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Jessops plc (JSP)

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Thursday 30 November, 2006

Jessops plc

Final Results

Jessops plc
30 November 2006

30 November 2006

                                  JESSOPS PLC

                              Preliminary Results

Jessops plc, the UK's No.1 specialist photographic retailer, announces its
preliminary results for the year ended 30 September 2006.

Financial Highlights:

   •Sales up 6.9% to £350.0m (2005: £327.4m)

   •Overall like for like sales up 2.9%

   • Gross margin increased by one percentage point to 32.9% (2005: 31.9%)

   • Operating profit up 12.3% at £20.0m (2005: £17.8m)

   • Reported profit before tax of £17.0m (2005 proforma: £14.8m) and
     earnings per share of 11.0p (2005 proforma: 10.1p)

   • Proposed final dividend of 1.50p (2005: 1.40p) making a total for the
     year of 2.25p (2005: 2.10p)

   • Net debt reduced by £4.3m to £34.9m

Operational Highlights:

   • Jessops digital camera market share for the year ended 30 September 2006
     increased to 18.7% (2005: 16.8%) against a challenging market

     -   Jessops digital SLR sales grew by 60%, whilst the market grew by 34%
     -   Jessops digital compact sales declined by 1.4%, whilst the market
         declined by 2.5%

   • Relaunch of helped drive direct sales up 68.5%, which in
     the last quarter represented c. 10% of total sales

   • New digital Spacemix format rolled-out to 200 stores in the year, giving
     Jessops over 1,200 digital printing kiosks - more than any other retailer

   • Digital printing sales up 36% by value, with a new high of 3 million
     digital prints per week

   • Jessops Picture House (the online photo printing service) is making
     encouraging progress since its launch in August and has already attracted
     over 300,000 customer registrations

   • 15 new stores added in the year, with a further 20 acquired in October
     2006. Total number of Jessops stores as at 30 November 2006 is 315

Chris Langley, Chief Executive of Jessops plc, said:

'We have delivered profits in line with our expectations, despite volatile
market conditions throughout the year. This was achieved by focusing on margin
growth and from increased digital SLR and digital printing sales. We continue to
seek new growth opportunities and are encouraged by the initial customer
response to our new online photo printing site, Jessops Picture House.

'Total like for like sales in the eight weeks to 26 November 2006 were up 4.2%,
with a 51.4% increase in internet sales offsetting a 0.3% decline in store like
for like sales. We continue to gain market share in all our key categories and,
although Christmas is less important to Jessops than it is to many other
retailers, we are taking a cautious view of the near term outlook in our
markets, particularly by comparison with the very strong Christmas we enjoyed
last year. It remains very early in our financial year, but subject to the
market softness easing, as referred to in our 29th September 2006 trading
statement, we are well positioned to deliver in line with our expectations.'

For further information please contact:

Jessops plc                                     Tel:
Chris Langley, Chief Executive                  020 7357 9477 (today 30/11/06)
                                                0116 232 6000 (thereafter)

Hogarth Partnership                             Tel: 020 7357 9477
James Longfield/Rachel Hirst/Georgina Briscoe


I am pleased to report that Jessops has responded well to the challenges facing
all retailers in 2006. Consumer spending, and our markets in particular,
remained volatile throughout the year, yet despite this we have delivered
results in line with expectations.

This achievement demonstrates the positive way colleagues in our stores and at
our head office have responded to these testing trading conditions. The team has
focussed on driving through margin improvements, capitalising on Jessops' unique
market position and strong supplier relationships. On behalf of the Board and
shareholders, I thank them all for their continued commitment and

Sales in 2006 were 6.9% ahead of the previous year at £350 million and operating
profit increased 12.3% to £20.0 million, a creditable performance given the
volatile retail climate in 2006. The Board is recommending a final dividend of
1.50p per share, representing a total of 2.25p for the year, an increase of
7.1%. If approved, the dividend will be paid on 9th February 2007 to
shareholders on the register on 12th January 2007.

The year also saw the orderly transition of the executive management from the
team that had brought the company from private to public ownership. Chris
Langley, our Chief Operating Officer since February 2005 succeeded Derek Hine as
Chief Executive in May this year. The Board was further strengthened in July
with the appointment of Robin Whitbread as Commercial Director. Robin, formerly
a non-executive director, assumed responsibility for the day to day commercial
operations, including stores, buying, marketing and developing and printing (D&
P). Following Robin's appointment as an executive director, the Board will
appoint another non-executive Director in the near term. Ian Harris, formerly
Finance Director of the RAC and Welcome Break, succeeds John Crabtree as Finance
Director with effect from 30 November.

