RNS Number : 1680C
MWB Group Holdings PLC
28 August 2008
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FOR IMMEDIATE RELEASE
28 August 2008
MWB GROUP HOLDINGS PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2008
HIGHLIGHTS
MWB GROUP HOLDINGS PLC
* Equity attributable to MWB shareholders at 30 June 2008 is 212p per share, compared to 254p at 31 December 2007, reflecting share
of property valuation deficit of �30.5m or 41p per share.
* Adjusted equity attributable to MWB shareholders, after taking account of stakes in MWB Business Exchange Plc and Liberty Plc at
Stock Market values at 30 June 2008 and incentives payable on realisation, amounts to 220p in comparison to 263p per share at 31 December
2007.
* Divisional operating EBITDA increased to �23.8m against �16.6m for the comparable period in 2007.
* Loss before tax of �5.4m in comparison to �3.8m in six months to June 2007.
"The second half of the year is now well underway and I am pleased to report that trading to date in all three of our businesses
continues to be positive. Our businesses are all appropriately structured and the Group is well placed to continue the performance delivered
during the first half of the year."
Eric Sanderson
Chairman
MALMAISON AND HOTEL DU VIN
* 22 operating hotels now open - a further four to open over next four months.
* Hotel properties valued at �510m at 30 June 2008 down from �529m at 31 December 2007.
* Revenue over the period grew by 24% to �52.0m from �41.9m for the comparable period to 30 June 2007.
* Operating EBITDA for six months to June 2008 increased by 22% to �12.2m compared with �10.0m for six months to 30 June 2007.
* Overall occupancy for six months to 30 June 2008, including new hotels, stable at 81%.
* Average room rate increased to �117 against �115 for year to 31 December 2007.
* Earnings before interest and tax increased to �7.4m in six months to June 2008, up from �2.3m in the comparative period.
"I am heartened by the level of performance achieved by Malmaison and Hotel du Vin in the current climate. We have the team and the
product in place to deliver an excellent and highly regarded customer-facing offer that will endure. I therefore look forward to continuing
to grow and develop the business as one of the UK's leading lifestyle hotel operators."
Robert B. Cook
Chief Executive
Malmaison and Hotel du Vin Group
MWB BUSINESS EXCHANGE PLC
* Revenue grew by 25% to �59.7m over comparable six months to 30 June 2007.
* Operating EBITDA rose strongly by 81% to �11.3m against �6.2m for the comparable six month period.
* Revenue Per Available Workstation (REVPAW) advanced 12% to �9,630 at 30 June 2008 from �8,600 at 30 June 2007.
* Revenue Per Occupied Workstation (REVPOW) up 7% to �10,500 at 30 June 2008 compared to �9,800 at 30 June 2007.
* Meeting and conference room division revenues up by more than 20% to �6.1m over six months to 30 June 2007.
* Occupancy increased to 92% at 30 June 2008, up from 88% at 30 June 2007.
* Robust contracted income already accounts for approximately 75% of current projections to December 2008.
* Profit before tax increased to �8.8m in six months to June 2008, from �3.5m in the comparative period.
"Our highly focused strategy, where we have concentrated on proven growing markets such as Central London, continues to bear fruit for
the company. We are again delivering results for the six months to 30 June 2008 that are ahead of expectations."
John Spencer
Chief Executive
MWB Business Exchange Plc
LIBERTY PLC
* Total revenue increased to �22.0m from �20.8m in six months to 30 June 2007.
* Independent Liberty of London showcase store in Sloane Street opened July 2008.
* Liberty balance sheet supported by Great Marlborough Street Flagship Store valued at �31.5m.
* Loss before tax increased to �4.1m in six months to June 2008 from �2.3m in the comparable period, reflecting increased brand
expenditure of �2.0m and one-off restructuring costs of �0.9m.
"I am pleased to be reporting more progress at Liberty over the first half of the year both within the flagship store and across the
business as a whole."
Geoffroy de La Bourdonnaye
Chief Executive
Liberty Plc
CHAIRMAN'S STATEMENT
Despite the deteriorating economic environment we have continued to grow the three businesses that comprise MWB Group Holdings Plc
during the six months to 30 June 2008. Over the period each of our businesses has continued to consolidate its position and the Group
overall has produced further advances in both revenue and EBITDA. This performance, in what have been quite difficult market circumstances,
reflects the progress we have made in two principal areas: increasing brand awareness and continuing the development one of our key assets -
our people.
Against this background I believe there has been a significant over-reaction towards the Group's share price and also that of our AIM
quoted subsidiary MWB Business Exchange. The share price of MWB Business Exchange, one of the UK's leading providers of flexible office
space in which the Group has a 68% holding, has fallen below its 80p per share issue price at the time of its December 2005 AIM flotation.
As shareholders will see from the accompanying results, MWB Business Exchange has produced 25% revenue growth to �59.7m and an 81% rise in
EBITDA to �11.3m in the six months to June 2008 against the comparable period last year.
The current share price of MWB Business Exchange represents a 2007 historic EBITDA multiple of less than three times. In our view, this
is absurdly low and does not reflect its current levels of profitability, its future prospects or the dynamic nature of its business. MWB
Business Exchange is now generating 66% more revenue and over 250% more EBITDA than it was at flotation and the Board continues to be
confident of its performance and overall prospects.
The Directors consider these results from MWB Business Exchange would be regarded as excellent in a healthy and growing economy. Against
a backdrop of the current business environment, I believe they are truly commendable and demonstrate the depth and quality of MWB Business
Exchange's offer as well as its management's capability in the face of tough market conditions. MWB Business Exchange continues to reap the
rewards of its highly focused expansion programme and this performance has been achieved with no borrowings at 30 June 2008.
At the same time our two leading lifestyle hotel brands, Malmaison and Hotel du Vin, in which the Group continues to hold an 82.5%
interest, have also made strong progress during this difficult trading environment. Our newer hotels are establishing themselves well whilst
taking slightly longer than in the stronger financial climate last year. The business has produced further revenue advances to �52.0m for
the six months ended 30 June 2008, and a 22% uplift in operating EBITDA to �12.2m in comparison to the previous year. Overall occupancy on
a like-for-like basis held firm over the period at 80% while at the same time average room rate across the business increased to �117, a
rise of 2%.
We have four new hotels opening this Autumn, taking our total operating portfolio to 26. These comprise three Hotel du Vins in Poole,
Newcastle and Edinburgh, and a new Malmaison in Aberdeen. While our business has performed well, we are well aware of the current economic
climate and have launched a number of initiatives aimed at making both Malmaison and Hotel du Vin ever more attractive to both stay and eat
in. We have no doubt that both these award-winning brands will continue to improve their positions in the UK boutique hotel market.
