RNS Number:7225M
Eaga plc
29 January 2008
29 January 2008
Half Year Results
eaga plc (EAGA.L), a "Green" Support Services Company and the UK's leading
provider of residential energy efficiency solutions, today announces its results
for the half year ended 30 November 2007.
Highlights
Financial highlights
* Revenue up 44% to �309.1 million
* EBITA(1) up 40% to �18.9 million
* Adjusted diluted earnings per share up 27% to 5.30p
* Interim dividend of 1p per ordinary share
Operational highlights
* Four strategic acquisitions completed in the period
* Carbon Emissions Reduction Target to proceed at double previous
commitment
* Government's Comprehensive Spending Review confirms funding for Warm
Front out to 2011
(1) EBITA comprises profit on ordinary activities before interest, tax,
amortisation of intangible fixed assets and exceptional items
Charles Berry, Chairman, commented:
"The immense scale of the environmental challenges ahead - for Government,
businesses and individuals alike - is becoming increasingly visible, and the
range and breadth of opportunities are developing rapidly for businesses who,
like eaga, offer practical and effective solutions.
A number of key developments over the period have re-affirmed eaga's strategy
and the Board remains confident in its direction and implementation. The
business has met our expectations during the first half of the financial year
and the outlook for the balance of the year remains unchanged."
For further information please contact:
eaga plc 0191 247 3800
John Clough MBE, Chief Executive
Ian McLeod, Group Finance Director
Ross Armstrong, Director of Corporate and Government Affairs
Rik Kendall, Media Relations Manager
Hogarth Partnership Limited 020 7357 9477
Chris Matthews
Andrew Jaques
Ian Payne
Notes to editors
1. eaga plc is the UK's largest residential energy efficiency provider. The
company is a leader in the provision of innovative and sustainable
services, products and solutions that address the environmental, social
and energy efficiency objectives of Government and the private sector both
nationally and internationally.
2. Working in partnership with central and local Government, eaga is
positioned at the heart of policy-making and front-end delivery of social
and environmental improvement programmes. eaga operates across the UK and
in the Republic of Ireland, India and Canada employing over 4,000 people.
3. eaga was established in Newcastle in 1990 to lead Government funded
efforts to improve the living conditions of vulnerable people living in
cold, damp and energy inefficient homes across England. Since its
inception, eaga has made a positive difference to over 5 million
disadvantaged households across the UK, by installing energy efficiency
measures and central heating.
4. eaga holds the contract to deliver the �1.5 billion Warm Front programme
in England, the cornerstone of government's target to eliminate fuel
poverty by installing energy efficiency measures in vulnerable homes by
2010. eaga also works with devolved nation governments to deliver similar
schemes across the UK.
5. eaga plc was admitted to the Official List on the Main Market of the
London Stock Exchange on 7 June 2007.
6. eaga is one of only a handful of UK organisations where every employee
with over a year's service is entitled to a share in the success of the
business. eaga's commitment to co-ownership is an integral part of the
values that define the ethos of the business and what it means to be an
eaga employee.
7. The Government has set targets for all local authorities to have all
social rented homes meeting Decent Homes standards by 2010. This requires
homes to be fit for habitation, in a reasonable state of repair, with
reasonably modern facilities and services and a reasonable degree of
thermal comfort.
8. Since 2000, eaga has invested over �3 million in the independent eaga
Partnership Charitable Trust which funds research into solutions to fuel
poverty.
Chairman's Statement
I am pleased to present our interim results for the six month period ended 30
November 2007.
Overview
The immense scale of the environmental challenges ahead - for Government,
businesses and individuals alike - is becoming increasingly visible, and the
range and breadth of opportunities are developing rapidly for businesses who,
like eaga, offer practical and effective solutions.
Given the trend in energy price increases, the need for decisive action on fuel
poverty remains critical. Alongside this, actions to tackle climate change have
driven stronger demand for our energy efficiency solutions more generally. This
has ensured that demand for eaga's services has never been higher, and our
results for the period reflect this with record revenue and profits, and EBITA
growth of 40%; 21% of which is organic and 19% of which has been contributed by
acquisitions. This is reflected in the announcement of an interim dividend of 1p
per ordinary share.
We continue to strengthen and diversify eaga's position within our chosen
markets. Since listing, progress in our existing operations has been augmented
by four acquisitions, enhancing our excellent growth platform within
Installation Services.
Management is focused on delivering its strategy across the business and sees no
shortage of opportunities for further growth.
Board Changes
This period also saw two changes to eaga's Board. eaga welcomed Non-Executive
Director, Tracy Clarke, to the Board in October 2007. As Group Head of Human
Resources for Standard Chartered plc and until recently a Non-Executive Director
of SC First Bank in Korea, she complements an already highly experienced team.
Tracy has replaced outgoing Non-Executive Director and former Chairman and
Deputy Chairman Michael Roberts OBE (who retired at the AGM on 22 November 2007)
as chair of the Remuneration Committee and also sits on the Audit Committee.
Prospects
During the period, eaga has continued to deliver on its strategic aims and has
generated strong performance. Two key developments over the period will
reinforce future growth:
* The new Carbon Emissions Reduction Target (CERT) - previously known as
the Energy Efficiency Commitment (EEC) - will stimulate increased demand for
residential energy efficiency measures. For the next three years, the
residential energy savings targets for energy suppliers are set to double,
with an estimated spend of �2.8 billion (1) over the period. The size, scale
and structure of the CERT obligation provides significant potential to
further expand our energy efficiency businesses.
* The outcome of the Government's Comprehensive Spending Review was
positive, announcing investment of just over �800 million for the Warm Front
Scheme over the next three fiscal years, which is higher than previous
market forecasts. Extending funding to March 2011(2), this provides eaga
with improved visibility of contract volumes.
These developments re-affirm eaga's strategy and the Board remains confident in
its direction and implementation. The business has met our expectations during
the first half of the financial year and the outlook for the balance of the year
remains unchanged.
Charles Berry
Chairman
29 January 2008
(1) Based on official estimate contained in the Regulatory Impact Assessment
for the Carbon Emissions Reduction Target, laid before Parliament in
December 2007 and available at http://www.opsi.gov.uk/si/si2008/draft/em/
ukdsiem_9780110805306_en.pdf
(2) eaga holds the contract to deliver the Warm Front Scheme across England
until June 2010, with an optional two year extension, taking the contract
out to 2012.
