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17 September 2009

NXT plc

Final Results

NXT plc ('NXT' or the 'Company' and together with its subsidiaries 'the Group'), the provider of unique sound solutions, best known for its flat-panel loudspeaker technology, announces its Final Results for the 12 months to 30 June 2009.

Highlights

• Revenues of £3.4 million, an increase of 62% over last year (2008 - £2.1 million)

• Sales boosted by Haptic licence agreement with Nissha Printing Co., a major move for NXT into the growing touchscreen market

• Operating costs of £4.0 million including £0.3 million provision for potential bad debts

• Retained after-tax loss £0.5 million (2008 - £2.1 million)

• Strategic focus now firmly on three growth markets - flat TV, portable speakers and small touch screens

• 28 new brands and eight new retailers have confirmed or launched NXT-equipped models since the beginning of the financial year

• Continued strong customer demand for NXT technology licences

• Appointment of James Lewis, with effect from 1 October 2009, the technology entrepreneur and founder of Oxford Semiconductor, as Non-executive Director to bring additional expertise in international sales and marketing, further strengthening the Board following the appointment of Ian Buckley as Chairman

Ian Buckley, Chairman, said: 'The year has been a demanding one for so many businesses globally. With the support of new and existing licensees NXT has been able to continue its development across many sectors and grow sales at a time when many other companies have experienced declining revenues, and our employees have continued to produce innovative solutions to technical and business challenges. We do not anticipate that the economy will improve dramatically in the short term. However, the level of interest in bending wave haptic technology and in our new product introductions gives the Board encouragement for the future success of the Company.'

The full published accounts for the financial year ended 30 June 2009 will be posted to shareholders at the end of October and will be made available on the NXT website at that time (www.nxtsound.com).

For additional information, please contact:

NXT plc: 

Ian Buckley, Chairman	+44 (0) 1223 597 840
Peter Thoms, Chief Executive	+44 (0) 1223 597 840

Media enquiries:

Allerton Communications	+44 (0) 20 3137 2500
Peter Curtain

Chairman's statement

For the year ended 30 June 2009 NXT plc achieved revenues of £3.4 million, an increase of 62% over the same period last year (£2.1 million). Operating costs on continuing operations were contained at the same levels as last year but following a review of trade debtors the Board has decided it would be prudent to make an additional provision for potential bad debts amounting to £0.3 million. This has resulted in operating costs totalling £4.0 million. The retained after-tax loss for the year was £0.5 million compared with a loss of £2.1 million in the previous year. 

A major contributor to the sales increase was the licence signed with Nissha Printing Co., Ltd ('Nissha') for $1.8 million in December 2008. This exclusive licence was for NXT's haptic and associated bending wave technology in certain small touch screen applications and was a significant step for NXT into the growing touch screen market.

Over the last 18 months NXT has negotiated the surrender of three onerous leases. The final surrender was completed this year and the termination of these three leases eliminates a significant cash burden of £750,000 per annum.

I was appointed Chairman at the beginning of April 2009 and succeeded David MacKay who had guided NXT through a period of restructuring and subsequently through to the execution of the licence agreement with Nissha. David decided that, following this significant milestone, it was an appropriate time to stand down. The Board and his colleagues at NXT thank him for his support and for the contribution made during his period first as a Non-executive Director, and then subsequently as Chairman.  

The Board considered that it would be strengthened by the addition of a non-executive Director with international sales and marketing experience and I am pleased to announce that James Lewis will join in that capacity with effect from 1 October 2009. James founded Oxford Semiconductor in 1992 and grew it into a $40 million global business supplying complex semiconductor devices for computer peripherals and consumer electronics. From 2000 until 2004 he lived in California to direct its US operations and since 2005 has provided non-executive and advisory roles to technology and cleantech start-ups in the UK.  Going forward, I believe that we have a small but experienced team who can deliver the business opportunities for NXT's audio and touch technologies. 

Following the announcement of NXT's interim results in February 2009 there was demand from institutions to invest in new capital. The Company placed 4% of its equity and raised £440,000 gross.  The major institution in this placing was Gartmore Investment Management which has since increased its holding in NXT ordinary shares to over 7%.

Principal risks and uncertainties

The principal risks and uncertainties facing the company are referenced in note 5 of the Financial review notes.

