TIDMCNT
RNS Number : 8247K
Connaught PLC
27 April 2010
Connaught plc ("Connaught" or the "Group")
Interim results for the six months ended 28 February 2010
Connaught, a market leading provider of integrated services to both the public
and private sector in the UK, today announces its interim results for the 6
months to 28 February 2010. We are pleased to be able to report another strong
trading performance across all sectors of the business.
Highlights
+--------------------------------------------+-------------------------+
| · Revenue of GBP355m, up 17% | (H1 2009: GBP304m) |
+--------------------------------------------+-------------------------+
| · Adjusted operating profit of | (H1 2009: GBP20.2m) |
| GBP23.8m*, up 18% | |
+--------------------------------------------+-------------------------+
| · Operating profit of GBP13.8m, down | (H1 2009: GBP16.4m) |
| 16% | |
+--------------------------------------------+-------------------------+
| · Adjusted Profit before Tax of | (H1 2009: GBP17.3m) |
| GBP20.7m*, up 20% | |
+--------------------------------------------+-------------------------+
| · Profit before Tax of GBP10.7m, down | (H1 2009: GBP13.5m) |
| 21% | |
+--------------------------------------------+-------------------------+
| · Adjusted EPS of 10.9p*, up 12% | (H1 2009: 9.7p) |
+--------------------------------------------+-------------------------+
| · EPS of 5.6p, down 26% | (H1 2009: 7.6p) |
+--------------------------------------------+-------------------------+
| · Dividend of 1.308p, up 20% | (H1 2009: 1.09p) |
+--------------------------------------------+-------------------------+
+--------------------------------------------+--------------------+
| · Revenue up 17% to GBP355m with organic growth of 12% |
+-----------------------------------------------------------------+
| o Social Housing revenue up 13% to GBP256m |
+-----------------------------------------------------------------+
| o Compliance revenue up 16% to GBP70m |
+-----------------------------------------------------------------+
| o Environmental revenue of GBP29m |
+-----------------------------------------------------------------+
| · Adjusted operating profit* up 18% to GBP23.8m |
+-----------------------------------------------------------------+
| o Social Housing operating profit* up 17% to GBP14.9m |
+-----------------------------------------------------------------+
| o Compliance operating profit* up 13% to GBP9.3m |
+-----------------------------------------------------------------+
| o Environmental operating profit* GBP1.6m |
+-----------------------------------------------------------------+
| · Group adjusted operating margin* | (H1 2009: 6.6%) |
| increased to 6.7% | |
+--------------------------------------------+--------------------+
| · Rolling 12 month cash conversion of | (H1 2009: 62%) |
| 72% | |
+--------------------------------------------+--------------------+
| · Order book GBP2.9bn | (H1 2009: |
| | GBP2.7bn) |
+--------------------------------------------+--------------------+
| · Pipeline GBP4.9bn | (H1 2009: |
| | GBP3.6bn) |
+--------------------------------------------+--------------------+
* before exceptional items and amortisation of acquisition intangibles
Mark Tincknell, Chief Executive, said:
"This is another good set of results as Connaught continues its strong growth in
all three of its divisions. Specifically, our client base is looking to us to
help them cut costs in the face of budget constraints, and with our integrated
business model we are well positioned to deliver these savings. This trend is
reflected in our orderbook which is growing at a fast rate, and I look forward
with excitement and confidence."
Contact details
+------------+---------------+
| Connaught | Today |
| Mark | 020 7251 3801 |
| Tincknell, | Thereafter |
| Chief | 01392 444 546 |
| Executive | |
| Stephen | |
| Hill, | |
| Finance | |
| Director | |
+------------+---------------+
| Altium | 0845 505 4343 |
| Phil | |
| Adams | |
| Mike | |
| Fletcher | |
+------------+---------------+
| KBC | 020 7418 8900 |
| Peel | |
| Hunt | |
| Julian | |
| Blunt | |
+------------+---------------+
| Finsbury | 020 7251 3801 |
| Faeth | |
| Birch | |
| Gordon | |
| Simpson | |
+------------+---------------+
The Market
The current economic environment in the UK is creating significant
opportunities. Financial pressure in the public and private sectors is driving
deep, structural change as customers seek to reduce cost whilst simultaneously
enhancing service levels. They are therefore carrying out fundamental reviews of
their procurement strategies, leading to an increase in multi-service
outsourcing. This represents a once in a generation opportunity for us to
demonstrate how we can help our customers deliver long-term change.
We have had a strong order intake of GBP403m (H1 2009: GBP385m) in the first 6
months of the year, contributing to a total order book of GBP2.9bn, up from
GBP2.7bn at February 2009. Group revenue visibility stands at an impressive 96%
of 2010 expected revenues and 72% of 2011. Group pipeline has increased by 30%
over the last 12 months and stands at a record GBP4.9bn.
Financial overview
Revenues increased strongly in the first half, up by 17% to GBP355m, despite
some impact from poor weather in January. Operating profit before amortisation
of acquired intangibles and exceptional items is GBP23.8m, an 18% increase on H1
2009. This result is after charging depreciation and other intangible
amortisation of GBP2m (H1 2009: GBP1m). The exceptional cost of GBP5.8m incurred
in the period splits out as;
· Integration costs of Igrox, UK Fire and Fountains of GBP1.5m. The
integration of these acquisitions is now complete and no further costs are
expected;
· Acquisition related fees under IFRS 3 of GBP1.1m. No further costs are
expected; and
· Reorganisation costs of GBP3.2m. This is part of the costs identified in
the December 2009 IMS, which we expect to total GBP6.9m in the full year.
Adjusted EPS, before exceptional items and amortisation of acquisition
intangibles, is 10.9p (up 12% from 9.7p).
