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Umbro PLC (UMB)

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Thursday 07 September, 2006

Umbro PLC

Interim Results

Umbro PLC
07 September 2006



Thursday, 7th September 2006

                                   Umbro plc

             Interim Results For The Half-Year Ended 2nd July 2006


Financial Highlights

   •Record profit before tax and exceptionals of £17.7m, an increase of 55.2%
    on the first half of last year (H1 2005: £11.4m)
   •Total Wholesale Equivalent (TWE) sales were £249.3m, an increase of 42.2%
    on the first half of last year (H1 2005: £175.4m)
   •Buy / sell gross margins decreased by 1.3% to 54.4% (H1 2005: 55.7%)
    driven by the greater volumes of England associated product which carry a
    lower margin than replica kits
   •Increased brand marketing expenditure associated with World Cup and
    support of new ranges
   •Adjusted earnings per share was 8.5p for the period (H1 2005: 5.8p)
   •The Board is recommending an interim dividend of 1.76p (H1 2005: 1.6p),
    an increase of 10%
   •The Group is now debt free

Strategic & Operational Highlights

   •The Umbro brand experienced unparalled global exposure at this year's
    World Cup in Germany
   •Broad basis of growth demonstrated by both branded and licensed product
    groups and all geographical regions showing sales growth
   •First half sales bias as a result of the World Cup
   •The Group has increased marketing initiatives to promote Umbro by Kim
    Jones, Philip Treacy for Umbro and U by Umbro, all of which continue to 
    enhance brand perceptions
   •The authenticity of the brand continues to be reinforced by the success
    of our global portofolio of clubs, players and tournaments
   •John Terry, who was re-signed in March 2006 on a long-term agreement, has
    recently been appointed the new England captain
   •The management team has been strengthened, in particular by the
    appointment of Steve Makin as Chief Financial Officer


Commenting on the results, Peter McGuigan, Chief Executive of Umbro, said:

"I am pleased with the great progress we have made in the first half and, in
particular, the strong performance of Group sales when compared to the last
tournament year. We have once again delivered results in line with expectations.

The brand enjoyed unparalled global exposure during the World Cup in Germany,
and with the further initiatives that we have planned for the remainder of 2006
and beyond, we are confident of a satisfactory outcome for the year and remain
confident of enhancing shareholder value."


Contacts:

Umbro
Peter McGuigan, Chief Executive                  020 7404 5959 (on the day)
Steve Makin, Chief Financial Officer             0161 492 2000 (thereafter)

Brunswick Group LLP
Simon Sporborg / Dominic McMullan / Tom Williams 020 7404 5959




Financial highlights
                                           6 months to  % change 6 months to
                                                2 July      over      3 July
                                                  2006  6 months        2005
                                           (unaudited)        to (unaudited)       
                                                          2 July 
                                                            2005
                                                  £000                  £000
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total wholesale equivalent of sales            249,322     42.2%     175,376
----------------------------------------------------------------------------

Turnover                                       108,712     68.2%      64,651

Profit before tax and exceptionals              17,673     55.2%      11,389

Profit before tax                               17,673   (51.8)%      36,635

Basic earnings per share                          8.5p                 18.2p
Diluted earnings per share                        8.4p                 17.9p
Adjusted earnings per share                       8.5p                  5.8p
Adjusted diluted earnings per share               8.4p                  5.7p




Chairman and Chief Executive Statement


Overview

Umbro's performance in the first half of 2006 was in line with the Board's
expectations. The Group announces record first half profits before tax and
exceptional items of £17.7m, an increase of 55.2% over £11.4m in H1 2005. Profit
before tax was £17.7m compared to £36.6m in H1 2005, which included £25.2m of
exceptional items.

Total Wholesale Equivalent (TWE) Sales (the Group's wholesale sales plus the
wholesale equivalent value of its licensees' sales) were £249.3m, up 42.2% on
the £175.4m of H1 2005. As expected, the World Cup had a significant effect on
the phasing of licensed apparel sales in comparison to a non-tournament year.
This has driven a 120.9% increase in licensed apparel sales, which accounted for
44.0% of TWE compared to 28.3% in H1 2005. Consequently, licensed apparel sales
in the second half of 2006 will be lower than in H2 last year. TWE of other
branded products grew by 11.0%, continuing the trend of broad-based growth in
the Group's activities.

Gross margin on buy/sell sales was 54.4% compared to 55.7% in H1 2005. The
expected reduction of 1.3 percentage points was driven by the greater volumes of
England associated product which carry a lower margin than the replica kits.
Selling & distribution expenses were £3.6m higher than H1 2005 due to marketing
expenditure connected with both the World Cup and investment in new ranges. Of
the expected annual marketing expenditure for 2006, 80% has been incurred in the
first half of the year.

The £24.5m compensation due from Chelsea FC under the 2005 settlement agreement
has been paid in full. This was paid in two instalments, £21m before 2nd July
2006 and £3.5m on 4th July, the latter in H2 and so showing as a receivable in
these accounts. The Group is debt free at the half year.

The Board has declared an interim dividend of 1.76p per share (H1 2005: 1.6p),
payable on 24th November 2006 to shareholders on the register on 3rd November
2006. The ex-dividend date will be 1st November 2006. Under International
Accounting Standards, the interim dividend is not shown in these accounts, but
in the period when paid.

Adjusted earnings per share was 8.5p for the period compared to 5.8p for 2005.


Operational Review

Turnover of licensed apparel, specifically that of national team kits, occurs
mostly in the first half of tournament years. Comparison with the previous half
year, which was a non-tournament year (in which licensed sales are more evenly
distributed throughout the year), has to be seen in that context. The 120.9%
increase in TWE of licensed apparel is reflective of this tournament year
effect. Comparing H1 2006 to H1 2004, which was the last tournament year, shows
an increase of 30.9%. The prime driver of the increase in licensed apparel is
the sales of England kits and associated products, with the England away jersey
being the best selling jersey of all time. In addition TWE has increased through
license revenues from the 3 Lions range sold through non-sports trade retail in
the UK.

TWE of branded apparel, representing 28.4% of total TWE, increased by 5.8% over
H1 2005. This increase was driven by licensee sales, which grew by 10.7% and was
offset by a reduction in buy/sell turnover in the UK and USA. TWE of branded
apparel in the UK in the first half was to some extent substituted by sales of
licensed apparel, and is expected to show growth for the full year.

Footwear TWE, representing 15.7% of total TWE, was £39.0m, a decline of 11.9%
due to reduced sales in the USA. Growth in Footwear TWE from international
licensees was 5.6%. TWE of equipment and other sales increased by 106.3% and was
driven by a World Cup ball promotional event in Germany. Underlying equipment
growth excluding this promotion was 18.2%.