Outlook

The year has been a demanding one for many businesses globally. With the support of new and existing licensees NXT has been able to continue its development across many sectors and grow sales at a time when many other companies have experienced declining revenues, and our employees have continued to produce innovative solutions to technical and business challenges. We do not anticipate that the economy will improve dramatically in the short term. However, the level of interest in bending wave haptic technology and in our new product introductions gives the Board encouragement for the future success of the Company. 

Ian Buckley

Chairman

  Chief executive's review

I am pleased to report that revenues for the year to 30 June 2009 increased by 62% to £3.4 million (2008 - £2.1 million). 

The instability caused by the global recession has altered the commercial landscape for NXT. Some of the business sectors within which we operate have suffered a considerable impact from the downturn in consumer discretionary spending. In the past 18 months, we have experienced some customers failing, others' divisions closing and development projects being cancelled. Against this difficult backdrop I am glad to report that NXT has achieved royalty income for the year to 30 June 2009 similar to that of the preceding year ($1.8 million vs $1.9 million). As a significant proportion of NXT's income is denominated in US dollars, year on year the sales figure benefited by 30% due to the Dollar: Sterling exchange rate (£1.2 million vs £0.9 million).

Licensing and consulting income for the period was £2.2m (up by 94% on the previous year), and during the 12 months NXT signed 19 new licences, the most significant of which was the agreement with Nissha Printing Co., Ltd, for our haptic interface technology, announced last December.  Consulting income for the period was lower than in the previous year, a direct result of a number of customers reducing R&D budgets. However, since July 2009 enquiries have increased and we have in that time received several new project briefs and a number of approvals to proceed with paid-for engineering work.  

As long ago as 2000, NXT scientists registered a series of inventions based on their studies into haptic functionality, recognising that it could be used as a feature of a distributed mode loudspeaker. It was this work that provided the foundations for the agreement signed with Nissha, an important endorsement from a leader in the global small touch screen market. The licence involves both companies focusing on the development of the technology for certain touch screen products, including mobile phone, gaming console, notebook PC and digital camera applications. Royalties will be generated upon the sale of relevant products and the three-year term of the licence can be extended in December 2011 with both parties' agreement. While it is not intended that there would be an additional licence fee payable for any extension, it is expected that there would be a substantial commitment by Nissha to pay minimum royalties. The combination of the Nissha endorsement and the demonstrable effects of tactile touch directly from the screen (the 'feel' of a pencil writing on paper while using a stylus and separate tactile feedback sensations at different locations when using a screen's multi-touch capabilities) lead us to believe there are many opportunities to license this technology in fields outside of those granted to Nissha. 

We have previously indicated our strategy of focusing sales and engineering resources on the three growth market sectors of flat TV, portable speakers and small size touch screens, and this continues to deliver positive returns, despite those markets growing at rates below expectations.  

Recognising that in a deteriorating global economy consumers would trade down to lower-priced products, our development team began designing simpler, cheaper products two years ago. Emphasising mobility, function and form, we have developed a series of value-oriented portable speakers that are now on sale. This diverse range includes speakers that double as cases for devices such as Apple's iPod and iPhone models, accessory speakers for netbooks (the latest development in mobile computing) and pocket-sized, value-priced speakers.

Over the years, NXT has cultivated strong relationships with certain retailers, developing products for their house brands. Without the marketing power of the international brands, retailers rely on design, performance and technology to help their own brand products stand out at the point of sale and create consumer appeal - defining characteristics of NXT's range of open model 'off the shelf' products. Many of the world's leading consumer electronics retailers now offer NXT-designed products in their private label and exclusive brand product ranges, including Best Buy, Currys, Future Shop, PC World, The Source, Dick Smith Electronics and Comet. Mass merchants, grocery retailers and specialist retailers are also looking to NXT to help create differentiation for their products.  

While the consumer electronics sector remains challenging, working with dynamic young brands has helped to expand the distribution of NXT-equipped products in both established and developing markets. With the ability to react quickly and capitalise on market trends, these brands typically work to faster, shorter development schedules than their more traditional competitors. Examples of such companies launching NXT-enabled products in the past 12 months include BlueDot (Japan), TechGear (Hong Kong, Taiwan, France), iHome (worldwide), Parrot (worldwide), Revo (worldwide) and AudioUnlimited (USA). Some of these products are truly exceptional in terms of their design and performance, including Parrot's Zikmu wireless speaker system, an award-winner at the 2009 Consumer Electronics Show and an excellent showcase for NXT technology.