Cash generated from operating activities, excluding the impact from
acquisitions, was GBP8.5m in the first half, up from GBP2.6m last year,
delivering a rolling 12 month conversion of 72% operating profit to operating
cash (H1 2009: 62%), in line with our 70% target. Closing net debt for the
period was GBP97.5m (H1 2009: GBP99.2m).
Mobilisation costs on new contracts incurred in the first half of the year were
GBP6m, with costs recovered in the same period of GBP2.7m. Acquisition impacts
absorbed GBP2.1m of working capital in the first half (H1 2009: GBP4.1m),
largely related to timing of VAT and PAYE payments for Fountains. Exceptional
cash costs of GBP6.1m relate to GBP5.8m of costs charged to the 2010 income
statement plus GBP0.3m of costs charged in the prior year. Development
expenditure of GBP4.2m relates to our ongoing systems investment, predominantly
in the new financial system, MS Dynamics. We expect the total investment in
this financial system to be GBP8-10m by the end of 2011.
Contract review and margin enhancement programme
Following Mark Tincknell's appointment at Chief Executive in February, we have
completed a thorough review of all our contracts and businesses which resulted
in the decision to exit underperforming areas as contracts expire. This will
reduce revenues in social housing by c. GBP25m in 2010 and c. GBP40m in 2011 and
in compliance by c. GBP5m in 2010 and c. GBP10m in 2011.
In addition, we have implemented a group wide margin enhancement programme
looking at all areas of the business. We are specifically seeking to lower
procurement costs, boost productivity and rationalise our property portfolio.
As the group has grown so rapidly over the last few years there are a number of
opportunities to target savings.
We have also created a new "big ticket" sales team, headed by the Group Business
Development Director who recently joined us from Capita. The big ticket team
will improve our bid capability on large, complex contracts with values in
excess of GBP100m.
Social Housing
Social Housing remains our largest division and has performed well. Social
landlords are continuing to look at ways of delivering better services at a
lower cost. Our approach, offering a multi-service solution, has gained
significant momentum as reflected in recent contract wins and the bid pipeline.
Notable successes include the GBP125m, 5 year Norwich City Council win, which is
an excellent example of a multi-service contract where all three of our
divisions are operating together.
We believe we are uniquely positioned to offer the service, value and cost
reductions our clients demand. Our customer service centres and infrastructure
investments are leading to greater efficiencies. We continue to leverage our
market leading platform to develop other revenue streams in complementary
markets such as defence and student accommodation.
Social Housing Results
Revenues were up 13% to GBP256m from GBP227m (H1 2009). Operating profit was up
17% to GBP14.9m from GBP12.7m (H1 2009) resulting in increased margins of 5.8%,
up from 5.6% in H1 2009. The severe winter weather had some impact in the half
year as snow and ice hampered certain activities.
Environmental
The Environmental Division combines our estate services business and the
Fountains acquisition. The integration of the business has gone extremely well
and is now complete. An exceptional charge of GBP1.5m was taken in the first
half to cover the cost of the integration. The growing season means this
business is second half weighted.
We are refocusing the business on longer term contractual revenue streams within
both the utility and public sector markets.
Environmental Results
Revenues were up 70% to GBP29m with underlying organic growth of 12%. Operating
profit was up 60% to GBP1.6m with margins reducing slightly from 5.8% to 5.5% as
a result of the pre-integration structure. We anticipate margins improving in
the second half as the benefits of the completed integration are delivered.
Compliance
Historically the Compliance division has been SME-focused. In order to increase
the resilience and visibility of earnings, the new leadership team within this
division is being more selective in its approach, focusing on longer term
opportunities within the public sector and corporate markets. These
opportunities provide significantly larger, longer term relationships and
therefore increase our earnings visibility. The second six months of the year
will see the completion of the final phase of integration, and we will exit the
current year with a stronger foundation to deliver our strategy.
Compliance Results
Revenues were up 16% to GBP70m from GBP60m in H1 2009, with an organic growth of
7%. Operating profit was up 13.4% to GBP9.3m from GBP8.2m in H1 2009,
maintaining margins in excess of 13%.
People
Following Mark Tincknell's appointment as CEO we are making good progress in
relation to the appointment of a new non-executive chairman.
The senior management team has been further strengthened by key director
appointments in HR, Business Development and in leaders for our Compliance and
Environmental divisions. In the second half of the year, we are also
introducing an independent internal audit function for the Group.
We employ approaching 10,000 people whose dedication and professionalism enables
us to deliver a first class service for our clients.
Outlook
Government fiscal pressures will inevitably lead to more outsourcing
opportunities after the election which, following our investments in the sales
team, operational leadership, and infrastructure, we are increasingly well
placed to deliver.
Our order book stands at GBP2.9bn with a pipeline of GBP4.9bn, providing
significant opportunities for the Group. We believe the strength of our core
business, together with our ability to deliver complex, longer term partnerships
will provide the foundation for continued earnings and dividend growth.
