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WATER HALL GROUP plc

Unaudited Interim Financial Report for the half-year ended 30 June 2009

Water Hall Group plc today announces its unaudited interim results for the half-year ended 30 June 2009.

For further information please contact:

Raschid Abdullah, Executive Chairman Water Hall Group plc	01483 452 333 07768 905 004
Emily Morgan, Blomfield Corporate Finance Limited	020 7489 4500
Daniel Briggs, Religare Hichens, Harrison plc	020 7382 7776

Chairman's Statement 

Overview

The weak and erratic trading conditions being experienced, as advised in my previous statements in the 2008 Annual Report and at the time of the AGM, have continued. These make it difficult for the board to predict the outcome of future trading periods with any reasonable degree of accuracy.

While a significant number of cost cutting initiatives were implemented in 2008 and 2009 to reflect the reduction in the number of the Group's activities and the level of the remaining ones, your board feels that further cuts would impinge on the fabric of the business and the ability to take the Group forward. 

Although there appear to be some signs of improvement in the economy, the Group's business is driven by local demand arising from the construction industry in parts of Hertfordshire and North London and not by the wider economy. In addition to normal market forces, the Group is currently having to compete in the short term with the availability of a free tip for certain inert soils at the nearby White Water Canoe Complex at Waltham Abbey being prepared for the 2012 Olympics.

The competitive nature for the available business during the first half of the year resulted in sales 6% lower than for the corresponding period last year and came at the expense of lower gross margins.

While activity levels within the construction industry are cyclical and the low point of the industry might well have been reached, the board had previously taken the decision to seek a sale of the sole trading asset, the Water Hall Complex ('the Complex'), on the basis that the Group lacked critical mass and business diversity from which to build a larger and more secure entity with associated growth prospects. Discussions are taking place with various parties who have made indicative offers for all or part of the Complex as a result of the marketing initiative previously advised to shareholders. The board's view remains, as reported at the time of the AGM, that a sale of either all or significant parts of the Complex represents the best way forward for developing shareholder value. Further announcements will be made in due course as and when appropriate.

Should a complete sale of the Complex be achieved, it is likely to be conditional on shareholder approval whereupon the Group would effectively become a cash shell and be defined as an investing company for the purposes of the AIM Rules for Companies. Under the AIM Rules, shareholders would be informed of the new designation along with the board's plans for the Group and would be asked to approve its investing policy going forward.

Quarry and landfill businesses are dependent upon the nature of their planning consents and licensing approvals; hence against the background of a possible sale the board has continued to explore areas within the Complex for planning improvements and investment opportunities. These opportunities include the potential for the development of the mineral reserves in two areas adjoining the Bunkers Landfill site, held under option agreements, and the development of the materials recycling facility and surrounding land areas for an energy from waste or other related waste facility. Additionally final proposals are awaited from specialist firms for the utilisation of landfill gases for the generation of electricity to be delivered to the grid. 

The board continues to monitor the investments held in Lloyds Banking Group plc ('Lloyds') and Petards Group plc ('Petards').

Results

Sales for the period were £823,000 (2008 - £880,000). Cost of sales was £545,000 resulting in a gross profit of £278,000 (33.78% of sales) compared with £428,000 (48.64% of sales) for the corresponding period last year. After administrative expenses of £562,000 and other losses of £145,000, the operating loss was £429,000 (2008 - £391,000). This compares with administrative expenses of £674,000 and other losses of £145,000 for the first half of 2008.

Administrative expenses include professional and other costs of £47,000 associated with a planning application submitted in July 2009 to vary an existing consent in order to achieve an enhanced and more appropriate restoration scheme for Southfield Wood. The board and its specialist advisers consider, now this landfill is filled and having regard for the nature of the waste received and the related expected final settlement levels, that the original restoration scheme was flawed and inappropriate.

