RNS Number:8421H
Innovation Group PLC
24 February 2003
24 February 2003
THE INNOVATION GROUP PLC
QUARTERLY REPORT FOR THE THREE MONTHS ENDED 31 DECEMBER 2002
AND TRADING UPDATE
The Innovation Group plc ("TiG" or "the Group"), the provider of innovative
insurance solutions to the global financial services industry, today
announces its unaudited results for the three months to 31 December
2002.
Highlights:
Quarterly report
> Ongoing revenue for three months to 31 December 2002 of
#15.8m (quarter 4 2002: #14.9m)
> EBITDA for three months to 31 December 2002 of #1.2m
(quarter 4 2002: adjusted loss of #2.8m)
> Adjusted PBT for three months ended 31 December 2002 of
#0.3m (quarter 4 2002: loss of #4.5m)
> FRS 3 loss before tax for the three months to 31 December
2002 of #3.8m after amortisation of #4.1m (quarter 4 2002: loss
of #15.8m)
> Adjusted EPS for three months to 31 December 2002 of 0.1p
(quarter 4 2002: loss of 2.9p)
> Cash satisfactory with #5.7m of funds excluding
guaranteed loan notes as at 31 December 2002
> Prior restructuring of cost base delivers savings ahead of expectations
with the annualised cash cost base reduced from #68m to #62m
Trading update
> Increased volume in the fixed cost element of our BPO division
provides real evidence of continued improvements in trading
> Significant value of BPO operations highlighted by sale of French
BPO operation to Groupama
> Underwritten Rights Issue to raise approximately #9.2m (net of
expenses). Proceeds to be used to strengthen Company's balance sheet
and thus assist in the negotiation of new business currently under
discussion
Enquiries:
The Innovation Group plc 01489 898300
Paul Smolinski, Group Finance Director
KBC Peel Hunt 020 7418 8900
Simon Hayes / Jonathan Marren
Weber Shandwick Square Mile 020 7067 0700
Sara Musgrave / Katie Hunt
Chairman's Statement
In common with other technology businesses the Group found the second half
of its last financial year extremely demanding. The trading
environment in the insurance industry resulted in many insurers
taking a cautious view on technology infrastructure and systems
investments, which in turn meant that new business licence sales and
the timing of licence deployments relating to existing customer
projects were proving difficult. Despite a difficult IT market
environment the Group has made a positive start to the current
financial year with quarter one seeing the Group return to
profitability before goodwill amortisation. This significant
milestone has been achieved by focusing on revenue growth from
continuing operations and decisive management action to continue to
optimise costs in line with the Group's revenue expectations.
Financial and Operating Review
Revenue from continuing operations for the three months ended 31 December
2002 was #15.8m (quarter 4 2002: #14.9m) and EBITDA for the three
months ended 31 December 2002 was #1.2m (quarter 4 2002: adjusted
loss of #2.8m). Profit before tax and goodwill amortisation was #0.3m
(quarter 4 2002: loss of #4.5m); FRS3 loss before tax was #3.8m after
amortisation of #4.1m (quarter 4 2002: loss of #15.8m). Adjusted EPS
was 0.09p (quarter 4 2002: loss of 2.93p). Cash is satisfactory with
#5.7m of funds excluding guaranteed loan notes as at 31 December
2002.
Overall, quarter one showed a positive trading improvement over the
previous quarter from continuing operations with the fixed cost base
being reduced significantly. In note 2 to the results, we have
introduced segmental analysis of our business providing additional
information on the profitability of our Business Process Outsourcing
(supply chain/e-procurement) ("BPO") and Technology Solutions
businesses. Revenue from our BPO business was #5.7m and Technology
Solutions #10.1m, comprising #0.7m initial licence fee, #3.0m
implementation and #6.4m recurring revenue.
The start of our current financial year has been an encouraging time for
our BPO operations. A significant new client win in our German
operation is already having a major effect on its run-rate revenues.
In the UK, client developments have resulted in our projected run-
rates increasing by 25 per cent. by the conclusion of quarter one.