Despite the considerable volatility in sales over the past year, decisive action
has helped us achieve our goals in 2006. As we head towards 2007, due to the
recent softness we are experiencing, we remain cautious about the near term
outlook for our markets. We have a strong team in place and are determined to
seize the opportunities that are open to us.

Gavin Simonds



The strength of Jessops' unique market position has been demonstrated by our
results in 2006. Despite continuing challenging retail conditions, sales were up
6.9% in the year and total like for like sales were up 2.9%. Management actions
ensured that we consistently delivered against expectations.

The volatile market conditions were evident in marked trading swings throughout
the year. Against this challenging trading background, we focused our efforts on
driving gross margins, whilst at the same time investing in our stores and
online, to capture and grow our market share

Sales increases hard won

                                                    Year ended 30 Sept 06
                                                          % change
Total sales                                                + 6.9%
Store like for like sales                                  - 1.0%
Direct like for like sales*                                + 68.5%
Total like for like sales                                  + 2.9%

* Internet, mail order and tele sales

Digital camera sales were up 16.6% by value in the year, with the growth driven
by a strong performance from digital SLR cameras, where our reputation for
unbiased advice, high levels of customer service and value for money, are
particularly important to customers. Our share of the overall digital camera
market for the year ended 30 September 2006 increased to 18.7% (Sept 2005:
16.8%) Source: Gfk Marketing Services Limited.

Digital SLR sales were up 60% by value. This segment of the market was very
active in the year, with new digital SLR launches from Sony and Samsung and
upgraded SLR models from Canon and Nikon.

The market for digital compact cameras remained tough, down by 2.5% in the year.
Despite this, we managed to increase our market share in this segment through a
combination of exclusive deals and competitive pricing.

Price deflation remained a feature across the camera hardware market, although
our strength in the SLR segment of the market provided some protection. The
average price of a digital camera sold in the UK in the year to September 2006
was £161, 8.4% below last year's level. This compares to an average price of a
Jessops camera sold of £218, 5.3% below last year. Source: Gfk Marketing
Services Limited.

Sales of accessories, camcorders and other photographic hardware were flat year
on year at £137.5 million, with an 8% increase in accessories offsetting
declines in camcorders and other photographic hardware sales. This reflected our
strong focus in the year on sales of higher margin accessories. D&P sales were
2% down in the year, with a 36% increase in digital printing almost offsetting
continuing declines in analogue D&P.

Driving the business

A number of initiatives were implemented in the year, which helped us achieve a
further one percentage point increase in gross margins for the full year,
building on similar gains achieved in 2005. Looking forward, further incremental
increases in gross margin will inevitably be harder to achieve.

We continued to work closely with our suppliers in the year, maintaining our
focus on exclusive merchandise deals. In addition we achieved our aim of
increasing the proportion of sales from higher margin accessories and digital
printing. This was supported by the roll-out of our £5 million Spacemix
programme, which greatly enhances our digital printing services and strengthens
the merchandising of accessories products. The roll-out was completed in
September, ahead of plan, and we now have over 240 stores trading under the
Spacemix format.

In May we also announced that we had created a state of the art in-house digital
photo printing operation in Leicester called 'Jessops Pro Lab'. This new
facility supports the 98 Jessops stores that do not have in-store minilabs, with
a capacity to print up to 2 million prints per week. This move provides us with
increased flexibility in supporting our online and store-based photo printing
activities and provides Jessops with greater control over the cost, quality and
pricing of its D&P offer.

Developing Jessops as a true multi-channel retailer

The second half saw a number of further initiatives in support of our
multi-channel retail strategy, including the relaunch of the
website in May. Direct sales increased 68.5% in the year, and 85.6% in the
second half, accounting for circa 10% of sales in the final quarter of the year.

Successful launch of Jessops Picture House

In addition to hardware sales online, we are also aiming to take a leading
position in the nascent online printing market. In August we launched our
innovative online digital printing, photo storage and photo sharing website,
'Jessops Picture House'.