The sources of the growth in TWE were also broad-based, with licensee TWE
increasing by 26.9% on H1 2005 and every geographical region showing growth: the
UK increased by 78.2%, Continental Europe by 31.1%, Americas and USA by 7.9% and
Asia Pacific by 16.9%. Asia Pacific growth was impacted by the termination of
the Korean licensee. Excluding Korea, Asia Pacific growth was 25.9% with the key
market China growing by 61.5%.

The business in the USA has not performed in line with expectations this year
largely as a result of reduced footwear license revenues from Foot Locker.
Management's decision to focus on the development of a broader credible range in
line with the Group's newly defined global footwear strategy has delayed
potential revenues in the current year. The new management team announced
earlier in the year has had a number of early successes. The buy/sell soccer
speciality business has increased by 32.5% from a small base and is establishing
the brand in the core soccer segment. In addition a 15 year distribution
agreement was signed in July with Dick's Sporting Goods Inc, one of the largest
sporting goods retailers in the USA with 255 stores. It is firmly believed that
this will drive significant sales of Umbro performance and branded products in
the influential "big box" distribution channel.

Gross margins were 54.4% (H1 2005: 55.7% and full year 2005: 54.4%) and
benefited from more favourable exchange rates, which contributed an extra 1.5%
points over last year. However, as expected, the greatly increased volumes of
England associated products sold this year have reduced the margin such that
there was a net 1.3% point decrease over H1 2005. Whilst England associated
products command good margins, these are typically less than those of replica
kits. The increased mix of England associated products has the effect of
reducing the overall percentage margin. Retail consolidation and tough market
conditions in the UK continue to challenge the Group's ability to maintain
margins.

The Group's executive team has been strengthened with the appointment of Steve
Makin as Chief Financial Officer. Steve, who joined Umbro in July, brings with
him a wealth of experience from his career at Asda Wal-mart, and the Board
welcome him to the Group.

The Board wishes to acknowledge the contribution made by its employees and
licensee partners in the achievement of these record results.


Developing the Brand

The Group is progressing well with its strategy of developing new product ranges
to expand its distribution channels and thereby increase branded sales. Brand
marketing programmes have been initiated in the first half to support England
sales in the UK and to promote Umbro by Kim Jones and U by Umbro ranges. As a
consequence, brand marketing costs in the first half have increased by £3.1m.

Carefully selected team and player sponsorship agreements underpin the
authenticity of the brand in terms of its football credentials and the Group was
pleased to announce the signing of a sponsorship agreement with West Bromwich
Albion in March. Umbro kit is currently worn by the national teams of England,
Sweden, Norway and Republic of Ireland and by over 140 teams worldwide including
high profile clubs Olympique Lyonnais, CSKA Moscow, Everton, Glasgow Rangers,
Espanyol, Gamba Osaka and Besiktas. Leading players sponsored include the new
England captain John Terry (Chelsea and England), Michael Owen (Newcastle and
England), Deco (Barcelona and Portugal), Luis Garcia (Liverpool and Spain), Tim
Cahill (Everton and Australia), and David James (Portsmouth and England).

The ranges developed in conjunction with leading designers Kim Jones and Philip
Treacy are continuing to give the brand exposure to non-sports retail and to
change brand perception. The ranges have been augmented by the U by Umbro
collection, which will commence introductory sales in Q4 2006 in advance of a
more significant offering to retail for the Spring/Summer 2007 period. Whilst
feedback from trade buyers is positive, it is too early a stage for these ranges
to yet make an impact on branded sales.

Umbro product continues to remain at the forefront of technical development with
exciting innovations. Evolution X products represent the pinnacle of performance
branded products and have sold very successfully. A new "SX" product range for
2007 will maintain the cutting edge of the brand in the football performance
segment.


Finance

Cash inflow from operations was £28.2m (H1 2005: outflow £5.3m). Cash inflow was
boosted by receipt of the Chelsea compensation of £21m and by the fact that £16m
of sports marketing royalties charged in the period is not contractually due for
payment until later in the year. Offsetting this is the increase of receivables
(excluding the Chelsea £21m) of £29m due to high sales in May and June, which
are scheduled for settlement in quarter three.

Consequently net debt at the start of the year of £16.1m was converted to net
cash of £1.0m by the half year.

The Group's bank facilities were amended in August to a simplified structure of
a £30m revolving credit facility and £20m overdraft allowing the loans and cash
balances to be offset.


Outlook

The performance in the first half of the year has been in line with the Board's
expectations. The combination of the World Cup and increased brand marketing
activity has given the brand unparalleled global exposure. The focus continues
to be: the development of innovative technical performance product; enhancing
the brand image through the development of lifestyle ranges; and executing
growth strategies in the key markets of China and USA. The Board remains
confident about a satisfactory outcome for the year and that the opportunities
for the brand will continue to enhance shareholder value.



Nigel Doughty           Peter McGuigan
Chairman                Chief Executive Officer




Income Statements
for the six months to 2 July 2006

                            6 months to                             6 months to                            12 months
                            2 July 2006                                  3 July                                to 31
                            (unaudited)                                    2005                             December
                                                                    (unaudited)                                 2005
                                        Non-exceptional Exceptional       Total Non-exceptional Exceptional    Total
                                                              items                                   items
                                                           (Note 4)                                (Note 4)
                       Note       £'000           £'000       £'000       £'000           £'000       £'000    £'000
--------------------------------------------------------------------------------------------------------------------
Total wholesale         2       249,322         175,376           -     175,376         351,903           -  351,903
equivalent
--------------------------------------------------------------------------------------------------------------------

Turnover                2       108,712          64,651           -      64,651         122,990           -  122,990
Cost of sales                  (75,242)        (41,961)           -    (41,961)        (77,476)    (16,854) (94,330)
--------------------------------------------------------------------------------------------------------------------
Gross profit                     33,470          22,690           -      22,690          45,514    (16,854)   28,660

Selling and                    (12,520)         (8,908)           -     (8,908)        (17,421)           - (17,421)
distribution costs
Administration costs            (5,018)         (4,331)           -     (4,331)         (9,367)           -  (9,367)

Other operating income            2,628           2,847      25,715      28,562           5,820      25,715   31,535
--------------------------------------------------------------------------------------------------------------------
Operating profit                 18,560          12,298      25,715      38,013          24,546       8,861   33,407

