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Havelock Europa PLC (HVE)

  Print      Mail a friend       Annual reports

Thursday 28 August, 2008

Havelock Europa PLC

Interim Results

RNS Number : 1536C
Havelock Europa PLC
28 August 2008
 



Thursday 28 August 2008



HAVELOCK EUROPA PLC - INTERIM ANNOUNCEMENT


'continuing good prospects for the full year'


Havelock, the Educational and Retail Interiors and Point of Sale Display group, announces that it again increased its pre-tax profit in the first half, historically much the quieter of the two halves, and, in challenging times, continues to have good prospects for the full year to 31 December 2008.


Financial Highlights


  • Revenue from continuing operations increased by 8% to £53.7m

  • Profit before tax from continuing operations increased by 11% to £0.97m; and on an underlying basis, excluding amortisation of intangibles (other than IT software), it increased by 1% to £1.15m

  • Period end net debt reduced to £15.2m (2007: £16.3m)

  • The interim dividend per share is increased by 9% to 1.2p


Commercial Highlights


  • In Educational Interiors, revenue increased by 9% to £19.9m. The upfront investment in overheads in order to handle the significantly larger volume of work which will be delivered in the second half was the main contributor to a first half loss. An improved full year outcome is expected

  • Retail Interiors had a sound first half, with revenue up 1% at £21.7m and order intake continuing to run well ahead of last year. The contribution increased significantly. The Board believes that this Division will continue to perform positively in challenging conditions

  • The Point of Sale Display Division performed particularly well, with revenue from continuing operations increased by 20% to £12.1m, a record order intake and an improved contribution. The Board remains optimistic that this Division will benefit from the maintained commitment by retailers to marketing during difficult trading conditions


Malcolm Gourlay, Chairman, stated 'Notwithstanding the current climate of economic uncertainty, with solid order books in the Retail and Educational Interiors businesses and with new customers in the Point of Sale printing business, the Board continues to anticipate further progress in the full year.'


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

  

28 August 2008

HALF YEAR STATEMENT


Havelock again increased its pre-tax profit in the first half, historically much the quieter of the two halves, and, in challenging times, continues to have good prospects for the full year to 31 December 2008.  


FINANCIAL REVIEW


Group revenue from continuing operations, for the six months ended 30 June 2008, increased by 8% to £53.7 million (2007 : £49.8 million). Operating profit at £1.54 million (2007 : £1.45 million) was up 7%. Profit before tax from continuing operations was £0.97 million (2007 : £0.87 million), an increase of 11%. Fully diluted earnings per share from continuing operations were 1.7p (2007 : 1.6p), an improvement of 6%. Underlying pre-tax profit increased marginally to £1.15 million (2007 : £1.14 million), after adding back the amortisation of intangibles (other than IT software) of £0.19 million (2007 : £0.27 million) and excluding the loss from discontinued operations.


Despite higher activity levels, continuing tight working capital controls resulted in net debt declining at 30 June 2008 to £15.2 million (2007 : £16.3 million). Net debt is usually substantially higher at the half year end than at the year end and committed bank facilities provide a comfortable amount of headroom. At 31 December 2007, net debt stood at £11.4 million.

  

DIVIDEND


The Board is pleased to declare an interim dividend of 1.2p per share (2007 : 1.1p), an increase of 9%. This dividend will be paid on 29 December 2008 to shareholders on the register on 7 November 2008.


TRADING REVIEW


Educational Interiors

Revenue in the educational furniture and supplies businesses was 9% ahead of last year at £19.9 million (2007 : £18.2 million). Of this increase, £0.6 million (3%) was represented by a full period contribution from Stage Systems, which was acquired in February 2007. With order flow substantially up on last year in both the PFI and Direct to Schools sectors, overheads were increased in the first half in order to handle the significantly larger volume of work which will be delivered in the second half. This upfront investment was the main contributor to a first half loss.


Retail Interiors

The Retail Interiors Division had a sound first half, with revenue up 1% at £21.7 million (2007 : £21.5 million). Order intake has continued to run well ahead of last year. The benefits of this will fall into the second half. The Group's largest customer this year will be House of Fraser, for which two new stores were completed in the first half, in Belfast and High Wycombe. Orders from retail financial service providers and other major High Street retailers were at satisfactory levels and in line with expectations. Revenues from Marks & Spencer and Boots were similar to those for the same period last year. The contribution from this Division increased significantly as a result of the benefits of the property rationalisation carried out in 2007 at Dalgety Bay and further savings from low-cost country procurement.