We are also pleased with the progress being made by the new management team at Liberty, our retail business in which we have a 68%
interest. Under its new chief executive, Geoffroy de La Bourdonnaye, who joined Liberty in July 2007, the business produced a 6% increase
in revenue for the six months to June 2008. This has been achieved during a particularly difficult period for retailing, with an especially
strong performance from our Men's Fashions and Wholesale Fabrics divisions. This translated into operating EBITDA before brand expenditure
and reorganisation costs of �0.3m, being the same as that for the six months to June 2007.
Liberty is increasingly offering a range of quality brands on an exclusive basis. This approach in part reflects the management
reorganisation that has been underway since the arrival of our new CEO last year. Here we have focused on attracting the right people to
develop both the Liberty brand, through Liberty of London, and a more luxury retail offer.
Last month we opened our first stand-alone Liberty of London store on Sloane Street in Knightsbridge. This beautifully designed retail
outlet stocks the increasingly wide range of Liberty of London products and acts as the international showcase for this luxury brand. The
brand is gaining both recognition and awareness of the style and quality of its product range as an increasing number of worldwide outlets
stock Liberty of London pieces.
We have also recently launched our new Liberty transactional website enabling customers from around the world to buy Liberty products
on-line. We are adopting a careful approach to the development of the site to ensure delivery fulfilment, increased revenue levels and
continued strength in the Liberty brand.
Overall, for the six months ended 30 June 2008, the Group produced divisional operating EBITDA of �23.8m, up from last year's �16.6m.
Pre-tax losses of �5.4m compare to a pre-tax loss of �3.8m in the six months to June 2007. Last year's results included profits arising on
property sales of �6.7m, while the current period's results reflect the absorption in the period of �2.4m of costs associated with our
successful corporate restructuring. On-going overheads continue to be closely controlled and the ServCo fee has been reduced by �1.1m to
�2.4m per annum from January 2009.
However, as far as shareholders are concerned, we consider the key statistic to be MWB's property valuations at 30 June 2008. During
this period, property values have fallen as a result of continued turbulence in the markets. Nevertheless it is gratifying to note the
robust nature of our hotel portfolio, which has withstood the majority of the adverse effects of recent market movements. Overall, a
reduction in value during this six month period of �37.2m arose, amounting to 6% of the gross value of the portfolio, resulting in a
reduction of �30.5m in equity attributable to MWB shareholders.
We continue to manage debt levels closely and our property gearing (being the percentage of net debt to total property interests) was
57% at the period end. This reflects the Board's continued strategy of maintaining property gearing at relatively low levels to ensure
protection of shareholder interests in these more uncertain times.
As a result of the decrease in property values during the period referred to above, equity attributable to shareholders after taking
account of minority interests, reduced to �157.5m from �204.4m at 31 December 2007. This represents a reduction of 42p per share from the
254p in our December 2007 results, to 212p at June 2008. This reflects, we consider, a creditable performance in the adverse financial and
property markets in the first half of this year.
It is important to remember that property valuations included on our financial statements take no account of the market value of the
Malmaison and Hotel du Vin brands, their goodwill or the current roll-out programme. We therefore believe there is further capital value to
be realised for shareholders as these successful niche businesses continue to grow.
Two important interlinked corporate transactions were completed during the period. Firstly, we completed the reorganisation of the
Group's businesses under our new holding company, MWB Group Holdings Plc. This reorganisation created a group structure with significantly
increased flexibility with regard to future disposals of the operating businesses; it increased distributable reserves by �160m and it
increased flexibility in the manner in which cash or cash equivalents can be returned to shareholders once the underlying businesses have
been sold. Secondly, in accordance with the structure previously approved by shareholders, we extended the Cash Distribution Programme for
two years to enable value realisation from our businesses when the markets are more receptive. We are totally focused on that delivery.
It is uncertain how long the current difficult economic environment will continue and I am therefore cautious about the immediate
future. However, the second half of the year is now well underway and I am pleased to report that trading to date in all three of our
businesses continues to be positive. Our businesses are all appropriately structured and the Group is well placed to continue the
performance delivered during the first half of the year.
Eric Sanderson
Chairman
28 August 2008
MALMAISON AND HOTEL DU VIN OPERATING REVIEW
The quality of the Malmaison and Hotel du Vin offer, combined with their distinctive brand values, has contributed towards further
progress in the business in spite of the difficult economic environment. I am pleased to report that all five properties we opened over the
past 18 months have established themselves well in their individual markets.
Across the business we produced healthy increases in revenue, ahead by 24% in the six months to 30 June 2008 to �52.0m. This, together
with the tighter cost controls implemented last year, have borne fruit in operating EBITDA, where we produced a 22% increase to �12.2m. At
the same time, on a like-for-like basis, we delivered an uplift in room rates to �117, an advance of 2% in this six month period, at a time
when the market is experiencing lower spends and falling revenues. Occupancy, on a like-for-like basis also rose by nearly 2% to 80%
against 78% for the same period a year ago.
We are operating in much tougher market conditions than a year ago, and we have seen a reduction in discretionary spending. This has
the potential to impact particularly our Hotel du Vin offer that, broadly speaking, is more targeted towards the leisure market. However, I
am pleased to report that HdV performed very well in these testing market conditions, reflecting the impact of the quality offer and strong
cost controls I mentioned earlier. Across the portfolio it has been interesting to note that our hotels in larger cities and conurbations
have performed generally better than those in the more provincial towns, mirroring the trend of a slightly reduced leisure spend compared to
the more robust business market.
At the period end the group comprised 22 operating hotels together with our property in St Andrews, which will shortly undergo a
refurbishment programme before re-opening in the first quarter of 2010 as a 41 bed HdV. A further four hotels will open during the second
half 2008, three of which, Poole (September), Newcastle (October) and Edinburgh (November), will be HdV properties providing a total of 126
rooms while the fourth property will be an 80 bed Malmaison in Aberdeen also opening in November. This will take the total to 26 hotels, of
which 14 will be HdV and 12 Malmaison.
Meanwhile, a site has been acquired in Canterbury and legal documentation is being finalised for the acquisition of a further site in
Chester, both of which are planned to be developed as HdVs for opening during 2010. At the same time we are looking for suitable properties
for Malmaison in London's West End, Dublin, Milton Keynes, Portsmouth, Bristol and Leicester which would take the total portfolio to 35
hotels.
Pub du Vin, which is being created out of part of the former Sussex Arts Club adjacent to our HdV in Brighton, will open in November
2008 while its 11 bedroom offer will come on stream in January 2009. There has been increasing market desire for the "Traditional British
Pub" as well as finer dining in more typical country and rural based pubs. We believe there will be long-term growth in this market sector
and we regard the HdV brand as well placed to take full advantage of the demand for a product of this nature.