The initial customer response to Jessops Picture House has been encouraging,
with more than 300,000 customers signing up to the site in the first 13 weeks
since its launch. Over four million customer photos have already been uploaded
to the site, which offers unlimited, free storage. Whilst it remains very early
days, over one million photos were printed from the site in October, and over
50% of customers are currently opting for our innovative [email protected]'

Online photo printing remains at a very early stage in the UK, but we believe
that we are at the leading edge of this market. We will be accelerating our
investment in marketing Jessops Picture House in the coming year. This will
drive customer acquisition and also add further functionality to the site, such
as our new 1 hour [email protected]' service, which we began rolling out in November.

New store openings

Our store opening programme continued throughout the year, with an additional 15
stores added in the year, including three stores acquired from That Camera Place
Limited. Since the year end we have opened 3 further stores and also acquired 20
former Photo Factory stores in Scotland and Northern Ireland from MacKinnons of
Dyce. These acquisitions and openings take the total number of Jessops stores to
315 stores.


As we continue to develop our business, we have also maintained our investment
in our people, who epitomise the Jessops difference. I thank all colleagues, on
behalf of shareholders, for the way they responded to the challenges and
opportunities we have faced during the year. Jessops' reputation stands on the
performance of our people in our stores and throughout the company.

As evidence of this, earlier this month we were delighted once again to receive
Practical Photography Magazine and Digital Photo Magazine's award for 'Best
Photo Retailer of the Year' for 2006, the 11th year in succession that we have
received this award.

Senior management changes

In addition to the appointments of Ian Harris and Robin Whitbread to the Board,
we have also taken further steps in the year to strengthen our operational
management team.

Peter Riordan, joined Jessops in July 2005 as Property Director and was
appointed Stores Director in May 2006. Peter has worked in the retail sector for
over 30 years, gaining a vast amount of experience in both operations and store
development. He was previously Group Store Development Director at Dixons and
Operations Director at Currys.

Ralph Percival joined Jessops in March 2006 as E-Commerce and B2B Director. Over
the last seven years, he was responsible for the development and management of
numerous e-commerce solutions, including the launch of new retail websites for
Phones4u and Dixons.

Most recently we have appointed Brian Linnington as Marketing Director. Brian
will join Jessops in January 2007, from Boots, where he has held a number of
senior positions in the UK and overseas. Most recently he was Commercial
Director - and New Channels.

Market Dynamics

At the compact end of the market, where competition is at its most intense as
digital compact cameras have now become mass market products, the market growth
seen in recent years has peaked, and now appears to be in decline. Price
deflation and competition means that sales growth can only be achieved through
increases in market share. Overall the digital compact market is maturing, with
around 60% of households now owning a digital compact camera (against 83% for
analogue compact cameras). The market is moving towards a replacement cycle and
in 2007 it is expected that 62% of digital compact camera sales will be
replacement cameras (source: Infotrends).

By contrast, the digital SLR camera market is still in its growth phase, with
new manufacturers, including Panasonic, Samsung and Sony, entering the market
and existing suppliers introducing new and improved product offerings. The
household penetration of digital SLRs is around 2% compared to 10% for analogue
SLR cameras. It is this segment of the market where the benefits of our
specialist knowledge and reputation for impartial advice gives Jessops a
competitive advantage. We expect the digital SLR market to continue to show good
growth for 2007 and beyond.

In D&P, the switch from analogue to digital continues. In the coming year, we
expect to see the growth in digital printing offset the continuing decline of
analogue developing and for the photo printing market as a whole to return to
growth. We are well placed to benefit from this trend. Our early move into
digital printing and our continuing innovation in this area, offering the full
range of online, in store and home printing solutions, has helped us secure a
significant share of the fast growing digital printing market.

Growth strategy

Our growth strategy aims to capitalise on these market trends and to use our
strong market position and reputation for impartial advice, to take advantage of
the opportunities open to us. In addition to pursuing operating efficiencies,
growth will be achieved through the maturing of recently opened stores,
continuing innovation and investment, and from targeting growth markets such as
digital SLR and digital printing.

We will continue to build the store portfolio, through a combination of
acquisitions of existing camera shops and from opening new sites, and will seek
to maximise the unique multi-channel opportunities open to us through the full
integration of our online and national store proposition.

We will also seek to exploit our expertise in running websites and fulfilment of
online sales across a broader range of consumer electronics products. To this
end, we recently launched a new website called, which offers
flat screen TVs, MP3 players, SatNav systems as well as a full range of digital
cameras, camcorders, printers and accessories.