Chief Executive's Operational Review
Our Market
eaga is the UK's leader in residential energy efficiency and is uniquely placed
in the market to meet the growing demand for environmental and social agendas to
be tackled in tandem. Our aim is to lead the support services sector in the
delivery of products and services that address these issues. With Government
already pursuing an increasingly ambitious environmental and social policy
agenda that will include legally binding targets to reduce fuel poverty and
carbon emissions, we are well positioned.
Through the development of our operations - both organic and inorganic - we are
building a green-collar workforce that is committed to protecting the
environment and providing sustainability solutions for everyone, including those
on low incomes and the most vulnerable. These are the least well equipped to
deal with the effects of high energy prices and climate change; eaga is a market
leader in delivering solutions to this sector through all of its business
segments, and has extensive intellectual property from its knowledge of this
sizeable customer base.
To meet the challenges within the commercial sector, companies are seeking
solution providers, such as eaga, that can lead them to demonstrate and develop
their environmental credentials both as part of Corporate Social Responsibility
strategies and as a key facet of their operations. We are working with a wide
range of organisations in this regard, including all of the major energy supply
companies; and with O2, in a programme delivered in partnership with the Energy
Saving Trust.
People and Culture
eaga's growth and success has been driven and is sustained by talented, engaged
people and underpinned by a unique, values-driven culture that recognises and
celebrates the fact that our actions make a difference to thousands of lives
every single day. As a co-owned business with a substantial employee
shareholding, we refer to our people as Partners, as each have a stake in the
future of the business. We pride ourselves on treating our Partners, customers
and communities with integrity, respect and enthusiasm, and passionately believe
that our commitment to employee share ownership will continue to provide us with
an excellent platform for future growth and success.
Government Contracts
Government Contracts is the management function of our contracting activity for
Government and comprises marketing, front office and back office activities.
Revenue (including inter segment revenues) increased by 28% to �216.6 million
(2006: �168.6 million) in line with increased demand for the Government-funded
fuel poverty programmes that we deliver. These contracts, the most significant
of which is the Warm Front Scheme, provide significant visibility for future
revenues. With recent increases in energy prices placing an increased focus on
the Government's legal obligation to eradicate fuel poverty by 2016, demand for
the Programmes is likely to remain high.
With EBITA rising by 37% to �4.4 million (2006: �3.2 million), margins also
increased by 0.2 percentage points to 2.1% (2006: 1.9%), underlining the
maturity of returns in this segment.
In December 2007, Defra announced that funding for the Warm Front Scheme will
exceed �800 million over the next three fiscal years (2008 to 2011). This
represents an increase of some �300 million in eaga's potential contract
pipeline due in the most part to the commitment to extend funding into 2011, one
year longer than previously indicated and at a level over the period that is
higher than previous market forecasts. The Warm Front Scheme is wholly delivered
by eaga across England.
Our performance in delivering fuel poverty programmes has never been stronger.
Activity increases are reflecting the fact that demand from customers is also at
record levels. It is pleasing that, in line with increased demand, our customer
satisfaction scores are extremely high and delivery times are continuing to fall
- they are now at the shortest they have ever been in the history of these
programmes.
Installation Services
The primary focus of eaga's Installation Services segment is the supply of
heating and insulation products and services into people's homes through a
nationwide network of installation specialists. Over 70% of our 4,000 people are
employed in this segment.
The end markets for the Installation Services Segment are:
* work carried out under EEC (soon to become CERT);
* the supply of installation services to our Government Contracts
customers; and
* heating installation and maintenance contracts in the social housing
sector.
We have seen organic growth in our heating business through: our supply into
Government programmes; central heating servicing, repair and renewal contract
wins in social housing; renewables; and in our heating offer to 'able to pay'
private households. In our insulation business, we have seen organic growth
through increased delivery for energy suppliers and high demand from Government
programmes.
We have delivered four acquisitions in the period, two of which extend our
insulation offering to solid walled homes at a level which is market leading and
two that further augment our capability in the south-east to service the social
landlord market for heating servicing and repair and renewal.
Revenue (including inter segment revenues) increased by 87% to �114.0 million
(2006: �61.1 million) with EBITA rising by 68% to �10.2 million (2006: �6.1
million). Acquisitions contributed approximately �30.8 million turnover growth
and �2.4 million EBITA growth. Excluding the impact of acquisitions, organic
EBITA growth of 28% was delivered by the business.
EBITA margins in the sector were 9.0% for the period (2006: 10.0%), with the
principal drivers for the one percentage point reduction being:
* holding an element of excess delivery infrastructure in the
traditional cavity wall and loft insulation business; positioning in
readiness for growth in CERT demand from our energy supplier customers; and
* initial costs associated with our rapid expansion into the attractive and
currently fragmented social housing central heating market.
Having built a robust platform for further progression, eaga's strategy within
the Installation Services segment is to leverage this base to deliver strong
organic growth; augmented as appropriate with 'tuck-in' acquisitions.
EEC and CERT
The recent announcements that energy suppliers' targets under CERT are set to
broadly double from April 2008 represents an excellent opportunity for our
existing cavity wall and loft insulation business. We have already secured, or
expect to shortly enter into, contracts with all of the major energy suppliers
to help them to deliver significant elements of their challenging targets. eaga
is uniquely placed in this market due to its dual strengths of a nationwide
delivery platform and detailed knowledge of the thermal efficiency of more than
a quarter of the UK's housing stock.
Incentives will also be in place under CERT for energy suppliers to increase
take-up of more innovative solutions including external wall insulation and
renewable technologies. eaga's recent acquisitions of Horrocks Group plc and
George Howe Limited - two of the UK's leading external wall insulation providers
- position the business to deliver into the solid wall insulation marketplace;
currently estimated to be in excess of five million homes(3) which are largely
untreated to date.
In addition, eaga Renewables installs a range of renewable technologies, certain
amongst which will also be incentivised under CERT.
(3) Taken from the Energy Saving Trust report, 'Practical Refurbishment of
Solid-Walled Houses' (2006 edition)
Government contracting installations
The installation of heating and insulation to Government programmes has again
increased significantly during the period.
Prospects for this area of the business remain good, with record levels of
installation activity expected for the current financial year. In addition,
there is now improved forward visibility on Warm Front following the recent
announcement by Defra of funding for the three year period to March 2011.
eaga's offer of vertically integrated solutions to customers will continue to
present further opportunities for profitable expansion of Installation Services'
operations.
