REG - Rentokil Initial PLC - Half Yearly Report <Origin Href="QuoteRef">RTO.L</Origin> - Part 2
30/07/2015 07:03
- Part 2: For the preceding part double click ID:nRSd4968Ua
Attributable to:
Equity holders of the Company 73.5 214.2
Non-controlling interests 0.3 0.1
73.8 214.3
Consolidated balance sheet
At 30 June 2015 At 31 December 2014
Notes £m £m
Assets
Non-current assets
Intangible assets 434.0 431.3
Property, plant and equipment 460.1 505.5
Investments in associated undertakings 16.5 14.4
Other investments 0.1 0.1
Deferred tax assets 2.9 3.5
Retirement benefit assets 9 203.9 192.2
Other receivables 8.5 11.5
Derivative financial instruments 8 1.0 1.4
1,127.0 1,159.9
Current assets
Other investments 98.5 51.4
Inventories 58.5 58.9
Trade and other receivables 312.8 314.5
Current tax assets 5.8 6.0
Derivative financial instruments 8 1.7 0.6
Cash and cash equivalents 167.9 197.1
645.2 628.5
Liabilities
Current liabilities
Trade and other payables (362.5) (382.0)
Current tax liabilities (67.5) (71.8)
Provisions for other liabilities and charges (22.2) (24.5)
Bank and other short-term borrowings 7 (333.0) (31.1)
Derivative financial instruments 8 (6.4) (6.7)
(791.6) (516.1)
Net current assets / (liabilities) (146.4) 112.4
Non-current liabilities
Other payables (14.2) (12.9)
Bank and other long-term borrowings 7 (650.7) (976.1)
Deferred tax liabilities (76.9) (78.3)
Retirement benefit obligations (26.0) (25.8)
Provisions for other liabilities and charges (55.0) (59.8)
Derivative financial instruments 8 (16.2) (19.4)
(839.0) (1,172.3)
Net assets 141.6 100.0
Equity
Capital and reserves attributable to the company's equity holders
Called up share capital 18.2 18.2
Share premium account 6.8 6.8
Other reserves (1,760.3) (1,772.0)
Retained profits 1,876.8 1,847.2
141.5 100.2
Non-controlling interests 0.1 (0.2)
Total equity 141.6 100.0
Consolidated statement of changes in equity
Called up share capital Share premium account Other reserves Retained earnings Noncontrolling interests Total equity
£m £m £m £m £m £m
At 1 January 2014 18.2 6.8 (1,790.2) 1,533.1 0.1 (232.0)
Profit for the period - - - 187.7 0.1 187.8
Other comprehensive income:
Net exchange adjustments offset in reserves - - 8.1 - - 8.1
Remeasurement of net defined benefit asset/liability - - - 21.5 - 21.5
Effective portion of changes in fair value of cash flow hedge - - 0.6 - - 0.6
Cumulative exchange recycled to income statement on disposal of foreign operations - - - 0.6 - 0.6
Tax related to remeasurement of net defined benefit asset/liability - - - (4.3) - (4.3)
Total comprehensive income for the period - - 8.7 205.5 0.1 214.3
Transactions with owners:
Dividends paid to equity shareholders - - - (29.2) - (29.2)
Cost of share options and long-term incentive plan - - - 0.9 - 0.9
At 30 June 2014 18.2 6.8 (1,781.5) 1,710.3 0.2 (46.0)
At 1 January 2015 18.2 6.8 (1,772.0) 1,847.2 (0.2) 100.0
Profit for the period - - - 55.5 0.3 55.8
Other comprehensive income:
Net exchange adjustments offset in reserves - - 11.6 - - 11.6
Remeasurement of net defined benefit asset/liability - - - 8.0 - 8.0
Effective portion of changes in fair value of cash flow hedge - - 0.1 - - 0.1
Tax related to remeasurement of net defined benefit asset/liability - - - (1.7) - (1.7)
Total comprehensive income for the period - - 11.7 61.8 0.3 73.8
Transactions with owners:
Dividends paid to equity shareholders - - - (33.1) - (33.1)
Cost of share options and long-term incentive plan - - - 0.9 - 0.9
At 30 June 2015 18.2 6.8 (1,760.3) 1,876.8 0.1 141.6
0.9
-
0.9
At 30 June 2015
18.2
6.8
(1,760.3)
1,876.8
0.1
141.6
Treasury shares of £7.0m (HY 2014: £11.1m) have been netted against retained
earnings. Treasury shares represent 3.8m (HY 2014: 6.0m) shares held by the
Rentokil Initial Employee Share Trust. The market value of these shares at 30
June 2015 was £5.6m (HY 2014: £6.7m). Dividend income from, and voting rights
on, the shares held by the Trust have been waived.