The progress of our multi-channel strategy and our increased in-store marketing
activities, which are designed to encourage store customers to visit and use our
online services, is making it harder to distinguish like for like sales between
store and online channels. Accordingly, going forward we intend only reporting a
single like for like sales figure. This will take effect from the Christmas
trading update in January.

Outlook and current trading

We have delivered profits in line with our expectations, despite volatile market
conditions throughout the year. This was achieved by focusing on margin growth
and from increased digital SLR and digital printing sales. We continue to seek
new growth opportunities and are encouraged by the initial customer response to
our new online photo printing site, Jessops Picture House.

Total like for like sales in the eight weeks to 26 November 2006 were up 4.2%,
with a 51.4% increase in internet sales offsetting a 0.3% decline in store like
for like sales. We continue to gain market share in all our key categories and,
although Christmas is less important to Jessops than it is to many other
retailers, we are taking a cautious view of the near term outlook in our
markets, particularly by comparison with the very strong Christmas we enjoyed
last year. It remains very early in our financial year, but subject to the
market softness easing, as referred to in our 29th September 2006 trading
statement, we are well positioned to deliver in line with our expectations.

Chris Langley
Chief Executive



Jessops' turnover increased by 6.9% to £350.0 million in the year ended 30
September 2006 (2005: £327.4 million). This was principally the result of
increased demand for digital photo imaging products, in particular digital SLR
cameras, growing internet sales and new store openings, partially offset by a 1%
decline in store like for like sales**.

Jessops' store network accounted for 88.5% of the Group's turnover in 2006. The
remainder was generated through the direct consumer channel, primarily the
internet, and the business to business and wholesaling activities. Like for like
sales on the internet grew by 68.5% resulting in an overall like for like sales
increase of 2.9% for the Group.

Digital SLR sales grew 60% by value, driven by new products, lower prices, and
more manufacturers entering the market, providing the consumer with a wider
range of products at competitive price points. Digital compact sales declined by
1.4%, resulting in an overall increase in digital camera sales of 16.6%. Strong
growth was also evident in digital printing, up 36% year on year, as consumers
became more aware of the convenience, quality and competitive pricing available
in all Jessops' stores. The decline in other photographic hardware reflects
lower sales of scanners and home printers.

                                                       FY2006           FY2005
                                                    £ million        £ million

Cameras                                                 183.0            159.8
Photographic accessories                                 88.1             81.2
Developing and printing                                  29.5             30.1
Camcorders                                               29.5             31.2
Other photographic hardware                              19.9             25.1
---------------------------------                    ----------       ----------
Total turnover                                          350.0            327.4
---------------------------------                    ----------       ----------

**Like for like sales information is a comparison of stores sales in consecutive
financial years, with new stores being included in the calculation after a
trading period of at least 12 months and excluding stores closed in the relevant

Product mix and margins

Product margins vary widely within and across product categories. As a general
rule, however, accessories and digital printing enjoy higher margins than
hardware (including cameras and camcorders).

Gross margin in 2006 at 32.9% was one percentage point higher than in 2005,
reflecting a number of management initiatives implemented in the year, including
increasing sales of higher margin digital printing services and own brand

Operating expenses increased by 9.8% to £95.2 million in 2006 from £86.7 million
in 2005. This increase was principally the effect of new store openings and a
higher depreciation charge on the new IT system which was only fully operational
for part of 2005. Total staff costs have risen in line with the increased
staffing requirements of the new digital Spacemix format, the new store
expansion programme and the new in-house printing laboratory whilst decreasing
as a percentage of sales from 12.2% to 12.0%. Occupancy costs have increased
from 7.2% of sales to 7.3% as rents, rates and energy costs have continued to
rise at above the rate of inflation.

Operating profit increased by 12.3% to £20.0 million in 2006 from £17.8 million
in 2005. This increase reflected management actions to improve margins and
control costs, and the uplift in sales. The operating profit margin increased to
5.7% (2005: 5.4%).

Jessops' turnover and operating profits demonstrate a semi-annual peak in
December, as a result of the Christmas shopping season, and again in the summer
period as customers purchase cameras, memory cards and film for their summer
holidays and subsequently have their images developed. In 2006 the Christmas
peak was higher than has historically been the case, reflecting strong demand
for digital cameras. The different mix of products bought in each of the peaks
contributes to slightly higher margins in July and August as compared to
December and January.

Interest charges

Jessops' net interest payable was £2.7 million in 2006 compared to £3.6 million
paid in 2005. The reduction reflects the higher interest paid in the first month
of 2005 immediately prior to flotation.

