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16 February 2009

 

Promethean PLC

Interim Results for the 6 months ended 31 December 2008

 

Promethean plc ('Promethean', the 'Company' or the 'Group') today announces its interim results for the six months ended 31 December 2008. 

  

Financial Highlights: 

  

-     Pro-forma net assets as at 31 December 2008 were £66.8 million (131 pence per share). 

 

-     During the six month period, Promethean's pro-forma NAV reduced by 5% or £3.3 million. Principal cause was further write down of Enterprise Group and falls in 
      the share prices of quoted investments. 

 

-     Falls in investment valuations partially offset by successful refinancing of InterMediactive Group enabling Promethean plc to receive early repayment of £7.4 
      million of loan notes and accrued interest during the period.

 

-     Overall, the decrease in pro forma NAV of 5% compares to a decrease in the FTSE All-Share Index of 21.13%.

Further enquiries:

Promethean plc

Sir Peter Burt                      +44 (0) 207 479 7660

Promethean Investments LLP

Michael Biddulph                 +44 (0) 207 479 7664    

James King / Gillian McCarthy  

Fairfax I.S. PLC                   +44 (0) 207 598 5368  

  

Other corporate information can be found at: http://www.prometheanplc.com  

 

Chairman's Statement

Introduction

The figures for the six months to 31 December 2008 reflect the impact of the dramatic economic changes which have occurred in the UK and elsewhere. I said in my previous chairman's statement that all storms, even hurricanes, eventually pass but I have to say that to date, I have seen little sign of the economic storm receding and I certainly have seen no green shoots emerging. The Government has tried to refloat the economy but, perhaps not surprisingly, their efforts have yet to show signs of actually working. However, it is early days yet and perhaps the economy will start to pick up as the winter recedes.

Given the financial services emphasis of our portfolio, it is hardly surprising that we have suffered considerably. Enterprise Group has continued to struggle in the continuing absence of any improvement in mortgage availability. Mortgage approvals have fallen substantially in comparison to the previous period. Enterprise continues to gain market share in a devastated market and I remain convinced that it will do well if and when normality returns to the market. We have provided a further £250,000 investment which has been followed by £250,000 contribution from the other shareholders. More information on Enterprise Group is contained within the Investment Manager's Review below.

TIS equally has been hurt by the reduction in annual bonuses declared by the life companies and this reduction in upside for with-profits life policies in TIS's funds has led to a consequent reduction in demand from purchasers. This reduction has also been compounded by the credit squeeze which has resulted in some investors seeking to redeem to create liquidity.  Our two quoted investments have fallen with the drop in the stock markets, despite their operating performance having been reasonable, while Atlas we continue to hold at cost reflecting the current uncertainties in the market.

Cambria, our car dealership business, is doing better than many of its peers. We have an excellent management team, which is operating in another dreadful market sector. Under the circumstances, I am pleased with Cambria's performance. 

InterMediactive Group continues to trade extremely well. We re-financed the business during the period which resulted in Promethean being repaid £6.7 million of its original £7.7 million loan note investment. This is reflected in the cost of the investment on the portfolio table contained within the Investment Manager's Review.

The Board announced on 23 January 2009 it had decided to offer shareholders the opportunity to participate in a tender offer of up to £25 million which should enable shareholders to tender a substantial part of their shareholding at a price of 70.5 pence per share, thereby creating liquidity for those shareholders who wish to exit.  The circular in respect of the tender offer will be sent to shareholders shortly and will contain a notice convening an extraordinary general meeting to be held in March at which shareholders' approval for the implementation of the tender offer will be sought.

 

We look forward with interest to what remains an unclear economic horizon. Time will tell whether the UK economy is headed back up or will sink further. At this stage, I think it is too close to call.

Sir Peter Burt

Chairman

16 February 2009

 Investment Manager's Review

The Investment Manager

Promethean Investments Fund LP is managed by Promethean Investments LLP ('the Manager' or 'Promethean'). Promethean is a limited partnership of which the Company is a Member along with its senior executives.