Analysis of other reserves Capital reduction reserve Legal Cash flow hedge reserve Translation reserve Total
£m £m £m £m £m
At 1 January 2014 (1,722.7) 10.4 0.1 (78.0) (1,790.2)
Net exchange adjustments offset in reserves - - - 8.1 8.1
Effective portion of changes in fair value of cash flow hedge - - 0.6 - 0.6
Total comprehensive income for the period - - 0.6 8.1 8.7
At 30 June 2014 (1,722.7) 10.4 0.7 (69.9) (1,781.5)
At 1 January 2015 (1,722.7) 10.4 - (59.7) (1,772.0)
Net exchange adjustments offset in reserves - - - 11.6 11.6
Effective portion of changes in fair value of cash flow hedge - - 0.1 - 0.1
Total comprehensive income for the period - - 0.1 11.6 11.7
At 30 June 2015 (1,722.7) 10.4 0.1 (48.1) (1,760.3)
0.1
-
0.1
Total comprehensive income for the period
-
-
0.1
11.6
11.7
At 30 June 2015
(1,722.7)
10.4
0.1
(48.1)
(1,760.3)
Consolidated cash flow statement
6 months to 30 June 6 months to 30 June
2015 2014
Notes £m £m
Profit for the period 55.8 187.8
Adjustments for:
- Profit on sale of discontinued operations excluding costs of disposal 5 - (146.0)
- Discontinued operations tax 5 - 0.5
- Tax 14.4 14.8
- Share of profit from associates (2.7) (2.2)
- Net interest credit from pensions (3.0) (1.3)
- Interest income (5.3) (4.4)
- Interest expense 25.2 29.3
Reversal of non-cash items:
- Depreciation and impairment of property, plant and equipment 80.4 87.0
- Amortisation and impairment of intangible assets1 13.9 10.1
- Amortisation of computer software 5.0 5.9
- LTIP charges 0.9 0.9
- Other non-cash items 7.0 -
- Profit on sale of property, plant and equipment (0.4) (0.2)
- Loss on disposal / retirement of intangible assets 0.4 -
- Profit on disposal of companies and businesses (not included within discontinued operations) - (3.1)
Changes in working capital (excluding the effects of acquisitions and exchange differences on consolidation):
- Inventories (2.0) (4.2)
- Trade and other receivables (12.0) (38.7)
- Trade and other payables and provisions 0.3 (20.2)
Cash generated from operating activities 177.9 116.0
Interest received 5.0 5.3
Interest paid (28.1) (39.3)
Income tax paid (14.7) (12.4)
Net cash generated from operating activities 140.1 69.6
Cash flows from investing activities
Purchase of property, plant and equipment (77.4) (92.2)
Purchase of intangible fixed assets (5.1) (5.6)
Proceeds from sale of property, plant and equipment 3.6 3.1
Acquisition of companies and businesses, net of cash acquired 10 (32.7) (41.7)
Disposal of companies and businesses - 253.1
Disposal of restricted cash - (16.3)
Net cash flows from investing activities (111.6) 100.4
Cash flows from financing activities
Dividends paid to equity shareholders (33.1) (29.2)
Interest element of finance lease payments (0.4) (0.4)
Capital element of finance lease payments (4.5) (4.0)
Cash outflow on settlement of debt related foreign exchange forward contracts (0.3) (5.4)
Proceeds from issue of debt 36.6 2.6
Net investment in term deposits (47.1) 241.5
Net loan repayments - (400.1)
Net cash flows from financing activities (48.8) (195.0)
Net decrease in cash and cash equivalents (20.3) (25.0)
Cash and cash equivalents at beginning of year 194.1 143.4
Exchange losses on cash and cash equivalents (6.5) (4.7)
Cash and cash equivalents at end of the financial period 167.3 113.7
167.3
113.7
1 excluding computer software
1. General information
The Company is a limited liability company incorporated and domiciled in the
UK with a listing on the London Stock Exchange.