The 2005 one-off cost relates solely to the write off of the unamortised
deferred finance costs which arose following the repayment of the existing loan
notes and bank loans post flotation.


The tax charge for the year amounted to £5.7 million (2005: £3.6 million) on
profit before tax of £17.0 million (2005: £9.9 million.) The effective rate of
tax for 2006 is 33.8% (2005: 36.7%).

Profit for the financial period

Jessops' recorded a profit after interest and tax in 2006 of £11.3 million. The
increase of £5.0 million from 2005 was principally the result of the increased
operating profit and reduced exceptional items.

Earnings per share

Basic earnings per share improved to 11.0p (2005 basic earnings per share: 6.4p;
2005 basic earnings per share before one off costs: 9.4p). The increases reflect
the increased level of profit for the financial period described above.


An interim dividend equating to 0.75p per share was paid in July 2006 in respect
of the 6 months ending March 2006. The total dividend paid in the financial year
was therefore 2.15p per share. It is envisaged that a final dividend equating to
1.50p per share, in respect of the 12 months ending September 2006 will be paid
on 9th February 2007 to shareholders on the register on 12th January 2007.

Cash flows

Cash generated by operations increased to £26.0 million in 2006 compared to
£13.4 million in 2005. The increase in 2006 was principally due to the increase
in EBITDA and net working capital held at broadly constant levels year on year.

Capital expenditure

The principal use of cash during the period has been capital expenditure
incurred in relation to the roll out of the digital Spacemix store format
(including the installation of additional digital printing kiosks), new store
openings, investment on the relaunch of website and establishing an
in-house photo-processing and printing laboratory

Financial structure and financial risk management

At 30 September 2006, Jessops' total net debt was £34.9 million (2005: £39.2

The Group has committed bank facilities comprising an amortising five year term
loan of £35 million, a £20 million revolving credit facility and a £12.5 million
overdraft facility, which together with occasional cash surpluses provide
sufficient funding for the Group's operations. In accordance with the committed
facility dated 28 October 2004, the Group repaid £2 million of term debt on 31
October 2005 and a further £3.5 million on 30 April 2006, and will continue to
pay bi-annual amounts for the remaining term of the facility. The Group had
undrawn committed facilities of £26.3 million at 30 September 2006.

The Group's bank borrowings carry a variable rate of interest linked to
prevailing LIBOR rates. From time to time the Group enters into interest rate
swaps and similar products to mitigate the risk of rises in UK interest rates.
There are no such arrangements in place at 30 September 2006.


Jessops operates a defined benefit pension scheme (The Jessop Group Limited
Pension and Life Assurance Scheme (1993)), which was closed to new members in
January 1997. The latest full actuarial valuation was carried out on 1 June 2004
and was updated for IAS19 purposes at 30 September 2006 by a qualified
independent actuary. Under the IAS19 valuation, the pension deficit decreased
from £10.2 million in 2005 to £8.3 million at the end of September 2006. The
Group is paying a monthly contribution of £130,000.

Jessops also has a defined contribution scheme ('The Jessop Group Limited Money
Purchase Pension Scheme') into which it contributes between 1% and 6% of salary
depending on the employee's age and length of service. This scheme is provided
by Norwich Union and is compliant with stakeholder requirements.

International Financial Reporting Standards

The consolidated financial statements of Jessops plc are now prepared in
accordance with International Financial Reporting Standards ('IFRS') as adopted
by the European Union and with those parts of the Companies Act 1985 applicable
to those companies reporting under IFRS. The Group had previously reported under

The date of transition to IFRS was 1 October 2004, which is the beginning of the
comparative period for the year to 30 September 2006. The results for the year
to 30 September 2005 have therefore been restated under IFRS and resulted in an
increase to operating profit of £4.0 million as follows:

                                                                         £ 000

Operating profit - UK GAAP - for the year ended 30 September 2005       13,759
------------------------------------------                              --------

Goodwill amortisation                                                    4,199
Charge relating to fair value of share based payments                     (121)
Lease incentives: change in the period over which benefit is
recognised                                                                 (45)
------------------------------------------                              --------
Total adjustments                                                        4,033
------------------------------------------                              --------

Operating profit - IFRS - for the year ended 30 September 2005          17,792
------------------------------------------                              --------

John Crabtree

Group Finance Director

Consolidated income statement

For the year ended 30 September 2006

                                                           2006           2005
                                                           £000           £000
                                                        350,044        327,381