The other losses of £145,000 were primarily the diminution in the value of the investment in Lloyds, the share price movement being taken through the income statement. Finance costs were £12,000 (2008 - income of £89,000). Investment income was lower than the corresponding period for 2008 when bank deposit rates were higher and the Company had less invested in equities.  

The loss for the period from continuing operations before and after tax was £441,000 (2008 - loss £302,000).

Basic loss per share was 0.78p compared with 0.54p for the same period of 2008 and fully diluted loss per share was 0.76p (2008 - 0.51p).  

Given that the board wishes to maintain balance sheet strength in support of an acquisition no dividend has been declared for this period (2008 - nil).

Cash flow used in operations was £56,000 (2008 - £310,000). Cash used in investing activities was £102,000 principally the purchase of additional Lloyds ordinary shares referred to later. In 2008 the cash inflow from investing activities of £401,000 related mainly to the proceeds of sale of plant and equipment, less capital expenditure on the successful planning application for the materials recycling facility. The decrease in free cash and cash equivalents during the half year was £158,000 (2008 - increase of £91,000) 

At 30 June 2009 the Group had cash and cash equivalents of £1.679m (31 December 2008 - £1.837m) and cash balances held in escrow accounts of £1.344m (31 December 2008 - £1.326m). In addition the middle market value of investments held at 30 June 2009 was £703,000 compared with £640,000 at 31 December 2008. 

Total equity at 30 June 2009 was £3.242m (31 December 2008 - £3.578m) equating to basic net assets of 5.72p per ordinary share (31 December 2008 - 6.31p).

Investments

As previously advised, during June 2009 your board purchased an additional 270,653 Lloyds ordinary shares under the terms of its placing under the Shareholder Compensatory Scheme at 38.43p per new ordinary share increasing the Group's total holding to 706,278 ordinary shares.

The investment in Petards is treated as a non-current available-for-sale financial asset and accordingly the increase in the market value during the period of £105,000 has been credited to reserves.

Based upon the middle market price of the Company's investments in Lloyds and Petards at 23 September 2009 the value of these investments was £1.048m reflecting an aggregate improvement of £345,000 in the value of the investments since 30 June 2009.

The board continues to monitor the performance of both investments.

Risks & Uncertainties

The principal risks and uncertainties affecting the business activities of the Group remain those detailed on pages 9 and 12 of the 2008 Annual Report together with those associated with the proposed disposal of the Complex. In the view of the board these properly reflect the uncertainties which may have a material effect on the Group's performance in the second half of the year.

Future

The board's objective remains to accelerate the cash flow from Bunkers Landfill Quarry whether through trading or a sale of all or part of the Complex.

A number of potential acquisitions have been or are still under review. It remains the board's view that any acquisition should be funded from the Group's cash resources as far as is realistic and that debt to equity ratios should be consistent with the available free cash flow on a conservative basis.

In the period between determining the future of the Complex and making an acquisition the board will consider investment opportunities as they arise and where it feels that the returns are expected to exceed those of holding money on deposit.

It is widely rumoured that Lloyds is considering a rights issue. Should this prove to be the case, the board will consider the merits of increasing its shareholding.

As noted at the beginning of this statement, the board is unable to confidently forecast trading and levels of activity. Additionally the result for the year will depend on the outcome of negotiations to dispose of all or part of the Complex. The board will continue to seek to position the business within its markets in order to maximise your Company's potential with the focus being on cash generation.