The effect of these increases should start to manifest itself in the
results for quarter two. These revenue gains within the UK and German
BPO operations are being achieved without any increase in the current
cost base.
In line with our strategy for the long-term sustainability of operations,
the basis for forward planning is that management will ensure that
there is no reliance on cash from any non-contractually committed
licence sales to generate positive cash from operations. Prior
restructuring and cost base optimisation has delivered benefits
beyond our previous guidance with the Group's annualised cash cost
base reducing from #68m to #62m. Management is still implementing
further optimisation of the ongoing fixed cash cost base with a
target of #60m driven primarily by rationalisation of facilities and
other non people based costs.
Trading Update
On 29 January 2003, following an approach from Groupama, the Group
announced that it had entered into an agreement to sell its BPO
business in France to the insurer Groupama for a total consideration
of 4 million Euros. In addition Groupama has paid 0.7 million Euros
for the licence to continue to use the TiG claims technology within
the operation.
The Board assessed Groupama's approach from a perspective of creating
shareholder value and this was the key driver for accepting this
unsolicited but attractive offer at a multiple of more than 80 times
the historic earnings of the French BPO business or 25 times the net
asset value. The Board believes that these terms highlight the
significant value of our BPO operations. The French operation
represented less than 1% of total revenue and less than 5% of our
total BPO revenues of approximately #20 million during 2002.
The Board has received a number of other approaches regarding various
assets of the business but believes that it is in the best interests
of our shareholders and other stakeholders for the Group to remain as
a single operating entity. Therefore, regardless of the cash
available to the business at this time, the Directors are of the view
that it is appropriate to raise additional funds via a rights issue
to strengthen the Company's balance sheet.
Rights Issue
On 14 February 2003 the Group announced a proposed 1 for 1 Rights Issue to
raise approximately #9.2m (net of expenses). This will provide
further confidence to clients and potential clients in the Group's
ability to fulfil contracts and thus assist in the negotiation of new
business currently under discussion. By way of an example of this,
the Company also announced that it had entered into an agreement with
Zurich Insurance Company, which has paid a licence fee of
approximately #1.8 million into an escrow account that will be
released to the Company upon the passing of the resolutions in
respect of the Rights Issue.
All of the Directors have irrevocably undertaken to take up their rights
which represent 20.8 per cent. of the issue. In addition, certain of
the Directors have agreed to sub-underwrite a proportion of the
Rights Issue. The Rights Issue has been fully underwritten by KBC
Peel Hunt.
Board Changes
Following the announcement of the Rights Issue, Hassan Sadiq was appointed
as Chief Executive of the Company. Hassan Sadiq has been the Chief
Operating Officer of the Company since December 2001. In addition
Robert Terry, founder and previously Chief Executive of the Company,
has been appointed as Non-Executive Vice Chairman and Chairman Elect.
The Company has, however, secured the ongoing services of Robert
Terry on the terms of a management consultancy agreement on a two-
year rolling basis.
John Birkmire, Gordon Crawford and Clive Vlotman resigned from the Board on
3 February 2003. It is the Board's intention to appoint additional
fully independent non-executive directors to the Board in due
course.
Outlook
The Directors consider that the Group has now taken the necessary steps to
put the business on a sound financial footing for the future whilst
ensuring that the Group is still recognised as an independent thought
leader in applying technology to the business issues facing insurance
companies across the globe.
The Group continues to provide modern, innovative IT solutions to insurance
companies, always focusing on systems which give cost and efficiency
gains in ongoing business operations and real measured return on
investment for customers. Our technology is fully proven in
production and is used by 25,000 people in 11 countries across the
world. Over 30 million client records are held and more than 20
million policies with all their associated claims transactions are
administered daily by our solutions.
In summary, the Board continues to believe, despite previous difficulties,
that the Group remains a leading solutions provider to the insurance
industry with clear opportunities for growth in both its BPO and
Technology Solutions businesses once the market returns to more
positive trading conditions.