Cost of sales                                          (234,841)      (222,884)
------------------------                               ----------      ---------

Gross profit                                            115,203        104,497

Operating expenses                                      (95,220)       (86,705)
------------------------                               ----------      ---------

EBITDA*                                                  27,120         23,424
Depreciation and amortisation                            (7,137)        (5,632)
------------------------                               ----------      ---------

Operating profit                                         19,983         17,792

Finance costs - ongoing                                  (4,034)        (4,863)
Finance costs - one-off                                       -         (3,920)
Finance income                                            1,059            874
------------------------                               ----------      ---------

Profit before taxation                                   17,008          9,883

Taxation                                                 (5,746)        (3,628)
------------------------                               ----------      ---------
Profit for the period                                                    6,255
------------------------                               ----------      ---------

Earnings per ordinary share - basic                        11.0p           6.4p
------------------------                               ----------      ---------
Earnings per ordinary share - diluted                      10.9p           6.4p
------------------------                               ----------      ---------

All activities relate to continuing operations. All profit is attributable to
equity shareholders.

* Earnings before interest, tax, depreciation and amortisation

Consolidated statement of recognised income and expense
For the year ended 30 September 2006

                                                             2006         2005
                                                             £000         £000

Actuarial gain recognised in the pension scheme             1,232          509
Deferred tax on actuarial gain in the pension scheme         (370)        (151)
Foreign currency translation differences                        2            -
----------------------------                            -----------  -----------

Net income and expense recognised directly in equity          864          358
Profit for period                                          11,262        6,255
----------------------------                            -----------  -----------
Total recognised income and expense for the period         12,126        6,613
----------------------------                            -----------  -----------

All recognised income and expense is attributable to equity shareholders.

Consolidated balance sheet
At 30 September 2006

                                                              2006        2005
                                                              £000        £000
Non current assets
Goodwill                                                    77,064      77,014
Intangible assets                                            9,107       9,393
Property, plant and equipment                               36,921      31,808
Deferred tax assets                                          2,557       3,050
-----------------------------                             ----------  ----------
                                                           125,649     121,265
-----------------------------                             ----------  ----------

Current Assets
Inventories                                                 61,853      56,429
Trade and other receivables                                 13,466      11,450
Current tax receivable                                         105           -
Cash and cash equivalents                                        -       4,809
-----------------------------                             ----------  ----------
                                                            75,424      72,688
-----------------------------                             ----------  ----------

Current liabilities
Bank overdrafts and borrowings                             (13,749)    (15,500)
Other borrowings                                            (1,291)          -
Obligations under finance leases                               (21)        (21)
Trade and other payables                                   (56,043)    (48,552)
Current tax liabilities                                          -        (423)
-----------------------------                             ----------  ----------
                                                           (71,104)    (64,496)
-----------------------------                             ----------  ----------

Net current assets                                           4,320       8,192

Non current liabilities
Borrowings                                                 (19,717)    (28,416)
Obligations under finance leases                              (100)       (121)
Retirement benefits obligations                             (8,304)    (10,166)
Deferred tax liabilities                                    (2,962)     (1,942)
-----------------------------                             ----------  ----------
                                                           (31,083)    (40,645)
-----------------------------                             ----------  ----------

Net assets                                                  98,886      88,812
-----------------------------                             ----------  ----------

Issued capital                                               2,571       2,571
Share premium                                               89,161      89,161
Retained earnings                                            7,152      (2,920)
Translation reserve                                              2           -
-----------------------------                             ----------  ----------
Total equity attributable to equity shareholders of the
parent                                                      98,886      88,812
-----------------------------                             ----------  ----------

Consolidated cash flow statement
For the year ended 30 September 2006

                                                                     2006         2005
                                                                     £000         £000

Cash flows from operating activities
Profit before taxation                                             17,008        9,883
Adjusted for:
Finance income                                                     (1,059)        (874)
Financing costs                                                     4,034        4,863
One off financing costs arising on flotation                            -        3,920
Depreciation and amortisation                                       7,137        5,632
Share-based payment expense                                           186          121
Exchange difference                                                     4            -
Loss / (profit) on disposal of property, plant and
equipment                                                               2         (227)
Pension contributions in excess of charge                            (927)        (407)
--------------------------                                      -----------  -----------
Operating cash flows before movement in working capital            26,385       22,911
Increase in stocks                                                 (5,402)     (14,001)
Increase in debtors                                                (2,016)        (910)
Increase in creditors                                               7,338        6,084
Decrease in provisions                                                  -         (664)
--------------------------                                      -----------  -----------
Cash generated by operations                                       26,305       13,420
Taxes paid                                                         (5,104)      (2,722)
Interest paid                                                      (2,433)     (15,717)
--------------------------                                      -----------  -----------
Net cash from operating activities                                 18,768       (5,019)
--------------------------                                      -----------  -----------