Finance costs                   (1,350)           (953)       (469)     (1,422)         (1,936)       (469)  (2,405)
Finance income                       12              44           -          44             126           -      126
Share of post tax                   451               -           -           -             269           -      269
profits of associate
--------------------------------------------------------------------------------------------------------------------
Profit before tax       3        17,673          11,389      25,246      36,635          23,005       8,392   31,397

Taxation                        (5,302)         (2,979)     (7,323)    (10,302)         (7,176)     (2,267)  (9,443)
--------------------------------------------------------------------------------------------------------------------

Profit for the period            12,371           8,410      17,923      26,333          15,829       6,125   21,954
--------------------------------------------------------------------------------------------------------------------

Attributable to:
Equity holders of the            12,345                                  26,265                               21,900
company
Minority interests                   26                                      68                                   54
--------------------------------------------------------------------------------------------------------------------
                                 12,371                                  26,333                               21,954
--------------------------------------------------------------------------------------------------------------------

Basic earnings per                 8.5p                                   18.2p                                15.2p
share
Diluted earnings per    6          8.4p                                   17.9p                                14.9p
share


The results above are in respect of continuing activities.




Statements of Recognised Income and Expense
for the six months to 2 July 2006

                                                   6 months to  6 months to     12 months
                                                        2 July       3 July         to 31
                                                          2006         2005      December    
                                                   (unaudited)  (unaudited)          2005
                                                         £'000        £'000         £'000
-----------------------------------------------------------------------------------------
Profit for the period                                   12,371       26,333        21,954
Exchange difference on retranslation of net
assets in subsidiary undertakings                            3            4          (10)
Cash flow hedges:
- net fair value (loss) / gain                         (3,630)        3,480         4,931
Actuarial loss in respect of pension scheme                  -            -       (2,442)
Movement in deferred tax on pension liability                -            -           733
-----------------------------------------------------------------------------------------
Total recognised income for the year                     8,744       29,817        25,166
Adjustments arising on first time adoption of                -      (2,597)       (2,597)
IAS 32 and 39
-----------------------------------------------------------------------------------------

Total gains recognised since last financial              8,744       27,220        22,569
statements
-----------------------------------------------------------------------------------------


-----------------------------------------------------------------------------------------
Attributable to:
Minority interests                                         26            68            54
Equity shareholders                                     8,718        27,152        22,515
-----------------------------------------------------------------------------------------




Balance Sheets
as at 2 July 2006

                                Note          As at        As at             As at
                                             2 July       3 July       31 December 
                                               2006         2005              2005
                                        (unaudited)  (unaudited)
                                               £000         £000              £000
----------------------------------------------------------------------------------
Non-current assets
Property, plant, and                          2,570        2,206             2,662
equipment
Goodwill                                     73,147       70,465            72,864
Intangible assets                             5,137        1,426             5,537
Investment in associate                         720            -               269
accounted for using equity
method
Deferred tax asset                            3,143        2,114             3,061
Trade and other receivables                       -        2,155                 -
----------------------------------------------------------------------------------
                                             84,717       78,366            84,393
Current assets
Inventories                                   8,091        9,741             7,259
Trade and other receivables      7           65,064       58,846            56,843
Financial assets                 11               -          923             2,346
Cash and cash equivalents                    21,795          693             1,580
----------------------------------------------------------------------------------
                                             94,950       70,203            68,028
Current liabilities
Trade and other payables         8           64,603       29,558            41,712
Financial liabilities            9           17,158       12,991            11,316
Current tax liabilities                       5,474       10,047             4,549
----------------------------------------------------------------------------------
                                             87,235       52,596            57,577

Net current assets                            7,715       17,607            10,451

Non-current liabilities
Financial liabilities            9            4,918        7,570             6,411
Other non-current liabilities    10           2,049        3,084             7,162
Retirement benefit liability                  7,808        5,434             8,008
----------------------------------------------------------------------------------
                                             14,775       16,088            21,581
----------------------------------------------------------------------------------
Net assets                                   77,657       79,885            73,263
==================================================================================

Shareholders' equity
Equity share capital                          1,445        1,445             1,445
Share premium account                        89,220       89,216            89,216
Other reserves                             (13,037)     (10,966)          (17,581)
----------------------------------------------------------------------------------
                                             77,628       79,695            73,080
Minority interests in equity                     29          190               183
----------------------------------------------------------------------------------
Total equity                                 77,657       79,885            73,263
==================================================================================




Statement of Cash Flows
for the six months to 2 July 2006

                                            Note   6 months to 6 months to       12
                                                        2 July      3 July   months
                                                          2006        2005    to 31
                                                   (unaudited) (unaudited) December
                                                                               2005
                                                          £000        £000     £000
-----------------------------------------------------------------------------------
Cash flows from operating activities
Cash inflow / (outflow) from operations      12         28,226     (5,284)   10,212
Interest and finance costs paid                        (1,241)     (1,306)  (2,188)
Interest received                                           12          44      126
Tax paid                                               (4,377)     (1,308)  (6,161)
-----------------------------------------------------------------------------------
Net cash from operating activities                      22,620     (7,854)    1,989

Cash flows from investing activities
Acquisition of subsidiary                                (458)        (29)     (29)
Acquisition of associate undertaking                         -           -  (2,755)
Purchase of property, plant and equipment                (353)       (262)  (1,148)
Purchase of intangible assets                             (24)       (245)    (317)
Proceeds from sale of property, plant and                   51           3       23
equipment                               
-----------------------------------------------------------------------------------
Net cash used in investing activities                    (784)       (533)  (4,226)

Cash flows from financing activities
Issue of ordinary shares                                     4           -        -
Repayments of borrowings                               (1,256)     (1,255)  (7,177)
Capital element of finance lease rental                   (56)       (212)    (313)
payments
Ordinary dividends paid                                (4,625)     (4,192)  (6,504)
-----------------------------------------------------------------------------------
Net cash used in finance activities                    (5,933)     (5,659) (13,994)

Effects of exchange rate change                             11          10        3
-----------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash                15,914    (14,036) (16,228)
equivalents

Cash and cash equivalents at beginning of              (7,292)       8,936    8,936
the period                              
-----------------------------------------------------------------------------------
Cash and cash equivalents at end of the                  8,622     (5,100)  (7,292)
period                                  
===================================================================================



Notes to the accounts

     
1.   Statement of accounting policies

     a.   Basis of preparation
     
     This financial information comprises the consolidated interim balance 
     sheets as of 2 July 2006 and 3 July 2005 and related consolidated interim 
     statements of income and cash flows for the six months then ended of Umbro 
     plc (hereinafter referred to as 'financial information'). The interim 
     consolidated financial statements of the Umbro plc group for the half year 
     ended 2 July 2006 are unaudited and do not comprise statutory accounts 
     within the meaning of Section 240 of the Companies Act 1985.