We continue to invest in our existing portfolio with programmes aimed at upgrading and, where appropriate, expanding the number of rooms
or facilities. At our Birmingham Malmaison we invested over �600,000 during the period refurbishing the reception area and bedrooms, while
at Harrogate we have added a further five bedrooms and a spa which opened shortly after the period end.
But it is not only in our properties where we continue to invest. Our employees are as important as the hotels themselves as they are
the people who deliver the brand values of which we are rightly proud. Their efforts have been recognised in the awards we continued to win
during 2008. Both Malmaison and HdV received the "Best Place to Work" award from the UK Hospitality industry during 2008 while Malmaison
was awarded the Sunday Times readers "Hotel Brand of the Year" and our HdV at One Devonshire Gardens in Glasgow won "Scotland's Hotel of the
Year" award.
Two of our young General Managers, Andrew Creese (HdV Newcastle) and Andy Roger (HdV Tunbridge Wells) won the hotel industry's Acorn
awards for "The Best 30 under 30". In addition, Sean Wheeler was awarded "HR Director of the Year" which was particularly pleasing as this
is a national HR industry award and not restricted to the hospitality sector.
During the period we have also strengthened our senior management team in response to the substantial growth achieved over the past few
years and to ensure we can manage our anticipated growth both in the UK and abroad. Bruce McKendrick has joined as Managing Director from
The Tussauds Group where he had great success in managing their extensive Theme Parks business and he is working closely with me.
We continue to look for further sites within the UK and Ireland. We appreciate that once the present requirements are fulfilled there
are probably fewer opportunities for expansion within the domestic market. With our expanded senior management team - all of whom have
extensive international experience - we are looking to take the Malmaison concept into overseas markets and are currently evaluating
Continental Europe, the Middle East and India.
We are adopting an open-minded approach to gaining footholds in these markets but do not expect to invest significant capital in this
expansion as it is expected to take the form of leases or management contracts. We believe the Malmaison and HdV brands are now
sufficiently mature that we can take them into new markets and achieve similar levels of success as we have done within the UK.
While market conditions are tougher than they were a year ago, I am heartened by the level of performance achieved by Malmaison and
Hotel du Vin in the current climate. It is difficult to predict the future but what is certain is that we have the team and the product in
place to deliver an excellent and highly regarded customer-facing offer that will endure. We recognise the challenges presented by the
current business environment which we have addressed and are prepared to meet any further changes as they arise. I therefore look forward to
continuing to grow and develop the business as one of the UK's leading lifestyle hotel operators.
Robert B. Cook
Chief Executive
Malmaison and Hotel du Vin Group
28 August 2008
MWB BUSINESS EXCHANGE PLC OPERATING REVIEW
Once again I am pleased to report another period of strong progress and consolidation as MWB Business Exchange continues to make
advances on all fronts in spite of the present difficult economic climate.
Our highly focused strategy, where we have concentrated on proven growing markets such as Central London, continues to bear fruit for
the company. We are again delivering results for the six months to 30 June 2008 that are ahead of expectations. EBITDA for the period was
�11.3m, a very creditable 81% uplift over our already strong performance a year ago. This resulted in an increase in pre-tax profits from
�3.5m in the first half last year, to �8.8m in the first half this year. Our balance sheet continues to be strong as we benefit from healthy
cash flows; we had �9.5m of borrowings at 31 December 2007 all of which we have now repaid.
These results reflect the increasing maturity of both the MWB Business Exchange brand and its product offering. The concept of serviced
offices continues to gather momentum and market acceptance, and this is borne out in the advances MWB Business Exchange has made over the
period.
We started the period with very high occupancy levels of 90% and I am pleased to report that we maintained those levels during the six
months to 30 June 2008, ending the period at 92%. This has given us both strong cash flow and protection of income streams as the average
length of client occupancy is approximately two years; a similar level to that at 31 December 2007.
Demand for the MWB Business Exchange offering has remained strong, with lead flow up 24% over the comparative period. The London City
market has remained particularly buoyant, with lead flow up 54% - an encouraging statistic considering current vacancy rates and low take up
in the conventional office market. These figures, coupled with our focus on securing client contracts for longer terms, reinforce our
belief that we are well placed to address the forthcoming challenges that the current economic climate presents. Organisations do not want
to commit to long term lease obligations and require the versatility that flexible office space can provide. Conventional leases can also be
an unnecessary risk for occupiers - which is why the risk averse route we provide continues to be so appealing to both corporates and SMEs
alike.
Our strategy has also been to preserve cash flow and as a result we have not opened any new leased or capital intensive centres during
the first half of 2008. Instead we have concentrated on driving business in the new centres that were opened last year, the results of which
have been very encouraging. These new centres have reached maturity quickly and consequently have made a positive contribution to cash flow
in a relatively short time frame. We have launched new services, some of which generate additional revenue and all of which help to improve
client retention - particularly important in the current market conditions.
A key highlight in the development of new services has been the enhancement of our IT and Telecoms offering, which enables us to provide
additional product and service streams, tailored to the specific requirements of our diverse client base. This has resulted in a 13%
increase in IT and Telecoms revenue over the period to �4.9m compared to the prior six months ended 31 December 2007.
In the present market we are adopting a cautious approach to expansion. We do not envisage acquiring more leased centres at present, but
there are opportunities to grow using our proven Operating and Management Agreement (OMA) operation, both within Central London and key
regional centres, and these are being pursued.
Since the period end, we have opened a further centre using the OMA strategy. Located in the City, not far from Bank in Clement's Lane,
EC4, this 34,150 sq. ft. building provides us with a further 407 workstations, as well as an additional Meeting and Conference Room
offering. Under our OMA model we receive a regular management fee and a profit share with no exposure to capital expenditure or long leases.
OMAs also continue to be particularly appealing to landlords and corporate occupiers looking to maximise their returns from vacant or
under-utilised space. This in turn enables us to adopt minimum risk in the growth of our centres, yet still enables us to expand our
business. Today we have a total of 17 centres that are operated under OMAs.
Since January 2008 we have reduced the number of centres slightly to 56, closing two underperforming locations and opening one new
centre as described above. Despite this we have marginally increased the number of workstations to 15,914 as we have taken on additional
space in existing buildings such as Cavendish Square in London's West End, where demand remains strong. Likewise we have maintained our
Meeting and Conference Room offer which continues to make a growing and profitable contribution to our business model.
The revenue in our Meeting and Conference Room division during the six months ended June 2008 totalled �6.1m, a 20% increase over the
comparable period. To help support the continued growth of this division, we have recently implemented a new yield management and booking
system, primarily to cope with the increased demand for our meeting rooms that we are experiencing from the corporate sector. We are
benefiting from companies' lower training budgets which require more single day facilities rather than including an overnight stay with
consequent higher accommodation costs. The new system enables us to better identify the sources of leads to maximise efficiencies and
provides us with a platform for a greatly improved on-line booking capability.