Overview

At 31 December 2008 the Company had pro-forma net assets of £65.6 million equivalent to 131 pence per share (30 June 2008: £66.8 million equivalent to 138 pence per share) and had a portfolio of seven investments. During the six month period to 31 December 2008, Promethean's pro-forma NAV reduced by 5% or £3.3 million and was principally caused by a further write down of £2.0 million on our original investment in Enterprise Group and the significant falls in the share prices of our two quoted investments. Compensating for some of these big reductions in valuations was the successful refinancing of InterMediactive Group which enabled the Company to receive £7.4 million of loan notes and accrued interest to be repaid early.

Overall, the decrease in pro forma NAV over the six month period to 31 December 2008 of 5% compares to a decrease in the FTSE All-Share Index of 21.13%.

During the period the Manager only made one new investment which was a small follow-on investment of £250,000 in Enterprise Group. This was viewed as being necessary given Enterprise's poor trading performance due to the near collapse of UK mortgage volumes in the second half of 2008. The Manager continues to work closely with Enterprise in order to help improve its performance. 

As well as difficulties in some of our private investments during the period, the share price performance of our listed investments in Media Square plc and IFG plc continued to suffer and led to a large reduction in the carrying value of these investments. The Manager believes that further falls in the UK stock market cannot be ruled out which may lead to a further reduction in the value of these investments. 

The rest of the investment portfolio continues to show signs of stress due to the extremely challenging economic environment. Unfortunately, a number of redundancies have been made within the portfolio companies because of the increasingly difficult trading environment they are facing. The Manager continues to work with and support the management teams of these businesses and is confident that all the necessary steps have been taken to help improve performance in these difficult times. However, the environment remains uncertain and the Manager is adopting a very cautious stance towards its portfolio investments and is focussed on improving performance rather than seeking out new investment opportunities in the near term.

Portfolio

As at 31 December 2008, the portfolio was as follows:

Company	Sector	Cost * £'000	Valuation ** £'000	Gain/(Loss)*** £'000
Atlas Acquisition Holdings Corp.	Investment company	894	1,210	316
Cambria Automobiles	Automotive retailing	10,633	11,470	837
Enterprise Group	Financial services	8,500	250	(8,250)
IFG plc	Financial services	6,316	2,024	(4,292)
InterMediactive Group	Telecoms services	1,750	7,337	5,587
Media Square plc	Marketing services	6,098	565	(5,533)
TIS Group	Financial services	10,006	11,845	1,839
Total		44,197	34,701	(9,496)

Note: 

* The cost of InterMediactive has been reduced reflecting the repayment of £6.7 million of loan notes in December 2008. The total original cost as at May 2007 for this investment was £8.5 million.

** The valuations are in accordance with IFRS / IPEVCA guidelines. Valuation of listed investments is based on the closing bid price as at 31 December 2008. The valuation of private companies also includes accrued interest on loan notes which is disclosed separately on the balance sheet and explains the difference in totals to the pro forma balance sheet.

*** Atlas Acquisitions is held at cost of US$1.75 million. The gain occurs due to exchange rate movements.

Portfolio Review

Atlas Acquisition Holdings Corp.

Promethean plc invested £0.9 million as a founder shareholder in Atlas Acquisition Holdings Corp. (a SPAC or 'Special Purpose Acquisition Company' listed on the American Stock Exchange). Atlas was established to effect a merger, capital stock exchange, asset or stock acquisition, exchangeable share transaction, or other similar business combination with an operating business which is not limited to any particular industry or geography. The CEO and Chairman of Atlas is Jim Hauslein, who built up Sunglass Hut, the US based retailer.

Promethean plc subscribed for 575,000 ordinary shares at US$0.004 a share and 1,750,000 warrants at US$1 per warrant in Atlas Acquisition Holdings Corp, when it completed its public offering on 30 January 2008. Atlas has until January 2010 to effect a business combination and the Directors of Promethean plc will review the valuation of this investment again at 30th June 2009. As noted in the table above, the gain on this investment is due to exchange rate movements.

Cambria Automobiles

Cambria Automobiles was formed to purchase underperforming car dealerships with a strategy of improving the operational performance and increasing the scale of the group. Promethean initially invested in Cambria in July 2006 and further investments have been made including the most recent which increased the total number of dealerships to 24 and increased the Group's turnover to circa £270 million.  