Alongside these companies, long-term brand partners including Maxell, TEAC, Hitachi, Medion and TDK each introduced new NXT-equipped products during the year. In many cases, these products have been either completely or partially designed by NXT's development team. 

In February's interim report, I highlighted the importance of expanding our distribution with new customers and since the beginning of the 2008/09 financial year, 28 new brands and eight new retailers have confirmed or launched NXT-equipped models. Determined to further increase the global distribution of NXT-based products, the Company will participate in the Mumbai Global Sources trade show in November, adding to the two Hong Kong shows and Las Vegas exhibition that NXT attends every year.  

VIZIO commenced shipments of its 55' VF550XVT LCD TV, its third and largest size TV to be fitted with NXT's Balanced Mode Radiator (BMR) drive units at the start of the year. In June 2009, Japanese consumer electronics brand JVC announced the availability of the LT-42WX70, the first TV from the brand to feature BMR technology. The mass production of the slim, high power drive units used in these TVs has led to cost reductions through economies of scale to the extent that the drive units are now being considered for other applications, including slim form sound bars. Development work continues focused mainly on evaluating alternative drive unit designs and enhancing performance levels.

The fortunes of the world's leading automotive manufacturers have been extensively reported, the industry suffering more than most in the downturn. While the slowdown in new vehicle registrations has directly affected revenues for NXT, with sales 7% below last year, the commitment of our licensees and their development roadmaps, including smaller exciters and BMR drive units, offers some reassurance as to medium term growth once consumer confidence returns and markets recover. Toyota introduced the new Wish mid-sized people carrier to selected Asian markets in April, the eighth vehicle from the Japanese manufacturer with our flat panel speaker technology deployed in the headliner as an invisible speaker solution. In addition to the Toyota vehicles, Citroën currently offers three models with NXT speakers.

In most years, certain NXT enabled products have reached markets that demonstrate one of the intrinsic advantages of NXT technology, the ability to go where other speakers cannot. This year's standout application originates in Oregon and deserves recognition for both its practical and safety benefits. The Enertia PowerCycle from Brammo is an electric motorcycle targeting commuters and leisure users. The environmentally friendly motor presents a safety issue for riders, passengers, pedestrians and others, since its quiet operation means it is barely audible in use. Brammo turned to NXT to resolve this problem by equipping the Enertia's engine cowling with NXT technology enabling the bike to reproduce authentic 'engine' sounds, warning other road users of its presence. Thanks to the unique advantages of NXT technology, these sealed speakers are impervious to dust, dirt and moisture, making them maintenance-free as well as lightweight and low powered.

Also in North America, Hallmark extended its range of NXT technology-based greetings cards ahead of the Christmas 2008 period with a number of new designs and the addition of recordable messaging for enhanced personalisation of the card. Hallmark's range of NXT technology-based cards now covers almost every major celebratory occasion in the calendar and continues to grow.

Technology Update

NXT's BMR technology, a hybrid drive unit that combines the mid and high frequency performance of an NXT flat panel loudspeaker with the low frequency attributes of conventional, pistonic speakers has continued to win selection for new applications. Designed to reproduce wide bandwidth audio from a single drive unit, BMR offers designers the ability to 'drop in' the technology to concept designs in much the same way as with cone speakers. This ease of selection is a major advantage in the fast-moving consumer electronics industry, where products are best brought to market quickly.

Within the catalogue of drivers there are now BMR speakers specifically designed for Hi-Fi, TV, home audio and professional audio applications. Further designs for custom installation, automotive and home theatre are also under consideration. In addition to the TVs launched during the year, several other products fitted with BMR drivers were announced, including the prestigious Ovator S-600 floor standing speakers from Hi-Fi specialist, Naim, bringing the total number of products launched to date to 20 with more planned introductions.  

Refinements to NXT's distributed mode actuator (DMA), a small scale piezo-ceramic transducer, have been ongoing for the past few years. Demand for increased performance, reduced cost and miniaturisation have been the key targets and the latest iteration is the best performing and smallest yet at just 1.8mm in height. Cost reductions have been accelerated by the recent availability of improved high voltage, low power drive electronics, opening up new opportunities for NXT in 2010. The DMA is used in portable devices, touchscreens and on-ear headsets. Long term licensee and DMA specialist, Authentic Ltd is currently producing the components for use as audio actuators in a portable home entertainment product to be launched by one of the major Japanese brands. In addition to this launch, prototypes of an on-ear headset are in the pre-production phase of development.