Social housing sector
This has been an area of rapid growth and investment in line with the Group's
strategy of developing a significant presence in this attractive and currently
fragmented market. We have already delivered significant organic growth with
annualised revenues of approximately �14 million having been added through 39
new contract wins in a twelve month period, including Registered Social
Landlords (RSLs) such as Birmingham City Council, Leeds City Council, Circle
Anglia and City West. With medium-term contract backing, these provide
significant revenue visibility, in some cases through to 2014.
The platform is also delivering significant recurring revenue capability.
Currently eaga has approximately 220,000 boilers under contract for annual
service visits and 24/7 repair and maintenance, which we estimate is a market
share of approximately 6%. Significant opportunities for new contracts are
expected.
The acquisitions of RG Francis Limited and AFR Limited complement our existing
heating business, further extending eaga's geographic coverage and leaving us
well positioned for further development and sustained earnings into the future.
Specialist Support Services
eaga's Specialist Support Services segment builds on the services provided by
Government Contracts and Installation Services, through the provision of
aftercare services, online retail of energy efficient white goods, and the
delivery of energy savings certificates to energy supplier customers.
Revenue (including inter segment revenues) increased by 56% to �32.2 million
(2006: �20.6 million) and EBITA remained static at �4.2 million. Revenue
increases have been driven by continued growth in demand for: the brokerage
services we perform for Government and energy suppliers in delivering energy
savings; for the supply of low energy lighting; and for 24/7 aftercare services
to heating customers.
EBITA margins in this sector were 13.0% (2006: 20.2%). This is in line with
expectations, though below the exceptional margins achieved in the prior period.
This follows a change in our brokerage arrangements with energy suppliers, which
improved revenue visibility at some cost to margins.
Specialist Support Services will also benefit from the higher targets due to
commence under CERT from 1 April 2008.
New Business Opportunities
Further opportunities for profitable expansion are expected within each of
eaga's three business segments from the growing influence of climate change as
part of the drive for low-carbon and carbon and water neutral developments.
Amongst the new environmental and social areas that the Group is exploring are:
Balance Trading
Our Balance Trading product identifies the increase in carbon emissions and/or
water demand due to a new development, and then, using funding from the property
developer in question, makes corresponding carbon and/or water savings by
improving existing homes in the surrounding neighbourhood. There is already
significant interest from both developers and local authorities who are
concerned about the impact of new housing developments in their area.
eaga Water Services
There is significant interest in the provision of water efficiency solutions,
with a particular focus on water affordability.
Defra recently published the results of a water efficiency pilot run in the
South West, with eaga as lead contractor, delivering water saving measures,
benefit checks and, where appropriate, energy efficiency advice, into more than
500 households. Pilot projects of a similar nature are also being delivered by
eaga on behalf of both Thames Water and Yorkshire Water.
Commercial returns in this area will depend on achieving scale, but the success
of these pilot projects, allied with the positive signals from key stakeholders,
mean that indications as to short and medium-term development are stronger in
this field than ever before.
Developments in this market emphasise the considerable synergies in joining up
work on energy efficiency with water efficiency to deal holistically with
sustainability, and eaga is well placed to take advantage of this.
eaga Advice Services
Strong organic growth has continued within our advice services unit, which now
employs over 100 people who provide advice on welfare benefits, debt, housing
and legal issues under contract with two Government Departments. As a leading
player in this market, we have developed a body of key partners with
wide-ranging expertise and a commitment to providing excellent service. We are
pursuing opportunities to use this base to develop new openings in this market.
Summary
eaga has made solid progress in the first half of our 2008 financial year. We
have delivered on our expectations, with expansion being driven from a
combination of organic growth and acquisitions. The Group remains well placed to
take advantage of the positive long-term drivers in the markets in which it
operates. We are dedicated to leading our workforce of some 4,000 Partners in
the ongoing development of a robust platform for the delivery of future growth.
The financial year continues to develop in line with our expectations, with the
full year outlook remaining unchanged. Our aim now is to leverage our business
position, delivering strong organic growth and augmenting that with strategic
acquisitions as appropriate.
John Clough
Chief Executive
29 January 2008
Financial Performance
Results
In the six months ended 30 November 2007 Group revenue increased by 44% to
�309.1 million (2006: �214.6 million). Group EBITA before exceptional items
increased by 40% to �18.9 million (2006: �13.5 million). These results include
revenue of �32.5 million and EBITA of �2.5 million from acquisitions.
Profit before tax, amortisation of intangible assets and exceptional costs
increased by 38% to �19.2 million (2006: �14.0 million). After deducting
amortisation of intangible assets and exceptional costs profit before tax is
�14.5 million (2006: �9.0 million).
The Board has declared an interim dividend of 1p per ordinary share, payable on
18 March 2008 to shareholders on the register at 15 February 2008.
Taxation
The underlying effective tax rate of 30.4% (2006: 32.0%) is above the tax rate
of 29.7% for the full year (reflecting the reduction in the UK tax rate from 30%
to 28% with effect from 1 April 2008), largely due to disallowable expenditure
incurred by the Group. The exceptional tax charge in the period relates to the
impact of the reduction in the UK corporation tax rate from 30% to 28% on the
Group's deferred tax assets at 30 November 2007.
Earnings per Share
Basic earnings per share increased to 3.60p (2006: 3.41p). Underlying fully
diluted earnings per share (adjusting for exceptional costs and amortisation of
intangible fixed assets) increased by 27% to 5.30p (2006: 4.17p).
Exceptional items
Exceptional items in the six months to 30 November 2007 relate to a share based
payments charge arising in respect of the fair value of share options granted to
certain key management under the IPO Key Management Plan by Eaga Partnership
Trustee Limited and Eaga Partnership Trustee Two Limited (EPT) during the
period. These awards were made solely in relation to successful admission of the
Company's shares to the London Stock Exchange.
Treasury
Strong cash generation has continued to be a feature of the Group's operations
during the period. �32.7 million of acquisition related cash outflows during the
period have been funded from a combination of the �28.5 million raised at
flotation and cash generated from operations. The Group remains net-debt free at
the balance sheet date, with cash balances having increased during the period by
�6.1 million to �11.6 million (2006: �5.5 million).