Point of Sale Display

The continuing operations of the Point of Sale Display Division increased revenue by 20% to £12.1 million (2007 : £10.1 million) as a result of high levels of activity in the Division's customer base and the introduction of new customers. The additional capacity available at Letchworth, following the commissioning of a new KBA large format digital litho printing press, has been fully utilised throughout the first half. As a consequence of the volume increases and property rationalisation at Bristol, the contribution from this Division also increased significantly.


Sale of Showcard Display

As announced at the AGM in June, as part of its strategy of focusing resources on those areas of its business with higher growth potential, the Group has undertaken a review of its Showcard Display business, which manufactures acrylic display stands and formed part of the Point of Sale Display Division. This business, which generated full year revenues of £4.9 million in 2007, has suffered from declining margins and sales in recent years. The Group decided to exit this business sector and, on 8 May 2008, concluded contracts for its sale to SDI Displays Limited, which generated cash proceeds of £0.3 million and will release some £0.4m in working capital. The disposal resulted in a loss from discontinued operations of £0.3 million. 


PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties which could have a material impact on Havelock's performance over the remainder of the financial year have not changed from those set out in the Annual Report for 2007.  


PROSPECTS


Within the Educational Interiors Division, a further increase in revenue from the PFI and BSF sectors is anticipated in 2008, accompanied by a useful recovery in the Direct to Schools business. This, coupled with better operational performance, is expected to produce an improved full year outcome. The smaller education supplies businesses have all experienced strong order flow in the first half and are also expected to produce improved results.


With further new stores for House of Fraser in Bristol and White City, due to be completed in the second half, and a refurbishment programme at the Glasgow store, the level of activity in the Retail Interiors Division continues to be robust. With signed framework agreements in place with Lloyds TSB and HBOS, the outlook for activity in the retail financial services sector also remains positive. In the accommodation sector, particularly as a result of relationships with Travelodge and Center Parcs, order flow remains solid. Accordingly, the Board believes that, with a spread of business across High Street retailing, retail financial services and other interior fit-out markets, this Division will continue to perform positively in challenging conditions.


The Point of Sale Display Division performed particularly well in the more demanding economic climate being experienced in the High Street in the first half, with a record order intake. Whilst visibility of orders is inevitably limited in this business, based on the evidence of the period 1990 - 92, the Board remains optimistic that this Division will benefit from the maintained commitment by retailers to marketing during difficult trading conditions.


Notwithstanding the current climate of economic uncertainty, with solid order books in the Retail and Educational Interiors businesses, and with new customers in the Point of Sale printing business, the Board continues to anticipate further progress in the full year.






Malcolm Gourlay                                28 August 2008





CONDENSED CONSOLIDATED INCOME STATEMENT

for the 6 months ended 30 June 2008 



        



6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000

(restated - note 9)


year

ended

31.12.07

£000

(restated - note 9)

Continuing operations:

Note




Revenue


53,687

49,794

120,038

Cost of sales


(42,649)

(39,628)

(94,169)

Gross profit


11,038

10,166

25,869






Administrative expenses


   (9,495)

(8,717)  

(17,927)

Operating profit 


1,543

1,449

7,942











Expected return on defined benefit pension plan assets


940

900

1,779

Financial expenses - on bank borrowings and finance leases


(585)

(669)

(1,420)

Interest on defined benefit pension scheme liabilities    


(930)

(810)

(1,638)

Net financing costs


(575)

(579)

(1,279)






Profit before income tax


968

870

6,663






Income tax expense

4

(293)

(263)

(2,136)

Profit from continuing operations


675

607

4,527






Discontinued operation:





(Loss)/profit from discontinued operation, net of tax

9

(309)

(148)

28






Profit for the period (attributable to equity holders of the parent)


366

459

4,555






Basic earnings per share 

5

1.0p

1.2p

12.2p

Diluted earnings per share 

5

0.9p

1.2p

12.0p






Continuing operations:





Basic earnings per share 

5

1.8p

1.6p

12.1p

Diluted earnings per share 

5

1.7p

1.6p

11.9p


  CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

for the 6 months ended 30 June 2008 





6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000





Actuarial (loss)/gain on defined benefit pension plan

(2,400)