+-------+---+-------+-------+------+---------+-------+----------+----+----+----------+----+---+------------+----------+-----------------+----------+----------+----------+----------+
| Connaught plc | | | | | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Condensed Consolidated Half-yearly Income Statement | | |
+---------------------------------------------------------------------------------------------------------------------------------------+--------------------------------+----------+
| for the six months ended 28 February 2010 | | | | | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | Note | Unaudited | Unaudited | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | 28 February | 28 February 2009 | 31 August 2009 | |
| | | | | | 2010 | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | 6 months | 6 months | 12 months | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | GBPm | GBPm | GBPm | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Revenue | | | 4 | 354.6 | 303.8 | 659.6 | |
+----------------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Cost of Sales | | | (302.6) | (254.3) | (559.7) | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Gross profit | | | 52.0 | 49.5 | 99.9 | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Administrative expenses | | | (38.2) | (33.1) | (67.3) | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Operating profit before amortisation of acquisition intangible assets | 4 | 23.8 | 20.2 | 48.4 | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| and exceptional item | | | | | | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Amortisation of acquisition intangible assets | | (4.2) | (3.8) | (9.0) | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| Exceptional items | | 5 | (5.8) | - | (6.8) | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Operating profit | | | 13.8 | 16.4 | 32.6 | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Finance costs | | | (4.5) | (4.7) | (8.8) | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Finance income | | | 1.4 | 1.8 | 2.9 | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Profit before tax | | | 10.7 | 13.5 | 26.7 | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Tax expense | | 7 | (2.9) | (3.9) | (9.2) | |
+--------------------------------------------------------------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Profit for period attributable to equity shareholders | | 7.8 | 9.6 | 17.5 | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| Earnings per ordinary share | | | | | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | Basic | | | 9 | 5.7p | 7.8p | 14.2p | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | Diluted | | | 9 | 5.6p | 7.6p | 13.5p | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| All operations are classified as continuing. | | | | | |
+-------------------------------------------------------------------------+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | |
+-------+--------------------------------------------+---------------+----+---------------+----------------+----------------------------+--------------------------------+----------+
| | | | | | | | | | | | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Condensed Consolidated Half-yearly Statement of Comprehensive Income | | |
+--------------------------------------------------------------------------------------------------------------------------------------------------+----------+---------------------+
| for the six months ended 28 February 2010 | | | | | |
+------------------------------------------------------------------------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | Unaudited | Unaudited | | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | 28 February 2010 | 28 February 2009 | 31 | |
| | | | | | | | | | | August | |
| | | | | | | | | | | 2009 | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | 6 months | 6 months | 12 | |
| | | | | | | | | | | months | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | GBPm | GBPm | GBPm | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Profit for the | | | | | | | 7.8 | 9.6 | 17.5 | |
| period | | | | | | | | | | |
+-------------------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | | | | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Other comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+---------------------------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Cashflow hedges | | | | | | | 0.3 | (4.0) | (3.0) | |
+-------------------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Other comprehensive income/(expense) for the period | | | 0.3 | (4.0) | (3.0) | |
+---------------------------------------------------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Total comprehensive income for the period | | | | 8.1 | 5.6 | 14.5 | |
+--------------------------------------------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | | | | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Attributable to: | | | | | | | | | | |
+-------------------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Owners of the Company | | | | | | 8.1 | 5.6 | 14.5 | |
+---------------------------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| Total comprehensive income for the period | | | | 8.1 | 5.6 | 14.5 | |
+--------------------------------------------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | | | | |
+-----------+-------+-------+------+---------+------------------+--------------------+--------+-----------------------+----------------------------+----------+---------------------+
| | | | | | | | | | | | | | | | | | | | |
+-------+---+-------+-------+------+---------+-------+----------+----+----+----------+----+---+------------+----------+-----------------+----------+----------+----------+----------+
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Condensed Consolidated Half-yearly Statement of Changes in Equity | | | |
+--------------------------------------------------------------------------------+----------+-------------+--------------------------------------+
| for the six months ended 28 February 2010 | | | | | | |
+------------------------------------------------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Half year ended 28 February 2010 | Share | Share | Treasury | Retained | Other | Total | |
| | capital | premium | shares | earnings | reserves | equity | |
+ + + + + + + +--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| At 1 September 2009 | 2.7 | 108.4 | (1.5) | 51.9 | 6.0 | 167.5 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total comprehensive income for the | | | | | | | |
| period | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Recognised income for the period | - | - | - | 7.8 | - | 7.8 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Other comprehensive income: | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Hedging reserve | - | - | - | - | 0.3 | 0.3 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total other comprehensive income | - | - | - | - | 0.3 | 0.3 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total comprehensive income for the | - | - | - | 7.8 | 0.3 | 8.1 | |
| period | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Transactions with owners, recorded | | | | | | | |
| directly in equity | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Shares | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| - proceeds from shares issued | 0.1 | 19.4 | - | - | - | 19.5 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| - share based payments | - | - | (0.1) | - | - | (0.1) | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Dividends | - | - | - | (2.9) | - | (2.9) | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total contributions by and | 0.1 | 19.4 | (0.1) | (2.9) | - | 16.5 | |
| distributions to owners, and total | | | | | | | |
| transactions with owners | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| At 28 February 2010 | 2.8 | 127.8 | (1.6) | 56.8 | 6.3 | 192.1 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Half year ended 28 February 2009 | Share | Share | Treasury | Retained | Other | Total | |
| | capital | premium | shares | earnings | reserves | equity | |
+ + + + + + + +--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| At 1 September 2008 | 2.5 | 80.2 | (1.5) | 37.9 | 7.7 | 126.8 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total comprehensive income for the | | | | | | | |