     These interim financial statements have been prepared in accordance with
     International Financial Reporting Standards and IFRIC interpretations and 
     with those parts of the Companies Act 1985 applicable to companies 
     reporting under IFRS. The Group has chosen not to adopt IAS 34, 'Interim 
     financial statements', in preparing its interim statements and, therefore, 
     this interim financial information is not in compliance with IFRS2. The 
     financial statements have been prepared under the historical cost 
     convention as modified by the revaluation of financial assets and 
     liabilities held for trading. In preparing this financial information 
     management has used the principal accounting policies as set out in the 
     company/group's annual financial statements for the year ended 31 December 
     2005. A summary of the more important Group policies is set out below.

     The preparation of financial statements in conformity with generally 
     accepted accounting principles requires the use of estimates and 
     assumptions that affect the reported amounts of assets and liabilities at 
     the date of the financial statements and the reported amounts of revenues 
     and expenses during the reported period. Although these estimates are based 
     on management's best knowledge of the amount, event or actions, actual 
     results ultimately may differ from those estimates.

     Following the subsequent endorsement of the amended version of IAS 19 
     (Employee Benefits) by the EU, the reported 2005 interims have been 
     restated in these accounts to reflect the accounting change from the 
     "corridor" method for the treatment of pension scheme actuarial gains and 
     losses used in the 2005 interims. The effect of the policy change on the 
     2005 interims is to reduce the deferred tax asset by £335,000 and reduce 
     the retirement benefit liability by £1,118,000. There is no effect on the 
     Income Statement.

     The comparative figures for the financial year ended 31 December 2005 are 
     not the Group's statutory accounts for the financial year, but have been 
     extracted from the statutory accounts, which were unqualified by the 
     auditors and did not contain statements under section 237(2) or (3) of the 
     Companies Act 1985 and have been delivered to the Registrar of Companies.

     b.   Consolidation

     The consolidated accounts drawn up to 2 July include the results of Umbro 
     plc and all of its subsidiaries. Intra-group sales and profits are 
     eliminated on consolidation and all sales and profit figures relate to 
     external transactions only.

     Associate companies are accounted for using the equity method of 
     accounting. The excess of consideration over fair value of net assets 
     acquired is analysed into its identifiable components of goodwill or 
     intangible assets, which are tested for impairment annually. The share of 
     post tax profits or losses of the associate is taken to the investment in 
     associate on the balance sheet.
          
     c.   Segment reporting

     A business segment is a group of assets and operations engaged in providing
     products or services that are subject to risks and returns that are 
     different from other segments. The group has identified the principal 
     business segments as buy/sell and licensee. Those costs which cannot be 
     reasonably allocated to either segment are separated as "unallocated".

     A geographical segment is engaged in providing products or services within 
     a particular economic environment that are subject to risks and returns 
     that are different from those of segments operating in other economic 
     environments. 

     d.   Intangible fixed assets

     Goodwill and intangible assets arising on the acquisition of subsidiary
     undertakings is calculated as the excess of the fair value of the purchase
     consideration over the fair value of the separately identifiable net assets
     acquired. Fair values are attributed to the identifiable assets and 
     liabilities that existed at the date of acquisition, reflecting their 
     condition at that date. Goodwill is tested annually for impairment and 
     carried at cost less accumulated impairment losses and accumulated 
     amortisation to 1 January 2004, the effective date for adoption of IFRS. 
     Intangible assets are amortised over their estimated useful lives as 
     follows:
          Brands and similar                     5%
          Customer lists and similar            10%

     Other intangible fixed assets are stated at historical cost less 
     amortisation. Amortisation of intangible fixed assets is calculated to 
     write off the cost of the assets in equal annual instalments over their 
     estimated useful lives at the following rates:
          Computer software                     25%
     
     e.   Tangible fixed assets and depreciation

     Tangible fixed assets are stated at historical cost less depreciation.

     Depreciation of tangible fixed assets is calculated to write off the cost 
     of the assets less net realisable value in equal annual instalments over 
     their estimated useful lives at the following rates:

          Plant and machinery                   20%
          Fixtures                              10%
          Motor vehicles                        25%
          Computer and Office equipment         25%
     
     f.   Investments

     Investments are stated at cost less any provision for impairment.

     g.   Inventory

     Inventory is stated at the lower of cost and net realisable value. 
     Provision is made to reduce cost to net realisable value having regard to 
     the age, saleability and condition of inventory.

     h.   Deferred taxation

     Deferred tax is recognised on all timing differences that have originated 
     but not reversed at the balance sheet date, where transactions or events 
     that result in an obligation to pay more, or a right to pay less, tax in 
     the future have occurred at the balance sheet date. Deferred tax assets are 
     recognised only to the extent that, based on all available evidence, it is 
     considered more likely than not that there will be suitable taxable profits 
     from which the future reversal of the underlying timing differences can be 
     deducted.

     Deferred tax is measured on a non-discounted basis at the tax rates that 
     are expected to apply in the periods in which the timing differences are 
     expected to reverse, based on tax rates and laws enacted or substantively 
     enacted by the balance sheet date.
     
     i.   Foreign currency

          1. Translation of foreign subsidiaries

          Results of foreign subsidiaries are translated to Sterling using the 
          net investment method. Income statement balances are translated at the 
          average rate ruling for the year. The closing rate is used to 
          translate the balance sheet.

          Exchange differences arising from the translation of net investment in 
          overseas subsidiaries are taken directly to reserves. All other 
          translation differences are taken to the profit and loss account.

          2. Transactions in foreign currencies

          Transactions denominated in foreign currencies are translated into 
          sterling at the exchange rate ruling at the date of the transaction. 
          Monetary assets and liabilities denominated in foreign currencies 
          which are held at year-end are translated into sterling at the rate of 
          exchange ruling at the balance sheet date.

          3. Hedging activities - cash flow hedge

          The effective portion of changes in the fair value of derivatives that 
          are designated and qualify as cash flow hedges are recognised in 
          equity. The gain or loss on the ineffective part is shown in the 
          income statement. Amounts accumulated in equity are recycled into the 
          income statement in the periods when the hedged item will affect 
          income. When the hedge is used to purchase a non-financial asset, such 
          as inventory, the amounts accumulated in equity are transferred to the 
          cost of the asset.

     j.   Turnover

          1. Buy/Sell operations

          Turnover represents amounts charged to external customers after 
          deduction of returns and allowances, discounts and VAT. Turnover is 
          recognised on despatch of goods.