Acquisitions
In line with the strategy announced at the time of flotation, the Group acquired
RG Francis Limited (RGF) on 22 June 2007. Based in Essex, RGF specialises in the
social housing market. The acquisition joined our heating business within
Installation Services giving us coverage in the social housing heating market in
the South East complementing eaga's existing UK coverage in the Midlands, the
North East and Northern Ireland.
eaga is already building on RGF's strengths, particularly through its servicing
contracts, by bringing in economies of scale, increasing installation capability
and introducing renewable energy options such as solar heating which is an area
of increasing focus by social housing providers.
On 25 September 2007, the Group acquired AFR Limited (AFR). AFR holds central
heating, servicing and maintenance contracts with local authorities, including
Welwyn and Hatfield Borough Council. Its market position in Hertfordshire and
North London adds to eaga's Heating Division's growing geographical reach in
this region.
On 26 October 2007, the Group acquired George Howe Limited (George Howe). George
Howe are based in Durham, and provide internal and external wall insulation into
the same marketplaces, with customers such as Yuill Homes, George Wimpey and
Shepherd Construction.
On 31 October 2007, the Group acquired Horrocks Group plc (Horrocks). Based in
Liverpool, Horrocks installs and supplies external wall insulation products to
the social housing and housing construction markets, with customers such as
Laing O'Rourke, Wates Construction and Sir Alfred McAlpine. Horrocks also owns
the Permarock System for production of external wall insulation.
Combined with eaga's existing activities these businesses help build a
market-leading position by delivering complementary geographic coverage and
customer bases, clear sector focus and experienced management teams who remain
in the businesses.
Risks and uncertainties
The Group faces a number of risks and uncertainties across a range of
commercial, operational and financial areas which are kept under regular review.
Those that the Board consider may impact on the Group's performance over the
second half of the financial year are set out below.
* The level of competition in the markets in which it operates which may
affect the Group's revenue and market share
* Decisions and changes in the Group's regulatory environment
* The non-achievement of expected benefits from business acquisitions
* Non-supply of equipment or services by a major supplier
In addition to the above, the Group is exposed to financial risks arising from
external factors including the movements in foreign exchange rates, interest
rates and other factors such as long term economic growth rates, all of which
may impact the Group's financial performance.
Any of the above and/or changes in assumptions underlying the carrying value of
certain Group assets could result in asset impairments.
Ian McLeod
Group Finance Director
29 January 2008
Statement of Directors' Responsibilities
The Directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by
the European Union, and that the interim management report herein includes a
fair review of the information required by the Disclosure Rules and Transparency
Rules of the Financial Services Authority, paragraphs DTR 4.2.7 and DTR 4.2.8.
The directors of eaga plc are listed in the eaga Annual Report for the year
ended 31 May 2007, with the exception of the following changes in the period:
Michael Roberts OBE retired on 22 November 2007; and Tracy J Clarke was
appointed on 1 October 2007. A list of current directors is maintained on the
eaga plc website: www.eaga.com.
By order of the Board
John Clough Ian McLeod
Chief Executive Group Finance Director
29 January 2008
Unaudited Consolidated Income Statement
For the 6 months ended 30 November 2007
Notes 6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
�000 �000 �000
Continuing operations
---------------------------- ------ --------- --------- ---------
Revenue 2 309,104 214,587 482,560
Cost of Sales (251,024) (171,484) (383,549)
---------------------------- ------ --------- --------- ---------
Gross profit 58,080 43,103 99,011
---------------------------- ------ --------- --------- ---------
Administrative expenses (43,877) (34,514) (186,438)
---------------------------- ------ --------- --------- ---------
Amortisation of intangible
fixed assets (3,300) (279) (3,245)
Exceptional items 3 (1,371) (4,646) (115,480)
EBITA 18,874 13,514 31,298
---------------------------- ------ --------- --------- ---------
Operating profit/(loss) after
exceptional items 14,203 8,589 (87,427)
---------------------------- ------ --------- --------- ---------
Finance income 954 528 1,226
Finance expense (634) (91) (1,186)
---------------------------- ------ --------- --------- ---------
Profit/(loss) before tax 14,523 9,026 (87,387)
---------------------------- ------ --------- --------- ---------
Tax (expense)/credit (4,422) (2,888) 25,761
Exceptional tax expense 3 (1,045) - -
---------------------------- ------ --------- --------- ---------
Profit/(loss) for the period 9,056 6,138 (61,626)
---------------------------- ------ --------- --------- ---------
Profit/(loss) for the period
attributable to:
Equity holders of the Company 8,927 6,101 (61,715)
Minority interests 129 37 89
---------------------------- ------ --------- --------- ---------
9,056 6,138 (61,626)
---------------------------- ------ --------- --------- ---------
Earnings/(loss) per share
(pence)
- basic 4 3.60 3.41 (34.33)
- diluted 4 3.57 2.66 (34.33)
Adjusted earnings per share
(pence)
- basic 4 5.34 5.34 12.27
- diluted 4 5.30 4.17 9.58
---------------------------- ------ --------- --------- ---------
EBITA comprises profit on ordinary activities before interest, tax, amortisation
of intangible fixed assets and exceptional items.
Exceptional items comprise items of expense that are material in amount and
unlikely to recur and therefore merit separate disclosure in order to provide an
understanding of the Group's underlying financial performance.