Unfortunately, the UK car market is experiencing one of its worst periods ever. Sales volumes both in terms of new and used cars are severely down year-on-year across the market as the recession is impacting consumer spending and the availability of car finance has reduced significantly. Despite these terrible conditions, Cambria's management team have performed well and the company is outperforming the wider market by some margin. In addition, the availability of distressed acquisitions has increased as expected.

Enterprise Group

Enterprise Group has three subsidiaries:

• Enterprise Finance Limited: is a master broker and packager of loans for other brokers and appointed representative networks;

• Enterprise Broker Services Limited: is a packager of sub-prime mortgages for directly authorised brokers and financial advisory networks; and

• Enterprise Debt Solutions Limited: a debt management and Individual Voluntary Arrangement ('IVA') business.

Promethean originally invested £8.5 million in May 2007. Unfortunately, Enterprise's performance has been very poor, largely due to the significant drop in UK mortgage volumes resulting in a major reduction in Enterprise's revenue. The company has however successfully implemented its EDGE 2 technology platform and increased its market share. Nonetheless, the significant uncertainty over mortgage volumes and the likely timing of any recovery has led to a full provision being made against the cost of the original investment of £8.5 million. In addition, a further investment of £500,000 was completed in December 2008, including £250,000 from the Enterprise management team. Promethean has also committed to a further £250,000 if required.

IFG plc

IFG plc is a listed financial services company that the Manager identified as being undervalued and which offers significant value potential. IFG operates corporate and trustee services; SIPP trustee and administration services and IFA and property intermediary services. The Company has acquired a minority shareholding in the business. Unfortunately, the value of this investment has been severely impacted by the fall in IFG's share price and is in line with declines in the wider stock market during the period. This investment is valued at the closing bid price at 31 December 2008 of 0.465 Euros per share. On 11 February 2009 the closing bid price was 0.577 Euros per share.

InterMediactive Group

InterMediactive Group ('IMA') is a telecoms services business. IMA has developed a number of successful products across voice (fixed line and mobile), interactive TV, 3G and online platforms and provides network services and resells minutes to other businesses and operates its own communities via non-geographical telephone numbers.

Promethean invested £8.5 million in May 2007 and acquired a 75% shareholding in IMA. Promethean's investment comprised £7.7 million of 12% unsecured loan notes and £800,000 of ordinary equity.

IMA continues to perform well and has comfortably exceeded its budgeted profit for the last financial year (year end 31 January 2009). In addition, the significant cashflow generated by the business enabled Promethean to refinance the business in December 2008 and repay £7.4 million of loan note capital and accrued interest. This reflects 87% of the original cost of the investment. The Manager continues to explore strategic options for this business and has engaged with a number of potential acquirers. However, given the poor economic environment and the lack of debt finance, there is a high degree of uncertainty over the timing of any realisation.

Media Square

Media Square plc ('MSQ') is a listed marketing services and communications group. MSQ has grown by acquisition and operates from offices in Europe, the USA, Africa and the Far East. MSQ had approximately eighty subsidiaries many of which were subscale but some of which appear to have considerable potential. As reported in Promethean's 2008 annual report, Media Square is part way through a three year turn around programme under the new management team led by Roger Parry. The trading environment for MSQ remains challenging despite the progress made to date in divesting of non-core businesses and focussing on those with real longer term potential. This investment is valued at the closing bid price at 31 December 2008 of 14.5 pence per share. On 11 February 2009 the closing bid price was 12 pence per share.

TIS Group

TIS Group ('TIS') is the UK's leading market maker and provider of services to the assigned with-profit endowment policies market, supplying Traded Endowment Policies ('TEPs') and ongoing policy valuation and management services to major institutional TEP funds. TIS includes Absolute Assigned Policies Limited ('AAP'), which is regulated by the FSA and is the UK market leader in the acquisition and sale of TEPs, and the largest UK manager of TEP assets, with approximately £700 million of funds under management.