The address of its registered office is Rentokil Initial plc, Riverbank,
Meadows Business Park, Blackwater, Camberley, Surrey GU17 9AB.
The consolidated half-yearly financial information for the half-year to 30
June 2015 was approved for issue on 29 July 2015.
On pages 56 to 57 of the Annual Report 2014 we set out the group's approach to
risk management and on pages 36 to 37 we define the principal risks that are
most relevant to the group. These risks are described in detail and have
mitigating actions assigned to each of them. In our view the principal risks
remain unchanged from those indicated in the Annual Report 2014 and actions
continue to be taken to substantially mitigate the impact of such risks,
should they materialise.
These interim financial results do not comprise statutory accounts within the
meaning of Section 435 of the Companies Act 2006, and should be read in
conjunction with the Annual Report 2014. The comparative figures for the year
ended 31 December 2014 are not the group's statutory accounts for that
financial year. Those accounts have been reported upon by the group's auditors
and delivered to the registrar of companies. The report of the auditors was
unqualified, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain statements under section 498(2) or (3) of the Companies Act 2006.
For all information relating to 2014 results please refer to the Annual Report
2014 which can be accessed here:
http://www.rentokil-initial.com/investors/results-centre
2. Basis of preparation
These interim financial statements have been prepared in accordance with IAS
34 Interim Financial Reporting as adopted by the EU.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU. As
required by the Disclosure and Transparency Rules of the Financial Conduct
Authority, the interim financial statements have been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the year ended
31 December 2014 except for the changes described in note 3.
After reviewing group cash balances, borrowing facilities and projected cash
flows, the directors believe that the group has adequate resources to continue
operations for the foreseeable future. For this reason they continue to adopt
the going concern basis in preparing the consolidated financial statements.
3. Accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 December 2014, as described in
those financial statements.
The preparation of the interim financial information for the half-year ended
30 June 2015 requires management to make estimates and assumptions that affect
the reported amounts of revenues, expenses, assets, liabilities and disclosure
of contingent liabilities at the date of the statement. If in the future such
estimates and assumptions, which are based on management's best judgement at
the date of the statement, deviate from the actual circumstances, the original
estimates and assumptions will be modified as appropriate in the year in which
the circumstances change.
Significant seasonal or cyclical variations in the group's total revenues are
not experienced during the financial year.
Changes in accounting policies
The group has adopted the following amendments to standards with effect from 1
January 2015:
- Defined benefit plans: Employee contributions - amendments to IAS 19
- Annual improvements to IFRS: 2010-2012 cycle - amendments to IFRS 2,
IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38
- Annual improvements to IFRS: 2011-2013 cycle - amendments to IFRS 1,
IFRS 3, IFRS 13 and IAS 40
These standards have had no impact on the financial position or performance of
the group. Consequently, no adjustment has been made to the comparative
financial information as at 31 December 2014 or 30 June 2014. The group has
not early adopted any standard, interpretation or amendment that was issued
but is not yet effective.
4. Segmental information
Segmental information has been presented in accordance with IFRS 8 "Operating
Segments" which the group has implemented with effect from 1 January 2009.
