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Havelock Europa PLC (HVE)

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Tuesday 03 April, 2007

Havelock Europa PLC

Final Results

Havelock Europa PLC
03 April 2007


Tuesday 3 April 2007

                 HAVELOCK EUROPA PLC - PRELIMINARY ANNOUNCEMENT

2006 was a year of significant progress for Havelock, the Education, Financial
and Retail Interiors and Point of Sale Display Group. Underlying pre-tax profit
increased substantially for a fifth successive year, with all three Divisions
performing strongly.

Financial Highlights

   •Revenue increased by 14% to £114.5m.
   •Underlying+ pre-tax profit increased by 16% to £5.8m and underlying+
    fully diluted earnings per share by 13% to 11.6p.
   •Reported pre-tax profit amounted to £5.4m against £6.0m in 2005 and
    reported fully diluted earnings per share were 10.6p against 12.1p. The 2005
    figures benefited from the inclusion of a non-recurring pension credit of
    £1.4m.
   •With the final dividend per share up 11% to 3.0p, the total dividend per
    share is increased by 11% to 4.0p and is covered 2.9 times by underlying+
    EPS.

+ Underlying excludes amortisation of intangibles (other than IT software) of
  £0.4m (2005: £0.4m) and a non-recurring pension credit of nil (2005: £1.4m).


Commercial Highlights

   •The Education businesses produced an excellent performance, with revenue
    up 35% to £39.6m and a marked improvement on the previous year's result,
    reflecting the resumption in the growth of Government education spend,
    particularly in the English and Scottish PFI markets. Further progress is
    anticipated in 2007, with letters of intent or orders having already been
    received from 14 of the 15 PFI/PPP projects with which the Group expects to
    be involved during 2007.
   •The Retail Interiors Division's revenue was up 4% to £47.5m, with
    significantly increased activity in the Financial Services market. Prospects
    for 2007 are encouraging, with the order book at the end of the first
    quarter at a level sizeably up on 2006.
   •Within the Point of Sale Display Division, the second half of the year
    proved extremely active in respect of the levels of business transacted for
    both existing and new customers, enabling the Division to increase revenues
    by 10% to £27.4m and improve its contribution. Orders for the print business
    for the first quarter were in line with 2006.

Share Placing and Acquisition of Stage Systems Limited

   •In February 2007, the Group raised £4.9m by placing new shares. This was
    applied in part to fund the acquisition of Stage Systems Limited, an
    educational furniture business, for a consideration of £3.45m.

Malcolm Gourlay, Chairman, said 'Following a year of substantial growth, the
Group has made a healthy start to 2007. As always, Havelock's annual business
cycle will be heavily tilted towards the second half, when the great majority of
the Group's profit is historically earned. The Board believes that further good
progress will be made by the Group in the current year as a whole and beyond.'


Presentations:

Today, from 09:00am to 10:00am, a presentation to brokers' analysts will be held
at the offices of Bankside Consultants, 1 Frederick's Place, London EC2R 8AE.

On Wednesday 25 April 2007, there will be a lunch in London for private client
brokers. Those seeking an invitation are asked to contact Charles Ponsonby at
Bankside Consultants on charles.ponsonby@bankside.com / 020-7367 8851.



Enquiries:

Havelock Europa PLC                                               01383-820 044
 Hew Balfour (Chief Executive)                                    07801-683 851
 Grant Findlay (Finance Director)                                 07768-745 960

Bankside Consultants Limited
 Charles Ponsonby                                                 020-7367 8851


                            PRELIMINARY STATEMENT

As stated in the Pre-Close Trading Update issued in early January, 2006 was a
year of significant progress for Havelock. Underlying pre-tax profit increased
substantially for a fifth successive year, with all three Divisions performing
strongly.

FINANCIAL OVERVIEW

Revenue increased by 14% to £114.5 million (2005: £100.2 million).

Underlying pre-tax profit increased by 16% to £5.8 million (2005: £5.0 million)
after adding back £0.4 million (2005: £0.4 million) in respect of the
amortisation of intangibles (other than IT software) and subtracting in, 2005,
£1.4 million (2006: nil) in respect of a non-recurring pension credit.
Underlying fully diluted earnings per share were 11.6p (2005: 10.3p), up 13%.
Reported pre-tax profit was £5.4 million (2005: £6.0 million), the comparable
figure for 2005 being boosted by the non-recurring pension credit of £1.4
million, and reported fully diluted earnings per share amounted to 10.6p (2005:
12.1p).