In June 2007, Promethean invested £10.0 million in the business and currently has a 57% stake. Promethean's investment comprised £9.95 million of 16% unsecured loan notes and the balance in ordinary equity. Additional funding of £52.5 million was provided by HBOS plc and by the vendors who retained a vendor loan note and part equity ownership in the company. HBOS plc has an option to acquire 2% of TIS' equity from Promethean on exit. 

TIS' performance during the period was at a lower level than in its previous financial year to 30 June 2008. This was due to an increase in redemptions from investors in the funds that it administers which led to a reduction in liquidity and trading commissions. As a result the Manager expects the performance of TIS in the current financial year to be circa 30% lower than last year. However, the business continues to generate significant profits and cashflow and this has enabled it to repay circa 35% of the original acquisition finance debt and the business is operating comfortably within its banking facilities.

Outlook

The Manager remains extremely cautious due to the severe economic conditions that are prevailing in the UK market at present. The damage that the economy has suffered in the last six months has in all probability not yet been fully reflected in our portfolio companies' trading performance and if the economy continues to deteriorate, the Manager cannot rule out further reductions in the value of certain investments. In addition, the uncertain environment will continue to impact the Manager's ability to successfully exit the Company's investments.

Promethean Investments LLP

16 February 2009

All statements of opinion and/or belief contained in the Investment Manager's Review and all views expressed and all projections, forecasts or statements relating to expectations regarding future events or the possible future performance of the Company represent Promethean Investments LLP's own assessment and interpretation of information available to it as at the date of this report. As a result of various risks and uncertainties, actual events or results may differ materially from such statements, views, projections or forecasts. No representation is made or assurance given that such statements, views, projections or forecasts are correct or that the objectives of the Company will be achieved.

 Independent review report to Promethean plc 

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2008 which comprises the unaudited Group Income Statement, the unaudited Group & Pro-forma Balance Sheets, the unaudited Statement of Changes in Equity, the unaudited Group Cash Flow Statement and notes 1-4. We have read the other information contained in the half yearly financial report which comprises only the Chairman's Statement and Investment Manager's Review and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a 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 conclusion we have formed.

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. 

As disclosed in Note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union. 

Our responsibility 

Our responsibility is to express to the Company a conclusion on the condensed set of 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 United Kingdom. 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 enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

Conclusion 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union.

GRANT THORNTON
AUDITOR

ISLE OF MAN
16 FEBRUARY 2009

 

Promethean plc
Group Income Statement for the period to 31 December 2008
Unaudited
	Group	Group	Group
	Period	Period	Year
	1 July 2008 to	1 July 2007 to	1 July 2007 to
	31 Dec 2008	31 Dec 2007	30 June 2008
	£'000	£'000	£'000
Investing Operations
Investment and other income	1,727	2,280	4,894
Realised and unrealised (loss)/gain on financial investments	(7,640)	24,570	18,616
	(5,913)	26,850	23,510
Management and other expenses	(1,001)	(6,841)	(2,877)
(Loss)/Profit from investing activities	(6,914)	20,009	20,633
Trading Operations
Continuing operations
Revenue from sale of goods and services	11,080	15,985	20,460
Operating costs	(8,086)	(12,898)	(15,260)
Profit from trading operations	2,994	3,087	5,200
(Loss)/Profit before finance costs and taxation	(3,920)	23,096	25,833
Finance income	515	97	187
Finance costs	(655)	(1,005)	(407)
(Loss)/Profit before tax from trading operations	(4,060)	22,188	25,613
Income tax expense	(738)	(631)	(1,009)
Group (Loss)/Profit from continuing operations	(4,798)	21,557	24,604
Discontinued operations
Loss for the period from discontinued operations	-	-	(83)
Group (Loss)/Profit	(4,798)	21,557	24,521
Attributable to:
Equity holders of the parent	(5,100)	21,392	17,832
Minority interest	302	165	6,689
	(4,798)	21,557	24,521
(Loss)/Earnings per share - (basic and diluted)
- Continuing	(0.10p)	42.78p	35.83p
- Discontinued	-	-	(0.17p)
- Total	(0.10p)	42.78p	35.66p

  