As part of the bending wave haptics development programme patents have been filed for improvements in function and new exciters. Demonstrators with touch panels over 10 inches have been shown to the supply chain, but most interest currently is in the 7-inch to 9-inch screen sizes where NXT is using new patented electro mechanical exciters. 

Having previously raised the possibility of supply chain participation, NXT has this year trialled this strategy by selling licence-paid exciters to selected resellers and developers. Initially focusing on specialised application exciters, the limited scale test has served to legitimise previous supply arrangements and provide a higher level of customer service to buyers. The trial will be extended this year to test other component sales opportunities.

In conclusion, I believe the progress made by NXT in the year under review represents a considerable achievement in some of the most challenging economic conditions and confirms the underlying demand for the technology. The commitment of my colleagues and the commercial opportunities available to NXT through the breadth of its technology portfolio, illustrated by the agreement entered into with Nissha, give the Board confidence for the future, notwithstanding the difficult trading environment.

Peter Thoms

Chief Executive Officer

  Financial Review 

Overview

The after tax loss for the year to 30 June 2009 was 76% less than the previous year at £496,000. The loss includes a bad debt provision of £275,000 which was reasonable following a vigorous review of trade debtors in the light of the current economic climate. Operating costs included non cash expenditure for the stock option valuation of £175,000 and depreciation and amortisation of £65,000. 

Most indicators were positive in the year, specifically revenue up 62%, speaker volumes up 101% and operating costs, excluding non cash items, controlled at last year's levels, despite the movement in exchange rates putting pressure on overseas cost bases.

A major contributor to revenue was the new haptic licence signed by Nissha Printing Co. Ltd. in December 2008. Having spent over two years preparing the new technology for commercialisation, this was an important milestone. Joint development continues on the technology, and we anticipate haptic related income continuing to make an important contribution to our revenue line going forward.

Performance monitoring

The Group monitors the financial performance of the business in a number of ways. The key performance indicators are:

- Royalties (as a percentage of income)

- Speaker volumes

- Average royalty rates

- Operating costs

- Operating cash flows

Revenue  

Revenue is generated in US Dollars, Euros and Sterling. However the majority of the income is US Dollar denominated and the Group monitors its income in US Dollars. The Sterling : US Dollar exchange rate can have a significant impact on the results as illustrated by the analysis below. 

  

Revenue		2008		2009		Growth
$		$'000		$'000		%
Royalties		1,885		1,795		(5)
Licences, consulting and other income		2,287		3,336		46
Total		4,172		5,131		23
Average exchange rate		2.01		1.53
£		£'000		£'000		%
Royalties		936		1,152		23
Licences, consulting and other income		1,139		2,211		94
Total		2,075		3,363		62

Royalty income accounts for 34% of the Group's annual income. The increased focus on licensing over the past two years has resulted in the royalty revenue becoming less significant as a percentage of total income, but it is anticipated this will reverse over the next two years. The continued concentration on licensing activity saw 19 new licences granted in the year (2008 - 18). The sales force saw a significant change in potential licensee behaviour due to the global economic crisis, which impacted notably on the take up of consulting and extended the sales lead time. However their sustained efforts enabled the new licensee numbers to remain stable.

Another key performance measure for the Group is the average royalty received per speaker. NXT has different royalty rates and volume discount tables based on the field of use for the technology. The average royalty per speaker has fallen from 41 cents to 20 cents due to the inclusion of high volume / low royalty products such as the Hallmark cards. The Group will only report the average royalty per speaker as it considers that publishing its royalty tables would restrict its competitive advantage. 

	2008	2009
Speaker volumes	4,524,162	9,113,862
Average royalty rate	41 Cents	20 Cents

Cost control

£'000	2007	2008	2009
Cash operating costs on continuing operations	5,094	3,410	3,475
Depreciation and amortisation	50	63	69
Stock option provision	91	114	175
Increases in provisions such as rent and bad debt	96	80	275
Restructuring costs	456	662	-
Total operating costs	5,787	4,329	3,994

There has been a continued focus on cost control and cash operating costs on continuing operations have remained stable year on year. 