Geoff Squire, OBE
Chairman
24 February 2003
The Innovation Group Plc
FINANCIAL HIGHLIGHTS
for the three months ended 31 December 2002
3 months ended Year to
Note 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Turnover 15,763 27,509 100,071
Adjusted profit before tax 1 300 4,101 10,028
Loss before tax (3,838) (8,029) (391,114)
Adjusted earnings per share (pence) 0.09 1.26 2.87
Basic loss per share (pence) (1.99) (4.90) (202.75)
Dividend per share (pence) - - 0.6
Note:
1.Adjusted profit before tax for the three months ended 31
December 2002 is FRS 3 loss before tax of #3,838,000 (three
months ended 31 December 2001: loss of #8,029,000; year ended 30
September 2002: loss of #391,114,000) after excluding exceptional
costs of #nil (three months ended 31 December 2001: #4,539,000;
year ended 30 September 2002: #374,498,000) and the amortisation
charge of #4,138,000 (three months ended 31 December 2001:
#7,591,000; year ended 30 September 2002: #26,644,000).
References to adjusted profit reflect the Directors' view that
this is an important measure for their own, and shareholders'
assessment of the Group's underlying performance.
The Innovation Group Plc
UNAUDITED PROFIT AND LOSS ACCOUNT
For the 3 months ended 31 December 2002
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
Note #'000 #'000 #'000
TURNOVER 2 15,763 27,509 100,071
Cost of sales (3,181) (4,160) (14,687)
----------------------------------------------------
Gross profit 12,582 23,349 85,384
Administrative expenses
- exceptional items 3 - (4,539) (374,498)
- other (16,352) (27,209) (102,411)
----------------------------------------------------
(16,352) (31,748) (476,909)
----------------------------------------------------
OPERATING LOSS (3,770) (8,399) (391,525)
Net interest (68) 370 411
----------------------------------------------------
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION (3,838) (8,029) (391,114)
----------------------------------------------------
Adjusted profit before tax 300 4,101 10,028
Amortisation (4,138) (7,591) (26,644)
Exceptional items - (4,539) (374,498)
----------------------------------------------------
Loss before tax (3,838) (8,029) (391,114)
====================================================
Tax on loss on ordinary activities 4 (78) (1,173) -
----------------------------------------------------
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION (3,916) (9,202) (391,114)
Equity minority interests (44) (9) (85)
----------------------------------------------------
LOSS FOR THE PERIOD (3,960) (9,211) (391,199)
Dividends paid - - (1,255)
----------------------------------------------------
RETAINED LOSS FOR THE PERIOD (3,960) (9,211) (392,454)
====================================================
Adjusted earnings per ordinary
share (pence) 5 0.09 1.26 2.87
Basic loss per ordinary share
(pence) 5 (1.99) (4.90) (202.75)
Diluted loss per ordinary share
(pence) 5 (1.99) (4.90) (202.75)
The Innovation Group Plc
UNAUDITED BALANCE SHEET
As at 31 December 2002
Unaudited Unaudited Audited
31 December 31 December 30 September
2002 2001 2002
Note #'000 #'000 #'000
FIXED ASSETS
Intangible assets 50,096 410,743 53,987
Tangible assets 22,194 28,135 22,441
Investments 5,992 9,003 5,034
----------------------------------------------------
78,282 447,881 81,462
CURRENT ASSETS
Stocks 151 202 131
Debtors 6 13,244 36,110 15,492
Investments 6,160 46,185 11,060
Cash at bank and in hand 4,825 14,587 9,149
----------------------------------------------------
24,380 97,084 35,832
CREDITORS: amounts falling
due within one year (23,020) (73,644) (30,576)
----------------------------------------------------
NET CURRENT ASSETS 1,360 23,440 5,256
----------------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 79,642 471,321 86,718
CREDITORS: amounts falling due after
more than one year
Convertible loan notes (2,040) - (2,040)
Other creditors (12,599) (10,929) (13,021)
PROVISIONS FOR LIABILITIES AND CHARGES (3,257) (1,552) (3,673)
DEFERRED INCOME 7 (9,915) (23,109) (10,379)
EQUITY MINORITY INTERESTS (247) - (206)
----------------------------------------------------
NET ASSETS 51,584 435,731 57,399
====================================================
CAPITAL AND RESERVES
Called up share capital 3,974 3,728 3,952
Shares to be issued 2,302 25,564 14,000
Share premium account 468,649 439,917 458,973
Profit and loss account (423,341) (33,478) (419,526)
----------------------------------------------------
EQUITY SHAREHOLDERS' FUNDS 51,584 435,731 57,399
====================================================
The interim results were approved by the Board of Directors on 24 February 2003.