Net debt reduced to £13.5 million (2005: £14.1 million). Net financing costs
reduced to £1.6 million (2005: £1.8 million) and were covered 4.7 times (2005:
3.6 times) by underlying operating profit. During the year, Havelock's remaining
17% stake in its overseas associate, Havelock AHI, based in Bahrain, was sold,
yielding net proceeds of £0.9 million.

In February 2007, the Group's financial position was further enhanced by the
raising of £4.9 million through the issue of 3.2 million new ordinary shares.
This was applied in part to fund the acquisition of Stage Systems Limited, an
educational furniture business, for a total consideration of £3.45 million.

DIVIDENDS

The Board is proposing a final dividend per share of 3.0p (2005: 2.7p), up 11%.
If approved at the Annual General Meeting on 26 June 2007, the dividend will be
paid on 4 July 2007 to shareholders on the register at close of business on 8
June 2007.

Including the interim dividend per share of 1.0p (2005: 0.9p), paid on 27
December 2006, proposed dividends per share for the year will total 4.0p (2005:
3.6p), which is up 11% on 2005 and covered 2.9 times by underlying EPS.

TRADING OVERVIEW

Education Furniture and Supplies

The Education businesses produced an excellent performance, with revenue up 35%
to £39.6m (2005: £29.4m) and a marked improvement on the previous year's result.
With solid performances in both key markets, PFI school refurbishment and the
supply of fitted furniture and equipment direct to schools and Local Education
Authorities, this improvement reflects the resumption in the growth of
Government education spend, particularly in the English and Scottish PFI
markets.

Retail Interiors

The Retail Interiors Division's revenue was up 4% to £47.5m (2005: £45.9m).
Activity was especially buoyant in the Financial Services market, with revenue
up by 21% to £16.6m (2005: £13.7m). The Division also provided significant
management and production capacity to support the Group's activities in the
Education sector.

Over the winter, the Group commenced the move of its metal fabrication plant
from Dalgety Bay to Kirkcaldy, which will provide the Group with property
savings from the second half of 2007, whilst further enhancing the benefits
arising from the integration of the production facilities of the Education and
Retail Interiors businesses. Property-related costs of this reorganisation,
amounting to £0.4m, were provided for during the second half of 2006.

Point of Sale Display

Within the Point of Sale Display Division, the second half of the year proved
extremely active in respect of the levels of business transacted for both
existing and new customers, enabling the Division to increase revenues by 10% to
£27.4m (2005: £24.9m). This activity, coupled with the full benefits of the
integration of the Bristol and Letchworth sites, following a programme of cost
saving measures completed in August, helped improve the Division's contribution
to the Group.

STRATEGY

The Group's strategy is based on a drive to find new growth sectors and improve
shareholder value by concentrating on UK markets offering significant
opportunities for expansion. This involves a continuing interest in enlarging
the Group's position in education, healthcare and selected retail and financial
services markets, particularly those that value innovative design, quality of
performance, capacity to supply, and consistency of service.

Within the educational sector, the Group has grown particularly strongly in that
part of the market which is subject to the Private Finance Initiative/Public
Private Partnership. There is a continuing concentration on this mechanism in
the future plans of both the Scottish Executive and the Department for Education
and Skills in England through the Building Schools for the Future programme.

The improved fortunes of the Retail Interiors Division reflect the focus on
three major areas, all of which provide a high level of repeat business:
profitable and successful retailers; major high street banks', and providers of
institutional accommodation within the education, healthcare and defence
sectors. The push for improved operational efficiency through the sharing of
common equipment, production planning and logistics, coupled with low cost
country procurement, are intended to enhance the Group's competitive position
within its chosen markets.

Within Point of Sale Display, capital investment will keep the Division abreast
of digital printing technology and enlarge its capacity to deal with a trend of
rising demand for its services.


CURRENT TRADING AND PROSPECTS

The Group has made an encouraging start to the year.

Following a year of substantial organic advance, the Group plans an increase in
its capital investment programme in 2007, to a level somewhat above its annual
depreciation charge of £1.8 million, in order to meet growing demand and to
deliver further operating efficiencies at each of its three main manufacturing
sites, at Kirkcaldy, Dalgety Bay and Letchworth.