It is particularly pleasing, especially in the current climate, to see this strong performance reflected in our key performance
indicators. For example, revenue per available workstation (REVPAW) advanced 12% to �9,630 at 30 June 2008 from �8,600 a year ago.
Similarly, revenue per occupied workstation (REVPOW) increased 7% to �10,500 from �9,800 in June 2007.
We have approximately 1,500 serviced office clients, spread across a diverse range of sectors, who have an average initial requirement
of seven workstations for an initial eight month term. Today our contracted income equates to approximately 75% of our projections for the
remainder of the year to December 2008. When anticipated renewals are factored in, this figure rises to 90%, further underpinning our
business model and providing certainty of our future income stream.
We work tirelessly to ensure that we support our clients' businesses and provide them with the freedom to excel during their time with
us. Our latest independent client survey reported that over 90% of our clients were satisfied or very satisfied with the service we provided
and virtually all rated our people as good, very good, or excellent. These results are especially pleasing as they highlight that our
strategy of both people development and market differentiation has been successful.
Over the past two years we have successfully implemented our strategy of focusing centre expansion in key markets, especially Central
London and in particular the West End, where a shortage of quality space and rising rents for office space have made the MWB Business
Exchange offering particularly attractive. In addition we ensure our centres are unbranded which increasingly appeals to a broad range of
clients. We continue to reap the operational and financial benefits of this approach.
Despite this considerable success, MWB Business Exchange's share price has fallen over the last year and recently dropped below the 80p
issue price at the time of our AIM flotation in December 2005. The current share price represents a 2007 historic EBITDA multiple of less
than three times. In our view, this does not represent anywhere near the true value of the Company, especially when considering our
excellent results since flotation, our financial position and the Company's prospects in the short and medium term.
The company is ungeared, having repaid all its loans from retained cash flow during the six months to 30 June 2008, whilst retaining a
revolving bank loan facility of �13m to take advantage of opportunities as they arise.
It is clear that market conditions are becoming tighter, but we are pleased to confirm that to date we have not seen any negative impact
on revenue streams due to the diversity and high quality of our offer. However we are monitoring the market extremely closely. Prospects for
the remainder of the year to December 2008 continue to be good and we anticipate reporting further progress in March 2009.
John Spencer
Chief Executive
MWB Business Exchange Plc
28 August 2008
LIBERTY PLC OPERATING REVIEW
I am pleased to be reporting more progress at Liberty over the first half of the year both within the flagship store and across the
business as a whole. This advance reflects the hard work that has been undertaken over the past year to reorganise both the management team
and the operating structures.
It is important to stress that we continue to develop the business on a number of fronts, all of which are aimed at making Liberty a
global luxury brand. To this end, we continue to take full advantage of Liberty's worldwide brand identity, its history, designs and
products.
Despite the current economic environment, I can report that revenue across all of Liberty's divisions has improved during the first half
of the year compared to the same period a year ago. Total revenue for the period advanced by 6% to �22.0m against �20.8m for the first six
months of 2007, with a particularly strong performance from our Fabrics division where we achieved a 15% rise in sales to �7.6m.
As shareholders will have noted, costs for the Liberty of London brand rose from just under �1.6m in the six months to June 2007 to
almost �2.0m for the current period. The impact of this investment and certain one-off reorganisation costs of �0.9m this period, is that
EBITDA for this six months was a loss of �2.6m compared to last year's loss of �1.2m. After interest and depreciation totalling �1.5m, this
resulted in a pre-tax loss of �4.1m this time, compared to the pre-tax loss of �2.3m for the same period last year. We believe the
expenditure invested during 2008 will improve performance in future years and the business has the benefit of the �31.5m Liberty flagship
store which supports its financial strength.
Against a backdrop of difficult trading conditions in the retail sector, the Regent Street flagship store saw total sales increase to
�16.7m. This reflects another successful half year for Men's Fashions, advancing by 13% on the back of a strong offer including an expanded
footwear section, while our Beauty and Homes departments also performed strongly, producing 8% and 4% sales uplifts respectively during the
first half.
The store is beginning to re-establish itself as a retail destination. We are undergoing a major transformation, both front-of-house
and behind the scenes, that will continue to improve our product offer, service, visual identity and marketing.
Typical of this transformation is our highly focused lingerie department which stocks a number of brands that in London are exclusive to
Liberty such as Kiki de Montparnasse. As a result, Liberty's lingerie department is now rated as one of the best in London. Additionally,
we are offering a range of brands exclusive to Liberty in London such as Karl Lagerfeld and Christian Lacroix bridal, Le Labo perfumes and
Jean Paul Gaultier ladieswear.
The store is also benefiting from its involvement with the Victoria & Albert Museum that led to collaboration over the staging of their
exhibition "China Design Now". Since then the store has hosted a highly successful Arts & Crafts exhibition, which attracted large numbers
of Liberty aficionados.
Part of the store's improvement is due to a reorganisation programme that has been implemented over the past nine months, the effects of
which are now being seen. We have placed greater emphasis on buying and merchandising, particularly in Accessories and Ladies' Fashion. To
that end we have appointed new buyers in Accessories and recruited Yasmin Sewell, an extremely talented and experienced buyer, as a
long-term fashion advisor. She joins the team led by Olivia Richardson who was appointed Head of Fashion Buying in May. The impact of
these changes, although coming through in the latter part of 2008, will be felt with more impact during the first half of 2009.
As I mentioned earlier, one of the great success stories of the period has been our Fabrics division especially in Japan where we now
wholly own our wholesale business. Liberty designs have become increasingly popular in Japan and underlying Yen revenues in Japan rose by
19% during the period. We believe there are great opportunities to expand our wholesale fabrics sales base in a number of key markets, such
as North America and the Far East and these are being examined.
Liberty prints are being used in a wide variety of design contexts across the world. Leading fashion designer Junya Watanabe is making
extensive use of our fabrics in his clothing ranges while global brands like Nike and Gap have incorporated Liberty prints in certain of
their best-selling product ranges.
We are collaborating with a range of artists, including the award winning English artist Grayson Perry, to produce new Liberty print
designs. At the same time we are working with the Central St Martin's School of Art to enable textile students to develop and produce
Liberty floral print collections for their end of year shows. The winner's designs will be presented in the store.
An important step in enhancing sales generally, as well as developing the brand globally, is the launch of our transactional website,
enabling customers from around the world to buy our products on-line. We undertook a "soft" launch of the website last month and we already
have a wide selection of the store products available. By the time I report to you again next Spring, the on-line store should have become
well established and I will update shareholders with the progress we have made on this important advance to bring Liberty into our
customers' homes.