Unaudited Consolidated Statement of Recognised Income and Expense
for the 6 months ended 30 November 2007
6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
�000 �000 �000
Profit/(loss) for the period 9,056 6,138 (61,626)
Net exchange differences arising on
consolidation (57) 145 42
------------------------------------- --------- --------- ---------
Total recognised income/(expense) for
the period 8,999 6,283 (61,584)
------------------------------------- --------- --------- ---------
Attributable to:
Equity holders of the Company 8,870 6,246 (61,673)
Minority interests 129 37 89
------------------------------------- --------- --------- ---------
8,999 6,283 (61,584)
------------------------------------- --------- --------- ---------
Unaudited Consolidated Balance Sheet
Notes At 30 At 30 At
November November 31 May
2007 2006 2007
�000 �000 �000
Non-current assets
Goodwill 59,894 7,426 38,055
Intangible assets 14,806 1,256 15,699
Property, plant and equipment 13,230 8,322 11,083
Available for sale financial assets - 83 -
Deferred tax assets 17,961 357 26,980
----------------------------------- ----- --------- --------- ---------
105,891 17,444 91,817
----------------------------------- ----- --------- --------- ---------
Current assets
Inventories 7,951 3,371 4,479
Trade and other receivables 62,168 35,074 52,401
Derivative financial instruments 538 616 548
Current tax assets 284 - -
Current asset investments 5,883 4,106 4,632
Cash and cash equivalents 12,660 51,990 6,776
----------------------------------- ----- --------- --------- ---------
89,484 95,157 68,836
----------------------------------- ----- --------- --------- ---------
Current liabilities
Trade and other payables 94,932 59,904 95,923
Loans and borrowings 1,343 26,762 1,625
Current tax liabilities - 2,552 1,354
----------------------------------- ----- --------- --------- ---------
96,275 89,218 98,902
----------------------------------- ----- --------- --------- ---------
Net current (liabilities)/assets (6,791) 5,939 (30,066)
----------------------------------- ----- --------- --------- ---------
Non-current liabilities
Other non-current liabilities 443 432 2,437
Loans and borrowings 294 286 306
Provisions for other liabilities and
charges 586 342 342
----------------------------------- ----- --------- --------- ---------
1,323 1,060 3,085
----------------------------------- ----- --------- --------- ---------
Net assets 97,777 22,323 58,666
----------------------------------- ----- --------- --------- ---------
Equity
Share capital 6 251 1 50
Retained earnings 6 65,154 18,447 54,856
Other reserves 6 32,131 3,800 3,648
----------------------------------- ----- --------- --------- ---------
Total shareholders' equity 97,536 22,248 58,554
Minority interest in equity 6 241 75 112
----------------------------------- ----- --------- --------- ---------
Total equity 97,777 22,323 58,666
----------------------------------- ----- --------- --------- ---------
Unaudited Consolidated Cash Flow Statement
For the 6 months ended 30 November 2007
6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
�000 �000 �000
Operating profit/(loss) after exceptional
items 14,203 8,589 (87,427)
Depreciation of property, plant and
equipment 1,608 1,004 2,353
Amortisation of intangible assets 3,300 279 3,245
(Increase)/decrease in inventories (1,413) 363 (179)
(Increase)/decrease in trade and other
receivables (1,691) 3,611 (5,680)
(Decrease)/increase in trade and other
payables (5,505) 3,670 20,985
Profit on sale of investments - - (23)
Loss on sale of property, plant and
equipment 10 15 260
Share based exceptional cost credited
directly to equity 1,371 - 104,225
Decrease/(increase) in derivatives 10 (116) (48)
Increase in available for sale
investment - (23) -
Exchange differences (31) 121 35
Negative goodwill recognised in profit - (6) (6)
---------------------------------------- -------- -------- --------
Cash generated from operations 11,862 17,507 37,740
---------------------------------------- -------- -------- --------
Finance income 1,115 528 1,208
Finance expense (88) (91) (694)
Taxation received/(paid) 668 (889) (5,209)
---------------------------------------- -------- -------- --------
Cash generated from operating
activities 13,557 17,055 33,045
---------------------------------------- -------- -------- --------
Cash flows from investing activities
Purchase of intangible assets (299) (152) (437)
Purchase of property, plant and
equipment (2,189) (4,190) (8,040)
Proceeds from sale of property, plant
and equipment 67 134 170
Proceeds from sale of investments - - 83
Purchase of subsidiary undertakings net
of cash/(overdrafts) acquired (24,185) (119) (31,093)
Payment of deferred consideration
including finance costs (8,500) - (475)
---------------------------------------- -------- -------- --------
Net cash outflow from investing
activities (35,106) (4,327) (39,792)
---------------------------------------- -------- -------- --------
Cash flows from financing activities
Proceeds from the issue of new bank
loan - 25,000 -
Repayments of bank loans (10) (34) (335)
Capital element of hire purchase
agreements (95) (226) (243)
Dividends paid to minority shareholders
of subsidiary - - (15)
Increase in short term investments (1,251) (2,731) (3,257)
Proceeds from issue of shares 28,952 70 69
---------------------------------------- -------- -------- --------
Net cash inflow/(outflow) from
financing activities 27,596 22,079 (3,781)
---------------------------------------- -------- -------- --------
Net increase/(decrease) in cash and
cash equivalents 6,047 34,807 (10,528)
Cash and cash equivalents at start of
period 5,532 16,060 16,060
---------------------------------------- -------- -------- --------
Cash and cash equivalents at end of
period 11,579 50,867 5,532
---------------------------------------- -------- -------- --------
Notes
1. Presentation of interim financial report
General
eaga plc is a public limited company incorporated in England and Wales under the
Companies Act 1985. The address of the Registered Office is eaga House, Archbold
Terrace, Jesmond, Newcastle upon Tyne NE2 1DB. The Company is listed on the
London Stock Exchange.
Basis of Preparation
The unaudited condensed consolidated interim financial report for the period
ended 30 November 2007 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 condensed
consolidated interim financial report should be read in conjunction with the
annual financial statements for the year ended 31 May 2007 which have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
Statutory Financial Statements
The financial information presented here does not represent statutory accounts
as defined by the Companies Act 1985. The Group's statutory financial statements
for the year ended 31 May 2007 were prepared under IFRS as adopted by the
European Union and filed with the Registrar of Companies. The auditors,
PricewaterhouseCoopers LLP, reported on those accounts and their report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
Accounting Policies
The accounting policies are consistent with those of the statutory financial
statements for the year ended 31 May 2007 as described in those financial
statements.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year ending 31 May 2008:
* IFRS 7 - Financial instruments: Disclosures. As this interim report
contains only condensed financial statements, any required disclosures will be
given in the annual financial statements.
* IFRIC 10 - Interims and impairment. This interpretation has not had
any impact on the timing or recognition of impairment losses as the Group
already accounts for such amounts using principles consistent with IFRIC 10.
* IFRIC 11 - IFRS 2 Group and treasury share transactions. This interpretation
has not had any impact on the recognition of share-based payments in the
Group.
* IAS 1 - Amendments to capital disclosure. As this interim report contains only
condensed financial statements, any required disclosures will be given in the
annual financial statements.