| period | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Recognised income for the period | - | - | - | 9.6 | - | 9.6 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Other comprehensive income: | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Hedging reserve | - | - | - | - | (4.0) | (4.0) | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total other comprehensive income | - | - | - | - | (4.0) | (4.0) | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total comprehensive income/(expense) | - | - | - | 9.6 | (4.0) | 5.6 | |
| for the period | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Transactions with owners, recorded | | | | | | | |
| directly in equity | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Shares | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| - proceeds from shares issued | - | 0.3 | - | - | - | 0.3 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| - share based payments | - | - | - | - | - | - | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | - | - | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Dividends | - | - | - | (2.2) | - | (2.2) | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| Total contributions by and | - | - | - | (2.2) | - | (1.9) | |
| distributions to owners, and total | | | | | | | |
| transactions with owners | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| At 28 February 2009 | 2.5 | 80.5 | (1.5) | 45.3 | 3.7 | 130.5 | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
| | | | | | | | |
+--------------------------------------+---------+---------+----------+----------+----------+-------------+--------------------------------------+
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Condensed Consolidated Half-yearly Balance Sheet | | |
+----------------------------------------------------------------------------+----------+----------+
| as at 28 February 2010 | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | Note | Unaudited | Unaudited | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | 28 | 28 | 31 | |
| | | February | February | August | |
| | | 2010 | 2009 | 2009 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | GBPm | GBPm | GBPm | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Non-current assets | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Goodwill | 6 | 193.7 | 150.0 | 175.2 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Acquisition intangible assets | | 26.4 | 29.2 | 24.6 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Other intangible assets | | 18.2 | 12.3 | 15.5 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Property, plant and equipment | | 10.1 | 9.7 | 9.1 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Trade and other receivables | | 29.3 | 16.5 | 27.8 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | 277.7 | 217.7 | 252.2 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Current assets | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Inventories | | 8.8 | 9.7 | 7.5 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Trade and other receivables | | 172.2 | 137.0 | 154.8 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Cash and cash equivalents | | 48.9 | 49.5 | 56.4 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | 229.9 | 196.2 | 218.7 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Total assets | | 507.6 | 413.9 | 470.9 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Current liabilities | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Borrowings | 10 | (12.0) | (19.1) | (11.5) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Trade and other payables | | (159.1) | (124.7) | (148.0) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Current tax liabilities | | (4.6) | (0.5) | (3.3) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | (175.7) | (144.3) | (162.8) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Non-current liabilities | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Borrowings | 10 | (134.4) | (129.6) | (133.9) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Deferred tax liabilities | | (0.7) | (3.9) | (1.7) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Derivative financial instruments | 11 | (4.7) | (5.6) | (5.0) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | (139.8) | (139.1) | (140.6) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Total liabilities | | (315.5) | (283.4) | (303.4) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Net assets | | 192.1 | 130.5 | 167.5 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Shareholders' equity | | | | | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Ordinary shares | | 2.8 | 2.5 | 2.7 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Share premium | | 127.8 | 80.5 | 108.4 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Retained earnings | | 56.8 | 45.3 | 51.9 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Other reserves | | 7.4 | 6.2 | 7.5 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Hedge reserve | | (2.7) | (4.0) | (3.0) | |
+------------------------------------------+--------+------------+-----------+----------+----------+
| Equity shareholders' funds | | 192.1 | 130.5 | 167.5 | |
+------------------------------------------+--------+------------+-----------+----------+----------+
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Condensed Consolidated Half-yearly Statement of Cash Flows | |
+-----------------------------------------------------------------------------+---------+
| for the six months ended 28 February 2010 | | | |
+---------------------------------------------+------------------+------------+---------+
| | Unaudited | Unaudited | |
+---------------------------------------------+------------------+------------+---------+
| | 28 February 2010 | 28 | 31 |
| | | February | August |
| | | 2009 | 2009 |
+---------------------------------------------+------------------+------------+---------+
| | 6 months | 6 months | 12 |
| | | | months |
+---------------------------------------------+------------------+------------+---------+
| | GBPm | GBPm | GBPm |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Reconciliation of operating profit to net | | | |
| cash flow from operating activities | | | |
+---------------------------------------------+------------------+------------+---------+
| Net profit | 7.8 | 9.6 | 17.5 |
+---------------------------------------------+------------------+------------+---------+
| Tax | 2.9 | 3.9 | 9.2 |
+---------------------------------------------+------------------+------------+---------+
| Profit on disposal property, plant and | - | - | 0.4 |
| equipment | | | |
+---------------------------------------------+------------------+------------+---------+
| Amortisation of intangibles and | 6.2 | 4.8 | 12.3 |
| depreciation | | | |
+---------------------------------------------+------------------+------------+---------+
| Exceptional costs | 5.8 | - | 6.8 |
+---------------------------------------------+------------------+------------+---------+
| Interest income | (1.4) | (1.8) | (2.9) |
+---------------------------------------------+------------------+------------+---------+
| Finance charge | 4.5 | 4.7 | 8.8 |
+---------------------------------------------+------------------+------------+---------+
| Other non cash changes | - | 0.4 | 1.3 |
+---------------------------------------------+------------------+------------+---------+
| Increase in inventories | (1.3) | (3.5) | (0.1) |
+---------------------------------------------+------------------+------------+---------+
| Increase in trade and other receivables | (15.1) | (10.8) | (39.4) |
+---------------------------------------------+------------------+------------+---------+
| Decrease in payables | (3.0) | (8.8) | (0.2) |
+---------------------------------------------+------------------+------------+---------+
| Cash generated from / (used in) continuing | 6.4 | (1.5) | 13.7 |
| operations | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash generated from continuing operating | 8.5 | 2.6 | 13.7 |
| activities excluding operating cash impact | | | |
| of acquisitions | | | |
+---------------------------------------------+------------------+------------+---------+
| Operating cash impact of acquisitions | (2.1) | (4.1) | - |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash flows from operating activities | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash generated from/(used in) operations | 6.4 | (1.5) | 13.7 |
+---------------------------------------------+------------------+------------+---------+
| Exceptional costs | (6.1) | - | (0.6) |
+---------------------------------------------+------------------+------------+---------+
| Interest received | 1.4 | 1.7 | 2.9 |