Progress continues to be made with the Liberty of London luxury brand. Last month we launched our first stand-alone Liberty of London
store in Sloane Street. This 1,800 sq ft two-storey store has been designed by Paris-based architects Pierre Beucler and Jean-Christophe
Poggioli. It is a showcase for the growing range of Liberty of London clothes and accessories, for both men and women. The new store
reflects a modern take on Liberty's historic prints and designs, featuring among other things, a three metre long scarf bar that brings
together an impressive mixture of exclusive designs. The store has been well received by the fashion media and is becoming a Knightsbridge
landmark as it establishes itself on this famous shopping street as another major internationally-recognised luxury brand.
Today I am delighted to report that Liberty of London merchandise is now sold in more than 100 of the world's leading stores. This
reflects the growing success of our wholesale operations especially through our trade shows in Paris, Milan and London.
Over the past few months we have appointed a range of high calibre people to key positions within Liberty as part of our overall
restructuring. In May, Paul Harris, who has a strong retail background, was appointed to the Board as Finance Director, having been with
the company for two years as Financial Controller.
Other senior management appointments include James Bradbury who joined as Retail Operations Director. He brings a wealth of experience
gained at Harrods and Jenners as well as a unique background from The Tussauds Group where his expertise in guest service standards will be
enormously helpful in refining the whole Liberty shopping experience.
Meanwhile Fabio Guidetti will be taking up his role as Sales and Distribution Director for Liberty of London in the Autumn of 2008. He
joins us from Pringle where he was head of international sales and he has held senior sales positions with other major brands such as Donna
Karan and Cerutti.
I believe we now have the management team and structures in place to deliver both the service and product that is expected of a brand
that is aiming at a global luxury retail market. We expect to see more collaborative ventures with major world brands, as well as
individual fashion designers, that will raise not only our profile but also generate revenue within the international retail market.
While it is difficult to gauge our performance going forward in the present retail market and general economic uncertainty, I sincerely
believe the entire Liberty business is better placed than ever to deliver a performance that reflects its inherent potential as well as its
extensive history. The current economic environment makes all business challenging but we have the people, the brand and the products to
face that challenge.
Geoffroy de La Bourdonnaye
Chief Executive
Liberty Plc
28 August 2008
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2008
Six months Six months Year
ended ended ended
30 June 30 June 31
2008 2007 December
2007
Notes �'000 �'000 �'000
Revenue 134,299 110,610 252,119
Cost of sales (115,799) (98,081) (218,468)
Gross profit 18,500 12,529 33,651
Administrative expenses (8,918) (6,773) (16,924)
Results from operating 9,582 5,756 16,727
activities
Net gain on sale of property,
plant and
equipment - 6,712 7,586
Abortive transaction costs - (4,610) (8,077)
Capital reorganisation costs (2,417) - (2,500)
Finance income 834 519 1,093
Finance expenses (13,381) (12,175) (28,592)
Loss before taxation (5,382) (3,798) (13,763)
Taxation (1,506) (231) (551)
Loss for the period (6,888) (4,029) (14,314)
Attributable to:
Equity shareholders of the (7,778) (3,682) (15,635)
Company
Minority interests 890 (347) 1,321
Loss for the period (6,888) (4,029) (14,314)
Loss per share 3 (9.8p) (4.6p) (19.4p)
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the six months ended 30 June 2008
Six months Six months Year
ended ended ended
30 June 30 June 31
2008 2007 December
2007
�'000 �'000 �'000
Foreign exchange translation
differences for
foreign operations (322) (118) 64
Revaluation of property, plant and (37,158) 164,986 146,280
equipment
Effective portion of changes in fair
value of
cash flow hedges (42) (658) (613)
Defined benefit pension scheme
actuarial
(loss)/gains, net of tax (1,595) 1,255 765
Income and expense recognised directly
to equity (39,117) 165,465 146,496
Loss for the period (6,888) (4,029) (14,314)
Total recognised income and expense for
the period (46,005) 161,436 132,182
Attributable to:
Equity shareholders of the Company (39,636) 132,388 105,433
Minority interests (6,369) 29,048 26,749
Total recognised income and expense for
the period (46,005) 161,436 132,182
CONSOLIDATED BALANCE SHEET
at 30 June 2008
30 June 30 June 31 December
2008 2007 2007
Restated Restated
Notes �'000 �'000 �'000
Non-current assets
Intangible assets and goodwill 25,969 18,200 25,969
Operational properties 4 491,759 503,894 522,663
Operational properties in the 4 38,094 40,740 26,047
course of construction
Plant and equipment 4 55,427 55,639 56,923
Deferred tax asset 15,673 - 16,292
Financial instruments - - 5
626,922 618,473 647,899
Current assets
Trading properties - 8,100 -
Inventories 9,527 8,804 9,489
Trade and other receivables:
Due after more than one year 2,430 - 2,345
Due within one year 35,792 43,609 40,652
Cash and cash equivalents 5 12,280 22,530 23,731
60,029 83,043 76,217
Total assets 686,951 701,516 724,116
Current liabilities
Bank overdrafts 6 - (32) (846)
Loans and borrowings (1,615) (42,718) (34,579)
Trade and other payables (65,615) (68,781) (67,630)
Tax payable (17,352) (223) (16,721)
(84,582) (111,754) (119,776)
Non-current liabilities
Loans and borrowings 6 (345,385) (256,388) (295,615)
Employee benefits (1,855) (97) (416)
Trade and other payables (13,870) (10,961) (12,149)
Derivative financial (35) (46) -
instruments
(361,145) (267,492) (308,180)
Total liabilities (445,727) (379,246) (427,956)
Net assets 241,224 322,270 296,160
Equity
Share capital 7 273 161,125 161,125
Other reserves 7 166,904 213,400 198,169
Retained earnings 7 (9,720) (143,036) (154,917)
Total equity attributable to 7 157,457 231,489 204,377
shareholders of the Company
Minority interests 83,767 90,781 91,783
Total equity 241,224 322,270 296,160
Equity attributable to
shareholders of the Company
in pence per share 212p 287p 254p
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2008
Six months Six months Year
ended ended ended
30 June 30 June 31
2008 2007 December
2007
�'000 �'000 �'000
Loss for the period (6,888) (4,029) (14,314)
Adjustments for non-cash items
Taxation 1,506 231 551
Finance income (834) (519) (1,093)
Finance expenses 13,381 12,175 28,592
Gain on sale of property, plant and - (6,712) (7,586)
equipment
Loss on sale of subsidiary companies - 4,610 -
Depreciation of property, plant and 7,899 6,917 13,023
equipment
Currency translation differences (320) (118) 93
Equity settled share-based obligations 112 90 182
Cash flows from operations before
changes in
working capital 14,856 12,645 19,448
Change in trading properties - (8,100) -
Change in inventories (38) 322 (363)
Change in trade and other receivables 4,776 (1,636) (14,805)
Change in trade and other payables (1,806) 1,745 25,629
Change in provisions and employee 1,439 (3,842) (3,524)
benefits
Cash generated from operations 19,227 1,134 26,385
Interest paid (14,186) (14,091) (33,276)
Tax paid (245) (129) (269)
Net cash from operating activities 4,796 (13,086) (7,160)
Cash flows from investing activities
Interest received 834 520 3,267
Proceeds from sale of property, plant - 8,776 12,597
and equipment
Acquisition of subsidiaries, net of - - (11,434)
cash acquired
Purchase of property, plant and (23,999) (35,154) (70,491)
equipment
Net cash from investing activities (23,165) (25,858) (66,061)
Cash flows from financing activities
Purchase and issue of shares, inclusive (8,616) - (5)
of costs
Proceeds from draw down of borrowings 27,063 39,830 71,598
Borrowings repaid (10,256) (1,560) (2,236)
Net (payments to)/receipts from (427) 7,465 11,776
minority interests
Net cash from financing activities 7,764 45,735 81,133
Net (decrease)/increase in cash and (10,605) 6,791 7,912
cash equivalents
Opening cash and cash equivalents 22,885 15,707 14,973
Closing cash and cash equivalents (note 12,280 22,498 22,885
5)
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES FOR GROUP FINANCIAL STATEMENTS
Basis of preparation
The consolidated Half-Yearly Financial Report of the Group for the six months ended 30 June 2008 has been prepared in accordance with
IAS 34 "Interim Financial Reporting" and International Financial Reporting Standards ("IFRS") as adopted for use in the European Union
("EU") and in accordance with the Disclosure and Transparency Rules of the Financial Services Authority.