The Innovation Group Plc
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the 3 months ended 31 December 2002
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Loss for the financial period (3,960) (9,211) (391,199)
Currency translation differences 145 225 (2,580)
----------------------------------------------------
Total recognised gains and
losses relating to the period (3,815) (8,986) (393,779)
====================================================
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Loss for the financial period (3,960) (9,211) (391,199)
Dividends - - (1,255)
----------------------------------------------------
(3,960) (9,211) (392,454)
Currency translation differences 145 225 (2,580)
Issue of shares 9,698 25,101 44,381
Shares to be issued (11,698) 13,564 2,000
----------------------------------------------------
Net (reduction)/additions to
shareholders' funds (5,815) 29,679 (348,653)
Opening shareholders' funds 57,399 406,052 406,052
----------------------------------------------------
Closing shareholders' funds 51,584 435,731 57,399
====================================================
The Innovation Group Plc
UNAUDITED CASH FLOW STATEMENT
For the 3 months ended 31 December 2002
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Net cash outflow from operating activities (4,235) (2,230) (8,086)
Returns on investments and servicing of finance (36) 608 697
Taxation 75 (1,551) (2,014)
Capital expenditure (556) (880) (7,328)
Acquisitions (958) (10,927) (14,958)
Equity dividends paid - - (5,625)
----------------------------------------------------
Cash outflow before management of
liquid resources and financing (5,710) (14,980) (37,314)
Management of liquid resources 4,900 16,835 51,960
Financing (3,514) (1,487) (19,811)
----------------------------------------------------
(Decrease)/increase in cash
less bank overdraft (4,324) 368 (5,165)
====================================================
RECONCILIATION OF OPERATING LOSS TO NET
CASH OUTFLOW FROM OPERATING ACTIVITIES
Operating loss before
exceptional items (3,770) (3,490) (17,027)
Depreciation and amortisation charges 5,006 8,824 32,121
Profit on disposal of fixed assets - - (131)
(Increase)/decrease in stocks (20) (49) 55
Decrease in debtors 2,044 256 15,935
(Decrease) in creditors (6,050) (2,081) (23,138)
----------------------------------------------------
(2,790) 3,460 7,815
Cash outflow arising from
exceptional items (1,445) (4,039) (13,140)
Acquisition related outflows * - (1,651) (2,761)
----------------------------------------------------
Net cash outflow from operating activities (4,235) (2,230) (8,086)
====================================================
*Acquisition related outflows during the three months ended 31
December 2001 and year ended 30 September 2002 relate to payments
made by the Company in respect of liabilities which crystallised as
a consequence of the acquisitions of MTW and Huon and creditor
payments associated with the pre-acquisition activities of the Cosy
Group.
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/increase in cash in the period (4,324) 368 (5,165)
Cash outflow from decrease in debt and
lease financing 3,514 1,487 19,811
Cash inflow from decrease in liquid resources (4,900) (16,835) (51,960)
----------------------------------------------------
Change in net funds resulting from cash flows (5,710) (14,980) (37,314)
Loans, loan notes and finance leases
acquired with subsidiaries - (1,546) (1,508)
Foreign exchange - (354) (484)
----------------------------------------------------
Movement in net funds in the period (5,710) (16,880) (39,306)
Net (debt)/funds at start of period (1,255) 38,051 38,051
----------------------------------------------------
Net (debt)/funds at end of period (6,965) 21,171 (1,255)
====================================================
The Innovation Group Plc
NOTES TO THE UNAUDITED RESULTS
For the 3 months ended 31 December 2002
1. BASIS OF PREPARATION
The interim financial information of The Innovation Group Plc is
for the three month period to 31 December 2002, and has been
prepared in accordance with the accounting policies set out in,
and is consistent with, the audited financial statements for the
year ended 30 September 2002. The results for the year ended 30
September 2002 have been extracted from the audited financial
statements for that year. The audited financial statements are
yet to be filed with the Registrar of Companies and the auditors'
report on those accounts was unqualified.