Revenue Revenue Adjusted operating profit Adjustedoperating profit
Ongoing operations 6 months to 30 June 2015£m 6 months to 30 June 2014£m 6 months to 30 June 2015£m 6 months to 30 June 2014£m
France 170.4 175.9 23.6 28.1
Benelux 110.1 111.0 16.7 17.3
Germany 90.4 87.8 23.3 21.0
Other Europe 43.9 38.5 6.1 5.4
Europe 414.8 413.2 69.7 71.8
UK & Ireland 111.0 94.1 20.4 17.8
Rest of World 58.2 55.4 12.5 13.0
UK & Rest of World 169.2 149.5 32.9 30.8
Asia 52.9 46.7 4.7 3.1
North America 176.9 163.3 17.8 14.9
Pacific 67.7 64.9 13.7 12.7
Central and regional costs - - (32.3) (34.7)
Ongoing operations at constant exchange rates 881.5 837.6 106.5 98.6
Disposed businesses1 4.6 10.6 0.4 0.3
Continuing operations at constant exchange rates 886.1 848.2 106.9 98.9
Foreign exchange (30.8) 6.2 (7.2) 1.3
Continuing operations at actual exchange rates 855.3 854.4 99.7 100.2
Restructuring costs - - (2.3) (3.1)
One-off items - operating - - 0.9 0.8
Amortisation and impairment of intangible assets2 - - (13.9) (9.7)
Operating profit - - 84.4 88.2
Interest payable and similar charges - - (25.2) (29.3)
Interest receivable - - 5.3 4.4
Net interest credit from pensions - - 3.0 1.3
Share of profit from associates (net of tax) - Asia - - 2.7 2.2
Profit before income tax and discontinued operations - - 70.2 66.8
66.8
1 disposed businesses are those businesses that have been disposed or exited
and therefore are not included as an ongoing operation
2 excluding computer software
Restructuring costs, one-off items, and amortisation and impairment of intangible assets (at actual exchange rates)
Amortisation and impairment 6 months to 30 June 2015 Amortisation and impairment 6 months to 30 June 2014 Restructuring costs 6 months to 30 June 2015 Restructuring costs 6 months to 30 June 2014 One-off items 6 months to 30 June 2015 One-off items 6 months to 30 June 2014
£m £m £m £m £m £m
Europe 3.4 1.9 1.9 1.6 8.0 (2.2)
UK & Rest of World 2.6 1.5 0.2 0.3 2.0 0.5
Asia 0.8 0.5 - 0.2 0.1 -
North America 6.1 5.0 0.1 - (0.3) 0.6
Pacific 0.2 0.1 0.1 0.3 - -
Central and regional 0.8 0.7 - 0.7 (10.7) 0.3
13.9 9.7 2.3 3.1 (0.9) (0.8)
Restructuring costs and one-off items have been separately identified as they
are not considered to be "business as usual" expenses and have a varying
impact on different businesses and reporting periods.
One-off items includes £10.1m for the costs associated with the closure of the
Austrian and Belfast flat linen businesses (Europe £8.3m, UK & ROW £1.8m),
offset by £10.8m related to the net income from the settlement of a legacy
legal claim (Central and regional).
5. Discontinued operations and disposals
There are no discontinued operations as at 30 June 2015.
On 18 March 2014 the group sold the Initial Facilities (IF) division. The
division was not previously classified as held for sale or as a discontinued
operation. Management committed to a plan to sell this division early in 2014,
following a decision to concentrate on the group's core international
businesses in pest control, hygiene and workwear. For details on the effects
of this discontinued operation, please refer to the 2014 annual report.
6. Dividends
6 months to 30 June 2015 6 months to 30 June 2014 Year to 31 December 2014
£m £m £m
2013 final dividend paid - 1.61p per share - 29.2 29.2
2014 interim dividend paid - 0.77p per share - - 14.0
2014 final dividend paid - 1.82p per share 33.1 - -
33.1 29.2 43.2
The directors have declared an interim dividend of 0.87p per share amounting
to £15.8m payable on 16 September 2015 to shareholders on the register at 14
August 2015. The Company has a progressive dividend policy and will take a
view on the level of any growth for 2015 based on the year-end results. These
interim financial statements do not reflect this dividend payable.