Within the Education sector, letters of intent or orders have already been
received from 14 of the 15 PFI/PPP projects with which the Group expects to be
involved during 2007. The value of enquiries in the core direct to schools
sector is running at a record level, with the average value of projects showing
a sizeable increase on previous years. Although the full impact of the Building
Schools for the Future programme in England will not be apparent until 2008,
Havelock believes that it is well placed to win a significant share of this new
market. The volume of work in the Scottish PFI sector is encouraging, with a
further three projects still to be released to the market. In the first quarter,
order intake at Teacherboards and Clean Air was well up on 2006.
The completion of the acquisition of Stage Systems took place on 12 February
2007, at which point the net cash in the business amounted to £1.0 million, a
higher than anticipated level and an effective reduction in the £3.45m
acquisition cost. Stage Systems specialises in the design and distribution of
demountable stages and postural furniture for primary and secondary schools.

In the Retail, Financial Services and Healthcare sectors, the value of the order
book at the end of the first quarter was at a level sizeably up on 2006. House
of Fraser will return as a customer in 2007, with the commencement of a major
programme for four new stores. Marks and Spencer, HBOS, The Royal Bank of
Scotland and Primark are also likely to be significant customers in the current
year.

The integration of the Group's Point of Sale print facilities at Bristol and
Letchworth is now complete and a programme of capital investment is in hand, at
Letchworth, which is expected to increase capacity significantly. This will
become operational in late June. Orders for the print business for the first
quarter were in line with 2006.

Following a year of substantial growth, the Group has made a healthy start to
2007. As always, Havelock's annual business cycle will be heavily tilted towards
the second half, when the great majority of the Group's profit is historically
earned. The Board believes that further good progress will be made by the Group
in the current year as a whole and beyond.



Malcolm Gourlay
Chairman                                                         3 April 2007





                         CONSOLIDATED INCOME STATEMENT
                      for the year ended 31 December 2006

                                                                  2006        2005
                                                                  £000        £000
                                                    Note

Revenue                                              4         114,504     100,194
Cost of sales                                                  (91,767)    (78,790)
                                                               _______     _______
Gross profit                                                    22,737      21,404
Non-recurring pension curtailment                                    -       1,389
Other administrative expenses                                  (15,868)    (15,290)
                                                               _______     _______
Operating profit                                     4           6,869       7,503

Expected return on defined benefit pension plan                  1,484       1,259
assets
Net financial expenses - on bank borrowings and                 (1,561)     (1,616)
finance leases
Interest on defined benefit pension scheme                      (1,479)     (1,411)
liabilities
                                                               _______     _______
Net financing costs                                             (1,556)     (1,768)
                                                               _______     _______

Share of profit of associates                                       24         294
Gain on sale of interest in associate                               98           -

Profit before tax and non-recurring pension                      5,435       4,640
curtailment
Non-recurring pension curtailment                                    -       1,389

Profit before tax                                                5,435       6,029

Income tax expense                                   5          (1,743)     (1,839)
                                                               _______     _______
Profit for the year (attributable to equity          4           3,692       4,190
holders of the parent)
                                                               _______     _______

Basic earnings per share                             6           10.8p       12.3p

Diluted earnings per share                           6           10.6p       12.1p



                  STATEMENTS OF RECOGNISED INCOME AND EXPENSE
                      for the year ended 31 December 2006



                                                           2006     2005
                                                           £000     £000
                                                 Note
        Exchange differences on translation of    11        (21)      63
        overseas associate
        Actuarial gain/(losses) on defined                  622   (1,039)
        benefit pension plan
        Tax on items taken directly to equity              (187)     312
        Cash flow hedges:
        Effective portion of changes in fair      11        303     (153)
        value
                                                        _______  _______
        Net expense recognised directly in                  717     (817)
        equity

        Profit for the year                               3,692    4,190
                                                        _______  _______

        Total recognised income and expense       11      4,409    3,373
        (attributable to equity holders of the
        parent)