The current instability in world markets has led the Group to continue its focus on cost control. Actions for the first half of 2009/2010 include a management pay cut of 10% and other staff pay cuts of 5% and a further rationalisation of headcount, travel and consultants' costs. Whilst no individual action impacts significantly on the cost base, the totality of the reductions should manage the cost base for the year.

Cash management 

Cash outflow for the year was £346,000. Two onerous leases were surrendered during the year, with a resultant cash outflow of £248,000.  Prototypes designed and developed by our engineers increased the fixed asset spend to £138,000.  Cash inflow from a placement of shares in March 2009 was £420,000, mainly taken up by the movement in working capital.

As a precautionary measure in this uncertain economic environment, an overdraft facility has been agreed with the Group's bankers. The Group has the ability to drawdown on this facility at any time. 

Operating cash flows are set out in the Consolidated Cash Flow Statement.

Results 

The retained loss for the financial year was £496,000 compared with £2,056,000 in 2008, an improvement of 76%.

Kate Barnes  Finance Director

  

Consolidated income statement at 30 June 2009

	2009  £'000	2008  £'000
Continuing operations
Revenue	3,363	2,075
Cost of goods sold	(89)	-
Net revenue	3,274	2,075
Other operating expenses	(3,994)	(3,667)
Redundancy costs	-	(662)
Operating expenses	(3,994)	(4,329)
Loss before financing income	(720)	(2,254)
Net financing income	23	21
Loss on ordinary activities before taxation	(697)	(2,233)
Taxation	201	177
Retained loss for the financial year attributable  to equity holders of the Company	(496)	(2,056)
Basic and fully diluted loss per share	(0.3)p	(1.7)p

  Consolidated balance sheet at 30 June 2009

	2009  £'000	2008  £'000
Assets
Non-current assets
Property, plant and equipment	139	43
Intangible assets	278	301
Long-term debtors	41	50
	458	394
Current assets
Trade and other receivables	1,172	1,079
Current tax recoverable	188	175
Cash and cash equivalents	599	945
	1,959	2,199
Total assets	2,417	2,593
Equity and liabilities
Share capital	1,496	1,436
Deferred share capital	22,682	22,682
Share premium account	87,019	86,595
Other reserve	282	282
Stock option reserve	746	571
Retained earnings	(110,290)	(109,825)
	1,935	1,741
Current liabilities
Trade and other payables	309	431
Short-term provisions	173	421
	482	852
Total liabilities	482	852
Total equity and liabilities	2,417	2,593

  Consolidated statement of changes in equity

	Share  capital  £'000	Deferred share capital  £'000	Share  premium  £'000	Other  reserve  £'000	Stock  option reserve  £'000	Retained  earnings  £'000	As at  30 June 2009 £'000
At 1 July 2007	23,627	-	83,881	437	457	(107,937)	465
Retained loss for the  financial year	-	-	-	-	-	(2,056)	(2,056)
Currency translation differences	-	-	-	-	-	14	14
Capital restructure	(22,682)	22,682	-	-	-	-	-
Issue of shares  (net of expenses)	470	-	2,563	-	-	-	3,033
Share-based payment	21	-	151	(155)	-	154	171
Fair value of stock options	-	-	-	-	114	-	114
At 30 June 2008	1,436	22,682	86,595	282	571	(109,825)	1,741
Retained loss for the  financial year	-	-	-	-	-	(496)	(496)
Currency translation differences	-	-	-	-	-	31	31
Issue of shares  (net of expenses)	60	-	424	-	-	-	484
Fair value of stock options	-	-	-	-	175	-	175
At 30 June 2009	1,496	22,682	87,019	282	746	(110,290)	1,935