7. Bank and other borrowings
At 30 June 2015 At 31 December 2014
£m £m
Non-current
RCF and other bank borrowings 0.1 0.2
Bond debt 635.1 960.6
Finance lease liabilities 15.5 15.3
650.7 976.1
Current
Bank overdrafts 0.6 3.0
Bank borrowings 1.0 1.3
Bond debt 302.9 -
Bond interest accruals 19.4 18.7
Finance lease liabilities 9.1 8.1
333.0 31.1
Total bank and other borrowings 983.7 1,007.2
Medium-term notes and bond debt comprises:
Bond interest coupon Effective hedged interest rate
Non-current
E500m bond due September 2019 Fixed 3.375% Fixed 3.62%
E350m bond due October 2021 Fixed 3.25% Fixed 3.52%
E50m bond due March 20181 Float 3M EURIBOR+0.48% Fixed 0.68%
£1.3m debentures Fixed 5.00% Fixed 5.00%
£0.3m debentures Fixed 4.50% Fixed 4.50%
Current
£300m bond due March 2016 Fixed 5.75% Fixed 4.48%
Average cost of bond debt at period end rates 3.76%
1 The E50m bond due March 2018 was fixed at 0.57% payable quarterly. The
effective hedge rate is higher than the annual coupon on our bonds due to
discount and fees paid on issuance
On 27 January 2015 a new combined facility of £315m, maturing in 2020, was
signed. This new facility replaced the previous facility which was due to
expire in December 2016. Under the facility, a maximum of £270m can be drawn
in cash and the remainder available for guarantees. The marginal cost of
borrowing under the facility at the period end was 1.18%. During the six
months to 30 June 2015 the facility was undrawn.
The group's facility, bank borrowings and bonds are held at amortised cost.
The carrying values and the fair values of the group's non-current borrowings
are shown below. Fair values are based on cashflows discounted at the current
market rates:
Carrying amount Carrying amount Fair Value Fair Value
30 June 2015 31 December 2014 30 June 2015 31 December 2014
£m £m £m £m
Bank borrowings 0.1 0.2 0.1 0.2
£300m bond due March 2016 - 304.8 - 315.8
E500m bond due September 2019 353.1 386.2 389.6 431.9
E350m bond due October 2021 245.6 268.6 275.8 308.0
E50m bond due March 2018 35.4 - 35.6 -
£1.6m debentures 1.0 1.0 1.7 1.7
Finance lease liabilities 15.5 15.3 15.5 15.3
650.7 976.1 718.3 1,072.9
The carrying values and the fair values of the group's bonds to be repaid in
the next 12 months are shown below. Fair values are based on cashflows
discounted at the current market rates:
Carrying amount Carrying amount Fair Value Fair Value
30 June 2015 31 December 2014 30 June 2015 31 December 2014
£m £m £m £m
£300m bond due March 2016 302.9 - 309.4 -
8. Derivative financial instruments
For all financial instruments held by the group, those that are held at fair
value are to be classified by reference to the source of inputs used to derive
the fair value. The following hierarchy is used:
Level 1 - unadjusted quoted prices in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices that are observable for the asset or
liability either directly as prices or indirectly through modelling based on
prices;
Level 3 - inputs for the asset or liability that are not based on observable
market data.
The group holds all derivatives at fair value using discounted cash flow
models based on market rates which are observable. Therefore all derivative
financial instruments and available-for-sale assets held by the group fall
into Level 2. Contingent consideration payable on acquisitions by the group
falls into Level 3. No financial instruments have moved between levels in the
period.
Fair value assets Fair value assets Fair value liabilities Fair Value liabilities
30 June 2015 30 June 2014 30 June 2015 30 June 2014
£m £m £m £m
Interest rate swaps:
- non-hedge - - (7.4) (7.9)
- cash flow hedge 1.0 0.4 (6.1) (3.1)
- net investment hedge 1.2 1.0 (9.0) (12.8)
Foreign exchange swaps:
- non-hedge 0.5 0.6 (0.1) (2.4)
2.7 2.0 (22.6) (26.2)
Analysed as follows:
Current portion 1.7 0.6 (6.4) (6.8)
Non-current portion 1.0 1.4 (16.2) (19.4)
2.7 2.0 (22.6) (26.2)
9. Retirement benefit obligations
Apart from the legally required social security state schemes, the group
operates a number of pension schemes around the world covering many of its
employees. The major schemes are of the defined benefit type with assets held
in separate trustee administered funds.