2. Segmental analysis
6 months ended 30 November 2007
Notes Government Installation Specialist Eliminations Total
Contracts Services Support
Services
�000 �000 �000 �000 �000
Revenue
Third party 216,605 61,681 30,818 - 309,104
Intersegment - 52,324 1,344 (53,668) -
------------------- ------ --------- -------- -------- --------- -------
Total 216,605 114,005 32,162 (53,668) 309,104
------------------- ------ --------- -------- -------- --------- -------
Segmental operating
profit 4,402 6,986 4,186 15,574
Unallocated
exceptional costs 3 (1,371)
------------------- ------ --------- -------- -------- --------- -------
Operating profit 14,203
------------------- ------ --------- -------- -------- --------- -------
Net finance income 320
Total tax expense (5,467)
------------------- ------ --------- -------- -------- --------- -------
Profit for the
period 9,056
------------------- ------ --------- -------- -------- --------- -------
Other segment
information
Amortisation of
intangibles 40 3,251 9 3,300
EBITA 4,442 10,237 4,195 18,874
------------------- ------ --------- -------- -------- --------- -------
6 months ended 30 November 2006
Notes Government Installation Specialist Eliminations Total
Contracts Services Support
Services
�000 �000 �000 �000 �000
Revenue
Third party 168,597 28,044 17,946 - 214,587
Intersegment - 33,017 2,638 (35,655) -
------------------- ------ --------- --------- -------- --------- -------
Total 168,597 61,061 20,584 (35,655) 214,587
------------------- ------ --------- --------- -------- --------- -------
Segmental operating
profit 3,192 5,889 4,154 13,235
Unallocated
exceptional costs 3 (4,646)
------------------- ------ --------- --------- -------- --------- -------
Operating profit 8,589
------------------- ------ --------- --------- -------- --------- -------
Net finance income 437
Tax expense (2,888)
------------------- ------ --------- --------- -------- --------- -------
Profit for the
period 6,138
------------------- ------ --------- --------- -------- --------- -------
Other segment
information
Amortisation of
intangibles 57 208 14 279
EBITA 3,249 6,097 4,168 13,514
------------------- ------ --------- --------- -------- --------- -------
Year ended 31 May 2007
Notes Government Installation Specialist Eliminations Total
Contracts Services Support
Services
�000 �000 �000 �000 �000
Revenue
Third party 359,279 76,841 46,440 - 482,560
Intersegment - 81,623 2,899 (84,522) -
------------------- ------ --------- --------- -------- --------- --------
Total 359,279 158,464 49,339 (84,522) 482,560
------------------- ------ --------- --------- -------- --------- --------
Segmental operating
profit 7,560 12,999 7,494 28,053
Unallocated
exceptional costs 3 (115,480)
------------------- ------ --------- --------- -------- --------- --------
Operating loss (87,427)
------------------- ------ --------- --------- -------- --------- --------
Net finance income 40
Tax credit 25,761
------------------- ------ --------- --------- -------- --------- --------
Loss for the year (61,626)
------------------- ------ --------- --------- -------- --------- --------
Other segment
information
Amortisation of
intangibles 80 3,110 55 3,245
EBITA 7,640 16,109 7,549 31,298
------------------- ------ --------- --------- -------- --------- --------
3. Exceptional items
6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
�000 �000 �000
Share based payments 1,371 - 104,225
Flotation expenses - 518 4,051
Partnership bonus - 4,128 7,155
Long-term incentive plan - - 49
------------------------------------- -------- --------- -------
1,371 4,646 115,480
------------------------------------- -------- --------- -------
Exceptional taxation expense 1,045 - -
------------------------------------- -------- --------- -------
Share based payments
6 months ended 30 November 2007
Share based payments comprise the IFRS2 charge arising in respect of the fair
value of share options granted to certain key management under the IPO Key
Management Plan by Eaga Partnership Trustee Limited and Eaga Partnership Trustee
Two Limited (EPT) during the period. These awards were made solely in relation
to successful admission of the Company's shares to the London Stock Exchange.
There was no cash cost to the Group in respect of the IFRS2 charge for share
based payments. A credit of equal quantum was made to reserves resulting in
unchanged net assets.
A statutory corporation tax deduction of �384,000 is expected to be received on
exercise of the options under Schedule 23 Finance Act 2003. This results in a
deferred tax credit of �384,000 at 30 November 2007.
Year ended 31 May 2007
Share based payments comprise the IFRS2 charge arising in respect of the fair
value of share options granted to Partners by the Company and EPT during the
year. These awards reflect the 100% employee owned nature of the business in the
period prior to IPO and were made solely in relation to successful admission of
the Company's shares to the London Stock Exchange.
There was no cash cost to the Group in respect of the IFRS2 charge for share
based payments. A credit of equal quantum was made to reserves resulting in
unchanged net assets.
A statutory corporation tax deduction of �30.9 million has been claimed in
respect of these options in the 6 months ended 30 November 2007 under Schedule
23 Finance Act 2003. This resulted in a release of the deferred tax asset of
�30.9 million held at 31 May 2007 relating to these options. There is no impact
on the underlying tax rate as full provision has been made for the losses
created.
Flotation expenses
The Flotation expenses relate to expenditure incurred in relation to the
Company's listing on the London Stock Exchange which did not relate directly to
the raising of new equity and therefore could not be charged to the share
premium account.
Partnership bonus
Partnership bonuses represent amounts due to Partners by virtue of their
beneficial interest through the EPT in the ownership of the Group in the period
prior to flotation.
For periods after flotation, any awards made in respect of that element of
employee ownership reflected by EPT's residual shareholding in eaga plc are
expected to be made directly by EPT to employees. To the extent that such awards
are made through share based payment mechanisms, no cash cost to the Group is
expected to arise and any related IFRS2 charge and statutory corporation tax
deduction are expected to be accounted for in the same way as the IPO related
share based payments outlined above.
Long-term incentive plan
A Directors' Long-Term Incentive Plan expired during the year to 31 May 2006. No
replacement scheme has been introduced and there is currently no intention to
re-introduce such a scheme.
Exceptional tax expense
The impact of the reduction in the UK corporation tax rate from 30% to 28%, with
effect from 1 April 2008, on the Group's deferred tax assets at 30 November 2007
has been included in the income statement as an exceptional tax expense.
4. Earnings per share
Basic
Basic earnings/(loss) per share is calculated by dividing the profit/(loss)
attributable to equity holders of the Company by the weighted average number of
Ordinary Shares in issue during the period.
6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
--------------------------------------- --------- --------- ---------
Profit/(loss) attributable to equity
shareholders of the Company �(thousands) 8,927 6,101 (61,715)
Weighted average number of Ordinary
Shares in issue (thousands) 248,067 178,727 179,750
Basic earnings/(loss) per share (pence) 3.60 3.41 (34.33)
--------------------------------------- --------- --------- ---------
Diluted
Diluted earnings/(loss) per share is calculated by adjusting the weighted
average number of Ordinary Shares outstanding to assume conversion of all
potentially dilutive ordinary shares. Potentially dilutive ordinary shares arise
from share options and any conversion of the Preferred Ordinary shares into
Ordinary Shares.
