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TG21 Plc (TGP)

  Print      Mail a friend       Annual reports

Wednesday 21 March, 2007

TG21 Plc

Final Results

TG21 Plc
21 March 2007

21 March 2007

                                    TG21 plc

Preliminary results announcement for the year ended 31 December 2006


   •Full year in line with City expectation
   •Net debt down to £3.3m from £3.8m
   •Overhead savings of 10% achieved in H2
   •21st Century wins new business in UK and overseas
   •Pay As You Go trials nearing completion

For Further Information:

TG21 plc                        Wilson Jennings                020 8710 4000
                                Finance Director

Hogarth Partnership Limited     Barnaby Fry/Harriet Pask       020 7357 9477

Chairman's statement

Trading Results

2006 was an extremely challenging year and, while the company achieved operating
profit in line with full year City expectation, the legacy businesses continued
to show the marked decline highlighted in my interim results statement. The
operating profit was £1.0m before amortisation. However, the impact of the
declining activities reduced turnover by £5.1m (2006: £31.2m; 2005: £36.3m)
clearly underlining our need to accelerate progress in the new market sectors
within which we now operate and which have greater potential. Gross margins were
down as a result of competitive pricing pressures in our legacy distribution
businesses and the increased proportion of low margin satellite navigation
sales. As a result of cost savings within our less profitable sectors the group
achieved breakeven at the net profit line (2005: £1.2m profit).

Group                                                        2006           2005
                                                               £m       Restated 
                                                                        (note 1)

Turnover                                                     31.2           36.3

Gross profit                                                 11.9           14.9

Gross profit percentage                                     38.1%          41.0%

Total operating expenses including share of loss of
associate but excluding amortisation and impairment 
of intangibles                                             (10.9)         (12.4)

Total operating profit before amortisation and impairment
of intangibles                                               1.0            2.5

Amortisation and impairment of intangibles                  (0.6)          (0.4)

Total operating profit                                        0.4            2.1

Net profit attributable to members of the parent
company                                                         -            1.2

EPS (basic)                                                 0.00p          1.45p

Net debt                                                      3.3            3.8

Analysis of turnover                                          2006          2005
                                                                £m            £m
Distribution                                                  18.4          21.9
Insurance Services                                             5.6           7.1
Technical Services                                             4.3           5.4
Public transport CCTV                                          2.9           1.9
Total turnover                                                31.2          36.3

In the interim statement for 2006 I indicated that as a result of the decline in
our legacy businesses and delays in the revenue streams from our new initiatives
we would need to reduce overheads and consider exit strategies from some of our
mature markets. During the second half of the year we made overhead savings of
over 10% per month overall. These savings have largely come about through
refocusing our Distribution sales channels from field sales to telesales and we
are currently enhancing our web sales capability.

During the year we have successfully integrated 21st Century's public transport
CCTV business into our operations and have undertaken two significant trials for
insurance Pay As You Go schemes.

Cash flow

Cash flow remains strong and we have reduced our borrowings during the year by a
further £0.5m so that net debt now stands at £3.3m (2005: £3.8m).

Current trading and outlook

Public transport CCTV

In 2006 21st Century supplied 465 CCTV systems for its main customer. The
current year proposed roll out schedule from this customer's UK regions is for a
further 1,000 CCTV system installations, substantially underpinning the 21st
Century business for 2007.

At the end of 2006, 21st Century won new business from another major bus
operator in the London region and also made its first export sales to bus
operators in Ireland and Scandinavia. While these are excellent opportunities,
we have come to learn that the gestation period for the development of new
business in this market can be very long. Consequently, we have to be more
prudent in our expectations for growth from these new projects in the current

In July 2006 the company acquired an option to purchase Cyberlyne Communications
Limited ('CCL'). CCL is a private company based in the North East of England.
Like 21st Century it specialises in the supply and installation of on-board CCTV
for public transport vehicles. CCL's customers include First Bus, Go-Ahead and
Translink. We feel that this company will significantly strengthen TG21's
presence in the public transport CCTV market. For the year to 31 December 2006
CCL made a net loss of £0.5m on turnover of £2.9m (£60,000, being our share of
this loss, is included within the group results for the year). We are encouraged
by the improvement in the order book that CCL has achieved in the first quarter
of the current year. However, if we were to take a controlling interest in CCL
we would need to reorganise the business to reduce its overhead base and to
integrate it within the group's operation.