                                 BALANCE SHEET
                             as at 31 December 2006


                                                           2006     2005
                                                           £000     £000
                                                Note
       Assets
       Non-current assets
       Property, plant and equipment                     12,321   12,902
       Intangible assets                                 12,470   12,852
       Deferred tax assets                                1,927    2,318
                                                        _______  _______
       Total non-current assets                          26,718   28,072
                                                        _______  _______
       Current assets
       Inventories                                7      11,791    8,923
       Non-current assets classified as held                348      842
       for sale
       Trade and other receivables                8      25,279   20,261
       Cash and cash equivalents                          2,080    2,089
                                                        _______  _______
       Total current assets                              39,498   32,115
                                                        _______  _______
       Total assets                               4      66,216   60,187
                                                        _______  _______
       Liabilities
       Current liabilities
       Interest-bearing loans and borrowings      9      (3,591)  (6,817)
       Derivative financial instruments                     (15)    (318)
       Income tax payable                                (1,160)    (590)
       Trade and other payables                  10     (26,603) (22,069)
                                                        _______  _______
       Total current liabilities                        (31,369) (29,794)
                                                        _______  _______
       Non-current liabilities
       Interest-bearing loans and borrowings      9     (11,964)  (9,331)
       Retirement benefit obligations                    (6,424)  (7,725)
       Deferred tax liabilities                          (1,132)  (1,072)
                                                        _______  _______
       Total non-current liabilities                    (19,520) (18,128)
                                                        _______  _______
       Total liabilities                          4     (50,889) (47,922)
                                                        _______  _______
       Net assets                                        15,327   12,265
                                                        _______  _______
       Equity
       Issued share capital                      11       3,486    3,479
       Share premium                             11       2,020    1,987
       Other reserves                            11       3,163    2,881
       Revenue reserves                          11       6,658    3,918
                                                        _______  _______
       Total equity attributable to equity               15,327   12,265
       holders of the parent
                                                        _______  _______



                              CASH FLOW STATEMENTS
                      for the year ended 31 December 2006


                                                        2006     2005
                                                        £000     £000
      Cash flows from operating activities        Note
      Profit before tax                                5,435    6,029
      Adjustments for:
      Depreciation of property, plant and              1,818    1,826
      equipment
      Amortisation of intangible assets                  466      510
      Gain on sale of property, plant and                (11)     (26)
      equipment
      Gain on sale of interest in associate              (98)
      Net financing costs                              1,556    1,768
      Share of profit of associates                      (24)    (294)
      IFRS 2 charge relating to equity settled           177       70
      plans

      Operating cash flows before changes in           9,319    9,883
      working capital and provisions

      Increase in trade and other receivables         (5,018)  (3,484)
      (Increase)/decrease in inventories              (2,868)     706
      Increase in trade and other payables             4,627    2,954
      Movement relative to defined benefit              (674)  (1,924)
      pension scheme
                                                      _______   _______
      Cash generated from operations                   5,386    8,135
                                                      _______   _______
      Interest paid                                   (1,585)  (1,768)
      Income taxes paid                                 (909)  (1,392)
                                                       _______  _______
      Net cash from operating activities               2,892    4,975
                                                       _______  _______
      Cash flows from investing activities
      Proceeds from sale of property, plant and           64       26
      equipment
      Proceeds from sale of interest in                  943        -
      associate
      Acquisition of property, plant and              (1,105)  (1,041)
      equipment
      Acquisition of intangible assets                   (84)    (125)
      Acquisition of subsidiaries, net of cash          (246)  (1,185)
      balances acquired
      Dividends received from associate                    -      127
                                                       _______  _______
      Net cash outflow from investing activities        (428)  (2,198)
                                                       _______  _______
      Cash flows from financing activities
      Proceeds from the issue of share capital            40      228
      Increase in bank loans                             782    1,244
      Movements in relation to purchase of own           (99)    (374)
      shares
      Repayment of loan notes                           (532)       -
      Repayment of bank borrowings                    (1,250)  (1,250)
      Repayment of finance lease liabilities            ( 72)     (72)
      Dividends paid                              11  (1,288)  (1,145)
                                                      _______  _______
      Net cash outflow from financing activities      (2,419)  (1,369)
                                                      _______  _______
      Net increase in cash and cash equivalents           45    1,408
      Cash and cash equivalents at 1 January           2,035      627
                                                      _______  _______
      Cash and cash equivalents at 31 December         2,080    2,035
                                                      _______  _______



                            NOTES TO THE STATEMENTS

1. The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2006 or 2005 but is derived
from the 2006 accounts. Statutory accounts for 2005 have been delivered to the
Registrar of Companies and those for 2006 will be delivered in due course. The
auditors have reported on those accounts; their reports (i) were unqualified,
(ii) did not include references to any matters to which the auditors drew
attention by way of emphasis without qualifying their reports and (iii) did not
contain statements under section 237(2) or (3) of the Companies Act 1985

2. Basis of consolidation

The consolidated financial statements comprise Havelock Europa PLC and its
subsidiaries, together with the Group's share of the results of its former
associate. The financial statements of subsidiaries are prepared to the same
reporting date using accounting policies consistent with those of the parent
company. Intra-group transactions and balances, including any unrealised gains
and losses or income and expenses arising from intra-group transactions are
eliminated in full.