+---------------------------------------------+------------------+------------+---------+
| Interest paid | (5.1) | (4.7) | (9.5) |
+---------------------------------------------+------------------+------------+---------+
| Taxation paid | (2.2) | (4.0) | (8.8) |
+---------------------------------------------+------------------+------------+---------+
| Net cash used in operating activities | (5.6) | (8.5) | (2.3) |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash flows from investing activities | | | |
+---------------------------------------------+------------------+------------+---------+
| Acquisition of businesses/subsidiaries | (1.3) | (10.3) | (14.9) |
+---------------------------------------------+------------------+------------+---------+
| Development expenditures | (4.2) | (4.8) | (11.2) |
+---------------------------------------------+------------------+------------+---------+
| Proceeds from sale of property, plant and | 1.0 | 0.4 | 5.0 |
| equipment | | | |
+---------------------------------------------+------------------+------------+---------+
| Purchase of fixed assets | (2.8) | (4.0) | (3.8) |
+---------------------------------------------+------------------+------------+---------+
| Net cash used in investing activities | (7.3) | (18.7) | (24.9) |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash flows from financing activities | | | |
+---------------------------------------------+------------------+------------+---------+
| Net proceeds from issue of ordinary share | 5.8 | 0.3 | 12.5 |
| capital | | | |
+---------------------------------------------+------------------+------------+---------+
| Purchase of treasury shares | (0.1) | (1.1) | - |
+---------------------------------------------+------------------+------------+---------+
| Net proceeds from issue of new bank loan | - | 27.7 | 81.5 |
+---------------------------------------------+------------------+------------+---------+
| Finance lease principal payments | (0.3) | (0.2) | (0.1) |
+---------------------------------------------+------------------+------------+---------+
| Repayment of borrowings | - | - | (56.8) |
+---------------------------------------------+------------------+------------+---------+
| Dividends paid to shareholders | - | - | (3.5) |
+---------------------------------------------+------------------+------------+---------+
| Net cash generated from financing | 5.4 | 26.7 | 33.6 |
| activities | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Net increase/(decrease) in cash and cash | (7.5) | (0.5) | 6.4 |
| equivalents | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash and cash equivalents at 1st September | 56.4 | 50.0 | 50.0 |
+---------------------------------------------+------------------+------------+---------+
| Cash and cash equivalents at end of period | 48.9 | 49.5 | 56.4 |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Analysis of Net Debt | | | |
+---------------------------------------------+------------------+------------+---------+
| | | | |
+---------------------------------------------+------------------+------------+---------+
| Cash and cash equivalents | 48.9 | 49.5 | 56.4 |
+---------------------------------------------+------------------+------------+---------+
| Finance Lease | (1.2) | (0.8) | (0.7) |
+---------------------------------------------+------------------+------------+---------+
| Interest bearing loans and borrowings | (145.2) | (147.9) | (144.6) |
+---------------------------------------------+------------------+------------+---------+
| Net debt | (97.5) | (99.2) | (88.9) |
+---------------------------------------------+------------------+------------+---------+
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| Notes to Condensed Consolidated Half-yearly Financial | | | | |
| Information | | | | |
+-----------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 1| General Information | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Connaught plc is a public limited company incorporated in the UK. The address of the | |
| | registered office is Connaught House, Grenadier Road, Exeter Business Park, Exeter EX1 3QF. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | The Company has its primary listing on the London Stock Exchange. This condensed consolidated | |
| | half-yearly financial information was approved for issue on 27 April 2010. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | These interim financial results do not comprise statutory accounts within the meaning of | |
| | Section 434 of the Companies Act 2006. Statutory accounts for the year ended | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | 31 August 2009 were approved by the Board of Directors on 28 October 2009 and delivered to the | |
| | Registrar of Companies. The report of the auditors on those accounts | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | was unqualified, did not contain an emphasis of matter paragraph and did not contain any | |
| | statement under Section 498 of the Companies Act 2006. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| 2| Basis of preparation and accounting policies | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | This condensed consolidated half-yearly financial information for the half-year ended 28 | |
| | February 2010 has been prepared in accordance with the Disclosure and | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial | |
| | Reporting' as adopted by the European Union. The half-yearly condensed | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | consolidated financial report should be read in conjunction with the annual financial | |
| | statements for the year ended 31 August 2009 which have been prepared in | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | in accordance with IFRSs' as adopted by the | | | | | | |
| | European Union. | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| 3| Accounting policies | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | The accounting policies adopted are consistent with those of the annual financial statements | |
| | for the year ended 31 August 2009, as described in those annual financial statements. | |
| | The prior half-year trade receivables balance has been represented to include GBP7.6m of | |
| | amounts receivable on contracts which had previously been included within inventories. This is | |
| | consistent with the treatment in the annual financial statements for the year ended 31 August | |
| | 2009. | |
| | The following new standards, amendments to standards or interpretations are mandatory for the | |
| | first time for the financial year ending 31 August 2010: | |
| | - IAS 1 (amendment) 'Presentation of financial statements'. This will affect the Group by | |
| | means of presentation of the primary statements only. | |
| | - IFRS 8 'Operating Segments'. Steps were taken in September 2009 following the acquisition of | |
| | the Fountains Group of Companies to create an additional business unit, 'Environmental' and | |
| | the management and reporting structure was aligned to support this change. The Group's | |
| | Environmental business prior to the acquisition of Fountains was managed and reported within | |
| | the Social Housing segment. In the segmental note the prior year comparatives have been | |
| | adjusted to reflect the impact of this change, where practicable. This new business unit is a | |
| | reportable segment under IFRS 8. The Group has determined and presented operating segments | |
| | based on the information provided to the Group's chief decision maker. | |
| | - IFRS 3 (revised) 'Business combinations' and consequential amendments to IAS 27 | |
| | 'Consolidated and separate financial statements', IAS 28 'Investments in associates' and IAS | |
| | 31 | |
| | 'Interests in joint ventures'; | |
| | The following new standards, amendments to standards and interpretations are mandatory for the | |
| | first time for the financial year ending 31 August 2010 but are not considered to have | |
| | a significant impact: | |
| | - IAS 23 (amendment) 'Borrowing costs'; | |
| | - IFRS 2 (amendment) 'Share-based payment'; | |
| | - IAS 32 (amendment) 'Financial instruments: Presentation'; | |
| | - IFRIC 13 'Customer loyalty programmes'; | |
| | - IFRIC 15 'Agreements for the construction of real estate'; | |
| | - IFRIC 16 'Hedges of a net investment in a foreign operation'; | |
| | - IAS 39 (amendment) 'Financial instruments: Recognition and measurements'; | |
| | - IFRIC 17 'Distributions of non-cash assets to owners'; and | |