The financial information contained in this Half-Yearly Financial Report has been neither audited nor reviewed by the auditors.
MWB Group Holdings Plc ("the Company") was incorporated in January 2008. The results of the Group for the six months ended 30 June
2008 incorporate the results of the Company and its subsidiary undertakings for the period then ended. The results have been prepared on the
basis of the accounting policies adopted in the financial statements of Marylebone Warwick Balfour Group Plc and its subsidiary companies
for the year ended 31 December 2007, which, other than MWB Group Holdings plc itself, comprised the Group at the previous year end. These
policies have been applied consistently in all material respects in the preparation of these results.
On 7 February 2008, Marylebone Warwick Balfour Group Plc ("Old MWB") announced its intention to re-organise the MWB group of companies.
This involved, inter alia, a Court approved Scheme of Arrangement under Section 425 of the Companies Act 1985 (the "Scheme") with the result
of making MWB Group Holdings Plc the new holding company of the Group. In accordance with the sanction from the Court under the Scheme, the
issued share capital and the share premium of Old MWB at the effective date of the Scheme were cancelled against its distributable reserves
at that date.
Under the Scheme, shareholders received one Unit in MWB Group Holdings Plc for each ordinary share previously held in Old MWB. Each Unit
comprises one ordinary share and twenty B shares. The B shares do not confer on their holders any rights in relation to income or voting and
have only limited rights to participate in capital. The B shares do, however, enable the Company to return cash or cash equivalents to
shareholders by their redemption at future dates from the resources of the Group. Every B share is, for all practical purposes, inseparable
from an ordinary share. As a consequence, the respective rights of shareholders in the Units in relation to capital, dividend and voting,
remained as they would have been had the B shares not been allotted and issued.
The Scheme has been accounted for as a reverse acquisition in accordance with IFRS 3 "Business Combinations". As a result, the previous
Group has been deemed to acquire MWB Group Holdings Plc, no goodwill arises on the acquisition, and the net assets of the Group remain
unaffected. Differences between the restated amounts in the financial statements of MWB Group Holdings Plc and those previously reported in
Old MWB represent the merger reserve in MWB Group Holdings Plc.
2. SEGMENTAL ANALYSIS
Consolidated Income Statement analysis
Six months ended 30 June 2008 Malmaison & MWB Business Liberty Plc Central Consolidated
Hotel du Exchange Plc �'000 �'000 �'000
Vin �'000
�'000
Total external revenues
Hotel income 52,020 - - - 52,020
Licence fee income - 59,713 - - 59,713
Retail income - - 22,028 - 22,028
Proceeds from sale
of trading properties - - - 538 538
Revenue per the Consolidated
Income Statement and
total segment revenue 52,020 59,713 22,028 538 134,299
Total segment revenue by
geographical origin
United Kingdom 52,020 59,713 18,453 538 130,724
Japan - - 3,575 - 3,575
52,020 59,713 22,028 538 134,299
Segment result 7,863 8,817 (3,625) (5,457) 7,598
Project start-up expenses (433)
Profit before finance income,
finance expenses and taxation 7,165
Net finance costs (12,547)
Taxation (1,506)
Loss for the period (6,888)
Six months ended 30 June 2007 Malmaison & MWB Business Liberty Plc Central Consolidated
Hotel du Exchange Plc �'000 �'000 �'000
Vin �'000
�'000
Total external revenues
Hotel income 41,942 - - - 41,942
Licence fee income - 47,910 - - 47,910
Retail income - - 20,758 - 20,758
Revenue per the Consolidated 41,942 47,910 20,758 - 110,610
Income Statement
Inter-segment revenue - - 30 - 30
Total segment revenue 41,942 47,910 20,788 - 110,640
Total segment revenue by
geographical origin
United Kingdom 41,942 47,910 18,182 - 108,034
Japan - - 2,606 - 2,606
41,942 47,910 20,788 - 110,640
Segment result 2,263 3,526 (2,124) 4,193 7,858
Net finance costs (11,656)
Taxation (231)
Loss for the period (4,029)
Year ended 31 December 2007 Malmaison & MWB Business Liberty Plc Central Consolidated
Hotel du Vin Exchange Plc �'000 �'000 �'000
�'000 �'000
Total external revenues
Hotel income 95,272 - - - 95,272
Licence fee income - 100,046 - - 100,046
Retail income - - 46,689 - 46,689
Proceeds from sale of
trading properties 10,112 - - - 10,112
Revenue per the Consolidated 105,384 100,046 46,689 - 252,119
Income Statement
Inter-segment revenue 26 - - - 26
Total segment revenue 105,410 100,046 46,689 - 252,145
Total segment revenue by
geographical origin
United Kingdom 105,410 100,046 41,684 - 247,140
Japan - - 5,005 - 5,005
105,410 100,046 46,689 - 252,145
Segment result 12,458 12,993 (5,986) (3,019) 16,446
Project start-up expenses (2,710)
Profit before finance income, 13,736
finance expenses and taxation
Net finance costs (27,499)
Taxation (551)
Loss for the year (14,314)
3. LOSS PER SHARE
Six months Six months Year
ended ended ended
30 June 30 June 31 December
Weighted average number of shares in 2008 2007 2007
issue during period
'000 '000 '000
Number of shares in issue at start 80,522 80,522 80,522
of period
Shares purchased by the Company for
cancellation during period
Market purchases
23 May 2008 (2,153) - -
24 May 2008 (800) - -
18 June 2008 (425) - -
23 June 2008 (2,773) - -
Number of shares in issue at end of 74,371 80,522 80,522
period
Weighted average number of shares in
issue
during period 79,741 80,522 80,522
The loss per share figures are calculated by dividing the loss attributable to equity shareholders of the Company for the period, by the
weighted average number of shares in issue during the period, as follows:-
Six months Six months Year
ended ended ended
30 June 30 June 31
2008 2007 December
2007
Loss for the period
attributable to equity
shareholders of the Company �'000 (7,778) (3,682) (15,635)
Weighted average number of
ordinary
shares in issue during the '000 79,741 80,522 80,522
period
Loss per share Pence (9.8p) (4.6p) (19.4p)
4. PROPERTY, PLANT AND EQUIPMENT
----------------Operational properties------------------
Plant,
In the Operating machinery,
Long course of leasehold fixtures &
Freehold leasehold construction improvements equipment Total
�'000 �'000 �'000 �'000 �'000 �'000
Cost or valuation
At 1 January 2008 345,521 142,995 26,047 37,139 103,991 655,693
Additions 6,942 924 12,047 1,322 3,478 24,713