          2. Royalties

          Royalty income from licensee activities is included in turnover and 
          represents royalties due on sales made (or in some cases on 
          merchandise sourced from suppliers) by royalty partners.

          'Total wholesale equivalent sales' represents the Group's wholesale 
          sales (where the Group acts as principal), plus the wholesale 
          equivalent value of its licensees' sales, from which Umbro is entitled 
          to royalties (where the Group acts as agent).
     
     k.   Sports marketing costs

          1. Basic payments

          Payments under team and individual player sports marketing contracts 
          are charged to the income statement over the active life of the 
          contract.

          2. Additional payments

          Some contracts include a requirement to make additional payments where 
          wholesale sales, over defined periods, exceed specified levels. The 
          Group forecasts total sales over the defined period and charges the 
          additional royalty expense to the income statement on a pro rata 
          basis. Subsequent revisions to estimates for earlier years are charged 
          to the income statement in the current year, rather than being spread 
          prospectively. Other additional payments specified in team and 
          individual players' contracts are charged to the income statement as 
          incurred.

          3. Impairment

          All contracts are individually reviewed annually and impairment 
          charges raised as needed.
     
     l.   Leased assets

     Assets held under finance leases where substantially all the benefits and 
     risks of ownership are transferred to the Group, are capitalised as 
     tangible fixed assets in the balance sheet and are depreciated over the 
     useful economic life of the lease. The interest element of the rental 
     obligations is charged to the income statement over the period of the lease 
     and represents a constant proportion of the balance of capital repayments 
     outstanding.

     Rentals in respect of operating leases, under which substantially all the
     benefits and risks of ownership remain with the lessors, are charged to the
     income statement on a straight line basis over the period of the lease.
     
     m.   Pension costs

     The Group operates a defined benefit scheme and defined contribution 
     schemes.

     A full actuarial valuation using the projected unit method of the defined
     benefit scheme is carried out every three years with interim reviews in the
     intervening years.

     The liability recognised in the balance sheet in respect of the defined 
     benefit pension scheme is the present value of the defined benefit 
     obligation at the balance sheet date less the fair value of scheme assets. 
     The defined benefit obligation is calculated annually by independent 
     actuaries using the projected unit method. The present value of the defined 
     benefit obligation is determined by discounting the estimated future cash 
     outflows using interest rates of high-quality corporate bonds that are 
     denominated in the currency in which the benefits will be paid, and that 
     have terms to maturity approximating to the terms of the related pension 
     liability.

     Actuarial gains and losses arising from experience adjustments and changes 
     in actuarial assumptions are recognised immediately through the Statement 
     of Recognised Income and Expense, as permitted by the amended version of 
     IAS19. The accounting treatment differs to the "corridor" approach adopted 
     for the interim 2005 accounts following the subsequent endorsement of the 
     amended version of IAS 19 by the EU and the reported 2005 interims have 
     been restated in these accounts to reflect the accounting change.

     Past service costs are recognised immediately in income, unless the changes 
     to the pension plan are conditional on the employees remaining in service 
     for a specified period
     
     n.   Costs of raising debt finance

     Costs of raising debt finance are deducted from the finance raised and 
     amortised on a straight-line basis to the income statement over the period 
     over which the finance is outstanding.
     
     o.   Financial instruments
     
     The Group adopted IAS 32 and 39 from 1 January 2005. The main changes on
     adoption have been to fair value foreign exchange contracts and record 
     these on the balance sheet as financial assets or liabilities. The Group 
     has adopted hedge accounting in relation to these foreign exchange 
     contracts.

     p.   Cost of sales

     Cost of sales comprises the cost of purchasing products for the buy/sell
     operations, sports marketing costs, and design and development costs.

     q.   Share related payments

     The fair value of equity-settled share-based payments to employees is 
     determined at the date of grant and is expensed on a straight-line basis 
     over the vesting period based on the Group's estimate of shares or options 
     that will eventually vest. In the case of options granted, fair value is 
     measured by a Black-Scholes pricing model.
     
     r.   Cash equivalents

     The Group considers all highly liquid investments with original maturity 
     dates of three months or less to be cash equivalents.
     
     s.   Tax charge in interim accounts

     The tax charge is estimated on the basis of the full year rate applied to 
     the profits at the half year.
     
     t.   Exceptional items

     Exceptional items are those which are considered to be large and infrequent 
     and are therefore disclosed separately to underlying activities.


2. Segment information

Primary reporting format- business segments                 6 months to    6 months to  12 months to
                                                                 2 July         3 July   31 December
                                                                   2006           2005          2005
                                                            (unaudited)    (unaudited)
                                                                   £000           £000          £000
----------------------------------------------------------------------------------------------------
Turnover - Buy/sell operations
Licensed apparel                                                 85,246         40,258        73,978
Branded apparel                                                   4,464          7,009        11,365
----------------------------------------------------------------------------------------------------
Total apparel                                                    89,710         47,267        85,343
Footwear                                                          2,431          4,748        10,409
Equipment and other                                               2,719          1,624         3,372
----------------------------------------------------------------------------------------------------
                                                                 94,860         53,639        99,124
----------------------------------------------------------------------------------------------------

Turnover - Licensee royalty income
Licensed apparel                                                  4,295          1,733         4,455
Branded apparel                                                   5,160          4,978        10,706
----------------------------------------------------------------------------------------------------
Total apparel                                                     9,455          6,711        15,161
Footwear                                                          2,791          3,288         6,609
Equipment and other                                               1,606          1,013         2,096
----------------------------------------------------------------------------------------------------
                                                                 13,852         11,012        23,866
----------------------------------------------------------------------------------------------------
Group turnover
Licensed apparel                                                 89,541         41,991        78,433
Branded apparel                                                   9,624         11,987        22,071
----------------------------------------------------------------------------------------------------
Total apparel                                                    99,165         53,978       100,504
Footwear                                                          5,222          8,036        17,018
Equipment and other                                               4,325          2,637         5,468
----------------------------------------------------------------------------------------------------
Group turnover                                                  108,712         64,651       122,990
----------------------------------------------------------------------------------------------------
Wholesale equivalent of licensee royalty income
Licensed apparel                                                 24,519          9,441        29,809
Branded apparel                                                  66,399         59,992       122,819
----------------------------------------------------------------------------------------------------
Total apparel                                                    90,918         69,433       152,628
Footwear                                                         36,594         39,546        75,194
Equipment and other                                              26,950         12,758        24,957
----------------------------------------------------------------------------------------------------
                                                                154,462        121,737       252,779
----------------------------------------------------------------------------------------------------
Total wholesale equivalent
Licensed apparel                                                109,765         49,699       103,787
Branded apparel                                                  70,863         67,001       134,184
----------------------------------------------------------------------------------------------------
Total apparel                                                   180,628        116,700       237,971
Footwear                                                         39,025         44,294        85,603
Equipment and other                                              29,669         14,382        28,329
----------------------------------------------------------------------------------------------------
Total wholesale equivalent                                      249,322        175,376       351,903
----------------------------------------------------------------------------------------------------