2,293

232

Tax on items taken directly to equity

672

(727)

(225)

Cash flow hedges:




  Effective portion of changes in fair value

167

173

(36)

Net income recognised directly in equity

(1,561)

1,739

(29)





Profit for the period

366

459

4,555

Total recognised income and expense for the period




(attributable to equity holders of the parent)

(1,195)

2,198

4,526







      CONDENSED CONSOLIDATED BALANCE SHEET

as at 30 June 2008 






as at

30.06.08

£000


as at

30.06.07

£000


as at

31.12.07

£000


Note




Assets





Non-current assets





Property, plant and equipment

7

13,611

14,956

14,117

Intangible assets

8

14,581

14,693

14,653

Deferred tax asset


2,089

1,200

1,417



30,281

30,849

30,187

Current assets





Inventories


15,279

14,033

11,385

Assets classified as held for sale


-

631

1,765

Trade and other receivables


25,312

22,905

25,276

Derivative financial instruments


116

158

-

Cash and cash equivalents

11

2,914

-

4,447



43,621

37,727

42,873






Total assets


73,902

68,576

73,060






Liabilities





Current liabilities





Bank overdraft

11

-

(2,163)

-

Other interest-bearing loans and borrowings

11

(1,987)

(3,595)

(1,577)

Derivative financial instruments


-

-

(51)

Income tax payable

4

(731)

(504)

(1,090)

Liabilities classified as held for sale


-

-

(409)

Trade and other payables


(25,008)

(24,713)

(25,512)



(27,726)

(30,975)

(28,639)

Non-current liabilities





Interest-bearing loans and borrowings

11

(16,144)

(10,573)

(14,286)

Retirement benefit obligations


(7,500)

(4,000)

(5,168)

Deferred tax liabilities


(1,007)

(1,132)

(1,007)



(24,651)

(15,705)

(20,461)






Total liabilities


(52,377)

(46,680)

(49,100)






Net assets


21,525

21,896

23,960






Equity





Issued share capital

10

3,853

3,851

3,853

Share premium

10

7,013

7,003

7,013

Other reserves

10

3,294

3,337

3,127

Revenue reserves

10

7,365

7,705

9,967

Total equity (attributable to equity holders of the parent)


21,525

21,896

23,960



    


  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the 6 months ended 30 June 2008 





6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000





Cash flows from operating activities




Profit for the period

366

459

4,555

Adjustments for:




Depreciation of property, plant and equipment

899

869

2,095

Amortisation of intangible assets

263

323

546

(Gain)/loss on sale of property, plant and equipment

(2)

28

(282)

Loss/(gain) on sale of asset held for resale

300

(306)

-

Provision for accelerated depreciation and rationalisation costs

-

280

-

Impairment losses on assets classified as held for sale

168

-

-

Net financing costs

575  

  579

1,279

IFRS 2 charge relating to equity settled plans

201

179

326

Income tax expense

160

200

2,148





Operating cash flows before changes in working capital




and provisions

2,930

2,611

10,667





Decrease/(increase) in trade and other receivables

1,060 

 2,847

(635)

(Increase)/decrease in inventories

(3,946) 

 (2,300)

468

Decrease in trade and other payables

   (2,332)

  (4,027)

(1,266)

Movement relative to defined benefit pension scheme

(58)

(43)

(883)

Cash (absorbed by)/generated from operations

(2,346)

(912)

8,351





Interest paid

(567)

(603)

(1,473)

Income taxes paid

(519)

(856)

(2,145)

Net cash from operating activities

(3,432)

(2,371)

4,733





Cash flows from investing activities




Proceeds from sale of property, plant and equipment and asset

 

 


 held for resale

 273

 672

699

Acquisition of property, plant and equipment

(320)

(3,568)

(4,113)

Acquisition of intangible assets

  (191)  

  (153)

(256)

Acquisition of subsidiary, net of cash balances acquired

  -

  (2,535)

(2,535)

Net cash outflow from investing activities

(238)

(5,584)

(6,205)





Cash flows from financing activities




Proceeds from the issue of share capital

-

5,098

5,110

Movements in relation to purchase of own shares

(131)

-

-

Increase in bank loans

-

-

1,031

New finance leases

2,350

-

-

Repayment of bank borrowings

-

(1,339)

(625)