Reclassification - - - (311) 311 -
Disposals - - - (40) (449) (489)
Revaluation (31,564) (7,245) - - - (38,809)
At 30 June 2008 320,899 136,674 38,094 38,110 107,331 641,108
Depreciation
At 1 January 2008 - - - (2,992) (47,068) (50,060)
Charge for the period (1,208) (443) - (1,012) (5,188) (7,851)
Reclassification - - - 80 (80) -
Disposals - - - - 432 432
Revaluation 1,208 443 - - - 1,651
At 30 June 2008 - - - (3,924) (51,904) (55,828)
Net book value
at 30 June 2008 320,899 136,674 38,094 34,186 55,427 585,280
Analysis of valuation deficit
for the period
Deficit debited to
revaluation
reserve (note 7) (24,909) (5,612) - - - (30,521)
Deficit debited
to minority
interests (5,447) (1,190) - - - (6,637)
Revaluation deficit reflected (30,356) (6,802) - - - (37,158)
in property, plant and
equipment
Operational properties at net book value 30 June 31 December
2008 2007
�'000 �'000
Freehold properties as above 320,899 345,521
Long leasehold properties as above 136,674 142,995
Operating leasehold improvements as above 34,186 34,147
Total operational properties per consolidated balance 491,759 522,663
sheet
Valuation
The Group's property, plant and equipment is all located in the United Kingdom. The Group's operational properties were valued at 30
June 2008 by qualified professional valuers working for the company of DTZ, Chartered Surveyors, ("DTZ"), acting in the capacity of External
Valuers. All such valuers are Chartered Surveyors, being members of the Royal Institution of Chartered Surveyors ("RICS").
DTZ act as valuers to the MWB Group and undertake half year and year end valuations for accounting purposes. DTZ has been carrying out
this valuation instruction for the Group for a continuous period since June 1999 and Paul Wolfenden has been the signatory of Valuation
Reports provided to the Group for the same period. In addition, DTZ provide ad-hoc valuation advice to MWB Group. DTZ is a wholly owned
subsidiary of DTZ Holdings plc. In the financial year to 30 April 2008, the proportion of total fees payable by MWB Group Holdings to the
total fee income of DTZ Holdings plc was less than 5%. It is not anticipated that this situation will vary in terms of the financial year of
DTZ to 30 April 2009. DTZ have not received any introductory fees or acquisition fees in respect of any of the properties owned by the MWB
Group within the 12 months prior to the date of valuation. DTZ have been appointed as valuers in respect of certain of the properties and in
the last 12 months they have provided valuation advice for bank lending purposes in relation to certain of the properties.
All valuations were carried out in accordance with the RICS Appraisal and Valuation Standards 6th Edition ("the Manual") and the
properties were valued on the basis of Existing Use Value. Existing Use Value is defined in the Manual as the estimated amount for which a
property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction, after proper
marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion, assuming that the buyer is granted vacant
possession of all parts of the property required by the business and disregarding potential alternative uses and any other characteristics
of the property that would cause its Market Value to differ from that needed to replace the remaining service potential.
The valuation of the hotels is based on estimates of annual maintainable earnings before interest, tax, depreciation and amortisation
("EBITDA") for each property over a 10 year cash flow period. These estimates are based on the historic, current and budgeted trading
information provided by the Group to DTZ. DTZ apply a market discount rate to the cash flow forecast of the hotels to assess the net present
value of each property asset. This is in line with the method used by the market for the valuation of this type of property.
In accordance with market practice, in valuing the Group's hotels, DTZ have had regard to the valuation of the properties as fully
equipped operational entities, and to their trading potential. The valuation therefore includes the land and buildings; the trade fixtures,
fittings, furniture, furnishings and equipment; and the market's perception of the trading potential excluding personal goodwill; together
with an assumed ability to renew existing licences, consents, certificates and permits. The value excludes consumables and stock in trade.
The valuation excludes any goodwill associated with the management by the Company or its subsidiaries but recognises that the hotel
property assets would probably be sold as trading entities. Guidance Note 3 of the Red Book states that the valuer must lot or group
properties in the manner most likely to be adopted in the case of an actual sale. Therefore DTZ have lotted together the hotel properties
owned by the MWB Group; were the hotel properties to be marketed individually the values achieved could be less than those included in the
Valuation Report.
Properties valued by DTZ at 30 June 2008 carried in the balance sheet at valuation in property, plant and equipment totalled �513.6m.
The carrying value of properties in the balance sheet excludes those revaluation surpluses attributable to the land element of long
leaseholds and developments which are held at cost. Other minor properties, properties in the course of construction, the short leasehold
properties of MWB Business Exchange Plc, and plant and equipment, are carried at the lower of cost and realisable value in the table above.
These assets had a net book value at 30 June 2008 of �71.7m.
The historic cost of the Group's properties at 30 June 2008 includes capitalised interest of �8.6m (30 June 2007: �7.0m; 31 December
2007: �7.9m).
5. CASH AND CASH EQUIVALENTS
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Cash and cash equivalents per 12,280 22,530 23,731
consolidated balance sheet
Less bank overdrafts per consolidated - (32) (846)
balance sheet
Net cash and cash equivalents per
consolidated
cash flow statement 12,280 22,498 22,885
The Group's net cash and cash equivalents are held in the following operating divisions of the Group.
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Malmaison and Hotel du Vin 3,184 4,442 6,910
MWB Business Exchange Plc 5,838 (32) 4,379
Liberty Plc 1,346 1,171 4,296
Central 1,912 16,917 7,300
12,280 22,498 22,885
Cash balances are held within the above divisions for utilisation within their businesses. Generally only cash within the Central
division is available for use in the Company's own activities.