Segment information
Primary reporting format- business segments
The segment results for the 6 months ended 2 July 2006
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Turnover                                                   94,860      13,852             -      108,712
Operating profit                                           11,423       7,302         (165)       18,560
Share of post tax profits of associate                          -           -           451          451
Finance costs                                                   -           -       (1,338)      (1,338)
--------------------------------------------------------------------------------------------------------
Profit before tax                                          11,423       7,302       (1,052)       17,673
Tax                                                             -           -       (5,302)      (5,302)
--------------------------------------------------------------------------------------------------------
Profit/(loss) for the period                               11,423       7,302       (6,354)       12,371
--------------------------------------------------------------------------------------------------------


The segment results for the 6 months ended 3 July 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Turnover                                                   53,639      11,012             -       64,651
Operating profit                                            5,408       6,890        25,715       38,013
Finance costs                                                   -           -       (1,378)      (1,378)
--------------------------------------------------------------------------------------------------------
Profit before tax                                           5,408       6,890        24,337       36,635
Tax                                                             -           -      (10,302)     (10,302)
--------------------------------------------------------------------------------------------------------
Profit for the period                                       5,408       6,890        14,035       26,333
--------------------------------------------------------------------------------------------------------


The segment results for the 12 months ended 31 December 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Turnover                                                   99,124      23,866             -      122,990
Operating profit                                            7,050      17,083         9,274       33,407
Finance costs                                                   -           -       (2,279)      (2,279)
Share of post tax profits of associate                          -           -           269          269
--------------------------------------------------------------------------------------------------------
Profit before tax                                           7,050      17,083         7,264       31,397
Tax                                                             -           -       (9,443)      (9,443)
--------------------------------------------------------------------------------------------------------
Profit/(loss) for the period                                7,050      17,083       (2,179)       21,954
--------------------------------------------------------------------------------------------------------


Segment information
Primary reporting format- business segments
Other non-cash segment items included in the income
statement for the 6 months ended 2 July 2006
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Depreciation                                                  421           -             -          421
Amortisation of intangible assets                             259           -           165          424
Value of employee services - share options                    338         113             -          451



Other non-cash segment items included in the income
statement for the 6 months ended 3 July 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Depreciation                                                  400           -             -          400
Amortisation of intangible assets                             266           -             -          266
Value of employee services -share options                     197          66             -          263
Exceptional items - compensation for loss of contract           -           -      (24,500)     (24,500)



Other non-cash segment items included in the income
statement for year ended 31 December 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                            £'000       £'000         £'000        £'000
--------------------------------------------------------------------------------------------------------
Depreciation                                                  794           -             -          794
Amortisation of intangible assets                             544           -            83          627
Value of employee services - share options                    448         149             -          597
Exceptional items - compensation for loss of contract           -           -      (24,500)     (24,500)
Exceptional items - NFC contract accrual                        -           -        10,000       10,000
Exceptional items - FA contract termination and renewal         -           -         4,854        4,854



Segment assets and liabilities and capital
expenditure for the 6 months ended 2 July 2006
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Assets                                                     68,362       8,348       102,957      179,667
Liabilities                                              (64,670)     (3,233)      (34,107)    (102,010)
Capital expenditure                                           377           -             -          377



Segment assets and liabilities and capital
expenditure for the 6 months ended 3 July 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                             £000        £000          £000         £000
--------------------------------------------------------------------------------------------------------
Assets                                                     43,923       5,296        99,350      148,569
Liabilities                                              (25,870)     (6,135)      (36,679)     (68,684)
Capital expenditure                                           537           -             -          537



Segment assets and liabilities and capital
expenditure for year ended 31 December 2005
                                                         Buy/sell    Licensee   Unallocated        Total
                                                            £'000       £'000         £'000        £'000
--------------------------------------------------------------------------------------------------------
Assets                                                     36,643       6,186       109,592      152,421
Liabilities                                              (44,238)     (4,636)      (30,284)     (79,158)
Capital expenditure                                         1,482           -             -        1,482
Acquisition of associated undertaking                           -           -         6,799        6,799



The business at the date of these accounts comprises two segments: buy/sell and
licensee. Items that cannot be reasonably allocated to these segments are
classified as "unallocated".

The buy/sell business is that in which the Group sells product to customers as
principal. The licensee business is that in which the Group licenses third
parties to sell product containing the Group's trademarks in return for a
royalty.

Unallocated represents exceptional items, holding company costs, interest, share
of associate's net profit, and tax in the income statement, and exceptional
items, investment in associate, loans and pension deficit in the balance sheet.



Segmental analysis
Geographical analysis
                                                              6 months to    6 months to    12 months to
                                                                   2 July         3 July     31 December
                                                                     2006           2005            2005
                                                              (unaudited)    (unaudited)
                                                                     £000           £000            £000
--------------------------------------------------------------------------------------------------------
Turnover - Buy/sell operations
United Kingdom                                                     91,554         50,181          93,230
Rest of Europe                                                      1,448          2,059           3,073
North and South America                                             1,858          1,399           2,821
--------------------------------------------------------------------------------------------------------
                                                                   94,860         53,639          99,124
--------------------------------------------------------------------------------------------------------

Turnover - Licensee royalty income
United Kingdom                                                      2,975          1,660           4,283
Rest of Europe                                                      6,736          5,695          11,384
Asia Pacific                                                        2,565          2,187           5,022
North and South America                                             1,576          1,470           3,177
--------------------------------------------------------------------------------------------------------
                                                                   13,852         11,012          23,866
--------------------------------------------------------------------------------------------------------
Group turnover
United Kingdom                                                     94,529         51,841          97,513
Rest of Europe                                                      8,184          7,754          14,457
Asia Pacific                                                        2,565          2,187           5,022
North and South America                                             3,434          2,869           5,998
--------------------------------------------------------------------------------------------------------
Group turnover                                                    108,712         64,651         122,990
--------------------------------------------------------------------------------------------------------
Wholesale equivalent of licensee royalty income
United Kingdom                                                     17,164         10,828          28,096
Rest of Europe                                                     81,838         61,457         124,667
Asia Pacific                                                       31,820         27,222          55,170
North and South America                                            23,640         22,230          44,846
--------------------------------------------------------------------------------------------------------
                                                                  154,462        121,737         252,779
--------------------------------------------------------------------------------------------------------
Total wholesale equivalent
United Kingdom                                                    108,718         61,009         121,326
Rest of Europe                                                     83,286         63,516         127,740
Asia Pacific                                                       31,820         27,222          55,170
North and South America                                            25,498         23,629          47,667
--------------------------------------------------------------------------------------------------------
Total wholesale equivalent                                        249,322        175,376         351,903
--------------------------------------------------------------------------------------------------------

Turnover and licensee royalty income is allocated based on where the customer is
located.