Cash flows from investing activities
Proceeds on disposal of property, plant and equipment                  64          828
Acquisition of property plant and equipment                       (10,610)      (7,999)
Acquisition of intangible assets                                   (1,397)      (2,828)
Acquisition of business assets                                        (97)           -
--------------------------                                      -----------  -----------
Net cash from investing activities                                (12,040)      (9,999)
--------------------------                                      -----------  -----------

Cash flows from financing activities
Proceeds from the issue of share capital                                -       90,743
Proceeds from new bank loan                                             -       34,541
Repayment of borrowings                                            (5,500)    (116,958)
Repayment of finance lease liabilities                                (21)          (9)
Purchase of own shares                                                (54)           -
Dividends paid                                                     (2,211)        (720)
--------------------------                                      -----------  -----------
Net cash from financing activities                                 (7,786)       7,597
--------------------------                                      -----------  -----------

Net decrease in cash and cash equivalents                          (1,058)      (7,421)
Cash and cash equivalents at the beginning of the
period                                                             (5,191)       2,230
--------------------------                                      -----------  -----------
Cash and cash equivalents at the end of the period                 (6,249)      (5,191)
--------------------------                                      -----------  -----------


1 Basis of preparation

The financial information set out above does not constitute the Company's
statutory accounts for the years ending 30 September 2006 or 2005. Statutory
accounts for 2005, which were prepared under UK GAAP, have been delivered to the
Registrar of Companies. The auditors have reported on the 2005 accounts; their
report was unqualified and did not contain a statement under section 237(2) or
(3) of the Companies Act 1985. The statutory accounts for 2006, which are being
prepared under International Financial Reporting Standards as adopted by the EU
will be finalised on the basis of the financial information presented by the
directors in this preliminary announcement and will be delivered to the
Registrar of Companies in due course.

2 Financial income and expense

                                                        2006             2005
                                                        £000             £000
Finance costs:
Bank borrowings                                        2,591            2,803
Other interest                                            87               82
Loan notes                                                 -              688
Pension scheme liabilities                             1,356            1,290
------------------------                          ------------     ------------
Finance costs before one off costs                     4,034            4,863
One off costs arising on flotation                         -            3,920
------------------------                          ------------     ------------
Finance costs                                          4,034            8,783
------------------------                          ------------     ------------

Finance income:
Expected return on pension scheme assets              (1,059)            (874)
------------------------                          ------------     ------------
Finance income                                        (1,059)            (874)
------------------------                          ------------     ------------

Net finance costs                                      2,975            7,909
------------------------                          ------------     ------------

One-off finance costs

On flotation the existing loan notes and bank loans were repaid in full. The
unamortised finance costs of £3,920,000 relating to these borrowings were
therefore written off. There was an associated tax credit of £1,080,000.

3 Taxation

                                                          2006            2005
                                                          £000            £000
Current taxation:
UK corporation tax charge for the period                 4,949           2,393
Adjustment in respect of prior periods                    (374)              -
------------------------                            ------------    ------------
                                                         4,575           2,393
------------------------                            ------------    ------------

Deferred taxation:
Origination and reversal of timing differences             687             920
Adjustment in respect of prior periods                     484             315
------------------------                            ------------    ------------
                                                         1,171           1,235
------------------------                            ------------    ------------

                                                         5,746           3,628
------------------------                            ------------    ------------

The tax charge is reconciled with the standard rate of UK corporation tax as

                                                            2006          2005
                                                            £000          £000

Profit before tax                                         17,008         9,883
---------------------------                           ------------  ------------

UK corporation tax at standard rate of 30% (2005:          5,102         2,965
Factors affecting the charge for the period:
Non-deductible expenses                                       81           120
Ineligible depreciation                                      462           235
Impact of small companies rate                                (8)           (7)
Adjustment for under provision in prior years                109           315
------------------------                            ------------    ------------
                                                           5,746         3,628
------------------------                            ------------    ------------

4 Dividends

                                                            2006          2005
                                                            £000          £000
Equity - ordinary
Interim for the year ended 30 September 2006 - paid 0.75p    771             -
Final for the year ended 30 September 2005 - paid 1.40p    1,440             -
Interim for the year ended 30 September 2005 - paid 0.70p      -           720
---------------------------                           ------------  ------------
                                                           2,211           720
---------------------------                           ------------  ------------

The directors are proposing a final dividend of 1.50p per ordinary share for the
year ended 30 September 2006 which equates to £1,543,000. The dividend will be
paid on 9th February 2007 to shareholders on the share register at the close of
business on 12th January 2007.