6. LOANS AND BORROWINGS
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Current liabilities
Secured bank loans - 41,098 32,959
Other unsecured loan borrowings 1,615 1,620 1,620
1,615 42,718 34,579
Non-current liabilities
Secured bank loans 315,469 225,063 264,997
9.75% Unsecured Loan Stock 2009/2012 29,916 29,710 29,813
Other unsecured loan borrowings - 1,615 805
345,385 256,388 295,615
Total loans and borrowings 347,000 299,106 330,194
Analysis by operating business
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Malmaison and Hotel du Vin 263,754 228,021 245,719
Liberty Plc 14,067 8,441 13,000
MWB Business Exchange Plc - - 9,410
Central debt 69,179 62,644 62,065
347,000 299,106 330,194
7. RECONCILIATION OF MOVEMENT ON CAPITAL AND RESERVES
A reorganisation of the MWB Group of companies through a Scheme of Arrangement ("the Scheme") in the manner set out in the circular to
shareholders dated 7 February 2008, and approved by shareholders on 4 March 2008 (referred to in further detail in Note 1 - "Basis of
preparation"), was sanctioned by the Court on 2 April 2008.
At 1 January 2008 and at the date of the Scheme, the issued share capital of Marylebone Warwick Balfour Group Plc ("Old MWB") was
�40,261,000, the share premium account was �79,563,000 and the capital redemption reserve was �30,663,000. In accordance with the sanction
from the Court, when the Scheme of arrangement became effective on 3 April 2008 the issued share capital, share premium account and capital
redemption reserve of Old MWB were cancelled.
Under the Scheme, the shareholders of Old MWB were issued with Units in MWB Group Holdings Plc ("New MWB Group") on a one for one basis.
Each Unit comprises one ordinary share with twenty B shares. The B shares do not confer on their holders any rights in relation to income or
voting and have only limited rights to participate in capital but they provide a mechanism for the return of cash or cash equivalents to
shareholders.
At the date that the Scheme became effective, each Unit consisted of one ordinary share with a nominal value of 0.1p and twenty B shares
with a nominal value of 10p each. As a result, New MWB Group had issued share capital of �161 million (being 80,522,017 ordinary shares of
0.1p each and 1,610,440,340 B shares of 10p each). In accordance with section 131 of the Companies Act, no share premium account was
recognised in New MWB Group on the issue of these shares.
A capital reduction in the New MWB Group's share capital was sanctioned by the Court on 9 April 2008 which became effective on 10 April
2008. As a result, the share capital of New MWB Group was reduced by decreasing the nominal value of each B share from 10p to 0.01p.
Thereafter, each Unit consists of one ordinary share with a nominal value of 0.1p and twenty B shares with a nominal value of 0.01p each. As
a result, at the effective date of the capital reduction, the issued share capital of MWB Group Holdings Plc amounted to �242,000 (being
80,522,017 ordinary shares at 0.1p each and 1,610,440,340 B shares at 0.01p each), being a reduction in share capital of �160,883,000 and an
increase in distributable reserves of New MWB Group by the same amount of �160,883,000.
At formation, New MWB Group had an issued share capital of �50,000, comprising 50,000 redeemable non-voting shares of �1 each, of which
�12,500 had been paid up. These shares conferred no beneficial rights on their holders and are due to be redeemed during the second half of
the year ending 31 December 2008.
Share Share Capital Revaluation Hedging Translation
capital premium redemption reserve reserve reserve
reserve
Six months ended 30 June 2008 �'000 �'000 �'000 �'000 �'000 �'000
At 1 January 2008 40,261 79,563 30,663 187,151 5 69
Scheme of arrangement April 120,864 (79,563) (30,663) - - -
2008 (note 1)
At 1 January 2008 restated for
effect of Scheme
of arrangement 161,125 - - 187,151 5 69
Movements during period:
Capital reduction (160,883) - - - - -
Retained loss for the period - - - - - -
Dividend paid to external
shareholders of
MWB Business Exchange Plc - - - - - -
Revaluation of property, plant - - - (30,521) - -
and equipment, net of tax
Transfer on increase in
minority interests in
Malmaison
Holdings Ltd and MWB - - - - - -
Business Exchange Plc
Issue and purchase of ordinary 31 - 18 - - -
shares
Defined benefit pension scheme - - - - - -
actuarial loss
Effective portion of changes
in fair value of cash flow
hedges - - - - (29) -
Transfer of depreciation on - - - (546) - -
revalued properties
Write back of option cost - - - - - -
through equity
Foreign exchange translation
differences for foreign
operations - - - - - (187)
At 30 June 2008 273 - 18* 156,084* (24)* (118)*
* = Disclosed as 'Other reserves' at 30 June 2008 totalling �166,904 in consolidated balance sheet.
Merger Other Retained Total equity Minority Total
reserve reserve earnings attributable interests equity
to
shareholders
Six months ended 30 June 2008 �'000 �'000 �'000 �'000 �'000 �'000
At 1 January 2008 9,403 1,783 (144,521) 204,377 91,783 296,160
Scheme of arrangement April (242) - (10,396) - - -
2008 (note 1)
At 1 January 2008 restated for 9,161 1,783 (154,917) 204,377 91,783 296,160
effect of Scheme of
arrangement
Movements during period:
Capital reduction - - 160,883 - - -
Retained loss for the period - - (7,778) (7,778) 890 (6,888)
Dividend paid to external
shareholders of
MWB Business Exchange Plc - - (427) (427) - (427)
Revaluation of property, plant - - - (30,521) (6,637) (37,158)
and equipment, net of tax
Transfer on increase in
minority interests
in Malmaison Holdings Ltd
and MWB Business Exchange - - 1,592 1,592 (1,592) -
Plc
Issue and purchase of ordinary - - (8,574) (8,525) (91) (8,616)
shares
Defined benefit pension scheme - - (1,089) (1,089) (506) (1,595)
actuarial loss
Effective portion of changes - - - (29) (13) (42)
in fair value of cash flow
hedges
Transfer of depreciation on - - 546 - -
revalued properties
Write back of option cost - - 76 76 36 112
through equity
Foreign exchange translation - - (32) (219) (103) (322)
differences for foreign
operations
At 30 June 2008 9,161* 1,783* (9,720) 157,457 83,767 241,224
Retained earnings at 30 June 2008 comprise the following:-
Accumulated net loss in Consolidated Income Statements to 30 June (81,205)
2008
Purchase by the Company of ordinary shares from Shareholders that
have
subsequently been cancelled (79,002)
Scheme of arrangement April 2008 (10,396)
Increase in retained earnings due to capital reduction 160,883
At 30 June 2008 (9,720)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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