Raschid Abdullah

Chairman

24 September 2009

  

Condensed Consolidated Income Statement for the half-year ended 30 June 2009 Unaudited Audited Half-year to Half-year to Year to 30 June 2009 30 June 2008 31 December 2008 Notes £000 £000 £000 Continuing operations Revenue 3 823 880 1,838 Cost of sales (545) (452) (1,013) Gross profit 278 428 825 Administrative expenses (562) (674) (1,343) Other losses 4 (145) (145) (878) Operating loss (429) (391) (1,396) Finance (costs) / income 5 (12) 89 170 Loss before income tax 3 (441) (302) (1,226) Income tax expense 6 - - - Loss from continuing operations 3 (441) (302) (1,226) Discontinued operations Loss from discontinued operations 3 - (6) (60) Loss for the period 3 (441) (308) (1,286) Loss per ordinary share 7 From continuing and discontinued operations Basic (0.78)p (0.54)p (2.27)p Diluted (0.76)p (0.51)p (2.13)p From continuing operations Basic (0.78)p (0.53)p (2.16)p Diluted (0.76)p (0.50)p (2.03)p

  

Condensed Consolidated Statement of Comprehensive Income  for the half-year ended 30 June 2009 Unaudited Audited Half-year to Half-year to Year to 30 June 30 June 31 December 2009 2008 2008 £000 £000 £000 Loss for the period (441) (308) (1,286) Gain on available-for-sale financial assets  105 29 64       Total comprehensive loss for the period attributable to equity holders of the parent (336) (279) (1,222)

Condensed Consolidated Statement of Changes in Equity
for the half-year ended 30 June 2009
						Available-		Employee
						for-sale		share-based
		Share		Share		investments		payment		Retained
		capital		premium		reserve		reserve		earnings		Total
		£000		£000		£000		£000		£000		£000
At 31 December 2007		567		8		(29)		106		4,148		4,800
Total comprehensive loss		-		-		29		-		(308)		(279)
At 30 June 2008		567		8		-		106		3,840		4,521
Total comprehensive loss		-		-		35		-		(978)		(943)
At 31 December 2008		567		8		35		106		2,862		3,578
Total comprehensive loss		-		-		105		-		(441)		(336)
At 30 June 2009		567		8		140		106		2,421		3,242

  

Condensed Consolidated Balance Sheet
as at 30 June 2009
				Unaudited				Audited
				30 June		30 June		31 December
				2009		2008		2008
		Notes		£000		£000		£000
Assets
Non-current assets
Property, plant and equipment				1,021		1,129		1,073
Available-for-sale financial assets		8		210		70		105
Total non-current assets				1,231		1,199		1,178
Current assets
Trade and other receivables		9		888		964		1,120
Financial assets at fair value through profit or loss		10		493		-		535
Cash - escrow deposits		11		1,344		1,289		1,326
Cash and cash equivalents		11		1,679		4,023		1,837
				4,404		6,276		4,818
Non-current assets held-for-sale				-		17		-
				4,404		6,293		4,818
Total assets				5,635		7,492		5,996
Equity and liabilities
Share capital				567		567		567
Share premium				8		8		8
Other reserves				246		106		141
Retained earnings				2,421		3,840		2,862
Total equity				3,242		4,521		3,578
Non-current liabilities
Provisions for liabilities and charges		12		1,443		1,578		1,536
Total non-current liabilities				1,443		1,578		1,536
Current liabilities
Trade and other payables				526		1,025		457
Provisions for liabilities and charges		12		424		368		425
Total current liabilities				950		1,393		882
Total liabilities				2,393		2,971		2,418
Total equity and liabilities				5,635		7,492		5,996

  

Condensed Consolidated Cash Flow Statement
for the half-year ended 30 June 2009
				Unaudited				Audited
				Half-year to		Half-year to		Year to
				30 June		30 June		31 December
				2009		2008		2008
		Notes		£000		£000		£000
Cash flows from operating activities
Loss from operations - continuing operations				(429)		(391)		(1,396)
Loss from operations - discontinued operations				-		(6)		(60)
Loss from operations				(429)		(397)		(1,456)
Adjustments for:
Depreciation of property, plant and equipment				53		78		207
Gain on disposal of property, plant and equipment				(1)		(378)		(454)
Impairment charges		4		-		168		168
Loss on investments		4		146		-		733
Decrease in provisions		12		(126)		(187)		(191)
Operating cash outflows before movements in working capital				(357)		(716)		(993)
Decrease / (increase) in receivables				232		22		(134)
Increase / (decrease) in payables				69		384		(184)
Cash used in operations				(56)		(310)		(1,311)
Cash flows from investing activities
Purchase of property, plant and equipment				(1)		(140)		(213)
Proceeds from sale of property, plant and equipment				1		441		534
Purchase of investments		10		(104)		-		(1,268)
Interest received				20		134		234
Amounts added to Environment Agency escrow accounts				(18)		(34)		(71)
Net cash (used in) / from investing activities				(102)		401		(784)
Net (decrease) / increase in cash and cash equivalents				(158)		91		(2,095)
Cash and cash equivalents at the beginning of the period		11		1,837		3,932		3,932
Cash and cash equivalents at the end of the period		11		1,679		4,023		1,837