Promethean plc
Group & Pro-forma Balance Sheets as at 31 December 2008
Unaudited
					Pro-forma	Pro-forma	Pro-forma
					Balance Sheet	Balance Sheet	Balance Sheet
	Group	Group	Group		(see Note 3)	(see Note 3)	(see Note 3)
	31 Dec 2008	31 Dec 2007	30 June 2008		31 Dec 2008	31 Dec 2007	30 June 2008
	£'000	£'000	£'000		£'000	£'000	£'000
Non-current assets
Property, plant and equipment	663	612	599		81	80	103
Other intangible assets	11,338	12,527	11,975		-	-	-
Goodwill	4,474	4,304	4,304		-	-	-
Investments held at fair value through profit or loss	26,527	30,850	33,814		33,854	41,287	45,357
	43,002	48,293	50,692		33,935	41,367	45,460
Current assets
Trade and other receivables	3,516	4,873	5,526		1,117	1,186	1,832
Cash and cash equivalents	32,804	33,517	26,343		30,819	30,462	22,786
Current assets	36,320	38,390	31,869		31,936	31,648	24,618
Total assets	79,322	86,683	82,561		65,871	73,015	70,078
Current liabilities
Trade and other payables	3,649	3,683	4,237		292	151	1,242
Current portion of long-term borrowings	3,079	58	1,941		-	-	-
Taxation liabilities	518	560	473		-	-	-
	7,246	4,301	6,651		292	151	1,242
Non-current liabilities
Long-term borrowings	5,376	7,359	4,220		-	-	-
Deferred tax	3,237	3,726	3,429		-	-	-
	8,613	11,085	7,649		-	-	-
Net Assets	63,463	71,297	68,261		65,579	72,864	68,836
Equity
Share capital	500	500	500		500	500	500
Share premium	47,954	47,954	47,954		47,954	47,954	47,954
Unrealised investment revaluation reserve	(18,009)	(6,285)	(10,369)		(12,432)	(4,333)	(7,540)
Retained earnings	31,930	28,866	29,390		29,557	28,743	27,922
Equity attributable to equity holders of the parent	62,375	71,035	67,475		65,579	72,864	68,836
Minority interest	1,088	262	786		-	-	-
Total	63,463	71,297	68,261		65,579	72,864	68,836
Net asset per share	£1.27	£1.43	£1.35		£1.31	£1.46	£1.38

  

Promethean plc
Statement of changes in equity for the period to 31 December 2008
Unaudited
Group
	Share Capital	Share Premium	Unrealised investment revaluation reserve	Retained earnings distributable	Minority interest	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance as at 30 June 2008	500	47,954	(10,369)	29,390	786	68,261
Unrealised gains reserve transfer	-	-	(7,640)	7,640	-	-
Profit and total gains and losses for the period	-	-	-	(5,100)	-	(5,100)
Distribution to minority interest	-	-	-	-	302	302
Balance as at 31 December 2008	500	47,954	(18,009)	31,930	1,088	63,463

  

Promethean plc
Cash Flow Statement for the period ended 31 December 2008
Unaudited
		Group	Group	Group
		Period	Period	Year
		1 July 2008 to	1 July 2007 to	1 July 2007 to
		31 Dec 2008	31 Dec 2007	30 June 2008
		£'000	£'000	£'000
Cash inflow from operating activities
Net (loss)/profit for the period		(4,060)	22,188	25,530
Adjustments for :
Depreciation		149	189	305
Amortisation of Intangibles		709	1,346	2,078
Profit on disposal of subsidiaries		-	(23,085)	(21,461)
Profit on disposal of investments		-	(20)	1,850
Distribution paid to minority interests		-	-	(6,035)
Interest income		515	(97)	(189)
Interest expense		(655)	1,005	1,283
Unrealised investment losses		7,640	4,034	8,118
Decrease/(increase) in trade and other receivables		939	(2,263)	(3,018)
Decrease in payables		(588)	(1,355)	(801)
Increase in deferred tax		-	3,726	3,726
Tax paid		(885)	(679)	(2,141)
		3,764	4,989	9,245
Cash flow from investing activities
Disposal of subsidiaries		-	33,235	33,270
Purchase of investments		(250)	(8,166)	(16,313)
Proceeds from sale of investments		-	20	150
Proceeds from returns on investments		841	-	-
Purchase of intangibles		(72)	(82)	(227)
Purchase of property, plant & equipment		(213)	(181)	(348)
Interest received		(515)	97	189
Net cash used in investing activities		(209)	24,923	16,721
Proceeds from bank loans		8,400	-	-
Repayment of bank loans		-	(10,067)	(10,808)
Repayment of other loans		(6,149)	-	(2,119)
Finance lease principal payments		-	-	(125)
Interest paid		655	(1,005)	(1,283)
Cash introduced by minority interest		-	15	50
Net cash used in financing activities		2,906	(11,057)	(14,285)
Net increase in cash		6,461	18,855	11,681
Cash and cash equivalents at beginning of period		26,343	14,662	14,662
Cash and cash equivalents at end of period		32,804	33,517	26,343