6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
--------------------------------------- --------- --------- ---------
Profit/(loss) attributable to equity
shareholders of the Company �(thousands) 8,927 6,101 (61,715)
Weighted average number of Ordinary
Shares in issue (thousands) 248,067 178,727 179,750
Adjustments for dilutive effect of
Preferred Ordinary Shares
(thousands) (note i) 1,654 50,440 -
--------------------------------------- --------- --------- ---------
Weighted average number of Ordinary
Shares for diluted earnings per share
(thousands) 249,721 229,167 179,750
Diluted earnings/(loss) per share
(pence) 3.57 2.66 (34.33)
--------------------------------------- --------- --------- ---------
(i) The adjustment for the dilutive effect of Preferred Ordinary Shares in the
year ended 31 May 2007 has not been reflected in the calculation of the diluted
loss per share as the effect would be anti-dilutive.
Adjusted earnings per share
Adjusted earnings per share is stated excluding exceptional items and
amortisation of intangible assets as follows:
Notes 6 months ended 6 months ended Year ended
30 November 30 November 31 May
2007 2006 2007
-------------------------------- ----- --------- --------- ---------
Profit/(loss) attributable to
equity shareholders of the
Company �(thousands) 8,927 6,101 (61,715)
- exceptional items 3 1,371 4,646 115,480
- amortisation of intangible
assets 3,300 279 3,245
- tax effect of above
adjustments (1,401) (1,478) (34,959)
- exceptional tax expense 3 1,045 - -
-------------------------------- ----- --------- --------- ---------
Adjusted profit �(thousands) 13,242 9,548 22,051
-------------------------------- ----- --------- --------- ---------
Adjusted basic earnings per
share
-------------------------------- ----- --------- --------- ---------
Weighted average number of
ordinary shares in issue
(thousands) 248,067 178,727 179,750
Adjusted basic earnings per
share (pence) 5.34 5.34 12.27
-------------------------------- ----- --------- --------- ---------
Adjusted diluted earnings per
share
-------------------------------- ----- --------- --------- ---------
Weighted average number of
ordinary shares in issue
(thousands) 249,721 229,167 230,190
Adjusted diluted earnings per
share (pence) 5.30 4.17 9.58
-------------------------------- ----- --------- --------- ---------
5. Share Capital
The following is a reconciliation of the authorised and issued share capital at
the start and end of the financial period:
Authorised Issued Ordinary Authorised Issued
Ordinary Shares Shares of Preferred Preferred
of �0.001 each �0.001 each Ordinary Shares Ordinary Shares
of �0.001 of �0.001
each each
------------------------ ----------- ----------- ----------- -----------
At 1 June 2006 40,000 36,800 970,000 970,000
Ordinary Shares
allotted on 9 June 2006 - 2,380 - -
Ordinary Shares
allotted on 19 July 2006 - 380 - -
------------------------ ----------- ----------- ----------- -----------
At 30 November 2006 40,000 39,560 970,000 970,000
----------------------- ----------- ----------- ----------- -----------
Increase in authorised
share capital on
24 February 2007 1 - 51,989,999 -
Ordinary Shares
allotted on
24 February 2007 - 441 - -
Bonus issue of
Preferred Ordinary
Shares on 24 February
2007 - - - 49,470,000
----------------------- ----------- ----------- ----------- -----------
At 31 May 2007 40,001 40,001 52,959,999 50,440,000
----------------------- ----------- ----------- ----------- -----------
Increase in authorised
share capital on
6 June 2007 277,000,000 - - -
Preferred Ordinary
Shares allotted
on 6 June 2007 - - - 1,520,208
Bonus issue of Ordinary
Shares on 6 June 2007 - 181,684,542 - -
Conversion of Preferred
Ordinary Shares to
Ordinary Shares on
6 June 2007 52,959,999 51,960,208 (52,959,999) (51,960,208)
Allotment of Ordinary
Shares on 7 June 2007 - 16,574,586 - -
Allotment of Ordinary
Shares on 31 October
2007 - 333,908 - -
----------------------- ----------- ----------- ----------- -----------
At 30 November 2007 330,000,000 250,593,245 - -
----------------------- ----------- ----------- ----------- -----------
6. Consolidated statement of changes in equity
Share Other Retained Attributable Minority Total
Capital Reserves Earnings to the Interest Equity
Equity
holders
of the
Company
�000 �000 �000 �000 �000 �000
At 1 June 2006 1 3,586 12,346 15,933 63 15,996
Profit for the period - - 6,101 6,101 37 6,138
Issue of share capital - 69 - 69 - 69
Acquisitions of
minority interests - - - - (25) (25)
Currency translation
differences - 145 - 145 - 145
---------------------- ------- ------- -------- --------- -------- --------
At 30 November 2006 1 3,800 18,447 22,248 75 22,323
---------------------- ------- ------- -------- --------- -------- --------
Loss for the period - - (67,816) (67,816) 52 (67,764)
Share based payments - - 104,225 - - 104,225
Bonus issue of shares 49 (49) - - - -
Dividends paid to
minority shareholders
of subsidiary - - - - (15) (15)
Currency translation
differences - (103) - (103) - (103)
---------------------- ------- ------- -------- --------- -------- --------
At 31 May 2007 50 3,648 54,856 58,554 112 58,666
---------------------- ------- ------- -------- --------- -------- --------
Profit for the period - - 8,927 8,927 129 9,056
Share based payments - - 1,371 1,371 - 1,371
Bonus issue of shares 182 (182) - - - -
Issue of share capital 19 28,722 - 28,741 - 28,741
Currency translation
differences - (57) - (57) - (57)
---------------------- ------- ------- -------- --------- -------- --------
At 30 November 2007 251 32,131 65,154 97,536 241 97,777
---------------------- ------- ------- -------- --------- -------- --------
7. Acquisitions
RG Francis Limited
On 22 June 2007, the Group acquired 100 per cent of the issued share capital of
RG Francis Limited, a company registered in England. The consideration paid was
�9,820,000 including acquisition expenses of �220,000.
RG Francis Limited installs and services domestic central heating systems in the
South-East of England.