During the half-year discontinued operations utilised £nil (2008 - half-year £348,000, full year £455,000) of the Group's net operating cash flows and received £nil (2008 - half-year £243,000, full year £512,000) in respect of investing activities. 

   

Notes to the Condensed Interim Financial Statements

for the half-year ended 30 June 2009

 1.    General information

Water Hall Group plc is a public limited company ('Company') incorporated in England and Wales under the Companies Act 1985 (registered number 438328). The Company is domiciled in England and Wales and its registered address is Parallel House, 32 London Road, Guildford, GU1 2AB. The Company's ordinary shares are traded on AIM, a market operated by the London Stock Exchange. The Group's principal activity is waste management.

The condensed interim financial statements for the half-year ended 30 June 2009 have been reviewed, not audited, and were approved for issue by the Board on 24 September 2009. The financial information contained in these interim financial statements does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 31 December 2008 has been extracted from the statutory accounts for the Group for that year. Statutory accounts for the year ended 31 December 2008, upon which the auditors have given an unqualified audit report and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of Companies.  Copies of the Interim Report for the half-year ended 30 June 2009 and the Annual Report for the year ended 31 December 2008 are available free of charge from the Company Secretary at the registered office of the Company and on the Company's website at www.waterhallgroupplc.com.

2.     Basis of preparation

The interim financial statements for the half-year ended 30 June 2009 have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and in accordance with IAS34 Interim Financial Reporting. They should be read in conjunction with the annual financial statements for the year ended 31 December 2008.

The accounting policies adopted are consistent with those of the year ended 31 December 2008 as described in those financial statements except for the adoption in the period of IAS 1 Presentation of Financial Statements (September 2007), which has required the inclusion of a condensed consolidated statement of changes in equity as a primary statement.

IFRIC 12 Service Concession Arrangements, IFRIC 16 Hedges of a Net Investment in a Foreign Operation, IFRIC 17 Distributions of Non-Cash Assets to Owners and IFRIC 18 Transfers of Assets from Customers were in issue at the date of authorisation of these interim financial statements but are not yet effective. The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Group.

The directors have considered the Group's financial position with reference to the actual results for the half- year period and the latest forecasts for the remainder of 2009 and 2010. In considering this information and having regard to existing cash resources, listed investments and the absence of any borrowings, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report. Accordingly they continue to adopt the going concern basis in preparing the half-yearly condensed interim financial statements.

The principal risks and uncertainties continue to be those described on pages 9 and 12 of the Annual Report for 2008, together with those associated with the proposed disposal of the Water Hall Complex.   

  3.    Segmental analysis

Segmental results

During 2009 and 2008 waste management has been the only continuing activity and business segment. 

During the first half of 2008 the skip collections business and the processing of waste at the materials recycling facility ceased and are included as discontinued operations in these financial statements.