The principal scheme in the group is the Rentokil Initial Pension Scheme in
the United Kingdom ("the scheme"). It has a number of defined benefit
sections which are all now closed to new members. At 30 June 2015 the scheme
was valued at an accounting surplus of £203.9m (December 2014: £192.2m) on the
group's balance sheet.
The scheme is re-appraised bi-annually by independent actuaries based upon
actuarial assumptions in accordance with IAS 19 requirements. The principal
assumptions used for the scheme are shown below.
30 June 2015 31 December 2014
£m £m
Weighted average %
Discount rate 3.7% 3.4%
Future salary increases N/A N/A
Future pension increases 3.4% 3.2%
RPI Inflation 3.5% 3.3%
CPI Inflation 2.4% 2.2%
2.2%
The trustees of the scheme value the scheme on a different basis and at 30
June 2015 their valuation is estimated to be a surplus in excess of £20m.
Under the terms of the agreed recovery plan, the group continues to make
payments into escrow of £3.2m per year and the balance in escrow currently
stands at £6.4m. The valuations stated exclude the payments into escrow. The
group continues to recognise the escrow balance as restricted cash. Under the
terms of the recovery plan in the event the scheme is in deficit at the time
of the 31 March 2019 valuation it will be funded from the escrow account.
10. Business combinations
The group purchased 100% of the share capital or the trade and assets of 14
companies and businesses in the period. The total consideration in respect of
acquisitions in the current year was £34.6m and the total cash outflow in the
period from current and past period acquisitions, net of cash acquired, was
£32.7m.
From the dates of acquisition to 30 June 2015, these acquisitions contributed
£7.1m to revenue and £2.0m to operating profit. If the acquisitions had
occurred on 1 January 2015, the revenue and operating profit of the combined
entity would have amounted to £857.4m and £84.6m respectively.
Details of goodwill and the fair value of net assets acquired are as follows:
6 months to 30 June 2015 6 months to 30 June 2014
£m £m
Purchase consideration:
- Cash paid 26.6 36.1
- Deferred and contingent consideration 8.0 10.0
Total purchase consideration 34.6 46.1
Fair value of net assets acquired (12.8) (23.4)
Goodwill from current period acquisitions 21.8 22.7
Goodwill represents the synergies, workforce and other benefits expected as a
result of combining the respective businesses. None of the goodwill recognised
is expected to be deductible for tax purposes.
Deferred consideration up to a maximum of £8.0m is payable over the next two
years, and the group incurred acquisition-related costs of £0.5m in respect of
the above acquisitions.
The provisional fair value of assets and liabilities arising from acquisitions
in the period are shown below. The provisional fair values will be finalised
in the 2015 financial statements. The fair values are provisional as the
acquisition accounting has not yet been finalised as a result of the proximity
of the acquisitions to the period end.
6 months to 30 June 2015 6 months to 30 June 2014
£m £m
Non-current assets
- Intangible assets 12.8 21.3
- Property, plant and equipment 1.7 3.6
Current assets 1.3 6.0
Current liabilities (0.5) (4.3)
Non-current liabilities (2.5) (3.2)
Net assets acquired 12.8 23.4
11. Events occurring after the balance sheet date
There were no significant events occurring after the balance sheet date.
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU
· the interim management report includes a fair review of the information
required by:
o DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
o DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so
By Order of the Board
Andy Ransom
Chief Executive
29 July 2015
The directors of Rentokil Initial plc are listed in the Rentokil Initial plc
Annual Report for 31 December 2014. A List of the current directors is
maintained on the Rentokil Initial website: www.rentokil-initial.com
INDEPENDENT REVIEW REPORT TO RENTOKIL INITIAL PLC
Introduction
We have been engaged by the Company to review the financial statements in the
half-yearly financial report for the six months ended 30 June 2015 which
comprises the consolidated income statement, consolidated balance sheet,
consolidated statement of comprehensive income, consolidated statement of
changes in equity, consolidated cash flow statement and the related
explanatory notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA"). Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this 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 reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the EU. The financial
statements included in this half-yearly financial report have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the financial
statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK and Ireland) and consequently
does not
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