Pay As You Go

In the second quarter of the current year we expect to complete pilot Pay As You
Go schemes with two major insurers. We were awarded these opportunities on the
back of the long and valued relationships which we have established in this
market through our insurance replacement services. We hope to report later in
the year on progress of these projects which offer the potential of significant
growth for our installation services.

Distribution, Technical Services and Insurance Services

Our Distribution businesses continue to suffer from the impact of competitive
pricing pressures on gross margins. We have seen a further decline in
Distribution sales and we anticipate that this trend will prevail through the
current year and beyond. We have also seen a marked slow down in mobile 'phone
hands free installations as more new vehicles are supplied with 'phone kits as
standard. We are more encouraged by the results of our insurance replacement
business which has held up a little better than expected so far in the current


My thanks and those of the board go to all our staff who have worked extremely
hard in what has been a challenging year.

Peter Ward
Chairman                          21 March 2007

Business review

The group operates in three divisions:

Public transport on-board monitoring systems

Principal activities in this division are the supply of CCTV, black box and
other monitoring systems for use on public transport vehicles.


Principal activities within Services are the replacement of stolen in-car
entertainment and navigation systems for insurance company customers and the
supply and installation of mobile 'phone hands-free kits for corporate fleets.
Following the acquisition of 21st Century, the division now also undertakes
installations of public transport monitoring systems.


Principal activities within Distribution consist of the distribution of in-car
entertainment systems, satnav/communications equipment, speed camera alerts,
audio leads and own brand automotive and motorcycle alarms to the retail trade.

Business environment

A number of the group's legacy businesses are in mature and declining markets

Within Services

   •Insurance replacement of stolen in-car entertainment systems

Improved vehicle security, reduced retail prices for in-car entertainment
systems combined with increased insurance excess payments have led to a 20% fall
in sales within this niche insurance replacement market during 2006.

Within Distribution:

   •Distribution of in-car audio, navigation and vehicle security systems

Retail prices in the in-car entertainment and navigation market have reduced
dramatically over the last few years and new vehicles increasingly come with
more accessories as standard. In addition, the introduction of portable
satellite navigation to the market has further brought down prices. While sales
volumes in the navigation market have undoubtedly increased, these sales are at
much reduced margins. Moreover, since 1998 all new vehicles sold within the UK
must have an immobiliser fitted and most also come with an alarm supplied by the
manufacturer. These factors have led to increased pricing pressure in the in-car
entertainment and navigation market and a significant decline in the volume of
product sold through the security aftermarket.

Strategy and key performance indicators

The group's immediate objective is to re-position the business into markets with
attractive and sustainable rates of growth and returns through a combination of
acquisitions and organic growth. Ideally these new markets will leverage our
three core strengths:

   •70 seat call centre
   •60 mobile installation engineers
   •Distribution network with over 1,000 active independent retail accounts

Public transport CCTV

In 2005 we took a majority stake in 21st Century Crime Prevention Services
Limited which is a leading provider and installer of high-tech CCTV systems to
the UK public transport market. 21st Century contributed £1.1m to group
operating profit before amortisation of intangibles in 2005. However, its
dependence on one major customer was highlighted when that customer reduced its
spend in 2006. This factor, when combined with increased investment in new
products, resulted in a fall in contribution of £0.7m in 2006.

During the second half of 2006 we further increased our potential presence in
this market by acquiring an option to purchase the whole of the share capital of
Cyberlyne Communications Limited which, while currently loss making, has a wider
customer base. We are looking for these two investments to give us a platform in
the UK from which we can develop a substantial export and distribution business
for public transport CCTV systems.

We aim to secure future growth from these businesses by developing other
monitoring systems for use on public transport vehicles.

Our success in this market will initially be measured by our ability to attract
new customers and to develop and launch new products. There are relatively few
major operators in the bus market and so a new customer win drawn from these
operators could lead to significant future orders. At the end of 2006 21st
Century won orders from one new major customer in the UK and two overseas
customers. In 2006 we increased our installed base of WiFi CCTV units to over
2,500 systems and we believe this makes us the UK's leading supplier and
installer of WiFi systems to the public transport market. During 2006 we also
established trials for two new products with a major UK bus operator and we hope
to build on this in the current year.

Pay As You Go

Within the Services Division we have been undertaking installations of black box
technology for two major insurance companies who are piloting Pay As You Go
insurance schemes.