Repayment of finance lease liabilities

(82)

(47)

(98)

Dividends paid

-

-

(1,579)

Net cash from financing activities

2,137

3,712

3,839





Net (decrease)/increase in cash and cash equivalents

(1,533)

(4,243)

2,367

Cash and cash equivalents at 1 January

4,447

2,080

2,080

Cash and cash equivalents at end of period

2,914

(2,163)

4,447






  NOTES TO THE FINANCIAL STATEMENTS



Note 1 Basis of preparation


These interim financial statements represent the condensed consolidated financial information of the company and its subsidiaries (together referred to as 'the Group') for the 6 months ended 30 June 2008. It has been prepared in accordance with the Disclosure and Transparency Rules of the UK's Financial Services Authority and the requirements of IAS 34 Interim Financial Reporting as adopted by the EU. The interim financial statements were approved by the Board of Directors on 28 August 2008. The interim financial statements do not constitute financial statements as defined in section 240 of the Companies Act 1985 and do not include all of the information and disclosures required for full annual financial statements. They should be read in conjunction with the Annual Report 2007 which is available on request from the company's registered office or to download from www.havelockeuropa.com


The financial information contained in this report in respect of the year ended 31 December 2007 has been extracted from the Annual Report 2007 which has been filed with the Registrar of Companies. The auditors report on these financial statements was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.


The interim financial statements for the current and comparative periods are unaudited. The auditors have carried out a review of the interim financial statements and their report is set out below.


Note 2 Significant accounting policies



The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group as disclosed in its consolidated financial statements as at and for the year ended 31 December 2007.


New standards and interpretations not yet adopted


The financial statements for the year ended 31 December 2008 are likely to be impacted by the following new standards and interpretations: IFRIC 14 'IAS 19-THE LIMIT ON A DEFINED BENEFIT ASSET, MINIMUM FUNDING REQUIREMENTS AND THEIR INTERACTION' is expected to be endorsed by the EU 2008. This Interpretation  would not be expected to have any impact on the interim results.







































3. Segmental reporting




Note


6 months

ended

30.06.08


6 months

ended

30.06.07


year

ended

31.12.07



£000

£000

£000

Total revenue from external customers





Retail


21,682

21,526

54,042

Education


19,856

18,175

43,289

Point of sale display


12,149

10,093

22,707

Total revenue from external customers


53,687

49,794

120,038

Inter-segment revenue 





Retail


318

286

839

Education


141

39

90

Point of sale display


14

13

13

Total inter-segment revenue


473

338

942

Total revenue





Retail


22,000

21,609

54,881

Education


19,997

18,417

43,379

Point of sale display


12,163

10,106

22,720

Total revenue 


54,160

50,132

120,980

Eliminate inter-segment revenue


(473)

(338)

(942)

Discontinued operations


1,001

1,835

4,917

Consolidated revenue


54,688

51,629

124,955






Segment result





Retail


1,025

610

3,644

Education


(876)

68

1,970

Point of sale display


2,497

2,130

4,673

Amortisation of intangibles (all relating to Education segment)


(186)

(268)

(435)

Total segment result from continuing operations


2,460

2,540

9,852

Unallocated expenses


(917)

(1,091)

(1,910)

Operating profit from continuing operations


1,543

1,449

7,942

Net financing costs


(575)

(579)

(1,279)

Profit before income tax


968

870

6,663

Income tax


(293)

(263)

(2,136)

Discontinued operations, net of tax


(309)

(148)

28

Profit for the period


366

459

4,555



4. Income tax


A charge for current taxation has been included at 30% (2007 half year: 30%, 2007 full year: 32%), being the effective rate likely to be applied to the result for the full year to 31 December 2008 given the reduction in the UK corporation tax rate during the period.