  Consolidated cash flow statement at 30 June 2009

	2009 £'000	2008 £'000
Cash flows from operating activities
Loss before finance income	(720)	(2,254)
Adjustments for:
Depreciation and amortisation	65	63
Fair value of share-based payments	175	114
Foreign exchange translation	31	14
	(449)	(2,063)
(Increase)/decrease in trade and other receivables	(84)	56
Decrease in trade and other payables	(122)	(268)
Utilisation of provisions	(248)	(887)
Shares issued for non-cash consideration	47	171
Profit on sale of fixed assets	-	4
Cash outflow from operations	(856)	(2,987)
Taxation received	188	346
Net cash outflow from operating activities	(668)	(2,641)
Cash flows from investing activities
Purchase of property, plant and equipment	(138)	(9)
Proceeds from sale of property, plant and equipment	-	(4)
Interest received	37	29
Interest paid	(14)	(8)
Net cash (outflow) / inflow from investing activities	(115)	8
Cash flows from financing activities
Proceeds from the issue of share capital (net of issue costs)	437	3,033
Net cash inflow from financing activities	437	3,033
Net (decrease) / increase in cash and cash equivalents	(346)	400
Cash and cash equivalents at the beginning of year (note A)	945	545
Cash and cash equivalents at the end of year (note A)	599	945

  

Financial Review Notes

For the year ended 30 June 2009

1. The financial information set out above does not constitute the company's statutory accounts for the years ended 30 June 2009 or 2008 but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

2. The financial statements at 30 June 2009 show that the Group generated a loss from continuing operations of £0.5 million with cash utilised in continuing operations of £0.7 million. The Group has increased revenue by 62% in the last year, and reduced losses by 77%. The Group balance sheet shows net assets of £1.9 million. Cash generated through the issue of equity in the year totalled £0.4 million. 

The main factors contributing to the increase in revenues was the launch of new NXT technology and the continuing ability of existing licensees to exploit the original NXT technologies. Should no new licensees sign up or should existing licensees cease to use the technology, the Group's funding and operating strategy would come under significant pressure, potentially requiring changes to the operating and financing model. 

However the Board has concluded that no matters have come to its attention which suggests that the Group will not be able to maintain its licensee base, and obtain new licensees. The Board has considered various alternative operating and funding strategies should these be necessary and are confident that these present viable options to allow the Group to continue as a going concern should they be necessary.

In August 2009 an overdraft facility was agreed with the Group's bankers. The Group has the ability to draw down the facility at any time and this has been put in place as a precautionary measure. The Board has considered the Group's forecasts and projections, together with adjustments to reflect various outcomes arising from adverse trading conditions, and conclude that they indicate that the Group has sufficient funding to operate within the level of this facility. The facility has no fixed date for review and the Board is satisfied that the Group can operate within the terms of the facility and that no review will be triggered in the foreseeable future.

Based on the information set out above the Board believe that it is appropriate to prepare these financial statements on the going concern basis

3. The directors do not recommend the payment of a final dividend.

4. Basic and fully diluted earnings per share have been calculated on the Group loss for the financial year and on the weighted average number of ordinary shares in issue for the year, which was 145,566,920 (2008 - 123,078,058) ordinary shares. Whilst unexercised options in the Company would increase the weighted average number of potential shares in the year, due to the losses of the Group in the year they are not considered to be dilutive.

5 The principal risks and uncertainties facing the Group are:

Going concern - the ongoing viability of the Group is assessed on a monthly basis through the Board meetings and Operational Priority meetings. Cash flows are prepared on a monthly basis so that cash flow issues can be identified at the earliest opportunity.

The success of the Group is materially dependent upon:

• the successful exploitation of existing technologies and products and the development of new products by its licensees;

• the generation of increased revenues by further exploitation of its existing technologies and through sales of licensed products by its licensees;

• the successful commercialisation by the Group of its new technologies presently at the development stage;

• the ability of the Group to identify market opportunities and invent, develop and commercialise new technologies and ensure that its licensees develop products appropriate for those markets; and

• the Group continuing actively to license its technologies and those technologies licensed in from third parties.

Development by the Group of its existing technologies or development of new technologies may take longer than anticipated; development delays, defects in technology or new technology proving to be unreliable may all lead to a reduction in anticipated revenue generation. The Group cannot guarantee that it will be able to commercialise technology at an early stage of development.

The Group depends on key executives and personnel - a significant part of the Group's value and the key to its future technology creation lie in its scientists, engineers and executives. Retention of key personnel, and the maintenance of such a qualified workforce, is a high priority for the Group. However, it is not possible to guarantee retention of the services of key personnel. The departure from the Group of any of the executive directors or certain senior employees could, in the short term, have a material adverse effect on the Group's business.

6. The Group's consolidated financial statements on which this financial information is based, have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted for use by listed companies in the European Union and also in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.  

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