Our success on this project will be measured by how well we perform in terms of
customer satisfaction: with the quality of the work undertaken by our
installation engineers and customer management by our call centre staff. Key
performance indicators are monitored by ourselves and our customers for most of
the installation work we undertake. Statistics typical of our performance show
that with one client we have improved our scores for customer satisfaction and
quality of work in 2006, so that we now rank first amongst the sub-contractors
employed by that client.

New products for Distribution

Through our Distribution division we are constantly looking for new products to
bring to market, ideally on an exclusive basis. One of the more recent products
added to our exclusive range is the Inforad speed camera warning device.

Our key measure of success in this area is the percentage increase in sales and
gross margin within Distribution year on year. Unfortunately in 2006 the fall in
sales within our legacy sectors of in-car entertainment and security was greater
than the increase attributable to new products. Consequently our Distribution
sales fell overall by 16% and our gross margin in this division fell 4 points
from 23% to 19%.

Net debt and cash generation

Since 1998 the company has financed its acquisitions through bank borrowing
serviced by cash generated from operations. At 31 December 2006 net debt was
£3.3m (2005: £3.8m).

A key objective is to manage cash flow through tight working capital control and
reduce net debt as quickly as possible. A key performance indicator is therefore
the amount of cash generated from operations. In 2006 the group generated £1.8m
from operations and £4.1m in 2005.

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are
subject to a number of risks. Risks are formally reviewed by the board and where
possible appropriate processes put in place to monitor and mitigate them. If
more than one event occurs, it is possible that the overall effect of such
events would compound the possible adverse effects on the company. The key
business risks affecting the company are set out below:

Dependence on major customers

Within the Services and CCTV divisions there is a high dependence on a
relatively small number of customers and consequently the loss of one single
customer would have a significant impact on the business. This risk is mitigated
by monitoring and managing the businesses key performance indicators which are
agreed with most of these customers. A key focus is to win new business in the
CCTV market and thereby reduce reliance on the existing customer base.


The group operates in highly competitive markets and there is significant
pressure to maintain quality of service and reduce costs. The sales team have
ready access to market pricing information so that they can respond
appropriately to price movements. Quality of service is monitored through
questionnaires given to our installation customers and through reviews of our
key performance indicators.

Decline of our legacy businesses

The business has its foundation in several markets which are now mature or in
decline. We have made significant strides is recent years to move into new
growth markets but the risk remains that reduced sales from our in-car
entertainment and security businesses will impact more quickly than the benefits
of these new markets can be exploited.

Future outlook

We have successfully achieved the first stages of our strategy to reposition the
business. However, our CCTV business had a challenging year in 2006 as a result
of the dependence of 21st Century on one major customer. In the second half of
the year we made overhead savings of over 10% per month overall and increased
our potential to access more of the public transport market through our
investment in Cyberlyne Communications Limited. Towards the end of the year 21st
Century was successful in winning business from new customers. In addition, we
see the potential to grow our installation services business through the
development of Pay As You Go insurance initiatives. Consequently we remain
confident that we can build on these opportunities to achieve sustainable growth
in the long term.

Nick Grimond

Chief Executive

Consolidated profit and loss account
for the year ended 31 December 2006

                                      Before Amortisation of      2006      2005
                                amortisation     intangibles            Restated
                                                                        (note 1)
                         Notes         £'000           £'000     £'000     £'000

Turnover                              31,228               -    31,228    36,316

Cost of sales                       (19,310)               -  (19,310)  (21,409)
                                   ---------       ---------  --------  --------

Gross profit                          11,918               -    11,918    14,907
Other operating expenses            (10,827)           (576)  (11,403)  (12,664)
                                   ---------       ---------  --------  --------
Group operating profit                 1,091           (576)       515     2,243

Share of operating loss
in associate                2           (60)               -      (60)     (137)
                                   ---------       ---------  --------  --------
Total operating profit                 1,031           (576)       455     2,106
Interest payable and
similar charges                       (427)               -     (427)     (500)
                                   ---------       ---------  --------  --------

Profit on ordinary
activities before taxation               604           (576)        28     1,606
Taxation                                   -               -         -     (289)
                                   ---------       ---------  --------  --------

Profit on ordinary
activities after taxation                604           (576)        28     1,317
Minority interest -
equity                                  (27)               -      (27)     (132)
                                   ---------       ---------  --------  --------

Profit for the year
attributable to members of
the parent company                       577           (576)         1     1,185
                                   =========       =========  ========  ========

Earnings per
share - basic                          0.71p         (0.71)p     0.00p     1.45p
- diluted                              0.71p         (0.71)p     0.00p     1.45p

All operations above relate to continuing operations - the share of the loss of
the associate in 2006 relates to an acquisition in the year which forms part of
continuing operations.