| | - IFRIC 18 'Transfers of assets from customers'. | |
| | The following new standards, amendments to standards and interpretations have been issued, but | |
| | are not effective for the year ending 31 August 2010 and have not been adopted early: | |
| | - IFRIC 19 'Extinguishing Financial Liabilities with Equity Instruments'. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | |
+-----------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 4| Operating Segments | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The Group comprises three distinct businesses - Social Housing, Environmental and Compliance. | |
| | The Social Housing business provides housing maintenance, compliance and estate | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | services to social landlords. The Environmental business provides expertise in vegetation | |
| | management, arboriculture, grounds maintenance, waste maintenance, cleaning, forestry | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | services and consultancy. The Compliance business is a leader in the field of | | |
| | health and safety consultancy, training and field based technicians. | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The information provided to the Board and Executive management (which collectively represent | |
| | the Chief Operating Decision Maker under IFRS 8) is used as the basis of the segmental | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | disclosures provided below. Central Group costs are allocated consistently based | | |
| | on management's assessment of the level of support provided. | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The main measure of profit used by the Board and Executive management to | | | |
| | assess performance is adjusted operating profit. | | | |
+-+-------------------------------------------------------------------------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | Social | Environmental | Compliance | Central | Total |
| | | | Housing | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | GBPm | GBPm | GBPm | GBPm | GBPm |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Half year ended 28 February 2010 | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment revenue | | 256.0 | 29.0 | 69.6 | - | 354.6 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit before amortisation of | | 14.9 | 1.6 | 9.3 | (2.0) | 23.8 |
| | acquisition intangible assets | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | and exceptional item | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Amortisation of acquisition intangible assets | | (1.8) | - | (2.4) | - | (4.2) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Exceptional items | | (3.1) | (0.7) | (0.5) | (1.5) | (5.8) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit/(loss) | | 10.0 | 0.9 | 6.4 | (3.5) | 13.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance costs | | (1.1) | (0.1) | - | (3.3) | (4.5) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance income | | 0.1 | - | 0.1 | 1.2 | 1.4 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Profit before tax | | 9.0 | 0.8 | 6.5 | (5.6) | 10.7 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax | | - | - | - | (2.9) | (2.9) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment result | | 9.0 | 0.8 | 6.5 | (8.5) | 7.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment assets | | 170.9 | 21.3 | 70.6 | - | 262.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Goodwill attributable | | 32.0 | 19.4 | 142.3 | - | 193.7 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated assets | | - | - | - | 51.1 | 51.1 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total assets | | 202.9 | 40.7 | 212.9 | 51.1 | 507.6 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment liabilities | | 141.9 | 9.0 | 71.1 | - | 222.0 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated liabilities | | - | - | - | 93.5 | 93.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total liabilities | | 141.9 | 9.0 | 71.1 | 93.5 | 315.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Half year ended 28 February 2009 | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment revenue | | 226.6 | 17.0 | 60.2 | - | 303.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit before amortisation of | | 12.7 | 1.0 | 8.2 | (1.7) | 20.2 |
| | acquisition intangible assets | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Amortisation of acquisition intangible assets | | (1.6) | - | (2.2) | - | (3.8) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit/(loss) | | 11.1 | 1.0 | 6.0 | (1.7) | 16.4 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance costs | | (0.4) | - | (0.2) | (4.1) | (4.7) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance income | | 0.3 | - | 0.2 | 1.3 | 1.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Profit before tax | | 11.0 | 1.0 | 6.0 | (4.5) | 13.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax | | - | - | - | (3.9) | (3.9) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment result | | 11.0 | 1.0 | 6.0 | (8.4) | 9.6 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment assets | | 176.9 | - | 83.6 | - | 260.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Goodwill attributable | | 31.8 | - | 117.1 | - | 148.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated assets | | - | - | - | 4.5 | 4.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total assets | | 208.7 | - | 200.7 | 4.5 | 413.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment liabilities | | 148.8 | - | 79.6 | - | 228.4 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated liabilities | | - | - | - | 55.0 | 55.0 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total liabilities | | 148.8 | - | 79.6 | 55.0 | 283.4 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Year ended 31 August 2009 | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment revenue | | 482.6 | 45.0 | 132.0 | 0.0 | 659.6 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit before amortisation of | | 28.1 | 3.1 | 20.5 | (3.3) | 48.4 |
| | acquisition intangible assets | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Amortisation of acquisition intangible assets | | (2.5) | - | (6.5) | - | (9.0) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Exceptional items | | - | - | - | (6.8) | (6.8) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Operating profit/(loss) | | 25.6 | 3.1 | 14.0 | (10.1) | 32.6 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance costs | | (1.4) | - | (0.6) | (6.8) | (8.8) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance income | | 0.3 | - | 0.4 | 2.2 | 2.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Profit before tax | | 24.5 | 3.1 | 13.8 | (14.7) | 26.7 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax | | (4.1) | - | (7.5) | 2.4 | (9.2) |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment result | | 20.4 | 3.1 | 6.3 | (12.3) | 17.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment assets | | 203.7 | - | 66.1 | - | 269.8 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Goodwill attributable | | 33.2 | - | 142.0 | - | 175.2 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated assets | | - | - | - | 25.9 | 25.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total assets | | 236.9 | - | 208.1 | 25.9 | 470.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Segment liabilities | | 150.6 | - | 72.9 | - | 223.5 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Unallocated liabilities | | - | - | - | 79.9 | 79.9 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total liabilities | | 150.6 | - | 72.9 | 79.9 | 303.4 |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 5| Exceptional items | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | At 28 | At 28 | At 31 | | |
| | | | February | February | August | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | 2010 | 2009 | 2009 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | Unaudited | Unaudited | Audited | | |
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | GBPm | GBPm | GBPm | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | 6 months | 6 months | 12 | | |
| | | | | | months | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Restructuring | | 3.2 | - | - | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Acquisition - purchase related costs | | 1.1 | - | - | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Acquisition - integration related costs | | 1.5 | - | - | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | OFT | | - | - | 6.8 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | 5.8 | - | 6.8 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Restructuring costs relate to the GBP6.8m announced in the Interim Management Statement on 15 | |