5. Earnings per share



The calculation of basic earnings per share and underlying earnings per share for the period ended 30 June 2008 is based on the profit attributable to ordinary shareholders as follows:





6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000


6 months

ended

30.06.08

EPS (pence)


6 months

ended

30.06.07

EPS(pence)


year

ended

31.12.07

EPS(pence)








Basic

366

459

4,555

1.0

1.2

12.2

Adjusted for:







Amortisation of intangibles that attract no tax deduction

186

268

435

0.5

0.8

1.2

Adjusted

552

727

4,990

1.5

2.0

13.4

Diluted basic earnings per share




0.9

1.2

12.0

Diluted adjusted earnings per share




1.4

1.9

13.1



Continuing operations




6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000


6 months

ended

30.06.08

EPS (pence)


6 months

ended

30.06.07

EPS(pence)


year

ended

31.12.07

EPS(pence)








Basic

675

607

4,527

1.8

1.6

12.1

Adjusted for:







Amortisation of intangibles that attract no tax deduction

186

268

435

0.5

0.8

1.2

Adjusted

861

875

4,962

2.3

2.4

13.3

Diluted basic earnings per share




1.7

1.6

11.9

Diluted adjusted earnings per share




2.2

2.3

13.0










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


Basic earnings per share




6 months

ended

30.06.08


6 months

ended

30.06.07


year

ended

31.12.07

In thousands of shares








Issued ordinary shares at 1 January

38,532

34,859

34,859

Effect of own shares held

(802)

(656)

(656)

Effect of shares issued in 2007

-

2,659

3,166





Weighted average number of ordinary shares for the period

37,730

36,862

37,369







Diluted earnings per share





6 months

ended

30.06.08


6 months

ended

30.06.07


year

ended

31.12.07

In thousands of shares




Weighted average number of ordinary shares

37,730

36,862

37,369

Effect of share options in issue

1,009

1,016

671





Weighted average number of ordinary shares (diluted) for the period

38,739

37,878

38,040






6. Equity dividends


The directors declared an interim dividend per equity share of 1.2p after the balance sheet date. In accordance with IFRS accounting requirements, this dividend has not been accrued in the interim consolidated financial statements.


Amounts recognised as distributions to equity holders in the period


6 months

ended

30.06.08


6 months

ended

30.06.07


year

ended

31.12.07


£000

£000

£000

Final dividend for the year ended 31 December 2007 of 3.4p per share

1,310

-

-

Final dividend for the year ended 31 December 2006 of 3.0p per share

-

1,155

1,155

Interim dividend for the year ended 31 December 2007 of 1.1p per share

-

-

424


1,310

1,155

1,579





  

7. Property, plant and equipment



    


6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000

Carrying amount




At beginning of the period

14,117

12,321

12,321

Acquired through business combinations

-

111

111

Additions at cost

320

3,568

4,113

Transferred from/(to) assets held for sale

73

(128)

(266)

Disposals

-

(47)

(67)

Depreciation charge for the period

(899)

(869)

(2,095)

At end of the period

13,611

14,956

14,117






Contracts placed for future capital expenditure not provided in the financial statements amount to £391,000 (30 June 2007: £361,00031 December 2007: £58,000)


8. Intangible assets




6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000

Carrying amount




At beginning of the period

14,653

12,470

12,470

Additions

191

2,546

2,736

Transferred to assets held for sale

-

-

(7)

Amortisation for the period

(263)

(323)

(546)

At end of the period

14,581

14,693

14,653








9. Discontinued operation


In May 2008, the Group sold Showcard Display, part of the Point of Sale division; Showcard Display was classified as held for sale at 31 December 2007. Comparatives have been restated accordingly.


Results of discontinued operation




6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000





Revenue

1,001

1,835

4,917

Cost of sales

(839)

(1,530)

(3,862)

Gross profit

162

305 

1,055

Administrative expenses

(304)

(516)

(1,015)

(Loss)/profit before tax

(142)

(211)

40

Income tax credit/(expense)

43

63

(12)

Profit after income tax

(99)

(148)

28

Loss on sale of discontinued operation

(300)

-

-

Income tax credit on loss on sale of discontinued operation

90

-

-

(Loss)/profit from discontinued operation

(309)

(148)

28

Discontinued operation basic earnings per share (pence)

(0.8)

(0.4)

0.1

Discontinued operation diluted earnings per share (pence)

(0.8)

(0.4)

0.1








Cash flows from discontinued operation




6 months

ended

30.06.08

£000


6 months

ended

30.06.07

£000


year

ended

31.12.07

£000

Net cash from operating activities

631

477

580

Net cash from investing activities

(8)

(19)

(19)





Net cash from discontinued operation

623

458

561



Effect of disposal on the financial position of the Group




6 months

ended

30.06.08

£000

Property, plant and equipment

(32)

Inventories

(433)

Receivables

(15)

Net identifiable assets and liabilities

(480)



Consideration received, satisfied in cash

335

Expenses of sale

(155)