Consolidated note of group historical cost profits and losses
For the year ended 31 December 2006
                                                                 2006       2005
                                                                        (note 1)
                                                                £'000      £'000
Reported profit on ordinary activities before taxation             28      1,606

Difference between historical cost depreciation charge and
actual depreciation charge for the year calculated on the
revalued amount                                                    28         28
                                                             --------   --------

Historical cost profit on ordinary activities before tax           56      1,634
                                                             ========   ========

Historical cost profit on ordinary activities after tax
and minority interest                                              29      1,213
                                                            =========  =========

Consolidated statement of total recognised gains and losses
For the year ended 31 December 2006

                                                             2006          2005
                                                                       (note 1)
                                                            £'000         £'000
Profit for the financial year
- Group                                                        61         1,322
- Associate company                                          (60)         (137)
                                                         --------      --------

                                                                1         1,185
                                                         --------      --------
Prior period adjustment - FRS 20                            (150)             -
                                                         --------      --------

Total recognised (loss)/gain for the year                   (149)         1,185
                                                         ========      ========

Group                                                        (89)         1,322
Associate company                                            (60)         (137)
                                                        ---------     ---------

                                                            (149)         1,185
                                                        =========     =========

Balance sheets

As at 31 December 2006

                                                     Group               Company
                               Notes       2006       2005       2006       2005
                                          £'000      £'000      £'000      £'000
Fixed assets
Intangible assets                         4,447      4,850          -          -
Tangible assets                           4,600      4,645          -          -
Investments                      2            -          -     14,928     13,721
                                        -------   --------    -------   --------

                                          9,047      9,495     14,928     13,721
                                       --------   --------   --------   --------

Current assets
Stocks                                    3,114      3,799          -          -
Debtors                                   4,662      6,771      1,815      3,395
Cash at bank and in hand                    745      1,525        127         40
                                       --------   --------   --------   --------

                                          8,521     12,095      1,942      3,435
                                       --------   --------   --------   --------

Creditors: amounts falling due
within one year                         (6,334)    (8,865)    (1,003)    (1,088)
                                       --------   --------   --------   --------

Net current assets                        2,187      3,230        939      2,347
                                       --------   --------   --------   --------

Total assets less current
liabilities                              11,234     12,725     15,867     16,068
Creditors: amounts falling due
after more than one year                (1,989)    (3,468)    (1,989)    (3,468)
                                       --------   --------   --------   --------

Net assets                                9,245      9,257     13,878     12,600
                                       ========   ========   ========   ========

Capital and reserves
Called up share capital                   8,169      8,169      8,169      8,169
Share premium account                     3,387     12,110      3,387     12,110
Special Reserve                           1,206          -      1,206          -
Other reserve                                43         43         43         43
Merger reserve                                -          -      1,001      1,001
Revaluation reserve                       1,350      1,378          -          -
Profit and loss account          3      (4,954)   (12,665)         72    (8,723)
                                      ---------  ---------  ---------  ---------

Total equity shareholders'       4        9,201      9,035     13,878     12,600
Minority interests                           44        222          -          -
                                      ---------  ---------  ---------  ---------

Capital employed                          9,245      9,257     13,878     12,600
                                      =========  =========  =========  =========

Consolidated statement of cash flows

For the year ended 31 December 2006

                                                                2006        2005
                                                  Notes        £'000       £'000

Net cash inflow from operating activities           5          1,813       4,092
                                                           ---------   ---------

Returns on investments and servicing of finance
Interest paid                                                  (407)       (463)
Issue costs of new loans                                           -        (40)
Dividend paid to minority interest                             (205)           -
                                                           ---------   ---------

                                                               (612)       (503)
                                                           ---------   ---------

UK corporation on tax paid                                     (192)       (151)
                                                           ---------   ---------

Capital expenditure

Purchase of tangible fixed assets                              (446)       (699)
                                                           ---------   ---------

Costs of acquisition of associate                               (25)           -
Purchase of investment in subsidiary                               -     (3,133)
Cash acquired                                                      -         319
                                                           ---------   ---------

                                                                (25)     (2,814)
                                                           ---------   ---------

Cash inflow/ (outflow) before financing                          538        (75)


(Decrease)/increase in long term borrowings                  (1,500)       2,500
Repayment of principal under finance leases                        -         (2)
                                                           ---------   ---------