| | December 2009. Acquisition purchase related costs have been treated as an exceptional | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | item. The acquisition integration related costs relate to expenditure | | | |
| | incurred integrating acquired companies, such as IT infrastructure. | | | |
+-+-------------------------------------------------------------------------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 6| Acquisitions | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | During the half year, the Group completed the | | | | | | |
| | following acquisition. | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | On 3 September 2009, the Group acquired 100% of the share capital of Fountains plc, for the | |
| | consideration of GBP13.7m. The merging of Fountains with the existing environmental business | |
| | unit results in the creation of a significant new environmental division within the Connaught | |
| | group. The combined business will have revenues of nearly GBP100 million and establish | |
| | Connaught as one of the few players able to offer a complete environmental service on a | |
| | national basis. | |
+-+ +-------------------------------------------------+
| | | |
+-+ +-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | If Fountains plc was treated as acquired from 1 September 2009, the | | | |
| | impact on the financial statements would be immaterial. | | | |
+-+-------------------------------------------------------------------------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The fair values recognised in respect of Fountains plc are provisional and will be finalised on the |
| | anniversary date of the acquisition. The fair values have not been finalised at 28 February 2010 |
+-+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | as the pre-acquisition statutory accounts of Fountains plc have not been completed. Goodwill comprises |
| | the following; cash/share purchase consideration, fair value provisions and deferred tax |
+-+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | recognised on acquisition related intangibles. The costs of the acquisition have | | |
| | been accounted for in the income statement in accordance with IFRS3 (revised). | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | Fountains | Fountains | Provisional | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | Book | provisional | Fair | | |
| | | | | | value | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | Value | fair | to Group | | |
| | | | | value | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | adjustments | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | GBPm | GBPm | GBPm | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Property, plant and equipment | | 1.9 | (1.9) | - | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Trade and other receivables | | 11.8 | (1.2) | 10.6 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Cash and cash equivalents | | 0.8 | - | 0.8 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Current liabilities | | (17.5) | (3.1) | (20.6) | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Net identifiable tangible assets and | | (3.0) | (6.2) | (9.2) | | |
| | liabilities | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Provisional intangible assets | | - | 6.0 | 6.0 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Deferred Tax | | - | (1.7) | (1.7) | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Total identifiable assets and liabilities | | (3.0) | (1.9) | (4.9) | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Provisional Goodwill on acquisitions | | - | 18.6 | 18.6 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | (3.0) | 16.7 | 13.7 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Discharged by: | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Share consideration | | - | - | 13.7 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | - | - | 13.7 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | A preliminary valuation of the intangible assets has been undertaken for purposes of the half | |
| | year accounts. This preliminary valuation will be finalised during the second half | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | of the year. The intangible assets identified comprise customer relationships, trade names | |
| | and software. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | Finalisation of fair value adjustments relating to prior year acquisitions | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | The provisional fair values were attributed to certain tangible assets and liabilities as at | |
| | 31 August 2009. Changes between the provisional fair values of the net assets acquired | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | at 31 August 2009 and the anniversary date of the acquisition are shown below. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | Fair | | |
| | | | | | value | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | to Group | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | GBPm | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Additional costs of acquisition | | | | 0.3 | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Changes to Goodwill | | | 0.3 | | |
+-+---------------------------------------------------+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The goodwill value has not been restated as the directors do | | | | |
| | not believe the adjustment is material. | | | | |
+-+---------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 7| Taxation | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The taxation charge is calculated by applying the Directors' best estimate of the annual tax | |
| | rate to the profit for the period. Taxation has been provided for the six | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | months ended 28 February 2010 at an effective tax rate of 27.1% (2009: 29.0%). The tax rate | |
| | of 27.1% includes the estimated tax effect of timing differences applicable to the | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | Group for the six months ended 28 February 2010. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 8| Dividend | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The final dividend for 2009 of 2.07 pence per share (2008: 1.755 pence per share) was paid on | |
| | 5 March 2010 to holders on the register on 5 February 2010 and an interim dividend of 1.308 | |
| | pence per share (2009: 1.09 pence per share) will be paid on 2 July 2010 to holders on the | |
| | register on 4 June 2010. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 9| Earnings per share | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Basic earnings per share is calculated by dividing the earnings attributable to ordinary | |
| | shareholders by the weighted average number of shares during the period. The diluted earnings | |
| | includes effects of all potentially dilutive ordinary shares. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | Unaudited | Unaudited | Audited | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | At 28 | At 28 | At 31 | |
| | | | | February | February | August | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 2010 | 2009 | 2009 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | GBPm | GBPm | GBPm | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 6 months | 6 months | 12 | |
| | | | | | | months | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Earnings | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Earnings for basic and diluted earnings per | | | 7.8 | 9.6 | 17.5 | |
| | share | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Number of shares | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Basic | | | 137,512,629 | 122,059,635 | 123,111,618 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Diluted | | | 139,262,941 | 126,481,901 | 129,043,641 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Earnings per share | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Basic earnings per share | | | 5.7p | 7.8p | 14.2p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Diluted earnings per share | | | 5.6p | 7.6p | 13.5p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Adjusted earnings per share | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Basic earnings per share | | | 5.7p | 7.8p | 14.2p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Business performance adjustments: | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Amortisation of acquisition intangibles | | | 3.0p | 3.1p | 7.3p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax effect of amortisation of acquisition | | | (0.7p) | (0.8p) | (2.1p) | |