The following is an analysis of the Group's revenue and results from continuing and discontinued operations by reportable segment:

Half-year ended 30 June 2009		Continuing operations		Discontinued operations		Total
		£000		£000		£000
Revenue
Waste Management		823		-		823
Segment profit
Waste Management		62		-		62
Corporate expenses		(346)		-		(346)
Other losses (note 4)		(145)				(145)
Finance costs (note 5)		(12)		-		(12)
Loss for the half-year		(441)		-		(441)
Half-year ended 30 June 2008		Continuing operations		Discontinued operations		Total
		£000		£000		£000
Revenue
Waste Management		880		178		1,058
Quarrying		-		6		6
		880		184		1,064
Segment profit / (loss)
Waste Management		139		(361)		(222)
Corporate expenses		(385)		-		(385)
Other (losses)/gains		(145)		355		210
Finance income (note 5)		89		-		89
Loss for the half-year		(302)		(6)		(308)

  

Year ended 31 December 2008		Continuing operations		Discontinued operations		Total
		£000		£000		£000
Revenue
Waste Management		1,838		183		2,021
Quarrying		-		5		5
		1,838		188		2,026
Segment profit / (loss)
Waste Management		236		(475)		(239)
Quarrying		-		(16)		(16)
Corporate expenses		(754)		-		(754)
Other (losses)/gains (note 4)		(878)		431		(447)
Finance income (note 5)		170		-		170
Loss for the year		(1,226)		(60)		(1,286)

4.    Other losses

		Unaudited				Audited
		Half year to		Half year to		Year to
		30 June		30 June		31 December
		2009		2008		2008
		£000		£000		£000
Continuing operations
Impairment losses on available-for-sale financial assets (note 8)		-		(168)		(168)
Loss on financial assets at fair value through profit or loss (note 10)		(146)		-		(733)
Gain on disposal of plant & equipment		1		23		23
		(145)		(145)		(878)
Discontinued operations
Gain on disposal of plant & equipment		-		355		431

5.    Finance (costs) and income 

		Unaudited				Audited
		Half year to		Half year to		Year to
		30 June		30 June		31 December
		2009		2008		2008
		£000		£000		£000
Interest on escrow deposits		13		35		66
Bank interest receivable		7		99		168
		20		134		234
Unwinding of discount on provisions		(32)		(45)		(64)
Net finance (costs) / income		(12)		89		170

  6.    Taxation

Income tax expense and deferred income tax are reduced to £nil by reason of tax losses.

7.    Loss per ordinary share

		Unaudited				Audited
		Half year to		Half year to		Year to
		30 June		30 June		31 December
		2009		2008		2008
The calculation of loss per ordinary share is based on:
The basic weighted average number of Ordinary shares in  issue during the period		56,691,102		56,691,102		56,691,102
Dilutive effect of share options		1,123,209		4,084,829		3,643,413
The diluted weighted average number of Ordinary shares in  issue during the period		57,814,311		60,775,931		60,334,515
		£000		£000		£000
Loss for the period - continuing operations		(441)		(302)		(1,226)
Loss for the period - discontinued operations		-		(6)		(60)
Loss for the period		(441)		(308)		(1,286)
Interest on share option receipts - continuing operations		1		7		3
Loss for the purpose of diluted earnings per share		(440)		(301)		(1,283)

  

8.  Available-for-sale financial assets

The available-for-sale financial assets represent the Group's holding of 46,500,000 ordinary shares in Petards Group plc ('Petards') an AIM listed company. Petards principal activities are the development, supply and maintenance of technologies used in security and surveillance systems. The shares represent 7.3% of Petards issued ordinary share capital and were acquired during 2007 for £238,000 at an average cost per share of 0.51p. 

At 30 June 2008 the shares were suspended in accordance with AIM rules as Petards had not published its Report and Accounts for the year ended 31 December 2007 within six months of the year end and the estimated impairment loss of £168,000 was charged in the income statement for the half year ended 30 June 2008. The suspension was lifted in December 2008 and the change in market value since 30 June 2008 is recognised in reserves. At 30 June 2009 the middle market price was 0.45p per share (31 December 2008 - 0.225p per share) and the value of the Group's holding was £210,000 (31 December 2008 - £105,000).   