The unaudited profit and loss account for the three month period
to, and the unaudited balance sheet as at 31 December 2002, do
not amount to full accounts within the meaning of section 240 of
the Companies Act 1985 and have not been delivered to the
Registrar of Companies.
2. ANALYSIS OF TURNOVER, OPERATING LOSS AND NET ASSETS
Turnover can be analysed into the following categories:
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Initial licence fees 709 6,269 17,520
Implementation 2,992 8,070 29,408
Recurring 12,062 13,170 53,143
----------------------------------------------------
Turnover 15,763 27,509 100,071
====================================================
Following the restructuring of the group at the end of 2002, the
Directors now consider that the Group has two principal
activities. These are technology solutions and business process
outsourcing. The results for the quarter ended 31 December 2002
can be analysed as follows. In practice it is not feasible to
provide comparative data with sufficient accuracy and so, as
permitted by SSAP 25 no comparative information is provided.
Unaudited
3 months to 31 December 2002
Technology
Solutions BPO Total
#'000 #'000 #'000
Turnover 10,104 5,659 15,763
---------------------------------------------
EBITDA before R&D and central costs 2,893 650 3,543
Amortisation and depreciation (2,674) (2,272) (4,946)
----------------------------------------------
219 (1,622) (1,403)
===============================
R&D (1,562)
Central costs (805)
--------------
Operating loss (3,770)
==============
* Research and development costs include approximately #60,000 of
depreciation.
BPO activities include certain territories and activities where
operations are still in initial development or are operating in
markets where they are yet to achieve critical mass. The result
above consequently includes turnover of #180,000 and an adjusted
operating loss of approximately #173,000 in relation to these
businesses. Excluding these, BPO operations are achieving an
adjusted operating margin of 15%.
The geographical analysis by location is as set out below:
Turnover Operating loss
Unaudited Unaudited Audited Unaudited Unaudited Audited
3 months to 3 months to Year to 3 months to 3 months to Year to
31 December 31 December 30 Sept 31 December 31 December 30 Sept
2002 2001 2002 2002 2001 2002
#'000 #'000 #'000 #'000 #'000 #'000
Europe, Middle
East and Africa 8,719 16,230 59,227 2,122 2,781 (262,381)
Americas 6,135 10,065 35,143 601 3,506 (66,340)
Asia Pacific 909 1,214 5,701 12 1,697 (1,412)
Central and R&D - - - (2,367) (4,253) (10,250)
Exceptional charge - - - - (4,539) (24,498)
Amortisation - - - (4,138) (7,591) (26,644)
--------------------------------------------------------------------------------
15,763 27,509 100,071 (3,770) (8,399) (391,525)
================================================================================
Due to the geographical spread of certain acquisitions and the
centralisation of certain functions, it is not possible to
allocate the related central costs over the geographical areas
for the above periods.
Net assets
Unaudited Unaudited Audited
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Europe, Middle East and Africa 26,268 (10,736) 18,156
Americas (20,168) (1,889) (21,191)
Asia Pacific (7,975) (6,466) (7,792)
Central 53,459 454,822 68,226
-----------------------------------------------------
51,584 435,731 57,399
=====================================================
Central net assets include goodwill, other investments and net funds.
3.EXCEPTIONAL ADMINISTRATIVE EXPENSES
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
Fixed asset impairment - - 4,616
Goodwill impairment - - 350,000
Office closure costs - 500 3,050
Termination payments - 744 5,804
Redundancy period costs - 3,295 9,255
Contractual settlements - - 1,773
-----------------------------------------------------
- 4,539 374,498
=====================================================
4.TAXATION
The effective tax rate for the group based on projected results
for the year ended 30 September 2003 before amortisation is 26%.