                                                                    As at          As at           As at
                                                                   2 July         3 July     31 December
                                                                     2006           2005            2005
                                                              (unaudited)    (unaudited)
--------------------------------------------------------------------------------------------------------                
                                                                     £000           £000            £000
Total assets
United Kingdom                                                    176,428        145,079         150,056
Asia Pacific                                                          512            513             494
North and South America                                             2,727          2,977           1,871
--------------------------------------------------------------------------------------------------------
                                                                  179,667        148,569         152,421
--------------------------------------------------------------------------------------------------------

Total assets are allocated based on where the assets are located.


                                                              6 months to    6 months to    12 months to
                                                                   2 July         3 July     31 December
                                                                     2006           2005            2005
                                                              (unaudited)    (unaudited)
                                                                     £000           £000            £000
--------------------------------------------------------------------------------------------------------
Capital expenditure
United Kingdom                                                        362            393           1,327
Asia Pacific                                                            2            116             130
North and South America                                                13             28              25
--------------------------------------------------------------------------------------------------------
                                                                      377            537           1,482
--------------------------------------------------------------------------------------------------------

Capital expenditure is allocated based on where the assets are located.


3. Profit before tax
                                                              6 months to    6 months to    12 months to
                                                                   2 July         3 July     31 December
                                                                     2006           2005            2005
                                                              (unaudited)    (unaudited)
                                                                     £000           £000            £000
--------------------------------------------------------------------------------------------------------
Profit before tax is stated after charging/(crediting):
Cost of inventories                                                43,291         23,781          45,204
Sports marketing costs (included in cost of sales)                 29,131         16,329          28,337
Design & development costs (included in cost of sales)              2,820          1,851           3,935
Staff costs                                                         6,897          5,855          13,197
Depreciation of owned property, plant and equipment                   358            252             510
Depreciation of leased property, plant and equipment                   63            148             284
Amortisation of intangible assets (included in                        259            266             544
administration)
Amortisation of intangible assets of associated
undertaking (included in administration)                              165              -              83
Profit on disposal of fixed assets                                   (40)            (1)            (11)


4. Exceptional items
                                                              6 months to    6 months to    12 months to
                                                                   2 July         3 July     31 December
                                                                     2006           2005            2005
                                                              (unaudited)    (unaudited)
                                                                     £000           £000            £000
--------------------------------------------------------------------------------------------------------
Exceptional items included under cost of sales are:
Sponsorship of National Football Centre                                 -              -          12,000
Termination and renewal of Football Association contract                -              -           4,854
--------------------------------------------------------------------------------------------------------
                                                                        -              -          16,854
--------------------------------------------------------------------------------------------------------

Exceptional items included under other income are:
Compensation for loss of Chelsea contract                               -         24,410          24,410
Reduction in Office of Fair Trading ("OFT") fine provision              -          1,305           1,305
--------------------------------------------------------------------------------------------------------
                                                                        -         25,715          25,715
--------------------------------------------------------------------------------------------------------

Exceptional items included under interest are:
--------------------------------------------------------------------------------------------------------
Interest on delayed payment of OFT fine                                 -            469             469
--------------------------------------------------------------------------------------------------------


5. Dividends
                                                              6 months to   6 months to    12 months to
                                                                   2 July        3 July     31 December
                                                                     2006          2005            2005
                                                              (unaudited)   (unaudited)
                                                                     £000          £000            £000
--------------------------------------------------------------------------------------------------------
Ordinary - Final 2004 paid: 2.9p per share                              -         4,192           4,192
Ordinary - Interim 2005 paid: 1.6p per share                            -             -           2,312
Ordinary - Final 2005 paid: 3.2p per share                          4,625             -               -
--------------------------------------------------------------------------------------------------------
                                                                    4,625         4,192           6,504
--------------------------------------------------------------------------------------------------------


6. Earnings per share

Adjusted Earnings per Share have been calculated from earnings adjusted to be
profit after tax and minority interests before dividends, adding back
exceptional costs and deducting exceptional income.

Diluted Earnings per Share take account of the potential number of shares that
may be issued under the SAYE and LTIP schemes, and the weighted average number
of such shares is added to the shares in issue.

                                                              6 months to   6 months to     12 months to
                                                                   2 July        3 July      31 December 
                                                                     2006          2005             2005
                                                              (unaudited)   (unaudited)
--------------------------------------------------------------------------------------------------------
Adjusted earnings per share (before                                  8.5p          5.8p            11.9p
exceptional items)
Adjusted diluted earnings per share                                  8.4p          5.7p            11.8p



7. Current assets - Trade and other receivables
                                                                     As at         As at           As at
                                                                    2 July        3 July     31 December
                                                                      2006          2005            2005
                                                               (unaudited)   (unaudited)
                                                                      £000          £000            £000
--------------------------------------------------------------------------------------------------------
Trade receivables                                                   56,361        27,593          24,693
Other receivables                                                    3,508        25,194          25,169
Prepayments and accrued income                                       5,195         6,059           6,981
--------------------------------------------------------------------------------------------------------
                                                                    65,064        58,846          56,843
--------------------------------------------------------------------------------------------------------

The "other receivables" balance at 2 July 2006 includes £3.5m in respect of the
Chelsea compensation (3 July 2005 and 31 December 2005: £24.5m).