Net proceeds

180

Expenses of sales accrued

91

Net cash inflow in respect of disposals

271



10Statement of changes in shareholders' equity




Share

capital

£000

Share

premium

£000

Merger

Reserve

£000

Hedging

Reserve

£000

Other

Reserve

£000

Revenue

Reserve

£000

Total

£000

Current interim period








At 1 January 2008

3,853

7,013

2,184

(51)

994

9,967

23,960

Total recognised income and expense 

-

-


167

-

(1,362)

(1,195)

Ordinary dividends

-

-

-

-

-

(1,310)

(1,310)

Movements relating to share-based payments 

and ESOP Trust

-

-

-

-

-

70

70

At 30 June 2008

3,853

7,013

2,184

116

994

7,365

21,525


Previous interim period








At 1 January 2007

3,486

2,020

2,184

(15)

994

6,658

   15,327

Total recognised income and expense 

-

-

-

174

-

2,025

2,199

Ordinary dividends

-

-

-

-

-

(1,155)

(1,155)

Issue of ordinary shares

365

4,983

-

-

-


5,348

Movements relating to share-based payments

and ESOP Trust 

-

-

-

-

-

177

177

At 30 June 2007

3,851

7,003

2,184

159

994

7,705

21,896


Prior year








At 1 January 2007

3,486

2,020

2,184

(15)

994

6,658

   15,327

Total recognised income and expense 

-

-

-

(36)

-

4,562

4,526

Ordinary dividends

-

-

-

-

-

(1,579)

(1,579)

Issue of ordinary shares

367

4,993


-

-


5,360

Movements relating to share-based payments 

and ESOP Trust

-

-

-

-

-

326

326

At 31 December 2007

3,853

7,013

2,184

(51)

994

9,967

23,960




11. Analysis of net cash and financial liabilities




as at

30.06.08

£000


as at

30.06.07

£000


as at

31.12.07

£000





Cash and cash equivalents

2,914

-

4,447

Bank overdrafts

-

(2,163)

-

Cash and cash equivalents per cash flow

2,914

(2,163) 

4,447





Secured bank loans

(1,000)

(3,021)

(1,000)

Loan notes

(476)

(476)

(476)

Finance lease obligations

(511)

(98)

(101)

Current financial liabilities (excluding bank overdrafts)

(1,987)

(3,595)

(1,577)





Secured bank loans

(13,974)

(10,207)

(13,974)

Finance lease obligations

(2,170)

(366)

(312)

Non-current financial liabilities

(16,144)

(10,573)

(14,286)





Net cash and financial liabilities

(15,217)

(16,331)

(11,416)


Finance lease obligations have increased following the sale and lease back of certain assets purchased in 2007.


12. Related parties


Transactions with key management personnel


Group key management personnel receive compensation in the form of salaries and short-term benefits, post employment benefits and share-based payments. Group key management received total compensation of £ 895,000 for the six months ended 30 June 2008 (six months ended 30 June 2007: £ 785,000)


13. Pension liabilities


During the period, the pension deficit, net of deferred tax, rose to £5.4 million (December 2007 : £3.8 million) as a result of a decline in the value of the fund's investments.  

  RESPONSIBILITY STATEMENT




We confirm that to the best of our knowledge:


  • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union; 


  • the interim management report includes a fair review of the information required by:


(a) DTR 4.2.7R of the Disclosure and Transparency Rulesbeing an indication of important events that have    occurred during the first six months of the financial year and their impact on the condensed set of financial  statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and


(b)   DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.





Hew Balfour                         Grant Findlay

Chief Executive                    Finance Director



28 August 2008




A list of current directors and their respective responsibilities can be found on page 14 of the Annual Report 2007.  INDEPENDENT REVIEW REPORT TO HAVELOCK EUROPA PLC


Introduction

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 which comprises the Condensed consolidated income statement, the Condensed consolidated statement of recognised income and expensethe Condensed consolidated balance sheet, the Condensed consolidated cash flow statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.


This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ('the DTR') of the UK's Financial Services Authority ('the UK FSA'). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.



Directors' responsibilities


The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.


As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.



Our responsibility


Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 



Scope of review


We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.



Conclusion


Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.



KPMG Audit Plc
Chartered Accountants  

191 West George Street

Glasgow

G2 2LJ
28 August 2008



This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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