3. Profit before tax
                                                Cost of      Administrative    Total
                                                 sales           costs
                                               2006  2005     2006   2005   2006   2005
                                               £000  £000     £000   £000   £000   £000
Profit before tax is stated after    Note
charging/ (crediting):

Depreciation of property, plant and           1,463   940      355    886  1,818  1,826
equipment

Amortisation of intangible assets                 -     -      466    510    466    510

Gain on sale of property, plant and               -     -      (11)   (26)   (11)   (26)
equipment

Dilapidations and non-recurring                   -     -      545    260    545    260
property costs

4. Segment reporting

Segment information is presented in respect of the Group's business segments and
is based on the Group's management and internal financial reporting structure.

Inter-segment pricing is determined on an arm's length basis.

Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items mainly comprise interest-bearing loans and borrowings,
deferred consideration payable for business combinations, income taxes and
corporate assets, liabilities and expenses.

Segment capital expenditure is the total cost incurred during the period to
acquire segment assets that are expected to be used for more than one period.

Business segments

The Group comprises the following business segments, all of which are continuing
operations:

  • Retail - design, manufacture and installation of interiors for retailers,
    financial services, hotels and healthcare premises;

  • Education - design, manufacture and installation of science laboratories,
    fitted and loose furniture, teaching aids, display boards and fume cupboards
    for the education sector;

  • Point of sale display - printing of promotional graphics and manufacture
    of display equipment for use in retail and branded goods businesses.



Business segments          Retail         Education      Point of       Elimination      Consolidated
                                                           sale
                                                          display
                        2006    2005    2006    2005    2006    2005    2006    2005     2006     2005
                        £000    £000    £000    £000    £000    £000    £000    £000     £000     £000

Revenue from          47,507  45,896  39,623  29,386  27,374  24,912       -       -  114,504  100,194
external
customers

Inter-segment            368     148     167     102     573     415  (1,108)   (665)       -        -
revenue

Total revenue         47,875  46,044  39,790  29,488  27,947  25,327  (1,108)   (665) 114,504  100,194

Segment
result before
pension
credit
and                    1,124    1,476   4,154   3,235   3,806   3,549      -       -    9,084    8,260
amortisation
of
intangibles

Pension                    -    1,016       -       -       -     165      -       -        -    1,181
credit

Amortisation               -        -    (368)   (368)      -       -      -       -     (368)    (368)
of
intangibles

Segment
result after
pension
credit
and                    1,124    2,492   3,786   2,867   3,806   3,714      -       -     8,716   9,073
amortisation
of
intangibles

Unallocated                                                                                  -     208
pension
credit

Unallocated                                                                             (1,847) (1,778)
expenses

Profit from                                                                              6,869   7,503
operations
before
financing
costs

Net financing                                                                           (1,556) (1,768)
costs

Gain on sale                                                                                98       -
of interest
in associate

Share of                                                                                    24     294
profit from
associates

Income tax                                                                              (1,743) (1,839)
expense

Profit for                                                                               3,692   4,190
the year

Segment              18,184    15,953  29,528  23,081  13,233  13,508      -        -   60,945  52,542
assets

Assets                                                    348                              348     842
classified as
held for sale

Unallocated                                                                              4,923   6,803
assets

Total assets                                                                            66,216  60,187

Segment             (18,055)  (15,277)(4,122)  (3,499) (4,013) (4,938)     -        -  (26,190)(23,714)
liabilities

Unallocated                                                                            (24,699)(24,208)
liabilities

Total                                                                                  (50,889)(47,922)
liabilities

Capital                (567)     (209)  (756)    (304)   (394)   (603)    -        -    (1,717) (1,116)
expenditure

Unallocated                                                                                 (5)    (50)
capital
expenditure

Depreciation           (502)     (548)  (449)    (443)  (853)    (773)    -        - (1,804)    (1,764)

Unallocated                                                                             (14)       (62)
depreciation

Amortisation            (24)      (54)  (407)    (400)   (20)     (35)    -        -   (451)      (489)
of intangible
assets

Unallocated                                                                             (15)       (21)
amortisation
of intangible
assets




5. Income tax expense

Recognised in the income statement

                                                             2006     2005
                                                             £000     £000
Current tax expense                               Note
Current year                                              ( 1,559)  (1,028)
Adjustments for prior years                                    80        -
                                                           (1,479)  (1,028)

Deferred tax expense
Origination and reversal of temporary                        (207)    (737)
differences
Adjustments for prior years                                   (57)     (74)
                                                             (264)    (811)