As at the date of acquisition, the consolidated net assets of RG Francis Limited
and its subsidiary undertakings determined using the Group's accounting policies
were as follows:
Book Provisional Provisional
value fair value fair value
adjustments
�000 �000 �000
---------------------------------- --------- ---------- ---------
Intangible assets - 1,627 1,627
Property, plant and equipment 63 - 63
Inventories 124 - 124
Trade and other receivables 2,881 - 2,881
Cash and cash equivalents (115) - (115)
Trade and other payables (1,799) - (1,799)
Deferred taxation 7 (462) (455)
---------------------------------- --------- ---------- ---------
1,161 1,165 2,326
---------------------------------- --------- ---------- ---------
Goodwill 7,494
Cash consideration 9,600
Acquisition expenses 220
---------------------------------- --------- ---------- ---------
9,820
---------------------------------- --------- ---------- ---------
Intangible assets identified on acquisition represent the Directors' estimate of
the value of contractual customer relationships at acquisition. The value of the
contractual customer relationships was derived using a discounted cash flow
analysis based on the forecast profitability of the relationships using a
discount rate of 9.5%.
A related deferred tax liability of �462,000 has been recognised in association
with the valuation of contractual customer relationships.
Goodwill arose on the acquisition of RG Francis Limited because of future growth
opportunities, added value to the Group in respect of non contractual customer
relationships, an assembled workforce and anticipated synergies for which the
recognition of discrete intangible assets is not permitted.
In the above acquisition, the fair values represent the Directors' current
estimates of the net assets acquired. In accordance with IFRS3, the values
attributed may be revised as further information becomes available.
AFR Limited
On 25 September 2007, the Group acquired 100 per cent of the issued share
capital of AFR Limited, a company registered in England. The initial
consideration paid was �2,506,000 including acquisition expenses of �106,000.
There is further consideration of up to �600,000 payable 6 months from the date
of acquisition depending on the post acquisition results of AFR Limited.
AFR Limited installs and services domestic central heating systems in the
South-East of England.
As at the date of acquisition, the net assets of AFR Limited determined using
the Group's accounting policies were as follows:
Book Provisional Provisional
value fair value fair
adjustments
value
�000 �000 �000
---------------------------------- --------- ---------- ---------
Intangible assets - 714 714
Property, plant and equipment 85 - 85
Inventories 391 - 391
Trade and other receivables 692 - 692
Cash and cash equivalents 57 - 57
Trade and other payables (755) - (755)
Deferred taxation (2) (201) (203)
---------------------------------- --------- ---------- ---------
468 513 981
---------------------------------- --------- ---------- ---------
Goodwill 2,102
Cash consideration 2,400
Acquisition expenses 106
Further consideration 577
---------------------------------- --------- ---------- ---------
3,083
---------------------------------- --------- ---------- ---------
Intangible assets identified on acquisition represent the Directors' estimate of
the value of contractual customer relationships at acquisition. The value of the
contractual customer relationships was derived using a discounted cash flow
analysis based on the forecast profitability of the relationships using a
discount rate of 9.5%.
A related deferred tax liability of �201,000 has been recognised in association
with the valuation of contractual customer relationships.
Goodwill arose on the acquisition of AFR Limited because of future growth
opportunities, added value to the Group in respect of non contractual customer
relationships, an assembled workforce and anticipated synergies for which the
recognition of discrete intangible assets is not permitted.
In the above acquisition, the fair values represent the Directors' current
estimates of the net assets acquired. In accordance with IFRS3, the values
attributed may be revised as further information becomes available.
George Howe Limited
On 26 October 2007, the Group acquired 100 per cent of the issued share capital
of George Howe Limited, a company registered in England. The initial
consideration paid was �3,312,000 including acquisition expenses of �112,000.
There is further consideration of up to �800,000 payable 6 months from the date
of acquisition depending on the post acquisition results of George Howe Limited.
George Howe Limited provides internal and external wall insulation in England
and Wales.
As the date of acquisition was near to the Group's interim reporting date the
assets acquired are included at their carrying values which are deemed to be
provisional fair values at 30 November 2007. The exercise to value separately
the acquired intangible assets will be undertaken in advance of the year end.
Provisional
fair value
�000
--------------------------------------------- ---------
Property, plant and equipment 394
Inventories 2
Trade and other receivables 2,628
Cash and cash equivalents 173
Trade and other payables (2,065)
Deferred taxation 7
--------------------------------------------- ---------
1,139
--------------------------------------------- ---------
Goodwill 2,936
Cash consideration 3,200
Acquisition expenses 112
Further consideration 763
--------------------------------------------- ---------
4,075
--------------------------------------------- ---------
Horrocks Group plc
On 31 October 2007, the Group acquired 100 per cent of the issued share capital
of Horrocks Group plc, a company registered in England. The initial
consideration was �9,686,000 including acquisition expenses of �223,000. There
is further consideration of up to �1,100,000 to be settled in Ordinary Shares of
eaga plc, payable 6 months from the date of acquisition depending on the post
acquisition results of Horrocks Group plc.
Horrocks Group plc installs and supplies external wall insulation products to
the social housing and housing construction markets in England and Wales.
As the date of acquisition was near to the Group's interim reporting date the
consolidated assets acquired are included at their carrying values which are
deemed to be provisional fair values at 30 November 2007. The exercise to value
separately the acquired intangible assets will be undertaken in advance of the
year end.
Provisional
fair value
�000
--------------------------------------------- ---------
Property, plant and equipment 868
Inventories 1,542
Trade and other receivables 2,537
Cash and cash equivalents (214)
Trade and other payables (3,717)
Provisions for liabilities and charges (244)
--------------------------------------------- ---------
772
--------------------------------------------- ---------
Goodwill 9,952
Cash consideration 8,825
Share consideration 638
Acquisition expenses 223
Further share consideration 1,038
--------------------------------------------- ---------
10,724
--------------------------------------------- ---------
The above acquisitions have contributed �558,000 to operating profit after
exceptional items in the period. If all of the above acquisitions had been
completed on 1 June 2007 instead of the dates above, total Group revenue for the
period would have been �325 million and Group operating profit after exceptional
items for the period would have been �15.4 million.
8. Related party disclosures
The Group's significant related parties are its joint ventures as disclosed in
the eaga Annual Report for the year ended 31 May 2007. There were no material
differences in related parties or related party transactions in the period or
prior period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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