The tax charge for the period is based upon the estimated
effective tax rate on FRS3 reported profits for the year of 26%
after excluding the impact of goodwill amortisation which is not
allowable for tax (December 2001: 34%; September 2002: nil).
5.EARNINGS PER SHARE
Unaudited Unaudited Audited
3 months to 3 months to Year to
31 December 31 December 30 September
2002 2001 2002
#'000 #'000 #'000
pence pence pence
Diluted loss per share (1.99) (4.90) (202.75)
Adjustments for share options and
shares to be issued - - -
----------------------------------------------------
Basic loss per share (1.99) (4.90) (202.75)
Adjustments for exceptional
items and amortisation 2.08 6.16 205.62
-----------------------------------------------------
Adjusted earnings per share 0.09 1.26 2.87
=====================================================
Earnings per share is calculated as follows:
Basic earnings per share
Average number of shares 198,904,011 188,087,967 192,946,800
Loss for the financial period (#'s) (3,960,000) (9,211,000) (391,199,000)
=======================================================
Diluted earnings per share
Average number of shares 198,904,011 188,087,967 192,946,800
Loss for the financial period (#'s) (3,960,000) (9,211,000) (391,199,000)
=======================================================
Adjusted earnings per share
Average number of shares 198,904,011 188,087,967 192,946,800
Loss for the financial period (#'s) (3,960,000) (9,211,000) (391,199,000)
Add amortisation (#'s) 4,138,000 7,591,000 26,644,000
Add exceptional items (#'s) - 4,539,000 374,498,000
Less tax credit arising on exceptional items (#'s) - (547,000) (4,400,000)
-----------------------------------------------------
Adjusted earnings (#'s) 178,000 2,372,000 5,543,000
=====================================================
FRS 14 requires presentation of diluted EPS when a company could
be called upon to issue shares that would decrease net profit or
increase net loss per share. For a loss making company with
outstanding share options, net loss per share would only be
increased by the exercise of out-of-the-money options. Since it
seems inappropriate to assume that option holders would act
irrationally, no adjustment has been made to diluted EPS for out-
of-the-money share options.
6.WORKING CAPITAL
Debtors as at 31 December 2002 comprise trade debtors of #10.0m
(30 September 2002: #11.8m), accrued income of #0.4m
(30 September 2002: #0.3m), prepayments, deposits and other
debtors of #2.8m (30 September 2002: #3.4m).
7.DEFERRED INCOME
The Company's Act format of accounts allows for the inclusion of
deferred income as a separate balance sheet category. In view of
the significance of this balance to the Group, the Directors
believe that showing this balance separately provides a fairer
presentation. Comparatives have been adjusted as appropriate.
8.ADDITIONAL COPIES OF THIS STATEMENT
Copies of this statement are available from The Innovation Group
plc, Yarmouth House, 1300 Parkway, Solent Business Park, Whiteley
PO15 7AE.
INDEPENDENT REVIEW REPORT TO THE INNOVATION GROUP PLC
Introduction
We have been instructed by the company to review the
financial information for the three months ended 31 December
2002 which comprises the profit and loss account, the
balance sheet, the cash flow statement and related notes 1
to 8. We have read the other information contained in the
interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company in accordance with
Bulletin 1999/4 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the
company those matters we are required to state to them in an
independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our
review work, for this report, or for the conclusions we have
formed.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of, and has been
approved by, the directors. The directors are responsible
for preparing the interim report in accordance with the
Listing Rules of the Financial Services Authority which
require that the accounting polices and presentation applied
to the interim figures are consistent with those applied in
preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance
contained in Bulletin 1999/4 issued by the Auditing
Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management
and applying analytical procedures to the financial
information and underlying financial data and, based
thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests
of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an
audit performed in accordance with United Kingdom auditing
standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial
information as presented for the three months ended 31
December 2002.
Deloitte and Touche
Chartered Accountants
London
24 February 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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