Total income tax expense in the consolidated               (1,743)  (1,839)
income statement

6. Earnings per share

The calculation of basic earnings per share and underlying earnings per share at
31 December 2006 is based on the profit attributable to ordinary shareholders as
follows:


                                                  2006      2005      2006     2005
                                              Earnings  Earnings       EPS      EPS
                                                  £000      £000     pence    pence
Basic                                            3,692     4,190      10.8     12.3
Adjusted for:
Non-recurring pension curtailment gain               -    (1,389)        -     (4.0)
- tax relief thereon                                 -       417         -      1.2
Amortisation of intangibles that attract no        368       368       1.1      1.1
tax deduction
Adjusted                                         4,060     3,586      11.9     10.6
Diluted basic earnings per share                                      10.6     12.1
Diluted adjusted earnings per share                                   11.6     10.3


Amortisation of intangible assets
                                                                2006     2005
                                                                £000     £000
Total amortisation of intangible assets                          466      510
Less amortisation of computer software                           (98)    (142)
Amortisation of intangibles that attract no tax deduction        368      368

The weighted average number of shares used in each calculation is as follows:

Undiluted earnings per share

In thousands of shares                                           2006    2005

Issued ordinary shares at 1 January                            34,789  34,300
Effect of own shares held                                        (656)   (673)
Effect of shares issued in 2005                                     -     351
Effect of shares issued in 2006                                    50       -
Weighted average number of ordinary shares at 31               34,183  33,978
December

Diluted earnings per share


In thousands of shares                                           2006    2005

Weighted average number of ordinary shares at 31               34,183  33,978
December
Effect of share options on issue                                  724     713
Weighted average number of ordinary shares (diluted)           34,907  34,691
at 31 December




7. Inventories


                                                  2006     2005
                                                  £000     £000
Raw materials and consumables                    3,161    3,371
Work in progress                                 3,783    2,176
Finished goods                                   4,847    3,376
                                                11,791    8,923

8. Trade and other receivables

                                                  2006     2005
                                                  £000     £000
Trade receivables                               22,719   18,761
Other receivables                                  466      336
Prepayments                                      2,094    1,164
                                                25,279   20,261


9. Interest-bearing loans and borrowings


Current liabilities                               2006     2005
                                                  £000     £000
Bank overdraft                                       -       54
Secured bank loans                               3,021    5,705
Loan notes                                         476    1,008
Obligations under hire purchase contracts and       94       50
finance leases
                                                 3,591    6,817

Non-current liabilities                           2006     2005
                                                  £000     £000
Secured bank loans and overdraft                11,547    9,331
Obligations under hire purchase contracts and      417        -
finance leases
                                                11,964    9,331

10. Trade and other payables


                                                2006      2005
                                                £000      £000
Trade payables                                15,045    15,222
Other taxes and social security                3,981     3,441
Accruals                                       7,577     3,160
Deferred consideration relating to                 -       246
business combinations
                                              26,603    22,069


11. Capital and reserves

Reconciliation of movement in capital and reserves

                          Share    Share  Merger  Trans-  Hedging   Other Revenue   Total
                        capital  premium reserve  lation  reserve reserve reserve
                                                 reserve
                           £000     £000    £000    £000     £000    £000    £000    £000

Balance at 1 January      3,430    1,808   2,184     (42)    (165)    994   1,904  10,113
2005

Total recognised income       -        -       -      63     (153)      -   3,463   3,373
and expense for the
period

Movements relating to         -        -       -       -        -       -    (304)   (304)
share-based payments
and ESOP trust

Shares issued                49      179       -       -        -       -       -     228

Dividends to                  -        -       -       -                -  (1,145) (1,145)
shareholders

Balance at 31 December    3,479    1,987   2,184      21     (318)    994   3,918  12,265
2005

Balance at 1 January      3,479    1,987   2,184      21     (318)    994   3,918  12,265
2006

Total recognised income       -        -       -     (21)     303       -   4,127   4,409
and expense for the
period

Movements relating to         -        -       -       -        -       -     (99)    (99)
share-based payments
and ESOP trust

Shares issued                 7       33       -       -        -       -       -      40

Dividends to                  -        -       -       -                -  (1,288) (1,288)
shareholders

Balance at 31 December    3,486    2,020   2,184       -      (15)    994   6,658  15,327
2006



12. The accounts for the year ended 31 December 2006 were approved by the
Directors on 3 April 2007.




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