9.  Trade and other receivables 

		Unaudited				Audited
		30 June		30 June		31 December
		2009		2008		2008
		£000		£000		£000
Trade receivables		204		264		417
Other debtors		128		64		72
Landfill engineering costs		556		636		631
		888		964		1,120

10.  Financial assets at fair value through profit or loss 

		Unaudited				Audited
		30 June		30 June		31 December
		2009		2008		2008
		£000		£000		£000
At 1 January		535		-		-
Additions		104		-		1,268
Fair value loss charged to income statement (note 4)		(146)		-		(733)
At end of period		493		-		535

Investments in financial assets at fair value through profit or loss comprise :

Listed equity securities - UK

493

-

535

In September 2008 the Company purchased 425,000 ordinary shares in Lloyds Banking Group plc ('Lloyds'). During the six months ended 30 June 2009 the Company received 10,625 Lloyds ordinary shares pursuant to a Capitalisation Issue and subscribed for 270,653 Lloyds ordinary shares at an issue price of 38.43p per share pursuant to a Compensatory Open Offer. The total number of Lloyds ordinary shares held at 30 June 2009 was 706,278 and the average cost per share was £1.94p. The middle market price at 30 June 2009 was 69.9p (31 December 2008 - £1.26p).   

  11.    Cash and cash equivalents

Escrow deposits comprise £1.344m (December 2008 - £1.326m) deposited in five bank accounts held jointly with the Environment Agency in escrow. These escrow accounts are to be used specifically for restoration and aftercare purposes and have been excluded from cash resources in the cash flow statement.

The cash resources are held as follows:

		Unaudited				Audited
		30 June		30 June		31 December
		2009		2008		2008
		£000		£000		£000
Escrow deposits		1,344		1,289		1,326
Short term bank deposit		1,557		3,809		1,724
Current account		122		214		113
		1,679		4,023		1,837

The cash and cash equivalents may be analysed between fixed and floating rate by currency as follows:

                                

30 June 30 June  31December 2009 2008 2008 £000 £000 £000 Floating rate cash and cash equivalents Sterling - £'000's 122 214 113 Fixed rate cash and cash equivalents Sterling - £'000's 1,557 3,809 1,724 1,679 4,023 1,837

  12.    Provisions for other liabilities and charges

		Restoration and aftercare
		£000
At 1 January 2008		2,088
Additional provisions		5
Utilised during the period		(192)
Unwinding of discount		45
At 30 June 2008		1,946
Additional provisions		23
Utilised during the period		(27)
Unwinding of discount		19
At 31 December 2008		1,961
Additional provisions		10
Utilised during the period		(136)
Unwinding of discount		32
At 30 June 2009		1,867
Analysis of total provisions :
Current		424
Non-current		1,443
		1,867

The restoration and aftercare provisions relate to the costs of restoring and reinstating land from which the mineral resources are extracted, addressing environmental issues at quarry and landfill sites and planning and related matters. These costs are expected to be incurred at varying times between 2009 and 2070.

Statement of Directors' Responsibilities

The directors confirm that the condensed set of financial statements has been prepared in accordance with all major aspects of IAS 34 Interim Financial Reporting. The directors of Water Hall Group plc are listed in the annual report for 31 December 2008 and there have been no changes during the period. The list of current directors is maintained on the Water Hall Group plc website: www.waterhallgroupplc.com .

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.

By order of the board

Raschid Abdullah

Chairman

24 September 2009

  Independent Review Report to Water Hall Group plc

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 30 June 2009 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated balance sheet, the condensed consolidated cash flow statement and related notes 1 to 12. 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 condensed set of financial statements.

This report is made solely to the company 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. 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 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 AIM Rules of the London Stock Exchange.

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 inquiries, 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 30 June 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules of the London Stock Exchange.

Deloitte LLP

Chartered Accountants and Statutory Auditors

Reading, United Kingdom

24 September 2009

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