5 Earnings per share

Basic and diluted earnings per share

Basic earnings per share is calculated by dividing the profit attributable to
equity shareholders by the weighted average number of ordinary shares in issue
during the period.

For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. These represent share options granted to employees where the exercise
price is less than the average market price of the Company's ordinary shares
during the period.

Weighted average numbers of shares:
                                                            2006          2005
                                                             000           000

Weighted average number of shares in issue during the 
period                                                   102,838        97,129
Weighted average number of dilutive shares                   257            76
----------------------------                          ------------  ------------
Number of shares for diluted earnings per share          103,095        97,205
----------------------------                          ------------  ------------

Adjusted earnings per share

In addition to basic earnings per ordinary share, an additional adjusted
earnings per share has been provided below which excludes one off costs (net of
tax). The earnings used for the basic and additional calculations, together with
the resultant basic earnings per share are shown below:

                                                            2006          2005
                                                            £000          £000

Profit for the period                                     11,262         6,255
One off finance cost arising on flotation                      -         3,920
Tax impact of one-off finance cost arising on               
flotation                                                      -        (1,080)
----------------------------                          ------------  ------------

Profit for the period excluding one off costs             11,262         9,095
----------------------------                          ------------  ------------

Earnings per ordinary share - basic                         11.0p          6.4p
Adjusted earnings per ordinary share - basic                11.0p          9.4p
----------------------------                          ------------  ------------
Earnings per ordinary share - diluted                       10.9p          6.4p
Adjusted earnings per ordinary share - diluted              10.9p          9.4p
----------------------------                          ------------  ------------

6 Analysis of movement in net debt

                               At 1        Cash         Other             At 30
                            October        flow      non cash         September
                               2005                   changes              2006

Cash at bank
and in hand                   4,809     (4,809)             -                -
Bank overdraft              (10,000)     3,751              -           (6,249)
----------------------       --------  ---------      ---------        ---------
                             (5,191)    (1,058)             -           (6,249)
Debt due
within one
year                         (5,500)     5,500         (7,500)          (7,500)
Debt due after
one year                    (27,125)         -          7,408          (19,717)
B preference
shares in
Camera Equity
Limited                      (1,291)         -              -           (1,291)
Hire purchase
creditor                       (142)        21              -             (121)
----------------------       --------  ---------      ---------        ---------
Net debt                    (39,249)     4,463            (92)         (34,878)
----------------------       --------  ---------      ---------        ---------

7 Capital and reserves

                                 Share      Share   Retained  Translation      Total
                               capital    premium   earnings      Reserve     Equity
                                 £'000      £'000      £'000        £'000      £'000

As at 1 October 2004               197        792     (8,934)           -     (7,945)
Profit for the period                -          -      6,255            -      6,255
Issue of shares                  2,374     88,369          -            -     90,743
Employee share option scheme         -          -        121            -        121
Actuarial gain (net of tax)          -          -        358            -        358
Dividends paid                       -          -       (720)           -       (720)
----------------               ---------  ---------  ---------    ---------  ---------
As at 30 September 2005          2,571     89,161     (2,920)           -     88,812
----------------               ---------  ---------  ---------    ---------  ---------

At 1 October 2005                2,571     89,161     (2,920)           -     88,812
Profit for the period                -          -     11,262            -     11,262
Employee share option scheme         -          -        186            -        186
Deferred tax on share
options                              -          -         27            -         27
Purchase of own shares               -          -        (54)           -        (54)
Actuarial gain (net of tax)          -          -        862            -        862
Currency translation
difference                           -          -          -            2          2
Dividends paid                       -          -     (2,211)           -     (2,211)
----------------               ---------  ---------  ---------    ---------  ---------
As at 30 September 2006          2,571     89,161      7,152            2     98,886
----------------               ---------  ---------  ---------    ---------  ---------

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

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