                                                             (1,500)       2,498
                                                           ---------   ---------

(Decrease)/increase in cash in the year             6          (962)       2,423
                                                           =========   =========

Notes to the preliminary announcement
For the year ended 31 December 2006

1.      Restatement of 2005 operating expenses

Share based payments are now accounted for under FRS 20. The adoption of this
standard represents a change in accounting policy and comparative figures have
been restated accordingly. Applying the Black Scholes valuation model gives a
fair value charge for the company's share options which in accordance with FRS
20 has been added to other operating expenses in each period as follows:

                                                            2006           2005
                                                           £'000          £'000
Share based remuneration charge (FRS 20)                     165            150
                                                      ==========     ==========

2.      Purchase of an associate

On 26 July 2006 TG21 entered into a loan and share option agreement with
Cyberlyne Communications Limited ('CCL'). Under the agreement TG21 made a loan
of £430,000 to CCL bearing interest from 1 January 2007 at 9.3%. In parallel
with the loan agreement, CCL has granted an option to TG21 to acquire 50% of
CCL's share capital for a nominal value of £100. TG21 has also been granted a
second option to acquire the remaining 50% of the share capital for £1,000,000
if TG21 chose to exercise the option before 30 April 2007 or the higher of
£1,000,000 in cash or the cash equivalent of five times CCL's 2007 operating
profit before management charges if the option is exercised after completion of
the CCL's 2007 accounts. The consideration for both options is to be paid in
cash and both options will lapse if not exercised by 30 June 2009. Neither
option has yet been exercised.

TG21 plc has the ability to exercise its first option at any time from the date
of signing the option agreement on 26 July 2006. However, the equity method of
accounting has only been adopted from 29 September 2006, being the date that
TG21 plc appointed its second nominated director to the board of CCL and the
company thereby, in the opinion of the board of TG21 plc, was able to exercise
significant influence over CCL.

From 29 September 2006 to 31st December 2006 the acquisition contributed a net
loss of £60,000 to the group's results for the year. In its last financial year
to 31 December 2006, the unaudited accounts of CCL show a net loss after tax of

The analysis of net assets acquired and the fair value to the group is as
                 Book value of     TG21 Group      Fair value      Fair value to
                    net assets          Share      adjustment              group
                         £'000          £'000           £'000              £'000

Tangible fixed
assets                     172             86               -                 86
Stocks                     929            465            (23)                442
Debtors                    358            179               -                179
falling due
within one
year                     (892)          (446)               -              (446)
falling due
after one year           (472)          (236)               -              (236)
                      --------       --------       ---------          ---------

Net assets                  95             48            (23)                 25
                      --------       --------       ---------          ---------

Cash                                                                           -
Acquisition costs                                                             25
Total consideration                                                           25
Goodwill                                                                       -

The fair value adjustment relates to additional provision for obsolete stock.

The fair values of the net assets acquired are provisional.

Details of the company's investments are:

                                                                    Interests in
At 1 January 2006                                                         23,870
Additions                                                                  1,207

At 31 December 2006                                                       25,077

Amounts provided:
At 1 January 2006                                                       (10,149)
Provided in the year                                                           -

At 31 December 2006                                                     (10,149)
Net book amounts:                                                         14,928
At 31 December 2006

At 31 December 2005                                                       13,721

During the year Toad (UK) Limited a wholly owned subsidiary issued one new £1
ordinary share to the company at a premium of £1,017,000. Following an
application to the High Court this share premium was offset against the brought
forward losses of Toad (UK) Limited. The cost of this ordinary share is included
in additions above along with £165,000 being the share based payments cost in
relation to employee services provided to Toad (UK) Limited and £25,000 in
respect of the costs of the acquisition of the associate company Cyberlyne
Communications Limited.

3. Share premium account and reserves

Group          Share premium   Special Share capital Revaluation Profit and loss
                                        to be issued     reserve         account
                        £000      £000          £000        £000            £000

At 1 January
2006                  12,110         -            43       1,378        (12,665)

Transfer in
respect of
depreciation               -         -             -        (28)              28

of share
premium              (8,723)         -             -           -           8,723

Profit for
the year                   -         -             -           -               1

FRS20 reserve              -         -             -           -             165

Transfer to
Reserve                    -     1,206             -           -         (1,206)
                    --------  --------      --------   ---------        --------
At 31
December               3,387     1,206            43       1,350         (4,954)
2006                ========  ========      ========   =========        ========