8. Current liabilities - Trade and other payables
                                                                    As at         As at            As at
                                                                   2 July        3 July      31 December 
                                                                     2006          2005             2005
                                                              (unaudited)   (unaudited)
                                                                     £000          £000             £000
--------------------------------------------------------------------------------------------------------
Trade payables                                                     11,630         7,297           12,478
Other tax and social security                                         291           288              317
Other payables                                                      5,966           847            2,743
Deferred income                                                     2,990         3,400            3,400
Accruals                                                           43,726        17,726           22,774
--------------------------------------------------------------------------------------------------------
                                                                   64,603        29,558           41,712
--------------------------------------------------------------------------------------------------------


9. Financial liabilities
                                                                     As at         As at           As at
                                                                    2 July        3 July     31 December
                                                                      2006          2005            2005
                                                               (unaudited)   (unaudited)
                                                                      £000          £000            £000
--------------------------------------------------------------------------------------------------------
Current borrowings:

Bank borrowings (secured):
Overdraft                                                           13,173         5,793           8,872
Term loan - amounts payable within one year                          2,868         7,177           2,510
Less: issue costs not yet amortised                                  (218)         (218)           (218)
Obligations under finance leases                                        84           239             152
--------------------------------------------------------------------------------------------------------
                                                                    15,907        12,991          11,316
Financial Instruments (see note 11)                                  1,251             -               -
--------------------------------------------------------------------------------------------------------
                                                                    17,158        12,991          11,316
--------------------------------------------------------------------------------------------------------

Non-current borrowings:

Bank borrowings (secured):
Term loan - amounts payable in more than one year                    5,199         8,067           6,813
Less: issue costs not yet amortised                                  (327)         (545)           (436)
Obligations under finance leases                                        46            48              34
--------------------------------------------------------------------------------------------------------
                                                                     4,918         7,570           6,411
--------------------------------------------------------------------------------------------------------


10. Other non-current liabilities
                                                                     As at         As at           As at
                                                                    2 July        3 July     31 December
                                                                      2006          2005            2005
                                                               (unaudited)   (unaudited)
                                                                      £000          £000            £000
--------------------------------------------------------------------------------------------------------
Other payables                                                       2,049           349           6,266
Deferred income                                                          -         2,735             896
--------------------------------------------------------------------------------------------------------
                                                                     2,049         3,084           7,162
--------------------------------------------------------------------------------------------------------


11. Financial instruments
                                                                     As at         As at           As at
                                                                    2 July        3 July     31 December
                                                                      2006          2005            2005
                                                               (unaudited)   (unaudited)
                                                                      £000          £000            £000
--------------------------------------------------------------------------------------------------------
Forward foreign exchange contracts -asset                                -           923           2,346
Forward foreign exchange contracts -liability (see note 9)         (1,251)             -               -


The Group enters into forward foreign currency contracts. The purpose of such
transactions is to manage cash flow currency risks associated with:
     
a.   Stock purchases denominated in foreign currency; and
b.   Royalty receipts denominated in foreign currency.

It is, and has been through the period under review, the Group's policy that no
trading in financial instruments shall be undertaken.


12. Cash generated from operations

Reconciliation of net profit to net cash flow from operations

                                                               6 months to    6 months to   12 months to
                                                                    2 July         3 July    31 December
                                                                      2006           2005           2005
                                                               (unaudited)    (unaudited)
                                                                      £000           £000           £000
--------------------------------------------------------------------------------------------------------
Net profit                                                          12,371         26,333         21,954

Adjustments for:
Tax                                                                  5,302         10,302          9,443
Depreciation                                                           421            400            820
Amortisation of intangible assets                                      424            266            627
Interest income                                                       (12)           (44)          (126)
Interest expense                                                     1,350          1,422          2,405
Amortisation of share incentive schemes                                451            263            597
Transfer from hedge reserve                                           (33)           (39)           (12)
Profit on disposal of fixed assets                                    (40)            (1)           (11)
Share of associate's profit                                          (451)              -          (269)

Changes in working capital (excluding the effects of
acquisition and exchange differences on consolidation)
Increase in inventory                                                (832)        (3,008)          (526)
Increase in receivables                                            (8,221)       (35,617)       (31,459)
Increase/(decrease) in payables                                     17,496        (5,561)          6,769
--------------------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operations                           28,226        (5,284)         10,212
--------------------------------------------------------------------------------------------------------


13. Consolidated statement of changes in equity

                                             Share     Share Hedge reserve  Retained  Minority       Total
                                           capital   premium  and exchange   profits  interest      equity
                                                               differences
                                              £000      £000          £000      £000      £000        £000
----------------------------------------------------------------------------------------------------------
At 1 January 2005                            1,445    89,216          (88)  (34,101)       127      56,599
Adjustment adoption on IAS 32 & 39               -         -       (2,597)         -         -     (2,597)
Net fair value gains                             -         -         3,480         -         -       3,480
Profit for financial period                      -         -             -    26,265        68      26,333
Share options - value of employee services       -         -             -       263         -         263
Other recognised gains                           -         -             4         -         6          10
Ordinary dividends                               -         -             -   (4,192)         -     (4,192)
Acquisition of minority interest                 -         -             -         -      (11)        (11)
----------------------------------------------------------------------------------------------------------
At 3 July 2005                               1,445    89,216           799  (11,765)       190      79,885

Net fair value gains                             -         -         1,451         -         -       1,451
Profit / (loss) for financial period             -         -             -   (4,365)      (14)     (4,379)
Share options - value of employee services       -         -             -       334         -         334
Other recognised gains / (losses)                -         -          (14)         -         7         (7)
Ordinary dividends                               -         -             -   (2,312)         -     (2,312)
Actuarial losses on pension fund                 -         -             -   (2,442)         -     (2,442)
Deferred tax on pension deficit movement         -         -             -       733         -         733
----------------------------------------------------------------------------------------------------------
At 31 December 2005                          1,445    89,216         2,236  (19,817)       183      73,263


13. Consolidated statement of changes in equity (continued)

                                             Share     Share Hedge reserve  Retained  Minority       Total
                                           capital   premium  and exchange   profits  interest      equity
                                                               differences
                                              £000      £000          £000      £000      £000        £000
----------------------------------------------------------------------------------------------------------
At 1 January 2006                            1,445    89,216         2,236  (19,817)       183      73,263
Issue of new shares                              -         4             -         -         -           4
Net fair value losses                            -         -       (3,630)         -         -     (3,630)
Profit for financial period                      -         -             -    12,345        26      12,371
Share options - value of employee services       -         -             -       451         -         451
Other recognised gains / (losses)                -         -             3         -       (5)         (2)
Ordinary dividends                               -         -             -   (4,625)         -     (4,625)
Acquisition of minority interest                 -         -             -         -     (175)       (175)
----------------------------------------------------------------------------------------------------------
At 2 July 2006                               1,445    89,220       (1,391)  (11,646)        29      77,657
----------------------------------------------------------------------------------------------------------



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