of
property, plant and equipment to purchase of intangible fixed assets.




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