Company       Share premium  Special reserve Share capital  Merger reserve Profit and loss
                                              to be issued                         account
                       £000             £000          £000            £000            £000

At 1 January
2006                 12,110                -            43           1,001         (8,723)

of share
premium             (8,723)                -             -               -           8,723
Profit for
the year                  -                -             -               -           1,113
FRS 20 Reserve            -                -             -               -             165
Transfer to
Special Reserve           -            1,206             -               -         (1,206)
                   --------         --------      --------        --------        --------
At 31
December              3,387            1,206            43           1,001              72
2006               ========         ========      ========        ========        ========

At the Annual General Meeting held on 23 May 2006 a special resolution was
passed to transfer £8,723,000 standing on the credit of the company's share
premium account to distributable reserves. Following the AGM an application to
the High Court was made and this completed on 28 June 2006. For the protection
of creditors an amount equal to the dividends received from subsidiary companies
out of the prior year profit has been transferred to the Special Reserve.

4. Reconciliation of movements in equity shareholders' funds

Group                                                        2006           2005
                                                                        (note 1)
                                                            £'000          £'000

Opening shareholders' funds                                 9,035          7,700
FRS 20 reserve                                                165              -
Profit for the year                                             1          1,335
                                                         --------       --------

Closing equity shareholders' funds                          9,201          9,035
                                                         ========       ========

Company                                                      2006           2005
                                                            £'000          £'000

Opening shareholders' funds                                12,600         12,672

FRS 20 Reserve                                                165              -
Profit/(loss) for the year                                  1,113           (72)
                                                         --------       --------

Closing equity shareholders' funds                         13,878         12,600
                                                         ========       ========

5. Reconciliation of operating profit to net cash inflow from operating

                                                                2006       2005
                                                                       (note 1)
                                                               £'000      £'000

Operating profit                                                 515      2,243
Depreciation on tangible fixed assets                            491        482
Amortisation and impairment of intangible fixed assets           576        312
FRS20 charge                                                     165        150
Decrease in stocks                                               685        273
Decrease/(increase) in debtors                                 2,142      (364)
(Decrease)/increase in creditors                             (2,761)        996
                                                            --------   --------

Net cash inflow from continuing operating activities           1,813      4,092
                                                            ========   ========

6. Reconciliation of net cash flow to movement in net debt

                                                               2006         2005
                                                              £'000        £'000

(Decrease)/increase in cash in the year                       (962)        2,423
Cash outflow/(inflow) from movement in debt                   1,500      (2,498)
                                                           --------     --------

Change in net debt arising from cash flows                      538         (75)
                                                           --------     --------
Capitalisation of loan issue costs                                -           40
Amortisation of loan issue costs                               (21)         (33)
                                                           --------     --------

Movement in net debt in the year                                517         (68)
Net debt at 1 January (see note 7)                          (3,793)      (3,725)
                                                           --------     --------

Net debt at 31 December (see note 7)                        (3,276)      (3,793)
                                                           ========     ========

7. Analysis of net debt

                 At 31 December     Cash flow      Non cash      At 31 December
                           2005                    movement                2006
                          £'000         £'000         £'000               £'000

Cash at bank
and in hand               1,525         (780)             -                 745
Bank overdrafts           (850)         (182)             -             (1,032)
                      ---------      --------     ---------           ---------

                            675         (962)             -               (287)
                      =========      ========     =========           =========

Short term
bank loans              (1,000)         1,000       (1,000)             (1,000)
Other loans             (3,468)           500           979             (1,989)
                      ---------     ---------     ---------           ---------

                        (3,793)           538          (21)             (3,276)
                      =========     =========     =========           =========

The net non cash movement relates to the movement in amortised loan issue costs
during the year.

8. Publication of non-statutory accounts and basis of preparation

The preliminary results announcement for the year ended 31 December 2006 is
unaudited. The financial information contained in this preliminary announcement
does not constitute statutory accounts for the year ended 31 December 2006.  The
financial information for the year ended 31 December 2005 is derived from the
statutory accounts for that period (after the restatement described at note 1
above) which have been delivered to the Registrar and included an audit report
which was unqualified and did not contain a statement under either Section 237
(2) or Sections 237(3) of the Companies Act 1985.  The statutory accounts for
the year ended 31 December 2006 will be finalised on the basis of the financial
information presented by the directors in the preliminary announcement and will
be delivered to the Registrar of Companies following the company's Annual
General Meeting.

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

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