  Note 1 - General Information

The information for the six month period ended 31 December 2008 and the period 1 July 2007 to 31 December 2007 do not constitute statutory accounts as defined in section 9 of the Companies Act 1982. Comparative figures for the year to 30 June 2008 are taken from the full statutory accounts, which contain an unqualified audit report.

Note 2 - Basis of accounting

This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the accounts for the Company for the year ended 30 June 2008, and in accordance with International Accounting Standard 34, 'Interim Financial Reporting'.

Note 3 - Pro-forma Balance Sheet

The pro-forma balance sheet removes the consolidated investee company and the associated consolidated adjustments. The pro-forma balance sheet has been presented as the directors believe that as an investment company the pro-forma balance sheet provides information that is relevant for comparison to other investment companies that are not required to consolidate investee companies and it is used by the directors to monitor the performance of Promethean plc.

Investee companies are required to be consolidated where the group is deemed to have a controlling stake.

Investments are valued in accordance with the International Private Equity and Venture Capital valuation guidelines.

Note 4 - Events after the balance sheet date

As at 11 February 2009 the closing bid price for Media Square plc was 12 pence per share and if applied to the valuation of the Company's investment as at the balance sheet date, would result in a reduction in the value of the investment of £0.14 million or 0.3 pence per share on a pro-forma NAV basis.

As at 11 February 2009 the closing bid price for IFG plc was 0.577 Euros per share and if applied to the valuation of the Company's investment as at the balance sheet date, would result in an increase in the value of the investment of £0.23 million or 0.5 pence per share on a pro-forma NAV basis. 

As at 11 February 2009 the prevailing exchange rate between sterling and US dollar when applied to the value of the investments in Atlas Acquisitions Holdings Corp. would have resulted in a further increase of £0.3 million or 0.6 pence per share on a pro-forma NAV basis. 

The impact of these post balance sheet movements in the share prices of Media Square plc and IFG plc and exchange rate movements after 31 December 2008 on the Company's pro forma NAV per share would result in an unaudited NAV per share as at 11 February 2009 of  132 pence per share. This represents an increase of 0.6% versus the pro forma NAV per share of 131 pence as stated in the unaudited pro forma balance sheet as at the 31 December 2008.

After the balance sheet date the Manager also entered into a non-legally binding agreement to divest of Promethean Investments Fund LP's  shareholding in InterMediactive Group. The transaction is dependent on the availability of debt finance for the purchaser. This is in addition to a number of other significant uncertainties over the transaction which it is hoped will be concluded during the first half of 2009. If the transaction were to be  successful in its current format, the difference between the valuation of this investment as at 31 December 2008 and the net sale receipts to Promethean would be up to an additional £3.3 million or approximately a 6.6 pence per share increase on a pro-forma basis.

The board announced on 23 January 2009 it had decided to offer shareholders the opportunity to participate in a tender offer of up to £25 million which should enable shareholders to tender a substantial part of their shareholding at a price of 70.5 pence per share, thereby creating liquidity for those shareholders who wish to exit. The circular in respect of the tender offer will be sent to shareholders shortly and will contain a notice convening an extraordinary general meeting to be held in March at which shareholders' approval for the implementation of the tender offer will be sought.

ENDIR EAKADFSKNEFE