| | intangible assets | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Exceptional reorganisation costs | | | 4.2p | - | 5.6p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax effect of exceptional reorganisation costs | | | (1.2p) | - | (0.3p) | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Adjusted earnings per share | | | 11.0p | 10.1p | 24.7p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Adjusted diluted earnings per share | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Diluted earnings per share | | | 5.6p | 7.6p | 13.5p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Business performance adjustments: | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Amortisation of acquisition intangibles | | | 3.0p | 3.0p | 6.9p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax effect of amortisation of acquisition | | | (0.7p) | (0.9p) | (2.0p) | |
| | intangible assets | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Exceptional reorganisation costs | | | 4.2p | - | 5.3p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Tax effect of exceptional reorganisation costs | | | (1.2p) | - | (0.2p) | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Adjusted diluted earnings per share | | | 10.9p | 9.7p | 23.5p | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 10| Analysis of debt | | | At 28 | At 28 | At 31 | |
| | | | | February | February | August | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 2010 | 2009 | 2009 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | GBPm | GBPm | GBPm | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Obligations under finance leases and hire | | | | | | |
| | purchase contracts | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Less than 1 year | | | 1.2 | 0.4 | 0.7 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 1 to 5 years | | | - | 0.4 | - | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 5 years + | | | - | - | - | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 1.2 | 0.8 | 0.7 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Bank loans | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Less than 1 year | | | 10.8 | 18.7 | 10.8 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 1 to 5 years | | | 79.5 | 129.2 | 79.2 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 5 years + | | | - | - | - | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 90.3 | 147.9 | 90.0 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Private placement loan notes | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 1 to 5 years | | | 21.6 | - | 21.4 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 5 years + | | | 33.3 | - | 33.3 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | 54.9 | - | 54.7 | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 11| Derivative financial instruments and hedging | | | | | | |
| | activities. | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Derivatives are initially recognised at fair value on the date a derivative | | |
| | contract is entered into and are subsequently re-measured at their fair value. | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | The method of recognising any resulting gain or loss depends on whether the | | |
| | derivative is designated as a hedging instrument, and if so, the nature | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | of the item being hedged. All the Group's current hedges | | | | |
| | have been designated as cash flow hedges | | | | |
+-+---------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The effective portion of changes in the fair value of derivatives that are designated and | |
| | qualify as cash-flow hedges are recognised in equity. The gain or loss relating | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | to any ineffective portion is recognised | | | | | | |
| | immediately in the income statement. | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The Group has an interest rate hedging facility with the Royal Bank of Scotland. | | |
| | The facility consists of a GBP45m vanilla swap and a GBP15m extendable | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | collar. The interest rate hedges are based on GBP60m of core bank debt. Group | | |
| | policy is to maintain approximately 70% of its borrowings in fixed rate | | |
| | instruments. | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The Group also has a series of cross currency swaps with Lloyds TSB Bank plc, Barclays Bank | |
| | PLC, Svenska Handelsbanken AB and Bank of Ireland to hedge the | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | currency risk arising on its private placement loan notes issued in August 2009. | | |
| | The amounts and maturities of the cross currency swaps correspond to the US | | |
+-+----------------------------------------------------------------------------------------------+--------------+-------------------------------------------------+
| | dollar and Euro denominated principal and coupon amounts due | | | | |
| | in respect of the private placement loan notes. | | | | |
+-+---------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| 12| Status of accounts | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The interim results for the 6 months ended 28 February 2010 and 28 February 2009 are | |
| | unaudited. The figures for the year ended 31 August 2009 have been extracted from the latest | |
| | published financial statements of the Group which have been filed at Companies House and on | |
| | which the auditors gave an unqualified report. | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| 13| Risks | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The principal financial and non-financial risks facing the Group are disclosed within the financial and |
| | risk management reviews (pages 22 to 25) of the Group's Report and Accounts for the |
+-+---------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | year ended 31 August 2009, a copy of which is | | | | | |
| | available at the Company's website, | | | | | |
+-+---------------------------------------------------+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | www.connaught.plc.uk. | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Statement of Directors' Responsibilities | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The Directors' confirm that this condensed set of financial statements has been prepared in | |
| | accordance with IAS 34 as adopted by the European Union, and that the | |
+-+-------------------------------------------------------------------------------------------------------------+-------------------------------------------------+
| | interim management report herein includes a fair review of | | | | |
| | the information required by DTR 4.2.4, 4.2.7 and DTR 4.2.8. | | | | |
+-+---------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | The Directors of Connaught plc are Tim Ross, Mark Tincknell, | | | | |
| | Stephen Hill, Robert Alcock and Caroline Price. | | | | |
+-+---------------------------------------------------------------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | A list of current Directors is maintained on the | | | | | |
| | Connaught Group website: www.connaught.plc.uk. | | | | | |
+-+---------------------------------------------------+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | By order of the Board | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Mark Tincknell | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Chief Executive | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Stephen Hill | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | Finance Director | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | 27 April 2010 | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| | | | | | | | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
| These interim results are being sent to all shareholders. Copies may also be obtained from the | |
| Company Secretary at the Registered Office of the Company: Connaught House, Grenadier Road, | |
| Exeter Business Park, Exeter EX1 3QF. | |
+-+-------------------------------------------------+-+-----------+---------------+--------------+--------------+-------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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